The paper 'Strategic Management - Nestle" is a good example of a management case study. Nestle is a global company dealing with food and drink. The company has its headquarters in Switzerland and is one of the biggest food companies in the global market. In 2014, Nestle was ranked to be position 72 in the Fortune Global 500. Nestle has various business units that specialize in specific categories and this paper is going to look at three of the company’ s business units which include PetCare, Coffee and Beverages and Chocolate and Confectionary.
These business units work with the company’ s research and development to guarantee that all the products and services of the company are in line with the needs of global consumers and align with the organization’ s objectives. Nestle Purina PetCare Nestle PetCare business unit goes by the brand name of Nestle Purina Petcare, which is a subsidiary of the company that deals with the production and marketing of pet food, treatments, and litter among other pet activities. The corporation under its Nestlé ’ s Friskies Petcare business established this unit of the business in 2001 through an acquisition of Ralston Purina.
According to the official websites, Corey (2010) notes that the unit is specifically dedicated to the pet industry and provides a wide range of products and services for pet owners around the world. Source of Sustainable Competitive Advantage Sustainable competitive advantage is what ensures that a business is able to thrive and make progress. In a market and industry characterized by competition, it is important for a business to have an edge over the competition. The pet care industry operates in a competitive market. For a business to have a sustainable competitive advantage, four factors have to be instituted or ensured and they include; valuable resources, rare resources, imperfectly imitable resources and non-substitutable resources. Valuable resources allow the business to improve its effectiveness and productivity.
However, various factors such as changes in consumer needs and requirements may make a business’ valuable resource less valuable. Rare resources are those that are not available to the competition. These resources prove difficult to possess or control and as such give the business an edge over the competition.
The competition must be unable to imitate or substitute these kinds of resources for them to be termed rare and a source of sustainable competitive advantage. Non-substitutable resources include ones that cannot be replaced by the competition or cannot be similarly produced and in the event, they are produced, the competition cannot get the exact value. In essence, these resources are irreplaceable. Nestlé ’ s Petcare business unit has strong research and development competencies that are the major source of sustainable competitive advantage. Through research and development, the business has managed to establish product lines that are innovative in the pet care industry.
For instance, in 2009 the company created a product for cats that acted as an appetizer food. The cat food named Fancy Feat Appetizers works on the pet’ s appetite and encourages better feeding habits. The same year, Nestlé ’ s Purina also introduced a brand of dog food that worked on the animals’ brain function and aids in digestion. Notably, the business has made use of research and development capabilities to make milestones in the pet care industry.
List of References
Black, J.A. and Boal, K.B., 2007. Strategic resources: Traits, configurations and paths to sustainable competitive advantage. Strategic management journal, 15(S2), pp.131-148.
Bourgeois, L.J., 2000. Strategy and environment: A conceptual integration. Academy of management Review, 5(1), pp.25-39.
Cartwright, S. and Cooper, C.L., 2012. Managing Mergers Acquisitions and Strategic Alliances. Routledge.
David, F. and David, F.R., 2016. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.
Gillespie, A., 2007. PESTEL analysis of the macro-environment. Foundations of Economics, Oxford University Press, USA.
Marks, M.L. and Mirvis, P.H., 2010. Joining forces: Making one plus one equal three in mergers, acquisitions, and alliances. John Wiley & Sons.
Mueller, D., 2003. The corporation: Growth, diversification and mergers. Routledge.
Reed, R. and DeFillippi, R.J., 2009. Causal ambiguity, barriers to imitation, and sustainable competitive advantage. Academy of management review, 15(1), pp.88-102.
Rouse, M.J. and Daellenbach, U.S., 2004. Rethinking research methods for the resource‐based perspective: isolating sources of sustainable competitive advantage. Strategic management journal, 20(5), pp.487-494.
Salter, M.S. and Weinhold, W.A., 2009. Diversification through acquisition: Strategies for creating economic value. Free Pr.