The leading health, nutrition and Wellness Company in the world are Nestle. It is established world wide among 84 countries having 456 branches and not only is that it employing 280,000 people. It was found in 1886 at Vevey, Switzerland and still it is considered as the main branch. It is considered to be “the multinational among multinationals”. A 1.5 percent sales is generated from home country alone, other factories are situated in abroad.
Having 250,000 shareholders world wide out of which there are one third people from Swiss. A single shareholder has less than 3% of the stock. By a sponsor program US investors having 30% of the capital purchase ADR. Nestle stands in first place providing soluble coffee, infant nutrition, condensed and evaporated milk, bottled water, ice cream, chocolate and malt drinks. In pet care it is a co-leader. Delivery of value through sustained, efficient capital and long-term profitable growth to shareholder is provided by the company.
History of Nestle:
Merging of many small companies resulted into the big company named Nestle. Chemist, merchant, innovator Henri Nestle made experiments with the wheat flour, cow’s milk, sugar. Resulted product was useful to the infants as a nutrition those who cannot be breast-fed by their mothers and it proved to be useful by saving an infant born prematurely. Then the production of it started and named as Farine Lactee Nestle at Vevey.
Developing of own brands and to achieve success in a tougher way instead of choosing an easier way to become a private label was the decision taken by Henri Nestle. Anglo-Swiss company was established by Charles and George Page, two Americans which is a condensed milk company that competed with Nestle products. Peter, world’s leading chocolate maker and a friend of Nestle merged his chocolate factory into Nestle Company. While World War I dairy product demand increased lot by considering the government contracts
By the end of the war the usage of the fresh milk started again leaving condensed milk resulted in first loss to Nestle Company in 1921. In 1930, a soluble coffee powder was produces by Dapples which revolutionized drinking of coffee all around the world. It was introduced as Nescafe due to the World War II onset. The affect of World War II haven’t impacted much upon Nestle and later it has grown up with many new products.
After 1974, there was lot of decrease in the profits earned by the Nestle. It was made better by the CEO Helmut Maucher in 1981, firstly by restructuring the internal matters and divestments and secondly by continuing with the strategic acquisitions. By 20th century Nestle became the undisputed leader in food industry. Bringing of best and most relevant products to the people is the main aim of Nestle Company.
Mission, Vision and Goals of Nestle
Providing high quality food to the people to meet the various needs of them by daily marketing and selling foods
The foods which are safer having high quality and that providing optimal nutrient to people for meeting the physiological needs is the main mission of Nestle.
- Business Objectives:
The main objective of the Company is to produce and market company products creating value to it. Not favoring short-term profit by expensing a lot. Maintaining consciousness of fact that professionalism reflects the corporation while recruiting the right people.
- Core Values:
Maintaining respect and trust in people is main core value to be kept in mind. To listen and engage with people is also one kind of communication. To cooperate and helping others should be done willingly which is the basic for advance and promotion of the company.
- Parent Support: Nestle India has got support from the parent company providing successful details about each and every brand.
- Brand Strength: It has many named brands like Nescafe, Cerelac and Maggi.
- Product Innovation: Many new products are introduced continuously by expansion of its product offerings. It became the innovative leader in the global world and nutrition sector.
- Exports: Rs 2,571 m was the company export revenues by the end of 2003. Volatile market for Nestle was present in Russia due t which there was a frequent hit in the over all performance.
- Supply Chain: Traceability is the main issue to be considered as the main issue and has chain management that is very complex. The hygiene, personnel and quality of edible inputs is the requirement for food industry.
- Expansion: The expansion of Company to the smaller towns is possible to it. The inherence advantage is present in the Nestle Company.
- Product Offerings: the expansion of the products as that produced by the parent Company is possible for it.
- Global Hub: India could be considered as an export hub due to the manufacture of some products is cheaper. Included the Health-based products are becoming popular in the whole world.
- Competition: Much competition is provided to the Company from sectors that are organized as well as unorganized. To intensify the battle the food segment import duty was reduced for better functioning of country in globalizes economy.
- Changing consumer trends: Customers are spending low on the FMCG products considering the trends increased. The situation might be handled late but the correct decision is taken i.e., to follow the monsoon for increase in sales (Richard Girard, 2005).
- Sectored Woes: the recent markets that entered into the market are matured. By raising the prices of fuels and raw materials, the packaging and manufacturing costs are being increased.
SHRM at Nestle:
Nestle being a human company provides response to the individual human needs in the complete world. There is reflection of attitude and responsibility of sense towards people. Increase of sales and profits is considered as the main aim of the company and also convinced that the formation of strength of company is done by the people as nothing is achievable without the presence of their commitment, energy. People involvement is needed in particular levels. From this it can be conclude that:
- High Performance
- High Involvement
- High Commitment
Spirit of Nestle:
The top priority is being given to the slogan that “Making big investment in people”. The key drivers to success are considered as people.
Corporate level Strategies of Nestle:
- Innovation and renovation being a part of the growth of the product.
- Long-term potential
- Business built upon sound human values, principles.
- Commitment to health and well being of people for long term.
Business Level Strategies:
- Follows fewer price – low cost for transparency.
- Differentiation- for reducing the supply chain risk of complexity and attractiveness of people towards discounters is low.
Talent management and international HR
Talent management and international HR team: nestle employs that are focused on potential and career developing with high level performance will become future leaders of nestle. Developing process and framework are main tasks used to develop potential of nestle employees. These tasks develop career development plans of individual employees to do international assignments which are out of present places such as international headquarters of Nestle in Switzerland, Vevey or other market of Nestle round world.
Learning and development
Learning and development team is included in cutting edge interventions development and change is supported by far reaching programs like Lead2Win programs etc. From supply chain manufacturing business covering helps to implement and create functional development program.
Continuous improvement and innovation and creativity are also named as Nestle development and learning and it leads to innovation and creativity. This process is carried in two stages:
- Core skill development strategies creation forms professional and passionate team and it enable growth in professional and personal issues in business. With business partners, directors and HR are help in modifying business area strategies.
- Next stage is take vast development and learning intranet advantages which are helpful to trainees. Available resources are designed to help trainees and their knowledge is used in virtual environments. With leadership development programs career and job ambition skills are improved and that creates new leaders for tomorrow.
HR strategies are aligned and used to success in differentiation strategies of Nestle. To support differentiation, HR strategies which are specified below are used:
- Long term performance measures are performed. At long term business development, nestle does not have short term profit favor.
- HR strategies are based on employees training with environment change and latest innovations updating.
- Fair and equal pay practices are followed by Nestle. To promote rewards, pay structure and incentives of nestle system is designed.
- Recruitment process is based on recruitment and hiring of people who have new ideas
- In organization by employee participation and career development continuity broad career paths are available.
Impact of recession on Nestle
In recession phase, some troubles are faced by Nestle.
- Shipment growth: From branded foods to retailers shoppers switching slowdowns shipment growth.
- The volume of goods sold: in 2008, goods volume selling raises to 2.8% from 4.4% I 2007.
Increasing of inflation raises second problem and it has influence of tough competition and weak dollar in UK. Nestle is also named as recession proof company. In 2008 nestle has 69.4% profit. In 2008 and 2009, world faced worst recession. In sales and services greatest downfall is presented in every company. In 2008 nestle has record breaking profit in recession and its product sales are huge numbers.
- In 2008, Nestle net profit was 15billon US dollars.
- In 2008, net income rose from 10.65 billion francs to 18 billion Swiss francs.
- In last year profit was 69.4%.
- In last year sales rose to 109.9 billion francs, 2.2 %, in 2008 8.3% revenue was increased to 8.3%.
- Over 2009 earnings growth is carried in Nestle although global recession is presented by using springboard for growth.
- In 2008 Indian market, 300 Crore investment is granted by Nestle which is doubled in 2009.
- EBIT margin growth and 5% organic growth are goals of Nestle and these can be achieved by internal strength of company.
- In 2008 organic growth of nestle was calculated and raised its global outlook by producing products like Nescafe coffee, Kit Kat chocolate bars and Maggi soup and it is raised from previous target 7.4% to about 8%.
- Share bars of Nestle jumping 5.4% from 2 year low.
- In 2008 after purchasing worth of 8.7 billon stock, Nestle will buy back stock of 4 billion francs this year.
- Nestle increase share dividend 15% to 1.40 francs.
During recession nestle strong survival reasons:
Nestle fight recession because of following reasons.
- Products and brands innovation and renovation are big tasks in Nestle. In 2008, for food research and development Nestle spent 15%.
- Market conditions are capitalized by Nestle and survived recession.
- India is slowdown but not in down turn. Nestle price range of consumer demanded goods hasn’t not been affected by liquidity. So, India is survived by Nestle.
- Because of quality and strong growth of Nestle Company its profitable growth is positioned and survived recession.
- In Middle East war will be despite if world is hold by recession. So, food is necessary for everyone. Nestle infant formula, Stouffer frozen foods and taster’s choice coffee included products are bought by millions of people.
- Market which want to be in safe position has key for short term performance of Nestle.
Changing role of HR
In global competition HR function has importance. Employment stability and intense competition are impacted by corporate planning managers and hard and real issues are addressed by them. By regarding employees costs saving policies are implemented (Phil Kelly, 2009).
Maintaining and recruiting efficient work force is more proactive by HR managers. Dynamic, flexible employees are selected, trained and motivated by mapping HR strategies for more productive.
HR are implementers not administrators and they are identified as strategic partners. In economic uncertainty climate HR helps top management and function well.
In economy ups and downs are formed by globalization, business partner’s change and Nestle business diverse. With practical experiences, result focus and professional skills nestle managers performs following qualities:
- HR must have people motivation and development skills to develop their capabilities and progress in their work.
- HR people must have high level of interest, open minded and inhibit curiosity in life styles. This process increase learning and sharing knowledge and ideas improvement.
- HR professional have responsibility to innovation creation and outside box thinking. This process have chance to make mistake and mistake correction can also provided.
- HR mangers have capability to accept and manage changes.
- Employees must have knowledge about International experiences and culture understanding by that they can face global market challenges.
VRIO and 5P’s Analysis
Internal analysis is performed by VRIO frame work and competitive advantage is leaded by valuable, inimitable, rare and organized resources (Timon Waugh, 2003).
If external threats of organization are handled then resources will be valuable. Valuable resources have any one of following things. Those are customer responsiveness, innovation, quality and efficiency. Nestle valuable resources are human resources, research and development processes and brand name.
If other competitors are not possessed resources then resources will be considered as rare and uniqueness should be presented in food products.
If resources substitution and replacing have difficulty then resources will be imitable. In nestle inimitable resources are nestle followed values, culture of corporation and reputation.
If resources are used in organization then those will be organized. Organization deals with firm management inner working.
5p’s at Nestle
On code of governance Nestlé’s philosophy
Company’s products must be sub stained consumers, employees, national economy and business partners value creation. Management ethical values and professionalism are based on success of product.
With professional skills and personal attitudes hire staff is recruited in company for company long term leadership. So, professional development is important in recruitment standards. Organization commitment and improvement imply quality and culture.
- Labor relations
Campus recruitment, internship and professional development programs are organized by company. For MBA student’s internship program is available in Nestle. Training program is provided to develop employee learning skills. By sharing and developing best practices group discipline is maintained. For substitution and complementation for training programs e learning programs are conducted.
In nestle following HR practices are performed:
- Performance management
- Incentives and rewards
- Recruitment and training
- Change management
- Employee relations
- Health and safety
For healthy and safe work environment nestle is dedicated.
HR strategies followed by nestle
- Communication strategy: This strategy is maintained by company to educate and train people about dynamically changed scenarios in organization.
- Effective training and development: most training programs are conducted by in house trainers and by external trainers specialized programs are implemented. Employee has opportunity to attend training programs conducted at abroad.
- Entrepreneurship strategy: independent entrepreneurs are generated in company by implementing their ideas in reality by organization support with existing resources.
- By cutting high operation cost.
- For HR decisions leverage real time decisions and decision making process is enhanced.