Professional Documents
Culture Documents
History
1867 Henry Nestle launched Farine Lactee Nestle 1905 merged with Anglo-Swiss Condensed Milk Company 1907 Warehouses in Asian market 1920 Factory in Brazil 1937 Nescafe 1948 Chocolate powder Nesquik After world war II Merged with Maggi 1974 - Entered Cosmetics Loreal 1977 Acquisition of Alcon Laboratories
CEO of Nestl SA from June 1990 to June 1997. Now Honorary Chairman nestle
Extended the reach of the company new product and new corner of the globe
Two primary objectives Improve market share in the United States
World leader in certain high-growth market segment
Peter Brabeck-Letmathe
CEO of nestle from 1981 to 1997 Now : Chairman of the Board of Directors, Nestl
Restructured R&D program 60/40 preference rating system Initiated GLOBE Moved away from its basic agricultural and processing root major acquisitions- solidified position Known for his vocal dismissal of two management popular paradigms of
Focus and radical change
3. Service
Wieght loss area, nutrition counseling sessions
4. Confectionary
nestle,crunch,kitkat, milkybar
Nestle nutrition
1. Infant nutrition (70% of sales) 2. Performance nutrition 3. Health care nutrition 4. Wieght loss Eg: NAN , Gerber
Organization
275000 employees - 130 countries Structure Decentralized, flat
Board of directors
Executive committee
Nestle nutrition
Nestle waters
Nestle professional
Zone America
Zone Europe
Nestle considered as a local company in many countries. Policy of developing local management Moving up the ladder
HQ as a platform for shaping defining ,thinking No contract negotiations in HQ providing guidance to where the journey is heading
Unwritten culture
we rely more in this than on management systems Top management exp > 25 years with nestle Time facilitates Alignment with nestle principles No external hiring for top management posts.
23 Product technology centers 20-25 R&D conference per year Network of volunteered experts
Video 2
Direct sourcing from farmers Creating shared value Volatility Reacting to globalized markets
Paul Bulcke
Should Nestl move towards pharmaceutical model? What are the implications?
Clashes with Nestles history of successful acquisitions to add profitable brands and product groups Pharmaceutical model can be characterized as time consuming, costly, and risky. Different markets have differing needs and preferences. Patents may be ineffective across geographies based on culture, customs, and regulations
How long will food patents last? Will it be enough to cover high R&D costs or will Nestle need to pass on costs to consumers thereby breaking its goal to keep products affordable? Is it possible to find a universal blockbuster product given the differences between food/nutrition and drugs/diseases? Competitors may be able to develop products faster and or outspend on R&D (arms race?)
GLOBE systems
Global Business Excellence in July 2000. Information system Unified data standard and tech infrastructure purpose - maximize operational efficiency, flexibility and competitiveness within the company. GLOBE is basically a re-engineering program designed to standardize data and information systems in all Nestl factories, sales offices and distribution centers.
Internal Market
affects internal purchasing within Nestl faster transfer of production within the Nestl system
Internal Competition
comparing individually factories internationally all benchmarking will be product-specific intensifying competition between each factory globally
Outsourcing
enables increased outsourcing of production, how? exercise the same levels of monitoring and control in factories that are not owned by nestle GLOBE had been implemented in 170 factories in 17 countries. But only 83 of these were Nestl factories
The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. Hard Elements
Strategy,Structure,Systems
Soft Elements
Shared Values,Skills,Style,Staff
Structure of Nestle:
Nestle has a decentralized and flat form of organizational structure. It has its operations divided worldwide on the basis of 3 zones of continents.
Strategy of Nestle:
'four pillar' strategy: 1. Operational efficiency 2. Innovation and renovation 3. Whenever, wherever, however 4. Consumer communication To enhance its strength the company focused on limited number of brands and on brand innovation. It also wants to shift its focus from a low-growth premium product portfolio to a higher volume-based growth portfolio.
Staff in Nestle
Our employees help us to gain and build competitive advantage through their energy, imagination and local insights. Its essential that we reward them competitively and invest in their development to ensure that we remain responsive to a rapidly changing world.
Style/Management style
Top management free from operational aspects and negotiations Decentralized decision making Democratic leadership style
For any advice and decision Nestle depends on its employees
Systems in Nestle
Unique routines and procedures grounded in nestle culture. Globe system
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