“Review Sun Tzi’s Art of war – how can Nestle Malaysia use strategies in their business”;
Sun Tzu was a Chinese general, military strategist, and rationalist who lived in the Spring and Autumn time of old China. Sun Tzu is customarily credited as the creator of The Art of War, a generally compelling work of military technique that has influenced both Western and Eastern reasoning. Beside his legacy as the creator of The Art of War, Sun Tzu is venerated in Chinese and Asian society as a fanciful recorded figure. His original name was Sun Wu, and he was known outside of his family by his cordiality name Chang Qing. The name Sun Tzu by which he is best known in the West is a honorific which signifies "Expert Sun".
Sun Tzu's accuracy is questionable. Si mama Qian and other customary antiquarians put him as a clergyman to King He lü of Wu and dated his lifetime to 544–496 BC. Current researchers tolerating his trustworthiness regardless place the current content of The Art of War in the later Warring States period based upon its style of sythesis and its portrayals of fighting. Conventional records express that the general's relative Sun Bin additionally composed a treatise on military strategies, likewise titled The Art of War. Subsequent to both Sun Wu and Sun Bin were alluded to as Sun Tzu in traditional Chinese messages, a few antiquarians trusted them indistinguishable before the rediscovery of Sun Bin's treatise in 1972.
Sun Tzu's work has been lauded and utilized all through East Asia since its sythesis. Amid the twentieth century, The Art of War developed in notoriety and saw down to earth use in Western culture too. It keeps on impacting numerous aggressive tries in Asia, Europe, and America including society, governmental issues, business, and games, and additionally advanced fighting.
The fundamental target of our study to know the procedures of Sun Zi's specialty of war and how it would it be able to has been executed in Nestle Malaysia's business administration. As it were, we additionally need to instruct others that Sun Zi's craft of war can be executed in current world to improve our financial. We additionally need to help different administrations to find out about business methodologies for critical thinking utilizing Sun Zi's craft of war.
Nature of business:
Founder of Nestle Worldwide are by Henri Nestle from Vevey, Switzerland which merge with Anglo-Swiss Condensed Milk Company. Nestle Worldwide Idea Emerge by Swiss chemist, Henri Nestle want to save the life of his neighbour’s child who was unable to breast feed and suffering from malnutrition, thus he developed his first infant formula in year 1967. Nestle Malaysia have been establish in year of 1912 and started first operation at Penang as the Anglo-Swiss Condensed Milk Company. According to annual report 2013, category of product produces under Nestle Malaysia are have 10 category which include dairy(Milo), milks(Nestle Omega Plus), Beverages(Nescafe), food business(Maggi), Nestle Liquid Drinks(Nestle Susu Steril), Ice-Cream(Nestle Drumstick Extrem Choc), Confectionery(Kit Kat), Chilled Dairy(Nestle Bliss), Nutrition(Nestle Lactogen 3), Healthcare Nutrition(Nestle Nutren Diabetik).
Nestle facing a huge problem which is child labor issue problem in 2014. A new report by the Fair Labor Association (FLA) which is commissioned by Nestlé had saw researchers visit 260 farms used by the company in Ivory Coast from September to December 2014. The researchers found 56 workers under the age of 18, of which 27 were under 15.
Other than that, we found out children younger than 15 continue to work at cocoa farms connected to Nestlé, more than a decade after the food company promised to end the use of child labor in its supply chain. The use of child labor in cocoa production is due to poverty and a lack of schools. It result Nestle to face the violation of child labor law and enslaved children and child trafficking issue.
Based on the research, a total of 24 children were found working on farms as “family workers. They unable to attend school as they worked alongside with their parents and siblings on plantations On the farms, children were expected to work in hazardous conditions and carry out dangerous tasks, including using machetes and transporting heavy loads.
At last, Nestle had addressed the problem with following solution. It included introduces the nestle supplier code, Monitoring all participants in its supply chain and set clearer labor standards and Give special training on how to address child labor problem.
PETALING JAYA: Nestle (Malaysia) Bhd expects the challenging economic conditions to continue in 2016, and, as such, has adopted a cautious approach for the short term.
It’s managing director, Alois Hofbauer, said going forward consumer sentiment will continue to be impacted post-Goods and Services Tax (GST) implementation and market conditions will remain tough. "In 2016, commodity prices are expected to increase, and prices of raw materials are foreseen to be impacted by the weakening currency," he said.
Taking this into account, Hofbauer said, the company will need to be flexible and responsive to change. "It will not be an easy year ahead but we are well poised to weather these challenges." He said Nestle Malaysia is focused on internal improvements to maintain prudent cost management and improve efficiency and productivity. Hofbauer said the Nestle Continuous Excellence (NCE) programme is the global Nestlé approach to identify and realize efficiency increases within and beyond operations on a sustainable basis.
Nestle company have done a great job in motivate the employee. Based on the Nestlé Human Resource Policy 2012, Nestle focuses on Fixed Pay, Variable Pay, Benefits, Personal Growth and Development and Work Life Environment as the key elements that define Total Rewards. Nestle also offers a comprehensive range of training activities and methodologies to support everyone’s learning and growth. Additionally, corporate leadership programmes help the company develop and retain the best-qualified management. Leaders have the opportunity to attend either international training courses at Rive-Reine, which build integrated business understanding and solidify and reinforce Nestlé values and principles, or programmes conducted by our strategic learning partners.
In Jun 21, 2013, company receives 2013 award in large employer category. PUSLINCH, Ontario – Nestlé Waters Canada, Canada’s marketshare-leading manufacturer and distributor of healthy beverage choices, and the Guelph & District Human Resources Professional Association today announced that the Company has been honoured with the Association’s Employer of Distinction award in the large employer category for 2013. The Employer of Distinction Award recognizes outstanding local employers who have shaped organizational excellence and raised awareness of the human resources contributions in helping to build and sustain a successful organization.
In year 2015, Nestle company have a wide commitment in Nutrition Quotient (NQ) training, this purpose is to have all Nestlé employees trained at least once on the NQ Foundation Module by the end of 2015, including an e-learning module. E-learning designed and made available to all employees, and a new leadership course piloted.
During the past few years, Nestle face a number of significant business challenges and risks. Firstly, Nestle facing threat of disruption in the supply of raw materials .This is due to some reason included bad weather and natural disaster, Inaccuracy of orders receives in inventory or stocks in hands and unexpected demand by customers.
This directly caused many raw materials prices have surged, thanks in part to rising consumption in Asia, where many economies are racing ahead. Nestlé (Malaysia) Bhd has shown resilience in tough times as it rides through the weak ringgit and softer consumer sentiment. The price of two commodities which are coffee and cocoa that are essential for Nestle, have been on the rise for years. Coffee hit a high of $1.94 a pound on Sept. 14 which is its highest level since September 1997. Cocoa, which hit a record in December, has fallen back but is still trading at lofty levels.
The situation is same with the price of wheat. Russia had experience drought and wildfires that destroyed as much as a third of this year’s wheat crop. Due to the fact that Russia was one of the world’s biggest wheat exporters, last month they imposed an export ban, which sparked supply fears and drove prices sharply higher.
The prospect of more increases in demand in the world’s largest population centers and weather-related crop failures have sparked concern over global food supplies. Besides that, growing water scarcity problem across the global may affect this potential for growth. It will have an impact on the availability of raw materials, or leads to restrictions being placed on access to water for production.
Besides that, Nestle alone is using over 320.000 tons of palm oil every year, especially for their product “Kitkat”. Due to the enormous demand, majority areas of rainforest are cleared to make way for plantations of oil palms. Therefore the production of palm oil threatens endangered animal species and causes climate change.
At last, Nestle had solved the problem by using Dealer Management Systems (DMS). This is software for solutions that provide tools for managing sales, services, parts and inventory management, business management, integration, and core architecture. Other than that, DMS able to maintain the relationship between dealer and consumers. At the same time, manager can build multiple relationships with other raw materials.
NESTLE (Malaysia) Bhd, which currently controls half of the domestic ready-to-drink market, is set to shake up the food and beverage market when its spanking new plant in Shah Alam opens in mid-2014. The 40,601.9 sq m land on which the plant is being built, is located next to Nestle’s existing factory in Shah Alam. It was bought from British American Tobacco two years ago. “The ready-to-drink market is very competitive and important to us as Nestle Malaysia is a market leader in the segment with a 50 per cent share,” Nestle Malaysia managing director Alois Hofbauer said in an interview. He however, did not reveal the investment amount nor capacity of the new plant.
Nestle’s stiff competition comes from rivals such as Dutch Lady, F&N, Polka and Yeo’s. The company currently has seven factories in Malaysia and two in Singapore. Last month, Nestle Malaysia rolled out Maggi Magic Meals, an easy-to-prepare chicken dish that comes in three flavours. Hofbauer, who took over the helm of Nestle in February 1, is confident of the success of the new product, terming it as “a guaranteed success”.
Another product, Nescafe Ipoh White Coffee, has been popular locally since it was launched in September 2012, and is also exported to other countries. On Malaysia’s halal food industry, Hofbauer is excited about its prospects. “Nestle Malaysia is the centre of halal expertise in the world, exporting to 50 countries because Malaysia’s halal certification is recognized around the globe.
As I was saying, in Chapter 1 of Sun Zi’s said “One of the five factor Doctrine and Law “. Refer to organization and control, management systems and procedures, and the command and control structure for the deployment of resources. The researchers found 56 workers under the age of 18, of which 27 were under 15, we found out children younger than 15 continue to work at cocoa farms connected to Nestle. The use of child labor in cocoa production is due to poverty and a lack of schools. Result Nestle to face the violation of child labor law and enslaved children and child trafficking issue. Based on the research, a total of 24 children were found working on farms as “family workers. They unable to attend school as they worked alongside with their parents and siblings on plantations. Nestle company should set rules and regulation about vacancy worker and prohibition under age worker. If not Nestle company will affect their company image and under age worker are not too skillful because they did not have a proper training. Nestle company should apply doctrine and law to make sure all the employee and worker follow and not to break the rules and regulation of the company. These will make the company have good disciplines.
Moreover, in Chapter 2 Sun Zi’s said “ As general rule, for a military campaign, one would need 1,000 speedy four-horse chariots, 1,000 heavy wagons, and 100,000 fully equipped and combat-ready soldiers. Speed is one of the ways to reduce the organization operating cost. This is to reduce the time for operation, then increase organization productivity and improve their value in the market. Example: Nestle Malaysia is focused on internal improvements to maintain prudent cost management and improve efficiency and productivity because consumer sentiment will continue to be impacted post-Goods and Services Tax (GST) implementation and market conditions will remain tough. Tax and costs of raw material will be increased as daily and other necessary products will be supplied to the company. The Nestle Company will need to be flexible and responsive to change. Nestle performed admirably this year and was resilient in weathering tough headwinds such as the GST implementation coupled with the rising cost of living this will affect the Nestle company while purchasing raw material, transportation, supplier and retailer to increase price. One of the most effective way is speed up organization productivity that can give good impact to company it will reduce the cost while increasing organization productivity. To ensure consistent and effective implementation.
In chapter 2, Sun Zi’s said: “For the troops to plunder the resources of the enemy, they must be motivated by material rewards. Therefore, the first person who succeeds in capturing ten chariots in a chariot battle should be rewarded.” In the business, organization should rewards employees who have high contribution to the organization based on their performance. When a valued employee quits, the loss to the employer can be serious. On the other hand, organization should not fired or punished those employee with poor performance. Organization also have to always review their compensation system to fulfill employee’s job satisfaction. When employee’s satisfaction increase, their loyalty also increase, so productivity will be increase. The benefits to motivate are increase morale among the employee and set as example for low achievers. At Jun 21, 2013, the Employer of Distinction Award recognizes outstanding local employers who have shaped organizational excellence and raised awareness of the human resources contributions in helping to build and sustain a successful organization. In my opinion, one of the ways in which employees can be motivated is by making them feel they have a stake in the performance of the company as a whole. Recognizing Employee Contributions by thanking people for work done well is a powerful motivator. People who feel appreciated are more likely to stay with a company than those who don’t. While personal thank-yous are always helpful, many companies also have formal programs for identifying and rewarding good performers. Giving the employees an opportunity to own stock in the company, it makes them feel as if the company is important to them. Another major way to motivate employees is to give them the chance to learn and to progress to more responsible jobs. All of the training that is required of employees makes them feel as if their job is important and more of a profession than just another job. The ability to attend forums and share their ideas with senior officials make them feel that they can have input and that they are being encouraged to think in ways that will allow them to progress up the corporate ladder.
In chapter 3, Sun Zi’s said: “When ignorant of the affairs of the enemy to participate and interfere with the army’s administration. This causes the officers and men to be confused and perplexed. When ignorant of matters pertaining to the exercise of military authority, to interfere in the exception of responsibility. This causes apprehension and skepticism in the minds of officers and men.” The organization should select the right position, so as to make the right decision. If the people who are not capable and up to their ability, wrong decision or planning will influence the whole team or organization such as this will lead to damage of reputation, business lost and even face bankrupt. Leader have to be well prepared before leading the team. When a problem arise, a leader shall solve the problems as soon as possible, so that worker loyalty and trust will not be reduced. Due to the disruption in the supply of raw materials which caused raw materials prices have surged, a leader shall shop aggressively for raw materials. If you’ve always relied on the same one or two vendors to supply raw materials, broaden your scope to look for other suppliers that might offer better prices. The purpose of doing this is to let your existing suppliers to be aware that you are soliciting bids from their competitors. The second solution, leader can also negotiate a Long-Term Supply Agreements. While a single order might be small, the total volume of material used over a period of time will be significantly larger. Offer to use a supplier exclusively for a specific period in return for a set lower price and better terms.
In Chapter 4 of Sun Zi’s said “those who are skillful in warfare can ensure that they will not be defeated by the enemy, but will not be able to ensure victory over the enemy”. All products have their own life cycle cannot sell only one product in the business. Example: Nestle have expanding their company products in the market and increase the range of the product. Nestle have different product on the market such as baby foods, bottled water, cereals, chocolate & confectionery, coffee, culinary, chilled & frozen food, dairy, drink, food service, healthcare nutrition, ice cream, petcare, weight management. Moreover, Nestle have creative, innovative and continuous improvement enable origin product to continue its life span and sales because Nestle product a lot of its for our daily life such as Maggi cup mee, Nescafe, Nestle ice cream and etc. Most of Nestle product focus in food and beverage product even animal food product also provide by Nestle. Therefore, Nestle upgrading existing products to become a new products such as Maggi Letup also Nestle product that come with more spicy maggie mee, Kit Kat green tea is different favour from the original Kit Kat and Nescafe Mountain Wash. Even products like Nescafe, which recently celebrated its 75th anniversary, has survived for so long. This will attract more customer to purchase their products.
As a conclusion, Sun Tzi’s Art of war is not only applicable for war strategies but also for modern day’s business. In our assignment, we have reviewed 4 chapters from Sun Tzi’s Art of war and studied how Nestle’s Malaysia have used them in their business. They consist phrases of Sun Tzi such as “One of the five factor Doctrine and Law “from chapter 1, “As general rule, for a military campaign, one would need 1,000 speedy four-horse chariots, 1,000 heavy wagons, and 100,000 fully equipped and combat-ready soldiers” and “For the troops to plunder the resources of the enemy, they must be motivated by material rewards. Therefore, the first person who succeeds in capturing ten chariots in a chariot battle should be rewarded.” from chapter 2, “When ignorant of the affairs of the enemy to participate and interfere with the army’s administration from chapter 3 and finally “those who are skillful in warfare can ensure that they will not be defeated by the enemy, but will not be able to ensure victory over the enemy” from chapter 4. Besides helping in business, Sun Tzi’s Art of war also helping lawyers to use them in their work.
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