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

Question 2.

Originally Nestle adopted the multinational business strategy. Ther headquarters were set up in Switzerland, but each local organization was given a lot of freedom to condct business as it saw fit and adjust products to local cultures. So the company was largely decentralized. The same can be said about their IT system. To support a lot of variation and diversity Nestle was using 80 different IT units. Over the years Nestle discovered that such strategy and corresponding IT was inefficient and was starting cost the company a lot of money affecting its bottom line.

Question 3.

There were several challenges that Nestle's management had to overcome to standardize its processes. First of all, the original deadline for converting most of the company's operations to GLOBE was underestimated, and it had to be postponed several times from December 2003 to 2006. Secondly, it was extremely difficult to convince managers of operations across the world to change to a unified system. The GLOBE project manager Chris JOhnson basically had to tell the managers that if they didn't back im up, he sould simply get fired, and the CEO would choose one of them to do the job. Another challenge was to identify and describe the main processes which had never been put on paper before and had been passed by word of mouth.

Question 4.

Nestle dealt with these challenges in several ways. The implementation deadline had to be postponed and instead of setting the goal of converting 70% of business to GLOBE by 2003, they decided to conver the majority of businesses to GLOBE by the end of 2005. To compile the Best Practices Library Chris Johnson made sure he chose the best of the best people he could find, people from different backgrounds with different experiences who knew exactly how the company was functioning. He used his leadership skills to convince the managers of different units to back him up. In my opinion, he was very successful with dealing with these complex issues.