Nestlé Presentation

Aslı BildikMelih ZerenHanife Armutİlkan GençDeniz Niyazi

Industry AnalysisFood Processing Industry

CanneryMeat ProcessingPackagingetc.

From raw to processed foodsLengthening shelf lifeHygiene and health standards

Big market with major rivals•Intense competition

Dieting & ObesityAllergensQuality IngredientsIncreasing demand for Organic/Health Products

Largest food company in the world

Core competency for Nestlé:Health, Nutrition & Wellness“Good food good life”

Economics of scale is a good advantage

Products are sold to wholesalers or retailers for distribution

End consumers aimed(Individuals)

Nestlé

Nestlé Corporate and organizational culture

- Different stakeholders’ expectations and interactions with

the company and with each other shape the culture of Nestlé.

- Fairness, honesty and concern for people

- Respect for diverse cultures, and developing long term relationships with suppliers and customers.

- Commitment to a strong work ethic,integrity, honesty and quality

Flexibility

Stability

External focus

NESTLE CULTURE

Internal focus

Clan- family type (collaborative)

Adhocracy(creative)

Hierarchy(controlling)

Market(competitive)

Creative Culture : -less functional barriers -team working -risk taking -encouraging innovation and flexibility - employee can take initiative - opennes and curiosity for market trends

Market Comptitive: - profit-priented business - expanding market share -result-oriented and competition - market research to reduce uncertainty

Nestlé Corpoarte Strategy

- Expectations and needs of consumers affect business strategy and operations

- Strengthening their leadership in the global market is key element of their corporate straregy

- series of strategic business units based around geography and product.

-‘CREATING SHARED VALUE’ -

Differentiation Strategy

-renovation and innovation of the Nestlé product lineex: FIRST infant formula, Farine Lactée spread chocolate, Chokella instant coffee, Nescafé chocolate powder drink, Nesquik coffee creamer, Coffee Mate coffee mix, Nescafé 3 in 1

-

the largest R&D network of any food company in the world; with 32 R&D centers and over 5,000 people directly involved in R&D

- market resarch to provide deep consumer understanding to create and deliver products, systems and services that its competitors cannot -Nestlé uses product differentiation strategy rather than cost-leaderhip. Why? Product Quality and Reputation

- the largest R&D network of any food company in the world; with 32 R&D centers and over 5,000 people directly involved in R&D

- market resarch to provide deep consumer understanding to create and deliver products, systems and services that its competitors cannot -Nestlé uses product differentiation strategy rather than cost-leaderhip. Why? PRODUCT QUALITY AND REPUTATION

Acquisitions and joint ventures

• With the increase in competition, Nestlé has had to both acquire other companies and

be prepared to enter into joint venture ex: - alliances with Coca Cola and two Chinese companies(1993) - Nestlé and L'Oréal have two successful joint ventures(2009) -Nestlé and Colgate-PalmoliveCompany(2003)

MISSION AND VISION

• Mission : The mission of Nestlé nowadays – “Good Food, Good Life” – is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions and to put a strong emphasize that leadership is not just about size; it is also about behavior and trust earned over a long period of time by consistently delivering on promises .

Vision : Whether it is in terms of convenience, health or pleasure, it is committed to create trustworthy products, systems and services that contribute to improving the quality of consumers’ lives.

ORGANAZITIONAL STRUCTURE OF NESTLE

GLOBAL NESTLE

• Nestlé has a Board of Directors, led by Chairman Peter Brabeck-Letmathe, who was the former Nestlé CEO.

• The Nestlé Group is managed by geographies (Zones Europe, Americas and Asia/Oceania/Africa) for most of the food and beverage business.Globally managed businesses

• Vertical oraganazition structure

- Its global center office is in Switzerland but it is not Swish company but it is a worldwide company in a sense that Nestlé has about 250 000 shareholders, none of whom individually own more than 3% of the shares

NESTLE TURKEY

• the center of Nestle Turkey is in Maslak,İstanbul.

• Gebze: distributing center• Karacabey ,Bursa: manufacturing center• Horizontal oraganazition structure

SWOT ChartStrengths Weaknesses

Unmatched product and brand portfolio

R&D capabilities

Distribution channels and geographic presence

Competency in mergers and acquisitions

Brand reputation valued at $7 billion

Inability to provide consistent quality in food products

Weak implementation of CSR

Opportunities Threats

Increasing demand for healthier food products

Acquiring startups specializing in producing well-being products

Establishing new joint ventures

Food contamination

Trend towards healthy eating

Growth of private labels

Rising raw food prices

High

LowHigh

Many buyers Substitutes

High costsStrong brand name

Competitive marketLoyalty expected but prices with quality important Medium

Global firm/Easy to access local suppiersQuality hard to achieve

High

Major RivalsHuge industry/market

Suppliers all over the worldShareholdersCustomersDistributors(global-local)Advertising PartnersGovernments

Quality products for food-processing markets all over the world.

ShareholdersProducers Dairy, grains, palmoil, cacao, peanut, nuts, pistachio, etc.

Focused on “Quality” and “Convenience in market”

New Focus:“Health Conciousness”

Loyalty: 1st Chocolate Factory in Turkey, Private names(Chokella, Damak),Brands (Nescafe, Nesquick)5th most loved

Reailers/Wholesale“Bim” issueDistribution throughout country/world

End ConsumersQuality seekersNot children orientedHealth- concious

Main costs:DistributionProduction with qualityAdvertisement

Pricing higher than rivals but not extreme due to industy and substitutesPayments from wholesales to retailers/shopping malls, etc.

Nestlé first major multi-national to launch human rights white paper

Social Responsibility• Nestle’s education programs have reached 9 million people

•Nestle India supports local schools, themaintenance of public parks

and green belts.

•By changing the recipes of its products, it has eliminated

•75,000 tons of trans fat,

•15,000 tons of salt,

•638,000 tons of sugar

• Water Education Programme in India,

informed the farmers on the

proper use of water.

• Nestle provides rural farmers with

technical support via Chilli

Farming Project.A proud farmer from Kelantan, Malaysia, whose chillies

are used in Maggi chilli sauce.

Continual improvement of the environmental performance along the value chain

Packaging Source Reduction Program

Shift from corrugated container to shrink film

From twin to single sachet

Reduced cut off length

Nestlé tops global corporate responsibility survey

‘Transparency helps us address problems, and there’s no doubt it contributes to better interactions with external stakeholders.’

Janet Voûte, Global Head of Public Affairs at Nestlé

Challenges of Nestlé

Large Company

• Has issues about flexibility• Time lost through decision periods

Solutions:• Regional management empowerment• Glocalization

Supplier Issues

• Cacao going exstinct in the world• Natural diseasters such as flood• Primitive agricultural methods

Solutions:• Education to farmers• R&D about seeds and agricultural methods• Being prepared to crisis

Image Problems

• Child Labor Issue• Suggestion of privatization of water sources• Working conditionsAll above creating a very bad image

Solution:• Legal issues• Charity and Social Projects• PR projects• Better working conditions througout the world

Social Media Usage

• Not much effective in social media• Losing a channel for customer relationships• Even not having social media pages is better(!)

Solution:• Having more appropriate social media usage

Sources• http://blsciblogs.baruch.cuny.edu/mgt4880nestle/2013/04/03/nestle-industry-ana

lysis/• http://www.slideshare.net/arif587/management-of-change-a-study-of-problem-

and-challenges-in-nestle• http://blogs.position2.com/nestles-pr-crisis-management-nightmare• articles.castelarhost.comhttp://www.nestle.co.uk/• manuscriptservices.co.uk/extras/examples/nestle.pdf• http://www.nestle.com/• http://www.rankia.com/blog/mundodelaempresa/1110186-empresas-nestle-feeds

-the-world-in-english• http://en.wikipedia.org/wiki/Nestl%C3%A9• http://businesscasestudies.co.uk/nestle/doing-better-by-the-environment/ways-in

-which-nestle-is-doing-better-by-the-environment.html#axzz2oQrqLiZX

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