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    Nestle Social Media Management Nestle Social Media Management Document Transcript

    • Author: Jeevana J Adusumilli
    • Table of ContentsEXECUTIVE SUMMARY ...................................................................................................... 3BACKGROUND/ CURRENT STATE ...................................................................................... 4Problem/Opportunity .................................................................................................................................................... 4 SWOT Analysis ........................................................................................................................................................................ 6 Porters Five Forces ............................................................................................................................................................... 9PROJECT OUTCOME/FUTURE STATE ................................................................................ 11Alternative 1 (Media Statement & Supply Chain Amendment) .................................................................... 12Alternative 2 (Investigate Supplier) ....................................................................................................................... 13Alternative 3 (Alternative for Palm Oil) ................................................................................................................ 13Alternative Assessment .............................................................................................................................................. 14IMPLEMENTATION STRATEGY ......................................................................................... 15CONTINGENCY PLAN....................................................................................................... 18CONCLUSION .................................................................................................................. 18References ..................................................................................................................... 19NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 2 Oct 2011
    • EXECUTIVE SUMMARYSocial media may be defined as media designed to be disseminated through social interaction betweenindividuals and entities such as organizations(Botha et al, 2011). Easy access, low marginal costs andmagnitude of audience explain the sustainability and strength of this medium. You Tube being one suchmedium with an average view count of 21,085 viewers per day (Hill, 2008) and one video uploadedevery minute, twenty four hours a day (Botha et al, 2011) make it the second most visited website.Sources like You Tube and Facebook not only impact brand reputation and equity but rapid circulation ofany information- by transforming viewers into producers. Influence of You Tube on brands is evidentfrom incidents like PETA vs. KFC. Greenpeace, an independent global organization chose to use the samemedium to raise an issue outlining environmental impacts of palm oil usage in Nestlé products, thelargest Food and Beverage Company in the world. This report conducts an in-depth analysis intoconsequences of the action including reputation crisis, loss of customer trust, customer loyalty andbusiness to competition ultimately affecting goodwill. The report outlines three possible alternatives toapproach this problem, with the best being:Media Statement & Supply Chain Amendment. Thisalternative facilitates timely communication addressing the issue with the customers and investors toensure undeterred brand image in the market. Recruitment of a “Zonal Corporate Governance andCompliance Manager” responsible for fabricating and formulating a code-of-conduct for suppliers basedon the creating shared value initiative of Nestlé also secures the ethical boundaries of the business in allregions. The new code-of-conduct is prepared with utmost uniformity but in compliance with regionallaws and is rolled out to each zone with a technical training program in place. An assessment isconducted quarterly and the results are passed on to the CEO, Governance board and the Zonal officersfor reevaluation of the policies in place. In the event of non-compliance, the supplier is then suspendedand an alternate is acquired at minimal costs considering the bargaining power ofNestlé.NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 3 Oct 2011
    • BACKGROUND/ CURRENT STATENestlé is the largest foods and Nutrition Company in the world with footprint in over 86 countries and anet profit of CHF 10.43 billion (2009) despite the recession in 2008 (Nestle, 2009). The confectionaryaccounts to 12 percent of the total sale with major contributors being Europe at 32 percent and NorthAmerica amounting to 31 percent of worldwide sale (Nestle, 2009).A demonstration of its stake in theworld confectionary market is the recent approach from Hershey’s in acquiring Cadbury brands(National Post, 2009). Although the company is best known for chocolate, ice-cream and sugary snacks,Peter Brabeck-Letmathe, the firms chairman, and Paul Bulcke, its chief executive, hope to transform thefood company into the worlds leading health, nutrition and "wellness" firm (Lusanne et al, 2009).Theexecutives aim to achieve this vision and continue to leverage on thesecure brand image for preservingmarket hold against competition including Unilever, DANONE etc. and strengtheningCreating SharedValue division.Problem/OpportunityReputation crisis is a terminal component; the company can afford to bet on. The video demonstrationtargeting Kit Kat (a star brand of Nestlé) from Greenpeace, an independent global organization is anindirect threat to the Nestlé’s thriving goodwill of CHF 27.5 billion for 2009. The reason for protest statesthat palm oil from Indonesia sourced through Sinar Mas used inNestlé’s chocolates: Kit Kat, Butter fingerand Coffee Crisp is leading to destruction of natural habitat of orangutans and further extinction.Themedium of protest chosen by Greenpeace is You Tube, a widely popular video broadcasting websitewith over 21,085 viewers per day (Hill, 2008) and one video uploaded every minute, twenty four hours aday (Botha et al, 2011) make it the second most visited website. Easy access, low marginal costs andmagnitude of audience explain the sustainability and strength of this medium. Sources like Twitter,Vimeo, You Tube and Facebook not only impact brand reputation and equity but rapid circulation of anyNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 4 Oct 2011
    • information- by transforming viewers into producers. Influence of You Tube on brands is evident fromincidents like People for Ethical Treatment of Animals (PETA) vs. Kentucky Fried Chicken (KFC). The rateof information exchange is evident from the 10,000 views received and a projection of nearly 12,000more views for the day alone on You Tube. As the video is interchanged amongst other channels likeFacebook with 800 million active users, the momentum in the world market builds within fewhours.Greenpeace does not state non-violence as its norm, but it has been known to resort to direct-action methods, primarily protests and has been a source of controversy in recent years (Shaw, 2010).An example of one its stances being a climate protest conducted at Heathrow Airport by scaling a BritishAirways Jet in 2008 (Milimo, 2008). With headquarters in Amsterdam, Netherlands, its 28 regionaloffices operating in 41 countries that include Nestlé’s major contributors of revenue for chocolates:United Kingdom and United States, and 2.8 million supporter base worldwide, it can be predicted thatrallies are evident.Once the possible rallies commence at locations like Nestlé USA Headquarters, there is an increasedpotential for media interference. The inferred unhealthy publicity is an early indication of hit to brandidentity further concluded by categorizing consequences into loss of customer trust, loyal customer baseand business to competition resulting in a deficit in goodwill. Nestlé has already been held accountableon grounds of unethical business practices in the past for issue concerning its promotion of breast milksubstitute, which campaigners claim contributes to the unnecessary suffering and even deaths of babies,largely among the poor. It has also been targeted by a Brazilian group called CidadãospelasÁguas(Citizens for Water) over the extraction of water from an aquifer in São Lourenço (Wikipedia,2011).Recurrence of cases doubting Nestlé’s business practices casts an uncertainty in customerconfidence.NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 5 Oct 2011
    • The potential conflict between the company’s Creating Shared Value images built on compliance &sustainability and the image projected by Greenpeace is a hindrance to visions of Peter Brabeck-Letmathe (of transforming the company into a new Health, Nutrition & Wellness firm). Greenpeace’sagenda not only includes concerns regarding SinarMas’s heavy deforestation of palm oil beds in spite ofdeforestation laws in Malaysia and Indonesia but also its intentions of doing so in the future. Thepotential environmental threats noted by Greenpeace concerning Orangutan extinction and defiancefrom the supplier toward the govt. pose an obstacle for the future visions and current values leading toa loss of customer allegiance and further a significant shortfall in goodwill. IMPORTANCE Low High Loss of Customer Hindrance to Health, Trust Low Nutrition & Wellness image Loss of Loyal Customers URGENCY Business to Public Protests High competition Negative Media Deficit in Goodwill Publicity Figure 1(a) Case Issue Importance and Urgency MatrixFigure 1(a) is a demonstration of current key issues ranked in the order of importance and urgency. It isevident that all the issues are interrelated and each individual instance is a consequence of thepreceding. In order to break the chain of events the first issue that needs immediate and utmostattention is the public protests from online video that drive negative publicity.SWOT AnalysisStrengths:NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 6 Oct 2011
    • Nestlé stands a shaper of the market trends and also has the ability to leverage its diverse brand names to generate sales. Fortune 500 has listed it at a 48 as opposed to its competitor Unilever at 121 in the ranking of 2009 world’s largest corporations (Fortune 500, 2009).One of Nestlé’s chocolate brands; Kit Kat, 150 of which are consumed every second worldwide (Nestle, 2009) chocolate bar brands of Nestle generated 12 percent of revenue amounting to CHF 12.9 billion dollars (Nestlé, 2009). Nestlé’s large portfolio of prominent diverse consumer brands helps it maintain and increase its shelf space presence giving it an advantage over competing firms that lack such a strong brand portfolio (Wiki Invest, 2008). Despite the recession in 2008 Nestlé has continued to invest in Research and Development (R&D). Nestlé holds 3000 scientists, technologist, engineers and anthropologists working in the R&D department of the company worldwide. It invested CHF 1.36 billion in 2009 as opposed to CHF 1.39 billion in 2008. The product development process involves three stages ranging from discovery (that involves In Vitro & experimental studies and human studies/ clinical trails) to product development (that involves product information, quality and safety, product information and packaging) and product launch (that involves communication and customer support).Nestlés global R&D is applied locally to meet different consumer needs and preferences through their 320 Application Groups worldwide. Weaknesses: Increased product recalls within the past few years.Nestlé USAs Baking Division has recalled all varieties of Nestlé TOLL HOUSE refrigerated cookie dough products, including their Cookie Bar Dough, Cookie Dough Tub, Cookie Dough Tube, Limited Edition Cookie Dough items, Seasonal Cookie Dough and Ultimates Cookie Bar Dough with 28 cases of E.coli reported in March 2009 (About Pediatrics, 2009).Nestlé also recalled Nesquik Strawberry Powder 21.8 ounce that mayNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 7 Oct 2011
    • contain small fragments of aluminum in 2008. Repeated recalls lead to low brand equity and affect the customer loyalty. Following the recession of 2008, a slower growth is projected in the company’s sale. Although Nestlé managed to secure strong cash flow, the net profit margin for the year 2009 dropped to CHF 11.79 billion compared to CHF 19.05 billion from 2008 (Nestlé, 2009). Since the customers spending is significantly low and is expected to raise at a snails pace on accounts of job security and the economy, a substantial hike in volume sales can not be expected anytime soon.Opportunities: Nestlé’s vision is to strengthen its position in the market against the competition with a new image. Since, Peter Brabeck-Letmathe, the firms chairman, and Paul Bulcke, its chief executive, hope to transform the food company into the worlds leading health, nutrition and "wellness" firm, this gives it a chance to gain an added advantage against its competition (Lusanne et al, 2009). An organic growth projection of 4.1% in the 2009 annual statement of Nestlé portrays rising health awareness in consumers in regard to fat consumption, cholesterol etc.With products like BOOST that is loaded with 26 vitamins and minerals, antioxidants plus protein, and a strong Research and Development wing in place the company has a scope for fabricating the vision and further capitalizing on it.Threats: Continued allegations on the company in concern to unethical business practices. Nestlé has been held on bar in 2003 in regard to the baby formula being promoted by the company as a substitute for breast milk in China, India, Russia and Latin America. Various health organizations contended the substitute on accounts of environmental hazards like baby’s health. In theNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 8 Oct 2011
    • Philippines, there exists a Boycott Nestlé campaign-2001 due to suspected labor rights violations in a factory in Laguna province led by Kilusang Mayo Uno(Wikipedia, 2011). Nestlé is seen to enter more mature markets that are being dominated by brands like Danone and Kraft. Kraft with its acquisition of leading gum and candy brands in much of EU has facilitated the company a market hold. Tang, Oreos, and Jacobs Coffee are some of the brands that have are particularly successful abroad and have allowed developing markets’ (Asia, Oceana and Australia) to account for 21% of Krafts total revenues(Wiki Invest, 2008). Danone being the first to arrive with a yogurt product in France, it holds to be a market leader. Nestlé’s significant sales drop in Europe (8.4%) from 2008-2009 as opposed to other markets shows the struggle.Porters Five ForcesThe threat of the entry of new competitors:Nestlé stands a leader against its immediate competitionincluding Unilever Plc., Kraft Foods Inc. and Tyson Food Inc. grossing CHF 107.6 billion in 2009(Nestle,2009).The company has been in operation since 1866, for 122 years giving the company a strongfootprint in the food manufacturing industry. Although the industry is very competitive and is constantlyevolving with entrants, Nestlé has an advantage of holding majority of the share in the market. With asubstantial brand equity and a base of loyal customers Nestlé is at an insignificant risk from entrants.The threat of substitute products or services: Nestlé’s portfolio of brands covers almost every food andbeverage category in the market ranging from baby food (Cerelac) to weight management (Jenny Craig).In spite of the diverse brands, Nestlé has seen resistance from other brands like Danone in Europeanmarkets, which led to a drop in its 2009 sales. Due to the nature of the industry and consumer attitudestoward food it is essential for Nestlé to constantly support its R&D for gaining an edge over competitionwith new introductions. Health and wellness objective is a clear example of the recent initiatives NestléNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 9 Oct 2011
    • has undertaken. But reputation threats from organizations like Greenpeace pose feasibilities forcompetition (Kraft Foods Inc., Unilever etc.) to scoop the customer base.The bargaining power of consumers: Global sales share of Nestlé’s product mix is significantly highcompared to its competition. Fig 1(b) shows sales share of Nestlé’s at Regional, Country and Productlevels. Fig 1(b) (Gehlhar, 2003)The buyer switching costs being are at a bare minimum, although majority of the products hold securepositions, other categories like Confectionary and Dairy products suffer a potential risk.An example of itsstrategy is its response to Unilever’s acquisition of Ben and Jerry’s byexpanding its ice cream corebusiness by acquiring General Millstake in Ice Cream Partners USA, giving it ownership of the premiumHagen-Daz in the United States (supplying to the recent demand for premium ice cream)(Gehlhar, 2003).Although the bargaining power of consumers is high in the industry Nestlé is a working monopoly inmost nations and product categories.NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 10 Oct 2011
    • The bargaining power of suppliers:Nestlé becomes aware of any actions or conditions not in compliancewith the Code, Nestlé reserves the right to demand corrective measures. Nestlé reserves the right toterminate an agreement with any supplier who does not comply with the Code (Nestle, 2011). Since thecompany’s strong distribution channel comprises of suppliers (165 000), farmers (556 6000) andmultipleagents, Nestlé enjoys minimal switching costs. Nestlé’s interaction processes with suppliers starts frominforming suppliers about contracts to engaging and assessing them to constant monitoring with Gapanalysis and corrective actions of necessary to qualifying suppliers with development and newopportunities (international). So, the company holds a higher bargaining power than its suppliers.Intensity of competitive rivalry:Nestlé is a global power in the nutrition and foods industry. ButTechnology employed by food processing firms is relatively unsophisticated and could easily bereplicated by rivals(Gehlhar, 2003). Preserving the brand identity is more important in avoidingreplication of similar processing technology by competition. The combination of processing technologyand specific brands helped Unilever differentiate its oils and fat products from those of its rivalConAgra(Gehlhar, 2003).Nestlé in spite of secure brand equity is still at constant competition from itsprogressing rivalry. But the company has been constantly vying with initiatives like acquiring Stouffersbrand in the United States giving the company the leading position in the ready meals productcategory(Gehlhar, 2003).PROJECT OUTCOME/FUTURE STATEIt can be inferred from the current and past business state that Nestlé’s reputation, which sustains largepart of the business has been targeted by organizations in multiple instances. Present allegations byGreenpeace in regard to Sinar Mas Group’s (supplier) practices in order to meet growing global demandof palm oil that includes Nestlé’s (and other companies: Unilever, HSBC, Carrefour, Burger king andNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 11 Oct 2011
    • Mattel) are a threat to the brand equity of Nestlé’ as well as 12 percent confectionary (Kit Kat, Rolo,Butter finger and Coffee Crisp) market share.Alternative 1(Media Statement & Supply Chain Amendment)Foremost risk in order of urgency and importance is public protests at regional headquarters (especiallyNorth America and Europe that account for nearly 60 percent of chocolate market) of Nestlé thatfurther leads to negative media publicity. In order to counter this plausible action by Greenpeace, it isvital that Rudolf Ramsauer (corporate communications officer) responds to the video posted bycommunicating to the public directly through a recorded and written corporate statement on thecorporate website and social media websites. This will help bar the rising mass hysteria and publicpressure over the allegations of unethical corporate governance. The public statement may includeNestlé’s tragic ignorance of supplier conduct in spite of rigid policies and assessments in place and apossible course of action. This message ensures public trust and unassuming market equity.In duecourse since Unilever (an immediate competition to Nestlé) dropped Sinar Mas as a supplier on groundsof unacceptable environmental practices in December 2009, pressure mounts on Nestlé to suspendSinar Mas as well.If Nestlé chooses to approach a new supplier, they would have to be from Malaysia,Indonesia or Colombia as they are the volume producers (63.9 million tones and account to ninetypercentage of world production) that can furnish the supply. Any portion of new supply may again beacquired through the deforestation considering the event that Sinar Mas could heavily deforest in spiteof several deforestation laws in place in both nations. So, the best approach in this case would be toformulate a new code-of –conduct and launch a training plan for all zones outlining the importance ofcompliance with laws and sustainability.Considering the repeating pattern of accusations against Nestléon grounds of ethics calls for a need to appointing three corporate governance officers for all threemarket zones (EUR, AOA & AMS) reportable to concerned zone heads ensures the practice new policiesNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 12 Oct 2011
    • and no further accusations against the company. This ensures full execution of the creating shared valueinitiative.Scope: The scope of this alternative includes human resources, suppliers, supply chaininitiatives, marketing department and all supplier code of conduct. When policy changes and code ofconduct changes occur, a training program is in place for education purposes. The budget allocation forthe project is $750, 000, and the time frame is six months.Alternative 2(Investigate Supplier)Having the video removed from the website on grounds of violation of trademark ensures no furthertransfer of information. Also, since Nestlé has a corporate social media presence, it can ensure no badremarks on every appearance including Facebook page and Twitter. The company can take a slowapproach toward investigating the supplier and the concerned agents. If Greenpeace’s accusations turnout to be true then Nestlé can look into alternative suppliers. This way the company can avoid thepressure built up but may instigate a protest from Greenpeace considering there is not profitablereaction to the video posted.Scope: The scope of this project involves the Information Technology,Marketing departments and supply chain initiatives. The budget allocation is $2,20,000 and the timeframe is two month.Alternative 3(Alternative for Palm Oil)The company may pursue laid-back approach and resort to having the video removed from the websites,further protect social media presence in Facebook and Twitter. Since Nestlé has a very strong Researchand Development entity, it can concentrate on conceiving an alternative for palm oil. This alternativecrushes information spread but may again encourage Greenpeace to protest considering no immediatecourse of action. This alternative also does not take into account the uncertainty of time frame for anew invention and certainty of Indonesia becoming the third largest carbon emitter after the UnitedStates & China by 2012 if the deforestation continues (Greenpeace, 2011). As this fact does not complyNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 13 Oct 2011
    • with Nestlé Creating Shared Value initiative, the company may loose customer trust, customer loyaltyand further goodwill.Scope:The scope of this alternative involves Information technology, Marketing andR&D. An individual is contracted to protection ofNestlé trademark until R&D arrives at a solution. Thebudget allocation is $4,50,000 and time frame is at least 5 years.Alternative AssessmentFig2 (a) is an assessment of alternatives against magnitude of threats and reinforcing brand equity. Theweightage is allocated according to the order of risks depicted in Fig 1(a). Alternative 1 addresses all theconcerns associated with current situation. The communication ensures that Greenpeace video isaddressed to the public oppressing any retaliation, new code-of-conduct and new title dedicatedCreating shared value (sustainability and compliance) protects the company’s initiative and further anyoccurrence or repetition of persistent allegations against Nestlé. Decision Criterion Alternative 1 Alternative 2 Alternative 3 (Investigate (Weighting) (Media Statement (Alternative for Supplier) & SCM Palm Oil) Amendment) Cost 0.1 4 10 8 Time 0.2 7 10 8 Corporate Image 0.2 7 4 3 Customer Satisfaction 0.3 10 5 3 Ethics 0.1 10 7 4 Goodwill / 0.1 10 4 4 Corporate Vision Total 8.2 6.4 4.7 Fig 2(a) Decision matrix for alternative assessmentNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 14 Oct 2011
    • This alternative also facilitates Peter Brabeck-Letmathe (chairman), and Paul Bulcke (chief executive)hope to transform the food company into the worlds leading health, nutrition and "wellness" firm(Lusanne et al, 2009).IMPLEMENTATION STRATEGYThe project for alternative 1 is broken into three phases: Communication & Recruitment phase,Formulation & Fabrication phase and Assessment phase. Each phase with Cost Analysis and Riskassessment is as explained.Communication & Recruitment phase: During this phase of the project Rudolf Ramsauer (corporatecommunications officer) communicates with public and media through the homepage of corporatewebsite (http://www.nestle.com/Pages/Nestle.aspx)and social media portalsincluding Facebook(http://www.facebook.com/Nestle) Twitter (http://twitter.com/#!/nestle)and YouTube between March18th -19th 2010 with an apology from Nestlé’s on grounds of ignorance in the event that Sinar Mas (amajor supplier) is indulging in unethical means to supply the company. Nestlé also emphasizes the factthat in spite of rigid supplier code-of-conduct and periodical assessments the supplier managed to resortto ways that do not comply with deforestation laws in Indonesia leading to near extinction ofOrangutans and increased carbon emissions.The phase also includes changes in Nestlé’s currentorganizational structure to accommodate a new role as in Fig 3(a), “Zonal Corporate Governance andCompliance Manager”. This new role is responsible for implementation of creating shared valuesobjectives and other job duties include: Overseeing and monitoring the implementation of thecompliance program including new code-of conduct for suppliers: Reporting on a regular basis to ZoneHeads and Governing body(D.P.Frick), CEO andprogress of implementation; Periodically revising theprogram in light of changes in the organizations needs and in the law and policies and procedures ofNESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 15 Oct 2011
    • Government; Ensure employees& suppliers have received, read and understood the standards ofconduct; Developing, coordinating, and participating in a multifaceted educational and training programthat focuses on the elements of the compliance program and seeks to ensure that all appropriatesuppliers, employees and management are knowledgeable of, comply with, pertinent Federal and Statestandards; Assisting management in coordinating internal compliance review and monitoring activities,including annual or periodic reviews of departments; Independently investigating and acting on mattersrelated to compliance, including the flexibility to design and coordinate internal investigations and anyresulting corrective action with all departments, contracted vendors, and if appropriate, independentcontractors; Developing policies and programs that encourage managers and employees to reportsuspected fraud and other improprieties without fear of retaliation; Continuing the momentum of thecompliance program and the accomplishment of its objectives long after the initial years ofimplementation. The scope for recruitment time is March 18th – April 18th and the budget allocation forrecruitment of three managers being: $2,70,000(Recruitment expense). The only risk involved in thisphase is time objective for recruitment.Formulation & Fabrication phase: This phase involves fabrication of a new supplier code-of-conduct(based on regional laws and cultural constraints for each country) involving the new recruits (ZonalCorporate Governance and Compliance Manager) with D.P.Frick (Corporate Governance and ComplianceDirector) and Chairman (Peter Brabeck-Letmathe). A technical training and educational program basedon the measures is then rolled out to each country. This initiative and new recruits are introduced oinvestors and the public through a public statement by Rudolf Ramsauer (Corporate CommunicationsOfficer). A new commercial is rolled out for Kit-Kat stressing on new initiatives by the marketingdepartment. This phase is aimed at being completed by May 19th 2010. And the budget for travel, legal,NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 16 Oct 2011
    • marketing ($2,80,000)and educational expenses is $2,00,000. The risk involved in this phase is timeobjective and aim to achieve utmost uniform practices across all zones. Fig 3(a) New Organizational StructureAssessment phase:During this phase each Zonal Governance and Compliance Manager visits assessessuppliers including Sinar Mas compliance strategies. And a report is then generated for corporategovernance, CEO and Zonal Managers for further revival of the policies if required. This phase alsoinvolves quarterly assessments within the origination to ensure conformity of the new policies. The riskinvolved in this phase is recurrence of unethical behavior from suppliers. The targeted completion timeof this phase is August 19th 2010.NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 17 Oct 2011
    • CONTINGENCY PLANIn the event that the project fails, and any supplier (including Sinar Mas) employs unethical means tofurnish Nestlé’s requirements then the contingency plan falls in plans. Any supplier that does not complywith new code-of-conduct of Nestlé or does not pass the assessment phase of the implementationstrategy is suspended from any future dealings with the company. An alternate supplier is sourcedduring this action. Because Nestlé possesses quantity of bargaining power as compared to the supplier,cost incurred for the switch is estimated to be considerably low and even negligible. By choosing a newsupplier, Nestlé can educate and develop them according to its policies and needs by maintaining a long-term relationship.CONCLUSIONNestlé is the largest nutrition and foods company in the world. The threat posed at the company byGreenpeace on grounds of unethical means may seem a minor issue. But accusations by variousorganizations on same grounds agents Nestlé calls for a need to reevaluate its organizational structureand strength of Creating Shared Values Initiative. Although the company has been attempting toreestablish its brand equity through each occurrence, absence of an accountable personnel such as“Zonal Corporate Governance and Compliance Manager” within the organization to fabricate rulesaccording to each nation forces employees and suppliers to leverage on its policies in place. Alsoconsistent communication with public from the corporate communications and governance ensurescustomer and Investor trust. In turn resulting in unaffected brand equity.NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 18 Oct 2011
    • ReferencesBotha, E, ManaFarshid, and Leyland Pitt. "How sociable? An exploratory study of university brand visibility in socialmedia." South African Journal of Business Management 42 (2011): 43-51.Hill, Joshua."YouTube surpasses Yahoo as world’s #2 search engine." http://www.tgdaily.com, Last modified October 17, 2008.Accessed October 14, 2011. http://www.tgdaily.com/trendwatch-features/39777-youtube-surpasses-yahoo-as-world’s-2-search-engine."Reports and Downloads." Nestlé Global. http://www.nestle.com/Investors/Reports/Pages/Reports.aspx (accessedOctober 15, 2011).LAUSANNE , and VEVEY. "The unrepentant chocolatier." economist 393, no. 8655 (2009): 79-81.http://search.ebscohost.com.libaccess.lib.mcmaster.ca/login.aspx?direct=true&db=p3h&AN=44919866&site=pov-can (accessed October 15, 2011).Anonymous. "Hershey Contacts Nestle On Cadbury; Deal Not Assured." National Post (Don Mills), December 7,2009.Dan Milimo. "Climate protesters arrested after scaling Heathrow jet." The Guardian (London), February 25, 2008."Nestlé boycott." Wikipedia. en.wikipedia.org/wiki/Nestlé_boycott#Other_Nestl.C3.A9_operations_targeted(accessed October 15, 2011)."Fortune Global 500 2009: The Worlds Biggest Companies - Nestlé - NSRGY ."CNNMoney - Business, financial andpersonal finance news. http://money.cnn.com/magazines/fortune/global500/2009/snapshots/6126.html(accessed October 15, 2011)."Kit Kat ." Nestlé Global . http://www.nestle.com/Brands/Pages/BrandsDetail.aspx?brandguid=470CB573-F555-4CFE-BBF2-3A1B05374821&BrandName=Kit%20Kat (accessed October 15, 2011)."Nestle (NSRGY) ." Wiki Invest. www.wikinvest.com/stock/Nestle_(NSRGY) (accessed October 15, 2011)."Nestle Toll House Recall - Cookie Dough Recall Alert." About Pediatrics - Pediatric Parenting and Medical Advice.http://pediatrics.about.com/b/2009/06/19/nestle-recall-cookie-dough-recall-news.htm (accessed October 15,2011).Gehlhar, Mark. "Regional Concentration in the Global Food Economy." Reading, First Biennial Conference of theFood System Research Group from Market and Trade Division, ERS-USDA, Wisconsin, June 27, 2003.NESTLE: A SOCIAL MEDIA NIGHTMAREBusiness Case Report 19 Oct 2011