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Nestle's Business Strategies

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With regard to the attached article, I need some help answering the following questions.

1) What kinds of business-level strategy is Nestle pursuing here? Explain.

2) What kinds of competencies do its CEO and managers possess that allows it to pursue these strategies and how do we know this?

3) In what ways may its strategies allow it to outperform its rivals such as Kraft and General Mills? Explain.

Any opinion, detail, or reference to other sources will greatly help for my expanding on this for a project.

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Kindly rate 5/5 for my notes and quotes:

1) What kinds of business-level strategy is Nestle pursuing here? Explain.
Nestlé's cost management is its major area of strategy triumph, I feel. The article reveals how Bulcke employed a clever (but risky in my opinion!) technique to leverage commodity prices and seek stability in his "...a strategy that doesn't depend on commodity prices falling. In order to reduce operational costs, he increased prices and debuted higher-margin, upscale products, where "...which raw material costs account for a smaller portion of the retail price."

In addition, they also minimize the impact of commodity prices by creating premium products.

I also see a major benefit in their ability to diversify their products beyond chocolate and coffee since "...Nestlé in Europe is rolling out ...

Solution Summary

Specific evidence is given from the article to demonstrate the business-level strategy from Nestle. An attached article is assessed.

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See Also This Related BrainMass Solution

How to Apply Different Business Strategies

Use your target organization and one other organization of your choice. For each organization, choose one of the eleven business strategies and provide both the definition of the strategy and an example of how it is applied in the organization. Use the form as displayed in the attached document and identify an example other than those provided in the book.

Strategy // Definition
Forward Integration // Gaining ownership or increased control over distributor or retailers
Backward Integration // Seeking ownership or increased control of a firm's suppliers
Horizontal Integration // Seeking ownership or increased control over competitors
Market Penetration // Seeking increased market share for present products or services in present markets through greater marketing efforts
Market Development // Introducing present products or services into new geographic area
Product Development // Seeking increased sales by improving present products or services or developing new ones
Related Diversification // Adding new but related products or services
Unrelated Diversification // Adding new, unrelated products or services
Retrenchment // Regrouping through cost and asset reduction to reverse declining sales and profit
Divestiture // Selling a division or part of an organization
Liquidation // Selling all of a company's assets, in parts, for their tangible worth

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