Week 3: Internal Environment Assignment # 1
Assignment # 1 – Nestle: Sustaining Growth in Mature Markets
Assignment # 1 – Nestle: Sustaining Growth in Mature Markets Describe each of the following elements in the Current Competitive Landscape: Globalization, Technology, Knowledge, Strategic Flexibility, Quality, and Profit Pool. The Nestlé Food Company has been part of the global community since it was first founded in 1866 marketing its products in 130 countries across the world. “Over the previous 130 years, Nestlé had acquired profound knowledge of markets all over the world, and enjoyed great success in adapting its products to local tastes” (Hitt, Ireland, & Hoskisson, 2009). In doing this Nestlé has retained the reputation as a heroine company who “thinks globally but acts locally” (Hitt, Ireland, & Hoskisson, 2009). Nestlé has not just succeeded in the food industry but is taking strong leads to impact nutrition, health, and wellness. The Nestlé Company continues to stay competitive within the global market while continually working with a failing economy; according to Barbara Kollmeyer of Market Watch (2009) "It's still a good defensive stock. Its international profile, combined with presence in 25 businesses provides good resilience in a downturn. The development of the product mix towards Nutrition and Health should have increased the group's defensive profile. This strategy is based on a price positioning that should remain competitive.” The knowledge that Brabeck introduced in 1997 brought many new strategies to Nestlé the first was to force the business to become more efficient by cutting back on their investment budgets by maximizing existing assets, maximizing capacity utilization and maximizing distribution logistics. Releasing his efficiency programs MH97 and Target 2004+ Braback was able to generate savings to the Nestlé Food Company of approximately 7 billion dollars creating the foundation to expand in strong investments in internal growth (Hitt, Ireland, & Hoskisson, 2009). Nestlé is consistently maintaining a company with a strong advantage in the marketing, distribution and manufacturing of food products. They have developed a vast international brand architecture that consists of 10 worldwide corporate brands, 45 worldwide strategic product brands, 25 regional corporate brands, 100 regional product brands, 700 local strategic brands and approximately 7,000 local brands (Parsons 1996). Nestlé’s production line is complete with 522 factories in over 81 countries, which provide key manufacturing capabilities in every market possible. Due to the vast geographic coverage, this provides the support for Nestlé to focus on the consumer’s needs catering from industrialized countries to emerging market countries while transferring knowledge from one market or region to another. Nestlé has held quality as high if not higher than their customer expectations of their products. They base the quality of their products from a large percentage of what their consumers are looking for in a product using quality as a cornerstone of their company. “This confidence is based on our quality image and a reputation for high standards that has been built up for many years” (Nestlé, 2004). Discuss the vision and mission of Nestle. Nestlé’s vision and mission statement both infer that they aim to provide the food and nutritional products that are demanded by consumers. They go one step further by stating that they embrace research heavily to “make better food so that people live a better life” (Nestlé, 2010). By taking such a position, Nestlé can position itself to deliver a wide range of consumable products thus entering multiple markets from chocolates and flavored beverages to baby formula and drinking water. This ideology allows their products to appeal to a wide variety of individuals with different tastes and lifestyle preferences (Nestlé, 2010). Nestlé also places a core concept of...
References: Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2009)._Strategic management: competitiveness and globalization, concepts and cases_. Masion, OH, USA: Cengage Learning.
Kollmeyer, B. (2009, February 12). Still a top pick?._Market__ Watch_, Retrieved from http://www.marketwatch.com/story/come-global-market-fury-nestle-still
Nestlé (2010). Mission statement, research. Retrieved from http://www.research.nestle.com/tools/mission_statement.htm
Nestlé (2004, September). Nestlé corporate business principles. Retrieved from http://www.nestle.com/Resource.axd?Id=70014B84-A4FC-4F82-BFA0-23939DC52E9D
Nestlé, . (2010). Our Vision. Retrieved from http://www.nestle-nordic.com/corporate/no/nestle+_nordic/vision/
Nestle, . (2004). Business focus and organization. Proceedings of the Nestle investor seminar (pp. 9). St Louis: http://www.nestle.com/Resource.axd?Id=3C3FCE4D-53C4-428E-9741-FB99BE63F429.
Neslte (2010). Nestle pure life - faq. Retrieved from http://www.nestle-purelife.us/about/faq.asp
Nestlé (2010, March). Stakeholders_ partnerships_. Retrieved from http://www2.nestle.com/CSV/CreatingSharedValueAtNestle/StakeHoldersEngagement/Pages/StakeholdersPartnership.aspx
Parsons, Andrew (1996). "Nestlé: The Visions of Local Managers," McKinsey Quarterly, No. 3.
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