Nestle Got into Trouble with Maggi Noodles - Assignment Example

Question 1 Nestle got into trouble with Maggi noodles because of different reasons which impacted them. Some of the root causes which created the trouble for the business are as Regulators: Nestle was facing issues with its regulators as they testing conducted by Indian laboratories showed a high degree of lead content. Lead is a harmful substance if consumed and can have a negative impact on human body. Nestle on the other hand stated that the test conducted by them showed no lead content as the mechanism of testing used by Indian laboratories were incorrect. Nestle also harped on the point that different laboratory testing in India was showing different results where showed agreed to the report generated by Indian laboratories and some agreed to the report generated by Nestle laboratories. This creates doubt regarding the mechanism which is being used to test Maggi. The regulatory bodies on the other hand disagreed with what Nestle was saying and stated that the product was having harmful content and needs to be banned. The different in report and testing mechanism which both the regulatory bodies and Nestle adopted resulted in different results. Since, the Indian regulatory bodies were not willing to accept the test results provided by Nestle and instead followed the results which the local testing laboratory provided it resulted in banning of Maggi till the time the product was corrected and free from any harmful chemicals. Corruption: The manner in which the overall mechanism was carried out also highlights a certain degree of corruption. This is on the backdrop that Baba Ramdev is looking to promote its own brand of fast food items under the brand of being swadeshi or Indian. He is against multinational brands on the ground that the products supplied by multinational organizations are highlight priced and of inferior quality. This could have resulted in simulating the government bodies in taking steps against Nestle and coming up with reports which were false and misleading. This can be stated on the backdrop that the products of Baba Ramdev have stated to capture a good chuck of the Indian market and Nestle has to deal with competition. To ensure that an Indian brand competes with the multinational brand strategies could have been developed to create a bad and false impression of Nestle. The situation unfolds that a degree of corruption was present in the entire scenario and Nestle had to face the situation as it was entirely against them resulting in the banning of Maggin from the Indian markets. Packaging: Packaging was another issue which had impacted Nestle. The packaging material which Nestle used is plastic of an inferior quality which has the risk of being leadous in content. This increases the risk as the packaging materials are not as per the determined quality which increases the overall risk. This is as aspect which had impacted Maggi as they need to look at using better materials so that the eatables are fresh for human consumption. The manner in which Nestle was unable to deal with the different requirements which was being presented highlighted overall risk for the business and ultimately led towards banning of its product Maggi. Question 2 The manner in which Nestle acted is appropriate and justifies the fact that the organization was aware of the situation and looked towards ensuring that steps were taken which would help to improve their brand name. Nestle looked at withdrawing the product from the market as the government pressure on the organization was slowly growing. In addition to it Nestle has realized that if it acted smart and removed their products from the market it would lead towards creating a positive impact on the consumers as they would be aware that the organization cares for them. It will make the consumers realize that they care for their wellbeing and look towards ensuring that quality products are supplied to them. Nestle was facing issues from all directions so it had no options other than withdrawing the product. On the forefront the organization was facing pressure from government bodies as they wanted Nestle to remove Maggi as it had a high lead content and if consumers consume they might fall ill. This forced Nestle to remove their products from the market. Nestle on the other hand while removing their products wanted to ensure that the brand image doesn’t gets tarnished. Nestle looked towards bringing forward to the consumer that they withdrew the product on the premise that the government bodies were not happy with the laboratory result which they feel is incorrect, but to ensure that no consumers are misled and the company cares for it consumers the products were withdrawn from the market. Nestle was looking at different areas where their brand image was also preserved the products were also removed so that both government bodies and consumer had a fair role which would help them in the future. Nestle knew that it was a matter of time as the issue would be solved and the company would come back again in the market. The company instead made a complete inspection and made certain changes so that the products which they were supplying in the future were free from lead. In the meantime the organization didn’t look at reducing the manpower but instead borne the cost associated with it as they knew that they would need the workforce in the future. The organization thereby didn’t remove any labour and over a period of time was able to rectify the entire situation and emerged as heroes (Davenport, 1993). Nestle also developed strategies to ensure publicity while it was withdrawing the product. The company came out with advertisement that despite being correct and fair it was withdrawing the products so that the consumers can feel safe. In addition to it the company also stated that they work as a legal entity and would look to file a suit but since the government bodies wanted them to remove the product they were acting in the same direction (Deem, 2005). The publicity mechanism helped Nestle to ensure that their brand image was not impacted and people and the society still favoured the brand. During the period where Nestle was undergoing changes in the production technique it ensured no advertisement of Maggi was shown but instead focused towards highlighting the manner in which the organization cared for the society and large and were willing to take any step to satisfy the society. This helped Nestle to ensure that their brand image was kept intact which thereby helped to bring about the required change and ensured that it could grow in the future. Question 3 Nestle has to develop strategies so that such situation or incidents don’t happen in the future. Some of the areas they need to consider are as Better regulatory requirements: At the forefront they need to ensure that the pass the different test which has been prescribed by local government authorities. Nestle on this front has to look at ensuring that the local needs and requirements are better met as it will help the business to be carried out without any hurdles. This will ensure that the business will face no obstacle with regard to the legal requirements and would help the business to be carried out smoothly (Bolloju, Khalifa & Turban, 2002). Nestle as a result would be better placed to deal with the different regulations and would help the business to ensure that all legal needs are fulfilled Building better relations: In addition to it Nestle has to look forward towards building with the different stakeholders like regulators, customers and employees. Nestle has to work on all fronts and develop better relations with the stakeholders. This will require that Nestle looks at ensuring that the different regulatory needs are filled, the different customer needs are fulfilled and the employees are looked after. Working on the different dimensions and looking at meeting the different needs of the business through better relations will help the business to be carried out smoothly. Building better relations will help in every sphere as it will provide Nestle with an opportunity where situations will be better handled and would help to deal with the different issues easily. This will help to build a better image and would provide an opportunity through which the different aspect of business will be handled in a better way. Improved monitoring: Nestle will further has to look at improving the process of monitoring. This will help Nestle to ensure that they are able to look at every minute details that the business needs. As a result the business will be better placed as every minute aspect which will have a long term impact will be handled properly (Bridges, 2003). This will provide an opportunity for the business to meet all the requirements which the external environment is presenting thereby ensuring that the business will be carried out smoothly. References Bridges, W. 2003. Managing transitions: (2nd Ed.). Cambridge, MA: Da Capo Press: p85 Bolloju, N., Khalifa, M. & Turban, E.2002. Integrating knowledge management into enterprise environments for the next generation decision support. Decision Support Systems, 33, 163-176 Deem, R. 2005. Management as ideology: the case of ‘new managerialism’ in higher education. Oxford Review of Education. pp. 217-235. Davenport, T, 1993. Process Innovation: Reengineering work through information technology. Harvard Business School Press, Boston, Pp.56 Read More