Strategic information systems are developed with respect to the corporate business initiatives for implementing information system in a business organization (Sarpong and O’Regan 2014). This strategy provides competitive advantage to in an organization that may have delivered a product or service that is comparatively differentiable from the others or are lower in cost. This organization can also be of a time that focuses on a specific market segment and is also suitable to make innovative changes in the business organization (Rezaeegiglo et al. 2014). A strategic information system can only be applied to an organization after having a complete analysis of the entire organization as a whole. In this report as well, the food manufacturing organization of Nestle has been selected for implementing strategic information system after analyzing the entire organization external and internal phases over the Australian market. Nestle has been found to prefer the Australian market better and its leading manufacturing industries are situated in the continental country of Australia as well. Amongst the external analysis phase it would first go through the background of the business and the industry overview followed by the environmental analysis or what is commonly known as the PESTEL analysis. This would describe the economic socio cultural legal and political aspect behind the organization. For that the report would present a clear idea about the environment of the industry with supplier power, buyer power and the potential market entrance. Finally, the competitive environment of the company would be discussed, followed by the opportunities and threats of the organization.
Next the internal analysis and proposal for implementing strategic information system in the organization would be described. This phase would have the tangible and intangible resources for the organization and identified capabilities with respect to the core competency analysis of the organization. The report would then propose a suitable solution for information system and evaluate the proposed system to be implemented in the organization of Nestle.
First found in the year of 1866, the organization of Nestle has become the largest manufacturer of food in the entire world that operates in the FMCG sector. It can easily be found that any given house at any point of time in the world has a Nestle product in their home (Drees 2016). The Global presence of Nestle is dynamic and it has a product portfolio of over 10000 products that has been manufactured in 450 factories and has a workforce of over 3, 00,000 personnel.
Nestle is a nutrition, health and wellness company operating in the FMCG or fast moving consumer goods sector. This organization is globally the biggest company operating in the food sector, in terms of sales. As mentioned earlier, it has a hugely varied range of products, owning some of the most well-known brands ever to have been created.
The latest economic turmoil of the world has somewhat made the world economy a bit weaker than usual to an extent (Carneval, Loureiro and Kabadayi 2018). Recession has been subsiding the market of Australia and therefore is making a comeback as a result. However, it has been found that Nestle remained unaffected with this economic turmoil in Australia and recorded net profit during this time had been around 9.5 billion CHF (Pandey and Puntambekar 2016).
One of the biggest consumer segment for Nestle in Australia, that is, the urban middle class people are slowly shifting their likings to the consuming of healthier food, such as the organic food. Thus, the more the people have reduced consumption of oily, fried, spicy food, the more these FMCG companies have suffered (Wijesinghe 2018). Therefore, this has made Nestle shift towards producing much healthier food products.
Nestle has been severely criticized for promoting their infant milk formula to the Australian markets, which resulted in the children being deprived of the natural source of mother’s breast milk (Pearlson, Saunders and Galletta 2016). Due to this the International Code of marketing breast milk substitutes was violated and this has also hassled the company further with legal battles. Again, in recent times, due to unspecified and harmful product involvement in one of the instant food products for Nestle, the product went through another hassle of legal battle where for an amount of time the manufacturing of that product was halted and many products were destroyed, resulting in the monetary loss for the company.
The demographic picture for Nestle is a lot better than any other competition in the Australian market. It utilizes over a huge range of workforce, making almost 3, 00,000 workers work for the organization (Kamariotou and Kitsios 2018).
Supplier power here in the organization of Nestle is unspecified since, the organization is a manufacturing industry that manufactures the food products by itself (Laudon and Laudon 2016). Thus, supplier power is not that much recognized in the market of Australia.
Buyer Power forms a huge competency for the organization of Nestle, especially in Australia. In the Australian market, the buyer power depends solely on the interest of the customers to buy their product and for this purpose only the organization has been manufacturing many innovative food products with the change of the perception from time to time (Kim, Lee and Bradley 2016).
Since Nestle is a food manufacturing industry in Australia, the potential entrants to barge into as the competitors have to be the similar food manufacturing organization like the Ben and Jerry’s, Lipton, Bru, Brooke Bond, Knorr (Fernandes 2015). In the Australian market, these have been the potential competitors for Nestle.
FMCG is a 3 trillion AUD industry, with 11.2 AUD billion being the average size of the top 250 competitors, each with an average sale of 2.5 billion AUD. The food sector bears the maximum intensity of competition (Laurini 2014). Nestle fetches a huge chunk of its revenues from the European market, whereas the Australian market is ruled majorly by PepsiCo, Coca Cola, Mars and Tyson foods which are all in top 10 FMCG list (Galliers and Leidner 2014). However, globally, the top two competitors of Nestle in descending order are Unilever and PepsiCo up to 57 billion AUD.
Opportunities of the organization has been innumerable, but to name a few amongst them, it can be said that transforming the way through which food was seen as is one of the major opportunities of the company (Bryson 2018). It had made the preparation of food much simpler than before having sole focus of the middle class and upper class people in Australia.
Similarly, there are threats to the organization as well. Such as, the contaminated products that have been badly harming brand image for Nestle in Australia. Rise in cocoa beans prices, wheat prices, and political unrest harming business also form the threats for the organization for the Australian market (Kerzner and Kerzner 2017). Moreover, competitors cluttering up the Australian market with more products in the same segments as that of Nestle increases the threats.
Tangible resources for any organization means the resources that are perceptible easily through the naked eye, that is, they have physical existences. Whereas, the intangible resources or the ones without the physical existences mean the resources, which could not be visible to the naked eye but can somehow be perceptible. In the following section, the tangible and intangible resources in Australia for the organization of Nestle will be explained in details:
One of the huge tangible resources behind the organization of Nestle definitely has to be its huge capital base and human resources. All around the world, Nestle possesses over 29 research and development centers and most of them resides in Australia. The evaluated asset for the organization in Australia alone has been recorded worth 120 billion CHF. In fact, the company also has a strong financial backbone with a humongous resource that enables information technology to be associated with it for aligning its operations. Thus, information technology implementation is also one of the chief tangible resources for Nestle.
The intangible resources that Nestle has is not visible to the naked eye as it does not have physical existence. However, easily identified with the huge number of brands that Nestle puts forward for leading the Australian market according to respective segments, these different brands poses the biggest intangible resources for the organization of Nestle. Nestle has made brand image in front of the customers by providing quality products, which are value for money and highly nutritional. Tending the trust of the customers are also one of the intangible resources for the organization, which adds to the indomitable spirit for Nestle and it is reported to have been irreplaceable.
The capabilities of the organization of Nestle are indomitable. They are identified to be the ability of the organization to have a crystal clear understanding for the Australian consumer market that helps organization to create innovative and healthy products. In addition to that, Nestle possesses a capability that seemingly adds more nutritional food products with the help of state of the art research facilities to produce to the customers. Again, Nestle understands its brands and also because of this capability of the organization in the new markets of Australia are also strengthened. Nestle happens to attract the best resources of work force and also seemingly wins the trust of the customers through quality products. It is also been found that Nestle positions its product strategy clean the market to attract strategic alliances, market value, partnerships, joint ventures, tie-ups and others.
Nestle has always look forward to create a roadmap for the future that can facilitate the company with a very strong alignment itself in the organization in the Australian market. This enables a scope in the organization for soul searching which means that the organization can further create a better and clear idea of identifying its true destinations and in what ways these destinations must be gone through to achieve the desired target (Cassidy 2016). It is often seen that Nestle is much more capable of living up to their own potential and at the same time making the company’s reputation uplift to sky high and deliver the customers with their promised good food and life. The core competency of the organization in the Australian market is definitely its innovation and renovation, through which Nestle has strategically planned. While innovation make sure that new and path breaking products would be added to the portfolio of Nestle innovation signifies the fact that revamping of the existing products will enhance the quality of them.
At the same time, there is increased customer communication in the organization that is established in a two-way channel so that a customer feedback and product experience can be recorded and used for the development of new and innovative products in the Australian market. In addition to that, there is efficiency in the operational managing for the organization that eliminates wastage and makes sure that the work is enhanced to more amplified efficiency.
Taking record of the entire report based on the business organization and operational management of Nestle as a food product manufacturing organization in the Australian market, it can be said that adopting to the Information System Solution of emerging market and e-commerce is an intelligent strategy that can be applied to the organization given the latest technological change. This can be justified by the fact that E-Commerce has now become a rage with the customers. Many of them do not prefer visiting physical shops and buying the required items and it has been reported that they would rather by that item online if available. Therefore, it can be proposed that E-Commerce websites for Information System Solution or the match advanced ERP or enterprise resource planning should be implemented in the business system for Nestle in Australian zone.
The proposed system of implementing ERP solutions or enterprise resource solutions to the organization of Nestle for the Australian markets can be justified in this section. Enterprise resource planning is a one-stop solution for all the data and information management issues regarding operation and information management from both the customer and employee end. Thus, having and implementing ERP system in the organization would only add to the benefit of Nestle because it would help to keep the employee information and customer information all at the same time with the business operational management and product information working simultaneously.
It is a known factor that every business should make use of the technological advancement and implemented in the business process through thorough research. Therefore it can be easily summed up that ERP or enterprise resource system should be utilized as an information management system in the organization of Nestle for the Australian markets.
It is recommended for the organization that the organization realizes its shortcomings and try to improve. In addition to that, it needs to be identified that what are the suitable strategies to implement for the Australian markets in the Information System for ERP and start developing the project.
Conclusion
Therefore, in conclusion it can be said that the organization of Nestle has created a huge market base in Australia but there are few irresponsible features noted that makes an impact on the success of the organization. This has been put forward through a report that would elaborate the background of the business and the industry overview followed by the environmental analysis or what is commonly known as the PESTEL analysis. This described the economic, socio-cultural legal and political aspect behind the organization. For that the report presents a clear idea about the environment of the industry with supplier power, buyer power and the potential market entrance for Australia. Finally, the competitive environment of the company has been discuss followed by the opportunities and threats of the organization.
Next the internal analysis and proposal for implementing strategic information system in the organization has been described. This phase has the tangible and intangible resources for the organization and identified capabilities with respect to the core competency analysis of the organization. As a suitable solution for information system in Nestle, ERP system has been taken into consideration.
References
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement. John Wiley & Sons.
Carnevale, M., Loureiro, Y.K. and Kabadayi, S., 2018. Customer Value Creation for Risky Products: The Role of Brand Trust and Trusting Beliefs. Journal of Creating Value, p.2394964317752731.
Cassidy, A., 2016. A practical guide to information systems strategic planning. Auerbach Publications.
Drees, K., 2016. Nestle and Baby Bottle Disease.
Fernandes, S.J., 2015. A study on role and effectiveness of performance management in Nestle Dubai (Doctoral dissertation, Dublin Business School).
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
Kamariotou, M. and Kitsios, F., 2018. Strategic Information Systems Planning. In Encyclopedia of Information Science and Technology, Fourth Edition (pp. 912-922). IGI Global.
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Laurini, R., 2014. Information systems for urban planning: a hypermedia cooperative approach. CRC Press.
Pandey, M. and Puntambekar, G.L., 2016. Maggi Noodles Sales Trend: Before and After Controversy. International Journal of Multidisciplinary Approach & Studies, 3(3).
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Rezaeegiglo, R., Sadouni, A., Aref, F., Khotbesara, P. and Eslam, N., 2014. Review and Rating factors affecting the Deployment of (CRM) Customer Relationship Management at Nestle Company. International Journal of Academic Research in Business and Social Sciences, 4(1), p.539.
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