Corporate Strategy and Strategic Directions of Nestle - Assignment Example

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Nestle operates based on the structure of ‘Outside-In’ corporate strategy framework where the company tends to revise its business, production and innovation model based on the changes in the external environment…
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Corporate Strategy and Strategic Directions of Nestle
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Download file to see previous pages New business policies are created by the form’s managers to help the corporation venture into newer segments like nutrition and wellness through the combined actions of research and development and incorporation of new technology and business principle. Moreover the company further works in enhancing the level of communication with the effective consumer base spread along various regions and thereby to modify its production and business policies. Development or modification in the production lines together working on business policies aimed at creation of local supplier networks helps the company in gaining the due potential of positioning its brand on a higher scale (Schmid, Slabeva and Tschammer, 2001, p.278-279; Bell and Shelman, n.d., p.775).
Porter’s Five Forces Model
The strategic framework of Nestle can also be analysed based on Porter’s Five Forces Model that would help analyse the industrial environment of the firm. Firstly in regards to the power of buyers, the company works in changing its production and business paradigm to rightly adapt to the changing needs of the consumer sphere. The management body of the company renders special focus on enhancing the level of communication with consumers in the targeted market thereby identifying their needs and changing production patterns accordingly. Secondly the company takes effective control of the supply chain activities by setting of local and regional supply chain and distribution networks. The company acting on the information technology paradigm effectively communicates with the supply chain networks spread along geographical territories to govern their actions pertaining to supply of healthy and fresh produces. Thirdly the company reduces the threat rising from the growth of substitute products through the gaining of patents and trademarks pertaining to the different innovative activities. Further the company also enhances the assortment of its production base to help develop a huge array of products pertaining to different product and consumption categories like nutrition, pet and baby products, pharmaceutical products and the like. Working on such huge array of products limits the chances of being imitated by local and regional producers. Nestle working on a highly integrated supply chain structure focused on regional and local areas helps in gaining on economies of scale thereby producing products at low costs. Moreover its enhanced communication base with targeted consumers pertaining to regional economies also restricts the consumers to shifting over to other local brands. Its acquisition strategies also help in gaining over the control of regional and local players thereby creating further entry barriers. The company also works based on an umbrella branding strategy that helps the consumers ...Download file to see next pagesRead More
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