Nestle

12 April 2010

Nestlé: Sustaining Growth in Mature Markets

Describe the characteristics of each of the following elements in the Current Competitive Landscape: Globalization, Technology, Knowledge, Strategic Flexibility, Quality, and Profit Pool.
Globalization
The company Nestlé is headquartered in the European country of Switzerland with its origins dating as far back as the 1860s.Nestlé operates in over 80 countries, and according to the 2003 Nestlé Annual Report, sales growth for the company’s three geographic zones were 32.5% in Europe, 31.4% in the Americas and 16.423% in Asia and Africa. Dunning wrote that globalization is the movement of countries and cultures becoming more connected through business, governmental cooperation mass media and other sectors (1993). As theopportunities of importing and exporting grow, business are able to expand their capacity into new markets and small business owners are able to network with people and familiarize themselves with products from vastly different cultures. Nestlé is one of the most multinational food companies in the world, greatly expanding its business globally in the 1980s. It was at this time that the companystarted to promote its baby formula products, partially in response to the malnutrition suffered by infants around the world.
Technology

According to the Product Technology Centre (PTC), science is such an integral part of everything Nestlé produces globally. For instance, chocolate melts very fast in tropical countries due to the warm temperatures. However, Nestlé’s researchers havedesigned the company’s chocolate so that the chocolate melts in a person’s mouth at 37 degrees Celsius but remains solid even when temperatures exceed 40 degrees Celsius. Additionally, researchers have found a way to reduce the amount of calories in its chocolate without affecting the taste. Nestlé has also been successful in cutting the levels of fat in a chocolate bar even though fat is what itneeds to dissolve in the mouth.
Nestlé has also used technology to its advantage when it comes to packaged products. Nestlé was the first company to launch and commercialize an easy-open cardboard box for wet products. Nestlé first tried the box out it in Italy in 2001 and when it was successful, The Company then marketed products in these boxes in France, Switzerland, United Kingdom andJapan.
Information technology will demonstrate a long-term opportunity for Nestlé to increase efficiency in packaging, among other operations. In 2000, Nestlé launched its GLOBE Program (Global Business Excellence) which will allow Nestlé to operate in a complex environment with efficiency through the implementation of harmonized best practices, standardized data and standardized informationsystems.
Knowledge
As part of the push or thrust to achieve internal growth, Nestlé needs to continue investing on extensive research and development. Existing products undergo improvements and changes such as product shape, packaging or even the taste. Other products are being moved to a new promising product segments in order to maximize earning potential.
Knowledge will come withtime, just as one learns that with any company. One must learn through hands-on experience, training, interaction with employees and any other means that an individual deems effective. Once an individual has gained knowledge of the firm and how it operates, how the products work and how the employees work together, it is important to integrate that into the Company’s business strategy.

StrategicFlexibility

The launching of the Global Business Excellence initiative (“GLOBE”) has transformed Nestlé into an extremely successful company. GLOBE covers a broad range of strategic objectives and also works to improve operational efficiency by integrating the company’s businesses on a global scale. This will help the leaders of the company in this market so that they are able to deal...