...Q1. What ethical issues arise in this case? After reading the case study, I came up with 3 issues related to unethical behaviour. * Misleading advertisement * Targeting vulnerable third world countries * Neglecting uneducated third world countries Misleading advertisement The most unethical practice in my opinion was to advertise Nestle’s product in third world countries without proper knowledge and expertise in this market. What Nestle did was they used to send sales people working on commission to the mothers of new born babies and offer them free samples. However, after a period of time when the samples were gone, the mothers used to dilute it with water from local rivers which in many cases served as a local toilet and laundry which resulted in diarrhea and other related illnesses. Many parents believed that the bottle itself had a nutrient value and didn’t even mix the formula. This kind of advertisement resulted in revenue loss of Nestle Company for a few decades. Targeting vulnerable third world countries Nestle knew what market they target, but they weren’t prepared for it, from which resulted in an ethical issue. The main issue is that they couldn’t send the right message to the third world consumers. Nestle wanted to westernise the third world countries, but in result they ended up in “killing babies”. (Caryn L. Finkle, 1993-1994) Neglecting uneducated third world countries The problem that people didn’t understand, is that the less developed...
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...Rina Thomas Nestle Case Study September 16, 2013 Introduction Nestle is one of the biggest food companies in the world with sales of $47 billion annually. Nestle has undergone through a huge number of transformation throughout the years. (Palmer, Dunford & Akin, 2009). Nestle manufacture product such as different cosmetics and chocolates that has been long known as a worldwide leader in its business. To increase its growth in operations, Nestle had picked up other markets for diversification other than the food industry which Nestlé’s first pick item was the cosmetic brand. But after some time, the company had acquired other products like ophthalmic and pharmaceutical. At last, for the expansion the company was required to concentrate on enhancing productivity, business expansion and financial improvement. Body 1. Did Nestle undergo either first-order and/or second-order change according to the case? Answer listing examples of types of change from the above story. In the case study, Nestle went through major first order change. One of the first-order changes that occurred was in the 1900’s when Nestle changed its approach to global expansion by acquiring subsidies in other countries. Prior to that, Nestle only operated with sales agents to buy their products out of Switzerland, so they changed their international strategy maintaining the company’s goals and the organizational mission. During the First World War, this had increased the demand...
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...Case Study: Nestle Introduction: Nestle is one of the largest consumer packaged multi domestic corporation in the world. Nestle is Nutrition, Health and wellness company and biggest food corporation. Nestle was a Swiss company that was that was established in 1866. Nestle has about 450 factories working in 86 countries. The turn over in 2009 was approximately $95 billion. Nestle is one of the main share holders of L’Oreal which is world largest cosmetic company. The most and successful global brand of nestle is Nescafé. In 2011 Nestle was listed as no.1 by fortune global 500 as world’s most profitable corporation. Nestle has always been about nutrition, so their global marketing over the years has been based off of demographics that show the changes in living standards and life styles. The ultimate goal of the company was to be realized by the consumers as the nutrition, health and wellbeing company and delivering a competitive return to the company’s shareholders at the same time. Key Acquisition: 1990 – Nestle opened its first factory in The United States of America. 1938 – Nestle introduced a coffee band called the Nescafe – Nescafe is one of the few brands that nestle has developed all over the world. Nescafe is the most successful of all the brands that Nestle manufacture. 1974 – Nestle enters non food business, by acquiring major stakes on L’Oreal. 1998 – Nestle acquires Spillers pet food business, making it the largest pet food maker in Europe. 2002 –...
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...Excelsior ID# 30796152 M5A1- Nestlé Nestlé Case Study Nestlé has been considered the world’s largest food and beverage company for many years and they achieved this by operating under a localization strategy. Under a localization strategy, a company focuses on local responsiveness, and requires little coordination between the subunits. Working under a localization strategy, firms do not have a high need to integrate mechanisms to knit together different national operations. With that each operation has the ability to control operations by relying primarily on output and bureaucratic controls and a policy of management by exception. Considering the need for integration and coordination is low, under a localization strategy, the need for common processes and organization culture is also low (Hill, 2011). With that, each operating unit basically acts as its own entity, creating their own independent set of core values and policies. Nestlé traces its origins back to the first European condensed milk factory, based in Cham, Switzerland, that opened in 1865 by the Anglo-Swiss Condensed Milk Company. One year after this, Henri Nestlé, a trained pharmacist, launched one of the world’s first prepared infant formula companies in Vevey, Switzerland. The two companies, that at the time were fierce competitors, decided to merge in 1905 to become the Nestlé we know today, and their headquarters are still in Vevey, Switzerland (Nestlé, 2012). Nestlé begin with the localization strategy...
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...Introduction Nestlé, founded in 1866 by Henri Nestlé, is the world’s largest food company, producing products such as chocolates, soups, coffee, cereals, baby formula, and a host of other items (Nestlé, 2006). In the late 1960’s and 1970’s, Nestlé found itself in the centre of a scandal (Krasny, 2012). It was accused of encouraging mothers in Asia, Africa, and Latin America to use baby formula instead of breast milk, a healthier and less expensive alternative (Krasny, 2012). The allegations of non-ethical marketing practices led to boycotts of Nestlé products, beginning in 1977, in the United States and Europe: some boycotts continue to this day (Facebook, 2012). The criticisms, public outcry, and attention from social activists resulted in Senate Hearings in the United States and meetings by the World Health Organization (WHO, 1981). The result was a new set of marketing rules, introduced in 1981,that restricted the promotion of baby formula (WHO, 1981). These restrictions are outlined in the International Code of Marketing of Breast-Milk Substitutes (WHO, 1981). The aim of the code is to “ensure the proper use of breast milk substitutes, when these are necessary, on the basis of adequate information and through appropriate marketing and distribution” (International Lactation Consultant Association, 2001). When you consider the corporate marketing practices uncovered in the Nestlé scandal, one can see that a corporation’s vision must go beyond profits, and consider...
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...What advice would you give to Nestlé now in light of the new problem of HIV infection being spread via mothers’ milk? Nestle being a globally renowned company that has a great influence on its consumers, does not mean it can exempt itself from being the target of diverse cultural and social criticisms. It may maintain its market share but this case only shows that malicious propagandas can create a bad reputation for the brand. Fortunately, Nestle has unconstrained amount of resources including the marketing efforts it could capitalize on to turn this dilemma around. In a sense, the emerging increase of HIV cases and its reported transmission via breastfeeding can be seen as an opportunity due to the fact that Nestlé’s established network can easily address these problems. They could initiate a PR campaign that includes free HIV testing programs much like Thailand’s approach to HIV positive mothers. Nestle could also fund some researches on how to reduce the risk of mother to child transmission or they could initiate an HIV-literacy convention wherein they could enlighten mothers on ways to make sure that their children are safe from the disease transmission. Oher than those, maybe Nestle could include a cause-related marketing effort of creating an awareness for women who might want to donate breast milk to infants who’s mothers have HIV. This way, it does not solely focus on mothers with HIV but also create a message that Nestle is a brand that cares. Instead of going...
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...Case Study: Nestlé Australia Introduction Nestlé manufactures and distributes a wide range of dairy food, beverages, confectionery, infant and clinical nutrition to almost all households around the world. With headquarters in Vevey, Switzerland, Nestlé has been recognised the world’s biggest food and beverage company. Employing more than 253,000 people, the company has factories and operations in almost every country in the world. The Nestle Lifestyle Survey Promotion and Commission MONSTER Commission Monster was appointed by Nestlé to work on their Life Style Survey promotion. The project was undertaken by Commission Monster working in close conjunction with Singleton OgilvyOne. Offering a first prize of $15,000, the survey required each applicant to fill up a 15-20 minute food related survey. The target market for this survey was females over the age of 25, preferably with family. Surveys were conducted in three periods, from November to December 2003, March to June 2004 and for one week only in December 2004. Nestlé granted Commission Monster to undertake the project given the targeted affiliates’ profiles that Commission Monster can offer. This was largely based on the affiliates’ site category, content, and member database. [pic] The Results A total of 85,343 surveys were completed during the promotional campaign. |Nestlé Life Style Survey Campaign |Number of Approved Affiliates |Number of Completed Surveys...
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...Operations Management Fall Semester 2011 Final Project “Operations management at Nestle” Instructor: Prepared by [pic] Table of Contents |List of Abbreviations………………………………………………………………………………………………… |3 | |List of Figures/Tables………………………………………………………………………………………………... |4 | |Executive summary…………………………………………………………………………………………………… |5 | |1. Introduction…………………………………………………………………………………………………………. | | |2. Company’s background | | | 2.1 History of Nestle………………………………………………………………………………………………... | | | 2.2 Nestle strategy…………………………………………………………………………………………………… | | | 2.3 Current situation of Nestle in Kazakhstani market……………………………………………………………… | | | 2.4 Major products…………………………………………………………………………………………………...
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...Nestle: Sustaining Growth in Mature Markets Describe the characteristics of each of the following elements in the Current Competitive Landscape: Globalization, Technology, Knowledge, Strategic Flexibility, Quality, and Profit Pool. Nestle’ recognizes that increasing globalization is leading to the development of more and more international recommendations. Although, as a general rule, these recommendations are addressed to governments they inevitably impact on business practices. [ (Brabeck-Letmathe, 2004) ]. The internet is changing the way of doing business. It concerns business-to-business relations and also the Company’s interaction with consumers. In this respect nestle’ S.A. has an Internet Privacy Policy which is available on the Corporate Website. This policy aims to protect the privacy of the users; it covers, for instance, the accessing, deleting or correcting of information, the security of information, and relates also to tracking technologies [ (Brabeck-Letmathe, 2004) ]. Nestlé’s broad known of their products and laws that are required in order to design different product are impeccable. Needless to say one company has to know about water, using raw materials, nutrition for not only infants but everyone including animals. Nestlé’s knowledge of human rights gives them a strong understanding of strategic flexibility. Nestle’ recognizes that governments are ultimately responsible for the establishment of a legal framework for protecting human rights...
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...known to put their profits before the people are but not limited to: Pfizer, ExxonMobil and Chevron. While doing the research for Week 1e-Activity I came across several website articles that discussed Nestle and child slavery and/or child labor. While reading this I became appalled with what I was reading and decided to share this case with you. Per the International Labour Organization, which is part of the UN, it is estimated that 284,000 children are working in dangerous conditions on cocoa farms in Côte d’Ivoire (the Ivory Coast) in Africa, where more than 40% of the world’s chocolate comes from. In recent years it has come to light that Nestlé buys from a third party cocoa that has been picked by slave labor and child labor. It has been said that children as young as twelve years of age have been kidnapped, trafficked or coerced labor. In 2005 nonprofit organizations sued Nestlé under two federal statutes, Torture Victim Protection Act and the Alien Tort Claims Act, which allows victims of human rights abuses who do not reside in the United States to sue U.S companies for violations of international law. The suit also charged Nestlé of making false claims that the problem of child labor on cocoa farms were being resolved. Nestlé ’s response was the following: "Nestlé is not the owner of any plantation," says Peter Brabeck-Letmathe, chief executive, exasperated after seven years of protests connecting the Swiss multinational with forced child labor in Ivory Coast. In...
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...marketing91.com/marketing-mix-nestle/ The Marketing mix of Nestle discusses the 4P’s of one of the strong FMCG companies of the world. The Nestle marketing mix shows Nestle has a strong product line which boosts its marketing mix. Below are the products, price, placement and promotions of Nestle. Products - There are 4 different strategic business units within Nestle which are used to manage various food products. Beverages – One of the most known coffee brands Nescafe, belongs to the house of Nestle and is one of the cash cows for Nestle. However, it is not the biggest cash cow. Nestle has a worldwide distribution and has many different variants. Looking at India, Nestle has also launched Nestea. Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are some of the milk and milk based products from the house of Nestle. Prepared dishes and cooking aides – Nestle has a third category of products which comes into prepared dishes and cooking aides. The major cash cow of Nestle lies in this segment, which is Maggi Noodles. Probably one of the most widely sold ready to cook noodle brands is Maggi. Maggi has a fantastic taste and quality. Thus, it was not a surprise, that Nestle expanded the Maggi brand to create an umbrella of different products like Maggi pasta, Maggi sauce, Maggi cubes etc. The maggi range contributes vastly to the bottom line of Nestle. Chocolates – Nestle has some popular chocolate products, most popular being Nestle Kitkat, Munch, Milky bar...
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...PHILIP KOTLER Philip Kotler (born May 27, 1931 in Chicago) is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management at Northwestern University Why chocolate? I. According to a recent study conducted by a major chocolate brand in India the major consumers of chocolates apart from kids are teenagers and people between the age of 15 - 35. Most of the chocolate brands in India produce chocolates in different sizes that are priced according to their sizes. Chocolates like Diary Milk and Five Star can be got for just Rs 10. Chocolates in India are slowly and steadily substituting the mithai or traditional Indian sweets. Due to the increasing levels of social consciousness people prefer gifting well wrapped chocolate packets rather than sweets on occasions and festivals. Taking advantage of this situation GATHERING AND ANALYSING MARKET INFORMATION PRODUCTS Amul chocolates Parent Company Amul Category Chocolates Sector Food Products Tagline/ Slogan Taste of India USP Quality and affordability STP Segment Quality conscious children and adults Target Group Kids and youth Positioning Taste of India by giving them quality products SWOT Analysis Strength 1. Good product range which includes chocolates, toffees, syrups etc 2. Good quality and packaging 3. Excellent distribution network of Amul ensure availability 4. Branding and advertising through TVCs and print ads is popular 5. Pricing is good as...
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...Nestle was established in 1866 in the city of Vevey in Switzerland. According to Mihir, Vincent and Anders (2006), “The trigger of huge success is that Nestle invented a wheat-based infant formula product for mothers unable to breastfeed”(p.2) Then, Nestle began selling to other European countries and was known for food brand such as Nescafe, Perrier and Buitoni. Nestle was the world’s number one food brand at the beginning of the new millennium. Nestle had one of the significant investment outside food sector which is eye-care company, Alcon. The company founded in 1945 and experienced early success with good reputations. Alcon was publicly listed in 1971 and became the world’s ophthalmology company in 2000. However, Mihir et al.(2006) stated “Even though Alcon has had a great development as a division of Nestle, it has not been recognized by financial world”.(p.4) Peter Brabeck-Letmathe, Nestle’s CEO, was concerned about the Alcon’s valuation and recognition by the financial world. For him, analysts are not recognizing the true value of Alcon, consequently it might affect Nestle from truly exposing of its value as well. In order to build up the value of Nestle as the sum of its components parts, Brabeck contacted Wolfgang Reichenberger, Nestle’s Chief Financial Officer (CFO), and Francisco Castaner, Executive Vice President (EVP). They had discussed to crave-out Alcon for a public listing and what effects this could cause for Nestle and Alcon. Considering the carve-out, Nestle...
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...MANAGING DIVERSITY – NESTLE COPORATION Agustín López Sánchez – MIB; Group: B. The company I have chosen to analyze how is being managed the diversity in terms of different nationalities and gender is Nestle Corp. As almost everybody knows, Nestle is a Swiss multinational company that makes food and beverages including baby food, bottled water, breakfast cereals, coffe, confectionery, ice cream, pet foods and snacks. Also it has well-known brands like Nespresso, Nescafe, Kit-Kat, Smarties, Nesquik, Vittel and Maggi. At a current time they have around 450 factories around the world and operates in almost 86 countries employing 339.337 workers. It is unquestionable that managing diversity have become a challenge for this type of company. Managing and treating people from almost 86 nationalities and try to adapt their strategy to the different customer needs and demands in those countries is an incredible tough work, and quite admirable. But it turns even more complicated inside the company at the time to transmit the company’s values, morals, know-how, ethics, etc… from the original idea. The idea that came from its foundations, in Switzerland, Europe. It is indubitable that the perspective, approaches, visions and different set of cultures that come from Switzerland are absolutely different from all of these countries the company decided to establish its operations in order to externalize their business. Therefore we can easily identify not only the challenge to repeat the...
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...ABOUT NESTLE Nestlé is a Swiss multinational food and beverage company headquartered in Vevey , Switzerland. It is the largest food company in the world measured by revenues. Nestlé’s products include baby food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of Nestlé’s brands have annual sales of over about US$1.1 billion including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer’s, Vittel, and Maggi. Nestlé has 447 factories, operates in 194 countries, and employs around 333,000 people. It is one of the main shareholders of L’Oreal, the world’s largest cosmetics company. Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George Page and Charles Page, and Farine Lactée Henri Nestlé, founded in 1866 by Henri Nestlé. The company grew significantly during the First World War and again following the Second World War, expanding its offerings beyond its early condensed milk and infant formula products. The company has made a number of corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007. Nestlé has 8,000 brands, with a wide range of products across a number of markets, including coffee, bottled water, milkshakes and other beverages, breakfast cereals, infant foods, performance and healthcare nutrition, seasonings, soups and sauces, frozen...
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