EXECUTIVE SUMMARY
The existing company that has decided on is Nestle (Malaysia) Berhad. This record starts with an introduction and a brief history about Nestle and Nestle Malaysia. This article includes the eye-sight and quest of Nestle and how Nestle will achieve them. This statement also includes a short summation of Nestle's market segmentation with examples provided. It discusses the talents and problems of the business accompanied by the answers to solve the problems. In the end, there are a few suggestions recommended by our group and a finish of this complete report.
TABLE OF CONTENTS
Assessment Criteria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Plagiarism Record. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Executive Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Content
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Market Segmentation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Strengths. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
Problems and Alternatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-11
Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11-12
Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CONTENT
INTRODUCTION
Nestle is a multinational company which is of the world's largest in food and beverages industry. Heinrich Nestle, whom also known as Henri Nestle, was the founder of Nestle Company (Nestle. 2010, "Introduction", Nestle [Online] offered by www. nestle. com), which headquarter is at Vevey, Switzerland in the entire year of 1866. Nestle Malaysia was founded in the year of 1912 in Malaysia as Anglo-Swiss Condensed Dairy Company. Nestle Malaysia hq is now situated in Mutiara Damansara, Petaling Jaya, Selangor, and has 6 sales offices with an increase of than 5000 employees across the country. Besides, Nestle produces its products in 7 factories and markets over 300 Halal products over the country. (Nestle. 2010, "Nestle in Malaysia", Nestle [Online] offered by www. nestle. com. my) Nestle customized in foods and beverages industry, some of the many popular brands Nestle has in Malaysia includes Maggi, Nescafe, Milo, System Kat, Nesvita (previously known as Nestum), as well as pet maintenance systems such as Purina and Friskies.
Nestle's vision (Nestle. 2010, "Corporate Philosophy", Nestle [Online] available at www. nestle. com. my) is usually to be the first choice in Nourishment, Health, and Wellbeing Company by delivering world-class products of the best consistent quality, trustworthiness, and convenience based on business excellence principles throughout the procedure. Nestle's mission ("The Nestle Corporate Essence - Our roots and wings" 2007, p. 4) is to improve the grade of life with good food and drinks, everywhere, so people could live a wholesome life. In order to achieve their eye-sight and quest, Nestle Nutrition Research Centre (Nestle. 2010, "Research & Development", Nestle [Online] offered by www. nestle. co. jp) pays off great focus on understand the consumers' nutritional and psychological needs and utilise the modern world superior technology and technology to produce high quality products to the entire world.
MARKET SEGMENTATION
Every consumer has different needs. Hence, it isn't possible to fulfill every customer utilizing a same marketing segmentation, which is also called mass marketing by supplying a single marketing combination to all consumers. Moreover, as a worldwide market has become extremely competitive, and consumers are increasingly requiring which is very difficult to satisfy. Therefore, Nestle uses goal marketing for each product with their customers.
For example, in consumer product, Nestle baby milk product such as Nestle Neslac Excella Gold is segmented and then infants and toddlers. However, baby doesn't have the capacity or capability to choose the food they needed. Therefore, to market this baby dairy product, Nestle does not fully concentrating on baby's basic need which is being hungry, but also to the baby's parents in terms of how the nutrition provided will give their children the best possible advantages in the children's life and development.
Another example is Nestle Milo, the milk beverage with chocolates and malt. Don Howart, the executive director of Nestle and Singapore Caffeine and Beverages claimed that Milo remains popular amonst the young and has a 90% (The Sun. 2010, "Milo with ProtoMalt to complete your day", Sunlight2Surf [Online] offered by www. sun2surf. com) market talk about among chocolate malt beverages in Malaysia. Aside from the youngsters, old people and dynamic people are also area of the target market segments of Nestle Milo beverages.
However, at first, Nestle's business was launched internationally and realised the actual fact that foods need to be taken into account to the neighborhood eating and social behaviour due to the particular country's practices, cultures, and traditions. Therefore, (1) Nestle has always shown respect for diverse ethnicities and customs and attempting to combine itself whenever you can into the cultures and customs, adding also to the neighborhood environment its set of values. Therefore, (2) Nestle embraces ethnical and social variety and will not discriminate on the basis of origin, nationality, faith, contest, gender or age. ("The Nestle Management and Leadership Rules" 2006, p. 9)
STRENGTHS
Nestle is a multinational company, not to mention Nestle is also the greatest industry in foods and drinks, hence Nestle has every capacity to appeal to more consumers compare to the local companies. Due to its high market talk about and high financial vitality, Nestle also has greater financial capacity in altering existing products in terms of product packaging, the formula of the particular product among others or creating new products, as well as to adapt or up grade latest information system technology in production, order processing and other related domains in order to preserve their competitive gain by delivering lower cost of goods and services than their opponents in this energetic environment.
Secondly, Nestle has quite a powerful strategic marketing ability. For instance, Nestle Maggi instant noodles has built a stable patent which is perfectly known in many countries especially in Australia and Malaysia. This is because Maggi instant noodles is straightforward to be differentiated from its competition such as Cintan Instant Noodles. Additionally, Nestle in addition has developed an extremely strong brand name for Maggi instant noodles because of strong advertising, which includes indoctrinated the majority of the people to name the other brands of instant noodles as Maggi instant noodle instead of the brand's original name.
Furthermore, Nestle also has a strong Research and Development functions that helps the company to attain cross-border synergy such as packaging its global products to local preferences. Nestle also emphasises on using today's information technology, which Nestle believe that it'll present a long-term opportunity for them to smoothen the business's operation or to increase efficiency in product packaging, among some other company's functions. Besides, Nestle also has better technological capabilities, for example, to renovate the prevailing products to be more innovative, higher quality, and much more healthy product as Nestle realised that consumer-centred innovation and restoration is the main pillar of Nestle's worldwide strategy, which would speed up Nestle to enhance from "good" to "better". ("The Nestle Corporate Essence - Our roots and wings" 2007, p. 34) And because of Nestle's commitments, more folks trust on the merchandise supplied by Nestle because of its proper health and safety precautions.
Besides, Nestle also offers great leadership qualities. The leaders like the top executives, branch managers, yet others are responsible in building organisation capability. For instance, the Chairman and Chief Executive Officer of Nestle S. A. , Peter Brabeck, (Castelarhost. 2005, "Nestle LC1 - S. W. O. T Analysis", Castelar Articles [Online] available at www. articles. castelarhost. com) emphasises internal growth worldwide, this means to achieve higher quantities of sales with the addition of value to the products, renovate existing products, and innovate new products, to keep speed in the industry because of speedily changing of consumer objectives.
PROBLEMS AND SOLUTIONS
Nestle produces a huge selection of products, has a global network of suppliers, and multiple distributions and advertising channels. Hence, to foresee and reply in this quickly changing in market demand condition is very hard. When forecasting a market demand, Nestle will require information to identify shifts in demand early so they could adapt for fads and send the right emails to the suppliers, shippers, and syndication centres before they may be overflow with unwanted or defective goods or shortages. (Manhattan Associates. 2010, "Planning and forecasting: Anticipate and Respond to Changes in Demand", Manhattan Associates [Online] at www. manh. com)
However, every company has its weakest links, so is Nestle. The weakest links are issues they are unable to control. (Labs. 2010, "Supply Chain Efficiency Starts at the Top", Food Anatomist [Online] available at www. foodengineeringmag. com) First of all, the most common problem is the resources of supply of recycleables. This is due to an abrupt and surprising increased in demand, that may cause extreme resource shortages for commodities that will result in major price raises. For instance, inclement weather and natural disasters will always be an issue impacting incoming raw materials. Second of all, the inaccuracy of orders received in inventory. No enterprise can ever achieve the requirement of zero problems especially in foods and beverages industry. For example, when the purchasing department of Nestle ordered 10, 000 of mixed berries yoghurt from its supplier, but what the dealer received was only 8, 000 of combined berries yoghurt, or on another occasion they might received faulty inventories. Another example is, when Nestle says its supplier that they needed extra orders of a specific product to be sent straight away because of unexpected increased popular, but in truth, the dealer may already has orders from other customers. This usually happen during special occasion such as Chinese language New 12 months, the demand of Nestle Cornflakes cereal will increase because many people will buy this product to make cookies. This can triggers Nestle to come across a great reduction because of inaccurate order of magnitude because they could not produce the actual end result needed.
Therefore, to be able to resolve these problems, it is very important for Nestle to engage with multiple suppliers or retailers in that particular region, so they could acquire inventories from multiple sellers, that may definitely reduce the risk of lack credited to incontrollable situation. Besides, Nestle also needs to base on the demand and buy planning on last couple of years of sales to forecast current year of demand and offer. Other than that, shared trust and strong relationship with all the sellers are needed to be able to increase the flexibility of materials source management, as well as to enhance the bargaining ability of Nestle. However, when there is a surplus, Nestle might need to plan a promotion to clear their inventories, in any other case Nestle will come across a great damage such as paying high materials handling cost, throw away of warehouse's space, or inventories that aren't sold became faulty and may have to be disposed which no revenue will earn. Therefore, when there may be a big event arranged such as Jom Heboh Carnival. Nestle will create a booth at the carnival to market its products, which are close to the expiry date at lower price such as Maggi products, Nescafe, Milo, yoghurt drinks, Nestle ice lotions etc. People often choose the products in big number due to cheap than the marketplace price. Because of this, Nestle could clear their inventories somewhat fast and save some space in the warehouses. which really is a win-win situation.
Thirdly, even though Nestle has a logistics section but it doesn't deal with travelling logistics. Nestle outsourced its source chain transportation to the third-party logistics (3PL) as Nestle tries to lower their supply chain costs also to concentrate more on their in-plant operations. Although Nestle doesn't have a transport logistics department, but they do have a delivery team to cooperate with the third-party logistics in routing protocol. Nestle is utilizing a Dynamic Source Routing (DSR), which really is a simple and productive routing protocol designed specifically for use within multi-hop wireless ad hoc systems of mobile nodes. The protocol is composed of the two main mechanisms of "Route Breakthrough" and "Route Maintenance", which interact to permit nodes to find and maintain routes on-demand to arbitrary destinations in the random network. (Maltz. 2003, "The Dynamic Source Routing Protocol" CMU [Online] offered by www. cs. cmu. edu) Therefore, the delivery team will there be to help Nestle and the 3PL that DSR is working according to company direction as well as DSR performance.
Next, it's the poor partnership marriage between dealerships and consumers. Retailers need these features because they, in close relationship with manufacturers - Nestle, are a connecting hub of services for the consumers, and other stakeholders. However, Nestle fixed this problem by using the Dealer Management Systems (DMS) as well as their dealers. DMS is a software alternatives that provide tools for handling sales, services, parts and inventory management, business management, integration, and core structures. DMS help manufacturers and sellers create designed marketing campaigns to provide inventory to target markets. This will integrate inventions into traditional in-store sales and service procedures and offer systems for non-traditional merchandising, sales, and service strategies through different programs for consumer engagement via Web, by mobile phone, or in-vehicle. (Microsoft Corporation. 2008, "Microsoft Supplies the Seller Management Solution" Microsoft [Online] available at www. microsoft. com/automotive)
RECOMMENDATIONS
After the reviews explained above, those were not the only alternatives that exist. MDZ has think of a few recommended ideas which may work or solve the problems that were experienced by Nestle. Rather than just finding or having multiple suppliers, Nestle could acquire the inventories from the other stores from the other region. Because some parts have different demographics, for occasion, race. Some areas have higher ratio of Malays such as Kuantan, Pahang, plus some may have higher percentage of Chinese language such as Ipoh, Perak. The Chinese New Calendar year (CNY) example stated above, in Kuantan area, there might be less demand during CNY, so to prevent scarcity, Nestle could just find the inventories from Kuantan. However, if there is a surplus, and unable to clear the inventories at a short time, Nestle could consider donation for short-run purpose, this could help clear the old companies, as well concerning help the donation receivers and build better goodwill and name of Nestle.
Secondly, Nestle is a multinational company; it will be has the potential in owning a transportation logistics team. Due to the hundreds variety of Nestle's products, 7 manufacturers in Malaysia, as well as a large number of customers such as vendors, wholesalers, distributors and so on, Nestle could cope with its own travelling service. Nestle could gain the whole electricity in such as method selections, routing, and more. They could do just about anything such as consolidating different type of products but to the same wall plug. Besides, they could save every cent they use in vehicles cost compare to third-party logistics (3PL) because 3PL charges according to the quantity, inventory storage space, value added operations such as special handling, plus more. It may benefit in the brief run, but not at all in the long run, as Nestle centred in the long-term business and strives to accomplish performance and efficiency.
Lastly, Nestle might use both manual and automation system in managing sales, services, among others. It is because one cannot trust wholly to a machine, as it may not be documenting the steps in its own cpu. Because some steps can not be automated and may required operator treatment to avoid the escapement handling steps, even though adapting advanced technology could help keeping cost as labour cost is reduced, but if you may still find problems occur, it will affect the business such as loss of customers because of the fault. Therefore, Nestle must update the machine software regularly and full utilisation of available technology as well as the manual providers, which will effectively increase the efficiency and stability of the resource chain systems.
CONCLUSION
Nestle exerts great attempts to achieve its visions to be the leader in Nourishment, Health, and Wellness Company by producing better quality of products to the consumers. Nestle also research about the consumer's needs from time to time and gratify the consumers as much as possible. Nestle's advantages such as high financial capabilities, effective strategic marketing capability, strong research and development, as well as great leaderships have helped them through the obstructions. Most importantly, Nestle targets its missions and ensures regularity by making the right decisions to manage and build its business to deliver the assurance of Good Food, Good Life all around the globe.
