5.

How would you describe Nestle’s strategic posture at the corporate level; is it pursuing a
global/international strategy, or a domestic strategy?

Nestle’s strategic posture at the corporate level is that it is pursuing a multi domestic strategy. In order to
survive in the market it has to gain a high level of local market responsiveness as the company is operated
in different region of the world and consumer tastes and preferences are substantially different between
countries. Based on case example collectively, Middle East accounts for only about 2 percent of Nestlé’s
worldwide sales and individual markets are very small due to the trade barrier and regional conflicts. It
has established a network of factories in five countries by supplying the entire region with different
products according to the local inputs and local demand and earned a good rate of return from each
region. The company is making ice cream in Dubai, soups and cereals in Saudi Arabia, yogurt and bouillon
in Egypt, chocolate in Turkey, and ketchup and instant noodles in Syria. In China and India it persuaded
strategy by meeting the basic food needs of the population with items such as infant formula and
condensed milk. The company also purchased local company which is a chocolate manufacturing
company in Poland as in polish market the chocolate consumption is high. In each different country they
operate in, the strategy of multi domestic is being used to increase the value of their product to the local
market by customizing it to meet local needs.

6. Does the overall strategic posture make sense given the markets and countries that Nestle participates
in? Why?

The overall strategic posture of Nestle makes sense given the fact that it operates in different region.
Multi domestic is the appropriate strategic approach because such strategy have little pressure for global
integration as local market responsiveness are mostly focused resulting in low costs for the company.
Furthermore, it adapts its products to local tastes by offering different products in different markets.
Consequently, multi domestic strategy often have a decentralized and loosely coupled structure where
subsidiaries worldwide are operating relatively autonomously and independent from the head quarter.
Nestle uses a unique marketing and sales approach for each of the markets in which it operates. For an
example, the marketing approach in Nigeria where local singers are hired for product promotion instead
of billboard or television advertisement. The national differences in taste and preferences from
distribution channel to government policies in market in which they operate, therefore it make sense that
following a multi domestic strategy is best for the company.