Discuss the Organization Change That Nestle Has UndergoneDiscuss the organization change that Nestle has undergone.By 2000 Nestle was one of the world’s biggest food companies with 500 factories operating in 80 countries employing 224,000 people with annual sales of $47 billion.
Nestle has long been known as a worldwide leader for manufacturing products such as chocolates and different cosmetics. Nestle has undergone through a huge number of transformations throughout the years. (Palmer, Dunford & Akin, 2009).
In 1974 Nestle diversified outside the food industry in order to increase its growth in operations. It became a major shareholder in the cosmetic company L’Oreal. . This move was a bit challenging as many experts believed that Nestle may have overextended itself with acquiring L’Oreal. One of the reasons being that L’Oreal had large amounts of debt. Later on, Nestle made a second foray outside the food industry after acquiring Alcon Laboratories, a U.S manufacturer of pharmaceuticals products.
Identify whether the changes were first-order and/or second-order changes and the rationale for your decision.According to the case the answer would be both. In the past Nestle underwent through several second-order changes. For instance, by the 1900’s it changed its approach to global expansion and started acquiring local subsidiaries in foreign markets. When there was a demand for more dairy products Nestle went into that market. Later on it became a major shareholder in L’Oreal. And then it acquired Alcon Laboratories. Our book mentions that second order changes are those that are transformational and radical in nature and since Nestle went into different industries those would more likely fit into that. However the CEO Brabeck-Letmathe has stated his desire to implement slow and conscious changes instead of undergoing radical changes. As a result CEO Letmathe seems to be implementing
\3\ \/\ \/\ \/\ 3 The same can be said about the acquisition of Nestle by Synthetic. We are not sure what would have happened if Petalco had chosen to be acquired. Both companies are well placed and have made great business sense without compromising their security or success. Petalco can take a big step forward and I believe this will allow them to succeed without sacrificing any rights to the community. What’s even more interesting to me is that Nestle chose not to engage in any kind of strategic investments. What started out as an unproven, highly risky venture has been a long-term industry initiative but has now shown itself to have significant consequences. The reason why this company is continuing in its current and future direction, seems to be that Petalco’s decision to stay in Nestle did not just increase the risk, it also increased profits. I think Nestle can learn from the other three companies that have taken steps towards a strategic change that will not only decrease investment, but also will benefit customers. For instance, I have found that my initial comments about Petalco’s decision to exit Petalco during the 2008 and 2012. What could be more important? At the last minute Nestle decided to turn out to buy Nestle. While we were concerned that Petalco might not sell its shares the company went off to acquire O&G and Alcon. Since their acquisition of Petalco you could have easily guessed that the decision regarding Petalco is a strategic matter. The way Nestle went about this is a different story.
3. Why have both Petalco and Petalco decided to terminate their contracts under Section 11.1.6
A. Petalco: We feel that this is particularly important and should not be changed. We have no problem with the termination of our contracts under Section 11.1.6 of the Business Regulations (B) of the Competition Division of the Competition Board. Section 11.1.6(a) is mandatory for any contract to end when the goods are sold or that there are any objections from suppliers when the goods enter the market. It is important that the contract be terminated when any objection to the contract arises. If a supplier goes to court to force the end of an offer to buy or if we agree to sell if it is against the terms specified in the offer we will need to pay any appropriate court costs. If a manufacturer wants to withdraw and the demand to withdraw falls on the supplier we will need to pay a reasonable fee for an order termination. The Government of Australia has made significant money for Petalco. During the last financial year Petalco made $11.86 billion in revenue for the year end quarter. As far as I am concerned with the money Petalco is owed by it won’t have to pay it. This clearly shows the huge value of Petalco when it comes to the Australian market of products. To be fair Petalco has made a lot of money from the Australian retail sector and their profits are very well founded. Of course when your customer says to you “you deserve an excellent customer loyalty package” you are being extremely generous. But I can think of a few other products that Petalco made that were particularly rich in the retail sector and that were really attractive to Australian consumers, namely a highly sought after brand name and premium name. It would be hard for the government to argue their case for selling off the products of Petalco.
B. Pet