Final Dis Ti Nation

8/14/2019 Final Dis Ti Nation

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IntoductionThe first idea of establishing the company

In 1866 Vevey, Switzerland Nestl was founded by Henri Nestl

and is today the world's leading nutrition, health and

wellness company.

The Nestl Company was Henri Nestl's search for a healthy,

economical alternative to breastfeeding for mothers who could not

feed their infants at the breast. It's first customer was a premature

infant who could tolerate neither his mother's milk nor any of the

conventional substitutes, and had been given up for lost by local

physicians.

People quickly recognized the value of the new product, after

Nestl's new formula saved the child's life and within a few years,

Farine Lacte Nestl was being marketed in much of Europe.

Henri Nestl also showed early understanding of the power of

branding. He had adopted his own coat of arms as a trademark; in

his German dialect, Nestl means 'little nest.'

Since Henri Nestl developed the first milk food for infants in 1867,

and saved the life of a neighbors child, the Nestl Company has

aimed to build a business as the world's leading nutrition, health

and wellness company based on sound human values and principles

. The company has been in business for over 130 years

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http://www.nestle.com/


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Q 1 :Search for the code of conduct of any real world

organization.

Now a days Nestl with all its branches all over the world , hugefactories , a lot of employees , need to regulate itself and make a

reference for any single action or any problem that face managers

employees in their daily work. And like any successful corporate it

has a code of conduct which is" a formal written set of ethical

standards guiding an organizations actions" by which the company

has committed to the world wide.

Compliance with laws, rules and regulations

We respect the law at all times

Conflicts of Interest

We will always act in the best interests

of Nestl

Outside directorships and

other outside activities

We take pride in Nestls reputation and

consider Nestls best interests also in our

outside engagements and activities

Families and Relatives

Our hiring and people development decisions

will be fair and objective

Corporate opportunities

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We are committed to advance Nestlsbusiness

Insider trading

We respect and follow the Insider Trading

Rules when buying or selling Nestl securities

Antitrust and fair dealing

We believe in the importance of free

Competition

Confidential information

We value and protect our confidential

information and we respect the confidential

information of others

Fraud, protection of company assets,

Accounting

We insist on honesty and we respect the

Companys assets and property

Bribery and corruption

We condemn any form of bribery andcorruption

Gifts, meals, entertainment

We compete and do business based only on quality and

competence

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Discrimination and harassment

We embrace diversity and respect thepersonal dignity of our fellow employees

Failure to comply

We will consult the Code, comply with its

provisions and seek guidance where needed

Reporting illegal or non-compliant conduct

We take responsibility for ensuring that

we all act with integrity in all situations

Every conduct from the previous ones is mentioned in Nestl 's

Website in long details and AS I said it is a reference for allemployees and managers including the companies ethical values.

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Q 2 : use the company's website and code of conduct to

identify the mission statement , vision statement , values and

key objective Nestle 's mission:

Mission:

Nestls long term success depends on the water resources and if it

will exist in the future. It is concerned about the future of water in

the world.

The company recognize that effective water resource management

is essential to create shared value for itself and society in the 21st

century.

Nestl relies on having clean water to make quality products. It has

adopted a restricted standards to reduce consumption of water.

The Agriculture uses two thirds of the worlds available fresh water,so Nestl support programs that teach it's suppliers a better ways

in how to use water and not to lose it.

Nestl is supporting the water resource awareness and the

education that it has programs to teach consumers, and the

children everything about the value of water . The company also

participates in global dialogue on water with the government and

the management issues with leading experts and policymakers.

Nestl says : " Since 1997, we have almost doubled our food

production while reducing our water consumption by 29 percent"

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Nestle 's vision:

The company's vision is represented in focusing on the research and

development sector. The vision of Nestl R&D is long term It has 27

research, development and technology facilities worldwide. Without

its R&D Nestl could not have become the food industry leader in

nutrition, health and wellness.

R&D is also critical in ensuring regulatory compliance of all Nestl

products. Nestl is able to launch new products quickly and

efficiently, in countries all over the world, by integrating regulatory

affairs in all its R&D activities, from start to finish.

Also the future of food will be driven by science , so that the

company taking care for the nutritionist side in making the food.

Nestl R&D is translating nutrition and food science in two ways:

From consumer needs into research priorities

From emerging science into consumer benefits, and services.

Nestle 's values:

Nestl is committed to the following Business values in all countries,

taking the account of local legislation, cultural and religion:

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Nestl's business objective is to manufacture and market the

Company's products in such a way as to create value that can

be sustained over the long term for shareholders, employees,

consumers, and business partners.Nestl does not favor short term profit it prefers long-term

business success.

Nestl recognizes that its consumers have a sincere and

legitimate interest in the behavior, beliefs and actions of the

Company behind brands in which they place their trust, and

that without its consumers the Company would not exist.

Nestl believes that, as a general rule, legislation is the most

effective safeguard of responsible conduct, although in certain

areas, additional guidance to staff in the form of voluntary

business principles is beneficial in order to ensure that the

highest standards are met throughout the organization.

Nestl is conscious of the fact that the success of a

corporation is a reflection of the professionalism, conduct and

the responsible attitude of its management and employees.

Therefore recruitment of the right people and ongoing training

and development are crucial.

Nestl continues to maintain its commitment to follow and

respect all applicable local laws in each of its markets.

Nestl calls this commitment Creating Shared Value and she focus

her efforts in three key areas:1. Nutrition 2.water and 3. rural

development. Those areas are core to our companys business

strategy and essential to creating a healthier world in the 21st

century.

Nestle key objectives:

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Nestl's corporate objective is to be the world's largest and

best branded food manufacturer, whilst ensuring that the

Nestl name is synonymous with products of the highest

quality.

the company has pursued a policy of expansion and

diversification through acquisition and divestment to achieve

a more balanced structure to the business

Nestle objective is to be recognized as the leader in Nutrition,

Health & Wellness and as the reference for financial

performance, trusted by all stakeholders.

Nestl is dedicated to a longterm strategy putting business

development above shortterm returns, meaning that they

have become a source of stability and economic growth in the

developing world.

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Q3 : Identify 2 main external stakeholders and 1 main internal

stake holder of the organization.

Internal stakeholder ( employees: (

As the success of any corporation is reflected from having

good employees , and putting the appropriate employee in

the right place , so a main internal stake holder is its

employees. Such as managers , nutritionists , doctors , and

employees working in various sectors.

External stakeholders (Costumers: (

who are the most important external stakeholders for any

company , who consumes Nestle's products in r eturn of profit

and are from different ages , children , teenagers, mothers ,

and old people around the world.

External stakeholders (Distributers: (

this is the second external stakeholder which comes after

having the finished product to distribute it by distribution

centers and retail customers and Grocery distribution ( IGD. (

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Q 4 : Explain the way the organization understands its

responsibilities towards the aforementioned stakeholders and

the strategis it employs to achieve their objectives.

a(Employees The responsibilities of Nestle toward employees

from the internal environment are:

Listening and responding to employee viewsby running

structured workshops to help translate opinions into action.

Nestls overarching principle is that each employee should

have the opportunity to develop to the maximum of his or her

potential.

Believe that it is important to give employees the

opportunities for life-long learning.

All employees are called upon to upgrade their skills in a fast-

changing world.

Believe that by offering opportunities to develop the

employee, not only enrich itself as a company, also makeitself individually more autonomous and confident.

Employable and open new positions within the company and

enhancing this virtuous circle are the ultimate goal of their

training efforts at many different levels through the thousands

of training programs.

Helping employees grow in their personal capabilities on anongoing basis making turnover so low (less than 5% per year.(

Nestle development personal schemes by literacy training,

apprenticeship programs, technology, scientific knowledge

transfer and cultural programs.

Encourage continuous improvement through training and the

improvement of professional skills at all levels in the

organization.

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create a safe and healthy working environment for each

employee.

b) customers : The second element from the external

environment that I aforementioned of the stakeholders is

They want to win and keep customers and the final consumers

which have very different requirements.

Trade customers expect excellent service

correct information and timely delivery.

Consumers consider taste, appearance and price when they

make their choice.

Understand what consumers want and respond to their

expectations rapidly and effectively.

All expect value for their money good quality at a reasonable

price

Nestl shares societys concern for the environment and is

committed to environmentally sound business practicesthroughout the world.

Consumers are central to their business and they always

respect needs and preferences of them.

Nestl aims to create value that can be sustained over the

long term by meeting consumer needs for nutrition,

enjoyment, and quality they can trust.

Nestl is a consumer-driven company, and they tailor their

products to suit local tastes and desires in the 100-plus

countries where they present.

they are committed to listening to their consumers, and

interact with hundreds of thousands of consumers per year

through their consumer hotlines, websites, Additionally, theyare committed to meeting consumer preferences, and they

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carry out extensive consumer testing on their products to

make sure that consumers will prefer their products to those

of the competition.

Communication with Consumers: Nestl is very conscious of

its role in communicating responsibly to consumers,

particularly as it influences following a healthy diet and

lifestyle. They are particularly sensitive to the need to help

children develop sound dietary habits.

Nestl responsibility toward children through moderation in

food consumption, and not encourage over-eating and theywould show children in healthy energetic pursuits and avoid

the portrayal of an inactive lifestyle. Nestl take care of

children by advertise them about unsafe situations nor

encourage them to accept invitations from people they do not

know

Nestl responsibility towards consumer communication is

congruent with healthy, balanced diets. their advertising is

not imply the replacement of meals with indulgence or snack

foods, nor encourage heavy snacking.

Nestl consumer communication about health benefits of

products must have a sound nutritional basis.

Nestl consumer communication should not exploit violence,

bad manners, or profanity. Its content must reflect good taste

in a given country and culture. It should not depict attitudes

that are discriminatory or offensive to religious, ethnic,

political, cultural, or social groups.

Regarding advertising placement, it is against our principles

to sponsor television and radio programs or magazines whose

strategy for attracting viewers or readers relies on exploiting

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violence, sex, or encouraging offensive behavior toward

others.

Nestl consumer communication should not portray

competitors products inaccurately, nor denigrate them.

c) Distributers:

We know that there are a lot of elements in the internal

environment, and one of them that I identified

aforementioned is distributor, and Nestle organization

understands its responsibilities by transporting the products

to distribution centers and retail customers "ensuring that

they reach their consumers safely and efficiently". and they

improve new ways to reduce the impact on the environment

such as fitting road-friendly suspension and low-rolling

resistance tires and, of course, purchase the most efficient

equipment available, so they are working with the Institute of

Grocery Distribution (IGD) to find ways to reduce distribution

impacts, in particular through a collaborative distribution

initiative, led by the IGDs Efficient Consumer Response (ECR)

program , through which Nestl partners with customers,

suppliers and competitors to utilize vehicle fleets in the most

efficient way. They focus on the Efficiency in transport

So they began to regionalize their delivery network which has

optimized central planning and local delivery and reduced the

distance of their products travel by ensuring that their lorries

carry more stock and reducing their annual travel so they

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have introduced new double-decker trailers for some routes

which carry more pallets per load.

"Their packaging is reverse engineering". This means that

they calculate the dimensions of each of their packagingtypes to maximize the number of packs per case and the

number of cases per pallet, so they maximize the number of

pallets transported and reduce the total number of trips.

They always look for ways to improve the use of fuel in their

transport and monitor the fuel consumption of individual

vehicles carefully. Special devices on their lorries are

designed to promote the complete burning of fuel in the

engine and the lorries that they purchase are bought with fuel

efficiency.

AS FOR THE STRATEGIES THAT NESTLE'S COMPANY IS

FOLLOWING:

They see that the most important thing for the business to be

successful in the long term, it must create value not only for

its shareholders but also for society.

Focus on their efforts at three key areas: nutrition, water and

rural development. Those areas are core to their companys

business strategy and essential to creating a better and

healthier world.

Believe that to achieve their strategies, they must go beyond

a commitment to complying with laws, sustaining theenvironment and conserving energy.

Developing healthier and more affordable foods and

beverages for consumers around the world;

Reducing water use, working with farmers to improve their

use of water resources and strengthening rural access to

clean water and sanitation.

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Helping rural communities grow by helping their suppliers

enhance the value and quality of the product.

Communicating reliable environmental information to

consumers in a meaningful and straightforward way.

Water treatment plant that gives direct benefits for their

business.

The companys commitment to working directly with farmers

in rural development is central to its business strategy, to

ensure a stable, high quality and safe supply of agricultural

raw materials.

Nestl supports the charity by redistributes indate surplus

food from the food and beverage industry to homeless and

vulnerable people via community organizations.

Nestl focus on long-term considerations is only possible if

the company is successful in the struggle for short-term

survival. This is why Nestle strives to maintain a satisfactory

level of profits every year.

Q 5 : (MERIT) Explain how the above company or its

managers are responding to the challenges they face in

terms of managing

A) The competitive advantage:

Nestl, like any other corporation,fights hard to remain competitive.

It has taken a long-term view of its business development - contrary

to many of its competitors.

Nestl has four clear competitive advantages, which are the envy of

our competitors. The first is it's portfolio of products and brands.

Nestl are the only food manufacturer who is capable of

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accompanying someone throughout his or her entire life, from

morning to night of every day. The Second competitive advantage is

it's research and development capabilities, that No other company

in this industry have 23 research centers, as Nestle do. No one is asnetworked with universities and other research as she are. Thirdly, it

has branches around the globe. For Nestl, presence is more than

simply being there, it makes many years of experience in sales, in

local production, and depth knowledge of its markets. Nestl fourth

and most important competitive advantage is the workforce. Nestl

value and appreciate the 280 000 men and women who work for it,

those who represent talents and give value to the company.

Also

For a company to be able to face the competitive challenge it

should take care of many important and major things ,such as its

consumers , innovation, in order to develop the quality of its

products and try to work efficiently by having high quality with less

cost and raw materials.

Consumers:

The customer comes first

Nestl wants to win and keep customers: distributors,

supermarkets, hotels, shopkeepers and the final consumers. As they

have very different requirements. And all of them expect excellent

service, and a correct information and timely delivery. Also the

consumers consider 3 things taste, appearance and price when they

are making their choice .So the company's task comes to

understand what consumers want and to respond to their

expectations in a quick and effective way. All of Nestl cosumers

expect value for their money ,good quality at a reasonable price.

Nestl says : Consumers are central to our business and we must

always respect their needs and preferences.

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Quality:

We live in a competitive world and must never forget that

consumers have a choice. If they are not satisfied with Nestl

products, they will choose another brand. Nestl's goal is to provide

value in every product and market sector in which it compete, but

focusing on the quality and ignoring the price is not a guarantee for

success, the lasting competitive advantage is gained from the

balance between the quality and cost , by improving the quality and

reducing the cost.

In order to be able to give this quality and safety assurance, Nestl

developed a Quality Management System, which collects the

experience of the Research & Development sector, on which it

spend CHF 800 million a year.

Innovation:

Innovation is one of Nestls key competitive advantages. We have

more than 140 years of research, development and scientific know-

how. While there is a great deal of pure and applied science

research that takes place in our global R&D centers, Nestl ensures

that the consumer, and the consumer benefit, remains at the core of

all our activities.

Open Innovation

Opening the door of innovation has helped to create popularly

positioned products (PPP) for emerging consumers around the

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world. For several years Nestl has been working with researchers

and designers to develop new products and branch out to new

audiences.

Example of Innovation in the past 140 years

1938Nescafe - The first drinkable instant coffee

Key consumer benefits:Taste and Convenience

Present

The last years of the 20 century saw a change in Nestls business

strategy. The company moved from being a technology led

company that produced convenient, tasty foods and beverages for

sustenance, to being a science driven, nutrition, health and wellness

company.

Affordable fortified milks

Key consumer benefits: Affordable nutrition

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World-wide, malnutrition in children includes micronutrient

deficiencies in iron, iodine, vitamin A and zinc.

Maggi noodles: Less fat, less salt same great taste

Key consumer benefits: Health (Weight management(

Experts working at the Nestl R&D centre in Singapore identified

two conflicting demands: consumers wanted healthy foods, but they

also wanted noodles with the same salty and fried taste. A new

recipe was developed that replaced part of the sodium with

potassium. Additional ingredients were also added to enhance the

taste of the remaining lower salt level.And totally new drying

process was developed to replace the frying method.

In the future

Reduction in environmental impact of

packaging

Key consumer benefit: Lightweight packaging

Nestl is committed to reducing the

environmental impact of packaging without

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jeopardizing the safety, quality or consumer acceptance of its

products

Personalized nutrition Getting to know the consumer

better

Key consumer benefits: Health

In the past Nestl has segmented the consumers by their age and by

their taste. Today she knows more about consumers, their desires,

physiology and nutritional requirements . By learning more about

individual groups or sectors of society we can tailor our products to

meet exact needs.

Nestle says about pricing if it limits it's competitiveness?

The value we create justifies higher prices, which our customers

accept. If we can make our procurement, production and sales

operations more efficient than those of our competitors, we can

keep the competitive advantages on our side. Nestl must focus on

innovation, and production and sales Nestle want to bring minds

and hands together.

In my opinion:

Any company must watch and learn from it's competitors. If they do

something better, the company must improve it's own

performance. it can also achieve competitive advantage through

using competitors mistakes to make the right choices.

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B ) The effects of globalization:

As a multinational company present in more than 80

countries with over 265,000 employees Nestl is able to gain

from obvious global benefits. Although it is ass Swisscompany, general management represents nine different

countries, and less than 2% of our sales are generated in

Switzerland.

Nestl also believes strongly in decentralization and has

always strived to centralize where it can.

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Thinking globally - acting locally

In spite of globalization, food remains a local business, based

on local cultures, tastes and habits. As the early Nestlpioneers knew very well, it is absolutely vital today to stay

close to consumers around the world, and to develop

relevant, added-value products to meet their specific needs.

Therefore, you'll get a different taste of Nestl in each of the

countries where we sell products.

Product Technology Centers (PTCs:(

each aligned with particular Nestl businesses to provide

expertise for specific product categories, and together forming

a hub for global product and process development.

Research and Development Centers (R&D Centers:(

working in close collaboration with the Product Technology

Centers to meet regional R&D requirements and provide input

to local application groups.

Application Groups:

these are located in Nestl factories and ensure that products

comply with local taste preferences. They also work closely

with the R&D centers and the Product Technology Centers to

test scientific applications as close to the end consumer as

possible.

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C) Information technology:

Nestl sees that the most important way to responding to

challenges of information technology by focus on internet market as

follows:

Nestl S.A and Danone Group, world leaders in the food

industry, are to set up Europe's first Internet market-place for

e-procurement in the consumer goods sector.

Nestle is using CPGmarket.com that enhance the efficiency oflogistics while at the same time reducing procurement costs

for businesses producing, distributing and selling consumer

goods.

Nestl cuts supply costs through automated processing of

orders and sales. Buyers and suppliers will be able to place

orders on catalogue offers, call for bids and participate in

auctions.

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They will also have access to sourcing services for raw

materials and packaging, as well as capital goods and

services.

Participants will benefit from a more efficient market andlower costs through higher transaction efficiency and

simplified procedures.

Services through CPGmarket.com may later be extended to

allow links between all parties involved in the production and

marketing of a product at every stage from market surveys to

logistics, planning and forward management.

For Nestle this is a significant step forward in the process of

using new technologies to support our purchasing efficiency.

It is also part of our overall 'business-to-business' and

'business-to-consumer' internet strategy

Swot analysis

Strengths

Their first strength is that they have a great CEO, Peter

Brabeck. Brabeck emphasizes internal growth, meaning he

wants to achieve higher volumes by renovating existing

products, and innovating new products.

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Nestle is a global food producer , which is located in over 100

countries. And it is the largest producers of food products ,

it's sales reached the number of $ 101 billion.

Nestle is the world's largest bottled water company.Nestle provides brands and products with high quality ,these

brands such as: Lean Cuisine , Yoplait , Maggi , Haagen

Daze ,Stouffer's , Boost , Dibs , Hot Pockets.

Chocolate and Candy : Kit Kat , Toll House, Butterfinger ,Baby

Ruth , Crunch Bar , the Willy Wonka Candy line.

Pet products : Purina , Alpo, cat chow .Fancy Feast ,

Friskies,tidy Cat.

Drinks: Carnation ,Perrier , Nesquik , S.Pellegrino , Nescafe,

Coffee Mate , Taster's Choice, juice.

General Mills : Subsidiary which makes Betty Crocers,Bisquik,

Hamburger helper, pillsbury, old El paso ,cereals. Fruit snaks ,

frozen pizza,canned soups,frozen fegetables,ready made

frozen meals.

Gerbar: baby formula, prepared baby foods for infants ,

toddlers and preschoolers.

These Professional brands sold to restaurants ,

colledges,hotels.

The company's successful due in part to their ability to keep

major brands consistently in the forefront of consumers

minds.

Strong R&D Team:

They have a great research and development team. James

Gallagher and Andrea Pfeifer were the masterminds behind

the research on the La-1 cultures in the LC-1 yogurt. They

were also the two that decided on selling LC-1 as a functional

food. This enabled Nestle to position the product in a way thatdifferentiated it among the other products in the market

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Weakness:

The main weakness of the LC-1 division of Nestle is that they werenot as successful as they thought they would be in France. The

launch in France was in 1994, but since the late 1980s, Danone had

already entered the market with a health-based yogurt.

The second weakness is that LC-1 was positioned as too scientific,

and consumers didnt quite understand that LC-1 was a food and not

a drug.

Little Differentiation between Nestle Brands

They have Too Much Products distract from Core business

they also have Large Workforce Difficult to Manage

Subsidiaries companies Difficult to Manage

Rising Prices of Raw Materials

Opportunities:

Nestle opportunity that it has health based products which

are becoming more popular in the world.

Expansion - The company has the potential to expand to

smaller towns.

One of the daily mirror report shows that 30% people of UK

are random soft drink user. So Cadbury has a huge

opportunity of increase their market share of beverage sector.

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Because of their huge market share they can provide credit

card facilities to the customer.

They can launch new varieties of food in market. Like: Bread,

various Ice cream etc.

Threats

One of their major threats is their strong competitors.Although they have the biggest market share

.One of their major threats is their strong competitors.

Although they have the biggest market share but

competitor like NESTLE, MARSH can beat

conclusion

The Company's strategy will continue to be guided by several

fundamental principles. Nestl's existing products will grow through

innovation and renovation while maintaining a balance in

geographic activities and product lines. Long-term potential will

never be sacrificed for short-term performance. The Company's

priority will be to bring the best and most relevant products to

people, wherever they are, whatever their needs, throughout their

lives, and to satisfy the growing need of nutrition, health and

wellness that food and beverages can bring.

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