NESTLÉ INDONESIA: CREATING SHARED VALUES

Nestlé had been operating in Indonesia since 1971 and currently had three factories across the country.  The ones in Kejayan and Pasuruan (East Java) produced Nestlé’s dairy products; the other in Panjang, Lampung (South Sumatra) produced coffee products; and the one in Cikupa (Banten) made confectionery products.

The Swiss-based private company placed the principle of Creating Shared Values (CSV) highly.  It believed that creating values for both the shareholders and society had to be placed on an equal footing in Indonesia.  Its mission in Indonesia was: Nurturing a Healthier Life for Indonesians.

 Nestlé believed that a strong and healthy future generation was very important for Indonesia, and therefore, it was equally important to ensure the availability of healthy and nutritious products for Indonesia’s next generation.

Along with the company’s business growth, Nestlé Indonesia had shown its commitment to uphold the CSV as part of its business strategy.  In 2010, approximately 72 percent of their products sold met the Nestlé Nutritional Foundation status – a strict measure to ensure that Nestlé products contributed to the nutritional needs of the consumers; about 660,000 liters of fresh milk were supplied from dairy farmers in East Java, as well as 10,320 tons of coffee beans from farmers in Lampung.  By the end of the year, more than 1,250 biogas units were installed in every house of Nestlé’s cattle raisers.

Issues that can be brought up from the case for class discussion would revolve around the value chain strategy developed by Nestlé using Michael Porter and Mark Kramer framework (2002, 2011)