Organisation Choices Essay Example

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Masters
  • Page:
    3
  • Words:
    1801

1Innovation process at Nestle. Co.

Table of Contents

2Introduction

2Entrepreneurship/innovative process

4Entrepreneurship/ innovative lessons learnt

5How the lessons have made Nestle successful

6Why it is difficult for another firm to adapt the lessons learnt

6Recommendations on how to overcome the challenges

8Bibliography

Introduction

This paper represents a report on how Nestle Company undertakes the process of innovation in its operations, in other words, the entrepreneurial/innovation program implemented by this organization. In addition, the report also focuses on the entrepreneurial and innovative lessons learnt and how the company has been able to stand out in the industry. Another aspect of the paper is about the reasons why the success factors at Nestle Company cannot be easily adopted by another firm in the same industry or outside. Lastly, the report will give recommendations on how the difficulties of adopting Nestlé’s innovative process can be overcome.

Nestle is one of the leading food companies in the world. It is the leading company in Health, Nutrition and issues of Wellness. The company provides people with nutrition, health and wellness solutions which are based on science and this helps in enhancing people’s lives and their families. Since when the company was started by Henri Nestle, it has been associated with providing products which are of high quality and customer focused. The company is a leader in the world in terms of research and development whereby Nestlé’s scientists are focused on creativity and innovation in all areas so as to create healthier and nutritious foods anytime they do so (Huehnergarth 2016 pp. 12). 

Entrepreneurship/innovative process

Nestle always works to be a leader in sustainable development and so the commit on two major aspects of entrepreneurship and innovative process and these are innovation-renovation and operational efficiency. Nestle innovates in new products as well as technologies that help in meeting the needs of customers in increasingly sustainable ways In addition, the company works on improving and renovating the existing products and technologies basically for the same reasons. The process of entrepreneurship and innovation at Nestle Company is based upon innovation and renovation. Each of the Nestlé’s factories in all countries are based on excellence and specialize in creating and developing new areas of food technology. Before launching a brand new product or renovating an existing product, the company conducts research and development in the factories so as to ensure that the product is tailored towards the company’s vision of being the leader in nutrition, wellness and health. New product development undergoes various important stages and this makes the company develop products that best fit the requirements of the market (Weyant & Zhuanget 2003 pp. 670).

In Nestle Company, they advocate for bottom-up innovation instead of using the traditional top down innovation processes. In many companies, innovation is primarily a top-down process whereby research and development areas are always identified by the upper management and then implemented by the lower levels of management. However, for Nestle company, they allow lower level employees come up with new products or ideas which if, authorized by the top management, the process of implementation starts. In this case of Nestle, the originator of a new business idea can be anyone irrespective of their status in the company. There are suggestion boxes where the ideas are kept and presented to the top management who decides to undertake the promising ones. Once the ideas are selected, the upper management commissions suitable teams to work on them so as to deliver the expected results. The team commissioned works on further analysis, development and then if possible implementation of the ideas if found to be feasible and in line with the company’s goals and vision (Fryxell, Judge, & Pryor 2007 pp. 1238).

Entrepreneurship/ innovative lessons learnt

Nestle Company focuses much on employee training and development aimed at keeping talents and skills for new generations. In any company, there is a need for skills on innovation strategies to be retained in the company in case of an employee loss. Thus, the major lesson here is that there is a need for knowledge management systems to be developed and maintained by any company not only in the food industry but also in all industries that require innovation and creativity (Weyant & Zhuanget 2003 pp. 671). Nestle focuses on developing strong talents from college, train and developing them so as to become experts and this has been a cycle whereby new people are always introduced into then system. Thus companies should get a lesson from this and focus on developing and keeping the best knowledge and skills through developing new members of staff.

Another major lesson learnt is that the companies need to start implementing the use of bottom-up form of innovation so as supplement the traditional top-down method of innovation. It is said that democracy brings out the best ideas forward. A system that is built for bottom-up innovation will always give the best ideas since they come out from different people who have a lot to share. At times, subordinates have ideas but if they are not given the chance to share, such ideas may never be implemented. In essence, the best option for any company who wants to be a leader in innovation should be a mix of both the two methods of innovation. This will help create the best platform for innovation (Gertz & Robson 2003 pp. 106).

Nestle focuses on training its employee to be more business savvy. The lesson obtained here is that businesses and companies should look for the best means of acquiring business savvy through understanding the fundamentals of business as well as the key issues that need to be taken care of in the business environment. Nestle does this through employing very high qualified members of staff.

How the lessons have made Nestle successful

Bottom-up innovation applied by Nestle Company has contributed a lot to its growth and enabled the company stay competitive in the industry. The major competitors in the industry are Unilever, Walmart, Glencore among others. Nestle is a highly focused company and has always been leading in most of the food and drinks lines except in the ice cream sector whose main competitor in this sector is Unilever. Despite this, competition in the industry is harsh, but due to the lessons learned above as approved by the top management, the company has been successful so far. Nestle carries out very strong market research and development before launching a new product. Nestlé. Co applies open innovation (bottom-up), trust, goodwill, new business models and care for the environment, all of which are considered as contributing factors to the success of the company (Fryxell, Judge, & Pryor 2007 pp. 1240).

Why it is difficult for another firm to adapt the lessons learnt

The nature and process of innovation varies from one firm to another and following another firm’s process of innovation could prove to be difficult. A good example is that firms differ in terms of number and quality of employee, profitability, culture, among other factors. Nestle company applies the concept of bottom –up innovation which other firms may find it difficult to implement due to the quality of staff. Nestle always looks for the best people in the market who have the qualities, knowledge and skills in the industry. This means that the employee’s ability to give feasible business ideas is high as to when compared with another firm with slightly lower level employees (Weyant & Zhuanget 2003 pp. 670). Nestle conducts extensive research and development across the world and this requires a lot of resources in terms of finance, time and personnel. Firms may find this difficult simply because they lack the resources required. Training all employees to be business savvy just like what Nestle Co. does may prove to be difficult due to the costs of training. Most firms in the food and beverages industry mainly focus on profitability and customer satisfaction.

Recommendations on how to overcome the challenges

In the food industry, entrepreneurship and innovation should be based upon value to the customer, offering solutions in terms of well-being, health and convenience while maintaining profitability. A well-executed process of innovation always comes from challenging conventional wisdom and looking for solutions to old and new problems. The organizational structure which a firm adopts should ensure that it promotes the process of innovation within all departments. It is also recommended that firms should come up with ideas on how to approach the bottom-up strategy of innovation, though it may be expensive. To avoid undergoing losses, a cost-benefit analysis is suggested (Weyant & Zhuanget 2003 pp. 650). Another recommendation is that companies who feel that innovation is expensive, they should undertake the process step by step and have a long term focus. There are a lot of new entrants in the food and beverages industry and this means that creativity and innovation has to be on the increase if competitive advantage is to be maintained (Gertz & Robson 2003 pp. 103). It is also recommended for companies to adopt a human resource personnel system that works to attract and retain expertise in their firms. Most of these challenges can be solved by experts who have been in the industry for long, so it is upon companies to create the culture of retaining the best employees. Employee motivation is also crucial in overcoming the challenges. Employees are motivated through good remuneration, independence in places of work, provision of recreation facilities within the company premises, among others. Employees are prefer the bottom up strategy of motivation since they are in apposition to share ideas and be involved somehow in decision making and this helps motivate them.

Bibliography

Fryxell, G. E, Judge, W. Q. & Pryor, R. S. (2007). “Belaboring the Not-So-Obvious: Consensus, Commitment, and Strategy Implementation Speed and Consensus”. Journal of Management, 26, 1237-1257.

Gertz, I. & Robson, A. G (2003). Innovate or Die: Is that a Fact? Creativity and Innovation management, 12 (3), 133-136.

Henderson, R. J. & Nestle R.M. (2011). Nestle SA: Nutrition, Health and Wellness Strategy. Harvard Business School

Huehnergarth. N. F. (2016). «Nestle on the Forbes World’s Most Valuable Brands List». Forbes. Retrieved 2016-01-05.

Jones, S. (2012). Articles Base. Strategic Management at Nestle: Retrieved on 14th March 14, 2016 from http://www.articlesbase.com/management-articles/strategic-management-at-nestle

Nestle. (2015). The World’s Leading Nutrition Health and Wellness Company Management Report 2008.

Nestlé’s Brabeck (2011).We have a «huge advantage» over big pharma in creating medical foods», CNN Money, 1 April 2011

Partos, L. (2008. Innovation in food products essential to weather economic storm www.foodnavigator.com. Oct 21

Pavitt, K. (2006). “Innovation processes”. In J. Fagerber et al (eds).

Shazzie, D. W. (2005). Naked Chocolate: The Astonishing Truth about the World’s Greatest Food. North Atlantic Books. p. 98. 

Weyant, J. P & Zhuanget. K. (2003). “Strategic decisions of new technology adoption under asymmetric information: a game-theoretical model”, Decision Sciences, Vol. 4, 34 No.4, pp. 643-75