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Competitive Environment In Dairy Industry

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Question:

Discuss about the Competitive Environment in Dairy Industry.
 
 

Answer:

Introduction

The report talks about the Nestle Company which is dealing in various food and beverage products. It explains that how the company manufacturing various types of food products in international market. It describes the objectives, mission and corporate and business level strategies of the company. Further, it explains the organizational structure of the firm. It describes the porter five forces model and it explains the function of human resource management within the organization. Along with this, it explains that how HRM helps to attain sustainable competitive advantages in the market. In addition, the report explains the ethical issues and strategies of the HRM to resolve these ethical issues within the organization.

Nestle is an international drink and food company with headquartered is located in Vevey, Vaud Switzerland.  It is one of the biggest food companies in the world measured and analyzed by the profit and revenue. It deals in various food and drink products such as baby food, bottled food, coffee and tea, breakfast cereals, ice-cream, snacks, frozen food, pet food, confectionery, and medical food etc (Sethi, 2012). The company operates and manages 447 stores in 194 countries and approx 339,000 employees are employed in the company. L’Oreal is one of the biggest shareholders of the company in the world. In today’s era, the firm is expanding and flourishing its business activities and operations in the global market. The company was founded on 1866 in Switzerland.  It is one of the largest leading companies in Switzerland which is based on the nutrition, wellness, and health (Eberle, Berens, and Li, 2013).

The mission of the company is to provide good quality of food and drink products to the customers with best nutritious choices, best testing and best requirements in the global market.  Further, the company maintains an effective and potential team to create and provide safe and delicious food and drinks products with highest quality in the universal market (Kiran and Sharma, 2011). The long-term vision of the company is to deliver the food and drink products for improving the shareholder value and growth within the organization. Further, the vision of the company is translated into the four strategic pillars of the science, consumers, implementation, and people etc. The main aim of the company is to achieve the long-term goals and objectives of the firm by maintaining sustainability within the organization (Saluja and Mahajan, 2017). 

Business level strategies: The Company uses effective and unique business-level strategies to attain the long-term success and growth of the firm.  The business level strategies include cost leadership, differentiation, and focus strategy. The strategies have been discussed below (Siddik, 2016).

Cost leadership strategies: Nestle delivers good quality of food and beverage products. The company purchases high quality of raw material from the suppliers in the global market. Thus, the costs of production are higher than comparatively other company. The company is not able to attain low-cost leadership in the food and beverage industry due to its high cost of production. This strategy focuses on the quality assurance, inventory management, and efficient operations etc. Nestle is using this strategy to achieve the operational efficiency and effectiveness within the organization (Epstein and Buhovac, 2014).

Differentiation strategy: The Company is using this strategy to differentiate its products from the competitor’s products in the global market.  By using this strategy, the company can take competitors advantages in the universal market. Currently, the company is producing more than 10,000 food and beverage products under 8,500 different brand names. Most of these products can easily differentiate from the competitor's products in the global market (Kapferer, 2012).

Focus strategy: It is the third business strategy of Nestle. It focuses on the low-cost strategy to control and manage the heavy marketing and manufacturing cost to maximize the growth and success of the firm. By using this strategy, the company is creating more revenue in the competitive environment around the world. 

Now it is assumed that differentiation strategy plays a major role in Nestle. The company is flourishing its business activities and operation around the world through differentiation strategy. This strategy also helps to develop and build a strong brand image in the food and beverage industry (Nestle, 2013).

Corporate level strategies: The Company is using effective corporate level strategies to maximize the revenue of the company. The corporate level strategies have been discussed below.

Growth strategies: Nestle is one of the biggest companies in food and beverage industry. The company is expanding its business activities and operations in 130countries with more than 500 production units. Through this strategy, Nestle is gaining tremendous growth in the global market.

Stability strategies: Further, the company uses stability strategies to overcome on the competitors in the universal market. Under this strategy, the company does not undertake any type of brand expansion, business expansion, and operational growth projects.

Retrenchment strategies: Nestle uses retrenchment strategies to get rid of the brands, business units, and low-performance products that are not contributing its success and growth. This strategy is a frequent option for the Nestle (Galbraith, 2011).

The company has obtained and acquired market leadership in terms of customer base, financial performance, product portfolio, financial performance and market share by using growth strategies. It is the important choice for Nestle. The business level strategies provide support and assistance to the corporate level strategies. Now it is assumed that the organization is making effective and unique position through business level strategies as well as corporate level strategies (Saebi and Foss, 2015).

 

Description of the specific context and organizational structure

The organizational structure of the Nestle is effective and unique. Through effective organizational structure, the company maintains effective relations among the people in the organization. There are various persons include an organizational structure such as co-workers, directors, chief executive officer, and managing directors. Nestle is one of the biggest corporation in food and beverage industry across the world. Further, Nestle include governing body, executive body and other four committees in corporate governance. The company has an executive board which comprises department heads and executives. They are responsible to manage and control the business activities and operations of the company (Khan, Grigor, Winger, and Win, 2013).

They implement and execute various policies, strategies, and plans within the organization. Further, the executive board looks after the day to day management activities of the firm in the world. Further, various effective and attractive strategies are used by the company to increase the demand for the food and beverage products around the world. It uses effective advertisement and promotional strategies to increase the number of customers in the global market. In addition, it uses effective marketing strategies to increase the sales of the company within the organization. These are the special context for the Nestle to attain the long-term mission and vision of the firm. Along with this, it uses effective research and development strategies to maintain the customers for a long time. Through effective and unique organizational structure, the company is able to overcome on its competitors in the global market. Further, it also provides help to achieve the long-term targets of the company. Along with this, the company measures and identifies the requirements, tastes, and preferences of the customers to increase the sales of the food and beverage products around the world (Baumann-Pauly and Scherer, 2013).

Nestle is a multinational corporation which provides food and beverage products to the customers around the world. The porter five forces analysis of Nestle has been discussed below.

Threats of new entrants: If the market is attractive and unique then competitors would always affect the operations and activities of the company. So it is very difficult to Nestle to become a leader in the market across the world. There are various competitors of the company which exists in the market. The competitors include Starbucks, Keurig, Amul, mother dairy, groupe Danone and Yinlu foods etc. Therefore, the company needs to focus and monitor the activities, plans, policies, and strategies of the competitors around the world (Dyllick and Muff, 2016).

Threats of substitute goods: The threats of a substitute are very high in the market which affects the business operations of the Nestle. Therefore, Nestle is producing innovative and attractive products to increase the demand of the products around the world. In this way, the company is able to reduce the competitors in the market.

Bargaining power of suppliers: Bargaining power is one of the biggest factors of porter five forces model. It is the main strength of the organization. The company always focuses on the strong business relations to make a good image in the market. Further, Nestle provides helpful guidance and support to its suppliers to do work effectively and efficiently (Gold and Heikkurinen, 2013).

Bargaining power of customers: It is an important factor to which affect the growth and success of the company. It is essential to understand and evaluate the power of customers and their needs, requirements, and expectations so that they can be satisfied.

Competitive rivalry within the industry: There are various competitors exist in the market that affects the success of the organization. Nestle company maintains a strong position in food and beverage industry. There are various competitors exist in the food and beverage industry such as Groupe Danone and Kraft foods, therefore, the company needs to focus on the plans, strategies, and policies within the organization (Stampfl and Prügl, 2011).

Further, the company can use pestle analysis to determine and evaluate the external environment of the company. Pestle stands for political, economic, socio-cultural, legal factors and environmental factors etc. Through pestle analysis, Nestle can find and evaluate the microenvironment of the country. It will also help to reduce and control over the key challenges of the global market in the world. It will also help to evaluate and analyze the economy of the country. Along with this, the company can use SWOT analysis to evaluate the strengths, weaknesses, opportunities, and threats of the company. In this way, the company can overcome on the competitors in the market (Sakunia and Jha, 2016).

 

Impact of porter five forces analysis on the organization HR related initiatives

There are the various impact of porter five forces analysis on the organizational human resource management. Porter five forces model helps to analyze and evaluate the enormous competitors in the market. Human resource management can easily reach its targets within the organization. It also helps to determine and identify the intensity and strengths of the competition in the global market. Further, it will also help to provide various competitor benefits in the global world. Porter five forces model also provide assistance to the HRM to attract more applicants in the universal market. It is useful to make a good and attractive image around the world. HRM can use this model as a statistical tool to determine and measure the attractiveness of the Nestle industry. Through this model, the company can take important decision related to the market segment. It also provides flexibility and transparency to the HR department within the organization. It will also help to make the good reputation of the company in the market. In this way, candidates can look the image and goodwill of the company. Therefore, it will provide assistance to the human resource management to appoint and retain new candidate in the global market (Spicka, 2013).

The company can increase its revenue and profit after analyzing and evaluating the competitors’ plans and policies around the world. HRM is the important part of the Nestle. Therefore, it plays a significant role in every organization to make effective plans, policies, and strategies within the organization. Through this model, the company can easily evaluate and analyze the needs, preferences, and requirements of the customers. In this way, Nestle is able to make important position in the universal market. It will also provide help to attract the new applicants around the world. They look the company profile and join the firm. Therefore, human resource management can easily recruit and select capable and potential employees within the organization. HRM can run the business policies and rules effectively and efficiently with the help of this model. This model gives a major contribution in the field of strategic management by providing five competitive strategies in the global market (Sharma, 2012). Through porter five forces strategies, the HRM is able to select the right candidate for the right employment within the organization. It will also provide assistance to attain the overall objectives and goals of the company. Low-cost strategy helps in recruitment and selection process in the organization. HRM can improve the performance and efficiency of the employees by using porter five forces model within the organization. HRM can bring changes in the strategies and policies with the help of porter five forces model in the firm. It can introduce new and innovative technologies in the global market. HRM can easily implement its new plans, rules, and policies through porter five forces model. Now it is assumed that porter five forces model is important for human resource management to initiate and implement its new plans and strategies within the organization (Parkes and Borland, 2012).

How HRM plays vital role to attain sustainable competitive advantage

Human resource management plays a vital and crucial role to attain the long-term goals and objectives of the organization. It will also help to maximize and increase the revenue and profit of the Nestle. In today’s era, HRM is the significant part of the Nestle to attract more candidates in the market. There are various role of human resource management in the global market which have discussed below (Mohajan, 2015).

Value: HRM provides worth to the employees in the organization and it shows a good value for the firm. In this way, human resource management helps to attain the sustainability and it provides effective competitive advantages in the market by creating value and worth around the world.

Rareness: Only value cannot help to the human resource department to gain the sustainable competitive benefits in the universal market. HR team should examine and evaluate the policies and plans of the competitors across the world. HRM evaluates and measures the rare and other risk factors in the talent management. In this way, the company can overcome on its competitors in the market (Li, 2015).

Imitability: HRM develops and builds effective policies and plans to overcome on the competitors around the world. They help to develop and build a unique culture within the organization.

Organization: HRM organizing and modify the various rules, policies, and strategies of the organization to prevent the risk and challenges of the market and to attract more customers within the organization (Cerdin and Brewster, 2014).

Recruitment and selection: Human resource management recruits and selects suitable and appropriate candidates in the market. It is the major function of HRM to make a good image around the world. The company appoints skilled and potential applicants to overcome on the competitors in the universal market. If the company makes effective and unique recruitment and selection process then it can provide various advantages in the market. It reduces the high employee’s turnover within the organization. Therefore, it will increase the revenue and profit of the firm (Stahl et al, 2012).

Rewards and compensation system: HRM plays a vital role in rewards and compensation system to gain the competitive advantages in the international market. HRM provides rewards and incentives to the potential and capable employees for improving their efficiency and effectiveness. Through rewards and compensation system, the company is trying to attain the sustainable competitive advantages in the global world (Ahmad, 2015).

Talent management system: HRM develops and builds talent management system plays a vital role in human resource department. HRM designs and implements this system to attract, motivate, develop and retain the employees within the organization. It will also increase and maximize the productivity of the firm. Thus, it provides various competitive benefits to the firm (Hartmann, 2011).

Further, the company HRM resolves various disputes and conflicts of the workers at the workplace. Human resource management provides training and development to the workers to improve their efficiency and effectiveness. It is the major competitor advantages for the company.  In addition, HRM evaluates and examines the efficiency and performance of the workers to gain the sustainable competitive advantages across the world. Along with this, HRM also maintains sustainability in the organization as well as the environment. Further, human resource management provides cross-cultural training to the employees for improving the skills and talents of the employees in the organization. Further, the firm can overcome on the competitors in the global market (Jackson, Schuler and Jiang, 2014). In addition, human resource management uses effective procedures, methods, and practices to attain the competitive benefits in the world. Now it is assumed that HRM plays a vital role to beat the competitors in the world and to gain long-term mission and vision of the firm. Nestle cannot survive its business activities and operations without effective and sustainable human resource management within the organization. The growth and success of the company depend on the human resource management (Wheelen and Hunger, 2011).

 

HR related issues and recommendations

There are various issues faced by the human resource management in Nestle. The main function of the company is to recruit and appoint new candidates for the success and growth of the company. Further, HRM is responsible to retain the candidate within the organization. They reduce the high employees’ turnover at the workplace. High employee turnover affects the business success and growth negatively. The company is not able to gain competitors advantages in the market due to high employee turnover (Benn, Dunphy and Griffiths, 2014).

It is recommended that the company should maintain proper and accurate records to reduce the retention issues. They must motivate the employees for increasing their quality and efficiency. The company must provide good and effective culture within the organization to reduce the retention issues. It must provide remuneration and incentive to the capable employees. It must use effective and unique strategies to overcome the retention issues within the organization (Jabbour et al, 2013).

Nestle is one of the biggest players in food and beverage industry. Recruitment of talent is the biggest challenge for the human resource management which is faced by the HRM within the organization. To find a capable and skilled employee is very difficult to the HRM. In this way, various recruitment and selection challenges are faced by the human resource management. Thus, HRM tries to find a right candidate for the right and suitable job (Kehoe and Wright, 2013).

To overcome on recruitment issue, HRM must maintain the entire detail of the suitable candidate within the organization. The recruitment process should be conducted in an effective and unique way to reduce and prevent recruitment issues in the market. HRM should improve in the recruitment process to attract more candidates in the organization. The job description should be used by the firm to provide all the details which are related to the profile and job position.

Training and compliance is another issue which is faced by the human resource management in Nestle. Sometimes, HRM is not able to provide proper training and development coaching to the workers within the organization.

It is recommended that the company must conduct proper training and development programs to improve the skills and potential of the workers in the organization. It should provide regular induction to understand the culture, policies, and strategies of the company. Through training and development, human resource management builds and develops the confidence and morale of the workers in the organization (Sharma, Sharma and Devi, 2011).

Along with this, various health and safety issues are faced by the company at the workplace. In this way, employees face various problems at the workplace. As result, they leave the organization frequently. HRM ensures whether the company follows legal rules and regulation or not.

Thus, the HRM must think about the employees’ safety and security to attain the long-term goals and objectives of the firm. Effective rules and regulations must be made by the human resource management for the welfare and morale of the workers at the workplace.

Discrimination and diversity is another problem for the HRM which can arise at the workplace. It affects the productivity and outputs of the company. HRM must reduce the discrimination and diversity issues at the workplace to increase the revenue and profit of the company. In addition, HRM makes strategies for maintaining discipline at the workplace to fulfill the goals and objectives of the firm. They should resolve the queries and problems of the workers to maximize and increase the outputs of the company. In this way, Nestle can become a global leader in the food and beverage industry around the world (Boxall and Purcell, 2011).

Ethical issues for human resource management

Various ethical and legal issues are faced by the human resource management in the organization. The ethical issues have been discussed below.

Cash and incentives plans: It is the major ethical issue which is faced by the human resource management within the organization. Cash and incentive plans include basic salary, incentives, bonus and annual increments (Sparrow, Brewster and Chung, 2016).

Privacy: It is considered another ethical issue which affects the performance and efficiency of the workers. Sometimes, human resource department does not maintain privacy in the organization. They disclose the employees’ personal information to the other person. It is an ethical issue which should be controlled and managed by the human resource team.

 


Compensation: It is another ethical issue which is faced by the HR team. Sometimes, the HRM does not provide fair remuneration and overtime to the workers which are mentioned in the job description and job specification (Kim and Brymer, 2011).

Thus, human resource management is obliged to maintain ethical standards and code of conducts within the organization. HRM should maintain fair hiring and remuneration system within the organization. Human resource team is responsible to maintain safety standards and to provide safe and secure working conditions for the workers. Further, the company must maintain legal law and regulations to carry the business activities and operations in the organization. Along with this, fake and wrong details must not be submitted by the job applicants within the organization. HRM must protect the rights and morale of the employees to do work effectively and efficiently (Anderson, 2013).

Further, various important functions are performed by the human resource management. It is the backbone of the each and every company to gain sustainability in the organization as well as the environment. HRM plays a vital role to maintain sustainability and corporate social responsibility within the organization. HRM performs tasks and duties effectively and efficiently. In addition, they encourage and motivate the employees. They are responsible to provide good and effective remuneration and compensation to the workers to encourage and inspire the employees for doing the work effectively. Further, HRM plays a vital role to manage and handle the employees within the organization. They maintain an effective relationship between employee and employer in the organization. Now it is assumed that human resource management performs their function and duties in an efficient manner (Van Buren, Greenwood, and Sheehan, 2011).

Conclusion

The report is based on the organizational structure of the Nestle. It explains the mission and vision and competencies of the company. On the above discussion, it has been evaluated and concluded that Nestle is one of the biggest brands in food and beverage industries to gain long-term profits and to maintain sustainability in the organization. Further, human resource management plays a vital role in Nestle to attract more people in the international market. Through effective HRM, the company is able to maintain sustainability and corporate social responsibility within the organization. It provides help to increase the shareholder value in the market.

Further, business ethics and code of conducts also play a crucial role in Nestle to attract more customers in the global market. Further, porter five force model plays a significant role to analyze and evaluate the competitors in the global market. Further, Nestle is using effective and unique organizational structure to maximize the long-term revenue and profit of the company. Now it is recommended that the company should improve its business level strategies and corporate level strategies to expand and flourish its business activities and operations around the world.

 

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Although it is a bit late, it is so perfect and detailed. I feel very confident about this work, though it has not graded. Very glad that I have found my assignment help for this. Thanks.

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Australia

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I received my assignment in a timely manner and still had time to review it for errors. My Assignment Help lived up to my expectations and then some. this has been a life saver for me. Thanks.

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Australia

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I was pleased with the results. My assignment was accurate with no errors, ( I did double check the work for accuracy). My Assignment Help is truly an asset to those of us who have busy lives and need that extra help along the way. Thanks.

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User Id: 364799 - 22 Feb 2020

Australia

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