...Case Study Analysis 8 Nestlé: Sustaining Growth in Mature Markets Strategic Management Instructor Dr. David J. Rambow Associate Professor of Management Summer Term 2011 Anchorage Campus Wayland Baptist University Nestlé: Sustaining Growth in Mature Markets Introduction Dated back to 1866, the Nestlé company had acquired profound knowledge of markets all over the world over the previous 130 years. Nestlé is the leading position in the global food industry with operated factories in 77 countries and sells its products on all six continents. Nestlé has a broadly diversified business portfolio and with leading global market shares in numerous product categories including coffee, mineral water, dairy products, nutrition and baby food, ice cream, confectionary, pet food, and chocolate. Nestlé is also committed to providing quality brands and products that are essential to good health. In doing so, Nestlé incorporated nutritional elements into vast array of product categories to promote food that are safe of high quality (Raisch & Ferlic, 2006). Peter Brabeck-Letmathe took the job as CEO of Nestlé in June 1997; he faced the challenge of having to improve the company’s profitability. In order to generate the financial means required to invest in growth initiatives, Brabeck launched a suite of process innovation initiative in an effort to maximizing existing assets, maximizing capacity utilization, and maximizing distribution logistics...
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...University - Online BUS499 Week 3: Nestle: Sustaining Growth in Mature Market Professor: Robert Brown Abstract Nestle is presently one of the largest food company in the world. Nestle has been called the most conglomerate companies ever, with more than 400 plants in 60 countries and growing. Nestle is Switzerland's largest industrial company and the world's leading food processor. The food giant ranks as one of the 100 largest companies in the world. Nestlé’s primary products include beverages such as (coffee, chocolate drinks, mineral water, and soft drinks), dairy products, infant formula, culinary products (soups, seasoning, condiments), frozen foods and ice cream, yogurt and chilled desserts, and chocolate. Nestlé is committed to providing quality brands and products that are essential to good living. In doing so, the Nestlé name has become synonymous with great-tasting, nutritious food and beverage products. (nestleusa.com) For well over a century, Nestle commitment to producing foods that’s uniquely fulfilling people's needs has been the secret ingredient in everything we they make. Introduction Nestle is know as one of the world’s leading Nutrition, Health and Wellness Company. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. Nestle boasts a broadly diversified business portfolio and has leading global market shares in numerous product categories, which...
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...and chilled desserts, and chocolate. Nestlé is committed to providing quality brands and products that are essential to good living. In doing so, the Nestlé name has become synonymous with great-tasting, nutritious food and beverage products. (nestleusa.com) For well over a century, Nestle commitment to producing foods that’s uniquely fulfilling people's needs has been the secret ingredient in everything we they make. Introduction Nestle is know as one of the world’s leading Nutrition, Health and Wellness Company. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. Nestle boasts a broadly diversified business portfolio and has leading global market shares in numerous product categories, which including soluble coffee, bottled water, dairy products, nutrition and baby food, ice cream, frozen prepared dishes, culinary preparations, and chocolate. Nestle, believes that research can help them make better food so that people live a better life. They strive to bring consumers foods that are safe, of high quality and provide best possible nutrition to meet physiological needs. In addition to nutrition, health and wellness, Nestlé products bring consumers the essential...
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...IPTV or VOIP as a disruptive technology. Second could be Wi-Fi and Wi-Max as a disruptor. I will pick on the first example here to go in detail i.e. cable television technology as sustainable and IPTV as disruptive. Cable TV was a disruptive technology at one time and has sustained through time. Cable television technology: Cable technology replaced the traditional over-the-air method of broadcasting. It has been in business for a long time and the reason I call it sustaining because, it is customer focused and it is main-stream. Sustaining technologies tend to maintain a rate of improvement and give customers something more or better in the attribute they value. This is what cable television technology was doing till last few year, though now it has some challenges. There is a big competition for this technology from direct broadcast satellite and few other forms of competitions as well, that I will discuss. Nevertheless – • It still dominates the market • It was once emerging technology that proved sustaining and very successful in the broadcasting field. • It is customer focused IPTV: IPTV is a disruptive technology in the field of video delivery. Disruptive technologies introduce a very different package of attributes from the one mainstream customers historically value, and they often perform far worse along one or two dimensions that customer value. This is what IPTV did initially - it had lack of bundling capability, it was not widely available, and even the technology...
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...through mergers with massive investments that has affected Nestle operational efficiency. Nestle ‘s organic growth is also in the mature markets therefore Nestle needs to strength its innovative capabilities in order to be more competitive in the organic mature market. Nestle program called “operational excellence in 2007 where Nestle’s key objectives are to improve supply chain productivity, optimise planning, eliminate overheads and reduce product complexity” {Raisch & Ferlic, 2006} * Page 566: The are new opportunities for Nestle in the area of wellness and nutritional product market segment. Brabeck the Chief Executive Officer (CEO) aimed at two main strategic goals that is developing nutrition and wellness as a value added feature and reinforcing Nestle’s leading position as specialised nutritional products. * Page 567: * Page 568: * Page 569: * What do you make out from the info given in page 571: * What do you make out from the info given in Page 572: * What do you make out from the info given in Page 573: * What do you make out from the info given in Page 574: * What do you make out from the info given in Page 575: * What do you make out from the info given in Page 576: * What do you make out from the info given in Page 577: References: Raisch, S and Ferlic, F 2006. Nestle: Sustaining growth in mature markets; cited in Hanson, Hitt, Ireland & Hoskisson, 2011 as Case 13 in Strategic...
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...NESTLE’: SUSTAINING GROWTH IN MATURE MARKETS 1. Describe the characteristics of each of the following elements in the Current Competitive Landscape: a. Globalization - Nestle’operates in 77 countries and sells its products in all 6 continents. Its global position is further enhanced by acquisition of companies which have an established global presence. b. Technology – As part of the GLOBE initiative, Operation Excellence program was implemented which deals with creating concepts & systems to optimize productivity, improving supply chain, eliminating overhead & reduce product complexity. Installation of common information systems in order to integrate all information from all business units. c. Knowledge - As part of the thrust to achieve internal growth , the company invested on extensive research and development . Existing products undergo improvement/changes such as changes in shape, packaging or even taste. Other products are being moved to a new promising product segments in order to maximize earning potential. d. Strategic Flexibility – The launching of Global Business Excellence initiative or GLOBE has transformed Nestle to what success it is enjoying at the moment. GLOBE covers a broad range of strategic objectives and also to improve operational efficiency by integrating the company’s businesses on a global scale. e. Quality – Putting into consideration consumers whose primary motivation to purchase a product is the product’s...
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...Disruptive innovation creates a new market and disrupts an existing market. Basic mobile phones overtook telephones, but then smartphones took the world by storm, almost rendering basic phones themselves irrelevant. With the combined features of a watch, camera, and computer in a lightweight device, smartphones shot to popularity. Hybrids are also examples of disruptive technology. The electric car is an automobile that runs on solar power and electricity. It takes the already effective automobile and makes it more eco-friendly. It is not meant to displace the original, but to branch out and start a new line of products based on it. Is digital disruption a bane or a boon? Digital disruption is not about the technology. It revolves around the customer and what the consumers want. Thanks to disruption...
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...analysis in to find the alternative solutions and the most suitable recommendation for Swiss – based Chemecal producer Clariant International Limited. – CAN NOT WRITE THE PURPOSE OF THIS STUDY! Several problems that impacted sales grows objectives of chemical industry in general and underlying earnings of growth that indicated to be poor. Clariant Ltd is facing problems related to mature market conditions such as high market competitiveness, excessive supply of demanded chemical materials, and variability of alternative products at a low price. The main concern of the company is how Clarient Ltd can fully develop its potential for meeting its sales and profits grows objectives. Company structural organization needs to be changed and improved in order to maximize its productivity and raise the profits of the company. Incentive program has been established, however the company structure as it is requires certain alterations to the incentive program for the sales team. Several competitors have established themselves at the market though positioning and marketing. Therefore Clarient is at the edge to decide whether the positioning will improve its competitiveness at the market. Clarient is working with a key account that is aimed to simplify purchasing operations willing to consolidate the procurement of specialty and commodity products. Production of the commodity products independently due to its focus on specialty chemicals, would lead to high costs of commodity production...
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...characteristics: relative market share and market growth as suggested from the figure below. [pic] Figure 5: Boston Corporate Group matrix It has four cells and each cell has its name as follows. • a. Dogs. The products that fall in this cell are the ones with a low share of a low growth market. These products do not generate revenues for the company. Firms should get rid of the products that fall in this cell as they tend to require huge investments from time to time. • b. Cash Cows. In a slow growth market products that hold a high share are represented by the Cash Cows in the BCG matrix. Cash Cows generate revenues more than that is invested in them since they are the leaders in the mature market. Firms can still continue to have them as a part of the portfolio till they eventually become dogs and stop generating revenues. • c. Question Marks (also known as the ‘problem child’). These products have low market shares and do not generate much cash. However, these products are in a rapidly growing stage and thus consume large amounts of cash. A question mark has the capability to gain market share when the market growth slows, and can thus become a star and finally a cash cow. Before making the investment required to grow the market share. Question marks must be analyzed carefully in order to determine their potential. • d. Stars. These products generate high amounts of income as they are in high growth markets with a relatively high share of that market. However, they...
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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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...Assignment #1: Marketing Model Model Marketing Marketing 506 (Intergrated Mkt Communication) Oct 23, 2012 1. Develop an argument regarding the significance of marketing to organizational success in the 21st century. Marketing plays an important role in creating a the solid position in the competitive market. Organizations are also able to build competitive advantage through effective marketing strategy. The importance of marketing for the business to be successful is so that firms can make appropriate strategies to gain advantages. In today’s competitive environment, the success of a business is solely dependent on the type of marketing. Most of the operations and aspects of the business are based on the successful marketing. Marketing covers different components such as personal sales, public relations, sales promotions and advertising. Marketing is the process through which, business firms introduce and promote the product and services to the potential customers. Without marketing, business firms can offer the products within its industry; they cannot sell it to the potential buyers in other countries and industries (Gitman & McDaniel, 2008). It is then very important for the business firms to make effective strategies for marketing of products. In the 21st century...
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...Change in a Contemporary Organisation At the beginning of the 21st century the forms of change within organisations have been innovatory and a widespread conviction has arisen as to the revolutionary nature to such changes as a sign of the times, (Pettigrew & Massini, 2003). While Tushman & O’Reilly III (1996) argue that the industry level of studies has not been helpful in illustrating the path of organisation’s change, Greiner (1972) outlines a corporate growth model in order to provide a useful framework in understanding organisational change. Psychologists believe that learning as a human behaviour can be defined as the relatively permanent change in actions as a result of experience or practice, (Baars, 1986). Reflecting and highlighting this concept in relation to an organisation it is subsequently essential to look at organisational change from a historical perspective as organisations learn from their own experiences. Thus innovations in terms of evolutionary and revolutionary change occur at each organisational growth level as determined by Greiner (1972). To answer these fundamental questions about the nature of organisational change it is vital to distinguish between two levels of change. Similarly the factors that directly influence organisational behaviour and organisational features that determine these factors should be examined in turn need to be considered. In line with Greiner’s (1972) theory each of the organisational elements and processes are shaped by its choices...
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...What do creativity and innovation signify and entail? What are the key types of innovation? Historically, creativity and innovation have been thought to been tied to new products that stimulate economic growth. Over time, these views were thought to have been narrowand new ideas of innovation came about. Karl Marx associated innovation to economic growth cycles. After World War II, much thought was given to innovation being a result of higher spending on research and design. Economists soon realized there was no direct correlation between innovation and R&D. Newer contemporary thought notes that innovation is a result of acquiring knowledge and being able to harness it into the development of new processes and products. Innovation is a complex process itself, having many facets making up what it is,and what it provides. Entrepreneurship comprises taking a risk on something, and quite often innovation requires faith. Design is the development and creation of something. It is becoming synonymous with innovationand an increasingly important part of the business world today;From Board Room layouts to the structure of a manufacturing line, all the way down to how a product may be used by a customer. Invention is another important part of innovation. It is the eureka moment or the concept of a new idea. Innovation takes invention and transforms it into something useful and commercialized. There are several types of innovation. Product innovation is the development of a new or...
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...With the U.S. economy struggling to expand and Europe on the brink of recession, fast-growing markets in the developing world offer the best opportunities for boosting revenues and profits today. Many companies in the developed world are keen to follow in the wake of corporations in a variety of industries—such as Boeing, Coca-Cola, DuPont, General Electric, Hewlett-Packard, IBM, Oracle, Unilever, and Disney—that appear to have succeeded in going global. Globalization is no panacea, however. Success abroad varies widely, and it’s often tough to boost profits by investing overseas. Because most studies look at cross-industry patterns to draw lessons about how to succeed at globalization, they can be Rajiv Lal is the Stanley Roth Sr. Professor of Retailing at Harvard Business School. misleading. When we focused on one industry—grocery retailing—we found that, with a few exceptions, globalization’s benefits had not accrued to retailers. In contrast to other industries, grocery retail is still dominated by local players in most countries. International players are almost entirely absent from even the largest retail markets. And every grocery retailer that has ventured overseas has failed as often as it has succeeded. Moreover, our research shows that on average, the extent of internationalization does not have a significant effect on retailers’ revenue growth rates or their profit margins. Some industries clearly can’t travel across borders as well as...
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...Expansion Elena Popova Professor Steven Englehart International Business Strategy 10/27/2013 Strayer University 1. Develop a revised international product life cycle plan As the global economy continues to stumble, retailers are struggling to achieve growth domestically. While there are pockets of opportunity, many retail sectors in the United States are saturated and not expected to grow much, if at all. Growth may be heavily dependent on winning share from competitors, typically a taxing effort. Consequently, many retailers are looking beyond their borders for potential growth. Foreign markets offer attractive growth rates fueled by burgeoning middle classes, lower competitive intensity, and greater pricing flexibility. Additionally, a global presence may help retailers lessen their risk exposure to an economic downturn in any one market. Every brand or product has its life cycle which spans from the time it is launched to the time it exits from the market. This cycle covers four stages, introduction, growth, maturity and decline. The life cycle of each and every brand or product is different, and different advertising strategies should be adopted at different stages to suit the marketing targets and market environment in order to achieve the best marketing results. The first stage in a product’s life cycle is the introduction stageintroduction stageThe first stage of the product life cycle after a product is launched.. The introduction stage is the same as commercialization...
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