Nestle Was Founded By Henri Nestle

Published Date: 02 Nov 2017

1.0 Introduction

Nestle was founded by Henri Nestle who was a trained pharmacist, developed a healthy and economical source of infant nutrition in 1867. Until today, the product of Nestle is all around the world, for the South-East Asia the most famous beverage is MILO. Mostly of the Asian customer will prefer for breakfast or lunch, besides the Nescafe also the most famous of drinks for different stages of customer.

These is some of the requirement in this report, that has several categories first will be the operation and the production mainly will discuss about the Nestle company operation, their product(beverage), main brands, the company structure and the mission of Nestle. Secondly will be the business mostly will be the feature of the business. Thirdly, there is finance that will be shown the sales of P&L of the company in the latest years. Then will continue the strategy and policy of the company that show the strategy their use in the Nestle product and what is the policy that using in Nestle Malaysia. Follow with the HR management that will explain the work flow of their employee, what are the opportunities and the work force. Nest will be the Marketing, in this category will show about the brand positioning and the recent marketing campaign will help the company to expand further. Lastly will be the corporate social responsibility that shown the activity that carries positive impact and will influence the environment, consumer, employees and communities.

2.0 Contents

2.1 Operations and Production

Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk Company, founded in 1866 by Henri Nestle and established in 1866 by brothers George Page, Charles Page, and Farine Lactee Henri Nestle. Nestle set up its operations food processing industry in India, as a trading company. Nestle Malaysia’s head office is located in Mutiara Damansara, which manufacturing facilities are based in Petaling Jaya and Shah Alam in Selangor, Chembong in Negeri Sembilan as well as in Kuching, Sarawak. The production started with manufacture of Milkmaid and other products were gradually brought onto the fold.

The mission statement of Nestle founder Henri Nestle is to positively influence the social environment in which Nestle operate as responsible corporate citizens, with due regard for those environmental standards and societal aspirations which improve quality of life. For different product categories there are different competitors of Nestle. The major competitors for Nestle in beverages category will be Fraser & Neave Holdings Berhad (F&N) which also such a food and beverages in Singapore.

The organisation structure of Nestle is with a function-based organization. The tasks are divided into separate jobs and the jobs are grouped together under different departments. Each major area is kept under the manager who is responsible for all activities, which that department performs. The chain of command is extends from upper organization levels to the lowest levels. The orders move from upward to downward while suggestions move downward to upward direction. The chain of command is for the purpose of encourages employees to give their suggestions and share the new ideas.

[Organizations Structure of Nestle was shown at Appendix page 15]

The Company was publicly listed on the now known as Bursa Malaysia Berhad on 13 December, 1989. Today, Nestle manufactures as well as markets more than 300 Halal products in Malaysia. The principal activity of Nestle is investment holding, whilst the principal activities of the subsidiaries are marketing and the sale, locally and for export, of powdered milk and drinks, instant coffee and other beverages, and related products.

All of Nestle's products are under license from its 62% substantial shareholder Societe des Produits Nestle SA, Switzerland. Nestle is more than just the largest food and beverage company in the world, the products in beverages categories that produce by Nestle are bottled water, coffee, dairy, drinks and healthcare nutrition. Some of its famous brand name such has NESTLE PURE LIFE, NESCAFE, NESQUICK, COFFEE MATE, MILO, BOOOST, NUTREN JUNIOR, NESTEA, and etc have become trusted household names for the continuous generations.

Nestle is now evolving as the world’s leader in nutrition, health and wellness. From the start, nutrition has been at the core of their business. For continued success and growth, the master franchisor for Nestle, is in charge of developing cookie store franchises Nestle Toll House Cafe across the United States as part of Nestle USA's challenge to the long time industry leader, Mrs. Fields Famous Cookies Inc.

2.2 The Business

Nestle is a world famous company which is leading and trusted food, drink, nutrition, health, and wellness in over 100 countries. Besides that, many brands are under nestle which is include Milo, Magi, Kit Kat, Nestum, Nestiva and many more. Nestle built strong reputation on their company and the brand easily identified by consumer. In Malaysia, Nestle also produces over 300 halal products which are acceptable by Malaysia government and exports the product to over 50 countries in worldwide from Malaysia such as India, Brazi, U.S and more.

Nestle target all age of consumer which is included child, adult or elderly people. There also no specialist products that are dedicated to male or female. They produce product such as coffee, ice-cream, milk, chocolate and so on. Moreover, they try to be to cost leadership by produce high quality of product and service at reasonable price that consumer benefits directly.

In Nestle company business principle, they have built their own business with long term success for their shareholders and ensure that all their business activities are sustainable and create significant value to the society. Since Company features are trying to meet consumers’ needs and demand. So, they keeping create new and improving their product to make sure they able to provide tastier, more nutritious and health product to consumer and maintain a good customer relationship compare to their competitors.

Furthermore, they use green technology (environmental friendly technology) which is production program to produce their organic and natural product that also saves electricity and does not pollute the air which benefits to society and improve consumer life. In addition, the company gets the raw material from farm friendly sources which mean the supplier are trusted organic and natural milk and cocoa supplier. The company also put a "Friendly Farm" sign on their product package to let consumer know which supplier supply the raw material. So, consumer well-known that what organic and natural raw material that use by the company because if they fail to purchase organic and natural milk and cocoa, then still consider failure to their company. Nestle meet all consumer demand and decrease pollution of environment, at the same time, Nestle company also maximize profit by increasing sales to bring profit to stakeholders.

2.3 Finance

The 5 year financial statistic from 2007 – 2011

From the statistic of the past 5 years is reflected that Nestle company income statement with the growth in the sales, earnings per share, employee of asset and profit margins.

The table shows from 2007 to 2008 the sales turnover had increased around 400millions but at the year 2009 had little drops around 100millions. After 2009 the sales had increased simultaneously around 1 billion sales turnover to 4.7billion. It shows the Nestle company has doing well from the pass 2009 until now. They have a very excellent growing of the top line at a faster pace than the country yearly GDP growth and improving profit margins year after year.

Nestle Company have capture the benefits of scale by the Nestle Global business Excellence programmed by be the first Nestle market to implement the programmed in the Asia-Pacific. Recently also take advantage of the regional Nestle shared services organization in Philippines. It shows the company has very wide and strong brands in the Asia-Pacific.

2.4 Strategy and Policy

2.4.1 Strategy

Nestle company their business and investment decision is always needed with long-term objective. From the past last three years, Nestle Company has spend about 500 million ringgit mostly will be focus on the manufacturing line for creating new product, capacity increase and technical skill for Halal manufacturing. There are some investment are focused on the domestic consumption and exports. With the Nestle Malaysia being the hub of Halal of the Nestle, their export has become the importance thing for the revenues.

Nestle Company have a clear focus on fewer but bigger and bolder innovations and renovations help the company to launch new product which is aim to create the new market segment and help to boost up future growth. The product is MILO Sejuk, NESCAFE Dolce Gusto, NESTEA Ice Lemon Tea and NESTLE CRUNCHY BITE wafer was the product that launch at the new market to target different of consumer.

From the research Nestle will continue to invest in the research and development, innovate more creative and renovate existing product to ensure they are keeping in the vision and mission which is more nutritious and healthier by ensuring less sugar, salt and fat while maintaining excellent taste of the product.

Beyond sound nutrition, the future foods will be increasingly be driven by science. Before the solid product coming out, they will consider from the consumer needs in to the research priorities and the emerging science in to consumer benefits and services as well.

2.4.2 Policy

Nestle Malaysia was the first multinational to voluntarily request for Halal Certification of the entire food product when it was introduced since in 1996. The certified Halal status for all Nestlé Malaysia products provides assurance that Nestlé products are manufactured, imported and distributed under the strictest hygienic and sanitary condition in accordance to the Islamic faith.

Nestle in Malaysia all products manufactured, imported or distributed are certified Halal. Product or premises for manufacturing have been inspected and have proven from the Halal certification. The entire Nestle product in Malaysia will have the Halal logo at the packaging this is for the stringent of the Islamic requirement.

2.4.3 Nestlé Malaysia's Halal Policy

Nestle Malaysia say that as a responsible corporate citizen of Malaysia, we are extremely mindful of our obligations to the country and its consumers. Besides that, they also ensure what they produce, import and distribute only products which have the certified Halal by the Department of Islamic Development Malaysia (JAKIM). Therefore the entire product that Nestle company produce, the product packaging will be have the Halal logo that prove been certified by the (JAKIM). In addition, Nestle Malaysia has set up the Nestlé Halal Committee comprising of senior Muslim executives from various disciplines to be responsible for all matters pertaining to Halal certification. Nestle Malaysia are subject to regular inspections by the Department of Islamic Development Malaysia to ensure that the right conditions are maintained. Furthermore, Nestle Malaysia is ultimately committed to ensuring the peace of mind of our Muslim consumers. Lastly, Nestle Malaysia is subject to regular inspections by the Department of Islamic Development Malaysia to ensure that the right conditions are maintained.

[Quoted from: http://www.nestle.com.my/AboutUs/Nestle_in_Malaysia/Pages/halal policy.aspx]

2.5 Human Resource Management

Human resources management (HRM) is to encompass all the tasks involved in acquiring, maintaining, and developing an organization’s human resources. The role of human resources management today is increasingly as a strategic one’s organization because of the accelerating rate today’s at which workforce, economy, and corporate cultures are being transformed. So that, human resources managers of Nestle figure it out how to attract qualified employees from a shrinking pool of entry-level candidates and also how to train employees become a professional, skillful, educated, experienced employees in few opportunities for advancement and treats every employees equitably.

Human resources play a role in the concept and implement of the people strategies that impact financial results and the organisations’ overall reputation and effectiveness. So that Nestle comes out with documents outline that based on Nestlé’s philosophy which are Basic Nestle Management and Leadership Principles’ document which that describes the management style and the corporate values of Nestlé, specifically in the area of interpersonal relations. Some of the major elements required by Nestle are a prerequisite for dealing with people is respect and trust; transparency and honesty in dealing with people are a essential condition for efficient communication; to communicate with not only to inform but also to listen and to engage in dialogue; the personality of willingness to cooperate with help others and to learn is a required basis for advancement and promotion within our Nestle. These are those policies for human resource management carry out by Nestle.

The sort of people work for the film are include with sustainable performance, the knowledge and skills have about function, the business the leadership skills and critical experience. Beside, mobility and flexibility to move between functions and categories, determine how far and how fast progress and develop how well a person network and how a person are open to new experiences. There requiring different sort of people to work. As long as in good personality, neat and tidy looking. The clearer information about people work for the firm should depends on what position the person required for, or the person expert in.

Nestle have an equal opportunities policy with it. Nestle give equal opportunity for engagement and promotion on the basis of merit, diligent service and conduct, depending on the occurrence of vacancies. Nestle pay salaries and benefits that based on who adhere to the principles of external competitiveness and internal equity. Nestle are concerned in turn with the wellbeing and security of all their staff. Nestle commitment to create a good work environment and provide adequate job security for their staff. Nestle always give opportunity of chance to every employee for proving their ability to qualify for a better position in the organization.

One of the examples of human resource management applies by Nestle was training employees. Training is part of every organization culture. At certain levels, every employee is conscious of the need to upgrade or continuously their knowledge and skills. Training that provide by is compulsory for every employee, therefore it’s a non-negotiable condition to be employed by Nestlé. First of all, training is done on-the-job. But guiding and coaching is part of the responsibility of each manager and it is crucial to make each one progress in every employee position. When formal training programs are organised, employees should be purpose oriented and designed to improve relevant skills and competencies. Therefore they are proposed in the framework of individual development programs. As a consequence, attending for training should never be considered as a reward. It’s just course that for the aim of updates all the latest information and transform to every employee.

Other than that, recruitment is also such an important human resource management for an organization. So, for recruitment in Nestle is made through established on manpower planning based on the Equatorial African Region. Based on Equatorial African Region that standardize by Nestle, it is the Company’s Policy to strive on achieves a balanced staff, reflecting the overall composition of the community in which it operates and apply non-discriminatory practices with stimulate equality of opportunity by the use of fair procedures and practices. To ensure that Nestle employees are always above favouritism to everyone, impartiality and fairness should be placed before anything else. Rewards for those who are contribute to company. The quality of recruitment contributes to the quality of the company since the new resources will be the drivers of the growth of Nestle.

[Quoted from: http://www.nestle-ea.com/en/jobssite/recruitmentprocess#.USDIQ_InDHY]

Over the past five years Nestlé UK & Ireland has invested over £100m in the Tutbury factory, strengthening its position as a leading NESCAFÉ production plant and introducing the NESCAFÉ Dolce Gusto brand. Twelve new high speed production lines will be introduced in a new extension which will manufacture pods for sale in the UK and export to over 38 countries around the world.

Nestle workforce had grown over recent years. A major employer in the local area, the workforce at the factory has grown from 160 to 500 employees since 2006 and will expand to 800 people by 2013. Of the 300 new employees some will become part of the first intake into the Nestlé Academy, a new initiative under which Nestlé UK & Ireland has committed to double its number of graduates, apprentices and internships.

Paul Grimwood, Chairman and CEO, Nestlé UK & Ireland said: "Over the past five years we have undertaken a multi-million pound investment programme in the UK, establishing our next generation of world class competitive manufacturing facilities.  This investment in Tutbury will extend our best in class facility, trebling our production capacity for export to over 38 countries across the globe. In order to grow we need to innovate and we are committed to the continued modernisation of our UK manufacturing capability."

[Quoted from: http://www.nestle.co.uk/media/pressreleases /nestl%C3%A9invests %C2%A3110m-treblingproduction#.USC66PInDHY]

The extension to the existing NESCAFÉ Dolce Gusto plant will treble its production capacity and create 300 new jobs. The jobs created by this new investment had benefit both skilled workers and those leaving school who will be able to train in the workplace to become the skilled workers of the future.

As a member of Nestle, reward for company's employees who are motivated will be given. Reward that will motivate employees to perform at the highest level as well as managing Nestle overall reward principles and processes including base salary, incentives and flexible reward.

2.6 Marketing

On the other hands, Nestle been suffered from bad publicity sectors before. The greenpeace distributed an argumentative video on YouTube about Nestlé’s source for palm oil for their products. The targeted product was the Kit Kat bar and the video play off the Kit Kat slogan "Have a break, Have a Kit Kat". Greenpeace said that Nestlé’s source have a dirty hands in ruining a rainforests which were natural habits for orang-utans. Furthermore, Greenpeace’s video also imitative Kit Kat’s commercial by starting by a bored office worker tearing paper for his boss for hours. He pulls out a Kit Kat bar and bites into it without noticing or caring that the Kit Kat is actually a bleeding orang-utan finger, and leaks blood all over his face and keyboard. In this case, Nestle took a quick action removed the video. By today technology, there is still had a way to let YouTube user repost the video. The users started reposting the video all over the internet and the more internet users repost the video all over the internet, and the more videos is taken down, the more videos will added.

Besides, the brand positioning of Nestle focus on affordable and nutritious. Nestle targeted customer with products that are nutritious, cheaper and tasty. Popularly Positioned Products (PPPs) supply high nutritional value by affordable cost and in suitable formats to send the needs of some 3 billion lower-income consumers worldwide. Their current PPPs spread from culinary products to beverages, to dairy and biscuit with over 400 products are sold under some global brands such as Maggie and Nescafe. These actions bring 30-40% improvement in market penetration within lower-income customers in the last 2 years and increase distribution of Maggie noodles by advertise about affordability and healthy messages.

Recently, Nestle provide some information about a recent marketing campaign with launch a promotion called "We will find you" that find by GPS trackers which the shape alike normal chocolate bars. When a winning customer opens the wrapper, it will activates and send a message to the prize team who tracking them down within 24 hours to deliver a check for £10,000. This chocolate product can find from KitKat Chunky, Yorkie Milk, KitKat 4 Finger and Aero Peppermint Medium.

London showed off this video of Nestle using cutting edge geolocation technology to track down six lucky winners across the UK and Ireland. They believe that this promotion will particularly invoke to men, fascinating them to the chocolate singles category and thus driving increasing sales. Nestlé Confectionery is delighted to be first to market with this highly innovative GPS for the promotion.

During August 2010, Brazil was the first to use GPS, drop it into a product to track you and take marketing promotions to a whole new creepy yet innovative level.

2.7 Corporate Social Responsibility

Corporate Social Responsibility is defined a concept which the company incorporate social and environmental concerns in business operations and interactions with stakeholders on voluntary basis.

By promote a positive impact through its activities on the environment, consumers, employees and communities, Nestle shown great concern for the society though the launch of their concept of Corporate Social Responsibility in 2006, Creating Shared Value (CSR).after the launch of CSR, Nestle undertaken many projects to help the society. A great project that brought significant change to society is The Cocoa Plan project to facilitate African cocoa farmers and the society take advantage of setting market prices by growing their productivity. Nestle funded farmer schools in West Africa to learn better ways which able to produce higher quality cocoa and increase revenue. Not only that, Nestle built a development and research centre that work in hand with Nestle plant science base. Nestle as a partner of International Cocoa Initiative and the World Cocoa foundation solved problems, example child labour and lack of access of education and health such as send farmers to field schools educates the farmer the way to increase productivity and also educated of diseases and prevention ways. In this case, the increasing of income for those West African household enhance their lifestyles. Between that, the dramatically of boosting of production of cocoa increase their exports and conversely decrease their foreign owing. There are also can learn new skills, study the technology and share useful information among the locals who sent to work.

Nestle developed two business principles that focused on communications with consumers. One of the business principles is Nestle consumer communication should reflect moderation in food consumption and not encourage overeating especially important regarding children. Another one of the business principles is must combine the desire for healthy and balanced diets. Their advertising must not mean the reposition of meals with snack foods and heavy snacking. Nestle helps consumers recognize and understand the nutritional content of the food that they bought. This is a positive impact on the reputation of the company. Consumers can know that Nestle behaving responsibly and communicating with them. They also facilitate and promote healthy living for their staffs. Nestle company linked to the Guideline Daily Amounts on the front of packs with the internal communication programme to tell staffs about GDAs and labelling system. In this case, it can help to motivate staffs as showed nestle cared about their well-being and their families.

3.0 Conclusion

In conclusion, Henri Nestle who was a trained pharmacist developed a healthy and economical source of infant nutrition in 1867and his most famous beverage is MILO. Nestle Company in Malaysia export Halal products to over 50 countries in world wide. Their product is target all age of consumer and tries bringing price benefit to consumer. They also put a "Friendly Farm" sign on their product to let consumer know who their supplier are and know their raw material are organic and natural. Nestle is a function-based organization that divided into separate jobs and the jobs are grouped together under different departments. Nestle become world’s leader in nutrition, health and wellness. Nestle Company has doing well from the pass 2009 until now, and be first implementing the Nestle Global Business Excellent Programmed in Asian-pacific. Moreover, Nestle spend RM500 million for creating new product, capacity increase and technical skill for Halal manufacturing that recognize by Department of Islamic Development Malaysia (JAKIM) so that Malaysian who are Muslim also able to buy their product. Nestle company come out a Nestlé’s philosophy which elements are a prerequisite for dealing with people is respect and trust; transparency and honesty in dealing with people are a essential condition for efficient communication. The Company also training their employee to done-on-job and improve relevant skills and competencies. Marketing section, Nestle have a bad publicity on argumentative video about Nestlé’s source for palm oil for their product on YouTube which is distribute by Greenpeace said that Nestle source have a dirty hands in running a rainforest. No matter how Nestle Company try to remove the video but other YouTube user still able to repost the video to spread out the news, so it will affect Nestle company image. Popularly Positioned Products (PPS) supply high nutritional value by affordable cost and in suitable formats to send the needs of some 3 billion lower-income consumers worldwide. Nestle Company organize Cocoa Plan project to facilitate African cocoa farmers and the society take advantage of setting market prices by growing their quality and productivity. Nestle Company support World Cocoa foundation to increasing of income for those West African household enhance their lifestyles such as child labor and lack of access of education and health. Nestle principle is to combine the desire for healthy and balanced diets and helps consumers recognize and understand the nutritional content of the food that they bought. Nestle also organize internal communication programmed to motivate staffs and increase staff better relation.

4.0 References and Appendixes

4.1 References

4.1.1 Internet Gateway

Wikipedia, 2013, Nestle. Available from: <http://en.wikipedia.org/wiki /Nestl%C3%A9> [3 February 2013]

Nestlé Malaysia, 2013, About Us. Available from: <http://www.nestle. com.my/AboutUs/Pages/index.aspx> [3 February 2013]

Nestlé Malaysia, 2013, Contact Us. Available from: <http://www. careers.nestle.com.au/contact-us.html> [3 February 2013]

Joomla, 2013, Mission Statement. Available from: <http://nestle. ciiweb.nl /index.php?option=com_content&view=article&id=48&Itemid=57> [3 February 2013]

Wikipedia, 2012, Nestlé Toll House Café. Available from: <http://en.wikipedia. org/wiki/Nestl%C3%A9_Toll_House_Caf%C3%A9> [3 February 2013]

Nestlé Malaysia, 2013, About Us. Available from: <http://www.nestle.com.my/AboutUs/Pages/index.aspx> [3 February 2013]

Nestlé Malaysia, 2013, Head Office and Factories. Available from: <http://www.nestle.com.my/AboutUs/Nestle_in_Malaysia/Pages/head_Office_and _factories.aspx> [3 February 2013]

Powerfulwords, 2013, The marketing activities of nestle. Available from: <http://www.powerfulwords.co.uk/sample-assignments/marketing/the-marketing-activities-of-nestle.php> [4 February 2013]

Ukessays, 2013, Nestlé industry. Available from: <http://www.ukessays.com/ essays/business/nestle-industry.php> [4 February 2013]

Financial Daily, 2010, Nestle (Malaysia) Bhd. Available from: <http://www.theedgemalaysia.com/the-edge-billion-ringgit-club/176386-nestle-malaysia-bhd.html> [5 February 2013]

Nestlé Malaysia, 2013, Message to Shareholders (Annual Report 2011). Available from: <http://www.nestle.com.my/AboutUs/Nestle_in_Malaysia/Pages/chairman_ statement.aspx> [5 February 2013]

Werner Bauer| Nestlé Malaysia, 2013, Our Vision. Available from: < http:// www.nestle.com.my/Nestle_Research/Pages/Our_Vision.aspx> [5 February 2013]

Nestlé Malaysia, 2013, Halal Policy. Available from: http://www.nestle.com.my/ AboutUs/Nestle_in_Malaysia/Pages/halal_policy.aspx> [5 February 2013]

Sumali Parikh, 2012, Organization Structure. Available from: <http://www. slideshare.net/SumaliParikh/project-presentation-12560015> [6 February 2013]

Cliff Kuehn, 2011, Nestle’s Negative Publicity in Cyberspace – Social Media Failure. Available from: <http://trademarkcopyrightlaw.wordpress.com/2011/09/20/nestles-negative-publicity-in-cyberspace-social-media-failure/> [7 February 2013]

Bureau Veritas, 2012, Popularly positioned products. Available from: <http://www.nestle.com/csv/nutrition/positionedproducts > [7 February 2013]

Ms. Smith, 2012, Privacy and Security Fanatic. Available from: <http://www.networkworld.com/community/blog/marketing-gone-wild-candy-bars-stalk-you > [8 February 2013]

Ukessays, 2013, Corporate Responsibility to the Environment and Society: How Nestle:. Available from: <http://www.ukessays.co.uk/essays/communications /nestle.php > [9 February 2013]

The Times 100, 2013, Ethics and business principles - Business principles in action - nutritional labelling –Nestlé. Available from: <http://businesscasestudies.co.uk /nestle/business-principles-in-action-nutritional-labelling/ethics-and-business-principles.html#axzz2L5lKmRxZ > [9 February 2013]

4.1.2 Book Reference

UCCB1013 Fundamentals of Business Systems’ note