Nestle Company Vision and Strategy - Case Study Example

Table of Contents Chapter I: Background 3 Vision and Strategy 5 Motive behind the use of Communication 6 Analysis of the Organization 7 Chapter 2 Target Groups 7 Human resources department 8 Finance department 9 Marketing Department 10 Research and Development Department 12 Chapter 3: Communication Goals 13 HR Department 13 Finance Department 13 Marketing Department 14 Research and Development Department 14 Chapter 4: Message 14 HR Department 15 Finance Department 15 Marketing Department 15 R&D Department 16 Chapter 5: Strategy and Tactics 16 Target groups 16 Communication Goals 17 Media 17 Message 18 Chapter 6: Media 19 Chapter 7: Activity Plan 23 Chapter 8: Budget 25 Appendix 27 SWOT Analysis 28 Bibliography 29 Chapter I: Background Nestle company has been going through some publicity issues in the past. There were a lot of cases where children died as a result of taking products from the nestle company. This led to massive protests by the people against their products. Nestle was accused of aggressively marketing their breast milk substitutes and dressing their sales ladies as nurses. The deaths reported were as a result of the increasing deaths of infants. For the infant formula milk, the powder has to mixed with water which in most poor countries is usually contaminated and unhygienic and therefore leading to the death of the children. Another issue was that even when the parents knew the hygienic standards that they had to have, they do not have the means to sterilise the equipment that they used and therefore having no choice but to use the contaminated water. The women in the poor countries sometimes could not afford the formula and thus would end up using less than the required amount of formula and mix it with more water so that a can would last for longer. This means that the infants got fewer nutrients than they required. Basically, children who are fed on breast milk are more protected than children who are fed on formula and thus have better health compared to the ones fed on formula. It was estimated that the death of children would have been prevented if they had been breast fed. The company is trying to clear their image and make the product well known and recognized by the people. Despite their unethical marketing, they have had to make changes so that they can improve their image. They claim that they use WHO recommended methods to come up with their formula and have even tried to reach out to the affected parties so that they can have better relationships with the people. Communication in the company has been wanting in the past. Communication in the company has not been successful in the past meaning that the goals of the company are not communicated to all the employees appropriately and on time. This means that there is a lot of confusion in the company and it nearly impossible to run the company successfully without proper communication channels. The strategy is meant to help the company come up with the communication problems of the company. There has been miscommunication within and outside of the organisation and therefore there has been the need for the company to come with strategies that would help the company to grow and to overcome the obstacles that have come up as a result. Communication has also been set up in order to empower the people about the changes in the products that have been made (Nestle, 2012). There has been a lot of politicking where there are a lot of concerns to make the people more profitable in what the company is doing. Efforts also have to be made to ensure that the energy profiles of the employees remain in place and that they are maintained throughout the entire company. Communication can be made clearer by coming up with strategies that would help the company to move forward and to realise their goals. Communication needs to be handled very carefully so that steps can be made in making profits for the entire company (Edgell, 2008). Since the company is a multinational, there are various employees who come from different areas and are required for the various branches in the world. This means that the company has a lot of diversity and the company has to find a way to fulfil the needs of all the employees without making any of them feel left out. This means that the company has to learn the various cultures of the employees and even the customers so that they can produce appropriate goods and services. Vision and Strategy Nestlé’s vision is primarily centred on its becoming a global leader in the wellness, health and nutrition industry. The company is of the strong belief that good food can be equated to their customers enjoying good health throughout their lives. In addition to the provision of healthy and nutritious food, the company also aims at providing pleasure and taste to all who happen to consume its various products. To aid it in attaining is vision; the company constantly conducts research to develop new way through which it can be able to provide its customers with their innate need for continuous improvement. The current strategy that is being employed by Nestle is for it to always make an early entry into the various emerging market. To this end, it always keeps a rather keen look out for new geographical markets that are currently in an early stage of development. Entering these markets at this state allows for the company to be able to make for itself a substantial market position. Most of the markets that the company has ventured into using this strategy are primarily in Asia, Eastern Europe and Latin America. One of the principle strategies that is employed by Nestle as it ventures into emerging markets is the placing of an emphasis on the customization of its products as opposed to globalizing them. To in effect means that as opposed to using a number of global brands, Nestle opts to use brand names that will resonate with the local market. This approach has the effect of causing the brand name to be more appealing to its various target groups (Guruvayura, 2013). The new strategy that Nestle plans to set in place will primarily focus on the company’s baby food products division. This is because over the years, there has been a widespread boycott of the company’s baby food products on the basis of allegations that claim that Nestle’s baby food products greatly contribute to unnecessary suffering and deaths among infants as a result of the aggressive marketing approach that is used by the company which arguably contravenes the set international marketing standards (Baby Milk Action, 2014). The strategy will be structured to effectively address the women demographic that are identified by the moniker of millennial moms. These are basically those women that happen to be working moms, are intensely focused on developing their professional careers and tirelessly work to successfully combine their professional and social lives. The strategy will encourage these women to offer healthy Nestle products to their babies with the added advantage that it takes very little time to prepare these products. Motive behind the use of Communication The implementation and success of this plan is crucial to Nestle as it is imperative that the losses suffered in its baby foods division be reversed .All the managers are expected to inform their respective departments on the need for this change although the departments that will be most affected by this strategy are the HR, marketing, R&D and finance departments. In implementing the new strategy, there is a relatively very strong probability that some departments will oppose it. As the strategy is expected to be rather challenging for some departments all the departments in the organization will have to prepare their members by communicating to them crucial information and directives during each step of the strategy’s implementation. Analysis of the Organization Nestle has been in operation for more than 140 years and has established for itself a reliable corporate culture. Its expertise in the market has enabled it to establish a number of stable popular brands and a wide range of products that combine to earn it an estimated over 1 billion in respect to annual revenues. This has enabled the company to consistently post strong financial results. The main challenges that is currently facing the company is that the baby foods have on recent years built up an undesirable reputation as being unreliable and this has prompted the company to conduct expensive product recalls. Nestle’s baby food products are widely reported as being contaminated and this has caused the company’s reputation to widely regarded as unethical and questionable. It is these factors that have caused the company’s reputation to become questionable and have promoted the company to develop a strategy that will focus on improving its baby food products and greatly improve the company’s image around Europe. The new strategy will involve the implementation of a new marketing strategy focused on Europe and channelling all the company’s resources towards it R&D department and encourage it as it works hard to find new components that won’t have a negative effect on babies. Chapter 2 Target Groups The new strategic plan envisioned by the company will necessitate that some changes be made across a nubmer of departments. The deparments that will be most affected by these changes are the Human Resource, Finance, Marketing, and the Reseach and Development Departments. Human resources department At Nestle, most of the personnel working at the department are noted to be mature employees of both genders aged between 30-40 years. These employees have an average of one child each and all tend to effectively balance their social and professional lives. These individuals also tend to prefer living around the city centre as their everyday activities are centred around this area. The human resources department will have to provide in-house training to the company’s employees so as to equip them with the skills that they will need to deliver on the new strategy. Human resources will need to communicate with the employees throughout the training program and explain in detail how they should carry out their work. There will be no gender bias on the training as all the employees will be given the same opportunities to train and advance in their careers. As part of the strategy, employees will be given a salary increment to match their new skills and expertise. As part of the strategy, the department might be forced to undertake the unpleasant task of firing some of the employees. It is expected that the department will be able to successfully deal with the changes that will be brought about by the strategy and that the employees working in this department have the necessary skills to successfully communicate with people and instruct them what is expected of them as part of the strategy and if they will be required to leave the company. Some of the employees in this department are expected to resist any move to fire employees but if the strategy happens to instead call for training, this move will be widely supported by the employees working in this department. Nestle company may require some changes internally which may mean that some of the employees will have to be transferred to other sections. Communication can be effected from the human resource to the various employees through internal memos, e-mails and even through the organisation’s notice board. The employees working in this department enjoy an informal relationship as they have formed the custom of routinely meeting each other for coffee after work. They also tend to use their mobile phones frequently and this is an indication that it will be easy for them to get in touch immediately if necessary. Finance department The finance department enjoys what is largely a mixed demographic of employees whose ages range between 40-45 years. Most of the employees in this department are noted to be married with an average of about 2-3 children. The department will be expected to make various adjustments to facilitate the successful implementation of the strategic plan. The plan will require substantial funding for it to be effective and to reach out to as many people as possible. Funds have to be allocated for the television commercials, fliers, and the extra staff that will be required during the campaign process. The finance department is one of the most important departments in an organisation. They have to plan of how money will come in and how it will be allocated to the various plans that the organization has in place. This is important of the company to function normally. Communication in the finance department takes place through internal memos, in meetings when they have to plan and even through the office intranet and via e-mails. The changes are likely to affect the finance department in a positive light since they will be able to plan better and be more in sync. If the employees working in this department get convinced that the new plan represents a win for Nestle and that it will bring substantial amounts of profits for the company, they will overwhelming support it and agree to the changes that it will cause. Marketing Department Most of the employees working in this department are aged between 28-32 years, are single and live within the city centre. The employees working in this department will be affected by the new strategy as it will drastically affect the manner in which they normally work. They will be required to implement a new strategy focused at increasing the sale of baby food products and will have to receive mandatory weekly trainings targeted as helping them to improve their marketing skills. Some of the employees in this department also stand the risk of having to leave the company in the event that they are deemed to be performing below the set expectations. In order for the company to communicate effectively with the clients from the rural areas, they have to ensure that they explain effectively the advantage of their product in relation to the other products. It is only in this way that they will be able to ensure that the people would welcome their products. They also have to ensure that their products are affordable as this would make the small difference seem negligible to the customers (Nestle, 2012). It is important to note that not all the customers are the same and therefore they all need to be treated differently. The customers in the urban areas have to be convinced of the nutritional values of their goods in relation to the other goods that are in the market. They have to ensure that everyone understands and values the advantage of their products over the others. It can only do this by ensuring that the goods are marketed effectively and that they can easily be differentiated by the other products. In some cases, the company would have to go through the politicking method where they discredit other companies as they promote their product. They can do this by empowering the various communities and making them know that the company has their best interest at heart (Bach, 2013). They need to ensure that the people share the same values as them and that they would be able to buy their products without even thinking twice about it. The resistance would mostly come from the other competitors or even from the people who believe that there is a cheaper option in the market. They would be able to know and understand that not every company cares for them but rather is just after sales by giving sub-standard low priced goods and services. Proper marketing strategies could be put in place to ensure that the sales remain high in the market. In the marketing department, employees generally tend to communicate through internal memos and emails. The communication between employees in this department is mostly informal as they frequently use social networks and hang out together during weekends. To communicate with clients, employees in the department can make use of television commercials, telephone calls, billboards and even promotion strategies. The changes in communication will affect the working of the department in a positive manner and thus would help in improving the said strategies so that the company gets more sales. As with all the other departments, there is no gender bias. Everyone in the company is supposed to carry out their work as effectively as possible. Some degree of resistance is expected from the employees working in this department and the strategy will have a massive impact on the department. Some of the employee working in this department will be terminated from their positions and the rest will have to undergo a tough training regimen that will drastically alter their working methods and habits. Research and Development Department This department will be tasked with the responsibility of researching the new ingredients that will be used in formulating the baby food products and establish how these products will be combined so as not to affect the health of babies. Most of the employees in this department are males aged between 37-50 years of age and live in the suburbs. The new change implemented in the strategy will have the effect of forcing them to have to research on new components that will be used in developing the new baby foods. These employees will have to conduct a series of tests to establish which ingredients are to be used in the new products. Most of the employees in this department communicate during the weekly departmental meetings when they discuss new findings and trends. In the event that they have to use a faster mode of communication, they will have to use the office intranet, email and through phone calls. The changes to be implemented by the new strategy will represent a challenge for the employees in this department as they will be required to work tirelessly and experiment with a cocktail of ingredients so as to develop a product that will provide the customer with the very best quality food. As the R&D department has been noted to enjoy challenges, it is expected that the employees in this department will support the strategy as opposed to resisting it. Chapter 3: Communication Goals This chapter will provide a description of the strategic plan’s intended communication goals as based on the internal segmentation of the various target groups. The goals set for each department will be developed around a SMART formula. HR Department The deparment has to be informed about the new strategic choice within the next two weeks, Within the next six months, the HR department will be made to establish a training program for the employees. Over the next three months, at least 80% of the employees in the department have to be convinced that the decision to fire the most unproductive employees will ultimatley prove to be best for the company. Finance Department Within the next 3 months, the employees in the department need to be convinced that the new strategy will be profitable for the organization. By 1st Jan 2015, the department is expected to find a method via whic hte new strategy will be implemented without necessarily forcing the organization to cut costs. Marketing Department The department should be informed about the new strategy that is to be implemented within the next two weeks. Within the next 4 months, the deparment has to be made to be about 40% more profitable. Before 1st January 2015, the loyalty of the members in this department should be increased by about 15%. Research and Development Department Within the next week, hte department has to be informed of the new strategy and given the necessary instructions on how to implement it. By 1st Jan, 2015, the productivity of the department has to be increased by at least 60%. Within three months of the strategy’s implementation, 50 percent of the department has to be convied that the new strategy will ultimately prove to be most profitable for Nestle Chapter 4: Message This chapter will highlight the messge that that the organization will put forth to their employees so as to convince them about the new strategy. The message will be structured so as for it to be suitable for the target group, the orgnanization and the media. HR Department There is an urgent need to train Nestle’s employees so as for the comapy to come up with a new marketing plan hat will be able to convince its customers. (Inform) With the aquisition of the proper skills, a proper marketing plan will be formulated for the organization. (convince) Finance Department The company needs to look into ways of investing in this new strategy without necessarily having to waste money. (inform) If the deparment can find a way through which the company can implement the strategy without wasting money, you will be rewared for this. (convince) Marketing Department It is imperative tha the company implements a new marketing plan so as for it to improve its image. (Inform) If the new plan is able to fit in with the organization’s objectives and helps it to improve its reputation, the members of this department will have the satisfaciton of knowing that they have attained their goal of helping the company and will receive a reward for their work. (convince) R&D Department It is necesary for the company to invest more in its R&D department if it its to find new ingredients that can be used in its baby food products. (inform) If you are able to successfully find a new formula for the company’s baby food products, the company’s image will be greatly impoved and you will enjoy the satisfaction of knowing that you are responsible for this improvement. (Convince) Chapter 5: Strategy and Tactics This chapter will explain all the reasons behind the choices that have been made in the plan. To start off, Nestle’s board of directors decided to implement a new strategy as the company had in recent years gained a negative reputation that resulted from the boycott of its baby food products. It is this reason that is identified as necessitating that the board meet with representatives from the company’s HR, R&D, Marketing and Finance departments to discuss the possibility of instigating a change. Target groups The target groups were selected based on their importance in the successful implementation of this strategy. The Human Resource department was selected because it will be responsible for the training of the personnel to be engaged in implementing the new strategy. It was also selected on the basis that it will have to ensure that the company’s employees have the necessary skills needed for this chagne. The department will also have to make some rather difficult decisions as it will have to evaluate the performance of emplyees and terminate those whose performance is deemed to be below par. The R&D department was selected on thei basis that it will have to experiment and come up with new ingredients that will be used in making the new baby food products. The Finance department also plays a critical role in the change as it will be required to be aware of the costs that resutl from the implementation of the new strategy. It will also have to come up with how the funding for the project is to be used so as not to have any wastes. Nestle’s marketing department was selected on the basis that it will have to develop the new marketing plan. Employees in this department will have to undergo a training program that will train them on how they can improve the company’s reputation. Communication Goals Each target group in the plan has a communication goal outlining exactly what they have to be informed about the strategic plan within a period of two weeks. As soon as this information is passed on to them, the organization can immediately start on implementing the change as the targeted groups will be ready for their involvement. The other communication goals in the strategy are aimed at attempting to increase the employee involvement in the new strategy and cause them to be more active. Nestle needs to ensure that it has loyal employes as the new strategy has to be implemented as soon as possible. Media The strategy will mostly use online communication avenues to ensure that communication is immediate. However, if the need should arise for more detailed explanations, well organized formal meetings will be scheduled where the respective departments will be able to give detailed explanations. The channels to be used include e-mails, formal meetings, informal meetings held during breaks, and mobile phones. Message Different messages will be sent to the different target groups as the strategy will affect the groups in different manners. In the messages, Nestle will have to inform and convince the groups on the need to join the strategy in addition to highlighting the manner in which they will be able to improve their knowledge and mode of working by accepting the changes caused by the strategy. Chapter 6: Media Media R&D Finance Human Resources Marketing E-mail X X Social networks X Mobile Phone X Formal meetings X X X X Informal meetings X X Intranet X X Target group Media Reason R&D department Formal meeting E-mail The department will have a meeting with the concerned directors where they will be informed about the strategy To discuss any recent news events and developments. Intranet This will be used to convey any urgent developments that may emerge. Human Resources Formal meeting Informal meeting Mobile phone To explain the new situation to this target group For example coffee breaks to see how the strategy is evolving and clarify any doubts. This will be used for urgent communication. Finance Formal meeting E-mail Intranet To provide information on the new changes. To convey messages on what is expected of the new strategy and how to best minimize expenses. To provide frequent updates on the strategy’s progress. Marketing Formal meeting Social networks Informal meetings To outline the new strategy Discuss emerging trends and new marketing opportunities. To answer any questions and highlight on how the project is evolving. Chapter 7: Activity Plan WHAT? WHO?/ FOR WHO? WHEN?/ FOR HOW LONG? Select the prospective representatives from the concerned departments Board of directors First three days starting 1st Nov, 2014 After the formation of the team, the team will decide on the message that is to be communicated to the employees in each department and when this message is to be communicated Change plan members 7 days Select the most important target groups and communicate the details of the plan to them. Change plan members 6 days Selection of the media that is to be used in the strategic plan Change plan members 4 hours Prepare a formal meeting to communicate the new change Change plan members 2 days Present the new strategic plan to Nestle’s employees Change members plan 5 hours Make a presentation of the Strategic plan, publish its contents and make it available for all employees For the target groups 8 hours Meeting to discuss the evolution, give feedback and solve doubts and fears For the employees 2 hours (every 14 days) Chapter 8: Budget Activities Costs ? ? Trainings and courses $ 30,000 Letters to employess $ 6,000 Marketing department $15000 Finance department $ 30,000 Distribution department $12000 Human resources department $10000 Internet costs $8000 Total costs $ ?,000 Since the company needs to install internet and telephone communication lines within the company, the finance department will need to have a budget for that. The marketing department will need the funds to carry out their campaigns and to cover for any transportations costs that may arise. The human resources department will require the extra funds for ensuring that the employees are well trained and that they are compensated accordingly. The finance department may need to hire seasonal experts to help them deal with the rising cost of production for the company and also to help in balancing the budget within the various departments. The distribution department will need the money to come up with new strategies in the distribution channel of the company. The marketing strategy and the change that is to be affected by the company should be affordable. The company can evaluate whether the strategy will be affordable and whether it will be cost effective. For a plan to be cost effective, it has to bring in more sales than what was used in the planning and the implementation stages (B, 2010). Since nestle is such a huge company, it can afford to make changes in the strategies and even if they have to do it in the long run. However, the fact that they have so much money to spend does not mean that they can take part in wasteful projects but rather should study the market well and only take part in the projects that will be beneficial to the company. It is the duty of the management to plan for the implementation of the strategies and to ensure that each employee takes part in their duties. Appendix SWOT Analysis Bibliography B, T. H.-T. (2010). Internationalization Strategies of Emerging Markets. Carlifonian management Review, 53(1), 67-89. Baby Milk Action. (2014). Nestlé boycott. Retrieved 30th of October 2014, from http://www.babymilkaction.org/: http://www.babymilkaction.org/nestlefree Bach, S. A. (2013). Managing Human Resources. Washington: Wiley and Sons. Edgell, J. M. (2008). Global sourcing trends in 2008. . Strategic Outsourcing: an International Journal, I(2), 173 – 180. Guruvayura, S. (2013). Nestlé: Global Strategy.Retrieved 30th of October 2014, from www.academia.edu: https://www.academia.edu/5366973/Nestl%C3%A9_Global_Strategy_INTRODUCTION Jones, S. (15th of May 2012). Strategic Management at Nestle. Retrieved 21st of September 2014, from http://www.articlesbase.com/: http://www.articlesbase.com/management -articles/strategic-management-at-nestle-5907881.html Nestle. (2012). Crisis Communication. Retrieved on Dec 17, 2014 from Nestle: http://irgc.org/wp-content/uploads/2012/06/M.-Schaedeli-Nestl%C3%A9-OCED-IRGC -workshop.pdf Read More