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Brief Background Of Nestle Malaysia Management Essay

The existing company that has determined is Nestlé (Malaysia) Berhad. This article begins with an intro and a brief overview about Nestlé and Nestlé Malaysia. This record includes the eyesight and objective of Nestlé and exactly how Nestlé is going to achieve them. This article also includes a short overview of Nestlé's market segmentation with instances provided. It talks about the strengths and problems of the company accompanied by the answers to solve the problems. In the long run, there are some suggestions recommended by our group and a final result of this complete report.

Nestlé is a multinational company and is of the world's most significant in food and drinks industry. Heinrich Nestlé, whom also known as Henri Nestlé, was the founder of Nestlé Company (Nestle. 2010, "Introduction", Nestlé [Online] offered by www. nestle. com), which headquarter is at Vevey, Switzerland in the year of 1866. Nestlé Malaysia was established in the year of 1912 in Malaysia as Anglo-Swiss Condensed Dairy Company. Nestlé Malaysia hq is now located in Mutiara Damansara, Petaling Jaya, Selangor, and has 6 sales office buildings with an increase of than 5000 employees across the country. Besides, Nestlé produces its products in 7 factories and marketplaces over 300 Halal products across the country. (Nestlé. 2010, "Nestlé in Malaysia", Nestlé [Online] available at www. nestle. com. my) Nestlé customized in foods and beverages industry, some of the many well known brands Nestlé has in Malaysia includes Maggi, Nescafé, Milo, Kit Kat, Nesvita (formerly known as Nestum), as well as pet care products such as Purina and Friskies.

Nestlé's eyesight (Nestlé. 2010, "Corporate Philosophy", Nestlé [Online] offered by www. nestle. com. my) is to be the first choice in Diet, Health, and Wellbeing Company by providing world-class products of the best consistent quality, consistency, and convenience based on business excellence key points throughout the operation. Nestlé's quest ("The Nestlé Corporate Essence - Our origins and wings" 2007, p. 4) is to enhance the grade of life with good food and beverages, all over, so people could live a wholesome life. To be able to achieve their eye-sight and mission, Nestlé Nutrition Research Centre (Nestlé. 2010, "Research & Development", Nestlé [Online] available at www. nestle. co. jp) gives great attention to understand the consumers' nutritional and mental needs and utilise the modern world superior technology and technology to create high quality products to the world.


Every consumer has different needs. Hence, it is not possible to fulfill every customer by using a same marketing segmentation, which is also known as mass marketing by supplying a single marketing combination to all consumers. Moreover, as a global market is becoming extremely competitive, and individuals are increasingly requiring which is very difficult to satisfy. Therefore, Nestlé uses target marketing for each and every product to their customers.

For example, in consumer product, Nestlé baby dairy product such as Nestlé Neslac Excella Gold is segmented and then infants and small children. However, baby doesn't have the capacity or capability to choose the food they needed. Therefore, to advertise this baby milk product, Nestlé does not fully concentrating on baby's basic need which is food cravings, but also to the baby's parents in terms of how the nutrition provided will give their children the best possible advantages in the children's life and development.

Another example is Nestlé Milo, the milk beverage with chocolate and malt. Don Howart, the professional director of Nestlé and Singapore Coffee and Beverages stated that Milo remains popular amonst the young and has a 90% (The Sun. 2010, "Milo with ProtoMalt to complete the day", Sunshine2Surf [Online] offered by www. sun2surf. com) market talk about among chocolate malt refreshments in Malaysia. Aside from the youngsters, old people and effective people are also part of the target markets of Nestlé Milo beverages.

However, initially, Nestlé's business premiered internationally and realised the actual fact that foods have to be taken into account to the local eating and public behaviour because of the particular country's practices, cultures, and traditions. Therefore, (1) Nestlé has always shown value for diverse cultures and customs and hoping to integrate itself whenever you can into the civilizations and customs, adding also to the local environment its set of worth. Therefore, (2) Nestlé embraces social and social diversity and will not discriminate based on origin, nationality, faith, competition, gender or get older. ("The Nestlé Management and Command Guidelines" 2006, p. 9)


Nestlé is a multinational company, not to mention Nestlé is also the most significant industry in foods and drinks, hence Nestlé has every capability to entice more consumers compare to the local companies. Due to its high market talk about and high financial electricity, Nestlé also has greater financial functionality in modifying existing products in terms of product packaging, the method of the particular product and more or creating new products, as well concerning adapt or upgrade latest information system technology in manufacturing, order control and other related fields in order to preserve their competitive advantages by delivering less expensive of goods and services than their opponents in this dynamic environment.

Secondly, Nestlé has quite a highly effective strategic marketing capabilities. For example, Nestlé Maggi instant noodles has generated a well balanced patent and it is perfectly known in many countries especially in Australia and Malaysia. It is because Maggi instant noodles is straightforward to be differentiated from its opponents such as Cintan Instant Noodles. In addition, Nestlé has also developed a very strong brand name for Maggi instant noodles because of strong advertising, which has indoctrinated almost all of the people to name the other brands of instant noodles as Maggi instant noodle instead of the brand's original name.

Furthermore, Nestlé also offers a solid Research and Development businesses that helps the business to achieve cross-border synergy such as packaging its global products to local preferences. Nestlé also emphasises on using today's information technology, which Nestlé consider it'll present a long-term opportunity for those to smoothen the company's operation or even to increase efficiency in packaging, among any other company's procedures. Besides, Nestlé also has better technological potential, for illustration, to renovate the existing products to be more innovative, top quality, and much more healthy product as Nestlé realised that consumer-centred invention and reconstruction is the main pillar of Nestlé's worldwide strategy, which would accelerate Nestlé to enhance from "good" to "better". ("The Nestlé Corporate Fact - Our origins and wings" 2007, p. 34) And because of Nestlé's commitments, more folks trust on the merchandise sent by Nestlé due to its proper health insurance and safety precautions.

Besides, Nestlé also offers great leadership qualities. The leaders including the top executives, branch managers, and others are accountable in building company capability. For instance, the Chairman and CEO of Nestlé S. A. , Peter Brabeck, (Castelarhost. 2005, "Nestlé LC1 - S. W. O. T Evaluation", Castelar Articles [Online] offered by www. articles. castelarhost. com) emphasises internal growth worldwide, which means to accomplish higher amounts of sales with the addition of value to the merchandise, renovate existing products, and innovate new products, to keep pace in the industry because of swiftly changing of consumer objectives.


Nestlé produces hundreds of products, has a worldwide network of suppliers, and multiple distributions and reselling channels. Hence, to anticipate and reply in this quickly changing in market demand condition is very difficult. When forecasting a market demand, Nestlé will require information to detect shifts in demand early so they could modify for styles and send the right messages to the suppliers, shippers, and distribution centres before they are really flood with unwanted or faulty goods or shortages. (Manhattan Associates. 2010, "Planning and forecasting: Anticipate and Respond to Changes in Demand", Manhattan Affiliates [Online] at www. manh. com)

However, every company has its weakest links, so is Nestlé. The weakest links are issues they are unable to control. (Labs. 2010, "Supply String Efficiency Starts at the very top", Food Engineering [Online] available at www. foodengineeringmag. com) Firstly, the most frequent problem is the sources of supply of raw materials. That is due to a sudden and surprising increased popular, that may cause extreme source shortages for goods that will lead to major price rises. For instance, bad weather and natural disasters have always been an issue impacting on incoming raw materials. Second of all, the inaccuracy of purchases received in inventory. No company can ever before achieve the requirement of zero problems especially in foods and beverages industry. For example, when the purchasing division of Nestlé purchased 10, 000 of blended berries yoghurt from its dealer, but what the dealer received was only 8, 000 of combined berries yoghurt, or on another occasion they could received faulty inventories. Another example is, when Nestlé tells its dealer that they needed extra requests of a particular product to be delivered straight away because of sudden increased popular, but in fact, the distributor may already has requests from other customers. This usually happen during special event such as Chinese New 12 months, the demand of Nestlé Cornflakes cereal increase because many people will buy this product to make cookies. This will triggers Nestlé to encounter a great loss because of inaccurate order of magnitude because they cannot produce the actual outcome needed.

Therefore, to be able to solve these problems, it is very important for Nestlé to engage with multiple suppliers or traders in that particular region, so they could acquire inventories from multiple traders, that will definitely decrease the risk of lack scheduled to incontrollable situation. Besides, Nestlé should also base on their demand and purchase planning on last year or two of sales to forecast current season of demand and offer. Besides that, common trust and strong romance with all the dealers are needed in order to increase the flexibility of material supply management, as well as to enhance the bargaining vitality of Nestlé. However, if there is a surplus, Nestlé may need to plan a promotion to clear their inventories, otherwise Nestlé will come across a great loss such as paying high material handling cost, waste material of warehouse's space, or inventories that aren't sold became faulty and may need to be disposed which no income will earn. Therefore, when there may be a major event prepared such as Jom Heboh Carnival. Nestlé will set up a booth at the carnival to sell its products, that are close to the expiry night out at lower price such as Maggi products, Nescafé, Milo, yoghurt refreshments, Nestlé ice products and so on. People often buy the products in big volume because of the cheap than the marketplace price. As a result, Nestlé could clear their inventories somewhat fast and save some space in the warehouses. which is a win-win situation.

Thirdly, even though Nestlé has a logistics team but it generally does not deal with travel logistics. Nestlé outsourced its supply chain travel to the third-party logistics (3PL) as Nestlé will try to trim their supply string costs also to concentrate more on the in-plant functions. Although Nestlé doesn't have a transport logistics department, nonetheless they do have a delivery team to cooperate with the third-party logistics in routing protocol. Nestlé is by using a Dynamic Source Routing (DSR), which really is a simple and productive routing protocol designed designed for use in multi-hop wireless ad hoc networks of mobile nodes. The standard protocol comprises the two main mechanisms of "Route Discovery" and "Route Maintenance", which interact to permit nodes to discover and maintain routes on-demand to arbitrary places in the random network. (Maltz. 2003, "The Dynamic Source Routing Standard protocol" CMU [Online] offered by www. cs. cmu. edu) Therefore, the delivery team will there be to help Nestlé and the 3PL that DSR is working as per company route as well as DSR performance.

Next, it is the poor partnership romance between dealerships and consumers. Dealers need these functions because they, in close partnership with manufacturers - Nestlé, are a connecting hub of services for the consumers, and other stakeholders. However, Nestlé solved this problem by using the Seller Management Systems (DMS) as well as their sellers. DMS is a software alternatives offering tools for handling sales, services, parts and inventory management, business management, integration, and core structures. DMS help manufacturers and sellers create included marketing campaigns to offer inventory to focus on markets. This will integrate innovations into traditional in-store sales and service functions and offer technology for non-traditional merchandising, sales, and service strategies through different programs for consumer proposal via Web, by mobile phone, or in-vehicle. (Microsoft Corporation. 2008, "Microsoft Offers the Seller Management Solution" Microsoft [Online] available at www. microsoft. com/automotive)


After the reviews mentioned above, those were not the only alternatives that are available. MDZ has come up with a few recommended suggestions that could work or solve the issues that were experienced by Nestlé. Rather than just finding or having multiple suppliers, Nestlé could find the inventories from the other outlet stores from the other region. Because some regions have different demographics, for example, contest. Some areas have higher percentage of Malays such as Kuantan, Pahang, and some may have higher percentage of Chinese language such as Ipoh, Perak. The Chinese New Season (CNY) example stated above, in Kuantan area, there might be less demand during CNY, so to avoid shortage, Nestlé could just find the inventories from Kuantan. However, when there is a surplus, and unable to clear the inventories at a short time, Nestlé could consider donation for short-run goal, this could help clear the old stocks and shares, as well concerning help the donation receivers and build better goodwill and name of Nestlé.

Secondly, Nestlé is a multinational company; it will be has the functionality in owning a transportation logistics team. Due to the hundreds variety of Nestlé's products, 7 manufacturers in Malaysia, as well as thousands of customers such as vendors, wholesalers, distributors and so on, Nestlé could handle its own travelling service. Nestlé could gain the whole ability in such as method selections, routing, as well as others. They could do just about anything such as consolidating different kind of products but to the same store. Besides, they could save every cent they use in travelling cost compare to third-party logistics (3PL) because 3PL charges based on the quantity, inventory storage space, value added techniques such as special handling, and much more. It may profit in the brief run, but not at all over time, as Nestlé centred in the long-term business and strives to achieve effectiveness and efficiency.

Lastly, Nestlé might use both manual and automation system in controlling sales, services, as well as others. This is because one cannot trust wholly to a machine, as it might not be documenting the steps in its cpu. Because some steps can't be automated and may required operator intervention to prevent the escapement handling steps, even though adapting advanced systems could help conserving cost as labour cost is reduced, but if you may still find problems occur, it will affect the business enterprise such as lack of customers because of the miscalculation. Therefore, Nestlé must upgrade the machine software regularly and full utilisation of available technology as well as the manual providers, that will effectively boost the efficiency and dependability of the resource string systems.


Nestlé exerts great work to attain its visions to be the leader in Nutrition, Health, and Wellness Company by producing better quality of products to the consumers. Nestlé also research about the consumer's needs every once in awhile and meet the consumers whenever you can. Nestlé's advantages such as high financial capabilities, effective tactical marketing functionality, strong research and development, as well as great leaderships have helped them through the road blocks. Most importantly, Nestlé targets its missions and ensures persistence by causing the right decisions to manage and build its business to provide the assurance of Good Food, Good Life all around the globe.

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