Essay - Case Study: Nestle Company with Reference to the Nestle Case...


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Case Study: Nestle Company

With reference to the Nestle case study, provide one example, which clearly illustrates a link between topics or concepts dr*****wn from at least two pre-requisite modules.

Nestle's success in the food stuffs industry has been due, in large part, to the value adding activities the *****ganiz*****ion has developed, in the form of a value chain, which is one concept covered in the pre-requisite *****. Not only have they mastered this concept within their own organization, but have also extended it beyond their company ***** include ***** supply chains and distri*****ion networks. China is a perfect ex*****mple of ***** successful strategy.

More than a decade of talks found Nestle finally inv*****ed to set up shop in China. Their powdered milk and infant formula plant was opened in 1990. Although the region ***** still relatively poor, Nestle knew that these basic products would be most applicable to the local citizen's needs, ***** once economic improvement matured, and citizens were found to have more disposable *****come, Nestle would then ***** able to expand their product line to products beyond essential food items. Yet it was dis***** that the infrastructure of the region would not support ***** necessary delivery of milk are the distribution of the final products.

Nestle unders*****od that to capture ***** value in both the supply cha***** and in the ***** network, and therefore add value ***** the entire enterprise, something had to be done about the infrastructure of ***** region. As such, ***** established what would become kn***** as milk roads, ***** 27 villages, located around the *****, ***** collection points for milk. This allowed the farmers to bring *****ir milk more quickly ***** the collection centers. This convenience, coupled with Nestle's prompt payment to the farmers for their product, encouraged the farmers to produce even more milk and allowed Nestle ***** increase *****ion from 316 tons in 1990 to more ***** 10,000 tons four years later.

In addition, this newly built infrastructure was useful for distribution as well. Finished product could now be delivered to the villages with greater e*****e and efficiency than previously. ***** ***** ***** reduced distribution costs, *****ks to the new infrastructure. This commitment to adding value throughout the chain has given Nestle a competitive *****dvantage in *****, that it otherwise would not *****.

A second concept covered in the pre-requis*****e modules that can be illustrated by an example provided in ***** ***** study is that ***** market share. Although in some geographic regions, ***** certain ***** segments, Nestle holds a considerable market share presence, in ***** areas, ***** as Jap*****, Nestle has not been able to adapt quickly enough and has lost valu***** market share in ***** process.

***** had become comfortable as the dominant coffee product in Japan, ***** such when the cold *****ned coffee market opened up, Nestle dismissed the idea, secure in its market share lead. As *****, they did not enter the canned coffee *****. However, Coca-Cola saw the potential and developed a ***** named Georgia *****

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