Nestle
Nestle is the leading food and beverage company in the world. It was established in 1887 by Henry Nestle to market baby formula he had manufactured (Albaum, Albaum, & Duerr, 504). The company is headquartered in Switzerland and operates 509 factories in 83 countries, employing nearly 230, 0000 workers worldwide (Albaum, Albaum, & Duerr, 504). It has a unique footprint and sells over 8000 products in about 187 countries across the globe. Common products and brands include Nescafe, Nespresso, Kik Kat, and Maggi (Albaum, Albaum, & Duerr, 506). Nestle also invests around 1.5 billion Franc annually on research and development. Currently, the company has nearly 17 R&D and testing centers globally.
Important Facts
- Nestle is the leading food and beverage company in the world, with 1999 revenues of $ 46.6 billion.
- The company is involved in all phases of the food industry, including purchasing raw materials, processing, packaging, marketing, and selling products.
- It sold baby food as the first product.
- It has around 230,000 employees worldwide.
- It operates 509 factories in 83 countries and has over 8000 products
- Its headquarters is situated in Switzerland.
- Nestle has ventured into e-commerce.
- The firm has made three acquisitions at the cost of $ 15.5 billion to extend its presence in the US.
Key Issues
- Many food items remain local products
- Size, complexity, and diversity of environments in which Nestle operates
- Competition
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Alternative Course of Action
Since most of Nestle’s food item remains local products, the company must make adjustments to product lines, pricing, packaging, and marketing to accommodate the demands of its consumers. Besides, with the growing technology, the firm has seen the need to focus on e-commerce to gain a competitive advantage over its rivals.
Recommendation
The best course of action is emphasizing on e-commerce. This course of action allows the company to perform its business activities through the internet. Most importantly, it enables the customers to reach a wide array of customers worldwide, which helps it to increase its market share.
Question 1
Based on the internet and Web, Nestle has adopted a strategy that will enhance communications between the company, its customers, and other stakeholders. This strategy will help Nestle to increase efficiencies across the board, thus, enhancing the daily operations of the organization. The use of e-commerce enables the active sharing of information through the internet, which improves corporation in the firm.
Question 2
After acquiring software explorations such as German-based Systems Applications and Products (SAP), Nestles’ prospects for the web increased extensively. Being the primary source of enterprise resource planning, SAP can provide a combination of integrated management systems like supply chain management, financials, and e-procurement.
Question 3
The signing of a contract with SAP seems appropriate at this stage. As such, the company should attempt to do so much at once rather than take one step at a time. The former can facilitate and speed up the process of developing an interconnected system such as a management information system. At the same time, the latter forces Nestle to rely on the overall system to work slowly. It can also expose Nestle to financial risks, especially if the whole system fails to work.
Question 4
The internet and web have already changed how businesses practice global marketing. Through the internet and web, the company communicates with the consumers at a global edge. The internet and web also enable the company to advertise its products globally, and this strategy helps it extend its market share in the world.
Question 5
The advantage of having some 8000 brands include adapting to local preferences within the market, customer recognition, easy introduction of new products, competitive edge, and enhanced credibility. The disadvantages include the possibility of duplicate advertising, risk of losing out on potential brand awareness and dispersed attention of the management
VW in China
China is the largest single market for Volkswagen AG (VW), a German multinational automobile manufacturer. The company has been successful in China since 1985 as the market leader and held that position until 2009 (Albaum, Albaum, & Duerr, 566). China’s operation has significantly contributed to VW’s profits for many years. Equally, the company has benefited from the time it entered into an automobile industry in China due to the opening of the Chinese market to foreigners; its adaptation to political, legal and economic environment; the development of management; its commitment strength and the changes its product line (Albaum, Albaum, & Duerr, 566).
Important Facts
- China is the largest single market for Volkswagen.
- Volkswagen is a multinational automotive manufacturing company based in Germany.
- VW continues to increase production and sales in China
- It continues to receive a decline in the market share due to stiff competition
Issues
- Competition
- The decline in market share
- Government policies
- The threat of new entrants
Alternative Course of Action
To address the issue of the decrease in market share caused by competition, Chinese companies have decided to enter into joint ventures with foreign companies and acquire technologies from foreign firms to design their own models.
Recommendation
The best course of action is acquiring technologies from foreign companies to develop their own models. Chinese automobile companies without foreign partners extend their market share because they built their own vehicles and set their quality to the international level.
Question 1
VW’s marketing strategies originated from the limitations the Chinese government policies subjected them. These regulations forced the company to regularly adapt its market strategy causing a short-term focus for VW. Nonetheless, these regular changes did not affect VW as the company’s decisions in its entry technique and its partners encouraged the company to dominate the automobile industry (Albaum, Albaum, & Duerr, 2008). However, the competition began to become a significant problem due to entrants like BMW, Nissan, Toyota, and Hyundai. To gain a competitive advantage, VW started to add new models like a phantom to its product line to separate its products from those of the competitors (Albaum, Albaum, & Duerr, 567).
Question 2
When VW initially entered China in 1985, it supplied the market by exporting its automobiles (Albaum, Albaum, & Duerr, 566). After establishing a sharp brand image, the company began exporting fewer products allowing it to assemble and produce its automobiles in China. During this period, the Chinese government gained a deep interest in the automobile market, leading to the establishment of a policy to provide developmental and financial assistance to the existing companies. In an attempt to kick out foreigners, the Chinese government increased tariffs (Albaum, Albaum, & Duerr, 567). The government also devised a rule that required any foreign company wanting to operate in China to have a native partner. Adapting to these changes, VW hose its partner’s wisely since it started choosing entities sponsored by the government to build positive relationships with the authority. In this case, VW made a wise decision because it sustained its operation in China.
Question 3
Volkswagen needs to make a steady market to maintain a market share to stay competitive in the automobile industry. Since competitors in the Chinese sector have reduced the price of products, Volkswagen also needs to lower its costs while maintaining its productivity level to remain in the market.
Question 4
As a luxurious car, the Phantom has numerous benefits, including the significant goal of productivity. Producing big and luxurious car such as phantom changes the images of the company. Although the Phantom does not make money in China, selling it, there is still useful as it builds the brand image of Volkswagen (Albaum, Albaum, & Duerr, 567). In other words, VW can use the Phantom to advertise its name and increase its brand recognition, which leads to a potential increase in sales.
Question 5
Volkswagen can expect benefits such as competitive advantage, brand recognition, increased market share, and profitability from promotional activities.
Eli Cheesecake Company
Question 1
Two factors have promoted Eli’s successful web initiative. They include the company’s promotional activities and its dessert quality within the industry.
Question 2
The company operates with one product: – Cheesecake sold in bulk to large customers. This activity makes Eli a medium-sized company within the industry. For promotional services, the internet will suit this type of business compared to traditional methods like newspapers and television (Albaum, Albaum, & Duerr, 566). The internet, being the common medium for advertising, can be suitable for the company due to its reduced cost. Since Eli resembles a large company, using the internet and social media platforms will suit its marketing budget.
Question 3
Eli’s Cheesecake has apparent objectives that are similar to those of large conglomerate. They may share goals such as making profits, attract employees, provide excellent customer service, and stay on top of the industry.
Question 4
Eli seems to have adapted on a long-term than short term approach in terms of business objectives. The company is guided by four principles: – quality services, excellent relationships, new product range, and changes in consumer taste. These principles indicate that the firm is committed to operating permanently in the market.
Question 5
When choosing a channel for expansion, Eli should consider direct selling, suppliers, and retailers. It is because Eli only provides Cheesecake as its primary product.
Question 6
Eli Cheesecake can identify potential new markets by participating in domestic and international trade shows. The company can also consider using the internet and social media to attract new customers.
Question 7
Eli can also find potential new distributors or large customers by attending national and global trade shows. These events provide a chance to display the company’s products to many people. Eli could also take part in sponsorship in international sports like the Olympics and World cup. These events can help in creating brand awareness.
Question 8
Eli has established itself as a top among its competitors within the industry. Because of this, the company has created an image that joint ventures or overseas production facilities would distort. Therefore, it should not consider these approaches.
Question 9
The present web page will not be adequate for the next several years due to the constant improvement of the internet. There is a possibility that internet-based applications used today will become outdated in the future. Therefore, for the present page to be adequate in the coming years, the company needs to make constant improvements to catch-up with the technology.
Question 10
Ely should consider expanding its product line to remain competitive in the market. One possibility is to adapt the idea of a specialized cake and introduce it beyond promotional events. The advantage of introducing a new cake is that Eli will gain a competitive advantage and extend its profitability. However, the disadvantage of launching this product is the risk of losing investment in case it does not sell.
Hewlett-Packard
Question 1
HP was not wise in trying to make significant changes simultaneously because it lacked adequate planning. Due to a lack of proper planning, HP did not succeed in its comprehensive reformation. In other words, HP did not develop a cohesive strategy before attempting to make changes, indicating a lack of wisdom.
Question 2
The restructuring of HP in the year 2000 made the company incur both internal and external complications. Due to this re-organization, corporate customers found it hard to contact the firm because they were not sure of whom to contact for help. Re-organization also led to misinformation. Sales agents started to misinform customers about the costs of products.
Question 3
Given the situation of HP, pointing out the fundamental factors affecting the organization’s change was the transparent approach, Mr. Hurd ought to have taken in his first discussion with customers and salespeople. The two parties are the backbone of the company.
Question 4
HP’s new structure appears to be appropriate after restructuring. The new organization forms three groups: Personal systems, imaging and printing, and technology systems. These groups can strengthen market leadership through operations, sales, marketing, and research development.
Question 5
Considering the present business environment, HP’s further actions appear appropriate due to a constant change in the business environment.
Work Cited
Albaum, G. S, G Albaum, and E Duerr. International marketing and export management. London: Pearson Education, 2008.