Nestle (Ite Analysis)

NestlÐ"© with headquarters in Vevey, Switzerland was founded in 1866 by Henri NestlÐ"©. Today, it is an international conglomerate operating as a food manufacturer with nearly 500 factories around the globe. With a presence in almost every country, NestlÐ"© employs some 230,000 people of more than 100 nationalities and of many creeds. It claims to be the leading food manufacturer and major purchaser of agricultural raw materials for over 130 years. It produces too many brands too count with some of the most popular appearing in various markets; coffee, bottle water, ice cream, infant nutrition and pet-care.

During the late 1990's and early 2000's, NestlÐ"© was interested in tying together disparate operations, creating partnerships with suppliers and customers to cut waste and to move food products more quickly from farm to factory and, finally, to the family dinner tables (www.estrategicmarketing.com). E-commerce seemed to be the way of the future, and NestlÐ"© moved in the right direction. With e-business initiatives offering the opportunity to strategically grow, NestlÐ"© executives embraced the inevitable. However, the executives also understood the great challenge that would face them Ð'- the transformation necessary in such an established company would be on immense. As with any other business activity, e-business strategy development would require in-depth analysis. After all, "when preparing their e-business designs, the key strategic issue confounding managers is how to transform old business design, based on the physical realities of business-as-they've-known-it, into a new design rooted in the digital requirements of tomorrow" (Kalakota & Robinson, 2001, pg.386).

What are the goals of the websites, and do they support the ITE business goals?

NestlÐ"©'s e-business design was not purely e-commerce for NestlÐ"©.com did not plan to sell direct, nor did it plan to bypass links in the supply chain to its customers (www.estrategicmarketing.com). Instead, NestlÐ"© took the time to answer some fundamental questions and designed a solid e-business strategy that was in line, not in opposition to its existing overall business plan. They understood that "even in a technology crazed-world, a good business strategy comes first" (Kalakota & Robinson, 2001, pg.388).

In 2002, NestlÐ"©'s e-business strategy was to "simply engage consumers in intimate and interactive relationships" (Quote from Nick Risso, Vice president of e-business; www.imediaconnection.com). The direct goals of their websites were the same Ð'- to make good use of the Internet as an advertising medium to support customer relationship management. For example, the company designed websites according to consumer interest rather than brand. While it did still have brand specific sites, the goal of these was more value added information, rather than relationship building. Each website is filled with specific interest related information, for example, the NestlÐ"© Nutrition site offers information about baby development, a mother's story-telling section, baby services, etc. Notwithstanding their main purpose for e-business development over the Internet (building customer relationships), NestlÐ"© also used technology to create more efficient operations. For example, in 2000, NestlÐ"© launched NestleEZOrder.com. Storeowners in the United States were required to order their merchandised from NestlÐ"© (chocolate bars and other products) via this website, which would trim logistic and order processing costs (www.estrategicmarketing.com).

What can we learn from NestlÐ"©'s Web site about some of the major ITE problems and issues in the world today, including the agricultural industry?

Browsing NestlÐ"©'s site, it is obvious that the company is committed

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