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Corporate Transformation Case Study

Case Title:

NESTLE: The Organizational Transformation

Publication Year : 2005

Authors: Srinath Manda, G Srikanth

Industry: Food, Diary and Agriculture Products


Case Code: COT0003

Teaching Note: Available

Structured Assignment: Available

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In nearly 140 years of existence, Nestle had grown from a small baby food manufacturing house in Vevey, Switzerland, to the world's largest food company, operating in 86 countries and with more than 500 factories spread across the globe. Nestle owns some of the world's best selling brands in instant coffee (Nescafe), baby food (Cerelac), bottled water (Perrier) and pet care (Friskies). The company's growth strategy through acquisitions resulted in an 'unwieldy empire', lower profit margins and a negative response from stock markets. To accelerate profits without a slow down in growth, Chief Executive Officer, Peter Brabeck, initiated a transformation of the organisation, which analysts felt was akin to moving a mountain.

Pedagogical Objectives:

  • To understand the business model of Nestle and the conditions in which its organisational transformation took place
  • To discuss as to how and whether Nestle could be transformed

Keywords : Nestle; Largest food company; Nescafe; Cerelac; Decentralised operational model; Organisational transformation; Business model; Nestle empire; Mergers and acquisitions; Peter Brabeck; Restructuring / Turnaround Strategies Case Study; Henri Nestle; Misguided diversification; Food industry consolidation; Centralised management model; Global Business Excellence Resource Planning System (GLOBE)

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