Cross Business Synergies: The Nestle Company

Cross Business Synergies: The Nestle Company Introduction Identifying the cross-business synergies within the organization throughout its history According to the case study, Nestle replicated its milk district model that was initially introduced in Switzerland to ensure sufficient milk supplies in 1870s and modified it by adding value to it and facilitating the availability of the product across the continents, example, Latin America, Asia, Caribbean, African and Inner Mongolia. This shows that the company recognized that choices varies across continents and by adding value to the original product (milk) to make it easy to use and available in other continents represents a synergy which was created and captured. Another important cross-business synergy in the history of the company is the Research and Development, RD. Nestle understood the limitations and challenges involved in starting a new company that will stand alone and compete favourable with competitors in a new market and therefore, utilized the combined strength of its businesses to invent new products, Nescafe, (a soluble instant coffee) by the help of its RD team. Nescafe remain one of the largest brands in the world and have changed the way we drink coffee across the world today by making coffee drinking fun, stylish, ready to use, high class and tastier. Also important is the production of another brand Nestea (an instant tea), and the chocolate powder Nesquik by the same drying process used in making Nescafe. Furthermore, from the case study, Nestle reinvigorated Nesquik originally sold in the form of a powder used in milk into syrup form and into ready to drink varieties, this is also a very important cross business synergy for Nestle, which provided an easy access to coffee drinking in restaurants, hotels, cafe, and made the products affordable, available, and to suit individual taste and choice. Another cross business synergy was in leveraging marketing approach which helped the company to build expertise in various business units and invention of new products through its Research laboratories to launch a platform for growth which eventually increased sales and generated increase market revenue. An important cross-business synergies within the organization is GLOBE (Global Business Excellence), this is a comprehensive information system which used by Nestle to secure and bring together the companys businesses together under a common and unique technology infrastructure. Globe was used by the company to capture data and to standardized data which is based on the same definitions and units. This enables Nestle to have a unified system and measurement across its business units anywhere in the world, manage information, and create knowledge that could be transferred and shared across its business units, and provided a better customer management system, thereby building customer confidence and promoting the quality of their products across the continents. Furthermore, GLOBE provided synchronization of data between manufacturers and retailers, which resulted in an improved order fulfillment. The system also enabled retailers to add new products to their store stocks simply by clicking the mouse of their computer. Another cross business synergy is the invention of new nutrition, health and wellness vision by basic scientific research and state of the art tools such as nutrigenormics. This allowed Nestle to improve consumer healthcare, fitness and weight management, by making their products healthier and reducing fatty acids. Corporate Growth Direction of the Company throughout its history Figure 1 Corporate Growth Direction From the case study, one of Nestle corporate growth came in the direction of Horizontal integration. This represents a horizontal integration because the company expanded forward within the food business by merging with a known food processing industry Anglo-Swiss Condensed Milk also a food business. The merger provided the company with more resources and capital to expand their products and later added Chocolate to their brand in 1905. (See figure 1.) The growth continued in the horizontal integration trend and expanded to other countries example, Britain, U.S., Spain, and Germany, where they operated their processing plant. The growth within the industry continued horizontally and allowed the company to expand into Brazil, Australia, and established their presence in Singapore and Hong Kong. The company merged with Maggi, Europe large producer of food enhancer and prepared food such as soup, which indicates that the company continued to expand and grow within its food industry. Nestle continued the chain of growth towards the horizontal integration direction and acquired several businesses example, canned and frozen food, bottled water and pet foods. Nestle diversified for the first time outside the food industry, and in 1974, the company became a major shareholder in LOreal, one of the worlds largest producers of cosmetics, with a 25 percent interest in the French company. Nestle undertook a second step outside food industry by acquiring Alcon Laboratories, a U.S. company which specialized in eye care products in 1977. This growth direction is called Horizontal Diversification, since it was the first time the company moved outside of its business industry. The company continued its growth in the direction of horizontal integration under new management (Maucher era) and In 1985, acquired the American food giant Carnation for $3 billion, which was regarded as one of the largest in the history of food industry during the time. From the case study, Nestle moved away from the Agricultural and processing roots and sold their Cocoa and processing plants ending their growth towards the Backward Vertical Integration direction and involvement with their supplier business. This pointed out that Nestle was moving in the Horizontal direction and has kept their competitive advantages gained over the years by continuing in the same horizontal growth direction i.e. Horizontal diversification. and Horizontal Integration. From the analysis, the writer believes that Nestle may no longer be interested in the Vertical growth direction, this may be evidence by the statement from its new CEO Brabeck who commented that the company want to reduce cost and devote more attention to other businesses that adds value There were also major acquisitions during Brabeck tenure which solidified the company position in key areas such as bottled water, coffee, ice cream, and infant formula, and also the company decision to dissociate from the Agricultural and processing business Thereafter, Ralston Purina was acquired in 2001; the pet food business has become a recognized name around the world. The company diversified horizontally again during Brabeck tenure beyond its technology and traditional line of products and processing food towards a wider vision of nutrition, health and wellness. To continue its platform for growth, the company made three important acquisitions: by acquiring Jenny Craig, a U.S chain of weight loss centre in 2006, providing Nestle a platform of moving into weight management. Novartis Medical Nutrition in 2007, which helped Nestle to strengthen their position in the area of healthcare nutrition, and the Novartiss Gerber baby foods business in 2007, thereby extending Nestlà ©s leadership in all the areas of infant nutrition. This showed that the company became interested in the healthcare and fitness business. The corporate Management Mechanisms used by Nestle to leverage its synergies The three management mechanisms used by managers to leverage synergies are: Centralization, Coordination and Standardization. These will be applied to the case study in order to discuss the corporate management mechanisms used by Nestle to leverage its synergies already identified in this assignment. One of the synergies identified earlier in this assignment was the replication of Nestle milk district model in Switzerland by modifying the product. This was possible from the writers point of view because the company retained the same standardization process and procedure which has already proved successful in Switzerland. The company simply repeated the process and then added value to the product which eventually resulted in an improved quality for consumer satisfaction and then introduced the product to other countries, example, Britain, Germany, Spain, Asia and Australia, Africa etc. Another corporate management mechanisms used by Nestle in leveraging its Research and Development are Coordination and Standardization. From the writers point of view, the establishment of the research laboratories requires the coordination of Nestlà ©s resources, activities, product offering and integration of its business units together to build world class research laboratories, and Standardization integration resulted because the company used the same process to replicate, modify and re-invent new products. Furthermore, other identified synergies were the reinvigoration of Nesquik originally sold in the powder form into syrup form. The management mechanism applied in this process is standardization mechanism. According to the passage, Nestle used the same drying process in making Nescafe and re-invented it to produce Nestea an instant tea and Nesquik a syrup form. Also of interest is the leverage of the GLOBE system using a standardized system, which synchronized data, improved information management and created knowledge that could be transferred across Nestlà ©s business unit and allowed customers to add new products to their inventories by a click of mouse. Again, the companys leverage of market approach which created a platform for growth and increase sales was based on the standardized integration mechanism system from the writers point of view. This is because Nestle continued in the same level of progress, growth direction and transferred the same management mechanism already tested and applied in some countries into other continents, which led to a rapid growth in sales and market revenue. The 60/40 benchmark standard used by the company to improve their nutrition, health and wellness and reduced fatty acids was also based on the standardized integration mechanism. According to the CFO, the process was based on taking out salts, fatty acids and sugar and putting in omega 3, whole grains and calcium to give it a healthier profile. The Future Scenario for Nestlà ©s corporate level strategy, based on the integrated organization and portfolio organization perspective One of the future scenarios for Nestle corporate level strategy is: how the company can remain relevant and dynamic and at the same time provide essential industry leadership in areas such as sustainable sourcing while keeping products affordable Firstly, based on the integration organization approach, the company should remain customer driven, always adding value to their products and improving the quality of their products by emphasizing their core competencies. Nestle should regard competencies as the core of coordination and to place their synergies at the heart of their company. They should continue to innovate and re-invent through their various RD centres, and integrate their multi business units. The company should promote synergies more than responsiveness; they should make acquisition infrequent and focus more on internal growth as stated by Bulcke the CEO. Building their business core competence should remain their strategic plan, while remaining tactical with their suppliers and sourcing of raw material. This is realizable by continuing their strategy of buying their agricultural products directing from farmers and encouraging continuity of their supplier business. These will ensure that prices are kept low and affordable while the premium quality is not affected. Besides, Integrated approach encourages looking after the brands to enable it remain relevant to customers in order to generate more sales. Consequently, the writer thinks that achieving the future ambition will be difficult using the portfolio approach. According to the portfolio approach, responsiveness should be strongly emphasized over synergies. This is risky because it may result in loss of synergies and brands. Nestle has several billionaire brands already established across the world. It will be unreasonable to risk losing any of them. Besides, portfolio approach does not encourage internal growth but is well suited to diversification through acquisition, which is contrary to the CEO vision for the future growth direction of the company from the case study. Portfolio perspective only leverage financial resources and does not recognize any synergies which are not financial related. The second scenario is to understand how Bulcke intend to balance local autonomy with global coordination. Based on the integrated organization approach, the company should balance local autonomy with global coordination by giving country managers reasonable degree of autonomy in matters dealing with the customers, they should integrate resources, activities and position along multi business synergies. Such coordination of work across multi business unit boundaries will result in the ability to operate in such a way that seems like the various part were actually in one units. The company should place the corporate centre at the forefront of competitive strategy. They should maintain the standardization activities, example GLOBE which synchronized data and information system management across the businesses. Based on the portfolio approach, the efficiency of the cash flow and balancing the business risk are regarded as more important. Portfolio approach supports, activities and produc ts offering to be split along business unit lines, hence global coordination may be difficult to realize. From the case study, Nestle future plan shows that the company will move towards an integrated organization approach. According to Bulcke, Nestle future growth will come from internal growth. The company is re-focusing its corporate strategy from the past. Nestle intend to build on their core competences and strength which according to their CEO is their products, RD, global presence, people, brand portfolio and Nestle culture. From the writers point of view, integrated approach will reinforce the companys product profile in the market and keep them very competitive by being focused, and put in more emphasis on developing and building their synergies rather than defending business unit responsiveness. The company has gained enormous synergies by sharing advances in their basic and applied sciences and research, which also helped to rapidly increase developments. Following the integration approach will ensure that Nestle does not lose their synergies or its billionaire brands through lack of invention and innovation. Nestle RD was identified as a fantastic platform for future growth, therefore, the management need to continue to leverage it better by building on the core competencies developed by the team of scientists and researchers, and integrating the multi-business units, activities, resources, and looking after their brands by supporting RD and invention programs. Nonetheless, the writer believes that the company may not be able to realize their internal growth ambition by adopting the portfolio organization approach. This is because Nestle culture over the years has been anticipation and being proactive rather than reactive according to the CEO, which showed that the company favours synergies rather than responsiveness. The company intends to focus more on reinforcing their brand, and capitalizing on their core competence for growth which does not agree with the portfolio approach. From the grow direction trend shown in figure 1. It appears that the company are not seeking to enter into any buyers or supplier business or pursuing new business opportunities towards the vertical direction but rather focusing on reinforcing their existing brand and building on their area of expertise. Conclusion This assignment has answered various questions based on the case study provided. The writer has identified the synergies which has enabled Nestle to expand its businesses globally. The growth direction of the company was also outlined and discussed with various analyses given. Furthermore, the writer highlighted the management mechanisms which relate to corporate level strategy and related it to the case study. Finally, the future scenarios of the company was outlined and discussed. Based on the discussions on integration and portfolio organization approach, the writer believes that the company will be better suited to realize its future vision and programs by adopting the integrated organization approach. This assignment presented an interesting discussions and an insight into the history and activities of a giant food industry Nestle. References Martin, and Eisenhardt, 2001,: 3. Cross-business synergy: Recombination, modularity and the multibusiness team. Bob De Wit and Ron M eyer. Strategy Process, Content, Context, an international perspectives fourth editiomn.

Strategic Alliance Between Nokia and Microsoft

Business Administration knowledge assists the implementation of the strategic alliance between Nokia and Microsoft from several aspects. To begin with, decisions about leadership are one of the most disturbing problems in the strategic alliance; interim leaders are appropriate solutions to the issue (Werther, 1998). Interim leaders are those haired from a third party, not belonging to the alliance partners. Compared to selecting a leader from one of the partners, interim leaders have their advantages.It eliminates the assumption from both the public and the employees that one party has the domination, which assists to build a neutral image of the alliance (Werther, 1998). Therefore, Nokia and Microsoft are in a fairly equivalent position in the alliance. Moreover, their focus is the success of the alliance rather than the benefits of one of the alliance parties (either Nokia or Microsoft). Compared to outside consultants, interim leaders also have more merits.Werther (1998) suggests that interim leaders have operational or practical authority instead of advising authority owned by consultants, and they are suitable in the start-up stage of the alliance. As the alliance between Nokia and Microsoft has just begun, interim leaders can be helpful. Interim leaders contribute to distinguishing between â€Å"actual values that are ‘in use’ from stated or ‘espoused’ values that are merely touted for internal or external consumption† (Argyriset al, 1985; cited in Werther, 1998, p. 342). Thus, Nokia and Microsoft should select an interim leader from the third party rather from themselves.In addition, information flow management including intellectual property protection is crucial to the success of the alliance. Microsoft is the leading software company in the world, and Nokia has been the leading phone manufacturer all over the world. Thus, the value of intangible information can be even greater than tangible assets companies own. Howeve r, partners are often in a dilemmatic situation where they want to balance the outflow of information to successfully achieve the task and the protection of intellectual asset (Osborn et al, 2001).The careful management of information is of great importance. Firstly, alliance managers need to have a clear understanding of partner’s intention of learning and the extent to which partners are willing to learn from cooperators (Ireland et al, 2002). Then, suitable organizational control like â€Å"integrating mechanisms and use of interest-aligning incentive plans† (Geringer& Herbert, 1989; Kumar & Seth, 1998; cited in Ireland et al, 2002, p. 437) can be used to manage information flow.When it comes to intellectual property protection, both Microsoft and Nokia should think about the value of the company’s intellectual asset and decide the key components that belong to inadvertent transfer. In this case, Microsoft may need to have a consideration of the safety of cor e techniques involved in providing the operating system. Moreover, Gadieshet al (2002) emphasize the necessity to have an intellectual property audit internally before alliance, with companies whose central capital consist of intellectual property.Lastly, building trust between partners also contributes to the success of strategic alliance. Trust means that the partner’s behaviours will meet expectations, and it leads partners to bear risks and produces a positive effect on the alliance (Ireland et al, 2002). Continuing to show the company’s goals for strategic alliance while partners do the same and demonstrate patience are important actions in building trust (Cullen et al, 2000; cited in Ireland et al, 2002, p. 38). As the problems are usually clearer to middle managers and engineers who experience every day alliance activities (Osborn et al, 2001), thus, the trust and communication building between these people from Microsoft and Nokia cannot be ignored. All in all, experts and managers with sophisticated business administration knowledge are required to implement these tasks. The successes of these aspects contribute to the success of the strategic alliance.

Pilinut Essay

Our company engages into pilinut business. Pili tart is a very profitable product, it has the so called 3C’s of Bicol pili nut: Competitive (market); Capability (financial); and Capacity (production) (Melchor A Aguilar). Because the Philippines is the only country where the fruit has market. No other country process pili in commercial quantity, meaning, we have the monopoly of processed pili in the foreign market, this kind of business has a very high potential of being successful especially if it will engage in exporting. There are many producers and processors of pili tart in the Bicol region, but this will be very few compared to the world market. Only few of these processors are into exporting business. Pili are very nutritious even as confection. Nutritionally, the kernel is high in calcium, phosphorous, and potassium, and rich in fats and protein. (DOST), so there is no issue to health concious. Our products will be of superior quality associated with the right price so that almost every body can afford it. We will produce product using ingredients of high quality so that it is guaranteed to be tasty and delicious. We will provide products that are not health and environmental hazard but instead a pilinut product that everyone can enjoy and environmental friendly that undergo in the right procedure. We will produce different pilinut products that are best for export, which does not easily spoil, and remain fresh even on long period of time. Pilinut for ordinary people may not be so important, but for a business person like us, pilinut has a long way to go and has a very large market to serve. Profit from this business may be abundant due to the monopoly of the products. We can start at a small capital but the comeback will be great. In not more than three years, we will regain our investment from this business and still continue to grow.

German Pet Names Used to Address Family and Friends

Germans often use animal names such as  Hasi  and  Maus  as terms of endearment for  loved ones, according to popular German magazines. Kosenamen (pet names) in German come in many forms, from the simple and classic Schatz  to cuter ones like Knuddelpuddel. Here are some favorite German pet names, according to surveys carried out by the German magazine Brigitte and the German website spin.de. Classic German Pet Names Name Variations Meaning Schatz Schatzi,Schatzilein,Schà ¤tzchen treasure Liebling Liebchen, Liebelein darling, sweetheart Sà ¼ÃƒÅ¸e/r Sà ¼ÃƒÅ¸ling sweetie Engel Engelchen, Engelein angel German Pet Names Based on Types of Animal Maus Mausi, Mausipupsi, Mausezahn, Mà ¤usezà ¤hnchen mouse Hase Hasi,Hasilein, Hà ¤schen, Hascha (combination of Hase and Schatz) *bunny Bà ¤rchen Bà ¤rli, Schmusebà ¤rchen little bear Schnecke Schneckchen, Zuckerschnecke snail Spatz Spatzi, Spà ¤tzchen sparrow *In this context, these names mean  bunny, but they usually mean  hare. German Pet Names Based on Nature Rose Rà ¶schen, Rosenblà ¼te rose Sonnenblume Sonnenblà ¼mchen sunflower Stern Sternchen star English-Language Names Baby Honey German Pet Names Emphasizing Cuteness Schnuckel Schnuckelchen, Schnucki, Schnuckiputzi cutey Knuddel- Knuddelmuddel, Knuddelkà ¤tzchen, Knuddelmaus cuddles Kuschel- Kuschelperle,Kuschelbà ¤r cuddly Germans love their pets, so it only makes sense that they would use pet names as terms of endearment for their human children, significant others, or other beloved family members and  close friends. Germans Are Animal Lovers More than 80 percent of Germans describe themselves as animal lovers, even if significantly fewer German households include a pet. The most popular pets are cats, followed by guinea pigs, rabbits, and in fourth place, dogs.  A 2014 Euromonitor International study found that 11.5 million cats were living in 19% of German households in 2013 and 6.9 million dogs were living in 14% of households. Other German pet populations were not mentioned, but we do know that Germans spend about 4 billion euros ($4.7 billion) a year on all their pets. Thats a lot in a population of   86.7 million. The Germans willingness to spend big on pets is a reflection of the pets increasing importance as companions at a time when single-person or small households in Germany are growing at nearly 2 percent a year, resulting in increasingly isolated lifestyles. And Their Pets Are Beloved Companions Pets are considered beloved companions that enhance their owners’ well-being and quality of living, said Euromonitor. Dogs, which enjoy a high status and high profile among pets, are also viewed as supporting their owners’ fitness and health and as helping them to reconnect with nature on their daily walks.   The ultimate German dog is probably the German shepherd. But the very popular breed that has won the Germans heart seems to be the cute Bavarian dachshund, typically named Waldi. These days, Waldi is also a popular name for baby boys, and the dachshund, in the form of a small bobblehead toy in the rear window of a good many German cars, is a symbol of the countrys Sunday drivers. Waldi, the Name and the Olympic Mascot But in the 1970s, dachshunds were synonymous with the rainbow-hued dachshund Waldi who, as the first official Olympics mascot, was created for the 1972 Summer Olympics in Munich, the capital of Bavaria. The dachshund was not chosen so much for this accident of geography but supposedly because it possessed the same qualities as a great athlete: resistance, tenacity, and agility. At the 1972 Summer Games, even the marathon route was designed to resemble Waldi.