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Creating shared value in the supply chain

Nestle case study

1- Describe what is meant by supply chain.

Group of integrated entities that work together in order to flowing
of goods and services (starting with supplier raw materials) to the
customer in the time with the least cost and high quality, as well as
flow of information for achieving revenue.

2- Explain the differences between the primary and the

secondary industries.
Primary industry Secondary industry
Definitions Extracting and delivering the Creating and supplying end
raw materials to the products and services to the
manufacturer customer from the outputs of
the primary industries(i.e.
construction and
manufacturing activities)
Examples e.g. farmers introduce cocoa e.g. Nestle converts cocoa to
chocolate bars KIT KAT

3- Using the examples from the case study, analyze e how

Nestle creating shared value contributes to its corporate
social responsibility activities.
- Corporate social responsibilities (CSR) is looking for abroad view
beyond the profits for all stakeholders.
- Nestle has a series of corporate business principles designed to
guide the way in which the organization and its employees
operate, these principles are the core of the corporate culture
and aim to protect the trust of consumer and other
stakeholders.
- The principles and their associated policies are concerned with
activities related to: Consumers, Human rights and labor
practices, Employees, Suppliers and customers and the
environment (i.e. long term relationship with stakeholders).
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- This long term relationship with stakeholders helps farmers to
run profitable farms and eliminate child labor, while developing
sustainable supply of high quality cocoa
(I.e. compliance, sustainability and profitability)
(I.e. creating great impact on water, nutrition and rural
development).
- The shared value became an integral part of NESTLE business
- NESTLE corporate business principles incorporate the 10 united
nation global compact principles of Human Rights, labor,
environment and corruption.
- NESTLE invested greatly in training of cocoa farmers and plant
researches (increase the quality and quantity and so increase
farmer income), improving of their social level by building
attractive schools (decreasing child labor).
- NESTLE also has partnership with organizations and
governments which support good agriculture practice (benefits
for all).
4- Evaluate how the values of an organization can be used
to benefit the different groups of stakeholders.
- Through creating shared value complied with international laws
and codes of contact, the company’s business principles and
focus on environmental sustainability and go beyond profits ,
the company should aim to create anew and a greater value for
society and shareholders in areas where the company has a
great impact on water, nutrition and environment.
- When The principles of the company and their associated
policies are concerned with activities related to: Consumers,
Human rights and labor practices, Employees, Suppliers and
customers and the environment (i.e. long term relationship with
stakeholders).
- This long term relationship with stakeholders helps as in our
case study farmers to run profitable farms and eliminate child
labor, while developing sustainable supply of high quality cocoa
(I.e. compliance, sustainability and profitability)
(I.e. creating great impact on water, nutrition and rural
development).
- We can measure the success of sharing the value through:
A. Measuring the Satisfaction rate of the labor.
B. Rural development ( building schools , sustainability of
resources)
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C. Increasing the quality and quantity of the production of
raw materials and so increase the income to the suppliers.
D. Measuring the Number of retained labor/year.
E. Measuring the Number of new employee attracted to the
company.
F. Decreasing child labor.
G. Increasing the trust and the profit of the company.

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