Laws of Globalization and Business Applications †MyAssignmenthelp

Question: Discuss about the Laws of Globalization and Business Applications. Answer: Introduction: This is a Switzerland based food and drink company, headquartered in Vevey Vaud, Switzerland. The company is spread all over the world and considered as the largest food company in the international market. Nestle was founded in 1866 by Henri Nestle, Charles Page and George Page and rapidly spread over the world with its products which includes medical food, baby food, bottled water, tea, coffee, cereals and many more (nestle.com. 2017). Reasons behind selecting the organization are due to its international presence where cage model can be studied and the business innovation model applied by the company which will contribute in the study. As Nestle is an international business CAGE analysis can be done on their business. CAGE stands for culture, Administrative, Geography and Economy, as the company also requires reducing their distance in the target market (youtube.com. 2017). Netles cross cultural facilitates them to communicate their products to the target market. Companys market study proves to be important part of their business strategy to provide the desired products to the target market. The divide their target market into three part based on their products that are baby food for children, coffee for the adults and foods and beverages for mostly teenagers and adults. They have separate policies operating under different administration in different countries. On the geographical grounds, the company targets the developed countries and also the working class of the society to ensure their product demand. On to it, urban societies of the countries are the primary target of these countries to make maximum profit. T he working class is considered as the target as it best possible segment of the society that will avail their products. Business model is strongly related with the customer value. According to Teece (2010), business model is used to explain the customer value and the process used by the company to convert these values into profit. Hence, business model theory explains the development processes opted by the company for increasing customer value to increase the revenue generation (Bocken et al. 2014). Nestles business model innovation includes adaptation of shared value strategy replacing the traditional value chain, taking society into consideration. They have implemented Creating Shared Value Advisory Board and Creating Value Alignment Board for governance of their shared value chain and the companys sustainability and compliance. Example can be drawn from their Nespresso division, where they generate their revenue not from the coffee machine but from the capsules. On to it, they im plemented companies for making the coffee machines as they dont want to enter the household accessory industry. They give away the coffee machines for a comparatively low cost and charge for the coffee capsules comparatively high. This strategy is often considered as razor blade strategy as it was first proposed by Gillette where they used to give away razors at cheap rate and charged for the blades in a comparably high price. Nestle also adopted this during their business model innovation (Gobble 2014). Hence, more than one innovation in their business model can be spotted in a single business setting of Nestle. The company was founded by Jerry Baldwin, Zev Siegl and Gordon Bowker in the year 1971 as a coffee store in Seattle in America that used to sell roasted coffee bean. Since then, the company has came a long way and spread all over the world. They have also moved from just selling the beans to coffee beverages, smoothies, tea, baked goods coffee machines and many more (starbucks.com. 2017). Their story and the evolution over this short period of time is the primary reason for considering the company for studying their innovative business model. The application of CAGE framework in Starbucks international business strategy to reduce can be clearly spotted. These factors mentioned in the CAGE framework are sometimes overlapping and cant be distinguished from one another. Starbucks opted local adaptations for promoting their companies in the international market which is country and its culture specific. For instance, the company focused on its chic western image to get into the Chinese and Japanese market. Considering coping with the economic factor, they expanded to only the developed and few developing countries. Moreover, they focused on the major metropolitan cities of the countries (Ghemawat 2016). In order to reduce the political dilemma in the countries, the company modified their policy to pay premium prices for coffee beans from local farmers in Mexico and Peru as these countries uses environmentally friendly techniques. Finally, to reduce the geographical and administrative gap and problems, they partnered with some of the local business. On the other hand, excellent work of the strategic team of the company needs appreciation (youtube.com. 2017). Five innovations using business model innovation can be highlighted that are sustainable culture, customers experience, technological adaptation, ambiance creation and business is more than just coffee. The company changed their business model based on the operating market. They change their store ambiance based on the culture and their expectance and make them feel like home. The company also embrace new technology and uses it as the fro better serving their customers. Moreover, they offer more than just coffee depending on the cultural settings they are operating in that enables them to provide customers the lifetime experience for which they will revisit the store. To achieve this above mentioned innovation the company went through the four steps mentioned in business model innovation. In the initiation part, they had to examine their business mod el and identify the required changes. Ideation is the confrontation of business model with other business model models available, and this is how they find the required model in the target model. In the integration part, they build new model and verify its efficiency. The final part is the implementation of the new business model of which the outcome is in front of us. In short, they examined their existing business model, studied the target market from various aspect, drew the framework of the advisable business model required and finally implemented it in the market for the best revenue generation (Massa and Tucci 2013). References Bocken, N.M.P., Short, S.W., Rana, P. and Evans, S., 2014. A literature and practice review to develop sustainable business model archetypes.Journal of cleaner production,65, pp.42-56. Ghemawat, P., 2016.The Laws of Globalization and Business Applications. Cambridge University Press. Gobble, M.M., 2014. Business model innovation.Research-Technology Management,57(6), pp.58-61. Massa, L. and Tucci, C.L., 2013. Business model innovation.The Oxford handbook of innovation management,20, p.18. nestle.com. 2017.History. [online] Available at: https://www.nestle.com/aboutus/history/nestle-company-history [Accessed 29 Aug. 2017]. starbucks.com. 2017.starbucks. [online] Available at: https://www.starbucks.com/ [Accessed 29 Aug. 2017]. youtube.com. 2017.CAGE Framework. [online] Available at: https://www.youtube.com/watch?v=7FpUJaG7uMk [Accessed 29 Aug. 2017]. youtube.com. 2017.Business Model Innovation. [online] Available at: https://www.youtube.com/watch?v=B4ZSGQW0UMI [Accessed 29 Aug. 2017].