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Nestle Strategic Plan
Transcript of Nestle Strategic Plan
Headquartered in Vevey, Switzerland
Formed in 1905
Largest food company in the world
In 2007, $89.8 billion in revenue
Operates in 86 countries, with 450 factories
“Nestle is the world's leading nutrition, health and wellness company. Our mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.”
Goals and Objectives
• Quality products such as Nescafe and great services like Nestle Nutrition developed in Nestlé’s R&D laboratories.
• Annually conducts a product test on the product portfolio using the 60/40
• Products that fail are reformulated, terminated or sold
• Nestle is going to have to continue to innovate
• With a powerful research and development team.
• R&D is made up of 275,000 employees in 130 countries.
• Nestle has to continue to be a proactive leader
Summary of Strategic Analysis
Mission and Vision Statement
Goals and Objectives
Core Strategy Recommendations
Summary of Performance Assessment
• Strategic Initiative:
• Acquire new companies
• Shareholder returns grew 408% in 2007
• Sales grew 78% in 2007
• Continue to increase size in same direction
• Focus on pet care market to obtain objective
• Benefit company by giving them leverage
Resource Development Scope
Geographic Scope (Global)
Resource Needs and Action Strategy Recommendations
• Development of leaders hired from other companies into Nestle is difficult (Human Resource Issue):
• Have the new leaders adhere to a more rigid structure to transition into Nestlé’s flat integration
• Job shadow under a veteran in the Nestle organization
• Extensive portfolio and solid financial performance
• Experienced managers
• Many different products
• Reach a broad array of customers
• Continue to expand opportunities
Local farmers and local markets
8,000 products into 5 major business categories and 2 global divisions
Operate in 480 factories in 86 countries
Nestle's New Mission Statement
“Nestle strives to be the full line provider of nutrition, health and wellness to every country in the world to assist consumers in their everyday life. Our mission of “Good Food, Good Life” is to meet the ever changing needs of consumers and pets alike by continually doing research and development.”
Past 12 years sales grew 78% from $60.5 billion to $107.6 billion in 2007
Nestle’s revenue $65.6 billion, Kraft $31.0 billion, General Mills $10.5 billion, Danone $14.9 billion
Asset turnover ratio .99
2007 sales per employee were $391,098.18
Customer Satisfaction (4)
Nestle : 83%
General Mills: 83%
Outstanding research and development
Key Strategic Issues
• How will Nestle leverage its brand equity to remain the industry leader in basic nutrition, sustainable sourcing, while keeping products affordable?
• How will Nestlé’s research and development department remain the industry leader while continuing to be on the cutting edge in product development?
• How will Nestle continue to grow the company with acquisitions while continuing growth of their current product lines?
To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred products.
Nestle's Vision and Values Statement
“With Nestle’s diverse portfolio of nutrition, health and wellness products, they provide a strong shareholder value by demonstrating continual industry growth, unequaled research and development abilities, experienced management and unrivaled geographic presences.”
Nestle's New Vision Statement
Nestle’s Mission Statement
1. Expand Nestle’s pet care market by 10% by the end of 4 years.
2. Increase shareholder returns by 25% by the end of 5 years.
• Nestle operates relation-only alliances with its suppliers.
• GLOBE allows managers and suppliers the ability to share key data among all geographic Nestle facilities
• As Nestle moves forward a challenge for them will be to work more towards vertically integrated processes.
Partner or buy out other businesses
Nestlé’s flat vertical integration leads to a more open environment
Most of the new leaders’ focus is not aligned with Nestlé’s vision of long-term success
Nestle is a proactive in every phase of industry, an example is the recycling. Nestlé’s lack of vertical integration can make it difficult to accomplish goals of being a proactive industry leader (Vertical Integration Issue).
First company in Europe to introduce biodegradable ingredients for the water bottles
• Nestle can become more cost effective by more backward vertical integration
• Instead of contracts with farmers, companies acquire these farms, reducing the cost
• Then able to allocate to these funds to benefit programs
Overview of the Plan
-Goals and Objectives
-Core Strategy Recommendations
-Action Strategy Recommendations
-Customer satisfaction needs attention
-Diverse portfolio of the company=spread thin
Purpose of the Plan
-Continue to grow the company
-Refocus the strategy
-How does Nestle maintain industry leader role
1. Enrich lives of customers
2. Excellence in operations
3. Financial gains
4. Motivation for growth
Four Key Parts
Customer satisfaction and spreading self thin
New Mission and Vision
Strategic Initiative: Grow
Work to train leaders better
Need to backward integrate
Plan's Next Steps
Nestle's current strategies are out of date
Time for update, now is the time
Large, but can continue growth for more profit
Need to maintain proactive leader
Continue great R&D