Case Study-Nestle Tries for an All-for-One Global Strategy

Questions:

2.) What type of global business and systems strategy did Nestle adopt?

Nestle adopted a transnational strategy which involved managing nearly all of its value-adding activities from a global perspective without reference to national borders, optimization of sources of supply and demand wherever they appear, and taking advantage of any local competitive advanatages. The globe not the home country is the management frame of reference. Nestle wanted to be the first global enterprise to conduct business as if it were operating in a single country. This meant that it had to choose one system and make all countries conform to that system no matter what local differences there might be and know matter what differences there were in the way they conducted day to day business.


3.) What management, organization, and technology challenges did Nestle have to deal with to standardize its business processes and systems?

Management challenges included convincing all of the market heads around the world to adopt one single set of business processes and systems for procurement, distribution , and sales management. All of the managers felt that their way of doing business was the right way and it was a challenge to get them all on board to give the new system a chance. As a whole organization it was challenging because up to that point each local organization had been allowed to run the business as it saw fit which took into account local conditions and cultures. Standardization of all of the company's systems completely changed the culture of the company. No longer was each global site its own autonomous unit, now everyone was expected to use the same system and do things the same way no matter what part of the world they resided in. The technological challenges that the company faced wsa that Nestle facilities in 14 countries all ran their ERP software differently and used different schemes for formating data and management forms. Also many of the company's core processes were not documented and were passed down by word of mouth. All of these processes needed to be documented so that the best way to run the business could be determined and all sites could use these core processes.