BUSINESS MANAGEMENT PROJECT (PSDA 2)

B.COM(HONS) EVENING
BY: ADITYA SARRAF

TOPIC OF THE PROJECT: IDENTIFY AND

MANAGE STRATEGIES OF NESTLE
CORPORATION

INTRODUCTION AND BACKGROUND

Nestle Corporation has grown over the years to be the worlds leading Nutrition,
Health and wellness Company with the mission of "Good Food, Good Life." It
endeavors this by striving to provide consumers with the best-tasting and, most
nutritious choices in a wide range of food and beverages category that is
suitable for any occasion a consumer can think of. Nestle Corporation is a Swiss
company started by Henri Nestle in 1866 with its headquarters in Vevey,
Switzerland and as of today the organization is present in 117 countries
throughout the world. At more than 145 years of age and the world largest food
company in terms of revenue, Nestle Corporation employs more than 330,000
people and has more than 500 factories operating in at least 86 countries
worldwide.
Nestle corporation has grown to provide a wide range of product brands that
include,baby food, bottled water, cereals, chocolate and confectionery, coffee,
culinary, chilled and frozen foods, dairy, drinks, food services, healthcare, ice-
cream, pet-care and recipes. The growth has been so significant that the
company was in 201 listed by Fortune Global500 as the world's most profitable
corporation. This has not come essay as nestle has endured difficult times
through merges, world war 1 and 2 and even introducing new productlines such
as ice-cream which has done so well. Not only that, nestle has undergone
management and strategy changes that has seen it overcome and continues to
get huge profits even goingbeyond $4.7 billion a year.

CHANGES THAT NESTLE CORPORATION HAS

UNDERGONE

Since its inceptions Nestles majored on producing and selling baby formulae.
As the market expanded and competition grew, Nestle corporation entered its
first merger in 1905 when it came together with Anglo-Swiss Condensed Milk
Company. This merger enabled increased production of its productions and was
successfully able to penetrate the European market. By the beginning of the 20
century the company had factories operating in the USA, Britain, Spain and
Germany. Moreover, upon making an agreement with the Swiss General
Chocolate Company, Nestle added chocolate to its range of food products in
1904. Later in 1907 the company started full-scale manufacturing Australia and
later built warehouses to serve its growing Asian market in Bombay, Hong
Kong and Singapore.
World war 1 and 2 brought several challenges to Nestle as acquiring raw
materials and distributing products became extremely difficult. This period was
forced with acute milk shortages and Nestle experienced a huge period of gains
when it had government contracts in demand for dairy products. This would last
because as soon as the war ended the shortage was over and the contacts were
gone and in 1921 Nestle recorded its first annual loss in revenue. Nestle
responded to this by reorganizing the corporation and streamlining operations to
bring production in line with sales as s result reducing the company's
outstanding debt.
After the war, Nestle diversified its strategy to realize growth and this it did by
diversifying its products within the foods sector to meet the demands of the
consumers. Many more merges and acquisitions were experience and additional
products were launched by Nestle with Nescafe experiencing one of the most
profitable runs. In addition, the management of Nestle diversified out of the
food industry by becoming the largest share holders at Loreal, a leading
cosmetics corporation. Also, the company acquired Alcon Laboratories, Inc, a
USA pharmaceutical and ophthalmic product manufacturer. This has today
given Nestle a very wide market and ways by which to satisfy the human body
by offering a wide range of products.

MANAGEMENT STUCTURE OF NESTLE

Nestles management is divided into 3 levels i.e. top-management level, middle
level management and low-level management. The roles are as follows;
1. Top level management: This contains the board of directors, the managing
director or the chief executive officer. This is the final source of authority
charged with managing aims and policies for an initiative. It is mainly focused
on planning and coordinating functions.
Their roles include;
• makes the broad policies of the corporations and lays down the objectives.
• It gives necessary instructions for preparing subdivision schedules,
procedures and budgets.
• It comes up with strategic policies and plans for corporation initiatives.
• It controls and coordinates the activities of all departments in the
corporation.
• It is responsible for creating and maintain contact with the outside world.
• It is responsible towards the stockholders for the performance initiative.
2. Middle level management: This is made up of the branch managers and the
departmental managers. They are answerable to the top-level management for
the operations of their departments. They are focused on directional and
organizational functions.
and their roles include;
• Making plans for the sub-units of the corporation
• Execute the plans of the organization in line with the policies and
directives of the top management
• Participate in training and employment of lower level management
• Understanding and explaining policies from top-level management to the
lower level
• Inspiring lower level managers towards better performance

3. Lower level management. This refers to the operative or supervisory level of

management. It is made up of supervisors and superintendent officers and their
roles include;
• Instructing and guiding workers on day-to-day activities
• Assigning jobs and tasks to various workers
• Are responsible for the quality and quantity of production
• Are responsible for maintain good relation in the organization
• Communicating workers problems, suggestions, and recommendatory
appeals to the higher levels. They also communicate goals and objectives
to the workers.
• Provide solutions to the workers complains
Motivation Strategy: Relationship Between Motivation
and Performance at Nestle
Nestle motivation is a key driver of performance among, the employees.
Motivation refers to the set of forces that initiates, directs and makes people
persist in their efforts to accomplish a goal. Empowering and encouraging
employees to do the best they can at work helps create job satisfaction. Also,
when the employees are happy, they are likely to be more stable and thus will
deliver improved customer service and would be more effective at building
sales and attracting repeat business. Nestle emphasizes on a culture of staff
wellness to help minimize stress at work and thus they may be able to put even
more effort during times of economic hardships when layoffs are unavoidable,
and they could work for lower tips and fewer benefits. Nestle values staff
recognition and the key approaches to staff motivation include;
 • Saying thank you using meaningful gifts
• Making important communication through writing
• Providing career development opportunities
• Endorsing a healthy lifestyle
• Using foodservice rewards as an incentive
These strategies help in developing a wholistic employee who is mentally,
physically, emotionally, psychologically fit for duty. Besides, career
development opportunities will help increase their knowledge base and skillet
that will improve their productivity at work.
RECOMMENDATIONS
Nestle Corporation has come a long way to make its mark as the leading food
company globally. Some of the recommendations to handle the changes it the
market include, continuing to focus on the growing sales in the emerging.
markets of Africa, Asia and Latin America. Also, they should pay more
attention to the areas where the raw material for production are sourced from as
some of the emerging markets can be a great source of raw materials given
stability.
In addition, Nestle should continually stream line its operation processes to
increase efficiency that will lead to more competitive prices and quality. Not
only that, nestle should focus on increased advertising. This is possible because
of its strong position and ability to meet the advertisement costs that some other
competitors might not be able to meet. It should also strengthen its presence in
the frozen and convenience food industry and the pharmaceuticals and health
foods as well. Nestle should also increase its efforts and commitment towards
green and sustainable farming of its brand besides improving on its brand
cohesion.
Conclusion
Nestle Corporation has come a long way and has succeeded in becoming a
leading global brand in the food and Nutrition industry. Competition is very stiff
in this field especially with the ever-growing local produces and brands and
therefore it is only through smart strategic management and change
management strategies that Nestle is able to continue its path of growth and
meeting consumer demand.