You are on page 1of 8

The chosen organisation is Nestl.

Almost each of Malaysians who are over half a century has

certainly taken with Nestl as early as their childhood. Nestl is one of the popular diet products
in Malaysia until now. Food and drink play an increasingly important role in people's lives not
only for enjoyment and social pleasure of eating together but more in terms of personal health
and nutrition.

Nestl is a multinational packaged food maker company founded and headquartered in

Switzerland. Establishment arising from the combination in 1905 of Anglo-Swiss Milk
Company, a dairy founded by brothers Page in Cham, Switzerland in 1866 and Farine Lactee
Henri Nestl Company, which was founded in 1867 by Henri Nestl, which produces food
products baby. Some Nestl brand known around the world and make it a global market leader in
the production of a number of products, including milk, chocolate, confectionery, bottled water,
coffee, creamer, food seasoning and pet food.

Meanwhile, Nestl began in Malaysia in 1912 as the Anglo-Swiss Condensed Milk Company in
Penang and Kuala Lumpur later evolved to be in 1939. Since 1962 the first factory in Petaling
Jaya, Malaysia Nestl currently producing in 7 factory- refineries and operates from headquarters
in Mutiara Damansara. Nestl Malaysia has been listed on the KLSE now known as Bursa
Malaysia Berhad on 13 December 1989. Today, the company has more than 5000 people and
produces and markets more than 300 halal products in Malaysia. Product brands such as Nestl
MILO, NESCAF, MAGGI, NESPRAY and KIT KAT is a choice for all Malaysians.

As a responsible corporate citizen, Nestl in Malaysia to manufacture, import and distribute only
products that have been certified halal by Jabatan Kemajuan Islam Malaysia (JAKIM) and the
Islamic authorities who recognised the connection. Halal certified status for all products Nestl
Nestl assured that the products produced imported and distributed under strict control in terms
of cleanliness and hygiene in line with the Islamic faith. Halal logo included in all packaging and
indicates that the product prepared according to Islamic requirements and adheres to strict
hygiene, quality and safety are tightly so appreciated by all users in Malaysia.

Nestl in Malaysia strives to offer products that are related to the changing lifestyles and
consumer needs. Nestl invests more than RM6 billion annually on R & D and has taken
continuous innovation and renovation to ensure that its products meet the requirements.
Consumers Nestl Research Center in Lausanne, Switzerland with scientists, specialists and
technical support personnel who served in a series of 27 R & D centres around the world.

New Economy Drivers

Media frequently use the new economy terms to define the changes that taken place in the
business world since the implementation of the internet technologies. The new internet
technology has been applied to a far-reaching range of issues and circumstance, the most
astonishingly are the rise and fall of internet startup and high tech companies. The fundamental
idea behind the new economy drivers was that the internet and computer have basically changed
the conventional way of doing business. Investors and analyst are focused on the stock price
evaluation and technology acceptance rather than long-term business plan and the firms incomes
when theyre evaluating companies and businesses.

The new economy has influence the companies to be involved in biotech industries and the
internet and the heave of the new technologies have spread out to other industries as well.
Effective marketing should not only convey the delivery methodology, price and product but
more significantly it is the tool use to communicate the value the company creates for their
partners, society and customers.

Industry Convergence

Industry convergence based on the recombination of existing technologies and associated

knowledge basis with the multifarious pool of industry players. According to Lee, Olson, & Trini
2010; Greenstein & Khanna, 1997; Prescott, Karim, & Hsu, 2014, Industry convergence alter the
basis of competition by dissolving the boundaries between two previously separated industries.
The industry convergence frequently disturbs the conventional industry foundations and possibly
challenges the competitive advantages of established companies, while giving the new
opportunities for both various start-ups and competitors. Industry convergence has become
progressively prevalent and becoming an empirical phenomenon. The examples including of the
industries like forest and plastics, telecom and entertainment, servers and enterprise software,
mobile handset and digital cameras, consumer electronic and watches, chemicals and crop seeds,
and food and pharmaceutical industries. There is research which shows that more that 50% of the
industries players either undergone or currently in the process of convergence. Industry
convergence has been a phenomenon which is relatively little studied and remains poorly
understood and misjudged. Industry convergence has become the basis of all industries. Its on
the brink of transforming the industries players as we know now and changing the way we work,
live, play, do business, and even think.

Digitalization and Connectivity

The laymen term meaning of digitalization means the conversion of analogue information into
digital information. Digitalization gives a clear idea of technology and development dependent
world. Digitalization also means computerization of jobs and systems for better accessibility and
ease. According to Business Dictionary, digitalization is the amalgamation of digital technologies
into everyday life by digitisation of everything that can be digitised and the process of converting
information into digital format. For example, the new Apple watch is a great example of the
digitalization, as they took a normal watch and introduce technology with internet capabilities,
messaging and phone capabilities. As digitalization capabilities expand, every aspect of life is
captured and stored in digital form and we are moving closer towards the networked
interconnection of everyday objects.
A new world of possibilities unfolds when the information becomes digitised and communicated
through the digital network. A Huge amount of information can be compressed and squeeze and
transmitted at the speed of light. The information can be stored and accessible from everywhere
in the world, which providing us with the instant access to all the information needed. The new
digital appliances created which will fit in the pocket and will impact a lot of aspects of personal
and business life. It is foreseen that by 2020, the entire generation, which is generation C (for
connected), will have grown in a primarily digital world. The internet, computers, social
networking, mobile phones and texting will the second nature t to this group. Their familiarity
with the desire to remain in contact with their family, reliance on mobile communications and
technology will transform on how they work and what they consume.
Overall, digitisation means conversion of non-digital material to digital forms. Digitisation is
needed for and easy storage and retrieval. The phone books and print advertisement are now
nearly obsolete due to the digitisation of the business world. Consumers now use the social
networking platform and search engines such as Google to search and locate for any product and
services that they need. Product reviews and word of mouth are made via social media sites such
as Instagram, Twitter or Facebook. In order to survive and thrive in todays market, businesses
and firms have to use the social media and online networking to approach and capture their
customers interest.

Disintermediation and Reintermediation

Disintermediation can be defined as cutting out the middleman in e-commerce transactions.

Instead of going through the conventional distribution channels, which have some type of
mediators such as wholesaler, broker, distributor or agent, companies now deal with their
customer directly online via the internet. For examples, General Motor Corp. bypassing their
dealership to sell their cars directly to the consumers and the insurance company is skipping their
agents to sell products and services. Disintermediation resulted in high market transparency in
which the customer are aware of the supply prices directly from the manufacturers. The research
done by the Peppers and Rogers Group of Stamford predicted that the number of customer direct
sales channel triple between 1998 and 2010 from 11 percent to 33 percent respectively.
A lot of companies now sells their product and services directly to the businesses and consumers
online, cutting out the middleman or intermediaries. Unfortunately, the disintermediation did not
turn out as it has been predicted to. Predictions by the Gartner Grop Inc. is that more than half of
the companies that maintaining or building their direct to customer websites will the abandon
them in next three years. And it is predicted that the companies will start to rely on the new web-
based intermediaries which bring sellers and buyers together in new ways.
Meanwhile, re-intermediation refers to the use of the internet to reassemble seller, buyers and
their partners in the traditional supply chain the new way. Re-intermediation is the reintroduction
of an intermediary between the producer and end users. This applies when the disintermediation
had occurred first in the business. Re-intermediation happened when there is too many issues
associated with the direct consumers approaches. Customer services issues, high shipping cost
and confronting the anger of the disintermediation retailer is one of the main reasons for the
businesses or company to choose re-intermediation approaches.

Customization and Customerization

Customization is the process when a business or company customises their services or products
by using the feedback they obtained from their customers. The company will then uses the
advanced form of customization when they can tailor their services, communication and products
based on an individual specific customer preference. Customization normally practised by the
companies whose product is unique or expensive, such as aeroplane manufacturer or home
builders because this product can be designed to suit the special request for each individual
customer. The company or business adapts its marketing program and product with a high degree
of speciality. Customised marketing is considered to be the ultimate form of their target
marketing to promote their products.
The differences between customization and customization are that in customization, the
consumers are involved in the designing process and become both producer and consumer at the
same time. For example, florists where you can select the flowers that you want for a flower
bouquet arrangement. On the other hand, in customization, the producer produces the products
based on the customers individual requirements. Customization, on the other hand, means that
its a combination of marketing and operational customization. The company or businesses have
to be able to work together with each of their customer personally in terms of services, customer
relation and message.

Nestle have to utilise the digital channels to create a seamless and consistent engagement
with their customers. Nestle should come out with an innovative move such as taking the
elements of all the channels available which their customers value the most and combine them as
one to deliver the most priceless experience overall to their customers. Nestle should be focusing
on the way to deliver a meaningful and seamless cross-channel engagement programs for their
stakeholders benefits and convenient. The example of the technology that Nestle can use to
improve their brands loyalty is by using QR coding which allow the customers to scan a physical
product or the advertisement to access for further information on the advertisement, product
details and promotion on their mobile.

Other than that, Nestle should use the digital technology to support and boost their
traditional business model. They can use the digital and automated service to compete with and
extend their existing manual services by making a better use of the self-service channel and
customer services through social media such as Facebook, Twitter and Instagram. This will
definitely helps Nestle to reduce their operating cost to serve and reduce time to revenue as well.
Nestle also should transform their existing business model digitally by offering their existing
services though a new digital channel, this without doubt will be a very convenient way for the
customer to purchase the products. Furthermore, it also will increase the business revenue stream
and reduced the company cost to serve. In short, Nestle should take a proactive measure to stay
in the business and cope with the digitalization which it seems will never stop evolving.


Nowadays, the companies and businesses need new ideas on ways to operate and succeed in the
new economy. The new economy which surfaced in the last few decades calls for a new business
and marketing practice. Even though its a new economy, it is still encompasses few old
economy traits. The companies and marketers have to understand what the meaning of the new
economy is and the steps that should be taken to ensure their businesses and company
sustainable in the new economy. There are four main drivers that is shaping the new economy
which is disintermediation and rein-termediation, industrial convergence, digitalization and
connectivity, and customization and customerization. Each of the drivers plays important roles in
shaping the new economy and moving the businesses forward.

Nowadays, most of the information are stored in digital technology, this obviously ensure that
the information are able to be accessed by anyone from any part of the world. Fortunately, in the
business world, this mean a huge amount of new business opportunity has open up to the
companies and businesses that are brave enough to take the risk. Industry convergence is a
situation where two separate industry have come together to produce a product or services to the
customers. For example, Nestle are using technology to support their product marketing
strategies to stay in the driving seat of food business.

Customization and customerization ensures that all customers needs are fulfilled. Customization
is where the producer uses the feedback from their customers to customize their product and
services to suits the customer needs. While customerization when the customer and the company
working together in the process of producing the product. Digitalization and connectivity plays a
very important role in the business nowadays. Everything is digitalise, long gone the use of the
old economy of doing business. The consumers now spending most of their time online, they do
everything using the technology, from study to shopping. It is because digitalization and
connectivity offers the customer the convenient way of living. And lastly disintermediation
means the removal of middleman in between companies and customers. Companies now can
approach their customers faster by using the digital technology and remove the agents or
middlemen. Re-intermediation in the other hand happens when there is reintroduction of an
intermediary between the producer and customer such as a web-based intermediary.

A lot of company nowadays are either thinking about or moving ahead with the digital
transformation ideas. A few company sign off their marketing strategies without incorporating
the new business channel which is the social media despite having their own company or
business website. Undoubtedly, social media nowadays has becoming a critical component of
any digital marketing strategy, but then a holistic approach to the digital shift should go further
than it is now.

Certainly digital is changing the world that we know, there are a lot of potential revolutions
waiting to be discovered. Nestle should be able to explore what the digital advances means to
their business and their stakeholders. The digitalization of everything is a huge step change and
even greater than the adoption and innovation of the internet, the reason being because of the
digitalization scale and its pace of change.