Nestlé SA: Nescafé Plan in China
AWARD WINNING CASE - This case was one of the winners of the 2016 John Molson MBA Case Writing Competition. In 2013, Nestlé SA, in an effort to integrate sustainability into its business model, has recently established the NESCAFÉ Plan. This multi-faceted plan is based on creating shared value. It emphasizes sustainability as a source of competitive advantage and wealth creation, rather than viewing sustainability as a cost to be incurred to minimize risks and protect the company’s reputation. Nestlé’s creating shared value manager in the Beverages strategic business unit faces two core dilemmas in executing this plan in China. In the short term, should Nestlé purchase green coffee beans that are socially or environmentally certified (e.g., Fairtrade), or should it instead expand its efforts to work directly with farmers to develop better farming practices? Longer term, would a backward integration into coffee farming provide a better means of ensuring that sustainability is embedded in the business model?
Collection: Ivey Business School (Canada)
Ref: IVEY-9B15D013-E
Format: PDF
Number of pages: 18
Publication Date: Jan 21, 2016
Language: English
Review date: Sep 29, 2015
What material is included in this case:
Description
AWARD WINNING CASE - This case was one of the winners of the 2016 John Molson MBA Case Writing Competition. In 2013, Nestlé SA, in an effort to integrate sustainability into its business model, has recently established the NESCAFÉ Plan. This multi-faceted plan is based on creating shared value. It emphasizes sustainability as a source of competitive advantage and wealth creation, rather than viewing sustainability as a cost to be incurred to minimize risks and protect the company’s reputation. Nestlé’s creating shared value manager in the Beverages strategic business unit faces two core dilemmas in executing this plan in China. In the short term, should Nestlé purchase green coffee beans that are socially or environmentally certified (e.g., Fairtrade), or should it instead expand its efforts to work directly with farmers to develop better farming practices? Longer term, would a backward integration into coffee farming provide a better means of ensuring that sustainability is embedded in the business model?
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Year: 2013
Geographic Setting: China
Industry Setting: Agriculture, Forestry, Fishing and Hunting;
Learning Objective
This case encourages undergraduate, graduate and executive education students to address issues related to developing an extended supply chain in which value is shared among supply chain partners. Depending on the specific course, the instructor can choose to focus on one or more of the following teaching objectives: ·To examine how firms can define and operationalize shared value. ·To evaluate how value can be shared among growers, other supply chain partners and customers by using such options as vertical integration, guaranteed price support and supplier development. ·To explore the strengths and weaknesses of an evolving business model that promises much potential for more sustainable outcomes as part of a long-term global strategy.
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