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Nestle Tries for an All-for-One Global Strategy

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Part Four Building and Managing Systems

Nestlé Tries for an All-for- One Global Strategy
CASE STUDY

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estlé is the largest food and beverage company in the world. Headquartered in Vevey, Switzerland, the company has annual revenues in excess of $70 billion and nearly 250,000 employees at 500 facilities in 200 countries. Best known for its chocolate, coffee (it invented instant coffee), and milk products, Nestlé sells hundreds of thousands of other items, most of which are adapted to fit local markets and cultures. Traditionally, this huge firm allowed each local organization to conduct business as it saw fit, taking into account the local conditions and business cultures. To support this decentralized strategy, it had 80 …show more content…

Johnson was instructed to find a way to harmonize processes, standardize data, and standardize systems. All of Nestlé’s worldwide business units were to use the same processes for making sales commitments, establishing factory production schedules, billing customers, compiling management reports, and reporting financial results. The units

Chapter 15 Managing Global Systems

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would no longer be permitted to adhere to local customs for conducting business except in cases where the laws of a particular country required that they do so. Every Nestlé facility would format and store data identically, using the same set of information systems. Johnson would have to oversee the confluence of divergent processes into a “single source of truth.” Johnson would have three and a half years to deploy the GLOBE strategy at 70 percent of the company’s global markets. Such an undertaking was unusual for Nestlé. Large projects, such as the construction of a coffee factory, generally cost the company in the range of $30 million to $40 million. Putting up billions of dollars to fund a project was risky, but for Brabeck, the potential benefits were too important. He could significantly curb IT spending, which was growing dangerously. In addition, he could gain an advantage over competitors like Unilever and Kraft Foods in improving operational efficiency

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