In this case we are presented with Nestlé’s GLOBE program, an effort to leverage the company’s size as a strength in a globally changing business world, uniting and unifying the company as a whole inside to create sources of competitive advantage towards competitors and enabling Nestlé to manage their complex and diverse data and processes as a global multinational enterprise by standardizing and labeling each aspect of it across the globe by transforming the Swiss company from a “collection of fiefdoms into an integrated global company. The three main goals of the program were to harmonize processes, standardize data, and standardize systems and create a best practices’ library to be globally used.
However, GLOBE was going to change the …show more content…
When applying the learning from the readings and classes, we can identify very clearly a change process of the organizational structure and strategy of this company. As the case states, at the dawn of the new millennium Nestlé was a company present in more than 81 countries and with revenue of approx. 66,2 billion euros (at today’s CHF/EUR exchange rate). However, less than 2% of this value was generated in Switzerland, its Supply chain was drove under the “intermarket supply” model and its organizational structure was fragmented in several markets with profit responsibility lying on the head of each market.
This is the sketch of what we saw to be a Multinational MNE with a decentralized federation model.
In this model, the HQ handles its several subsidiaries as independent national businesses, with loose operational control systems and concentrating in these its key assets, limiting headquarters’ ability to intervene in the management of the company’s spreading worldwide operations . This is drawn from the company’s Administrative Heritage, i.e. the way the business strategy, structure and culture are influenced by the history and origin of a company. Being Nestlé a European company that initiated its internationalization by the end of the world war, adopting this strategy was a way to overcome its liability of foreignness and thus had this independence and flexibility of each one of its country market business …show more content…
This is drawn in the case as we find out that although Nestlé was the envy of its competitors due to its growth and international spread, its managers predicted this advantage to become unsustainable as it could be threatened by the sales and administrative overheads. Therefore, there was an urgent need to cut the costs the current multinational strategy was
However, GLOBE was going to change the …show more content…
When applying the learning from the readings and classes, we can identify very clearly a change process of the organizational structure and strategy of this company. As the case states, at the dawn of the new millennium Nestlé was a company present in more than 81 countries and with revenue of approx. 66,2 billion euros (at today’s CHF/EUR exchange rate). However, less than 2% of this value was generated in Switzerland, its Supply chain was drove under the “intermarket supply” model and its organizational structure was fragmented in several markets with profit responsibility lying on the head of each market.
This is the sketch of what we saw to be a Multinational MNE with a decentralized federation model.
In this model, the HQ handles its several subsidiaries as independent national businesses, with loose operational control systems and concentrating in these its key assets, limiting headquarters’ ability to intervene in the management of the company’s spreading worldwide operations . This is drawn from the company’s Administrative Heritage, i.e. the way the business strategy, structure and culture are influenced by the history and origin of a company. Being Nestlé a European company that initiated its internationalization by the end of the world war, adopting this strategy was a way to overcome its liability of foreignness and thus had this independence and flexibility of each one of its country market business …show more content…
This is drawn in the case as we find out that although Nestlé was the envy of its competitors due to its growth and international spread, its managers predicted this advantage to become unsustainable as it could be threatened by the sales and administrative overheads. Therefore, there was an urgent need to cut the costs the current multinational strategy was