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ACKNOWLEDGEMENT
All the praise to Almighty ALLAH, the most beneficent and merciful because it
is due to His grace that we have completed the report.
It would not be possible to prepare the report without the assistance and
encouragement of some respected persons, who deserve our greatest gratitude.
We are thankful to our teacher Sir Junaid Tariq for providing us inspiration
and guidance to prepare this report without which we could not have
successfully achieved our task.
Sincerely,
Muhammad Arsalan Younas
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NESTLÉ PAKISTAN
Nestlé 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, we always focus on
environment friendly operations, ethical business practices and our
responsibility towards the communities.
Nestlé in Pakistan is operating since 1988 under a joint venture with Milk Pak
ltd and took over management in 1992.
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. Nestlé’s existing products grow 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.
Nestlé 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. Nestlé Pakistan also
prides itself in being the leaders in Nutrition, Health & Wellness. Ever since
1867, when Henri Nestlé invented the first infant food, nutrition has been in our
DNA. Today more and more consumers mirror our emphasis on nutrition, as
they realize that food choices affect their health and quality of life.
Nestlé Pakistan operates in many ways but people, products and brands are the
main flag bearers of the Company’s image, and we continue to enhance the
quality of life of Pakistanis.
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MD'S MESSAGE
Assalam-o-Alaikum,
Anyone visiting Pakistan soon discovers the extraordinary sense of hospitality of the
Pakistani people as well as their passion for food. It is therefore easy for a company like
Nestlé, whose promise is Good Food, Good Life, to feel right at home.
Indeed Nestlé through all its operations since 1988, is well entrenched in the Pakistani
society. Nestlé is one of the top employers in Pakistan, creating jobs in the local economy.
Over 170,000 dairy farmers benefit from our elaborate milk shed spread out across the
country and we are making humble progress connecting with fruit farmers. Working hand in
hand with our suppliers, transporters and distribution partners we are taking our brands, loved
by millions, to thousands of outlets in all corners of Pakistan. As part of Nestlé’s global
Creating Shared Value approach, we are also working with stakeholders in governmental and
non-governmental organizations to make a positive impact in the fields of Nutrition, Water,
Environmental Sustainability and Rural Development. A concrete example is the “Nestlé
Healthy Kids Program”. Through the program, we have reached out to 70,000 children with
the aim of helping them and their families realize that taking care of their bodies and minds
starts from a young age; good nutrition and healthy physical activity are foundation blocks
for a healthy and productive life. This program is one of many we are conducting as the
leading Nutrition, Health and Wellness Company in Pakistan and around the world.
I am proud to be part of this successful organization which is dedicated to doing business
while living up to our Corporate Business Principles by being transparent, honest and caring
for individuals and society.
On behalf of Nestlé Pakistan I would like to thank all of our Pakistani consumers for their
trust. I commit to work hard with the whole team to continue to deliver tastier, healthier food
and beverage choices and maintain the high international quality and food safety standards
you have come to expect from us. We do this so you can close your eyes when consuming
our products because you know ours are open.
Behtar Kal Hamara (striving for a better tomorrow)
Bruno Olierhoek
Managing Director and C.E.O
Nestlé Pakistan
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MISSION & VISION
Our Vision:
Nestlé’s vision is to be the globally recognized leading Nutrition, Health and
Wellness (NHW) Company. Nestlé Pakistan subscribes fully to this vision and
the values that come with it.
In particular, we envision:
Leading a dynamic, passionate and professional workforce, proud of our
heritage and positive about the future
Meeting the nutritional needs of consumers of all ages – from infancy to
old age, from nutrition to pleasure, through an innovative portfolio of
branded food and beverage products of the highest quality
Delivering shareholder value through profitable long-term growth, while
continuing to play a significant and responsible role in the social,
economic, and environmental sectors of Pakistan
Our Mission:
To positively enhance the quality of life of people of Pakistan by all that we do
through our people, our brands, products and our Creating Shared Value (CSV)
initiatives.
Our Ambition:
To be the leading Nutrition, Health and Wellness Company in Pakistan.
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HISTORY OF NESTLE
Our history begins in 1866, with the foundation of the Anglo-Swiss Condensed
Milk Company. Henri Nestlé develops a breakthrough infant food in 1867, and
in 1905 the company he founded merges with Anglo-Swiss, to form what is
now known as the Nestlé Group. During this period cities grow and railways
and steamships bring down commodity costs, spurring international trade in
consumer goods.
The history of the Nestlé is given below:
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EVOLUTION OF NESTLÉ
1867: Henri Nestlé founded the company in Vevey, Switzerland.
1898: Nestlé purchases its first factory outside of Switzerland - Viking Milk
factory in Norway.
1905: Nestlé merges with Anglo-Swiss Condensed Milk Company.
1929: Nestlé merges with Peter-Cailler-Kohler Chocolates Suisses S.A.
1938: Nestlé launches Nescafé - the world’s first instant coffee.
1947: Nestlé merges with Alimentana S.A. with the brand Maggi.
1962: Nestlé purchases Findus.
1974: Nestlé becomes a significant shareholder in the Cosmetics Company
L’Oréal.
1977: Nestlé purchases Alcon, manufacturer of eye care products and kits.
1985: Nestlé purchases the Food Company Carnation.
1988: Nestlé purchases the confectionary company Rowntree Mackintosh and
the pasta company Buitoni-Perugina.
1992: Nestlé purchases the mineral water Company Perrier.
1998: Nestlé purchases Spillers pet foods business.
2000: Nestlé sells the Findus brand in all countries except for Switzerland.
2001: Nestlé merges with Ralston Purina, the premier pet food company in
North America, and with unique expertise in the dry dog food area
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NESTLÉ QUALITY POLICY
Quality is all about the trust of our Consumers and Customers. At Nestlé,
Quality is the foundation of our company and is fully embedded in our
Nutrition, Health and Wellness promise. Every day, Nestlé products and brands
are chosen by millions of people all over the world to fulfill their nutrition,
health and wellness needs, at every moment of the day, and across their lifetime.
This trust is based upon our quality image and our reputation for consistently
delivering high quality products. It has been built up over many years, ever
since Henry Nestlé created the first Farine Lactée Nestlé in 1867.
Every product on the shelf, every service and every consumer and customer
contact helped to shape this trust. A Nestlé brand name on a product is a
promise that it is safe to consume, that it complies with all relevant laws and
regulations and that it constantly meets our high standards of Quality.
Each and every Nestlé employee is involved in and dedicated to achieving high
Quality standards for our consumers and customers through the application of
the Nestlé Quality Management System.
To sustainably create value and to effectively and efficiently build customer and
consumer trust, Quality at Nestlé is to:
1. Guarantee food safety and full compliance by respecting our policies,
principles and standards with full transparency,
2. Ensure preference and consistency to delight consumers and customers by
valuing what they value and by offering products, systems and services that
always meet or exceed their expectations,
3. Strive for zero defects and no waste by constantly looking for opportunities to
apply our continuous improvement approach to deliver competitive advantage,
and
4. Engage everybody’s commitment across our complete value chain and at all
levels of our organization to build the Nestlé Quality Culture.
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NESTLÉ BRANDS
Ambient Dairy
Chilled Dairy
Juices
Bottled Water
Culinary & Food
Baby Food
Breakfast Cereals
Coffee
Confectionery
CREATING SHARED VALUE
What is CSV
Nutrition
Water
Rural Development
Nestlé Healthy Kids
OTHER NESTLÉ BUSINESSES
Nestlé Health Science
Nestlé Institute of Health Sciences
Nestlé Nespresso
Nestlé Nutrition Institute
Nestlé Professional
Nestlé Purina Petcare
Nestlé Skin Health
Nestlé Waters
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COMPETITORSANALYSIS
Nestle Pakistan have many competitors in market to cut their market & capture
the market they have. These competitors are;
Haleeb Ltd.
Engro food Ltd.
Shezan Ltd.
Others
They have to face many hurdles in order to be the best & deliver because they
cut throat competition with all of the competitors.
“Do not Compete with your Rivals just make them Irrelevant”
Haleeb Ltd
Strengths
1. The thickest milk
2. Taste
3. Nutritious
4. Hygienic
5. Packaging
Weaknesses
1. Focus Shifted from Main Product to other products
2. Lack of Research & Development
3. Weak distribution
4. Low spending on advertisement
Engro Foods LTD
Strengths
1. PR with farmers
2. Positive response from customers
3. Strong consumer & products research
4. Third generation plant
5. Haing a good reputation in the market by strong brand name
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Weaknesses
1. Packaging
2. Milk collection & distribution costs
3. Narrow brand portfolio
4. Under utilization of the capacity
5. Not yet ISO certified
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SWOT ANALYSIS
1. STRENGTH
STRONG BRAND:
In Pakistan Nestle has come very strong brands like Nescafe, Maggie, Cereals,
Nestle water these brands are almost generic to their products categories. So
when a brand becomes generic then it creates the feel of strong brands in the
eyes of customers.
DIVERSIFIED:
Nestle is a highly diversified company operating in many different markets and
sectors of those markets.
RELATIONSHIP:
Nestle has strong relationships with retailers.
2. WEAKNESS
LIMITED DISTRIBUTION:
Nestlé’s major & bad factor is the limited distribution channel because they
distribute their products to whole seller in their own factory vehicles. As
compare to their major competitor they have limited distribution channel but
they are maintaining to penetrate the market as far.
NO OUTLET:
They don’t have direct outlets to whole sellers to create less burden on the
factory distribution channels however their competitors give them a major threat
by this.
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ADVERTISEMENT:
The company is heavily dependent upon advertising to shape consumer opinion
and drive traditional sales. This can lead to high marketing costs with a
questionable return on investment
3. OPPORTUNITES
SUPPORT FROM FOREIGN INVESTORS
Government support foreign investors to invest in Pakistan which eventually is
the opportunity for Nestle.
ENHANCE DISTRIBUTION CHANNEL
Nestle should be working on the distribution network to enhance the company’s
network against its competitor.
CHANGING SOCIAL TREND
Consumers in urban areas now adopt Western lifestyles, especially the younger
generation which is hugely influenced by the Western media. Younger
consumers tend to follow Western life style. There was an increase in demand
for Nestle products over the review period.
HEALTH CONSCIOUS
Increasing health and hygiene awareness among Pakistanis has greatly increased
sales of nestle products. Both the government and the media have started health
awareness campaigns to make Pakistanis realize that consumption of Nestlé’s
hygienic products is as essential as eating food. Fruit/ juices & eatable products
are doing very well in both urban and rural areas.
MARKET GROWTH
Nestle market expands very fast. A new research proves that in future (2012)
every person use 85.5 liters juices per years & uses more hygienic products
because of the low hygienic conditions of the environment.
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4. THREATS
FAKE PRODUCTS:
One of the major threads that Nestle faced in Pakistani market is the availability
of fake Nestle products for sales, hence customer are deceived when they
consume the sub standard products consequently they lose trust and
consumption of the Nestle products.
GOVERNMENTREGULATIONS:
They face problem if government employ taxes on them which forcethem to
raise the price of their product.
MARKET SEGMENT:
Market segment growth could attract new entrants.
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SUCCESS FACTOR
Key success factors are significant to future success of industry firms. These
factors encompass competencies, market achievements, resources, competitive
capabilities and product attributes etc. It is most important for the strategists to
be familiar with the surroundings of sector in order to distinguish the most
important competitive success factors. The KSFs of Nestle are given below:
1. Localization amidst Globalization:
Successfully achieving localization in the increasingly globalized food industry•
Product planning, production, marketing and services form a strategy of
successful localization of a global company• Nestle has 2 organizations that
focused on leveraging its global reach to achieve operational efficiencies:
GLOBE and GNBS provide the process, organization and technology
infrastructure to allow Nestlé to leverage its global size• GNBS will enable
Nestlé to leverage its scale to increase the efficiency and effectiveness of its
"back office" whilst enabling the markets and businesses to focus on demand
generation and profitable growth• Nestlé’s Swiss sales is only 2% of their total
global sales
2. Global Brand Strategy:
Nestle has products that resonate all over the world under a unified brand•
These brands are unified under the Nestle banner, which delivered a value and
reputation of a “global food company” while the products delivered its own
specific attributes• The global corporate brand was the brand platform for
delivering localized products and brands• Nestle has built global brands such as
Nescafe, Nesquik, Nestea, Taster’s Choice, Haagen-Dazs
3. Successful M&A:
Nestle has grown thru organic growth but really thru successful M&A• Nestle
has acquired to enter both emerging and developed markets, and new product
categories• Clear strategic focus: Food & Beverages, Nutrition, Health &
Wellness, adjacencies to existing core businesses so Within these strategic
focuses, 12 of their brands represent 70% of sales, most are #1 or #2 in Market
Share (4 of these brands are billion dollar brands)• Clear criteria for
transactions: Enhancing key metrics, strong market positions, brands,
capabilities, ease of integration(culture)• Global scope but focus on bolt-ons:
both emerging and developed markets• M&A drives profitable growth thru
competitive advantages, growth drivers, and operational pillars.
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CONCLUSION
For a company that will turn one hundred in a decade, Nestle has almost tried
all of the strategies there can be. Nestle company has expanded internationally,
helped countries’ economies grow, be environmentally conscious and create
joint ventures with other companies in which enhanced Nestlé’s and these
companies’ performance positively. Followed are a couple of recommendations
in which might enhance their performance which are:
1. Exploit lands in poor countries
2. Avoid actions that are bound to fail
3. Invest on R&D
4. Joint ventures
Even though the future can’t be told by looking at numbers and financial
performance, companies should extrapolate what might happen and look at all
the angles of matters in both ways, positively or negatively. This action is
crucial in the business field in order to come up with a plan to overcome these
obstacles and enhance their strengths for a better performance in the market.
