Around of UK households consume our rand and more than two billion Nestle© products are sold in the I-J every year. Nestle© is one of the I-J and Ireland food industry major exporters, exporting over Emma worth of products every year to over 50 countries around the world. History: Our history begins back in 1866, when the first European condensed milk factory was opened in Champ, Switzerland, by the Anglo-Swiss Condensed Milk Company. In Peeve, Switzerland, our founder Henry Nestle©, a German pharmacist, launched his Farina lace©e, a combination of cows milk, wheat flour and sugar, saving the life of a sagebrush’s child.
Nutrition has been the cornerstone of our company ever since. Objectives of Nestle Nestle©’s objectives are 1. To be recognized as the world leader in Nutrition, Health and Wellness 2. Trusted by all its stakeholders, and to be the reference for financial performance in its industry. We believe that leadership is not Just about size; it is also about behavior. Trust, too, is about behavior; and we recognize that trust is earned only over a long period of time by consistently delivering on our promises.
These objectives and behaviors are encapsulated in the simple phrase, “Good Food, Good Life”, a phrase that sums up our corporate ambition. CARS of Nestle In Business Studies curriculum terms, Corporate Social Responsibility (CARS) involves the business taking a broad view of its activities, looking beyond profits for shareholders and focusing on other stakeholders. A stakeholder is anyone that has Nestle Pestle By birdbrain an interest in or may attest the decisions and actions to a business . Stakeholders can be internal or external to the business. Internal stakeholders include employees and shareholders.
External stakeholders include suppliers, customers, the communities in which the business operates and the environment. For companies like Nestle©, which work with suppliers from a range of countries, many in poorer regions of the world, it is becoming increasingly important to take a wider view of responsibilities. Nestle© believes for a company to be successful in the long term and create value for its shareholders, it must also create value for society. It calls this Creating Shared Value. Creating Shared Value Creating Shared Value has become an integral part of the way in which Nestle© does business.
It is based on compliance with international laws and codes of conduct and the company’s business principles, and a focus on environmental sustainability. However, Creating Shared Value goes beyond compliance and sustainability. It aims to create new and greater value for society and shareholders in the areas where the company can have the biggest impact – nutrition, water and rural development. These are core to its business activities and vital for its value chain: Water: because the ongoing quality and availability of it is critical to life, to the production of food and to Nestle©’s operations.
Rural development: because the overall well- being of farmers, rural communities, workers and small businesses and suppliers is intrinsic to the long-term success of Nestle©’s business. Nutrition: because food and nutrition are the basis of health and of Nestle©’s business as the leading Nutrition, Health and Wellness company. Partnerships Nestle© actively seeks engagement and partnerships with external stakeholders to optimism positive impact. It aims to use the power of its core activities and partnerships for the Joint benefit of the people in the countries where it operates and of its shareholders.
Global principles and goals set by organizations such as the United Nations also help to shape a company’s approach to corporate social responsibility. For example, Nestle©’s Corporate Business Principles incorporate the 10 United Nations Global Compact Principles on Human Rights, Labor, the Environment and Corruption. Nestle© is an active member of several of the Compact’s Working Groups and Initiatives. Page 3: Creating Shared Value along the supply chain Supply chain activities transform natural resources and raw materials into finished products which are delivered to the end consumer.
Each stage of the process adds value to the overall end product. Nestle© operates within complex supply chains. Its cocoa supply chain goes from cocoa bean to chocolate bar. This path starts with cocoa from farmers, who grow the crops; to cooperatives, which manage the sale of the crops; to processors and manufacturers, such as Nestle© which create chocolate products; to retailers such as supermarkets, and finally to consumers who purchase the products. Nestle© sources materials from thousands of farms, many of them small farmers in poorer rural regions of the world.
In many rural communities, a lack of investment in infrastructure has a serious impact on the quality and quantity of raw materials that Nestle© and other companies rely on. Nestle© provides training in order to encourage sustainable production, protect the supply and quality of its raw materials and have a positive, long-term impact on the local economy and farmers’ standards of living. Around two-thirds of Nestle©’s worldwide expenditure is on raw materials. Nearly 40% of this goes on three main ingredients: milk, coffee and cocoa.
Cocoa is the main ingredient in chocolate and as such is vital to Nestle©. It comes from cocoa beans that grow in a pod on a cocoa tree. Porters five forces Porter’s Five Forces Model was created to act as a framework for industry analysis and business strategy development. Porter singled out five different forces that impact competitive intensity which portrays an image of the overall attractiveness and profitability of a market. To aid in our evaluation of Nestle and its status in the industry, we will apply Porter’s Five Forces Model to the company.
Threat of New Entrants: The food processing industry is very large and competitive; it is not uncommon for rims within the industry to do quite well. As a result, many companies enter into the market every year in an attempt to gain a portion of the profitable market. Luckily for Nestle, the company has been around for over a century and boasts a long history of quality products and consumer satisfaction which has allowed the company to obtain a considerable share of the market. As a result, new entrants into the industry must attempt to seize a portion of Nestle©’s market share in order to survive.
Essentially, Nestle is constantly a target and so the threat of new entrants is moderate. Threat of Substitute Goods: Due to the nature of the industry, Nestle is beset with the threat of substitute goods. From bottled water to lean pockets, there are arrays of similar products that compete directly with Nestle. It is vital for Nestle to continuously find new ways to improve its products as the competition is so fierce. In recent years, Nestle has focused on the health and wellness aspects of its products to maintain its competitive edge in the market.
Bargaining Power of Suppliers: Nestle prides itself on creating and maintaining positive relationships with its suppliers all over the world. Due to the large purchasing power of Nestle and the fact that the suppliers of agricultural commodities offer a product that is far from unique, Nestle holds more bargaining power than its suppliers. Aside trot this, Nestle does prefer to create and preserve long term relationships with its suppliers as this helps to ensure the quality of the raw materials being purchased.
In addition, Nestle also offers useful advice to its suppliers on how to perform more efficiently to minimize unnecessary costs. Bargaining Power of Customers: Customers have a large amount of bargaining power regarding their consumption of Nestle products. As stated previously, there are close substitutes for Nestle products which allows for the preferences of the customer to be very powerful. Nestle understands the power of the customer and has taken specific steps to meet the needs of its products consumers.
Specifically, Nestle is incorporating health and wellness into the creation of its products as society has begun to grown more health conscious. Competitive Rivalry within the Industry: Nestle is a powerhouse is the food processing industry but so are Kraft Foods and Grouper Deanne. These companies, among others, are in a constant and continuous battle to outperform one another. Regarding advertising alone, these companies spend hundreds of millions of dollars in an attempt to appear more desirable than the other companies.
Rivalry is fierce in the food processing industry and this is a good thing for consumers. As long as these companies continue striving to one up one other, consumers will continue to enjoy ever improving product lines. When applied to Nestle, Porter’s Five Forces Model depicts a competitive but profitable market for the food processing industry. Furthermore, the model places Nestle© in a somewhat comfortable position within the food processing industry, while acknowledging the threats to its market share.
Specifically, the model notes a moderate threat of new entrants into the market and a substantial threat of substitute goods. In addition, the model shows that Nestle tends to maintain the upper hand over its suppliers as commodities have exact substitutes in the market. Also according to the model, Customers have a considerable amount of bargaining power, as Nestle must adhere to consumer wants and needs as there are so many close substitutes. For the final force, the model depicts a large amount of rivalry within the food processing industry. SOOT Analysts
