Speech by Me.
Chief Executive Officer
Key Markets Conference and Market Managers Conference
14-17 May 2000
This document is Peter Brabecks speech
on innovation and renovation regarding the new economy and how our
business must shape the forces created by arising opportunities in
order to maintain its competitive advantage and financial situation
in the future. A summary of some of the ideas in this important document
is displayed below to give the reader a glimpse of what contains therein.
Since the speed of transformation and the impact of the new economy
have been faster and more influential on Nestlés business
than foreseen, it has created accelerating discontinuities,ranging
Changes in consumer behavior, for instance, variations on the public
perception of food.
Distribution discontinuities, such as the increasing pressure to globalize
and centralize while physical retailing is trying to grow by adding
And changes that electronic commerce has made in shopping behavior
and distribution and consequently demanding new marketing skills where
knowledge is seen as "todays primary resource of economic
Mr. Brabeck emphasizes on how these accelerating discontinuities
in all aspects of our business provoke an increased level of ambiguity.
This is why Nestlé needs new and innovative thinking
to succeed in the changing business environment. Success
depends on clear long term goals, objectives, and strategies to achieve
them, supported by shared values and leadership principles.
Fortunatley, the new market environment
also represents a few certainties such as growth: annual food market
growth for the next decade is excepted to be approximately 2.5%
per year, therefore in the next decade all parts of the globe should
offer excellent growth opportunities. Another, and perhaps more
important, certainty is that Nestlé has proven to be a very
efficient operator through programs such as the "continuous
improvement programme" which has already saved millions of
dollars in less utilization of raw materials, packaging and labour
through application of new technologies, productive initiatives
to exploit better current technologies and better satisfaction of
customer and consumer requirements.
Finally, Brabeck addresses the success of future business through
the application of four pillar strategies, each of which explains
with clear examples:
Low cost, highly efficient operations
Our strength is our brands
Whenever, wherever and however
He concludes his speech encouraging leaders to have speed
of action, creative thinking and constant questioning in order
to survive, win and create the future in the rapidly changing economic
environment we face today.