International Business

Strategy

CASE: ORGANIZATIONAL TRANSFORMATION AT NESTLE

Submitted By:
Kunal Ujjainkar 1601057
Shivansh Kansal - 1601103
What was Nestls initial organizational approach as an
MNE (central-ized exporter, international projector,
international coordinator or multi-centred MNE)?

Nestl's initial organizational approach: multi-centred MNE

Large number of independent entrepreneurial subsidiaries abroad
International strategy based on national responsiveness.
Has Nestl transformed itself towards a less
homogeneous, more multi-dimensional
model?

Part 1:
Nestl has become less homogenous
Some subsidiaries integrating their operations
Subsidiaries (ex: Africa) more independent
Can you identify certain Nestl subsidiaries
with specific roles e.g., strategic leaders
or contributors?

Part 2:
Nestl Purina PetCare USA - strategic leader
It is the lead position in an important market
German operation - implementer
Europe's 3rd most important market for output
Low managerial attention to German market
Specialist strategy (limited focus on premium products)
Content to maintain presence rather than compete for market leadership
Has Nestl been able to transfer knowledge from
strategic leader sub-sidiaries to other types of
subsidiaries? Please identify an example in the case.

Nestl Purina PetCare USA, a strategic leader, pioneered the "small serving" pet food
concept in the USA transfer to Europe, increased market share
What is dierent between the subsidiary
network discussed in this case and the
model in the paper by Bartlett and
Ghoshal?

Bartlett and Ghoshal see a network with clearly defined roles assigned by
headquarters.
Subsidiaries are classified based on evaluation of their potential and
capabilities
Nestl's network seems to have evolved in a much more organic manner
and to have a wider range of different roles
Reflecting different market potentials and characteristics, different
subsidiary capabilities and the different historical evolution of the
subsidiaries
Centralization on back office functions like accounting and purchasing,
moderate coordination to the downstream marketing function
Can you provide an update on Nestls
international organizational approach,
using materials available on the Web?
Thank You !!