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Assignment 2 Diversification Strategies

3296 words - 14 pages

1.INTRODUCTION
1.1 Brief Overview of Nestle
Over the previous 130 years Nestle Company has been able to acquire great amount of knowledge of almost all the varied markets of the world since 1866. This is the reason why Nestle has been able to gain a leading position in the global food operations as it has factories operation in 77 countries and it is selling its gamut of products in all the six continents. The best part so Nestle is that it occupies the leading market shares  along with a  broad and diversified  business portfolio in varied and many product categories which include  nutrition and baby food, coffee, dairy products, ice creams, mineral water, confectionary, chocolate and pet ...view middle of the document...

1.2Report Objectives, Scope and Limitations
The main objective of this case study is to find the ways for organic growth for Nestle in the mature markets all across the globe. Brabeck’s view of achieving growth through innovation needed significant amount of investments in the varied marketing capabilities and Research and Developments at the same time. It has been noticed that the  R&D department of Nestle acts as the key factor in the successful growth and provided a strong platform for achieving organic growth in future  (Hitt, Ireland, & Hoskisson, 2009).
The scope of Nestle can be defined through the ‘Mission’ and ‘Vision’ statement of Nestle which is:
‘Vision Statement’
“Nestlé’s vision is to bring the best and most relevant products to the people, wherever they are, whatever their needs are, throughout their lives.” (At a glance: introduction, 2010a)
The above vision of Nestle is being supported by the three-tiered mission which is entitled “Creating Shared Value”. Therefore along with compliance Nestle understands that sustainability of the planet’s resources is of vital importance (The Nestlé corporate business principles, 2010b).
The mission statement helps in analysing what Nestle stands for therefore the mission statement of Nestle states:
“Nestle is dedicated to provide the best foods to people through their day, throughout their lives, throughout the world. With our unique experience of anticipating consumer’s needs and creating solutions, Nestle contributes to your wellbeing and enhances your quality of life.”
The only limitation is that since it is a multinational company there might be some cultural as well as regional challenges which the company will have to face to implement the growth strategy framed. Moreover the expectations of the customers will also vary according to the country in which they are operating and their tastes will also vary as per the country.
1.3Define the key terms
Strategy:  An integrated and coordinated set of actions as well as commitments which has been designed for gaining a competitive advantage through exploitation of core competencies (Hitt, Ireland, & Hoskisson, 2011).
 Strategic Competitiveness: It is achieved when any organization successfully formulates and implements a strategy which is highly value-creating (Hitt, Ireland, & Hoskisson, 2011).
Competitive Advantage: It is the strategy of any firm which when implemented cannot be duplicated by competitors or they find it very costly to imitate (Hitt, Ireland, & Hoskisson, 2009).
Strategic Management processes:  They are a complete set of commitments, actions and decisions which are needed by any competition in order to attain strategic competitiveness and earn above-average returns (Hitt, Ireland, & Hoskisson, 2011).
Globalization: It is the increased amount of economic interdependence which exists between countries and their companies which is reflected through flow of goods and services, financial...

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