Sustaining Growth in Mature Markets

Sustaining Growth in Mature Markets

Over the last several decades Nestle has been engaging in a strategy of growing through acquisition. This is because the company has been finding great valuations with a number of different businesses that have allowed it to diversify and improve the overall bottom line. A few of the most notable products / businesses that the company is involved in would include: Nescafe, Poland Spring Water, Power Bar, Dryers Ice Cream, Stouffers, Kit Kat, Butterfinger and Purina. Yet, to fully understand the various lessons learned as well as success requires an examination of: the current competitive landscape, the vision / mission of the company, the fundamental principals that guide the company's strategy, understanding the way the company manages its relationships with stakeholders and the leadership tasks that are the foundation to Nestle's success. Together, these different elements will provide the greatest insights as to what were are the lessons learned during the tenure of the last CEO and what were the biggest successes. This will provide the new CEO with an overall view of what has been taking place at the company over the last ten years and how these factors have contributed to its success.

Describe the characteristics of each of the following elements in the Current Competitive Landscape: Globalization, Technology, Knowledge, Strategic, Flexibility, Quality, and Profit Pool.

Nestle is a Swiss-based company that sells various products in every country on Earth. This is because they were able to acquire a number of different brands that give the company access to a variety of different markets through the various divisions. They have used various forms of technology such as the internet and mass media to continue to promote their image within the different a nations. Where, their overall product knowledge and strategies are allowing them to be able to present the company in a way that is unique to each market. ("About Us," 2010) For example in the United States children will often associate Quick Chocolate milk with an American brand, despite the fact that it is owned by a Swiss company. In general, the company uses this flexible approach of promoting the brand name of the product and the overall reputation for quality that it has established with consumers. As a result, the profit margins of the company have dramatically increased because of the way that the company is promoting the different products that they sell, in the various countries around the world. Recent evidence of this can be seen by looking no further than the 4.8% growth rate that the company delivered in the first quarter. ("Strong First Quarter Results," 2010)

Discuss the vision and mission of Nestle

The vision and mission of Nestle is to provide customers with a wide variety of products that they use on a daily basis at an affordable price. Where, the company is focused on delivering the highest quality products in a timely manner. This is based off of number of different morals / values which are used to help guide employees and management towards the achievement of this objective to include: compliance with all international / national regulations, honesty from all employees, avoiding actions that could damage the image of the company and putting the interests of the company before your own personal interests.

Identify and describe the fundamental principles that guide the company's strategy.

There are several different principals that would guide the company's strategy to include: manufacturing products that will create value, not favoring short-term profits at the expense of long-term profits and the success of the company is a reflection of the professionalism within the corporation itself. When looking at the manufacturing of products that creates value, this means that the company will always be focused on delivering those products to consumers that are most useful to them (at an affordable price). Not favoring short-term profits over long-term profits, means that everyone is focused on building for the long-term, even when it may cause a short-term loss. The success of the company is a reflection of its professionalism; this means that everyone will seek to always be professional at all times. This is how the company will be able to separate itself from the competition. ("Code of Business Conduct," 2010)

Explain how Nestle establishes and manages relationships with its primary stakeholders.

Nestles builds and manages its relationship with primary stakeholders by ensuring that they are consistently delivering to them the kind of results; that will promote the long-term stability and growth of the company. This is achieved by finding those businesses / products that have the potential to contribute to the company's bottom line growth, during times of expansion and economic contraction. This is significant because it establishes and maintains strong relationships with shareholders, who see directly how such a strategy is benefiting them. A good example of this would be the 4.8% growth rate that the company delivered in the first quarter, despite the fact that many companies are struggling. ("Strong First Quarter Results," 2010)

Discuss the leadership tasks that are fundamental to Nestle's success.

Management has the responsibility of providing leadership to the entire company. Where, there are a number of different tasks that they must engage in to continue to effectively lead the company the most notable would include: ensuring that the company has viable product lines that will contribute to the bottom line, locating business opportunities that will support the long-term growth of the company and ensuring that the staff remains focused on providing the best quality products to consumers. Ensuring that the company has viable product lines that will continue to promote profit growth is when: management must be observant and identify those areas that could hurt the bottom line. At which point, they must divest themselves of these businesses that could become a drag on profit growth. Locating business opportunities that will support long-term growth is when you are seeking out those products that could help to grow the company's bottom line over the long-term. Once such products have been identified, is the point that leadership must be exercised to acquire those companies. Ensuring that the staff is focused on providing the best products to consumers is a constant challenge that all leadership must go through. This is imperative because if the staff begins to deliver poor quality products, it could mean that the company's reputation could be damaged over the long-term.