Basic Strategies Used To Respond To Uncertainty Management Essay

Nestle is the worlds leading nutrition, health, wellness company. The headquarter of Nestle company is located in Vevey, Switzerland. That is in 1866, there was a first European condensed milk factory opened in Cham, Switzerland. The name of the company is Anglo-Swiss Condensed Milk Company which established by brothers George Page and Chatles Page. After that year, the founder of Nestlé, Henri Nestle, a German pharmacist, developed a combination of cow’s milk, wheat flour and sugar, which name as Farine Lactee. The launched of Farine Lactee had become the largest competitor of Anglo-Swiss Condensed Milk Company.

In 1905, Nestlé merged with Anglo-Swiss Condensed Milk Company after a couple of decades as fierce competitors to form the Nestlé and Anglo-Swiss Condensed Milk Company. In 1929, the chocolate company Peter, Cailler , Kohler Chocolats Suisses S.A. joined Nestlé. And in 1947, Nestlé change its name to Nestlé Alimentana S.A after merged with Maggi, a well-known manufacturer of seasonings and soups. In 1974, Nestlé for the first time diversified outside the food industry and they become a major shareholder in LO’real, one of the world’s leading maker of cosmetic products. And then finally, the last name change that the company would endure was in 1977, where it adopted the name Nestlé S.A.

The first product that launched by Nestlé is Farine Lactee Nestlé, a combination of cow’s milk, wheat flour and sugar. Farine Lactee was launched by Henri Nestle in 1867 and it was supported by the public. After that, Nestlé also launched Milo in 1934. Milo is a chocolate and malt powder which is mixed with hot or cold water to produce a beverage and it is developed by Thomas Mayne in Sdyney, Australia. After the launched of Milo, another product launched by Nestlé that famous among the world which is Nescafe. Nescafe is a powdered coffee that was introduced in Switzerland on April 1, 1938 after being developed for seven or eight years by Max Morgenthaler and Vernon Chapman. Another product that pull Nestlé toward success is Nestlé Pure Life, a bottled mineral water that launched in 1998.

The smart strategy of Nestlé had bring them toward the road of success. In 2012, Nestlé has around 8,000 brands on the market included coffee, bottled water, milkshakes and other beverages, breakfast cereals, infant foods, performance and healthcare nutrition, seasonings, soups and sauces, frozen and refrigerated foods, and pet food.

Organizational chart

Planning and Strategic Management

Basic strategies used to respond to uncertainty

Nestlé is a company that mainly act as a prospector while responding to uncertainty. Prospectors focus on developing new products or services and in seeking out new markets, rather than waiting for things to happen. Nestlé had create many brands and many different types of products to satisfy consumers’ needs and wants. The table below showed the list of product of Nestlé.

Types of Products

Brand

Baby foods

Cerelac, Gerber, Gerber Graduates, NaturNes, Nestum

Bottled water

Nestlé Pure Life, Perrier, Poland Spring, S.Pellegrino

Cereals

Chocapic, Cini Minis, Cookie Crisp, Estrelitas, Fitness, Nesquik Cereal

Chocolate & confectionery

Aero, Butterfinger, Cailler, Crunch, Kit Kat, Orion, Smarties, Wonka

Coffee

Nescafé, Nescafé 3 in 1, Nescafé Cappuccino, Nescafé Classic, Nescafé Decaff, Nescafé Dolce Gusto, Nescafé Gold, Nespresso

Culinary, chilled and frozen food

Buitoni, Herta, Hot Pockets, Lean Cuisine, Maggi, Stouffer’s, Thomy

Dairy

Carnation, Coffee-Mate, La Laitière, Nido

Drinks

Juicy Juice, Milo, Nesquik, Nestea

Food service

Chef, Chef-Mate, Maggi, Milo, Minor’s, Nescafé, Nestea, Sjora, Lean Cuisine, Stouffer’s

Healthcare nutrition

Boost, Nutren Junior, Peptamen, Resource

Ice cream

Dreyer’s, Extrême, Häagen-Dazs, Mövenpick, Nestlé Ice Cream

Petcare

Alpo, Bakers Complete, Beneful, Cat Chow, Chef Michael’s Canine Creations, Dog Chow, Fancy Feast, Felix, Friskies, Gourmet, Purina, Purina ONE, Pro Plan

Sports Nutrition

PowerBar

Weight management

Jenny Craig

In the effort of seeking out new markets, Nestlé had employed around 330 000 people in over 150 countries and have 461 factories or operations in 83 countries. Nestlé also becomes one of the sponsors in many events. For example, on 27 January 2012, the International Association of Athletics Federations (IAAF) announced that Nestlé will be the main sponsor for the further development of IAAF’s Kids’ Athletics Program for the consecutive of 5 years starting from January 2012. This is one of the biggest grassroots development programs in the world of sports.

In the year 2012, Nestlé expect that it will be a challenging year as they will face many uncertainties in the global economy and. However, as a prospector, the company had made specific plans to overcome the uncertainties. They believe that they have good fundamentals and will be able to diversify the global uncertainties.

Nestlé aim to continue the innovation and renovation of their products as long as launching further promotion of nutritional diets and healthy lifestyles Nestlé will remain vigilant and will take all necessary method to soften any impact on their business due to the volatile commodity prices that were expected to continue in 2012.

Besides that, Nestlé Company can also be considering as an analyzer. Analyzers let other organizations take the risks of product development and marketing and then imitate or perhaps slightly improve on what seems to work best.

For example, Nestlé was Gail Borden’s most successful imitators in the production of milk. Nestlé imitate and make changes based on the condensed milk manufactured by Borden’s first canned milk factory. Nestlé invented a powdered milk food that primarily composed of cows’ milk and then mixed with water. By 1868, this product was being sold in Switzerland, Germany, France and England. After five year, the product was available throughout Europe. Eventually, Pet Milk and Carnation Milk were produced and sold in United States.

In the 21th century, humans’ wants are unlimited. Therefore, Nestlé create new brands on the products that already exist in the market and are needed for the consumers to widen their choice.

Mission and Vision

Nestlé’s mission is to provide consumers with safe and convenient high quality food products so that people can live a better life. They are friendly, caring and efficient organization and they believe that research can help them make better food so that they can provide selections for all individual taste and lifestyle preferences.

We should responsible we role, that means we need to responsive to the social, environmental, economic and cultural aspirations of people anytime, whilst ensuring our shareholders a reasonable return on their investment.

Our staff can succeed job satisfaction, self-development and their reasonable targets because Nestlé are seen as a perfect place of employment with good working conditions and benefits, with an internal environment.

Nestlé’s vision is to providing customers with high quality products and services with added value at competitive prices, simultaneously ensuring the long term viability and profitability of the organization. We have to continue to struggle to get the recognition and satisfy the trust our customers and business partners place in us.

Our ambition

As the leading Nutrition, Health and Wellness Company we enhance lives by offering tastier and healthier food and beverage choices at all stages of life and at any time of the day, helping consumers care for themselves and their families. This is the foundation of our promise of Good Food, Good Life and puts nutrition at the heart of everything we do.It is our firm belief that, for a company to be successful over time and create value for its shareholders, it must also create value for society. We call this “Creating Shared Value”. Built on strong foundations of compliance and sustainable business practices, this is our way to do business and to be the trusted leader in Nutrition, Health and Wellness.

SWOT analysis

Grand Strategy

Grand strategy is a systematic, comprehensive, long-term plan of all the company use to achieve their goals. Market, product, and organization development is the main element of this strategy. There are three types of strategy such as Growth strategies, Stability Strategy and Defensive Strategy. Growth strategy involves the expansion of a company. Stability strategy is a strategy there are no-change strategy or little change strategy. Defensive strategy is a control to reduce the probability of loss.

Nestlé is a company that apply growth strategy. Nestlé started the business in the year of 1866 with a first European condensed milk factory and today becomes the world’s biggest food producer. The product of Nestlé such as Milk, Beverages, Coffee, Ice-cream, Confectionery & Chocolate, Junior Food and other, has make a sales of CHF 44.1 billion in 2012 from 74,660 million at 1999. There net profit increase from 8% to 9.5billion Swiss francs ($10.35 billion) that show at9 August 2012. In 2003,Nestlé got around 328,000 people that are Nestlé’s staff in 70 countries and have many operations or factories in the world compare to the old figure of employee in 1998 299,800 people.

Besides that, Nestlé is increasing the size of their company year by year. One of the strategies is give different promotion on day. They give a discount for customer by using coupons. For example, Nestlé Toll House Birthday Sugar Cookies can save 55$ if we print out the coupons to buy. In addition, Nestlé also provide the samples food for customer in a promotion time, for instance, Maggi MeeGorengget the FREE Samples of the Delicious in 2nd July 2012 to 2nd August 2012. These was the successful strategy of Nestlé in now a day.

Nestlé begin the business at 1866 with the combination of cow’s milk, wheat flour and sugar. After 1 year, infant cereal developed for a whole new world to babies. Next, the launch of Milo, Nescafe, Nestea, Nestlé Pure Life, and Power Bar are launches at the years after 1929. Although these are many product launches, they merger with another company as an example Maggi and Ursina-Franck. Nestlé did the high risky of investment in the follow year such as joint venture with L’Oreal, General Mills, Coca-Cola and Fonterra.

In conclusion, Nestlé was trying their best at the sales of product. It has a smart plan for the uncertainly. Growth strategy will give the increasing of cash, bank payment and other to the Nestlé company and Nestlé will improve in new product or new market in the future.

Competitive Strategies

Nestlé mainly focused on differentiation strategy. Nestlé is a quality focused company. They differentiate their products with their competitors by giving them better customer satisfaction and quality with in an acceptable price limit. All their market is based on quality products and customer satisfaction. The main factor that motivates a customer is to buy their goods is the nutritional content in their products. They also focused on creating a strong brand by creating brand equity.

For have a better quality on their products, Nestlé had created Nestlé Nutrition, which is a global business organization designed to strengthen the focus on their core nutrition business. They believe that strengthening their leadership in this market is the key element of their corporate strategy. In order to reinforce their competitive advantage in this area, Nestlé created Nestlé Nutrition as an autonomous global business unit within the organization, and charged it with the operational and profit and loss responsibility for the claim-based business of Infant Nutrition, HealthCare Nutrition, and Performance Nutrition. This unit aims to deliver superior business performance by offering consumers trusted, science based nutrition products and services.

In order to produce a better quality product, Nestlé had made an effort on research and development. Research and development is a key of competitive advantage for Nestlé. Without research and development, Nestlé could not have become the leader in food and beverage industries. With 29 research, development and technology facilities worldwide, Nestlé has the largest research and development network of any food company. Based on the research and development done by Nestlé, they are able to produce many products that have a high quality in nutrition, wellness, taste, health, texture or convenience.

Besides that, Nestlé also use cost-leadership strategy for minor products. Nestlé had used a new strategy called Nestlé’s Popularly Positioned Products (PPPs) strategy that provide consumers with high-quality, nutritious products, regardless of where they sell them and the price point at which they sell them. PPPs focuses on the specific needs of 3 billion lower-income consumers worldwide. PPPs offer these consumers the opportunity to consume high-quality food products that provide nutritional value at an affordable cost and appropriate format. With a range of locally adapted distribution methods, including street markets, mobile street vendors and door to door distributors, PPPs are a source of income for street traders and individual distributors and contribute to the creation of local jobs.

Recommendation

Utilizing the identified strengths and opportunities

Overcome the identified strengths and opportunities

Conclusion

Overall achievement

Firstly, on 21 May 2012, Nestlé was in the rank of No. 18 in The Gartner Supply Chain Top 25. The Gartner Supply Chain Top 25 is about leadership. Nestlé has created a successful supply chain segment for its popular Nespresso line. Nestlé is also highly advanced and integrated in its raw material sourcing strategies, and has invested significantly in supply development and innovation.

Moreover, on 12 April 2012, Nestlé becomes the first food and beverage company that receives A+ rating, which is the highest standard in Global Reporting Initiative (GRI) for Creating Shared Value report. This shows that Nestlé do take seriously their responsibility to create shared value and conduct their business in a sustainable way.

Next, Nestlé won the ACCA Malaysia Sustainability Reporting Award 2011. This was because Nestlé use Sustainability Reporting to communicate to stakeholders regarding the progress of their Creating Shared Value strategy, which is to create value simultaneously for society and their shareholders while carrying out our business activities.

On 19 May 2011, Nestlé receives top environment award which is the 27th World Environment Center (WEC) Gold Medal award for its commitment to environmental sustainability. This shows that Nestlé was recognized as a global company that has demonstrated an example of sustainability in business practice.

Furthermore, on 7 June 2011, Nestlé became winner of the Stockholm Industry Water Award for its leadership and performance to improve water management in its internal operations and throughout its supply chain. Nestle also has a leading role in the 2030 Water Resources Group.

In July 2010, Nestlé Malaysia was crowned as a winner of the Asia Responsible Entrepreneurship Awards 2010 (AREA). This awards show that Nestlé was recognized as an organization that have shown a lot of efforts, perseverance and courage in corporate social responsibility initiatives.

Besides that, a Global Food Industry Award was given to Nestlé by The International Union of Food Science and Technology (IUFoST) .in 2010. Nestlé’s dedication to food science and technology has been acknowledged by the IUFoST as long as Nestlé’s efforts to advance global food science and technology for the benefit of everyone had been recognized by them.

Last but not least, Nestlé won the StarBiz-ICR Malaysia CR Awards in the year 2009. Nestlé was one of the seven public-listed companies which were recognized and honoured for their outstanding Corporate Responsibility practices at the StarBiz-ICR Malaysia CR Awards 2009 presentation ceremony.