Nestles Changes in Organizational Architecture and Strategy Case Study

Nestles Changes in Organizational Architecture and Strategy - Case Study Example But in 1990s they started their globalisation and the best way for them to do that was to purchase local subsidiaries in foreign markets. The launch in American markets was around the First World War when there was an increase in demand for dairy products; they constructed a lot of different factories in US at that time period. The underlying objective of moving into foreign markets was to increase efficiency and productivity in the company. In 1974 they diversified into the completely different branch of cosmetics by becoming a major shareholder in Loreal. This was a very bold and daring move and till today investors doubt whether this was a correct financial move or not. The other diversification Nestle engaged in was the purchase of Alcon Laboratories, a U.S manufacturer of pharmaceutical products. The diversification and constant restructuring the firm did was to make it more flexible and adaptable to rapid market changes. Restructuring is a continuous process of Nestle and their restructuring charges run up to $300 million a year. The company has done well over decades, which is why a lot of people often wonder if they are doing everything right why try to change? But that is just Nestles culture and what sets the company apart. The change is often slow in nature as one has to consider the magnitude of the multinational, yet it still happens. Nestle greatly relies on its intrinsic corporate culture to reform employees and make them think the same way. Everyone wants to increase the longevity of the organization rather than focus on solely short-term profits. Nestle has also developed a list of â€Å"untouchables†, which comprises of the companies strengths and should never be changed. One example of this is that nestle understands the importance of IT yet they don’t consider is as a sole tool for implementing successful strategies. It is important to reinforce and focus on the strengths and leave them as is. R & D is one of nestles strengths, which is why the company is so open to change. They constantly come up with innovative practical ideas to succeed. Innovation is in fact the first pillar of Nestles corporate strategy. They recently implemented an â€Å"Innovating the future† leadership strategy which is based on: Continuous improvement in consumer research, to find out exactly what they want and to build superior products to satisfy that demand. Using the vast expertise that Nestle has in its R&D network. Recruiting the best open-minded and passionate innovators are included in this strategy. This also includes working closely with leading universities to find out the latest in technology. Lastly the innovations should meet the core demand of nestle which is Nutrition, health and wellness. In 2008, nestle was struck hard by the Chinese food scandal. Even though the company has developed a great reputation over the years when something this serious happens the images takes a huge hit. Nestle however responde d well by announcing changes and new operations.