Operating Strategies Case Study

Case Title:

Nestle: Streamlining Operations

Abstract:
Nestlé S.A, the Switzerland based Food and Beverages Company was the global leader in the industry. The first half year results of 2005 surpassed analysts’ predictions. The profits of the company were predicted to fall for the period due to the increasing raw material and packaging costs and the falling demand in France, Germany and Italy. Nestlé was able to achieve higher profits mainly because of its operational reforms, acquisitions, divestments and product innovations for better market penetration. The company had set and achieved targets for considerable reduction in marketing, manufacturing and administrative expenses. The case discusses the various operational efficiency programs and marketing strategies adopted by Nestlé to counter the difficult market conditions in parts of Europe and to exploit the opportunities in the developing nations markets.

The case provides ample scope for discussion on the effectiveness of Nestlé’s strategies in retaining its leadership position. An analysis can also be done on whether exclusive strategies have to be evolved for developing markets which provide ample growth opportunities.

Pedagogical Objectives:

• To discuss operational efficiency programs and marketing strategies of Nestle
• To discuss effectiveness of Nestle’s strategies in retaining leadership.

Keywords :  Nestlé; Operational efficiency; Operating Strategies Case Study; Management strategies; Leadership retention; Nestlé’s financial results; Nestlé’s Target 2004; Operational Excellence; Nestlé’s Fitnes; Global Business excellence; Product innovation; Cost reduction Marketing strategies; Market penetration; Strategic effectiveness; Food and Beverages industry