INTRODUCTION“Nestlé” is a Swiss-German word which means “LittleNest” which is its trademarkNestlé is the worlds’ number one food company5th largest company of the world according to its turnover2 million 31 thousand people employed from all overthe worldPresent in 81 countries of the globe having 522factoriesOver 700 products renovated or innovated in the pastfive years, with wellness in mind
HISTORYHenri Nestlé establishedNestlé in 1867 inSwitzerland (Vevey HQ)His first product waslactogen formula forinfants by the name“Farine Lacteé”
KEY DATES 1866 COMPANY FOUNDATIONMajor joint ventures 1981 Galderma1905 Merger between Nestlé and Anglo-Swiss Condensed MilkCompany1929 Merger with Peter, Cailler, Kohler Chocolates Suisses S.A.1947 Merger with Alimentana S.A. (Maggi)1969 Vittel (equity interest)1971 Merger with Ursina-Franck1974 LOreal (equity interest)1977 Acquisition of Alcon (2002: partial IPO)
1985 Acquisition of Carnation1988 Acquisition of Buitoni-Perugina1988 Acquisition of Rowntree1990 Cereal Partners Worldwide1991 Beverage Partners Worldwide (formerly CCNR)1992 Acquisition of Perrier1998 Acquisitions of San Pellegrino and Spillers Petfoods
2000 Acquisition of Power Bar2001 Acquisition of Ralston Purina2002 Acquisition of Schöller and Chef America2002 Dairy Partners Americas and Laboratoriesinnéov2003 Acquisition of Mövenpick, Powwow andDreyers2004 Acquisition of Valio (ice cream activities)2005 Acquisition of Wagner, Protéika, Musashi
BUSINESS DEFINITION AND SCOPE
MISSION STATEMENT"Nestlé is the largest food company in the world. But, more important to them is to be the worlds leading food company”.
PRODUCT DEFINITIONNestle, a multinational company has acquired& merged with various companies.Factors behind its success are multifarious,quality, improved technology, innovationwhich have created brand loyalty amongst itscustomers.SBU’s like Pharmacy, Breakfast Cereals andCosmetics, Ice cream, Frozen Foods, Sauces.
BRANDSQuality and nutritional value are the essentialingredients in all of its brands.Millions of people prefer Nestlé productsevery day, happy with the addition to theirwellness that they bring.Today Nestlé is present in different marketswith the following main brands:-
CUSTOMERSEvery person, of any age group,gender etc is the target customer ofNestleNestle target its customers by knowingcustomer needs & demands. For thispurpose it made customer profile.Customer profile based on two
Qualitative research:- This involves setting up small focus groups of consumers who express their ideas and opinions about their needs and views on different products. At one level, this might involve asking groups of athletes to talk about their lifestyles, dietary habits and training regimes. At another level, it could involve a consumer focus group discussing the quality of the nutritional labeling on a yogurt drink.
Quantitative research:- This involves only relatively few people like professional market researchers may interview thousands of people through postal or telephone interviewing. Nestlé regularly uses both forms of research to gain a clear idea of consumer opinions and trends. Using these customer profile techniques, Nestle developed its different product strategies to target the customers.
COUNTRIESBangladesh PakistanChina PhilippinesHong Kong Republic of KoreaIndia Saudi ArabiaIndonesia SingaporeIran Sri LankaIsrael SyriaJapan TaiwanJordan ThailandKazakhstan United Arab EmiratesKuwait UzbekistanLebanon VietnamMalaysia
• Nestlé Waters is number one in Vietnam with its La Vie brand.• Annual consumption per person varies in Asia, from 1.2 L in Pakistan to 47 L in Thailand.
INTRODUCTIONNestlé MilkPak Limited (NML) wasincorporated in Pakistan under the CompaniesOrdinance, 1984 & listed on Karachi andLahore stock exchanges since 1980.Joint venture between Nestle Switzerland andMilkPak Limited came about in 1988.Nestlé Pure Life was launched in Pakistan in1998
SEGMENTATION Segmentation of world in three zones US Asia Oceania & Africa Nestle has divided the whole Pakistan in to three zones: Northern Zone Central Zone Southern Zone
REGIONAL SALES OFFICESNestle has 10 Regional Sales Offices in all over the Pakistan.: Karachi F - 77/1, Block 7,Clifton, KDA Scheme 5,Karachi, Sind, Pakistan Phone: (021) 5833935-6 Fax: (021) 5833937 Hyderabad 178, Block C, Unit 2Latifabad, Hyderabad, Sind, Pakistan Phone: (0221) 860403Fax: (0221) 863202 Sukkur F - 33/5 - CWorkshop RoadSukkur, Sind, Pakistan.Phone: (071) 615946Fax: (071) 615946 Lahore 29-B, Main Gulberg,Lahore, Punjab, PakistanPhone: (042) 5754335-6, 5761484Fax: (042) 515061
HIERARCHY REGIONAL MANAGER (1) SALES AREA SALESADMINISTRATION MANAGERS (3) EXECUTIVE (1) TERRITORY INCHARGES (10) SALES DISTRIBUTION STAFF
CEO MANAGEMENT DIECTORFINANCE MANAGER MARKETING MANAGER PRODUCTION MANAGER NATIONAL SALES MAANGERZONAL SALES MANAGER ZONAL SALESMANAGER ZONAL SALES MANEGER NORTH CENTER SOUTH SALES DEPT A/C DEPT SALES PROMOTION DEPT REGONAL SALES MAANGER SALES DEPT A/C DEPT AREA SLAES SUPERVISOR SALES FORCE
Nestlé has very strong flexible liberalstructure with tight internal control with strictcheck & balances.Zonal and regional managers are told budgetlimitations & targets guidelines from Vevy(HQ)
SWOT ANALYSISSTRENGHTS: Value added products Brand name Six brands having 70% group sales R&D department Unique features and technologies 40 & 60% test result criteria
Weakness: Less consumer research in few areas.Opportunity: Market expansion by using bio- technology.Threats: Baby milk action New and indirect competitors Product acceptance
COMMITMENTThe continuous progress and leadership is madepossible through the collective commitment of the tensof thousands of individual Nestlé employees who, on adaily basis, work to make this a better planet on whichto live.
RECRUITMENTEach year, number of top young graduates arerecruited. All have strong academicqualifications, essential language skills &relevant internships or professionalexperience.
RECRUITMENT CRITERIA Graduates with a degree in Business Administration or Economics with professional experience. High degree of adaptability and mobility. Unquenchable thirst for knowledge. Superb communication skills. The ability to assume control anywhere in theworld.
TRAINING OF EMPLOYEES New employees are prepared to gainexperience in sales and marketing-relatedactivities & other areas of the business. Activities include:- Production, Supply chain & information systems, Finance & control, Purchasing, Communication & Market Research.
MOTIVATION Employees get Motivation by:- Immediate job satisfaction Long-term career development Superior pay and benefits The personal growth that comes from experience and training Materialistic as well as internal motivation
REWARDS & BENEFITSHealth screening/on-site occupational health facilitiesSick pay25 days holidayMobile phone on a business need basisCompany bonus schemeContributory final salary pension schemeChildcare vouchers (dependant on salary)Gym facilities at larger sitesStaff shop at most sitesFlex time at some sites
LEADERSHIP PRINCIPLES Their motto is: "Teamwork with responsible leadership". Nestlé is people & product oriented. Value for its stake holder but would not favorshort term profit at expense of long term businessdevelopment. As decentralized as possible. Concept of Continuous improvement of activities.
Nestlé FAVORS Flat organization structure Clear level of responsibility Function responsibilities Team with its leader
GENERAL INFORMATIONName of the agency: Regional Sales Office,Satellite Town, Gujranwala.Postal address: Plot No: 144-A, First Floor,Satellite Town Market, Gujranwala, Pakistan.Postal code and City: 52250.Country: Pakistan.Phone: 92-055-3733415, 92-055-3733243
Fax: 92-055-3733379E-mail: email@example.comWWW-address: www.Nestle.comContact person: Mr. Ikram ElahiFunction contact person: Sales Administration ExecutiveFounding date: April 1997
SECURITY AND ENVIRONMENTAL MANAGEMENT Different actions like emergency exit signs, training sessions on safety are taken by the SEM committee. SEM training records are updated on monthly basis. It’s the duty of reporting safety officer in every region/area. Department is established for safety policies according to job description and according to the sensitivity of area.
Goal of safety department is “No Accident” and allthe equipments and tools are working according tothe safety measures.Department ensures that required medicalsurveillance, monitoring, removal, and reportingresponsibilities for applicable exposure standards areassigned and carried out.Security and security procedures in everydepartment is very strict. All the employees have towork under specific security rules.Budget is given to SEM committee by the headoffice.
Human Resource Security Management AuditAll the employees and contractors are wellinformed about their responsibilities andcompany’s rules and regulations before they arehired.All third-party users are fully aware and are toldtheir limits i.e. up to that extent they are eligibleand allowed to use the facilities.All the employees are assigned to perform dutiesand responsibilities that they can perform.
Third party users are provided those facilities whichthey actually deserve.Job description is provided clearly to understand theresponsibilities in a proper way and to perform up torequired standards.All the employees have to face interviews that totallyreflect each and everything regarding their personalityand character.Prospective employees and contractors are asked tosign agreements that specify what their security rolesand responsibilities are.
Third party users are asked to sign the agreementsabout their duties and responsibilities as a proof tomake sure that they are fulfilling their promise/duties.Organizations security role and responsibilities areaccording to information security policies in order toavoid any violation.Implementation of security policies is according tosecurity requirements.Security roles and responsibilities are documented forthe guidance of organizations new associates.
All personnel implement our organization’sinformation security policy as they are given in-depthinformation about our security policies.Security policies are developed as there is no risk toface for any sort of un-authorized destruction.Security events must be reported to the organization inorder to achieve protection and establish securitypolicies according to requirements.
Security roles are not communicated to jobapplicants during the pre-employment processand neither to non-staff members.Job description is linked with security policiesso they are documented and communicatedproperly.
ORGANIZATIONAL STRUCTURE Organizational chart clearly indicates the, responsibilities, authorities and accountability for each function. Employees in the organization has clearly written job description according to the designation. When delegations occurs, agreement is written with the mutual understanding.
HUMAN RESOURCE MANAGEMENTEvaluation of the employee is done quarterly in a year.Wages, salaries and fringe benefits increases with theworking duration of employees in the organization.Training programs are offered primarily and frequentlyto improve the skills of employees.Company’s policies and procedures are displayed as achart in every office of Nestle and they are alsoaccessible at net
BUDGETING AND EXPENSE CONTROLLimited budget is given annually to everyoffice of Nestle’.If extra budget is required then that particularoffice put forward the request to the CEO ofhead office and CEO approves the budgetaccording to the need and situation.Amount and rate of expenditures are madeaccording to the budget given.
TAXES AND LEGAL OBLIGATIONSTax, finance and accounting department isresponsible for all tax reports and payments.Company has its own multiple distributionchannels which enables company to supply anycritical items.Before any purchases, comparison marketstatement is made and according to the prices inthat statement purchases are made.
MARKETING AND SALES PROMOTIONNestle knows the specific segment ofthe market, its business is attemptingto serve.It determines the sales of its productsagainst those of its competitors withthe help of research.
LOCATION Nestle always make sure that all ofits operations are convenient andeasily accessible to its target market.Product handling is responsibility ofcompany.
PRICING All the prices are totally based on quality,services and organization makes sure thatprices should be affordable by all thecustomers.
[A] Segregation of Duties IC Questions: Head office payroll department controls paychecks. Checks are transferred to the banks in respective accounts of the employees.[B] General internal Controls: Accounting system is handled by accounts department. Finance department approves/reviews bank reconciliations, monthly financials/P&Ls & reviews monthly budgets to actual monthly expenditures.
Personals of finance department has apassword to access the financial system.Finance department of Head Office hascustody of blank checks.Sales operation department of each regionreviews monthly/year end accruals.
There are 15 working leaves and 22 official leaves given to employees in a year. Every person is responsible for reviewing policies and procedures for compliance with Commission rules.[C] Control Over Expenditures: Purchase requests are made by concerned purchase department by the head of regional office and then put forward to the head office for approval. Venders entered into the accounting system on contractual basis.
Purchase requests matched to invoices when paid & time sheets approved by supervisors. Human Resource department of head office approves the executive directors bonuses. Payroll department of head office has custody of unclaimed payroll checks.[D] Control Environment Controls: Environment committee of the factories regularly manages routine environment issues and review with the factory management their past performance and future objectives
Termination, detention etc. are the disciplinary actions taken against employees which depends on the sever-ness of violation and handled by legal department. Strict confidentiality of the names of employees. Gain it depends upon the sever-ness of situation.]E] Commitment to Competence: Detailed job description is given and it’s revised time after time.
[F] Board Direction: Annual General Meeting is held every year other then that it depends on the situation.[G] Assignment of Authority and Responsibility: Employees are evaluated according to the company policies.[H] Risk Assessment Controls: Policies and procedures address the safeguarding of assets as company is very strict about the safeguarding of assets
[I] Communication Controls: Polices & procedures made available to staff and revised time to time. Budget requirements, expenditures etc. reports are provided to management & board in annual meeting or when asked by the head office. There is a process in place for communicating changes in accounting methods, regulations, and rules. Policies describe the process for communicating changes in accounting methods and rules to staff.
There are established internal and externalcommunication channels. Employees are free to communicate toany authority. There is no particularestablished channel. Authorities are boundto listen to the employees.
[J] Monitoring: Management periodically reviews the accounting processes to recommend changes needed for improvement.[K] Information system controls: The financial system password is only known to the personals of finance department.
PROBLEMSHRM department is not giving good salaries to theemployees, so employees are de-motivated and don’twork with the company for very long.Staff is not as responsible as it should be.There are not much security measures in the office.A constant threat to the company’s economic balancedue to unstable government policies.
Shortage of certain products like Nestle ghee,which is a significant demand in the market.The regional office is not managed properlye.g. no board is placed to mention the identityof the office.
SOLUTIONS/SUGGESTIONS Bonus packages and increment in salaries for a selective level of work and efficiency should be awarded to attract the employees’ concern. Staff should be made more responsible by implementing strict rules and regulations and taking disciplinary actions against any un-professional behavior. Skilled workers of the company should join the security department to enhance the system.
Long term agreements to be signed withgovernmental departments.A small part of the budget should be spent forthe management of the office.Inventory should be maintained.
CONCLUSION Nestle is a market leader due to different reasons: Its price is high against its competitors but it matches its quality with its competitors. Nestle is using its brand name to promote its products & it’s very popular as compared to its competitors. Its packaging is good. We can easily find Nestle from any retailer shop.
Due to its advertisement, Nestle attracts more customers & has very prosperous future if it continues to promote its products and bring all the possible innovational aspects using different product line strategies. It has always maintained the quality of its products. Despite of all the facts, there’s need to maintain the condition of office and enhance the security. Behavior of employees is not professional and every department should treat equally.