Group 6: Grygiel, Dike, Markarian, Steger

Company BackgroundCompany Background

• Multinational Corporation • 143 years old

850 brands 210,000 employees

• 500 factories in 76 countries• International brand

Nescafé, Kit Kat, Gerber, Purina

• In 2008 their sales were 109,908 million S₣

• Nestlé is committed to taking into account local legislation, cultural and religious practices

• Multinational Corporation • 143 years old

850 brands 210,000 employees

• 500 factories in 76 countries• International brand

Nescafé, Kit Kat, Gerber, Purina

• In 2008 their sales were 109,908 million S₣

• Nestlé is committed to taking into account local legislation, cultural and religious practices

Corporate StrategyCorporate Strategy

• Seek Emerging Markets with high population growth India expected growth 700million

• Improve products via improved R&D• Source local raw materials • Acquire companies that give first mover advantage• Compete on price• Create products with high growth potential: new

product that fit the lifestyle of the growing middle class

• Customize where necessary to tailor to the location• Locally adapt: In Nigeria, satellite locations

opened in different part of the country do to bad road and poor security

• Establish good distribution channels and local infrastructure

• Seek Emerging Markets with high population growth India expected growth 700million

• Improve products via improved R&D• Source local raw materials • Acquire companies that give first mover advantage• Compete on price• Create products with high growth potential: new

product that fit the lifestyle of the growing middle class

• Customize where necessary to tailor to the location• Locally adapt: In Nigeria, satellite locations

opened in different part of the country do to bad road and poor security

• Establish good distribution channels and local infrastructure

Organizational ShiftOrganizational Shift

Past• Nestlé operated as a decentralized organization

• They did not believe in global food and beverage consumers

• They felt that there was a need to tailor products to local tastes

Past• Nestlé operated as a decentralized organization

• They did not believe in global food and beverage consumers

• They felt that there was a need to tailor products to local tastes

Present• Creation of global business units

• Creation of major product lines

• Centralized purchasing, production and R&D

• Marketing and sales will remain decentralized

Present• Creation of global business units

• Creation of major product lines

• Centralized purchasing, production and R&D

• Marketing and sales will remain decentralized

Falling trade

barriers

Rise of global

markets and

competitors

ConclusionConclusion

• Nestlé’s middle ground between decentralization and centralization has benefited them Elimination of duplication, which has allowed for cost savings

By developing more major products that are distributed globally, their international brand has grown and is more identifiable

They can now compete with global competitors like Procter & Gamble

They can still respond to geographic regions through national subsidiaries and develop local strategies

• Nestlé’s middle ground between decentralization and centralization has benefited them Elimination of duplication, which has allowed for cost savings

By developing more major products that are distributed globally, their international brand has grown and is more identifiable

They can now compete with global competitors like Procter & Gamble

They can still respond to geographic regions through national subsidiaries and develop local strategies