Company Review - Nestle Malaysia ( Final) PDF

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MANAGEMENT REVIEW ON NESTLE...

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Course Title/Code: INTRODUCTION TO MANAGEMENT/UFA 1001 COURSE CODE Title: COMPANY REVIEW REPORT NESTLE MALAYSIA Date: 27 JUNE 2021

Lecturer: MDM. SYAHIRAH MOHD BAKI

Name of student: Name MAZLINDA BINTI MD.RAIS NURUL SAIDATUL HUSNA BINTI KUDUS SITI ZURIAH BINTI MD YUSOFF MUHAMMAD ZHULUL-NAIN BIN MOHD AZMAN 5. NIK MOHD SHARIFUDDIN BIN NIK HIM

1. 2. 3. 4.

Matrix No. UFC210033 UFC210019 UFA210186 UFA210150 UFA210184

TABLE OF CONTENT PAGE

1. INTRODUCTION

2-4

2. MANAGEMENT PRACTICE 2.1

2.2

2.3

Planning 

Vision



Mission



Strategic Planning

6

Organizing 

Organizational Chart

7



Type of departmentalization

8

Leading 

2.4

5

Leadership styles

9 - 10

Controlling 

Quality control system

11

3. SWOT Analysis SWOT Analysis of Nestlé Malaysia

12



Opinion of management practices

13 - 14



Environmental changes affect the management

15 - 16

 4. Conclusion

5. REFERENCE

17

1|Page

1. Background of the company Nestlé is a global leader in the food and nutrition industry. The headquarters of Nestlé is in Vevey, Switzerland, in the year 1866. Nestlé's operation is supported by a strong network of over 500 factories in more than 86 countries. Furthermore, the company also gets benefits from its worldwide R&D network. Nestlé factories can be found in Asia, America, Africa, Europe, and Oceania. Nestlé remains sensitive to culinary and eating habits, and responds to specific nutritional issues, despite developing and matching new trends such as expanding out-of-home consumption and caring about the well-being of its consumers, since the company is in the food and nutrition industry.

Figure 1: The Nestlé logo Henri Nestlé was one of the first Swiss entrepreneurs to use a logo to establish a brand. His family's coat of arms, which portrayed a single bird sitting on a nest, inspired the original Nestlé trademark. This indicated the family name, which means "nest" in German. To make a visual link between his name and his company's infant cereal goods, Henri Nestlé modified the coat of arms by inserting three baby birds being fed by a mother. In 1868, he registered the image as a trademark. In a modified form, the wellknown bird's nest logo is still used on Nestlé goods around the world today. In 1867, Henri Nestlé, a Swiss pharmacist, created the world's first milk meal for infants in order to save the life of a neighbour's child, a premature infant who was unable to tolerate his mother's milk or any of the normal solutions. His main objective was to deal with the issue of newborn mortality caused by malnutrition. Farine Lactée Nestlé, a new Nestlé product, saved the life of an infant who could not be breastfed. People soon recognized the benefits of this product, and it was marketed all throughout Europe. As a result, they launched a tradition of creating shared value that is ingrained in their objectives and corporate culture. This legacy is their pride and continues to motivate us after more than 140 years. Nestlé has put a lot of effort into its humble origins to establish itself as the World's top Nutrition, Health, and Wellness Company focused on sound human values and principles. 2|Page

Figure 2: The logo of Nestlé Malaysia Nestlé Malaysia was incorporated in Malaysia in 1912. Nestlé began its journey as the Anglo-Swiss Condensed Milk Company in Bishop Street, Penang. The company only offered one product, Sweetened Condensed Milk, which became popular under the brand name MILKMAID. More products were later introduced, and as the company's reputation developed, it relocated to Kuala Lumpur in 1939, centralizing its nationwide operations and ushering in a new era for the Company. The company's growth in the 1960s and 1970s paralleled the country's growth following the country's independence in 1957. These were exciting times, with Nestlé products making steady inroads into Malaysians' lives throughout the country. Nestlé Malaysia opened its first factory in Petaling Jaya in 1962 to produce sweetened condensed milk and, later, MILO, tomato, and chili sauces. From then on, the company began to grow and produce new products such as NESCAFÉ, NESPRAY, NESTUM, and EVERYDAY. Nestlé's manufacturing operations put the company at the top of Malaysia's fast-growing food and beverage industry and served as a pioneer to the country's industrialization process. MILO, one of the Nestlé 's most popular trademarks, was created as a nutritious beverage in 1949. Because of its unique taste, MILO has millions of lovers from all levels of society. MILO became immensely famous among Malaysian school children as a result of the brand's grassroots method of establishing the MILO brand through sampling and sports sponsorships. The iconic MILO van was a popular feature at school sporting events, with students excitedly lined up for an ice-cold cup of MILO. Nestlé entered a new era in the 1980s, with the expansion of its product categories and the development of new manufacturing facilities. Nestlé had been known for quality, innovation, and inspiration by that point. Its amazing ability to predict Malaysian tastes and preferences resulted in a range of products that, with their emphasis on health and wellness, became an important part of people's lives. One of the most prominent initiatives in the 1980s was the internal campaign called "Together for a Billion," which gathered all Nestlé employees in a pledge to accomplish a 3|Page

billion Ringgit in sales. They were all filled with pleasure and satisfaction when Nestlé met the campaign's goal of achieving the company's first MYR 1 billion turnovers. Nestlé Company was publicly listed on the KLSE, now known as Bursa Malaysia Berhad, on December 13, 1989, at an issue price of RM5.20 per share. Nestlé Malaysia now has 6 factories and employs over 5,000 people across the country, providing over 500 Halalcertified products. Many of the main brands, including Malaysian favourites such as Milo, Maggi, Nescafé, and Kit Kat, have now become part of Malaysian households for generations.

4|Page

2. MANAGEMENT PRACTICE 2.1

Planning

 Vision “To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred products” is Nestlé's vision affirmation. To lead and navigate others within the right track are what Nestlé is respectable at based on this affirmation. Therefore, they aim to be a supreme company in the market and at the same time delivering ameliorate values. Nestlé has learned the art of leadership based on their proven memoir that extends as far as the early 1900s. As for now, the organization has been credited with nudging many other companies in the right direction in terms of quality-wise. It accomplishes this through it liberate services to everyone it serves.  Mission “The world’s leading nutrition, health, and wellness company” is Nestlé's mission affirmation.

Their mission of “Good Food, Good Life” to provide

consumers with the appetizing, most healthy options in an exceedingly wide variety of all-day food and drinks types and dining occasions. This affirmation shows that Nestlé ranks the experiences of their consumers is that the main of its prime concern. And helps to promote improving health, enhance lives and revamp communities. For years, Nestlé has been highly praised for its persistence in making sure that all the food goods that it manufactures comply with the minimum health guidelines and needs. The organization does this to make sure that it protects consumers covered against defilements while at the same time giving them excellent foods to satisfy their demands. Furthermore, Nestlé acknowledges that the physical, societal and economic stability of consumers reaches first before other exploiting goals. For that reason, they have persistently uplifted the general health of the people.

5|Page

 Strategic Planning Nestlé believes that the ability of food can create a significant change in the lives of buyers, safeguard and improve the ecosystem and create important value for their investors and other investors alike by clear-cut their energy and resources. Hence, they: • Apply their competence in nutrition, fitness, and health to aid consumers. • Create inexpensive and high-quality nutrition for the market irrespective of their income level. • Provide unique, premium transformation to promote charge by creative study, consumer insights, innovative nutrition science, and culinary quality. • Meet the demand of the trendy consumer with nutritious, tasty, appropriate products for conscious, time-constrained everyday life. • Promote their strategic outline to build up the health of the earth, drive general progress and reinforce a balanced food system, especially in terms of: -

Packaging and distributing their goods in ways in which are reliable and protect the environment.

-

Recommending more plant-based food and drink options to allow us to be the buyers' favorite choice as they differentiate their diets.

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2.2

Organizing

♦ Organizational Chart For any company to be called an organization, systemic structure is one of the compulsory elements. The company must have an organizational structure. Organizational structure is so important because it shows the segregation of tasks for the company and also the hierarchy of the company. By providing an organization chart, the employees can identify the upper person responsible for the certain department and easier for the reporting structure too. Before we look into the details of organization structure of Nestlé company, let’s take a look at few points first : A)

Chief Executive Officer – In a large company as Nestlé, the CEO is the highest-ranking executive. The task of the CEO is to manage the overall operations and be the middle for communication between the board of directors and corporate function.

B)

Chief Financial Officer – CFO is focusing on the financial matters of the company. CFO is always responsible to monitor the company's finances and involves in financial planning as well.

C)

Executive Director – The senior operating officer of the organization, responsible for the managing of company operation. For Nestlé company, Executive Director is being split into few parts such as Human Resources, Supply Chain, Sales and etc.

D)

Business Executive Officer – Responsible for administration of the business. In Nestlé company, each of the product portfolios such as beverages, milk, Milo has Business Executive Officer as a leader.

However, the role of each level organization may vary depending on the size of the company and also the distribution of workload and the employees as well.

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The picture provided below shows the organizational structure of Nestlé company.

Type of departmentalization ●

The organizational structure in Nestlé Malaysia is a tall structure as it has many organizational levels.

●

The type of departmentalization used in Nestlé company is a combination of functional and product.

●

At the Executive Director level, departmentalization is the functional type based on job functions performed such as Communications, Legal, Supply Chain and etc. While for Business Executive Director, the grouping job is based on the product line such as MILO, Foods, Ice cream and etc.

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2.3

Leading

 Leadership styles As a large, trusted, and global companies company, Nestlé takes steps to control and manage the employees and companies by using the ‘Democratic Style’ for the leadership style. Employee : •

Nestlé provides all the employees with good working conditions and flexible employment possibilities.

•

Follow the guideline in the International Bill of Human Rights. As a result, they take action against any violations of human rights in our operations and value chain, with zero tolerance to child labour, forced labour, and modern slavery.

•

By using ‘Nestlé Management System (NMS)’ for Quality and ‘Safety Health and Environment (SHE)’. Nestlé can monitor the employee to assure a safe and healthy life in the workplace. It corresponds to the policy to maintain safe and health same as they in leading Nutrition, Health, and Wellness company.

•

Nestlé promotes an inspiring, innovative, transparent, and open work environment, where each employee is respected, has the liberty to engage, create and contribute, always with the ability to speak up.

•

Employee is free to discuss any matter with his or her line manager and, in order to ensure the continuous evolution of such work environment, can approach Human Resources, Compliance, or access our Integrity hotline with full confidentiality.

Customers : •

As customers, Nestlé is given transparent nutrition information and encouraging healthy lifestyles.

Business partners : •

Nestlé adopts business principles with honesty, integrity, and fairness. If the business partners can’t follow or demonstrate a lack of adherence with any of our business principles. They will request an open and transparent discussion, establish corrective actions or terminate the relationship. Conversely, we respect our partners’ reasonable standards.

9|Page

This allows Nestlé to bring in a pool of ideas by participation and getting everyone working towards the same goals and values of the company, while also focused on developing and growing the employees for the future. By adopt business principles between Nestlé and business partners, Nestlé can keep the company away from controversies affecting investor relations.

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2.4 

Controlling Quality control system

• Nestlé’s top priority is quality and safety to our consumers. This applies to all the products across the world, from foods, beverages, Nestlé Malaysia’s systems, and services. • To prove the quality and safety of every Nestlé product, they have a Quality Management System (QMS), to guarantee food safety and compliance with quality standards. The QMS is audited and verified to international standards, ISO norms, laws, and other regulatory requirements. • Nestlé’s factory laboratories, regional quality control laboratories, and central quality control work together to make sure that the products are safe and of the best quality. • Nestlé’s R&D network develop product according to the requirements of the consumers and following all food safety and regulatory requirements. • Nestlé applies internationally recognized Good Manufacturing Practices (GMP) to ensure quality and food safety. GMP covers all aspects of manufacturing, including SOP, people management and training, equipment maintenance, and handling of materials. • Nestlé also applies the internationally-recognized HACCP (Hazard Analysis and Critical Control Point) system to ensure food safety. HACCP is proving to prevent based on system identifies, evaluates, and controls hazards that are significant for food safety. HACCP plans and systems are verified by external certification bodies with international ISO 22’000:2005/ISO 22002-1 standard. • Nestlé Malaysia produces more than 500 Halal products and is the biggest Halal producer in the Nestlé world since the 1980s. Nestlé Malaysia is recognized as the global Halal Centre of Excellence for the Nestlé Group (Out of over 180 markets worldwide). • Nestlé Malaysia only manufacturing, import and distribute products which have been certified Halal by the Department of Islamic Development Malaysia (JAKIM) certified. Halal by the Department of Islamic Development Malaysia (JAKIM).

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3. SWOT Analysis of Nestlé Malaysia Strength

Weakness

- Highly diversified company

-

Nestlé

highly diversified

Most of their sales come from Maggi & Milo

company that operates in a wide variety of

(80% of revenue), both of which already

sectors and market segments.

have high market share future revenue

-

Malaysia is

a

Saturation of local market

growth is difficult.

Biggest Halal food producer

Nestlé Malaysia is the biggest Halal food

-

producer in Malaysia, which allowed Nestlé to

Price fluctuations by retail giants Nestlé’s

explore business potential with other markets

grocery sales are achieved majorly through

around the world especially in country with

huge retail giants like Tesco and Giant. Any

muslim citizen.

reduction or increase in prices by these

- Ownership of some of the most recognizable

retailers can affect Nestlé’s sales. -

brands in the world

Price fluctuations by retail giants

Lack of raw material sources

Nestlé Malaysia have more than 2,000 brands

It can be seen that sources such as wheat

worldwide,

and oats are difficult to find in Malaysia.

from

global

icons

to

local

favourites.

Resources can be obtained through the

Opportunity

import of raw materials. Threat

-

- Online criticsm

Capacity expansion

Nestlé can ramp up investments to produce

Nestlé has been criticized many times over

more factories that will meet increasing

different issue such as Milo controversy,

demand from population growth.

which claims Milo drink contains 40% sugar, which makes it less trustworthy.

-

Authentic labeling

- Entry of foreign competitors

Nestlé has already been criticized for giving

There are a number of competitors that are

misleading nutritional information on its labels.

considered threats to Nestlé. Some of the

So, there’s an opportunity to improve its

top competitors are Hershey’s, Kellogg’s,

practices by giving trustworthy information and

Kraft Foods, Unilever, and Heinz.

accurately labeling its products.

- Counterfeit Milo

-

Nestlé Malaysia has been alerted that the

New venture products

New venture with Starbucks (i.e. Via instant

authorities have found counterfeit versions of

coffee & Starbucks Nespresso pods), Coffee

MILO packaging and MILO powder being

is a huge market, and this collaboration with

produced in Negeri Sembilan.

Starbucks could potentially be enormous if executed successfully.

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4. Conclusion  Opinion of management practices As a summary of what we discussed, Nestlé Malaysia can be concluded as a worldwide Nutrition, Health, and Wellness Company all over the world. Not only is it paramount that they can provide the highest quality...