Abstract

This research work has been undertaken to throw some light on Nestle co. by analyzing the forces that hinder or support it in way of success and the desired state. The styles of changed management, change management roles and pitfalls of change management will also be taken into account. This project will be beneficial for readers who want to learn how changes bring influence to Nestle Company.

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Introduction
Nestle is a food gigantic based in Switzerland and was established in 1866. In this project I am going to highlight the preferred future state of Nestle and the forces which stimulate the company towards desired state and those which restrain. It will be helpful for the analyst who wants to invest in Nestle as this research work will let him know if the company is moving toward success. Afterward, styles of change management will assist the knowledge of how strategy changes affect this company. Moreover, in management role the approach of strategic leadership in nestle, the way middle management of nestle implements and controls the strategy as well as the influence of outsiders (stakeholders) on the management of company. And in the end, the pitfalls of change management describe the failures that Nestle had to face in the history and what were the elements which lead to failure.

Task 1

Force field analysis

Force field analysis include the identification of the factor that promote and hinder the changes, in this research work I am going to figure out the factors which support or hinder the success of nestle. The desired future state of nestle is to become largest dairy providing sector of the world. The forces which push it toward its vision or which resist are

Driving forces Quality products and spread around the world:

Nestle as a big company has many products. Nestls products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy products, ice cream, pet foods, and snacks. As a biggest food producer in the world Nestl's products had spread more than 509 countries in the world. That is making Nestls product more known rather than the other products. This matter causes Nestle has excellent reputation and Nestle was well known around the world. Almost all people in the world know Nestle and their products.

Employees around the world:

Nestle has 328000 employees in all of their company in the world. Based on the survey in 2004 16.9% respondents said that Nestle could give better salary than the other company and Nestle also concern about safety in work for their employees. Nestle also has a great research and development team who make Nestle can be a successful company.

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Very competitive price:

Nestle is one of the healthy food producer. Their products are contains of good nutrition. As a good food producer, Nestle has a competitive price in the market. With the good quality and reasonable price, Nestle can have loyal customer whom always buy Nestls product.

Delicious foods and contain of a lot of nutrition:

Not just made a lot of products Nestle which produced daily food has made delicious products too and they concern about the nutrition. In Nestls products we can get a lot of nutrition. Suitable with their slogan "Good Food Good Life". Nestle tries to give the best quality in taste and nutrition for the consumer.

High quality of manufacturing:

Nestle Company already used high technology so they can produce good quality of daily products.

Unmatched product and brand portfolio:

The business offers one of the widest portfolios of food and brewery products in its sector. It also operates 29 brands that earn more than $1 billion in annual revenues. With more than 8000 products it is hard for any other corporate to compete against Nestle.

R&D capabilities:
Nestle invested more than 2 billion $ in R&D in 2011. It is introducing new and redesigned products every year strengthening firms competitive advantage.

Distribution channels and geographic presence:

Nestle runs in more than 100 countries and has extensive distribution channel all over the world which supports its operations globally.

Competency in mergers and acquisitions:

Over the years Nestle has been forming successful partnerships and acquiring other companies in order to grow and maintain its leadership in the market.

Increasing demand for healthier food products:

The trend of buying and consuming healthy food products is increasing day by day. Currently Nestle tries to introduce more healthy food products in response to the trend.

Establishing new joint ventures:

Nestle is already involved in many successful partnerships with major world companies like The Coca-Cola Company and Colgate-Palmolive.

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CSR (Corporate Social Responsibility):

Nestle has many participation in Corporate Social Responsibility "CSR". Nestle have willingness to help people to improve their condition. For example Nestle gives technical counseling to increase live quality of thousand farmer of coffee in Lampung. The other example is Nestle indirectly sponsored quiz competition between elementary and junior high school student also sponsored badminton competition for junior athlete. The latest of Nestls CSR is help tsunamis victims in 2004. In 2007 Nestle made strategy of reducing the emission of carbon dioxide to 130g per kilometer. This strategy collaborated to changes in driving habits and production style in nestle and it achieved its target in May 2013.

Fans over social media:

To be precise Nestle have nearly 150 million fans across 650 pages on face book, Twitter, etc and they produce 1500 pieces of original content on that platforms every day.

Restraining forces: Economic situation always change:

Because of the economic situation always change that was making Nestle has to match this condition to maintaining their business activity. As an example in 2004 Nestle said that challenge in the market made them had to limit their buying of milk (quota). Market demand made Nestls product (Dancow) has to contain of high value ingredient. It makes Nestle had to decrease the milk content in Dancow to save their production cost. Half of production cost had to switch to process of adding high value ingredients, like: DHA, Omega3, and honey and they have to decrease milk content.

Many competitors:
Nestle has much competitors as a producer of dairy product such as Kraft, Coca-Cola, Unilever, etc. Nestle has to increase their quality of the products and they have to think how to make a strategy to win the competition. Beside made products with a lot of nutrition Nestle has to make something different, maybe with make attractive packaging or make good advertisements to attract the people.

Government Policy sometimes complicating:

Political situation that always change makes sometimes complications. For example in 2003 Nestle Indonesia asked the government to consider again about Halal Labeling because it was adding the production cost.

Demand decrease because the economic slowdown:

Economic situation is unstable. Adverse economic situation has a severe impact on buying power. Like if the value of currency fell down, the price of the product will become higher automatically, and society feel difficult so they have to limited their needs and they have to reduce their demand.

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They will stop to buy Nestls products, so that Nestle has to have contingency planning to solve this problem.

Food contamination:
It is the Nestls responsibility to run thorough quality checks of its products, the company had been reportedly providing contaminated food. Such actions hurt companys reputation and result in losses. On 30th June 2011 a piece of glass was found in a packet of baby food, nestle recalled 34000 pots of the product made in the same batch. Moreover in USA on august 2013 some dog food packages were found poisoned. Nestle recalled all the supply and provided cure to dogs which had eaten it. However such cases are success restraining.

Trend towards healthy eating:

Nestle is a major supplier of chocolate and chocolate drinks that have high level of calories and due to changing customer habits, will experience decline in demand.

Growth of private labels:

The growing number of supermarkets and other retailers are introducing their own label products that cost less and can easily compete with Nestls product portfolio.

Rising raw food prices:

With an overall growth of world economy and population, the demand for raw food will rise. It is resulted higher material costs for Nestl.

Weak implementation of CSR:

Nestle is involved in many programs that aim to make company more eco-friendly and improving the working conditions of its suppliers. Still, Nestle receives a lot criticism over the effectiveness of its programs

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Task 2

Styles of Change Management

Education and communication:
Nestle provides consumers with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction. For example Nestle Agricultural Services has used the experience gained by Nestle across the world to set up a system of direct and efficient contact with the farmers. Company veterinarians and agronomists supervise the milk routes and advise farmers on various issues including proper feed for the herds (flock of sheep).. Veterinary services are provided free, and medicines provided at wholesale cost.

Collaboration:
Salt is present in all foods in different amounts, but consuming too much can have adverse effects on health. The World Health Organization recommends adults consume no more than about one teaspoon of salt per person per day. Since 8 Sep 2012 Nestle is establishing a collaboration with a US life sciences company. This collaborative project will help Nestle to reduce the amount of salt used in its products while preserving the tastes consumers are used to.

Intervention:
HR is acting as a change agent in Nestle. The Human Resource department is dedicated to their employees, and ensures that they have all the right people with the right skills, in the right places at the right time. Understanding that their people are the bedrock of all their business strategies, it is their mandate to enhance their skills with training and provide them with world-standard facilities. They select flexible, innovative people who are ready to confront new challenges and make a difference.

Direction:
The operational strategy of Nestle is based on direction as it follows the top down approach. The production limit and times and even resources are allocated by higher management. Then the middle management let the strategy implemented and the operational core makes it happened under the control of middle management.

Coercion:
On 27 April, 750 workers at Nestle factory in Pantnagar, Uttar Pradesh (India), went on strike demanding the reinstatement of unfairly dismissed workers. The union (Nestle Workers Union NWU) began the strike when management attempted to force four workers to "voluntarily" resign from organization. Three workers refused and were dismissed. After an agreement was made between the union and management on 1 May the next day the company suspended four NWU
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leaders including the union president. Workers attempted to resume their strike but police prevented them from protesting at the factory. In March 55 workers officially formed the NWU when they submitted an application for registration with the local authorities. In response Nestle threatened 25 workers and forced them to sign a false statement claiming that they joined the union under "coercion".

Task 3

Change management role

It focuses three groups in an organization strategic leaders, middle management and outsiders.

Strategic leadership
Leadership is a process of influencing an organization (or group within an organization) in its efforts towards achieving an aim or goal. There are five approaches to strategic leadership 1. Strategy 2. Human assets 3. Expertise 4. Control 5. Change From the above nestle follows the strategy approach as all the strategies are given by top management. Strategic analysis is also its function and other managers are responsible for the routine operations of nestle

Middle management:
Strategic leaders pursuing change may see their middle managers as implementers at best and possibly as potential blockers. In case of nestle the middle management has a function to implement the strategy and to monitor it. For example the fleet management strategy was implemented and monitored by the middle management from 2007 to 2013. Middle management is also responsible for the relationships with the suppliers and customers.

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Outsiders:
Outsiders contribute to changes in an organization in various ways. For nestle its consumers have been bringing changes. For example in April 2011 2, 998 shareholders attended the Nestle Annual General Meeting in Lausanne. They represented 49.78 percent of the total capital and 70.64 percent of the shares entitled to vote. The annual report and the accounts were approved and the shareholders agreed to the release of the Board of Directors and the Management. The Nestle Compensation Report was accepted in a separate advisory vote in line with the Swiss Code of Best Practice for Corporate Governance. The shareholders further approved the proposed dividend of CHF 2.05 per share. All proposals of the Board of Directors were approved with strong majorities. Shareholders re-elected Mr. Peter Brabeck-Letmathe, Mr Steven G. Hoch, Ms Titia de Lange and Mr. Jean-Pierre Roth to the Board, each for a further term of three years, and elected Ms Eva Cheng as a new member of the Board for a three-year term. Ms. Cheng is the former Corporate Executive Vice President responsible for Greater China and Southeast Asia Region of Amway Corporation a U.S. based global consumer Product Company. Mr. Andre Kudelski who had reached the end of his third term was not standing for re-election. The Board thanked him for his highly appreciated services provided to Nestle over the past twelve years.

Task 4

Pitfalls
Pitfalls of change management
The company faced a critical problem and criticism once in its history where its management and strategy both were accused of being guilty. During the late 1800s Nestle developed an infant formula as a substitute. "save the life of an infant who could not be fed by their own mother". Nestle an entrepreneur could not expect to make much money selling his substitute. Therefore the company decided to make its pitch not only to mothers of infants but also to a much larger market. Nestle had to convince millions of mothers that bottle feeding is better for the babies. Nestle became one of the leading manufacturers of infant formula promoting the products in such a way that even mothers all over the world began feeding their babies with the baby formula products.

Boycott
Nestle as one of the leading multinational corporations became involved in a very well-organized boycott campaign during 1970s-1980s. This conflict demonstrated that companies have to constantly preserve and enhance their legitimacy in the public eye.

Problems and Issues:

Less healthy and more expensive:

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Outrage started in the 1970s when Nestle corporation was accused of promoting the baby formula which negatively affected the mothers in the third world countries. It has been stated that the baby formula was less healthy and more expensive. A boycott was launched in the United States on July 7, 1977 against Nestle and expanded into Europe in the early 1980s

Unethical marketing:
Nestle marketing techniques in promotion of the use of the infant formula in the Third World countries have been considered unethical. Nestle was also not quite well acting in accordance with the established moral standards worldwide. The company used very aggressive marketing what also included hiring unqualified sales girls.

Ignored geographical factors:

Nestle as one of the leading nutrition multinationals should have been more aware of how the baby formula should have been promoted and advertised in the Third World countries where the level of education and cultural development are lower than compare to the developing or developed countries. Nestle somehow ignored the problems with water supplies, cleanliness of water.

Diseases:
Even though the link between bottle-feeding and infant diseases and deaths was brought to public attention in the early 1960s the problem did not seem very alarming until 1970s when a few leading newspaper agencies published their articles. First the New Internationalist published the article on Nestls marketing practices in 1973 called "Babies Mean Business" which described in details how the companys baby formula negatively affected infants in the Third World countries. In 1974 War On Want anti-poverty charity and organization based in London published a booklet "The Baby Killer" which increased awareness of the importance of the existing problem related to the companys unethical ways of marketing the infant formula.

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Conclusion
Nestle is a market capturing and innovations bringing company in the food industry. It wants to be biggest food supplier of the world and the forces which support this dream are .. But still some factors are there which are in its way. The information flow in Nestle is highly centralized; some of its strategies have brought internal changes to the company. Its HR has been acting as its change agent; the leader approach of its higher management is Strategy approach. Its shareholders have been playing a vital role in management. Over all the company has performed well but one decision of its strategic core was wrong when introduced the infant formula which caused even deaths of kids.

Recommendation
Nestle introduced an infant formula as a substitute of human milk and marked it unethically. Furthermore it ignores the customs and conditions of the third world countries. And the worst thing was that its milk causes diseases in children and even took them to death. If the formula was based on true research work and the management had taken wise decision thousands of life could be saved. As a whole the company has been performing well and it needs no recommendations but in area it has been weak: Heroin and primodos, these drugs would have been properly tested before their supply in market and process should also be made strict for the fore coming inventions.

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References
http://lidwinamarcella.blogspot.com/2009/03/strengths-weaknesses-oportunities-and.html http://www.strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis.html http://holmesreport.com/people-info/13662/smart-router.aspx

http://www.examiner.com/article/nestle-purina-dry-dog-food-voluntary-recall-for-contamination http://www.foodproductiondaily.com/Safety-Regulation/Nestle-orders-French-baby-food-recall-on-glasscontamination-fears http://www.technologyevaluation.com/search/for/nestle-information-system.html http://sanyum-misexample.blogspot.com/2010/09/information-system-of-nestle.html

http://www.the-financedirector.com/features/featurefinance-director-europe-nestle-andrzej-sacha/ http://www.nestle.pk/aboutus/humanresource http://www.studymode.com/essays/Operational-Strategy-In-Nestle-1485900.html http://blsciblogs.baruch.cuny.edu/mgt4880nestle/2013/04/22/crisis-facts-problems-and-issues/

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