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Example research essay topic: Nestle Growth Strategy And Business Development - 981 words

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... e market in the appropriated way. A company must as well learn to consider decisions under the long-run perspective, because markets can be conquered within in short period, but the successful implementation of a strategy needs more time than that. Entering a new market requires some pre-math. The company must estimate the perspectives it has in that new market with regards to threats and opportunities formulating the profile of that country. Basing on this profile the company is able to figure out the strategical approach.

One important part of the strategy must be the cultural awareness, which means a company should employ locals in order lower cultural barriers and resentments established by the foreigner. Hence, this results in a better insight and handling of local demand conditions and knowledge about the customer. In order to guarantee flexibility the functional level units must have their own responsibility and must have freedom in decision making, which allows a quick response towards market fluctuations. To relate these statements to this case Nestles business process in Nigeria gives a good example. An entirely new marketing approach, distribution channel and network had to be set up due to changing demands, lacking infrastructure and a lack of security. Nestle managed these threats successfully by understanding the culture and the being aware of the lack of essentials. 4. ) How would you describe Nestle strategic posture at the corporate level?

The ability to react and act on environmental changes is a crucial part of Nestles strategy. Consequently, all subsidiaries have their freedom in decision making regarding strategy issues. This allows them act independently from the headquarter. Hence, it responds quicker to the local environment, conditions and demands with the result of a more efficient approach to local distribution, employees, advertising, products and marketing. To support this approach Nestles established its expatriate army which is a group of about 700 managers who have a lot of experience in doing management activities in foreign countries. These managers are highly educated and trained in order to enable them a worldwide field of operations.

Employee training is not the only distinctive competency Nestle was able to establish. As mentioned earlier, Nestle has a sophisticated R& D department. A steady stream of new inventions and product improvements allows Nestle to keep up its competitive edge. Supporting this globally aware approach the company is organized into seven worldwide strategic business units which are called SBUs. These units formulate the high level strategic decisions on a worldwide basis, while each of these SBUs focuses on a specific segment: chocolate, infant food, cereals, coffee etc... Engaging in the overall strategy development such as acquisition and market entry strategy these SBUs form an important part of the companys decision making and operating process.

Acquisition contributes about 2 / 3 to Nestles growth rate, hence this emphasizes the importance of this functional part of the company. Additionally Nestle established a structure of regional organization which divides the world into 5 major geographical zones: North America, South America, Asia, Europe and Asia. These organizations are assisting the SBUs and have the responsibility for developing strategies within their region. 5. ) Does this overall strategic posture make sense given the markets and countries that Nestle participates in? Why? This overall strategic posture makes sense which is proved by Nestles successful worldwide expansion, the steady growth rate and the continuously generated profits. Nestles approach of expanding into emerging markets clearly is highly functional throughout the organizational structure (support of R& D, SBU, regional zones) and the corporate level strategy.

One of the main reasons for this successful expanding into new markets is due to flexible responds to environmental changes and the ability to obtaining a steady learning process. These two factors make up a large contribution to Nestles operating performance, which is as well manifested in the credo of having customisation rather than globalisation. Through this attitude the company was able to create a functional and operational synergy among the corporate level strategy, the organizational structure and the general strategy set up. Despite of recessional tendencies and high market fluctuations in the western economies, Nestle was able to grow continuously into new market segment through skilful market penetration.

Clearly, this extraordinary performance was only enabled through its strategy of avoiding an ethnocentric approach, building up customer ties through local employees and managing the distribution channel by an entirely unique approach. The company will continue to generate profits and increase market share when it keeps up its strategy but has to be aware that macroeconomic, social or cultural aspects have to be taken into account while pursuing the strategy. Especially in the new emerging markets this strategy awareness makes a lot of sense, because western economies are pretty much standardized in regards to cultural or social economic aspects while Asian or South American markets are characterized by different means. Nestle was already able to emerge into markets such as Africa and the Middle East where long lasting formal and informal trade barriers were established by local government.

Lesser developed countries tend to raise trade barriers justifying it with the infant industry protection argument. Nevertheless, food is needed all over the world and with the product range and the distinctive competencies the company possesses a decent platform is given to keep up that strategy. Finally, the approach makes sense from that point of view, that these transitory and less developed economies have a high growth potential over the next two decades. China, Southeast Asia, South America and Mexico will be the future markets on this planet with a growing population and growing income level. If Nestle would not take the opportunity of moving into these markets with these incredible potentials, the company will lose its competitive edge and will lose its position as a global player.

Hence, I strongly recommend to pursue this strategy because it makes sense of the highest degree.


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Research essay sample on Nestle Growth Strategy And Business Development

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