Merged Nestlé and Rowntree

Merged Nestlé and Rowntree.

The purpose of this memo is to summarize the most important points discussed in the negotiation between Nestlé and Rowntree, on those points that should be taken into account if the purchase is done in the best way possible, taking full advantage of the resources of both companies.

The points developing during the negotiation were the following:

1. Corporate governance and organizational structure

The most important issue to discuss in this point is how Nestlé is going to include Rowntree to its organization structure. On the other hand, the obstacle that Rowntree found is how they can fit into Nestlé plans.

So finally we agreed that, as Rowntree has large market share in coutline and box chocolate, we decided that they will take these operations. However, Nestlé will continue with block chocolate operations.

Due to this, Mr Dixon (Rowntree's CEO) will be the Vicepresident of countline and box chocolate operations, and he will work with another Nestlé's Vicepresident who will direct the other confectionary operations.

The following figure shows how the organization would be structured:

2. Marketing, sales, service, outbound logistics.

In this section, the main issues are related to the other departments. So as discussed above, to add Rowntree only the confectionery operations, the obstacle that we found is able to fit the different departments of Rowntree in Nestlé's department without the numbers will be affected.

The following points were discussed:

Marketing

The actions that will take place in the marketing department are as follows:

-Rowntree's marketing division absorbed by Nestle, but the strong Rowntree employees will be absorbed too.

-To enhance the quality of products and make that people knows that now Rowntree is from Nestlé, some of Rowntree's item will be adding Nestle's brand name, or viceversa.

Sales

In the sales department, as Nestlé has strong presence in USA, more Rowntree's products will be introduced in this market. Otherwise, Nestlé will maintain the Rowntree's success in UK keeping the price too. This action will increase the presence and the market share of Rowntree in US.

Service

In the area of services, we will incorporate existing methods of both organization and we will include Rowntree's products in grocery where Nestlé has the largest presence, to try to increase sales in this sector.

Outbound logistics

About Outbound logistics, downsize the number of Nestlé's factories in favor of Rowntree, to maintain quality of its products. Also invest money in upgrading good productivity. Moreover, it will be used Nestlé's distribution channels.

3. Operations, procurement, inbound logistics, quality control

This section will discuss the important points that are related to the realization of different products and their distribution. That is, the obstacles we encountered are the different ways that each company has to conduct its activities.

Operations

As discussed above, Rowntree keeps practices in operations related with countline and box chocolate products. Besides, block chocolate and other confectionary products, all else, fall under Nestle's operation strategy.

Furthermore, most factories will stay but we will keep the more efficient one.

Inbound logistics.

Regarding the distribution channel we will keep all in place moving Nestlé's