Nestl Corporate Level Strategy

Corporate level strategy is essentially what makes the whole company greater than
the sum of its business units. The separation of strategic and tactical decision
making as argue by Chandler (1962; 1991) is the most efficient corporate
organization as it allows the corporate centre to focus on the destiny of the
corporation and allow business units to focus on within business unit operations.
Mintzberg puts forward five formal definitions of strategy: plan; ploy; pattern;
position; and perspective. Planning is concern with the development of mission or
vision of what the company would aim to achieve. The organization must have a
vision of what they want the company to be at a point in future. The pattern has to
do with how the strategy unfolds and becomes concrete. If strategy as plan refers to
deliberate, intended strategy that may or may not be realized, then strategy as
pattern suggests unplanned, emergent strategic patterns or consistencies that are
realized despite, or in the absence, of intentions (Mintzberg and Waters, 1985 in
Graez 2002, p. 456).
An integrated organization strategy is based on overall orientation towards growth
and stability. In the case of Nestl, the overall orientation is to be the world's largest
and best branded food manufacturer with the highest quality standard. A company
may also focus portfolio corporate strategy, which is a strategy focus on the market
that the firm competes in through product line and business units. In fact this is the
basic underpinning strategy that drives Nestl orientation of producing the world
healthiest product. The core principle of Nestl is helping consumers to have a
balanced healthier diet. "For firms to sell successfully to foreign customers requires
culturally sensitive adaptations to product services, services, marketing and
advertising (Rugman and Collinson 2009, p. 132). In the face of an unpredictable,
highly volatile and competitive marketplace, a capacity for innovative, divergent
strategic thinking at multiple organizational levels is seen as central to creating and
sustaining competitive advantages (Liedtka 1998 in Graez 2002, p. 456). Nestl
uses both planning scenario and strategic business models.
Nestl Nutrition, an autonomous unit within Nestl, is responsible for the claimbased business of infant and healthcare Nutrition. This is one of the strategic units
of Nestl created in order to maintain the company competitiveness. This unit aims
at delivering superior business performance by developing and offering consumable
nutritious products. The unit in particular would strengthen Nestl leadership in this
market hence a key element of the company corporate strategy .Michael Porter
(1979) came up with four competitive strategies for business. The first strategy is to
be the cost leader which means having the lower cost either across the industry or
within the industry segment. An example of across the industry cost leader strategy
of Nestl is its ability to make its entire product available and affordable to
consumers regardless of countries. Income disparities exist among countries, so
Nestl produce and repackage products in line with consumers capacities to

purchase if different countries. The cost leader within the industry segment
would be Nestl making its product to be the cheapest in the entire industry.
Business Level Strategy:
Business Level Strategy Wide range of products (over 20 categories: coffee, milk, mineral water,
pet foods, cereals) Nestl Nutrition- Strengthening their leadership in this market is the key
element of their corporate strategy. Deliver superior business performance by offering consumers
trusted, science based nutrition products and services. Strives to closely align Nestls scientific
and R&D expertise with consumer benefits. Addressing current customer concerns as well as
anticipating future consumer trends.