Integration Company Practice And Context: Nestlé's
Milk District
how Nestle achieved competitive advantage
while also driving positive social progress
Cont:
• works with small farmers (neither own land nor big businesses)
• helps both nestle and farmers
Nestle
1. ingredients
2. secure and sustainable supply chain for their products
Famrers: (limited resources and small scale operations)
1. trainings
2. Access to markets
3. fair pricing
How Nestle has a positive image even after
criticism?
• invested in programs to enhance agricultural practices,
• support local communities,
• promote responsible sourcing of raw materials.
History of Nestle Milk in India:
• in 1962 started milk business
• build dairy in Moga
• region was lacking basic facilities like: electricity, transportation,
phones, or medical care.
• small plots of land, less than five acres. (not fertile)
• one buffalo cow
• death of calves
Action of Nestle after examining this lacking?
• Nestlé set up special places to collect milk in each town with
refrigerators to keep it fresh.
• sent trucks to pick up the milk
• brought along experts like veterinarians and nutritionists.
• provided medicine
• training to help sick animals
• how to improve their cows' diet (milk quality)
Now farmers could afford to dig deep wells
for irrigation, which not only helped their
cows but also increased their crop harvests,
making life better for them.
Change in Moga:
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earlier 180 farmers supplied milk
now getting from 75000+ farmeers in Moga
decreased death rate by 75%
higher pay than govt decided
competing daries and milk factories have opened.
Now Moga has higher standards of living than other regions:
• 90% homes with electricity and telephones
• primary and secondary schools
• number of doctors increased
Nestle's successful model:
• Collection points,
• providing training,
• introducing advanced technology.
Strategy replicated such as Brazil, Thailand, and China, benefiting both
Nestlé and local communities.
Why CSR is difficult to find here?
• where the business ends and the social good begins.
• example: working with farmers to get ingredients
• social benefits such as improved healthcare, education, and economic
development. ( positive social impact)
By investing in local infrastructure and sharing knowledge and
technology, Nestlé not only ensures it has what it needs to make
money but also helps improve healthcare, education, and the economy
in those places
Organizing CSR:
• Good Intentions and Leadership (help society)
• Changes Needed
• Paying attention to social Issues
• Making Social Responsibility a Core Part of Business
• Changing Approach
This means they need to move away from just trying to have a
good image and focus on making real changes that matter.
Importance of decision making
in CSR
1. Strategic Decision Making:
• which social issues to address.
2. Short-term Pressures vs. Long-term Investment:
• it can be challenging for company.
• while long term investments get their future competitiveness. (sustained growth and
success)
3. Creating Shared Value:
• not only benefit society but also enhance the company's competitive positioning.
• can align their social impact efforts with their business goals. (benefits for both
stakeholders and the organization)