Nestlé is a large multinational corporation headquartered in Switzerland that operates in over 185 countries around the world. It entered the Indian market in 1961 by establishing its first factory in Moga, Punjab. Since then, Nestlé has grown significantly in India and works with farmers and suppliers to provide livelihood for about one million people. The document discusses Nestlé's history and global expansion, and analyzes the company using a PESTLE framework to identify political, economic, social, technological, legal, and environmental factors impacting the business. It also outlines Nestlé's market penetration strategy of promoting brand awareness and adapting products to local markets. The SWOT analysis notes Nestlé's product diversity and brand strength but also

1. CASE STUDY
Nestlé
By
KARTHIKEYA
Case study-Nestle

2. MNC……
• According to Stuart Wall, Sonal Minocha and Bronwen Rees (2010),
MNC (Multinational corporate) is a company that has headquarters in
one country but has operations in other countries.
According to an analysis by McKinsey Global Institute, as many as 158
global large companies have their headquarters in India with a
combined revenue of $ 898 billion. The US topped the chart with 2,123
large firms followed by Japan (1,028 firms, $ 7,347 billion), China (577,
$ 5,449 billion), Germany (462,$ 3,788 billion) and United Kingdom.
MNC

4. Introduction to the MNC Nestlé….
• In 1860s, a pharmacist named Henri Nestlé had succeeded in
developing a food for babies who were unable to be breastfed. And
his first success was to be able to feed a premature infant who
could not take his mother's milk or any of the usual substitutes
(Nestlé 2010).
• In German Nestlé means little nest. The Nestlé symbol is universally
understood to carry the meaning of nurturing and caring, security,
nourishment and family bonding. These attributes are still the
guiding legacy of the company, Henri Nestlé founded, which fulfils
the commitment to 'Good Food, Good Life.
Nestle

5. • In 1905 Nestlé work together with the Anglo-Swiss Condensed Milk
Company, the year after Nestlé added chocolate to its line of foods.
The newly formed Nestlé and Anglo-Swiss Milk Company had
factories in the Spain, Germany, United States and Britain. Soon,
the company had full-scale manufacturing in Australia with
warehouses in Hong Kong, Singapore. Most production still took
place in Europe.
• After many M&A Nestlé is --- Currently, having their principles,
which is to provide the best products throughout the world. As the
leading Food and Nutrition, Health and Wellness Company, Nestlé
provides the best food for anytime of day and for anytime of your
life.
Introduction to the MNC Nestlé….
Nestle

6. India and Nestlé……..
• After India's independence in 1947, the economic policies of the
Indian Government emphasised the need for local production.
NESTLÉ responded to India's aspirations by forming a company in
India and set up its first factory in 1961 at Moga, Punjab.
• NESTLÉ has been a partner in India's growth for over a century now
and has built a very special relationship of trust and commitment
with the people of India. The Company's activities in India have
facilitated direct and indirect employment and provides livelihood
to about one million people including farmers, suppliers of
packaging materials, services and other goods.
India and Nestle

7. Nothing what appears outward
is same as
inward….!!!!
So lets understand what the company Nestlé
is….

8. This analysis is a framework or tool used by
marketers to analyse and monitor the macro-
environmental factors that have an impact on an
organisation. The result of which is used to
identify threats and weaknesses which is used in
a SWOT analysis.
What is this analysis????
Question

10. PESTLE analysis……
• Political factors.
• Economical factors.
• Social factors.
• Technological factors.
• Legal factors.
• Environment factors.
Pestle Analysis

11. • Political factors.
Since the company has to deal with many diversified communities it
has to consider the different factors like- it has to build the plant
according to a country’s political stability, good tax incentive, skilled
workforce and the like.
For ex. it has chosen Malaysia to be the regional manufacturing
centre for NESCAFE, it should be very careful dealing with Emerging
economies for political stability is weak.
Pestle Analysis

12. • Political factors.
• Economical factors.
It has started preparations of the beverages, baby food, pet food
and the like. And its also working in more than 85 countries and
hence the economical factor comes in. It also requires profits. Due
to different economic policies in different countries it has got
problem to meet all the customers and also that cost of raw
material also increased.
Pestle Analysis

13. • Political factors.
• Economical factors.
• Social factors.
Education level had increased in the developing and developed
nations the people are aware of the quality of the products. Since the
Nestlé is an MNC is has to maintain the international standards in
production. And in has. And also that the culture difference will be
there in different countries to which it has to give respect to.
For example, Kit-Kat's formula is almost different everywhere. A
Russian Kit-Kat is smaller than a Bulgarian, but less sweet than
Germany's Kit-Kat. While in Japan, the strawberry Kit-Kat is all the rage.
Pestle Analysis

14. • Political factors.
• Economical factors.
• Social factors.
• Technological factors.
The impact of the IT development in the market had created a new
approach to people respond to the ADVT., so to transform people to
leads and then to prospect is entirely depends on the technology. E-
commerce has grown into a giant in the economy so it has to cope
with the rivals..
Recent study had shown that Nestlé had been using the efficient
processes which have reduced the wastage..
Pestle Analysis

15. • Political factors.
• Economical factors.
• Social factors.
• Technological factors.
• Legal factors.
Nestlé has to face the labour laws of the different countries and
has to abide by the minimum wages to be given to workers. It
should also abide by the rules and regulations in time of setting up
also. It should also need to protect the trademark and should not
imitate the other ones.
Pestle Analysis

16. • Political factors.
• Economical factors.
• Social factors.
• Technological factors.
• Legal factors.
• Environment factors.
There always been problems with environment with all the MNCs
for their interest lies in the profits and not the environment. So all
the governments will impose some of the restrictions on the
company or the product. The certificate for environment is ISO-
14000 where as ISO-9000-9003 will deal on quality of the
product…
Pestle Analysis

17. After having seen the factors
affecting the MNC now we will
see what are Nestlé’s strategies
to go to public.
Strategy

18. Market Penetration Strategy(MPS)…....
• The strategy meaning is that what it does to reach out the Public.
• They do something called Market Penetration Strategy..
• It simply means that to increase the market share of the existing
products. Something like- buy one and get one.
• It will also involve the 4Ps which are
Product
Price
Promotion
Place
MPS

19. 4Ps
• Product
Product in the international marketing is the extent to which
the product is standard and differentiated.
Ex. Nestlé is using the differentiated products of Kit-Kat in
different flavours for different countries. A Russian Kit-Kat is
smaller than a Bulgarian, but less sweet than Germany's Kit-
Kat. While in Japan, the strawberry Kit-Kat is all the rage.
4Ps

20. • Promotion
Promotion basically means putting forth its own products.
So Nestlé promotes its products through advertisement, direct
marketing, personal selling, sales promotion. This will ensure
that children will get attracted and would want to have it.
4Ps
4Ps

21. • Price
International Price for any product depends on the various
factors like- trade between the countries, exchange rates,
tariffs, taxes, government regulation, competition.
Thus Nestlé prices the product with regard to all these things
and the price will change from country to country.
4Ps
4Ps

22. • Place
Place means how does any company place its product or
distributes. This step is difficult because the company is based
in home country but has to control the overseas subsidiaries.
For ex. Nestlé may hire a local person to take the charge of the
subsidiary if any problem arises with regard to warehousing or
selling markets.
4Ps
4Ps

23. For every company be it
a MNC
or a non-MNC
there will be strengths and weaknesses,
let’s see those
..….

26. Strengths….
• Product diversity : Nestlé is highly diversified country and is operating
in many different markets. It has economics of scale and is performing
better.
• It has well established relationship with many reputed brands.
• Brand value : Nestlé has become the one of the top ten reputable
companies in the world in the annual, in 2013. A report published by
Forbes, Nestlé became 43rd position in the World’s most valuable
brands.
SWOT Analysis

27. Weakness….
• Incident in India : in recent years in India we know that MAGGI had
been banned because of the unfair trade practices, thus affecting the
brand value of the Nestlé.
• Nestlé had to reduce the sugar content in its products around 2004
because it was affecting the people in longer lives causing diabetics
among the American children.
• There was a strong competition by other brands. When it entered the
France it was dominated by the existing brand DANNON
SWOT Analysis

28. Opportunity….
• It can open up a online retail store and thereby it has a new
opportunity to grow bigger.
• Demand for healthier products : now that people are becoming more
of health conscious it has a great opportunity to increase its product
line and width. It also has the strong R&D team.
• It can increase its focus on the developing nations.
SWOT Analysis

29. Threats….
• There is a pressure from large retailer like Wal-mart to cut down the
prices.
• The growing use of new retail channels like Amazon prime may not
favor the traditional ones.
• With the growth of the world economy the prices of the raw
materials are also going up.
SWOT Analysis

30. “At Nestlé, we believe that
Quality = Trust”
Quote

31. “Quality is not an accident.
It is a passion that meets stringent norms
at every
step and ensures safety”
Quote

32. Conclusion
• On the day Nestlé was introduced, it was only food for infants. As
time went by, Nestlé has grown to be a famous brand. Today, Nestlé is
one of the most famous and successful foods and drinks producers.
Besides that, Nestlé will always try to counter threats and competitor,
such as the current products or new product entrants. Therefore,
Nestlé still has the potential to grow more and continue to be the one
of the leaders in the market share.
Conclusion