Nestle is a company that was established with the main goal of producing food products. The company has made several changes to enhance sustainability in the turbulent market. The first change was experienced when the company started to expand internationally. Several outlets were opened in foreign countries. This strategy was aimed at getting a large market share in the global markets. The company purchased subsidiaries abroad so that it could implement the strategy. The company started moving executive employees to the new subsidiaries after the introduction of foreign subsidiaries. The aim of this strategy was to enhance the improved efficiency of the employees of the company.
The management diversified from food production to the production of cosmetics as a strategy to improve on the growth of the company. This strategy was implemented in 1974, where the company established a strategic partnership with L’Oreal. The company also diversified further by purchasing Alcon Laboratories Inc. The new venture was aimed at entering into the pharmaceutical industry. Nestle continued to diversify by acquiring other firms. The management focused on investing in profitable businesses. The business units, which performed poorly, were sold, and profitable businesses were acquired. For example, the Carnation was acquired in 1984 after selling out non-profitable business units of Nestle. The company remained flexible in its global operations by divesting in profitable businesses. Nestle has continued to change its systems to fit the prevailing conditions in the market. Brabeck-Letmathe restructured the top management team of the company when he was hired as the CEO of the company. He sacked the top ten management employees of the company because he claimed that they were not performing properly. According to Brabeck-Letmathe, this strategy was created to strengthen the organization. However, this change was criticized because it was not necessary. The company was performing well, and there was no need of restructuring it.
The changes made by the management of Nestle Company are second-order changes. These changes were irreversible because the company had digressed from its core business into other businesses. As such, reversing the decision would be impossible. In addition, the company introduced strategies that are new, and that was totally different from the initial business idea. The management had to challenge the status quo of the company by adopting strategies to improve the performance of the company.
Nestle has focused on creating new business partnerships, acquiring other businesses, and adopting other strategies, which are profitable. The company had to close and sell the business units which were not profitable. Therefore, the changes made by Nestle are second-order changes because the company has done a total overhaul of the activities of the company. This is opposed to first-order change which applies the status quo of a company. In the first-order change, it is possible to reverse the decisions made by the company. It is evident that Nestle developed strategies which were risky because there were irreversible