Sales Performance of Nestle

Observing the surroundings bestows different ideas on the individuals. These ideas generates different and varying perspectives regarding the observations. These perspectives are generally conflicting, which, in the business context, is harmful in terms of exposing productive output (Haimes, 2015). Moreover, these perspectives contradict the aspect of teamwork, which the companies and organizations need for enhancing the productivity. This assignment prepares a report on Nestle’s business strategy and ethical consideration.

Founded in 1866, Nestle has achieved accolades and glory by emerging as the largest food and Beverage Company in the world. With its headquarters in Vevey, Vaud, Switzerland, the brand operates under food processing industry. As a matter of specification, the company deals with baby food, dairy products, breakfast cereals, confectionary, bottled water, ice creams and pet foods among others. According to the annual report of 2017, the company earned an annual revenue of 89.791 billion CHF, which reflects a stable condition in the market (Nestle.com.au, 2018). The total operation income was 10.112 billion CHF, which is a downmarket scenario in the competitive ambience. Even the net income, total assets and equity reflect a downmarket scenario. Presence of 323,000 employees was a striking factor in the business of 2017. However, focus towards the Sustainable development Goals 2030 contradicts the negative aspects. Herein lays the appropriateness of the aim of “enhancing the quality of life for the customers and beautifying their future.

The managers of Nestle need to be applauded for exposing conscious approach towards the adoption of best organizational practices. This is in terms of averting the instances of risks and failures. This is a planned and reasoned approach, which helps the brand to stand out from the contemporaries. This approach aligns with the standards and protocols of Ethical Code of Conduct. Aligning with the arguments of Bahr, (2014), it can be stated that risk assessment at Nestle covers four essential aspects- Anticipation, Prevention, Planning and Finance.

Figure 1: Components of risk assessment in Nestle

(Source: Nestle.com.au, 2018)

Anticipation involves identification of the potential risks, which acts as an obstacle in the business operations. After identification, evaluation is needed in terms of assessing the impact of the risks on the overall business of Nestle. Appropriate approach is needed in this stage, as it lays the foundation of customer attraction. Herein lays the appropriateness of the term, “enterprise risk management. Chemweno, Pintelon, Horenbeek and Muchirz, (2015), opines that after this, comes the attempt towards loss prevention. This is in terms of introduction of accidental policies and insurances, which ensures the wellbeing of the stakeholders and shareholders. Typical example of this is the application of EGRON Safety measures in the Air bags filters and coffee machines.

Risk Management Strategy of Nestle

After the risk prevention process, business continuity plans are created for preventing the risks from occurring in the near future. This Plan is created by the members of Group Compliance Committee. Group level interventions are monitored by the Board panel. Here, integrated frameworks are used for determining the probability and frequency of the risks and their impact on the profit and loss of Nestle’s business as a whole (Nestle.com.au, 2018).

Figure 2: Framework for risk assessment in Nestle

(Source: Nestle.com.au, 2018)

The reports and results prepared from this framework are sent to Executive Board and to the Audit Committee. The conclusions drawn from this are reported to the Board of Directors. In this process, the main aim is to bridge the gap between perceptions in the risks and their impact on the brand image. However, Reason, (2016) feels that the penultimate step is the risk financing, which includes activities like risk retention, risk transfer and claim management among others.

Since the era of 2013, brands like Nestle, has been struggling with the issue of obesity. Typical evidence of this is their tagline, “Good Food, Good life”. Obesity is aggravating the health complexities of the customers. Increased demands of fast foods have compelled Nestle to think of something healthy for the customers. The research and development team of Nestle needs to be praised for coming up with the plans of reducing salt, sugar and fat content from the platters. Addition of micronutrients in the foods and beverages has mitigated the health deficiencies. These initiatives have placed Nestle on the third position in the Access to Nutrition Index (Nestle.com.au, 2018).

Mention can also be made of the initiatives to make the people aware of the portion size. This approach has been effective in terms of stabilizing the financial parameter through the welfare of the customers. Helping the people to adopt small sizes have added innovation into the food and beverages. Reference can be cited of International Nutrition Symposium on Nutrition, Obesity and Society held at Nestle Research Centre in 2013. Leading scientists took part in this event, which aimed at preventing obesity through the suggestion of possible treatments. Strategies were developed regarding control of the energy intake in the food and the beverage items (Nestle.com.au, 2018).

The interventions of the scientists can be related with the behavioural theories. As a matter of specification, controlling and regulating the intake of fat is the sole responsibility of the customers. However, the scientists, after experimenting with the appetite cravings have come to the conclusion that appearance, taste, palatability, micronutrient composition, portion and size can influence the food intake behaviour of the people. Gastric simulation gains an important position in the report produced by Nestle research team.

Initiatives to Reduce Obesity

Promotion of physical activity is one of the latest trends, which Nestle has adopted for mitigating the levels of obesity. Typical examples of this are the advertisement campaigns regarding maintaining a balanced diet.

Figure 2: Advertisement campaigns of Nestle

(Source: Nestle.com.au, 2018)

Within the campaigns, Nestle takes special care not to hurt the individual sentiments of the customers. This consciousness reflects adherence with the standards and protocols of Ethical Code of Conduct. Moreover, this consciousness relates to the preservation of the organizational culture for luring more and more customers. The advertising leaflets and brochures are evaluated for assessing whether they affect the individual sentiments of the customers. For this, the means of survey and feedbacks are adopted. The pictures in the leaflets are devoid of any human character for preventing any kind of provocative behaviour from the customers.

In order to reduce the intensity of the risk levels, positivism philosophy proves appropriate. This is in terms of developing scientific and objective knowledge about the risks and their impact on the business as a whole. Deductive approach is relevant in terms of deducing relevant conclusions from the data collected about the risks of obesity in case of the customers (Bromiley et al., 2015). Strategic approach, in the process of data collection is effective in terms of exploring the unexplored realms of obesity.  Within this, mention can be made of the qualitative and quantitative methods of data collection. In primary quantitative, survey on the customers and interview on the managers would be appropriate in terms of gaining an insight into their opinions regarding the strategies for reducing the risk of obesity.

Adopting social media for conducting advertisement campaigns would be effective in terms of reaching to large number of audience at a single point of time. This adoption can would be a planned methodology towards efficient execution of the risk assessment. However, Leveson, (2015) is of the opinion that uploading the feedbacks forms on the social media can be considered as an incorporation of primary quantitative data. Referring to different case studies, journals and online articles correlates with the act of collecting secondary data on Nestle’s approach towards mitigating the risks of obesity.

Ethics is an important parameter within the business aspects of a company or organization. Maintaining the ethics help in forming the brand image. Along with this, ethical considerations makes a brand approachable among the customers. Moreover, ethical considerations helps the brands in achieving loyalty, trust and dependence from the clients and the customers. Mention can be made of the arguments of Aven, (2015), where Ethical Code of Conduct gains prominence. It helps the companies and organizations in preserving the organizational culture and the values. All these aspects seem true even for brands like Nestle.

Adherence to Ethical Code of Conduct

The organizational values of Nestle consists of integrity, honesty, transparency and compliance to the legislations. The employees are instructed to abide by the ethics in their everyday business, which enhances the brand image. Specific mention can be made of the Corporate Business Principles, which the managers develop for regulating the performance of the employees. Herein lays the appropriateness of behavioural theories of planned action and reasoned behaviour. Gurcanli, Bilir and Sevim (2015) opines that these principles cover specific behavioural areas of the employees- when they are in doubts regarding the display of honest and legal act. Even the associates, officers, directors and subsidiaries have the liberty to make use of these principles.

In terms of dealing with conflicting interests, Nestle personnel prefer to deal with them in a fair and transparent manner. Space and platform are provided to the victims for disclosing their grievances to the Line Managers, HR or the Compliance functionaries. This approach reflects the consciousness towards the wellbeing of the clients and the customers. According to the arguments of Sekaran and Bougie, (2016), mention can be made of the employment legislations, which Nestle complies for providing compensations, promotions and transfers to the employees. One of the striking facts is the reporting relation with the employees and their relative partners. This aspect contradicts the fair employment practices.

Adherence to Data Protection Act (1998) helps Nestle in maintaining the security and privacy of the clients and customers. Within this, example can be cited of the preventive measures, which is taken in terms of purchasing and selling the shares. Consulting the Legal and Compliance Functionaries results in averting the unwanted illegal instances. On the other hand, Harrison and Lock, (2017) feel that even in terms of deals, trades and transactions, Nestle believes in maintaining fairness and transparency. Herein lays the effectiveness of anti-trust and fair dealing laws. While dealing with the suppliers and customers, fair trading laws are incorporated for gaining their trust, loyalty and dependence. Apart from this, Data Protection Act (1998) is also helpful in terms of maintaining the privacy of the confidential information. This specifically covers marketing and service plans, consumer insights, ideas about engineering and manufacturing, product recipes, salary information, designs and database among others.

Unless and until an emergency occurs, Nestle refrains from disclosing private and confidential information to the associate partners. The personnel attach due respect to the interest of the third parties. As per the assumptions of Aven and Zio, (2014), the information levied to the third parties is treated with same care and caution, as incorporated in protecting the information of the clients and the customers. According to the Ethical Code of Conduct, the managers instruct the employees not to indulge in fraudulent cases of misutilizing the company assets. This is in terms of averting the criminal cases. The managers take special initiatives for regulating the behaviour of the clients and the customers. The measurement areas relate to the effective and judicious utilization of the organizational resources, assets and liabilities.

Corporate Business Principles

One of the mentionable facts is the condemnation of bribery and corruption. According to the Ethical Code of Conduct, the employees ought to refrain from any kind of illegal benefits, which may degrade the organizational culture (Nestle.com.au, 2018). Within this, prohibition of the political party intervention gains an important position. Herein lays the effectiveness of policies, which exempts any kind of contributions, which do not cater to the interest of the organization and its country of operation.

Nestle managers adhere to the standards and protocols of United Nations Global Compact. Public relation with the UN Secretary General helps in preservation of the core values and employment standards. This represents the conglomeration of political, economic and social parameter for enhancing the business environment (Nestle.com.au, 2018). Typical examples of this are the incorporation of International Labor Organization Convention, International Code of Marketing in Breast Milk Substitutes. These joint ventures help in preparing policies for deals and transactions. Along with this, Nestle also incorporates endorsements for relevant commitments and recommendations for upgrading the standards and quality of business. Here, mention can be made of joint ventures with International Chamber of Commerce and Business Charter for Sustainable Development among others (Nestle.com.au, 2018).

Conclusion

Similar to other companies and organizations, Nestle conducts risk assessment, which reflects their approach towards maintaining the organizational culture. Involvement of the board panel in this assessment results in the development of efficient and effective solutions for mitigating the intensity of risks. Aligning with the recent trends, there has been several advertisement campaigns regarding improving the health conditions of the customers. Joint ventures with the scientists and research and development team of the universities improves the public relations of Nestle. Along with this, it also enhances the corporate social responsibility. Social media marketing is an effective methodological approach in terms of upgrading the standards and quality of the business operations.

References

Aven, T. (2015). Implications of black swans to the foundations and practice of risk assessment and management. Reliability Engineering & System Safety, 134, 83-91.

Aven, T., & Zio, E. (2014). Foundational issues in risk assessment and risk management. Risk Analysis, 34(7), 1164-1172.

Bahr, N. J. (2014). System safety engineering and risk assessment: a practical approach. CRC Press.

Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long range planning, 48(4), 265-276.

Chemweno, P., Pintelon, L., Van Horenbeek, A., & Muchiri, P. (2015). Development of a risk assessment selection methodology for asset maintenance decision making: An analytic network process (ANP) approach. International Journal of Production Economics, 170, 663-676.

Gurcanli, G. E., Bilir, S., & Sevim, M. (2015). Activity based risk assessment and safety cost estimation for residential building construction projects. Safety science, 80, 1-12.

Haimes, Y. Y. (2015). Risk modeling, assessment, and management. John Wiley & Sons.

Harrison, F., & Lock, D. (2017). Advanced project management: a structured approach. Routledge.

Leveson, N. (2015). A systems approach to risk management through leading safety indicators. Reliability Engineering & System Safety, 136, 17-34.

Nestle.com.au (2018), Good Food, Good Life, Retrieved 25^th Oct 2018 from https://www.nestle.com.au/

Reason, J. (2016). Managing the risks of organizational accidents. Routledge.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.

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