Case Scenario:
I need a little help putting some answers together....If Nestle is one of the world's largest global food companies. And it has over 500 factories in 76 countries, and sells its products in 193 nations, and only 1% of sales and 3% of employees are located in its home country, Switzerland. If, having reached the limits of growth and profitable penetration in most Western markets, and it turned its attention to emerging markets in Eastern Europe, Asia, and Latin America for growth. And if many of these countries are relatively poor, but the economies are growing quickly. Will there be a consumer base capable of buying many Nestle products will develop over the next couple of decades.
Now, if Nestle tries to enter emerging markets ahead of competitors, and build a substantial position in basic foodstuffs. As income levels rise, the company progressively moves from these niches into more upscale items. It very much focuses on developing local goods for local markets, however, and places relatively less emphasis on its global brands in emerging markets. It also localizes its distribution and marketing strategy to the requirements of the local market. When good opportunities are available, Nestle acquires local firms.
Now, we know that Nestle is a very decentralized organization, with operating decisions pushed down to local units. On top of this are both a SBU organization focused around food groups, and a regional organization that tries to help rationalize production and marketing among nearby countries. Helping hold the organization together is a group of managers who rotate around the world on various assignments.
Now, here's where I need help....If Nestle did move....Does it make sense for Nestle to focus its growth efforts on emerging markets? Why? What would be the company's strategy with regard to business development in emerging markets? and would that strategy make sense?
Also, from an organizational perspective, what would be required for this strategy to work effectively? And, how would we describe Nestlé's strategic posture at the corporate level; is it pursuing a global strategy, a multi-domestic strategy, an international strategy, or a transnational strategy?
Does this overall strategic posture make sense given the markets and countries that Nestle participates in? Why? Nestlé's management structure and philosophy aligned with its overall strategic posture? Provide an update on the company and the issue described in the case using Internet research.