Nestl Tries for an All-for-One Global Strategy Case Study

Nestl Tries for an All-for-One Global Strategy - Case Study Example Decentralisation could best apply in different situations, but as organizations grow and establish more branches in different areas, numerous problems arise. Establishing individual organizations could need a lot of infrastructures, and capital to conduct operations in any decentralized system.   For Nestle, the decentralized strategy had created inefficiencies and accrued extra costs, which hindered the company from fully realizing its profits and competing through electronic commerce (â€Å"Nestlà © Struggles,† itu.edu). From this, the company was exposing itself to potential external threats, such as its shared global suppliers, and competitors. Even with the huge investment on numerous computer and information system resources, decentralization gave room for inefficiencies, more expenditure, inventory mismanagement, distributed decision making, operation complexity and data isolation that prevented data sharing, due to the differences in Information Systems, and lack of a standard platform. It was obvious that the company was not receiving the exact benefit that could come with information systems.   Due to the differences and challenging experiences in the global market, Nestle SA had to act towards business integration and consolidation, so as to allow standardization and coordination of its business processes and information systems (â€Å"Nestlà © Struggles,† prenhall.com). The company embarked on a global implementation of SAP R/3 ERP software, which intended to replace the SAP R/2 version that had been operating in most of the local organizations. Through the introduction of the software, the inefficiencies and accrued costs would be cutback, in the long run, to allow the company realize its full benefits.