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Develop AN UNDERSTANDING Management Strategy For Nestle Information Technology Essay

The reason for this statement is to develop an understanding management strategy for Nestle. Secondary resources of information such as internet, journals and articles were used to get the knowledge difference in the company. The current knowledge management strategy used has been stated, and what the company wants to accomplish has also been specifies in the article.

The company has several areas which may have been criticized due to lack of knowledge transfer in the business and these areas have been discovered and recommendations are given in the report.


Nestle is recognized as nutrition, health and fitness company, it is one of the greatest food and beverage company in the world and has dominated the food industry since almost 150 years.

The Nestle Company was founded in Vevey, Switzerland in the entire year 1866 by Henri Nestle with the Main goal of producing high quality dairy food for newborns and is also today the world's leading food and beverage company. The Nestle Company had aimed to create a business as the world's leading nutrition, health and fitness based on individuals values and key points. This goal was achieved through various popular brands that come under Nestle.

The company has grown significantly and has achieved a significant esteem and trust by its consumers in the market. The company's products are growing through technology while preserving a balance between geographic activities and product lines. The company prioritizes in producing and distributing the best products to its customers.


The company has certain goals to the next Business Concepts:

One of the aims of Nestle is to make smarter food for their customers. There's a very clear romantic relationship between the aims and the business logo. As the business aims to provide there consumers with food that might be safe, of high quality and has ideal nutrition.

Nestle's corporate target is to be the world's greatest and best branded food maker, whilst making certain the Nestle name is synonymous with products of the best quality (Nestle Corporate Objective, 2009). It shows that Nestle has already achieved a part of objective that is to be the most significant food production company. This goal relates to another target of Nestle which is the company wants to make sure that the merchandise creates value that may be sustained above the long term for shareholders, employees, consumers, business companions and the countrywide economies in which Nestle runs.

  • Nestle main aim is to check out and respect all relevant local laws in each of its market segments.
  • The business is designed to be as decentralized as possible within the framework imposed.
  • Nestle's goal is to keep up the team work and the levels of organizational culture where networking and communication shall be encouraged.


Nestle has over 500 factories in 76 countries, and markets its products in 193 countries. The company employs around 280 000 people and also have factories or businesses in nearly every country on the planet. The next is Nestle's organizational chart, by January 2010. That is organizational chart at the Exec Level.

Nestle Organization Composition 2010

Nestle Company 2010, General Organizational Chart January 2010


The approach to knowledge management strategy is Zacks strategy proposed by Michael Zack in which he shows that the construction which helps an organisation make an explicit interconnection between its competitive situation and a knowledge management strategy to help the company maintain or (re-)establish its competitive benefit. (Zack, 1999) This might help find the link between knowledge and strategy.

In this process, analysis is performed by using SWOT (Strengths, Weaknesses, Opportunities and Hazards) that helps figuring out the gaps in an organization's knowledge. This would help the organization to find out where the knowledge that can be used and where can it be used to improve its competitive position.

That is achieved by analysing the organisation's knowledge position along two proportions:

Exploration vs. Exploitation

It refers to the area where in fact the organization must improve and develop its knowledge in vs. the chance it could have to use the unused knowledge unexploited resources.

Internal vs. Exterior Knowledge

This identifies if the data is within the business or outdoors. Some organisations are definitely more externally-oriented, drawing on publications, universities, consultants, customers, etc. Others tend to be more internally-oriented, building up unique knowledge and experience which is problematic for competition to imitate.

The information gathered for the research was done with the help of an employee at Nestle Midsection East (UAE) as well as literature review predicated on secondary resources which were on the internet, journals, case studies and articles.

SWOT Analysis

Gap Analysis

Strategic Gap

  1. Lack of direction in Marketing strategy (Overdiversification)of General Mill (a Nestle founded product) that was aggressively advertised by the Nestle group in almost all the sectors. Over diversion resulted in unclear organizational objective and poor financial result.
  2. Prioritize market segments and determine competition emphasis. For instance, the advantages product LC-1(pro biotic yogurt) on the market where pro biotic food had been popular and the consumers realized the health great things about it such as Europe like Germany and France. Instead the merchandise was released in Latin America where there is no much knowledge between public. Another issue was the product was released as a individual scientific product, that ought to have been unveiled through Nestle's Dairy products.
  3. To build up harm over competitor's weaknesses. It is always beneficial to establish a product as first or second movers where Nestle made many blunders. In case of releasing products, it will make quick move and get into the market as fast as possible to gain the market share. For instance when Nestle released its cereals much later after Kellog's had been ruling the market.
  4. Deception and Foreknowledge:Nestle's first rung on the ladder should be to teach its consumers about the merchandise to be unveiled and its benefits before releasing. The education marketing campaign should be backed by medical support and with exemplory case of success from the marketplace situation.
  5. To focus on the proper market: The business targets it big market such as America's and European country, whereas it should have a wider give attention to emerging market segments in Asian countries such as China, Russia and India as these were closed to overseas market in the past for their political systems.

Knowledge Gaps

  1. The objective of food being safe is not so clear to management. There were certain failures based on the safety of the meals products including the Food contamination of Dog or cat food in 2007 and Toll's Cookie dough food contaminants case that occurred in '09 2009. This led to recalling of products from the market
  2. Nestle has been alleged of breaking the neighborhood law, in case there is cutting down of rainfall forest. This shows lack of Exterior knowledge in the business.
  3. The business has different levels of management and employs a formal culture. Hence there is not much communication between your levels which causes lack of knowledge showing within the departments of the business. For instance A few years ago Nestle UK noticed the difference of knowledge was the teams of low fat experts, there was ordinarily a limited low fat knowledge basic that maintained their knowledge within stock management levels. While other managers, such as those in accountancy and executive, came with an expert body of understanding of the fundamentals of the willpower that was gained off their initial professional education and on-going development, the procedures and manufacturing managers often did not have the same "focused" training framework. As a result, many had just not had the chance to develop an in depth grounding in modern creation tools, techniques and practices.
  4. The business has not been in a position to achieve its goal with of being a completely decentralized company where delegating decisions and providing authorities to lessen levels are believed.
  1. People - People are the most important assets in a corporation. Members at all levels of the corporation are concerned to add value to the business. The company has a Hierarchical culture, where there are a few degrees of management but has broad spans of control and is also rule centered and formal. Hence, communication and co-operation is fixed to the particular level to which the employee belongs to.
  2. Process -In an large group like Nestle, a process is a string of actions taken before delivering something to customer. It first starts at the Nestle Headquarters in Switzerland, which performs an important role in development of new food product. Experts are invited from worldwide to perform the next steps based on their knowledge:

Develop products that are reliable and profitable

Develop and process the business model that will support the new product to avoid minimum amount commercial risk.

Researching and studying consumer personal preferences and trends.

Launch the merchandise (within a region initially) and aggressive marketing to build a customer demand.

The further process:

  1. First, the overview of the product from the market is studied.
  2. After ensuring that the product does well on the market, the brand description and additional development begins. Finally comprehensive market research is carried out for making the final changes with the product


Technologies that are currently employed by Nestle are the ERP ( Venture Resource Planning), this can be a computer founded system that is employed to manage interior and external resources which include tangible assets, financial resources, materials and human resources. The main reason for the program is to help the movement of information between all business functions within the organization and also control links outside stake holders. Businesses use a large amount of softwares and functions and presenting an ERP system which is usually complicated impose some serious changes in the staff work.

SAP is the kind of ERP system Nestle uses. In fact, Nestle uses five modules of SAP namely,

purchasing, financials, sales and syndication, accounts payable and accounts receivable. SAP systems are being used for accessing, distributing and sorting the info.

Manugistic's Supply String system happens to be used by Nestle for automating its source chain procedures.

Intranet is widely used technology by virtually all the organizations in the world. Sharing information among different departments is easier by using intranet. It is utilized in Nestle for providing tools and applications, e. g. collaboration (to facilitate focusing on groupings or teleconferencing)

Or corporate sites, sales and CRM tools, project management etc. to increase the productivity.

CRM (Customer Relationship Management) Nestle Food service have adopted CRM. It really is a tool that was created to help the clients to get nearer to them


People: While maintaining the formal culture of the business networking and communication shoul be inspired. The organization's framework should be ensuring operational velocity along with personal tasks with higher focus on results. Communication among different levels of the organization should be urged.

Clear levels of responsibility and well described objectives are a must to know by the company's employees.


After the development process, research on the product should be done not only by desire and trends but also by using the past knowledge and checking the previous developments and preferences used in the mark market.

Apart from this, before developing the product the nutritional value is highly recommended well, as the culture today getting ultimately more health mindful.

The marketing for the merchandise should be prioritized alternatively than intense marketing in areas the product would not be used.


The company is using Manugistic's Source chain system which is bound to work on the Java platform. The technology should be changed by SAP's source chain module, APO (Progress Planner and Optimizer). Because the company uses SAP's other modules it might be easier for Nestle to streamline and accelerate the whole development process at the same time support boosting efficiency.



Training should be provided to the personnel as a new technology is introduced by Nestle's learning and posting program. A program called developing improvement techniques program (MITP) provided by Smallpeice Corporations should be created to teach the managers. This kind of program basically involves softer management issues of change, the way to handle resistance to change, planning and operating projects, command, and team building and communication skills. This would help Nestle becoming a learning firm and would provide its staff the confidence to deal with the changes in technology taking place. The course would also help enhance the culture of the business, teamwork and powerful by the staff. Moreover, companies who have trained there personnel with MITP course has seen significant and a broad development in the data sector with their individual companies such as IBM.

Open communication and active cooperation must be urged where everyone in the division at any level would get an opportunity to contribute their suggestions and views to improve and enhance the company also result in personal development. Additionally it could lead to knowledge transfer.

Enforce regular sharing views via websites for the employees to stay connected and present their viewpoints about the technology released.

Solutions and encounters based on the issues or changes in the organization placed on the intranets for the employees to see anytime they want in need.


As the merchandise development process begins in the organization, prior tacit and explicit knowledge should be utilized. Aswell as, exterior knowledge will be well processed before the development of the product.

Research should be carried out about the client demands, also the region where the product is usually to be launched; their ethnical value should also be studied. It is necessary to understand the prospective market before expanding the merchandise. The vitamins and minerals of the product should also be considered during research, otherwise the merchandise might fail because of its low vitamins and minerals and quality.

Several quality assessments should be achieved using Nestle's Quality Guarantee program to keep up the image of Nestle before the product is brought to the market.

Once the product is developed which is ready for distribution on the market, customers must be briefed about the merchandise.


Technologies that needs to be used for knowledge showing should be Data repositeries A data source warehouse is one large Data Repository of all business related information including all historical data of the business organization implementing the info warehouse. Data warehousing is a complicated process of building a data repository in the form of a relational data source so the company can support web or content material mining in order to leverage data and transform or aggregate them into useful information.

In all conditions, organizations use data warehousing to gain a competitive benefits, support for decision making functions through extensive data analysis.

Some of the key components of data warehousing are Decision Support Systems (DSS) and Data Mining (DM).

A content management system(CMS) is a collection of procedures used to manage work circulation in a collaborative environment. These procedures can be manual or computer-based. The methods are made to:

  • Allow for a large number of people to contribute to and talk about stored data
  • Control usage of data, predicated on user roles. Consumer roles establish what information each individual can view or edit
  • Aid in easy storage space and retrieval of data
  • Reduce repeated duplicate input
  • Improve the ease of record writing
  • Improve communication between users
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