Management: Case Study of Nestlé

Osee R. Lieberman
Ottawa University

2015
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Nestlé

Business strategies are the most important tool for a company to achieve goals effectively

for an extended period of time. In order for companies’ to be successful, the managers and

CEO’s must have outstanding competencies for adequacy of strategies to fall into place within

the organization. Competent managers and successful business strategies performed within an

organization make competition between rival companies tough. Nestlé is an international

company that has been very successful for a long time.

The kind of business-level strategy that Nestlé is pursuing is significantly intelligent in

regards to decisions being made, what objectives to pursue, and how to achieve goals through the

adequate use of resources (Jones & George, 2013). The business-level strategy that Nestlé uses

is planned in a way that competes against its rivals. Also, Nestlé takes advantage of

opportunities that their rivals do not. According to Jones and George (2013), Nestlé teams up

with farmers to coach them on how to boost their crops in numbers. Nestlé encourages its

business partners to recycle and educates them on being sustainable (Jones & George, 2013). By

engaging in such strategies, “Nestlé has cut its use of packaging materials by 518,000 metric tons

in the past two decades” (Jones & George, 2013, p. 209). One of the business-level strategies

that Nestlé engages in is the low-cost strategy. They drive their costs down lower than their

rivals by engaging in sustainable practices and educating within their market of farmers and

distributors. By educating the people that they get their products from they are minimizing their

cost which is part of their low-cost business strategy. They may not have the cheapest products;

however, they are creating ways to be less wasteful which will eventually save money.
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The CEO’s and managerial teams within Nestlé have a diverse set of competencies.

According to Mudd (2001), the CEO and the managers speak many different languages in order

for their business to flourish in different parts of the world. By speaking the language of the

locals they are able to understand the wants and needs of the locals (Mudd, 2001). The managers

engage in strategic leadership as well. They want to be at the same level as all members of the

organization so that they know the needs of everyone. Managers work all around the world so

that they can get an advantage in the market. They believe in creating a shared value within

society (Mudd, 2001). Mudd (2001) stated that because Nestlé has stresses internal growth

which creates a substantial 4% internal growth rate per year.

Nestlé has a competitive advantage because of how many years they have been around

(Mudd, 2001). Home for Nestlé is originally in Switzerland; however, they have over 400

factories in 81 countries now (Mudd, 2001). That is another reason why Nestlé has a

competitive advantage over its rivals. Probably, Kraft and General Mills do not have a long

global influence like Nestlé has.

One of the reasons why Nestlé is doing to much better than its rivals is because of the

global market that it has. “The company has decades of experience with operating in different

cultures” (Mudd, 2001, p. 36). Nestlé is also trying to learn what consumers want and learning

what locals want in various parts of the world (Mudd, 2001). Mudd (2001) also stated that

because of the 134 years of operations throughout the world the international knowledge that the

managerial team “makes it possible for Nestlé to operate on as grand a scale as it does” (p. 36).

It seems that Nestlé is so successful because of the social responsibility the company

gives to society. Not only is the company trying to educate sustainability, but they are also

educating other companies they work with to be sustainable.

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This eventually saves everyone money along with benefiting our planet. After learning all of

this about Nestlé, I want to buy their products more and maybe work for the company one day.
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References

Jones, G.R. & George, J.M. (2013). Essentials of contemporary management (5th ed.).

McGraw-Hill Inc., New York, NY. ,

Mudd, T. (2001). Nestle Plays To Global Audience. (Cover story). Industry Week/IW, 250, 34.