Nestle Corporate Strategy Case Study Example | Topics and Well Written Essays - 1500 words

Nestle Corporate Strategy - Case Study Example (Porter, 1985:15) Nestle's growth strategy is what porter called as focused differentiation variant. Nestle's strategic business units concentrate on market entry in emerging markets to achieve sustainable growth. They analyze potential host countries; anticipate the shift in the competitive forces and exploits change by creating appropriate strategies. In this way, the company establishes itself and defends its position by capitalizing on its strengths and capabilities. The product based SBUs The regional organization of Nestle, on the other hand, aims to penetrate the market and establish its presence by promoting several products. They achieve this by maintaining manufacturing facilities in the host country as well as importing other goods produced from another country. Differentiation provides Nestle insulation against competition through brand loyalty by customers. Through this local strategy, the company earns remarkable returns on capital employed and creates a defensible market position. A strong coordination between the R&D, product development and marketing departments helps local Nestle firms achieve sustainable profitability and increase market share. Hill mentions in his book that brand management is one of the most important aspects of companies doing international business. Product recognition while entering a new market is considered to be one of the most important strategic strengths of a company. Many researchers have tried to extrapolate this view resulting in the one-brand one-world school of marketing. According to this view the best strategy for a company is to go in to a new product segment or market with an already established brand name. This is considered to be one of the most fundamental principles of international brand management. However, the success of Nestle and its branding strategy are a contrast to this popular belief. Nestle prefers its brands to be local and people regional, with only the technology being a common global factor. The company has pored billions of dollars into local acquisitions like Ralston Purina pet products in US. Nestle complete portfolio consists of a staggering 8,500 brands that are organized by geographical status and role. Together these brands create a hierarchy of brands in which each product is associated with at least two bands at different levels in the hierarchy (Kapfere, 2008:413). The geographical criterion allowed three groups of brands to be distinguished - international, regional and local brands. These brands fulfill different functions and roles depending on the customers and represent the principal families of brand architecture (Mhlbacher, Leihs and Dahringer, 2006:482). Nestl's brand strategy is organized into two categories: The corporate brand - Nestle has formulated a basket of corporate brands under the umbrella of Nestle itself and others often acquired like Blackwell, Friskies and Buitono. The corporate brands are there to give the image of a company that is a reliable specialist in some area. The product ranges like Nescafe and individual product brands like Kitkat and Crunch (Mazur and Hogg, 1998, 133-134) To control the branding of the products, Nestle maintains a tight control from the centre on the policy towards the strategic

International and Cross-Cultural Marketing Essay

International and Cross-Cultural Marketing - Essay Example The concept of cross cultural marketing suggests that it is important for the marketers to know that there is very little room for ethnocentrism in the modem 21st century and there is no culture that is superior to the other. Globalization is inevitable and so is ‘cross-culturalization’. Hence one of the key parameters of success for global firms would be the ability to distinguish and understand the cultural aspects of the host nations. The present context of the study has been conducted to analyze the international and cross cultural marketing strategy of Al- Jumeirah a UAE based luxury hotel chain. The host or target country has been selected as China. The reason for such choice is due to the fact that china is one of the fastest growing economies in the world and since the entry of china in to WTO various major companies are looking to enter the prospective Chinese market. ... egment; positioning; cultural; educational; demographic issues of China has been analyzed along a set of recommendations for Jumeirah for the future has been provided (Deresky, 2011, p. 231). Reasons making the transfer of practices attractive to the parent company Presence in Saturated Markets Prior to the entry to China Jumeirah has had presence in the saturated and matured economies like UAE (the home country), U.K., Germany. Such economies provide very few opportunities of growth. Also the economic downturn possessed additional threat to the luxury hotel chain. Hence in order to gain the competitive advantage and cope up with the volatile economy the hotel chain decided to enter China . (Doole and Lowe, 2008, p. 391) High amount capital gain from local market Another probable factor could be the relative strong position of the hotel chain that may have prompted the hotel chain to enter in China. Analysis (Findings) Factors influence the transfer of such practices Market Attractiv eness Entry of China to WTO In an attempt to welcome foreign companies invest in China after several years of negotiation the country became a member of WTO in September 2001. This opened up the economy of China as the trade related barriers went down. This was the beginning of the economic developments in China. Today China is regarded as one o the most emerging economies in the world (Appendix1). Educational Developments in China As foreign companies started to come to China; the demand for the skilled labours went up. Over the years the Chinese education system has gone through several reforms. The government has made considerable amount of investment to develop the colleges and universities. The focus of the government has shifted from quantity based education system to quality based