Nestle is a large multinational company headquartered in Switzerland that produces food and beverage products. It has over 2000 brands and operates in over 190 countries worldwide. The document discusses Nestle's history, products, organizational structure, strategies, and operations in Pakistan. Key points include that Nestle aims to meet global nutrition needs through products like baby food and bottled water. It employs over 300,000 people and has a market capitalization of over $300 billion.

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INTERNATIONAL BUSINESS MANAGEMENT
Topic of Project:
NESTLE
Submitted to:
Sir Hammad Badar

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Group Members
Maryam Khalid (2014-ag-4205)
Tehreem Ashraf (2014-ag-4195)
Maryam Rabia Zafar (2014-ag-4132)
Aqsa Tabbasum (2014-ag-4122)

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INTRODUCTION:
Nestle S.A is a Swiss multinational nutritional and health-related consumer goods company
headquartered in Vevey, Switzerland. They have more than 2000 brands ranging from global
icons to local favorites, and they are present in 191 countries around the world. They have 447
factories and 339,000 employees. It has been the largest food and Beverages Company in the
world, measured by revenues and other metrics, for 2014, 2015, and 2016.It ranked no. 72 on
the Fortune Global 500 in 2014 and no. 33 on 2016 edition of the Forbes Global 2000 list of
largest public companies.
Nestle's products include baby food, medical food, bottled water, breakfast cereals, coffee and
tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks.
29 of Nestle's brands have annual sales of over 1 billion (about US$1.1 billion), including
Nespresso, Nescafe Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. It is one of the main
shareholders of L'Oreal, the world's largest cosmetics company.
HISTORY:
It originated in a 1905 merger of the Anglo-Swiss Milk Company for milk products established in
1866 by the Page Brothers in Cham, Switzerland, and the Farine Lactee Henric Nestle Company
set up in 1866 by Henri Nestle to provide an infant food product. The two World Wars both
affected growth: during the first, dried milk was widely used but the second war caused profits
to drop by around 70%.

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OBJECTIVE:
Nestlé’s objective is to combine and strengthen its leading position in the food area to meet the
needs and desires of customers around the world, for pleasure, convenience, health and
wellbeing.
MISSIONSTATEMENT:
“…positively influence the social environment in which we operate as responsible corporate
citizens, with due regard for those environmental standards and societal aspirations which
improve quality of life.” — Henri Nestlé, 1857.
VISION STATEMENT:
To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved
shareholder value by being a preferred corporate citizen preferred employer preferred
supplier selling preferred products.
OTHER NESTLE BUSINESS:
 Nestle Health Science
 Nestle Institute of Health Sciences
 Nestle Nespresso
 Nestle Nutrition Institute
 Nestle Purina Pet care
 Nestle Skin Health
 Nestle water

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SHARECAPITAL DISTRIBUTIONGEOGRAPHY:
Strategy Implementation
There are several strategies that the company can peruse. From alternative strategies, Nestle
can follow environmental strategy and growth strategy.
o Environmental Strategy
Nestlé believes that environmental functions is a mutual obligation and needs the support of all
segments of society. One of the strategies that the company can inspect in order to attain a
worthy business is succeeding an environmental sustainability strategy. Nestlé is following this
strategy in all stages of their product life cycle. This strategy ponders on using natural resources
efficiently in order to produce environmental friendly products. They implement this strategy
by the courtesy of the use of sustainably coped renewable resources, and mark zero leftover.
Also, by investing constantly in order to develop better environmental functions.
Environmental Management System.
One of the particular focus areas of the company is water. Nestlé is dedicated to the
environmental usage of water and nonstop upgrading in water management. This is done
through The Nestlé Commitments on Water set, which sets primacies and objectives on
accountable water usage.

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o Growth Strategy
Nestle Corporate growth strategy consists of obtaining to grasp leadership and warrant that
confidence by sustaining the prospects of customers. “Creating Shared Value” is a term used in
the company, which refers to the behaviors, strategies, and operations that are creating value
for the communities where Nestle operate.
Their growth is done by investing for the future in order to certify the financial and
environmental sustainability of activities and procedures. This includes:
 Capacity.
 Technologies.
 Capabilities.
 People.
 Brands.
 R&D.
Their purpose of the growth strategy is to
I. Meet today’s needs without compromising the capacity of future generations to meet
the needs.
II. Do this in a way, which will guarantee profitable growth in the future.
III. Also to provide a high level of returns for shareholders and society at large over the
long-term.
o Nestlé’s Marketing Strategy
The management following what is expected has designed a marketing strategy mix. Which
is basically the combination of four aspects: product, distribution, promotion and price.
Nestle main strategy and way of business is to focus on innovation and renovation while
maintaining a balance between the earlier two and geographic activities and product lines.
• Nestle is devoted internationally to taking into consideration local legislation,
cultural and religious practices:
• Manufacturing and marketing the company's products in a sense to create
sustainable value over a long period of time for stakeholders, employees, consumers
and business partners, is Nestlé’s business objective.
• Nestle prefers long-term business development to short-term profit.

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• Nestle is invested in its customers feedback, and admits to identifying the genuine
interest coming from them. They believe that without the customers, the company
would not exists.
• Nestle always maintains a respectable relationship with the countries in which it
operates, by respecting laws, culture and traditions.
- STRATEGIC HRM AT NESTLE
Nestlé aims to increase the business, list of customers, profits and sales but, at the
same time, to improve the Standard of living everywhere it is active and the quality
of life for everyone. Nestlé is also convinced that nestle employees is the strength of
the Company and it is impossible to achieved without their energy and their
commitment, which makeshieve people its most important asset. Involvement of
people and also showing their interest at all levels starts with the basic and
appropriate information on the Company's activities and also on the specific aspects
of their work. Through shared their views, ideas and communication and focused
vision, everyone is invited to share and contribute their opinions and views to
improvements enhancing Company personal development and results.
The recruitment process at Nestle is clearly defined.
• People with qualities like dynamism, realism, loyalty, pragmatism, hard work,
honesty and reliable.
• Match between candidate's values & company's culture.
• Recruitment for management levels takes place in the head office and all others
at the branch level. The existing employees are promoted to higher posts as per
the requirements. There are no lateral recruitments. Another source of
recruitment is campus placements and human resource consultancies.
Nestle maintain its mission and goals through three different policies (Operational Pillars,
Growth drivers, and Competitive advantage).
Operational Pillars:
1. Innovation and renovation
2. Operational Efficiency
3. Whenever, Wherever, However
4. Consumer communication
Growth Drivers:

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1. Nutrition, Health, and Wellness
2. Emerging markets and popularity positioned products
3. Out-of-home consumption
Competitive Advantage:
1. Unmatched Product and Brand Portfolio
2. Unmatched Research and Development capability
3. Unmatched geographic presence
4. People, culture, values and attitude
Nestle used these strategies to ensure that it succeeds in the market. Nestle uses strong brands
that are able to create competitive barriers. As part of their operational pillars, their key
success comes from their unbelievable marketing. Their marketing is based on the element that
they are able to provide quality and cheaper priced products while providing customer
satisfaction. This comes from their main mission of nutrition, health, and wellness.

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They have also partnered with other large companies, for example: Coca Cola. They also do
something very different than their other competitors, Nestle purchases local companies to
create regional mangers that know the local markets and culture. This allows them to gain a
strategic advancement in the global areas that they are part of, to gain better consumer
satisfaction.
Each brand of Nestle business has the same strategy since Nestle is a food organization. The
core strategy for each brand is the same as the organization's strategy as laid out in the 3
pillars. The manufacturing factories for these brands follow the same procedure for energy
reduction. They recycle many of their products in order to create energy to produce their
products. Their main strategy is to create low-cost, highly efficient operations make a
universally ability products, and to improve communications with their consumers. Similar to
their business strategy, they are able to focuses these similar strategies through their brands.
Organizational Structureof Nestle
Nestle is a function based organization. Tasks in the organization are distributed into separate
jobs, which are later grouped together under different departments. The organizational
structure at nestle is hierarchical, as it shows on the chart.

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The chain of command spreads from the organization’s upper levels to the lowest levels, clearly
showing who is supposed to report to whom. Suggestions move from downward to upward,
while orders move from upward to downward. Thus encouraging employee to share their
opinions and thoughts with their superiors, yet keeping ordered easy to follow and from a
single direction. Moreover, in an effort to stay in pace with change and current trends, Nestle
has moved towards decentralizing decision-making, and to be more flexible and responsive.
Improved Organizational Structure
Perhaps an improved version of the organizational structure could be one where departments
are divided according to the genre of the product being manufactured and sold, thus making it
relevant and more convenient to manage and project expectation and goals. In the improved
version of the organizational structure each department or rather facility will work as an
individual unit, however they all must report to the headquarter office with reports that
indicated how well they are doing and what they may be facing.
This can implemented on a local level, since Nestle operates in multiple regions all over the
world, it would be better to satisfy customers to have functions operation under each location’s
requirement, while still maintaining the main values of the original company.
1990–2011: Growth internationally
The first half of the 1990s proved to be favorable for Nestle. Trade barriers smashed, and world
markets developed into more or less combined trading areas. Since 1996, there have been
various achievements, including San Pellegrino (1997), Spillers Pet foods (1998), and Ralston
Purina (2002). There were two major achievements in North America, both in 2002 – in June,
Nestlé merged its US ice cream business into Dreyer's, and in August, a US$2.6 billion
acquisition was announced of Chef America, the creator of Hot Pockets.
In the same time-frame, Nestlé entered in a joint bid with Cadbury and came close to
purchasing the iconic American company Hershey's, one of its fiercest confectionery
competitors, but the deal eventually fell through.
In December 2005, Nestlé bought the Greek company Delta Ice Cream for €240 million. In
January 2006, it took full ownership of Dreyer's, thus becoming the world's largest ice cream
maker, with a 17.5% market share. In July 2007, Nestle developed the Medical Nutrition
division of Novartis Pharmaceutical for US$2.5 billion, also purchase, the milk-flavoring product
known as Ovaltine, the "Boost" and "Resource" lines of nutritional supplements, and Opt fast
dieting products.

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The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia), in
February 2007. In April 2007, returning to its roots, Nestlé bought US baby-food manufacturer
Gerber for US$5.5 billion. In December 2007, Nestlé entered into a strategic partnership with a
Belgian chocolate maker, Pierre Marcolini. Nestlé agreed to sell its controlling stake in Alcon to
Novartis on 4 January 2010. The sale was to form part of a broader US$39.3 billion offer, by
Novartis, for full achievement of the world's largest eye-care company. On 1 March 2010,
Nestle concluded the purchase of Kraft Foods's North American frozen pizza business for
US$3.7 billion.
Since 2010, Nestle has been working to transform itself into a nutrition, health and wellness
company in an effort to struggle declining confectionery sales and the threat of expanding
government regulation of such foods. This effort is being led through the Nestle Institute of
Health Sciences under the direction of Ed Baetge. The Institute aims to develop "a new industry
between food and pharmaceuticals" by creating foodstuffs with defensive and corrective health
properties that would replace medical drugs from pill bottles.
The Health Science branch has already produced several products, such as drinks and protein
shakes meant to battle starvation, diabetes, digestive health, obesity, and other diseases. In
July 2011, Nestle SA agreed to buy 60 percent of Hsu Fu Chi International Ltd. for about US$1.7
billion. On 23 April 2012, Nestle agreed to acquire Pfizer Inc.'s infant-nutrition, formerly Wyeth
Nutrition, unit for US$11.9 billion, topping a joint bid from Danone and Mead Johnson.
Nestle in Pakistan
Nestle in Pakistan is operating since 1988 under a joint venture with Milk Pak ltd and took over
management in 1992.
 Butter, cream, desighee under brand name MILK PAK
 Juice drink under brand name FROST
 1990 it start producing NIDO, Everyday, CERELAC
 1991 LACTOGEN 1 & 2
 1994 MILO and NESCAFE 3 in 1
 1998 sweet treats (POLO)
 1999 fruit drops, NESTLE PURE LIFE
 NESTLE fruita vitals
STRENGTH
 Strong brand name.
 Socially responsible company.
 Innovative.

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 Multinational.
 Quality products.
 The world’s largest processed food and Beverage Company.
 Presence in almost every country.
 Strong brands like Nescafe, Maggi and Cereal.
 High quality and strong R&D team.
 Dedicated and focused company.
WEAKNESS
 Selective investment due to uncertain economic and political conditions.
 Lack of awareness among the target market.
 Complex supply chain management.
 Subsidiaries difficult to manage.
 Too much product distracts from core business
OPPORTUNITIES
 Pakistan is the 7th largest producer of milk in the world.
 Credit policy can be adopted to increase sale.
 Potential to expand to smaller towns and other geographies.
 Expansion of product folio.
 Further development of global brand.
 Emerging market penetration.
 More health based products.
THREATS
 Global image may harm all brands if one brand fails.
 New diet trends.
 Immense competition from the organized as well as unorganized sector.
 There is no entry barrier for new entrants.
 Taste of consumer is difficult to change.
 Inflation is getting higher and purchasing power of people is decreasing.
CHANELS OF COMMUNICATION
- INTERNAL COMMUNICATION
• PERFORMANCE AWARD
• PROMOTION

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• EID BONUS
• FREE RETURN TICKETS
• INCREASES IN SALARIS OF EMPLOYESS
- EXTERNAL COMMUNICATION
• INTERNET
• ADVERTISEMENT
• T.V.ADDS
• RADIO
• SIGNS BOARDS
• NEWS PAPER
• PUMPHLETS
• BROUCHERS etc.
•
BRANCHES IN PAKISTAN
Nestle in Pakistan has its branches in fallowing major cities.
 LAHORE
 ISLAMABAD
 FAISALABAD
 SHEIKHUPURA (factory)
 KARACHI
Nestle Pakistan is proud of its commitment to excellence in product safety and quality and to
providing value and aims to be the leading Nutrition, Health and Wellness Company. As a
socially responsible corporate, they always focus on environment friendly operations, ethical
business practices and our responsibility towards the communities.
-Strategies in Pakistan
The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in line
with internationally accepted best practices and ethical performance culture. Nestles existing
products raise through innovation and renovation while maintaining a balance in geographic
activities and product lines. Long-term potential is never sacrificed for short-term performance.
The Company’s priority is to bring the best and most relevant products to people, wherever
they are, whatever their needs are, and for all age groups.

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Nestle Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on
Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to
serve the consumers. Nestle Pakistan also prides itself in being the leaders in Nutrition, Health
& Wellness. Ever since 1867, when Henri Nestle invented the first infant food, nutrition has
been in our DNA.
Today more and more consumer’s emphasis on nutrition, as they realize that food choices
affect their health and quality of life. Nestle Pakistan operates in many ways but people,
products and brands are the main flag bearers of the Company’s image, and they continue to
enhance the quality of life of Pakistanis.
Controversy and criticism
 Status of Potable Water
At the second World Water Forum in 2000, Nestle and other corporations persuaded the
World Water Council to change its statement so as to reduce access to drinking water
from a "right" to a "need." Nestle chairman and former CEO Peter Brabeck-Letmathe
stated that "access to water should not be a public right." Nestle continues to take
control of aquifers and bottle their water for profit. Peter Brabeck-Letmathe later
changed his statement.
 Ethiopian debt (2002)
In 2002, Nestle demanded that the nation of Ethiopia repay US $6 million of debt to the
company at a time when Ethiopia was suffering a severe famine. Nestle backed down
from its demand after more than 8,500 people complained via e-mail to the company
about its treatment of the Ethiopian government. The company agreed to re-invest any
money it received from Ethiopia back into the country. In 2003, Nestle agreed to accept
an offer of US $1.5 million, and donated the money to three active charities in Ethiopia:
the Red Cross, Caritas, and UNHCR.
 Child labor
The International Labor Rights Fund filed a claim in 2005 under the Alien Tort Claims Act
against Nestle and others on behalf of three Malian children. The suit alleged the
children were worked to Ivory Coast, forced into slavery, and experienced frequent
beatings on a cocoa plantation
The 2010 documentary The Dark Side of Chocolate brought attention to purchases of
cocoa beans from Ivorian plantations that use child slave labor. The children are usually
12 to 15 years old and some are trafficked from nearby countries. The first allegations
that child slavery is used in cocoa production appeared in 1998. In late 2000, a BBC

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documentary reported the use of enslaved children in the production of cocoa in West
Africa. Other media followed by reporting widespread child slavery and child trafficking
in the production of cocoa. In September 2001, Bradley Alford, Chairman and CEO of
Nestle USA, signed the Harkin–Engel Protocol (commonly called the Cocoa Protocol), an
international agreement aimed at ending child labor in the production of cocoa.
 Chocolate price fixing
In Canada, the Competition Bureau raided the offices of Nestle Canada (along with
those of Hershey Canada and Mars Canada) in 2007 to investigate the matter of price
fixing of chocolates. It is alleged that executives with Nestle (the maker of Kit Kat, Coffee
Crisp, and Big Turk) planned with competitors in Canada to inflate prices.
The Bureau alleged that competitors' executives met in restaurants, coffee shops and at
conventions, and that Nestle Canada CEO, Robert Leonidas once handed a competitor
an envelope containing his company’s pricing information, saying: "I want you to hear it
from the top – I take my pricing seriously."
Nestle and the other companies were subject to class-action lawsuits for price fixing
after the raids were made public in 2007. Nestle settled for $9 million, without
admitting liability, subject to court approval in the New Year. A huge class-action lawsuit
continues in the United States.
Former Nestle Canada CEO Robert Leonidas is under threat of a criminal charge for his
role in the price fixing of chocolates in Canada when he was at the helm of Nestle
Canada from 2006 to 2010.
Food safety
 Milk products and baby food
In late September 2008, the Hong Kong government found melamine in a Chinese-made
Nestle milk product. Six infants died from kidney damage, and a further 860 babies were
hospitalized. The Dairy Farm milk was made by nettle’s union in the Chinese coastal city
Qingdao. Nestle admitted that all its products were safe and were not made from milk
infected with melamine. On 2 October 2008, the Taiwan Health ministry announced that
six types of milk powders produced in China by Nestle contained low-level traces of
melamine, and were "removed from the shelves".
As of 2013, Nestle has implemented initiatives to prevent corruption and utilizes what it
calls a "factory and farmers" model that eliminates the middleman. Farmers bring milk
directly to a network of Nestle-owned collection centers, where a computerized system
samples, tests, and tags each batch of milk.

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To reduce further the risk of infection at the source, the company provides farmers with
continuous training and assistance in cow selection, feed quality, storage, and other
areas. In 2014, the company opened the Nestle Food Safety Institute (NFSI) in Beijing
that will help meet China's growing demand for healthy and safe food, one of the top
three concerns among Chinese consumers.
The NFSI announced it would work closely with experts to help provide a scientific
foundation for food-safety policies and standards, with support to include early
management of food-safety issues and collaboration with local universities, research
institutes and government agencies on food-safety.
 Cookie dough
In June 2009, an outbreak of E. coli O157:H7 was linked to nestle refrigerated cookie
dough originating in a plant in Danville, Virginia. In the US, it caused sickness in more
than 50 people in 30 states, half of whom required hospitalization. Following the
outbreak, Nestle voluntarily recalled 30,000 cases of the cookie dough. The cause was
strong-minded to be polluted flour obtained from a raw material supplier. When
operations resumed, the flour used was heat-treated to kill bacteria.
 Maggi noodles
In May 2015, Food Safety Regulators from the Uttar Pradesh, India found that samples
of nestles leading noodles Maggi had up to 17 times beyond allowed safe limits of lead
in addition to monosodium glutamate. On 3 June 2015, New Delhi Government banned
the sale of Maggi in New Delhi stores for 15 days because it found lead and
monosodium glutamate in the eatable beyond permissible limit. Some of India's biggest
retailers like Future Group, Big Bazaar, Easy day, and Nilgiris had imposed a nationwide
ban on Maggi as of 3 June 2015. On 3 June 2015, Nestle India's shares fell down 11%
due to the incident.
Thereafter, multiple state authorities in India found unacceptable amount of lead and it
had been banned in more than 5 other states in India by 4 June 2015.The Gujarat FDA
on 4 June 2015, banned the noodles for 30 days after 27 out of 39 samples were
detected with objectionable levels of metallic lead, among other things. On 4 Jsune
2015, nestles share fell down by 3% over concerns related to its safety standards. On 5
June 2015, Food Safety and Standards Authority of India (FSSAI) orders banned all nine
approved variants of Maggi instant noodles from India, terming them "unsafe and
hazardous" for human consumption.
On 5 June 2015 Nepal indefinitely banned Maggi over concerns about lead levels in the
product. On 5 June 2015, the Food Safety Agency, United Kingdom launched an
investigation to find levels of lead in Maggi. Maggi noodles has been withdrawn in five

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African nations - Kenya, Uganda, Tanzania, Rwanda, and South Sudan by a super-market
chain after a complaint by the Consumer Federation of Kenya, as a reaction to the ban in
India. As of August 2015, India's government made public that it was seeking damages
of nearly $100 million from Nestle India for "unfair trade practices" following the June
ban on Maggi noodles. The 6,400 million rupee suit was filed with the National
Consumer Disputes Redressed Commission (NCDRC), regarded as the country's top
consumer court, but was settled on 13 August 2015.
The court ruled that the government ban on the Nestle product was both "illogical" and
had violated the "principles of natural justice." Although Nestlé was not ordered to pay
the fine requested in the government's suit, the court ruled that the Maggi noodle
producers must "send five samples from each batch of Maggi [noodles] for testing to
three labs and only if the lead is found to be lower than allowable will they start
manufacturing and sale again." Although the tests have yet to take place, Nestle has
already destroyed 400 million packets of Maggi products.
Recommendations:
Nestle was boycotted for being blamed of not using the best possible breast milk in their
products for poorer areas. I would recommend that since other leading industries (who are also
pursuing the field of nutrition, health, and wellness) have been using organic products as part
of their products, Nestle should use their science research technology to look into the organic
foods. This would show the consumer that nettle’s main objective is to provide for the wellness
and health of their customers.
One of Nettle’s weaknesses was that they also have unhealthy product brands. This can clash
with their mission and goals, so I recommend that Nestle look into those products that have
highly unnecessary sugar, fats, and ingredients that are unhealthy and see how they can
enhance their product so that they can make their brand more powerful.
Nestle should also diversify its product range and introduce ice creams and some other
products which can cut the competition of the major companies in Pakistan. Dog items should
be back up by the cash generated by cash cows & renovate them. Nestle should increase the
distribution Network and diversified their portfolio.
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