This paper critically evaluates the international strategy of the Nestle Waters. The paper deals with different theories such as Porter's five forces, SWOT analysis, Hofstede's four cultural dimensions, Hill's pressures for local responsiveness and cost reductions, the Integration-Responsiveness framework from Bartlett and Ghoshal, and various theories such as the psychic factor developed by Wiedersheim-Paul (reviewed by Johanson) and the Uppsala Model. It also provides some recommendation to improve Nestle Waters' strategy.
[...] Concentrate on one market Nestle has a lot of activities and cannot concentrate on one market. With new competitors all over the world, in particularly Coca-Cola, Nestle Waters will have to focus on the bottled water segment. Differenciation To promote its water, Nestle could advertise on the fact that some brands are Nestle because consumer sometimes do not know it and Nestle has a very good image all over the world because its product are well known and appreciated. Moreover, by increasing the research and development budget Nestle Waters could create new products such as flavoured water with different tastes. [...]
[...] The level of competitive risk This plan summarizes the risks concerning each player in the bottled water market, and particularly regarding Nestle Waters: a strong risk at the level of the customers and of the internal competition. The threat of new entrants Customers Suppliers Substitute Internal competitio n Porter's framework has repeatedly been challenged by other academicians and strategists such as Stewart Neill, also the likes of Kevin P. Coyne and Somu Subramaniam have stated that three dubious assumptions underlie the five forces: Buyers, competitors, and suppliers are not related and do not interact and collude. [...]
[...] It should be interesting to understand the strategies that Nestle adapt, in order to be the leader in its industry. What is Nestle's strategy? ‘Strategic management should be about developing tools to ensure success. Grant (1998) suggests that there are four factors which are parts of strategic management. First are goals that are simple, consistent and long term. Second is rooted in a profound understanding of the competitive environment. Third, the strengths and weaknesses of an organisation, fourth, and critical to success, effective strategy implementation. [...]
[...] But Nestle has a very good strategy, which gives a lot of freedom to the mangers and a good control from the headquarters. Nestle continue its growth by acquiring companies and created sources in developing countries, and changed its name to Nestle Waters. The group has 17% shares of the global bottled water market, in 130 countries and with 77 brands of bottled water. Culture impact Culture is a very important point in international business, and there is a model, Hofstede's four cultural dimensions, which gained considerable acceptance in international business studies and researches. [...]
[...] Nestle Waters had to adapt with this aspect, because Switzerland is a country with high masculinity and for example, Netherlands is a country with high feminity. This difference of culture can have a strong impact in advertising, managing, human resources, and employees' motivations. By adopting a local policy Nestle Waters can manage this easily. Nestle Waters have done a good job with culture, thanks to its entry mode, by acquiring companies since the beginning they tried to adapt successfully to new markets. [...]
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