New Product Development and Nestle

Topics: New product development, Innovation, Value chain Pages: 6 (2121 words) Published: November 9, 2012
Nestle is a company that is operating in food and beverage market. In the last decade nestle is a leading nutrition and health corporation that promise a safe and high quality product to its customers. The company illustrates a significant profit ratio and therefore nestle become a role model for those companies that want to be successful. As a result this report is illustrating why and how nestle have achieved a superior performance VALUE CHAIN ANALYSIS

First of all the company have a operation in all around the world which means that they achieve an economy of scale. Apart from this minor information in terms of product offering the company are currently developing a products that are requiring a similar tangible and intangible resources. As a result they are exchanging production equipment and workers between factories. So we can easily say that nestle are also achieving an economy of scope. In addition to this, capacity are being utilized by the department. Apart from those economic terms their labor are being highly trained and therefore they are highly specialized about what they are doing which also resulting in an another efficiency at the operational activities. Moreover the department are frequently adapting its latest technologies that is reducing labor input and increasing its automation and mechanism of operations. However nestle brand express a quality and safety products to its customers. So its clear that the company company are not reducing its cost by buying a low quality raw materials and this means that they have integrated differentiation and low cost leadership strategy. We can easily conclude that this department are producing output much more efficiently than its competitors. MARKETING AND SALES

The company is heavily investing on research and development. For instance according to resources they invest 1.5 million on this department every year. For example they employ more than 3 500 people and those employees are highly motivated labors that is helping nestle to adapt its dynamic and fast changing environment. In other words labors have a huge contribution to nestle to provide a new products quickly to its market. For example the employees latest innovation is pleelable ice cream which is a product that has a rich creamy flavor of a regular ice cream. However it also contains a low fat in comparison to other brands .In addition to this the department have also invented a interesting flavors to this ice cream. Apart from this their research team have also found a actobacillas that contains a oriobitic agent which is improving human body’s immune system. As a result they are trying to inject actobacillas to their yogurt brand .employees also reported that actobillac is not changing the texture of yogurt. As a result those examples clearly illustrates that how well the company is adapting to its socio cultural environment. As tidd and bessant illustrates the importance of product innovation by stating that(2009 p6)”new product development is an important capability because the environment is constantly changing. Shift in the socioeconomic field create opportunities and constraints .Legislation may open up new pathways or close down others for example, increasing the requirements for environmentally friendly products. Competitors may introduce new product which represent a major threat to existing market positions. In all these ways firms need the capability to respond through product innovation”. Apart from innovation capabilities the company employee are also illustrating an effective performance in the international market. For example they are spending three days with the people that are living in the country that the corporation are planning to make an investment for this reason they are understanding their purchasing habits and motivations and therefore they are developing a product that is appealing to its people. In addition to this employees are also...
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