Nestlé-Rowntree

The strategic value of this deal comes from Rowntree’s brands and presence in markets and segments in which Nestle has not been strong. These are
• Rowntree’s strong position in the growing countlines segment.
• Strong presence in non grocery outlets
• Strong brands in UK and continental Europe.
It should be noted that none of these value propositions will be impacted because of organizational or operational changes in the Rowntree. Hence the success of the deal depends solely on the high degree of strategic integration between the two companies. Organizationally the two companies are very different but there is no strategic need to keep the two organizations separate. In fact if the two organizations are left separate, it will cause long term growth problems for Nestle (Unlike Rowntree, it always had a strong country management). Hence full integration of the two firms is the most appropriate action in this case.