Environmental and Strategic Elements of the Company - Essay Example

Select an international company that has been boycotted. Critically assess environmental and strategic elements of the company that have been impacted? With reference to your chosen international company, discuss the key critical environmental is By (Author) Name of the Class (Course) Professor (Tutor) Name of the School (University) City Date Introduction Consumers boycotts have been around for many years in companies and traced back to the 14th century. In the United States for instance, boycotts by customers were the key to unionization and the 1955 Montgomery bus clients boycott marks the start of the contemporary civil rights movement. Elsewhere, for instance, include Gandhi’s boycotts of British cloth and salt prior to Indian self-rule and the British boycott of Barclays Bank before its withdrawal from apartheid in South Africa. In the 1990s, the organization presses reached an agreement that boycotts are often successful and were rising (Kennedy-Glans & Schulz, 2013 p., 47). The recent prominent consumer boycotts include the European boycott of Shell over its idea to dump the Brent Spar oil podia at sea and the multi-nation boycott of Nike over supposed sweatshop conditions at Asian suppliers. As these illustrations propose, boycotts today are more typically focused on business practices rather than broader socio-political goals such as civil rights. Consumers boycott is never far from the company’s exchange with its customers. Must researchers in marketing to comprehend the consumer protest behavior. Consumer boycott implies a boycott espoused by users of both company’s product and services to show their displeasure with the seller, provider or manufacturer (Goodman, 2003 p., 144). Many times, customers may not be willing or refuse to purchase a particular item in order to show their discontent to the excessive price or offensive action of an individual producer or manufacturer. As a result, it mainly focuses on the long-term alteration in the buying habits by permitting reform in commodity markets or times by inducing government commitment or obligation to moral purchasing. I reality consumer boycotts have been a reality and for many decades many organizations have struggled smoothen their operations to continue maximizing their sells and at the same time enhancing their relationship with the customers they serve. Despite the ever increasing occurrence of consumer boycotts worldwide, little has been documented on this form of economic and social protest. According to (Kozinets and Handelman, 1998) Boycotting behavior has always been theorized as a collective or joint effort to coerce corporate change. This paper looks at a multination company Nestlé that has been boycotted in the past, critically examining environmental and strategic elements of the business that has been impacted. The paper begins with an overview of the company to give a clear understanding of its operations and products to help build on the basis of the consumer boycott. The paper then examines and integrates theory about international marketing linking it with the ways in which Nestlé as a company deals with consumer boycotts. Finally, the paper provides a conclusion that summarizes the main conclusions from the research and discussion. It also includes comments about possible concerns or issues for the future. Company Overview Nestlé is the largest food company worldwide as measured by revenue. It is a Swiss multinational corporation operating in foods and beverage and is headquarter in Vevey (NESTLE, M. (2010). Nestlé as a business has been in working for more than 140 years. Nestlé was formed in 1905 exactly by the merger of the, Farine Lactée Henri Nestlé, which was founded in 1866 by Henri Nestlé and Anglo-Swiss Milk Company, established in 1866 by Page brothers(George Page and Charles Page). The company grew drastically during the First World War and further following the Second World War while expanding its offerings beyond its early infant formula products and condensed milk. The multinational company has in the past made a number of corporate acquisitions, such as Crosse & Blackwell in 1950, Libby’s in 1971, Findus in 1963, Gerber in 2007, Rowntree Mackintosh in 1988. The company is a commitment to producing foods that in all ways uniquely fulfill peoples needs in the whole world, and this has been the secret ingredient in everything they make. Nestlé’s products include bottled water, baby food, breakfast cereals, coffee and tea, dairy products, confectionery, frozen food, snacks and pet foods. Twenty-nine of Nestlé’s worldwide brands have annual sales of over US$1.1 billion including Nescafé, Nespresso, Kit Kat, Smarties, Nesquik, Vittel, Stouffer’s and Maggi. Nestlé operates in 194 countries with 447 factories operational and employs around 333,000 individuals. It worth noting; Nestlé is one of the principal shareholders of L’Oreal and which is the world’s largest cosmetics company (Hitt et al., 2008 p., 55). Nestle consumer boycott The boycott of Nestlé consumers is the world’s longest running. It started in 1977 in response and frustration to the aggressive marketing of Nestlé baby milk formula in poorer countries or third world countries. In the 1977, declining rates of breastfeeding resulted in a number of organizations to raise increasing concerns about the marketing practices of breast milk substitute manufacturers - including Nestlé - in poor countries. This led to the Infant Formula Action Coalition launching a boycott of Nestlé products in 1977 in the United States. This boycott was however dropped in 1984 (Biddle, 2002 p., 90). Baby milk issue Boycott. Factions such as the International Baby Food Action Network (IBFAN) and again Save the Children assertion that the promotion of infant formula over the breastfeeding has resulted is health problems and massive deaths among infants in less economically developed nations. There are four challenges that can arise when poor mothers in these countries switch to formula: • Formula must always be mixed with water, which is more often than not contaminated in poor nations, resulting in disease in vulnerable infants. Due to the low literacy rates in developing nations, as several mothers lack knowledge of the sanitation methods required in the preparation of bottles. Even mothers who can read in their native language may always unable to understand the language in which sterilization directions are noted(Hitt et al., 2008 p., 104). • Despite the fact that some mothers may understand the sanitation standards needed, they often do not have the ways to perform them: electric (or other related reliable) light to ensure sterilization at night or fuel to boil water. The United Nations Childrens Fund (UNICEF) projects that a formula-fed child living in unhygienic conditions and disease-ridden is between 6 and 25 times more probable to die of diarrhea and five times more probable to die of pneumonia than a case of breastfed child. • Many poor mothers in developing countries use less formula powder than is necessary. Mothers in these poor countries prefer these acts to ensure that the formula can last them for long due to their poverty. As a result, many of infants whose mothers do this receive inadequate nutrition from weak solutions of the formula. Furthermore, the formula lacks many natural nutritional values that breast milk possesses. Always antibodies and nutrients are passed to the infant while hormones are introduced into the mothers body. Breastfed infants are protected, in many degrees, from several of illnesses, bacterial meningitis, including diarrhea, gastroenteritis, respiratory infection, and ear infection. Breast milk by mothers contains the right amount of the natural nutrients essential for neuronal (nerve and brain) development. The bond between mother and baby may be strengthened during the breastfeeding process. Frequent and exclusive breastfeeding may also delay the fertility return, which can assists women in poor countries to space their births. Breastfeeding generally: • Benefits mother health • May make mother life easier • Protects the baby These benefits from breastfeeding process versus the formula by Nestlé formed basis the consumer boycott. Advocacy groups, and charities in the past have accused Nestlé of unethical techniques of promoting baby formula over mothers milk to poor mothers in developing nations. For instance, The International Baby Food Action Network (IBFAN) claim that Nestlé as a company distributes free formula samples to maternity wards and hospitals; after leaving the medical institution, the formula is no longer that free, but due to the fact that the supplementation has interfered with lactation, the individual families must continue to buy the formula. The International Baby Food Action Network (IBFAN) also allege that Nestlé uses "humanitarian assistance" to develop markets, does not label its items in a language appropriate to the nations where they are vend, and offers gifts and sponsorship to influence health workers to promote its products. Nestlé however have denied these allegations (Hitt et al., 2008 p., 33). The argument was Nestlé as a company knows that artificial feeding in the developing nations of the world is dangerous. So the question for boycott has been why do they promote their products in these countries? The dreadful reality is that each breastfeeding mother then represents competition for formula feeding companies. In what has become a dangerous zero-sum game, Nestlé is trying to persuade mothers all over the world to engage in deadly feeding methods. The Nestle boycott may prove to be one of the most successful consumer movements in recent years. It is also one of those relatively few cases where individual action has the potential to affect the actions of others and, in turn, dramatically change the health status of millions of people over a period of time. Implications of customers boycott in Nestlé’s were massive Various professional associations across the globe are refusing Nestlé sponsorship of their events and conferences to date. Despite the allegation by the company that boycott was successfully ended boycotts has had serious adverse consequences for the company. This extends beyond any direct loss in company in terms of sales to include longer-term effects on company reputation and even brand image (Root, 1994 p., 20). The function of perceived egregiousness in consumer boycott participation means that there is less probability of being targeted by a boycott if a company does not engage in activities that might be viewed as unacceptable. Responses and strategies to combat Consumers boycott The company has had various ways of responding to consumer boycotts. One key to successful management response to consumer boycotts has been the recognition that the consumer boycott may have long-term negative impact, reputation and image to the brand. Because company executives too have always been at risk of negative reputation (Kourdi, 2009 p., 7).  Most importantly, (“the urge to change the company decision” and “angry and want the firm to know”). Communications intended to convey that the company is unlikely to alter its decision on the perceived egregious strategies or policy might well lessen the probability of consumer boycott participation. However, this has totally always been balanced against the possible negative impacts of stonewalling. The paper might further speculate that real acknowledging consumer anger would also reduce the probability of boycott participation though this is purely based on assumption and commitment of top management as it is not directly investigated (KourdI, 2009 p., 60). Nestle as a company too have tried combating the consumer boycott through vigorous marketing campaign. Through this, the company has attempted to assuage the guilt that would-be boycotters could otherwise experience (advertisers of company products in various categories of goods such as include bottled water, baby food, breakfast cereals, coffee and tea, dairy products, confectionery, ice cream, snacks and pet foods are accustomed to creating campaigns with guilt reduction in their mind). Despite this strategy, other self-enhancement moderators have been a challenge or more difficult for the company to influence (Bennett& Blythe, 2002 p., 77). The company’s belief has been that the boost to self-esteem that would come from consumer boycott participation has to do with associating with the values and views of the NGO calling the boycott and, for some boycotts, anti-capitalist values in broad ways. If right, this rejection of the values of the firm might be very problematic to counter, at least for any specific firm. It would also be the reason some boycotts linger, for instance, their company, and long after the company has addressed the challenges that gave rise to the consumer boycott. In this view, The Economist (2001) has argued that business as a whole has to present its case at hand more effectively. As well as attempts to influence the promote change and self-enhancement variables, consumer boycott targets might also try to increase the rationalizations and the perceived costs of boycotting that seems to reduce the probability of boycott participation (Lymbersky, 2008 p., 12). Nestle as a company in the recent past laid strategies to combat customer boycott unlike companies experiencing product crises, such as say recalls, who are advised to cut back on advertising. In the case Nestle, who experiences consumer boycotts, however, increased advertising has been seen beneficial if it rise the direct costs of boycott participation and reminds the would-be boycotter of what he/she would be missing. More essentially, perhaps, has been communicating potential harms of the consumer boycott. In the consumer boycotts management responses always included communication of company attempts to lessen the harm of its actions, and these did succeed in reducing apparent egregiousness and hence boycotted involvement. As important, managers never assume that non-boycotters are not affected by the consumer boycott. A key insight from recognizing the role of the moderating strategies by the Nestle Company has been to acknowledge that none boycotters could well strongly disapprove of the firm’s practice but this is not portrayed in sales data; they could not be boycotting since they don’t believe the boycott would change the firm’s policies, for instance. Part of Nestlé’s strategy or to handle World Health Organization (WHO) criticism was to advocate or promote an industry-wide response. Nestle´ as a company has in the recent past worked closely with the International Council of Infant Food Industries (ICIFI), the food industry’s self-regulatory body. International marketing involves recognizing that individuals all over the world have different needs. As such strategies lie in place to address these variations. Nestle as a company has in a recent fact factored in these aspects to handle its global clients well knowing that these are the aspects that contributed to customers boycotts. For instance, they have tried to emulate companies like Coca-Cola, BIC, Gillette and Cadbury Schweppes, who have brands which are recognized across the globe and considered customer friendly by activists. Nestle as a company has tried emulating the packaging of their products and marketing strategies; as these have been singled out as the major causes of customer boycotts they experience. While several of the products that these companies sell are targeted at a global customers using a consistent marketing mix, Nestle realized the products are marketed basing on deep understand regional differences and social and economic issues in various regions. The Organisations felt that they must accept that differences in customs; languages and values will mean that some company’s products will only suit particular countries. Conclusion More often than not, customers may not be willing or refuse to purchase a particular item in order to show their discontent to the excessive price or offensive action of a particular producer or manufacturer. This drastically goes in the long run in tarnishing the company’s reputation and brand image. It is hence upon the company to explore innovative ways to combat these customer boycotts. The paper has in detail discussed consumer boycott at Nestle and help build on the basis of the consumer boycott. The paper has further examines and integrates theory about international marketing linking it with the ways in which Nestlé as a company deals with consumer boycotts (Waters, 1997 p., 10). . Generally, four factors are found to continuously predict consumer boycott participation: One is the desire to make a difference; two is the scope for self-enhancement, thirdly the counterarguments that inhibit boycotting and finally the cost to the boycotter of the constrained consumption. Finally, my recommendation to the company is to one, apply WHO rules and laws, secondly to include warning in labels that are controversial and this and other strategies they have applied, they will lessen these boycott and operate efficiently (Kennedy-Glans & Schulz, 2013 p., 190). References Top of Form Bottom of Form Top of Form Bottom of Form BENNETT, R., & BLYTHE, J. (2002). International marketing: strategy planning, market entry and implementation. London [u.a.], Kogan Page. BIDDLE, S. (2002). Internationalization: rhetoric or reality? New York, NY, American Council of Learned Societies. GOODMAN, D. J. (2003). Consumer Culture a Reference Handbook. Santa Barbara, ABC-CLIO. http://public.eblib.com/choice/publicfullrecord.aspx?p=265470. HITT, M. A., IRELAND, R. D., & HOSKISSON, R. E. (2008). Strategic management: competitiveness and globalization. Mason, Ohio, South-Western. KENNEDY-GLANS, D., & SCHULZ, R. (2013). Corporate integrity a toolkit for managing beyond compliance. Hoboken, N.J., Wiley. http://rbdigital.oneclickdigital.com. KENNEDY-GLANS, D., & SCHULZ, R. (2013). Corporate integrity a toolkit for managing beyond compliance. Hoboken, N.J., Wiley. http://rbdigital.oneclickdigital.com. KOURDI, J. (2009). Business strategy: a guide to taking your business forward. London, Eng, Economist in association with Profile LYMBERSKY, C. (2008). Market entry strategies text, cases and readings in market entry management. Hamburg, Management Laboratory Press. NESTLE, M. (2010). Safe food: the politics of food safety. Berkeley, University of California Press. ROOT, F. R. (1994). Entry strategies for international markets. New York, Lexington Books. WATERS, C. P. M. (1997). Consumer boycotts in the "New Economy": how should the common law respond? Thesis (LL. M.)--McGill University, 1997. Read More