Core Competancy Table
Marketing in the emerging markets and popularly positioned products It has formulated Popularly Positioned Products (APP) strategy, which aims to reach out to consumers in emerging markets, offering products at affordable prices. Such products mainly consist of dairy Items, Nesses© and Magi culinary products, which are largely fortified against nutritional deficiencies In some emerging markets. Manufacturing – Making premium and out of home consumption products Despite the currently still gloomy economic outlook, Nests©’s focus on premium-end development remains strong.
The group Is present In some categories with higher end products such as Hagen- Dads Ice cream and Indo Gold In baby food. A number of premium food Items withstood the downturn better as these were thought to be inexpensive treats. According to Nests©’s own research, the out-of-home consumed food and drinks segment is growing faster than overall food consumption in both developed and emerging markets. Nests© Professional is the group’s division targeting this market with added-value branded food and beverages.
Its best performing brands in the division are Magi and Nests© milk brands. Operational efficiency Nests©’s cost-saving strategies have been Implemented as per the Nests© Continuous Excellence programmer. In 2013, both the cost of goods and dilutions expenses rose, but the company’s trading operating profit grew by 4% and its trading operating margin increased by 20 basis points on 2012. Is capability valuable? Is capability rare? Is capability costly to imitate? Is capability non substitutable?
Competitive consequence Performance Implications R& D Capabilities Yes Sustainable Competitive advantage Above average returns Marketing Capability No Temporary Competitive advantage Average returns to above-average returns Management Information System Capability Temporary Competitive Advantage Economies of Scale Capability Sustainable Competitive Advantage Human Resources Capability Nestle has develop the Customer Needs R activities in order to predict the specific needs of customers on today and in the future (Nests©, 2014).
This kind of activities can provide new ideas to Nestle to develop a new product which is focus on customers need. Nutrition Research Nestle uses the scientific basis to assess the use of the correct nutrition in a correct amounts and study the forms of nutrients in order to select the most available form to use in the fortification (Nests©, 2014). The nutrition research makes Nestle can reduce the most suitable product to different lifestyle people with different nutrition needs.
Development Nestle through its R to improve the existing technologies and invent the new technology to in order to perfect its production processes (Nests©, 2014). This makes Nestle owns the original production technology. Inbound Logistics Nestle purchases materials from suppliers and make sure there are enough materials for different products in 1 55 different regions’ plants (Nests©, 2013). Operations Nestle manufacture different kinds of products in different countries’ plants (Nests©, 2013). Quality and Safety Nestles has employed a large number of quality managers.
Those quality managers will test and make sure that all the products have reached the maximum standards in all the time (Nests©, 2014). This makes Nestles products can keep the best quality and let the customers can get the most safest and healthy products. Outbound Logistics Nestle packs its products according to different strategic business units’ requirement and transports the products to different countries’ regional offices (Nests©, 2013). Marketing and Sales Nestles different strategic business units according to different countries’ price level o charge the value price to the products (Nests©, 2014).
Also, it will promote products by using personal marketing, such as TV, public relation and sales promotion. This makes Nestles marketing and sales activities can focus on a specific area but not an extensive area and customers can get a fair regional price. Services Nestle has the service home office delivery (Nests©, 2013). It delivers its products to different supermarkets, restaurants and shops and so on. Consumption Nestle use its 60/40+ initiative to test the consumer product rigorous thereby make sure that the products have meet consumer needs (Nests©, 2014).
Support Activities Procurement Nestles procurement department responsible to purchase good quality raw materials at a low costs in order to decrease the cost to the products and make sure that the raw materials have reach the specific quality. Technological Development Nestle Product Technology Centers responsible to develop breakthrough technologies and conflagrate those technologies to the operations of the company. Human resource department is responsible to select the right people with right skills to develop the company’s business. Also, Nestles Management Trainee Programmed plans to foster some young people who have potential.
Core Competencies Analysis In this part, it will be use two tools to identify Nestles core competencies. The first tool is uses the four specific criteria of sustainable competitive advantage to measure Nestles capabilities in order to determine the core competencies 0. The analysis has shows in the following table. According to Table, the R capability and economies of scale capability have matched the four specific criteria of sustainable competitive advantage which are valuable, rare, costly-to-imitate and non-substitutable. This shows that both these two capabilities can be determine as Nestles core competencies.