Nestle Supply chain Management Strategy | Procurement | MBA case study examples with solutions
Summary
TLDRNestlé, the world's largest food manufacturer, has a history rooted in solving child malnutrition and has since diversified into chocolate and pharmaceuticals. With a focus on innovation, customer value, and a strong brand, Nestlé excels in supply chain management, emphasizing responsible sourcing and ethical practices. The company's acquisitions and commitment to zero waste by 2020 showcase its environmental responsibility and contribute to its impressive net worth of 247 billion dollars.
Takeaways
- 📚 Nestle is the world's largest food manufacturing company with a global presence and a diverse range of products.
- 🍼 Founded in the 1860s by Henri Nestle to address infant malnutrition, the company initially offered a food supplement as an alternative to breast milk.
- 🍫 After merging with the Swiss General Chocolate Company, Nestle expanded into new countries and diversified its product portfolio, including chocolate.
- 🏆 Nestle owns some of the world's most famous brands, such as Milo, Nido, and Nescafe, and has diversified into pharmaceutical products.
- 🛠 The company's operational success is attributed to sound business strategies that focus on product innovation and renovation, as well as customer value creation.
- 🌐 Nestle emphasizes core values like cultural diversity, quality, brand strength, customer satisfaction, and high-performance goals.
- 🔄 The company outsources some activities and uses supply chain management to maintain product quality and ensure smooth operations.
- 👥 Nestle has a large workforce to support its supply chain operations and achieve a competitive edge through customer satisfaction.
- 🏆 Nestle's supply chain management is highlighted by four main strengths, demonstrating excellence in the industry.
- 📈 The company uses a strategy called 'Building the Nestle Way' to create appealing products and actively engages with customers through social media, gathering feedback across various platforms.
- 🌱 Nestle places a high priority on responsible sourcing, respecting agricultural communities and ensuring ethical practices in its supply chain.
- 💼 The company has grown through acquisitions, such as purchasing Ralston Purina and other brands, to introduce new products and eliminate competition.
- 🌿 In response to environmental concerns, Nestle revamped its policies, committing to zero waste to landfill by 2020 and improving supply chain efficiency to save costs.
Q & A
What is the primary focus of the 'Five Minutes Learning' channel?
-The 'Five Minutes Learning' channel focuses on providing a global and diverse collection of case studies to help management students.
Who is the founder of Nestle and why was the company established?
-Henry Nestle founded the company in the 1860s to address the issue of child malnutrition caused by mothers' inability to breastfeed.
What was the initial product offering of Nestle?
-Nestle initially made a food supplement from cow milk, wheat flour, and sugar as an alternative to breast milk to reduce infant mortality.
How did Nestle expand its product portfolio after the merger with the Swiss General Chocolate Company?
-Following the merger, Nestle reorganized itself and expanded its product portfolio to include chocolate, and diversified into other countries and product categories.
What are some of the most famous brand names owned by Nestle?
-Nestle owns some of the most famous brand names in the world, including Milo, Nido, and Nescafe.
What are the core business values emphasized by Nestle?
-Nestle emphasizes core business values such as cultural diversity, quality products, brand strength, consumer satisfaction, and high-performance goals.
How does Nestle approach supply chain management?
-Nestle embraces supply chain management by outsourcing some activities and utilizing a large workforce to ensure smooth operations, maintaining product quality throughout the supply chain.
What is the strategy Nestle uses to create products that appeal to consumers?
-Nestle uses a strategy called 'brand building the Nestle Way' which focuses on profiling its brands and engaging actively with consumers, especially through social media.
How does Nestle gather customer feedback efficiently?
-Nestle gathers customer feedback efficiently through its active online presence, with 210 million fans on 850 Facebook pages for various brands, and by posting around 1,500 new items per day.
What is Nestle's approach to responsible sourcing and why is it important?
-Nestle emphasizes responsible sourcing by tracking the origin of its products to ensure compliance with ethical practices, which earns loyalty from suppliers and customers.
How has Nestle addressed environmental concerns in its supply chain?
-Nestle revamped its environmental policies after a media backlash in 2010, implementing a no deforestation policy and committing to becoming fully zero waste to landfill by 2020.
What can other companies learn from Nestle's business model?
-Other companies can learn the importance of market research, responsible sourcing, product diversity, and waste reduction from Nestle's business model.
Outlines
🌟 Organizational Strategies and Nestle's Success
This paragraph introduces the concept of learning organizational strategies through case studies and highlights Nestle as a case study. Nestle, founded in the 1960s by Henry Nestle to combat child malnutrition, started with a food supplement and expanded globally after merging with the Swiss General Chocolate Company. The company's operational success is attributed to sound business strategies focusing on product innovation, customer value creation, and core values like cultural diversity and quality. Nestle's supply chain management is emphasized, with a focus on customer satisfaction and a unified supply chain maintaining product quality. The paragraph also discusses Nestle's strengths in supply chain management, including brand building, active customer engagement, responsible sourcing, and the importance of understanding customer needs for successful supply chain analysis.
💼 Nestle's Acquisitions, Environmental Policies, and Business Model
The second paragraph delves into Nestle's growth through acquisitions, which not only introduces new products but also eliminates competition and secures access to suppliers. It mentions significant acquisitions like Ralston Purina and others, contributing to the company's diverse portfolio. The paragraph also addresses Nestle's revamped environmental policies post-2010, focusing on eliminating deforestation and waste in the supply chain, with a commitment to zero waste to landfill by 2020. The summary underscores the importance of market research, responsible sourcing, product diversity, and waste-free operations in Nestle's business model, attributing the company's substantial net worth to these practices. The paragraph concludes with an invitation to subscribe for updates on upcoming case study videos.
Mindmap
Keywords
💡Organizational Strategies
💡Case Studies
💡Supply Chain Management
💡Brand Building
💡Customer Value Creation
💡Cultural Diversity
💡Product Innovation
💡Acquisitions
💡Environmental Policies
💡Zero Waste to Landfill
💡Market Research
Highlights
Nestle is the world's largest food manufacturing company with global reach.
Founded by Henry Nestle in the 1960s to address child malnutrition.
Began with a food supplement made from cow milk, wheat flour, and sugar.
Merged with Swiss General Chocolate Company, expanding to include chocolate in its products.
Nestle owns famous brands such as Milo, Nido, and Nescafe.
Underwent transformations including diversification into pharmaceutical products.
Emphasizes sound business strategies with a focus on product innovation and renovation.
Customer value creation and practical business core values are central to Nestle's approach.
Outsources activities and employs supply chain management for efficiency.
Utilizes a large workforce for smooth supply chain operations.
Customer satisfaction is key to Nestle's competitive edge and profitability.
Nestle believes in a unified supply chain to maintain product quality.
Brand building through the 'Nestle Way' to create consumer-appealing products.
Actively engages with customers online, with 210 million fans on Facebook.
Nestle posts 1,500 new items daily for high customer response rates.
Responsible sourcing and ethical practices are top priorities for Nestle.
Over 2,000 brands and 10,000 products, showcasing Nestle's market diversity.
Supply chain based on acquisitions, such as Ralston Purina and other companies.
Revamped environmental policies in response to media backlash, focusing on no deforestation.
Committed to becoming fully zero waste to landfill by 2020.
Nestle's supply chain analysis offers lessons on market research, product diversity, and waste reduction.
Nestle's net worth of 247 billion dollars reflects its successful business model.
Transcripts
have you ever thought there's got to be
a better and simpler way to learn
organizational strategies five minutes
learning has a global and diverse
collection of case studies to help
management students click the Subscribe
button and hit the Bell icon to stay
updated with our upcoming and
interesting case studies
Nestle is the world's largest food
manufacturing company with its products
available in almost every household in
the world
Henry Nestle founded the company in the
1960s to solve the problem of child
malnutrition caused by mother's
inability to breastfeed
in the beginning Nestle made a food
supplement from cow milk wheat flour and
sugar which was used to reduce infant
mortality by offering an alternative to
breast milk
following its merger with the Swiss
General Chocolate Company in the early
20th century the company reorganized
itself expanded to countries like
Britain the United States Spain and
Germany and diversified its product
portfolio to include chocolate
Nestle currently owns some of the most
famous brand names in the world
including Milo Nido and Nescafe
it has undergone a lot of
Transformations over the years including
diversifying into pharmaceutical
products
the secret behind Nestle's operational
success lies in having Sound business
strategies that incorporate product
Innovation and renovation
in addition Nestle emphasizes customer
value creation as well as practical
business core values such as cultural
diversity quality products brand
strength consumer or customer
satisfaction and Company high
performance goals
the company outsources some of its
activities as part of its management
structure to embrace Supply Chain
management
moreover it makes use of a large
Workforce to ensure smooth supply chain
operations
an organization's Competitive Edge and
profitability are achieved through
customer satisfaction which has been a
key component of Supply Chain management
furthermore running the full process of
sourcing raw materials to delivering the
finished product to the consumer is
tedious and can negatively affect the
utility of the goods
Nestle therefore believes it is
important to embrace a unified supply
chain that maintains product quality
this case study discusses Nestle's four
main strengths along with how they have
exceeded expectations in Supply Chain
management
Nestle uses a strategy called brand
building the Nestle Way to create
products that appeal to Consumers
bbnw focuses on profiling its Brands
consumers as one of its six founding
principles
in fact Nestle engages actively with its
customers online for their clientele the
company extends far beyond market
research as they aim to understand their
demographic and what drives them
Nestle excels at interacting with
real-life consumers through social media
they have 210 million fans on their 850
Facebook pages for various brands
it's an inspiring way to gather customer
feedback quickly and efficiently across
their online platforms the company posts
around 1 500 new items per day to ensure
a high response rate
having an in-depth understanding of what
your customers want from your products
as critical to successful supply chain
analysis
Nestle's supply chain analysis reveals
that responsible sourcing as a top
priority
Nestle puts a great deal of emphasis on
respecting the many families and
agricultural communities that depend on
its farmers
therefore Nestle tracks the origin of
its products to ensure that they comply
with ethical practices
it is this honorable attitude that earns
Nestle the Loyalty of its suppliers as
well as their customers
the Nestle group has over 2 000 Brands
and 10 000 products on the market making
it a very diverse company
a large portion of the company's supply
chain is based on Acquisitions as they
constantly acquire various companies
in 1989 the Berlin Wall fell opening up
the European and Chinese markets for
buyouts
Nestle purchased the Ralston Purina
company in 2001 which is a popular pet
food manufacturer
they followed this purchase up with
dreyers move and pick Jenny Craig and
Gerber over the following years
by investing in other companies Nestle
is able to continually introduce new
exciting products to the market
additionally by acquiring former
competitors they eliminate any threats
and gain access to their suppliers
Nestle revamped its environmental
policies after a media backlash in 2010
Nestle's no deforestation policy was
first implemented in response to
greenpeace's allegations regarding
Nestle's palm oil collection methods
the company's current priority is to
eliminate waste in their Upstream supply
chain
by 2020 Nestle has committed to becoming
fully zero waste to landfill
the company invests in improving the
efficiency of its supply chain through
these practices
Nestle will save money in the long run
by not wasting food
as a result of Nestle's supply chain
analysis Nestle's business model has a
lot to offer all companies
in spite of how small or large your
company is this Swiss conglomerate
demonstrates the true importance of
market research responsible sourcing
product diversity and being waste free
after all having a net worth of 247
billion dollars was no accident for
Nestle thank you so much for listening
to this video do not forget to subscribe
this YouTube channel for receiving
updates about my upcoming case study
videos
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