Nestle Purina Petcare Company
Assessing Strategy
“The most successful organizations are continually reviewing their strategic
and operational processes to ensure they stay top of their field” (Newton, 2021, p. 3).
Business success and longevity is achieved through well-crafted, well-executed, and constantly evolving strategy (Thompson, 2020, p. 3). Strategy is defined as the organized actions planned by leadership throughout the business for the company to be highly profitable and outperform their competition (Thompson, 2020, p. 4).
Nestle Purina PetCare Company (NPPC) is the market leader in pet food in the US and “promotes responsible pet care, community involvement, and the positive bond between people and their pets” (NIST, 2019, p. 5). Through a thorough process of analysis, development, deployment-integration, and performance management the company plans a 1, 3, and 5-year strategy centered on their six core competencies (NIST, 2019).
Company History & Advantages
“Strategy is about competing differently from rivals—doing what competitors don’t do or, even better, doing what they can’t do!” (Thompson, 2020, p. 4)
Market Leader
Purina is the #1 U.S. pet care company in sales, volume, and market share (NIST, 2019).
- Most recognizable pet food brand with it’s checkerboard trademark
- Focused on developing high- quality products through innovation
- Best Nutrition and Science
- Distribution and Logistics
Customer Focus
We have curated a well-rounded approach to consumer satisfaction through product development and innovation as well as educational resources for consumers to utilize in caring for their pets with online apps and sites.
Our Background
The company is headquartered in St. Louis, MO was founded in 1894 giving us approximately 127 years in the industry (NIST, 2019). Purina brand become part of Nestle in 2001 (NIST, 2019). Nestle Purina PetCare Company received the Baldridge Award in 2010 when we operated with 24 manufacturing facilities, 16 regional sales offices, employed approximately 7,000 people, and reported global sales of $12.5 billion (NIST, 2019). This is a trusted pet care company as well as being listed as a top- rated place of employment with lower-than-average turnover (NIST, 2019).
Operational Leverage
Today we are composed of seven operating companies, we have 68 manufacturing facilities, and employ more than 36,000 people (Nestle, 2021). Part of competing differently is being able to do what your competitors cannot do (Thompson, 2020, p.4) Our company size matters in being able to offer more investments in innovation as well as create efficiencies that add value to everyday operations. We are also able to leverage our size in better partnerships with suppliers and retailers in addition to leading the industry towards high-quality pet care products.
The Voice of the Customer
Crafting a strategy is a continual work in progress, not a one-time event (Thompson, 2020, p. 9). Market conditions, disruptive innovation, and customer needs change over time and the company must evaluate and evolve their strategy through proactive initiatives with some reactive responses (Thompson, 2020, p. 9). Strategies must have a clear statement of the value created for the customers (Kunc, 2019). A key in creating strategy clarity is continual research to understand consumer needs and trends as they change rapidly to ensure our products are meeting the consumer requirements and priorities (NIST, 2019).
Business Model
“A company’s business model sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit” (Thompson, 2020, p. 11). NPPC’s strategic plan is called “Blueprint for Success” and has 5 focus areas that stay consistent from year to year (NIST, 2019). Those areas are consumer communication, renovation and innovation, product availability, low-cost/highly efficient operations, and people (NIST, 2019). Each of these pillars align to the consumer value proposition and/or the profitability of the company. The goals and objectives for each department and team are then aligned to this blueprint to keep the total company moving together.
A Winning Strategy
A winning strategy must be a good fit, offer a competitive advantage, and are contributing to above-average performance or performance improvements (Thompson, 2020, p.14). Fit is understanding the industry and where it falls within its life cycle (introduction, growth, maturity, decline) to define the competitive forces in the industry (Kunc, 2019). For NPPC, this means aligning to the market and industry conditions, while continuing to lead the industry in quality and consumer satisfaction and maintaining their #1 position in market share.
Guiding Principles
Mission & Vision Statement
We stand for trust. We earn it every day as we enrich the lives of pets and the people who love them. We earn it with our integrity, our passion, our expertise, and our relentless dedication to performance as we move toward the future of Nestlé Purina Pet Care – the day when a Checkerboard is in every involved pet owner’s home (NIST, 2019).
The Founder’s 4 Talls and one more
Stand Tall, Think Tall, Smile Tall, and Live Tall We create tall with innovation.
Core Competencies
Unparalleled Knowledge of customers
Unmatched expertise in nutrition
Comprehensive range of high-quality brands
Highly efficient manufacturing and distribution Innovation driving product development
Managing risk to achieve sustainable growth/profitability (NIST, 2019)
When you read the combined statement, you can tell the first part is meant to be the mission. It is NPPC’s “who we are” and “what we do”. The core values that drive the company forward each day is our passion, our pledge, and our promise. The last part of the statement is the vision, the future. To have a checkerboard in every involved pet owner’s home. We are telling our customers and partners who we want to serve and to serve them we must follow the mission and build trust. To execute the mission and vision, our core competencies must align to the core values and be centered on the customer. The “5 Talls” are integrated in the company success and strengths through the “Blueprint for Success” (NIST, 2019).
Operational Success
Objectives
The organizations performance targets need to be specific, measurable, time-limited, challenging, and achievable (Thompson, 2019, p. 30). The key is to create balance in setting strategic, financial, and stretch objectives that improves the company’s performance without jeopardizing long-term health (Thompson, 2019, p. 31). NPPC does this in their strategic blueprint process by including multiple departments (sales, HR, product development, supply, manufacturing) in the evaluating the current capabilities/needs to create the 1, 3, and 5 year objectives (NIST,2019). Each area has a say and is measured against the same objectives aligning the company to the strategic blueprint.
Strategic Initiatives
The corporate strategy is developed by the CEO and other senior executives through the “Blueprint for Success” and then is cascaded through the hierarchy for each department to ensure the functional area strategies and the operating strategies are supporting the corporate strategy. Each manager in the company has responsibility for the area they lead and collaboration across the departments at all levels of management is essential to align the initiatives both horizontally within the levels but also vertically to keep the company as a whole moving toward the same goal (Thompson, 2019, p. 35). “Purina has a comprehensive performance management system deployed to all levels that includes setting expectations and goals, defining expected behaviors and action plans, and making clear links to performance” (NIST, 2019).
Operating Excellence
There are several key parts to creating operational excellence in a company. Having a structured strategy, achievable objectives, and aligning the company as a whole is just the start. The elements that aid in driving performance and change in the company are the employees and ensuring the resources, policies, procedures are in place for effective execution and strategic success (Thompson, 2019, p. 39). The culture makes a difference. NPPC has established a reputation for our exceptional work environment and lower than average turnover meaning that we retain company expertise (NIST, 2019). NPPC has also established an award and recognition system that aligns directly to the pillars within the “Blueprint for Success” (NIST, 2019).
Company Governance
Corporate governance is accountability, it is the duty of the board of directors to oversee the strategy process, guide the business decisions, evaluate the executive leadership performance, and institute an appropriate compensation plan for executive leadership (Thompson, 2019, p. 41). NPPC has a Corporate Compliance Committee that fills this role and abides by Nestle’s management and business principles (NIST, 2019). This committee is actively involved in scheduled, regular audits and has a cadence for reporting to the key stakeholders through reports, newsletters, and meetings (NIST, 2019).
References
Kunc, M. (2019). Strategic analytics integrating management science and strategy. Hoboken, NJ: Wiley.
NIST. Baldridge Performance Excellence Program. (2019, November 16). Nestlé Purina PetCare Company. Retrieved February 27, 2021, from https://www.nist.gov/system/files/documents/2017/10/11/2010_Nestle_Award_Applicati on_Summary.pdf
National Institute of Standards and Technology (2020). Baldrige Performance Excellence Program. Baldridge Award Recipients Listing. Retrieved from https://www.nist.gov/baldrige/award-recipients
Nestle. (n.d.). Nestlé About Us. Retrieved February 27, 2021, from https://www.nestleusa.com/about-us
Newton, P. (2021.). 5 essential business Strategy tools, Free Management EBOOKS. Retrieved from: https://myeducationmanager.tradepub.com/free/w_frec65/
Purina. (n.d.). Purina About Us. Retrieved February 27, 2021, from https://www.purina.com/about-purina
Thompson, A. A., Peteraf, M. A., Gamble, J., & Strickland, A. J. (2020). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases. New York, NY: McGraw-Hill Education.
