Tuesday, May 7, 2013

NESTLE ---- How to create shared value ?

Creating shared value typically involves bringing business and society together. It is a means by which can organization creates economic value in a way that it also creates value for the society by addressing its needs and challenges. One such organization is NESTLE.

Nestlé is the world’s leading nutrition, health and wellness company. It employs about 330,000 people and has 461 factories in 83 countries around the world. Almost half of these countries are developing countries.

Nestle's creating value strategy is based on compliance with international laws and conduct. They aim at creating value for shareholders in mainly 3 business activities -
 Water -  It is critical to invest time and money in this since it is a major component of Nestle's food production
Rural Development - This relates to the overall development of and well being of farmers and rural communities which also includes small businesses and suppliers.
Nutrition - This is the heart of Nestle's business and its important for them to focus on this.

Creating value in the supply chain

This refers to the process where in natural resources and raw materials are converted into finished products and then delivered to end consumers. Each stage in this process adds value to the overall product.
For Example, Nestle's cocoa supply chain goes from the cocoa bean to chocolate bar. One end are the farmers who grow crops and the other end are the consumers.
Nestle supports thousands of farms, many of them belong to small farmers in rural areas of the world. The company provides training in such places so as to maximize production and efficiency and deliver quality product. Hence, it also helps in the development of local economy.

Nestle Cocoa Plan is a prime example of the company's approach to business. This offers help to cocoa farmers both financially and through practical training. It focuses to teach them about the importance of respecting the environment, having a good quality of life and providing children with the best education possible.
The company has partnered with World Cocoa Foundation to maintain schools within cocoa farming regions and support farmers and their families. This can eventually reduce child labor has attending school will become one attractive option for parents and children.

Nestle sets an example as a company which focuses on social responsibility to create shared value. They are able to maintain a globally respectable name through such initiatives.

References : http://www.nestle.com/csv/what-is-csv

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