Agricultural Material Sourcing within the Concept of Creating Shared Value (CSV) Case Solution
The major suppliers of the raw materials required by the company are the farmers and the company pays special attention towards their development and investing in the infrastructure of the rural areas which will again help the company in sustaining the important aspects as their strategy revolves around the sustainability of nutrition and water. The company is not inclined towards investing in activities which would only benefit them but they have also considered the affects their activities would be having over the people directly and indirectly involved in the business operations of the company.
Nestle is focused towards creating a balance between the strength a buyer has and the strengths of a supply market, as these circumstances have the potential to bring positive changes to the sustenance of factors which have been a cause of worry to the company while conducting their business activities.
3. In terms of partnerships, review procurement strategies Nescafe products using the concept Simchi-Levi:
a. Describe the procurement strategy Nestle products at this time?
b. What are the benefits and risk son which the Nestle consideration in implementing the procurement strategy?
c. Judging from 5 criteria hierarchical model(customer important, component clock speed, competitive position,capable suppliers, and architecture), what strategy should have been adequate for by Nestle for the procurement of agricultural raw materials most important?Whether this strategy is in line with the procurement strategy of Nestle products at this time?
d. What similarities and differences in the procurement strategy for the product Nescafe coffee beans than Star buck strategy in obtaining coffee beans?
Answer to Question#3
Procurement of the cocoa beans is an important aspect for the company to continue with their production procedures with respect to the manufacturing of coffee products. Acquisition of cocoa beans heavily depends upon the farmers who are responsible for supplying the cocoa beans to the company manufacturing facilities.
Currently, the company has focused over gaining the cocoa beans directly from the farmers. Direct relationship between the farmers and the company allows the company to gain access to a more responsible production method used in the production of the cocoa beans. The cocoa beans being acquired from the farmers are made sure to satisfy all the quality standards which have been stated by the company in order to produce the best quality cocoa bean products.
Direct contact of the company with the farmers responsible for providing the cocoa beans allows them to state the farmers with the required level of quality. Moreover, the company is able to acquire the required level of quality with respect to the cocoa beans.
In order to acquire higher level of quality of the cocoa beans, the company has indulged in a number of training programs for the farmer which will enable them in producing the finest quality of the cocoa beans. Enhanced quality of the cocoa beans will directly benefit the company as well as enhance the production standards of the farmers responsible for supplying the cocoa beans to the company.
These activities of the company will not only help them in the short run by providing an adequate volume of the cocoa beans for carrying out the production methods, however it will also help them in maintaining their competency in the industry against a number of rivals who are continuously fighting over an increase market share in the operating industry………………
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