Abstract
The purpose of this paper is to clarify how business models are localized and how they evolve through that process. In order to clarify this issue, we looked at the case of Nestle Japan's Nescafe Barista and used this case as an illustration for our discussion. In other words, we are aiming to clarify how business models originating from head offices overseas are tailored to the needs and circumstances of Japan and adapted to local conditions (i.e., localized) to achieve further success, by looking at the case of Nescafe Barista, a very successful recent case of this approach. In this paper, we presented details of Nescafe Barista and discussed the following points: (1) Localization comprised two aspects: the products and the business model. (2) The local unit (Nestle Japan) adapted the business model from one based on instant coffee to one based on an appliance (the Nescafe Barista coffeemaker). (3) Localization of the business model required that characteristics of meta-national management be incorporated into a global matrix organization, and that during the localization process, the local unit be given a lot of freedom to determine not only the products it would sell, but also the business model it would employ. Specifically, the local unit needed to exercise strategic initiative and negotiate with head office on product development and other aspects of business. Furthermore, to carry out such negotiations successfully, the local managers had to be creative and capable of logically persuading head office to approve their ideas.
