The paper “ Theory and Experience regarding Nestle Corporation’ s Communication with Suppliers for a Sustainable Development of International Operations” is a worthy variant of case study on marketing. Buyer-supplier relationships are important to any multi-national that is expanding into a new country. A strong mutual relationship between a supplier and a multinational company can enable a company to realize competitive advantage (Arino 2003, pp. 67). Additionally, a product harm crisis can harm the reputation and consequently the performance of multinational companies in all its markets. A strong buyer-supplier relationship is one of the methods that companies can use to make sure it avoids or recovers from the product harm crisis. The purpose of this report is to identify a suitable model for a multinational corporation to build a relationship with suppliers to realize a competitive advantage and prevent a possible occurrence of a marketing crisis. Scope of the StudyThis report deals with how companies manage their global relationships and marketing crisis using the case studies of two Multinational companies: Nestle Corporation and Mattel.
The report will propose a model that Nestle can use to develop a long-term buyer-supplier relationship with Warrnambool Cheese and Butter Factory Company Holdings Ltd.
It will also identify the effects of product harm crisis on the marketing activities global company in this case Mattel. It also identifies steps Mattel can take to deal with the crisis from a corporate social responsibility perspective. Limitations of the Report: The study will rely on secondary data that has been collected by other authors. Developing a relationship with a supplierNestle corporation expansion into the Australian market will be affected by a number of factors. Nestle corporation's relationship with its suppliers will play a large role in its success on the Australian continent.
Nestle plans to market the Nestle boost in Australia will be affected by the bargaining power of the suppliers of the raw materials used to manufacture the nutritious chocolate drink (Borys and David 1989, pp. 235). One of the raw materials that nestle needs to source from suppliers is raw milk. Nestle will have to find an Australian supplier who can source and deliver the milk to its manufacturing unit, one such company that operates in Australia is the Warrnambool Cheese and Butter Factory Company Holdings Ltd (WCB). Warrnambool Cheese and Butter Factory Company Holdings Ltd (WCB) is a publically listed company that deals with a collection of milk from farmers, processing, and manufacture of milk products.
Additionally, WCB supplies bulk milk for industries mainly in Western Australia. Nestle has limited knowledge of the Australian dairy industry when it comes to the collection, logistics and even legal regulations (Agarwal and Ramaswami 1992, pp1-27). A supplier-Buyer relationship between WCB and Nestle Corporation limited will be highly beneficial to Nestle as it seeks to successfully market Nestle Boost in the Australian market. Nestle's rationale for pursuing the supplier relationship is best explained by porter’ s five forces model that calls for firms to limit the bargaining power of suppliers in order to realize competitive advantage (Harrington 1997, pp 52).
By sourcing, the milk component of Nestle Boost Nestle is able to shield itself from the power of suppliers when demand for milk is high. A second rationale for the relationship with WCB would be the capacity it would give Nestle to concentrate on its core business rather than involve a logistics headache of sourcing the milk component of Nestle boost.