1. Behind the Scenes: Nestlé Carola Trinkle • Andrea Restrepo • Christine Lee Jason Schron • Jesse C. Vaughan May 2, 2011
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3. Strategic Analysis
4. SWOT Analysis Internal Environment Strengths : Strong reputation, largest global food company, brand equity, historical expertise Weaknesses : labor condition controversy, coordination and communication problems External Environment Opportunities : health conscious consumers, organic markets, new technology Threats : rising commodity prices, many strong competitors for each brand product, government regulation
5. General Strategy Product Differentiation Strategy “ Renovation and Innovation” of products and brands. Their portfolio ranges from baby foods, bottled water, coffee, chocolate, drinks, ice cream, and petcare Mergers and Acquisitions with Peter, Cailler, Kohler Chocolats Suisses S.A and joint ventures with L’Oreal, Coca-Cola, and General Mills Low Cost Strategy Majority of products are produced in-house Operational Effectiveness Nestlé Continuous Excellence (NCE) program addresses increasing efficiency in standard operating procedures, consistency and manufacturing management
6. Current Strategy Premiumisation Promoting premium products like high-end coffee and chocolate brands Launched a new tea-brewing system called Tpresso Emerging Markets 45% of sales by 2020, $7 billion over 2 years Asia, Latin America and Africa Growing population, rising disposable income
7. (Cont.) Health Science & Nutrition Concerned with health problems, obesity and aging $500 million over 10 years Nestlé Institute of Health and Science
8. Organizational Structure
9. Organizational Structure Divisional Structure in senior management Matrix Structure in levels below senior management Senior members of Nestlé are of diverse origins and backgrounds Corporate HQ in Vevey, Switzerland, offices around the world
10. Organizational Chart
11. Corporate Culture
12. Creating and Pursuing Shared Values Sustainable Agriculture Initiative of Nestlé (SAIN) Creating Shared Value key performance indicator 2009 2010 Rural Development: Farmers trained through capacity-building programs 165 500 144 900 Markets covered by SAIN programs 35 45 Direct procurement markets covered by SAIN programs (%) 89 100 Educational and apprenticeship programs: In 2002, 65% of all Nestlé employees worldwide followed an educational program “ The opportunity for growth is not always presented. It is possible to stay in one job for a long period of time” Anonymous, Nestlé supply chain worker “ Creating Shared Value is a fundamental part of Nestlé's way of doing business that focuses on specific areas of the Company's core business activities – namely water, nutrition, and rural development – where value can best be created both for society and shareholders.”
13. Corporate Culture (cont.) “ To communicate is not only to inform; it is also to listen and to engage in dialogue.” A requirement of all employees is to be open and willing to learn Nestlé is willing to enter dialog with diverse stakeholders, not just shareholders (e.g. consumers, employees, suppliers, governments and residence of host countries) The results of their cultural integration are products better targeted to segmented markets (e.g. Nestlé is largest halal food manufacturer, milo)
14. TRIVIA
15. TRIVIA!!! Which of these chocolate brands does Nestlé own? Butterfinger Milky Way Snicker’s Reese’s Peanut Butter Cups All of the above None of the Above
16. TRIVIA!!! Which of these brands does Nestlé NOT own? Cookie Crisp Poland Springs Häagen-Dazs Cat Chow Jenny Craig All of the above None of the Above
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