Nestle final project

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Nestle final project

  1. 1. 1|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  2. 2. MANAGEMENT PRACTICES FINAL REPORT Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com 2|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  3. 3. PHASE 1 3|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  4. 4. Executive summary: Nestle has been serving this world for over one hundred and thirty years. It has differentiated itself through its high quality product mix and positioned itself as health and Nutrition Company while targeting the health conscious people throughout the world. Nestle started its operations in Pakistan back in1988, by acquiring a diary company MILKPAK LTD, when people of Pakistan actually needed it. Since Pakistan is the fifth world’s largest milk producing country therefore Nestle deals mainly in dairy products. Moreover it also sells juices, chocolates, prepared food like noodles, baby food, infant formula milk and breakfast cereals in Pakistan. Nestle is a low cost leader with its efficient operations hence it provides its customers with high quality products and sells them at a premium price. Therefore it is earning good profits. Nestle has set its manufacturing plants at in Karachi, Lahore, Islamabad and Kabirwala. The milk processing plant at Kabirwala district is the Nestlé’s world largest milk processing plant. When nestle introduced its products in Pakistan people were neither aware nor accustomed to them. Therefore nestle ran an extensive marketing campaign to educate people and create a need for its products. Pakistan is a land where fresh eatables are readily available. Nestle should sell the same quality of products in Pakistan as it sells abroad. It should also introduce more brands in Pakistani market which it offers in other markets of the world since consumers in Pakistan are becoming more demanding day by day. 4|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  5. 5. History: In the mid-1860s Nestlé, a trained pharmacist named Henri Nestle began experimenting with various combinations of cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant nutrition for mothers who were unable to breast feed. His ultimate goal was to help combat the problem of infant mortality due to malnutrition. He called the new product Farine Lactée Henri Nestlé. Nestlé's first customer was a premature infant who could not tolerate any of the conventional substitutes, and had been given up for lost by local physicians. People quickly recognized the value of the new product, after Nestlé's new formula saved the child's life and within a few years, Farine Lactée Nestlé was being marketed in much of Europe. Henri Nestlé also showed early understanding of the power of branding. Nestlé means 'little nest'. Nestle was created in 1867. Nestlé is today the world’s leading food company, with a 140-year history and operations in virtually every country in the world. Their principal assets are not office buildings, factories, or even brands. Rather, it is the fact that they are a global organization comprised of many nationalities, religions, and ethnic backgrounds all working together in one single unifying corporate culture. Their culture unifies people on all continents, with roughly half their factories and people located in the developing world. Nestle started it operations in Pakistan in 1988. A qualified workforce, trained by nestles or emerging from a strong educational and industrial context, strongly influences the company’s ability to be globally competitive. The fair treatment and development of company staff and the strengthening of the local workforce are essential long-term investments. They reinforce the conditions for growth and sustained economic development in the locations where Nestlé operates. Nestlé’s ability to employ thousands of people each year is an important contribution the company makes towards future generations, providing income to 5|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  6. 6. families who can enhance their chances at better education, healthcare and standard of living for entire families and communities. Company Information Ticker: NESTLÉ Country: PAKISTAN Major Industry: Food & Beverages Sub Industry: Diversified Food Employees: 2,345 (Pakistan – as of January 2008) Currency: Pakistan Rupee Market Capital: 61,221,938,400 Share Type: Ordinary 6|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  7. 7. Mission Statement: "Nestlé is the largest food company in the world. But, more important to them is to be the world's leading food company”. At Nestlé, we believe that research can help us make better food so that people live a better life. Good Food is the primary source of Good Health throughout life. We strive to bring consumers foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In addition to Nutrition, Health and Wellness, Nestlé products bring consumers the vital ingredients of taste and pleasure. Vision statement: “Nestlé aim is to meet the various needs of the consumer every day by marketing and selling food of a consistently high quality. The confidences that consumers have in our brands is a result of our company’s many years of knowledge in marketing, research and development, as well as continuity – consumers relate to this and feel they can trust our products”. In particular, we envision to; • Lead a dynamic, motivated and professional workforce – proud of our heritage and positive about the future. 7|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  8. 8. • Meet the nutrition 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. • Deliver 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. Goals of Nestle: The main goals as described by Nestle are as follows: “Good Food, Good Life, the key to health, nutrition and wellness. With over 140 years of experience and expertise, we take great pride in bringing you the best products because happy, healthy consumers are important to us. We develop our products keeping your preferences, tastes and needs in mind. We understand that you, along with millions of other consumers, know that you can trust our products to deliver purity, quality, convenience and nutrition. Our products are carefully aligned to Pakistani tastes and needs. We're always trying hard to develop new products and improve existing ones, and serve our consumers better. That's why through constant renovation and innovation we're always testing or launching value added products and making them available in sizes that will suit every requirement. So explore the world of health with Nestlé products, and find out what suits your family's needs” Objectives of Nestle: “Marketing objectives are compatible with the overall corporate objectives of nestle. Company’s objective is to be the world’s largest and best branded food manufacturer while insuring that nestle name is synonymous with the products of the highest quality”. Philosophy of Nestle: Nestlé‘s philosophy is summed up in four words: Good Food, Good Life. In their quest to become the world's leading health, nutrition and wellness company, they do everything they can to help people live more fulfilling lives. 8|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  9. 9. Good Food, Good Life Henri Nestlé chose his own coat of arms to represent the company's philosophy: a bird's nest, with a mother feeding her young. The image represents Nestlé core values: care, family values, nutrition, healthy growth, safety and comfort. It is a guarantee of quality and a commitment to responsibilities as a food company and experts in nutrition. Over the years Nestlé has reaffirmed its commitment to wellness, helping consumers to live longer, healthier, and more productive lives, no matter their age, gender or socioeconomic status. Good Ingredients Three vital ingredients lie at the heart of Nestlé and come together in their brands: Their people, their research and development, and their commitment to quality. The 250,000 dedicated people who make up the Nestlé family are their source of strength and energy. Realizing this, Nestlé offer them constant professional development, and feel their cultural diversity is one of greatest assets. Products: Business Lines in Pakistan: Milked dairy and chilled dairy: MILKPAK NESVITA NIDO NESLAC EVERYDAY NESTLE Dahi NESTLE Fruit Yogurt 9|Page Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  10. 10. NESTLE Raita MILKPAK Cream Beverages: NESCAFE NEQUICK MILO NESTLE Fruita Vitals Bottled Water: NESTLE Pure Life Baby Food: CERELAC Food: MAGGI-2 Minute Noodles Break Fast Cereals: Corn Flakes Honey Gold Flakes KOKO Crunch Chocolate & Confectionary: KITKAT KITKAT Chunky Polo 10 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  11. 11. Target market of Nestle: • Milk, dairy and Chilled dairy: wide variety of dairy products is available to cater almost every segment of customer. Liquid Milk especially Nesvita is produced especially for the females as it contains high content of iron, beneficial for them. • Beverages: it includes Nescafe, Milo, Nesquik, and Nestle Friuta Vitals. Their main target market includes people of all ages. • Bottled water: businesses, students, for the people who do not have access to clean drinking water. • Baby food: target market of baby food is all the parents • Food: it includes Maggie noodles which mostly caters children and teenagers. • Breakfast cereals: children, teens and adults benefits from it • Chocolates and confectionary: people of all ages. • Sports nutrition: it specifically targets sports persons for a nutritive protein diet. Size of the organization: 2010: Nestlé’s first quarter revenues in 2010, increased by 6.5% compared to the previous year. The company's food and drinks segment revenues increased by 5.1% in Europe and more than 10% in emerging markets. In the first half of 2010, Nestlé’s revenues increased 6.1% compared to the first half of 2009; net profits increased 7.5% 2009: Nestle is the world's largest food and beverage company, with 2009 sales of over 107 billion CHF ($101 billion USD). 2008: With sales of CHF 109.9 billion (Swiss currency) in 2008, Nestlé is the world's leading nutrition, health and wellness company. The company employs more than 280,000 people and has 456 factories in 84 countries. Nestlé products are sold in almost every country in the world. Only about 1.5 percent of its sales are generated in its home country, and all but 12 of its factories are situated abroad. Nestlé is a truly public company with over 250,000 shareholders of which around one third are Swiss. No single shareholder owns more than 3% of the stock. US investors, who, together, hold over 30% of the capital. 11 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  12. 12. Competitors:  Engro Foods Pakistan Major product lines: Olpers milk, Olwell, Olper Cream, Tarang Tea whitener, Tarkka Ghee  Haleeb Foods Major product lines: Bread, snacks, desserts and meals.  Shezan Foods Pakistan Major product lines: Food Products, Jams Jellies & Marmalades, Tomato Ketchup, Sauces & Pickles, Fruit Juices Syrups & Squashes 12 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  13. 13. Organization Chart CHAIRMAN P.Barbeck-letmathe CEO Corporate governance P.Bulcke D.P FRICK Corporate communications R.Ramsauer Operations Finance & control SBU’s marketing &sales J.Lopez J.Singh Pharma & cosmetics HR F.Castaner W.Bauer Innovation technology & R&D W.Bauer Nestle nutrition Nestle waters Nestle Professional R.T.Laube J.J.Harris M.Caira Zone EUR: EUROPE Zone AOA: ASIA/AFRICA Zone AMS: Americas L.Freixe F.Van Dijk L.Cantarell 13 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  14. 14. Pakistan - key positions occupied by: • Trevor Clayton, Managing Director, MD Office (Country Head of Operations) • Syed Yawar Ali, Chairman • Raymond Franke, Head of Finance and Controls, Finance & Control Division • Haseeb Aslam, country business manager water, water division. • Peter Wuetherich, Head of Technical, Technical Division • Salman Nazir, Head of Supply Chain, Supply Chain Division • Uzma Qaiser Butt, Head of Human Resources, Human Resources Division • Zafar Hussain, Head of Sales, Sales Division Registered and Corporate Offices in Pakistan 308 – Upper Mall, Lahore +92 042 111.637.853 +92 042 578 9303 +92 042 578 9304 Corporate Office Annex 14 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  15. 15. 304 – Upper Mall, Lahore +92 042 111.637.853 Park Lane Tower 72-Tufail Road, Lahore Cantt Lahore +92 042 609 9300 Sheikhupura Factory 29thK.M.Lahore-Sheikhupura Road, Sheikhupura +92 056 340 6615-25 +92 042 636 8710 Kabirwala Factory Kabirwala-Kabirwala Road, Kabirwala, District Khanewal +92 065 111.637.853 +92 065 241 1432 Islamabad Factory (Water) Plot no. 32, Street 3; Sector 1 – 10/3, Islamabad +92 051 444 5991-3 +92 051 444 5997 15 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  16. 16. Karachi Factory (Water) 23-A, North Western Industrial State, Port Qasim Authority, Karachi +92 021 472 0151-3 +92 021 472 0154 Type of Business: Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world, their basic foundation is unchanged from the time of the origins of their Company, and reflects the basic ideas of fairness, honesty, and a general concern for people. Nestlé is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices. Consumers 1. Nutrition, Health and Wellness Our core aim is to enhance the quality of consumers’ lives every day, everywhere by offering tastier and healthier food and beverage choices and encouraging a healthy lifestyle. We express this via our corporate proposition Good Food, Good Life. 2. Quality assurance and product safety Everywhere in the world, the Nestlé name represents a promise to the consumer that the product is safe and of high standard. 16 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  17. 17. 3. Consumer communication We are committed to responsible, reliable consumer communication that empowers consumers to exercise their right to informed choice and promotes healthier diets. We respect consumer privacy. Human Rights and Labor Practices 4. Human rights in our Business activities We fully support the United Nations Global Compact’s (UNGC) guiding principles on human rights and labor and aim to provide an example of good human rights and labor practices throughout our business activities. Our People 5. Leadership and personal responsibility Our success is based on our people. We treat each other with respect and dignity and expect everyone to promote a sense of personal responsibility. We recruit competent and motivated people who respect our values, provide equal opportunities for their development and advancement protect their privacy and do not tolerate any form of harassment or discrimination. 6. Safety and health at work We are committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain. Suppliers and customers 7. Supplier and customer relations 17 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  18. 18. We require our suppliers, agents, subcontractors and their employees to demonstrate honesty, integrity and fairness, and to adhere to our non-negotiable standards. In the same way, we are committed to our own customers. 8. Agriculture and rural development We contribute to improvements in agricultural production, the social and economic status of farmers, rural communities and in production systems to make them more environmentally sustainable. The Environment 9. Environmental sustainability We commit ourselves to environmentally sustainable business practices. At all stages of the product life cycle we strive to use natural resources efficiently, favor the use of sustainablymanaged renewable resources, and target zero waste. 10. Water We are committed to the sustainable use of water and continuous improvement in water management. We recognize that the world faces a growing water challenge and that responsible management of the world’s resources by all water users is an absolute necessity. Customers • Every person, of any age group, gender etc is the target customer of Nestle • Nestle target its customers by knowing customer needs & demands. For this purpose it made customer profile. Customer profile based on two criteria: Qualitative research:18 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  19. 19. • 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. 19 | P a g e Online Projects, Reports, Presentations.. :) www.studentsgoonline.blogspot.com
  20. 20. SWOT Analysis Strengths: • Company’s name Nestle specifies the quality image high standard and quality product • Loyalty from customers is also the major strength for the company • Employees are also loyal due to the decentralized culture of the company • People trust on products due to proper health and safety measures • The strength of Nestle confectionary is its imported chocolates and candies, which strengthens its image • Being a multinational company it has the capability to attract more customers than the local companies • Company has the ability to compete in a dynamic environment • Company always adapt the new technology Weaknesses: • There is not much margins for retailers to prefer it’s sales. • They need to improve the facilities like chillers. • The distribution cost is high as compared to the competition in the local market. • Company mostly advertises its milk products, advertisement of confectionary products is not so better. Opportunities: • They have an opportunity to expand or capture the market by adding its product line.
  21. 21. • They have the opportunity to offer snacks. • They can also capture the market of home appliances. • Company can open separate stores to eliminate retailers. • Recently, they have created an opportunity for themselves by introducing chillers in the market. • Company is trying to open stores in universities. • They can provide incentives to retailers to increase sales volume. • Company can enter in ice cream products Threats: • Existing companies are increasing their product lines that can prove to be a threat in the coming years. • Company like Cadbury is giving more discounts to retailers as compared to distributors due • to which retailers prefer its products for sale. As compared to the local competitors, our distributor cost is very high. As Nestlé confectionary Products has to maintain and obey the Nestlé standards. • Some companies are competing on the basis of cost. Environment: In line with Nestlé's global commitment, Nestlé Pakistan is dedicated to playing its role in helping to protect the environment. We comply with the Environmental Act (1997), and try to ensure that at every stage of our operations, the environmental impact is minimal. Learn more about our Responsibility to the Environment projects: Our Environmental Commitment in Action: Our environmental commitment extends to every part of our value chain.
  22. 22. Thus, at the raw materials stage, we support sustainable agricultural and dairy farming practices, including environmental protection. When it comes to production, all our factories try to maximize eco-efficiency, i.e. increase production while minimizing resource consumption, waste and emissions. Our factories are equipped with complete testing and monitoring facilities for waste and air emissions. To eliminate air pollution, we have stopped using heavy fuel oil in our factories, which are now run on clean natural gas. This has reduced our emissions into the atmosphere to well below the legal limits. Our Sheikhupura & Kabirwala factories have elaborate water treatment systems to prevent wastewater from polluting the environment. In 2005, we upgraded our wastewater treatment plants in both factories. That's not all; we are continually reducing our consumption of raw water per ton of production. Irresponsible packaging can have a heavy impact on the environment. To reduce the amount of material used without jeopardizing the safety and quality of our products, we are always working on new packaging solutions that have minimal weight and volume and can be easily recycled. We even operate a collection system for used packaging. Solid waste is collected at source and then reused, recycled or disposed in an environmentally friendly way. Natural gas incinerators at our Sheikhupura & Kabirwala factories are used to safely dispose of material that cannot be recycled & dumped. Our factories have environment committees to manage routine environment issues and review performance. Environmental impact assessment is done in advance for every new project and measures are adopted to minimize adverse impacts on the environment. Our employees regularly undergo training to inculcate awareness about environment-friendly practices. Managerial Implications: The problems faced by Nestle in today’s world are the claims faced by it as being charged with the responsibility of violating the “International Marketing Codes”. Nestle claims that I is doing nothing wrong and unethical in the way it markets is baby foods around the world. Baby milk action has raised the case of “Syed Aamar Raza” who has publicizes evidence of
  23. 23. Nestle malpractice in Pakistan as well. It has been claimed that company marketing is causing unnecessary deaths and suffering of babies, largely among poor because they do not use the proper amount of powder in order to save some volume for future use which causes great danger to baby life. Recommendations: Nestle must state in writing that it accepts the international code and the subsequent relevant World Health Assembly Resolutions are minimum requirements for every country. Nestle must state in writing that it will require changes to bring its Baby Food Marketing policy and practice into line with International Code and Resolutions.
  24. 24. PHASE II
  25. 25. Corporate Social Responsibility Nestle believes that every single company, no matter where in the world it operates, ought to be fully integrated into the local social, cultural & economic life. Company must be good corporate citizens, and give back to the societies to which it belongs. There are two ways of fulfilling the responsibility and practicing corporate Social Responsibility: 1- Through social investments: giving to charities, leading and supporting cultural or welfare initiatives. 2- Through the realization that businesses create social and environmental impacts, both positive & negative, through the daily operations of their value chain. The operations of Nestle throughout the world are committed to making full use of the above tools. Thus Nestlé people everywhere are involved in the many programs and projects we have designed to strengthen local communities and nations. Nestle is heavily involved in projects relating to its areas of expertise, such as nutrition, education & research, health projects, and agricultural assistance. In times of crisis Nestle is amongst the first on the scene to help with humanitarian relief aid and food donations. To help culture & society flourish, Nestle does its best to encourage a host of other activities: they support charities, education and training initiatives, art and cultural events, sport events and HIV/AIDS prevention. Following are the major contributions of Nestle in being social responsible:
  26. 26. Education Nestlé Pakistan is involved in a wide range of programs and projects intended to improve the lives of underprivileged Pakistanis. Our efforts are focused on: 1- Social Rehabilitation and education advancement: To help improve education in rural areas, they undertook the rehabilitation of several primary and middle schools, focusing especially on schools for girls. In 2004, in partnership with an NGO, they adopted a school in Pindi Dhallon, Sheikhupura, and achieved such an improvement of educational facilities, including teaching aids and teacher training, that school attendance doubled. Three schools were rehabilitated in 2004-05, and also donated over 100 computers to schools in poor rural and urban community. (1) 2- Research and Development Initiatives: In the 21st century, no country can hope to progress without a strong commitment to scientific training and research. Demonstrating our investment in Pakistan's long-term future, they have committed to help set up a School of Science and Engineering at the world-renowned Lahore University of Management Sciences (LUMS). Earthquake Relief: 1- The Shocks:
  27. 27. In October 2005, the biggest natural calamity in our history struck Pakistan. Thousands died and millions were left homeless after a massive earthquake hit mountainous northern areas. In step with the rest of the nation, Nestlé Pakistan responded immediately, putting its infrastructure and resources to work in the affected areas. A) First Responses: When the earthquake struck, Nestlé Pakistan responded instantly, even before the magnitude of the disaster had dawned upon the nation. They immediately donated food and beverage items. Within two days, they had established a crisis committee under the supervision of Managing Director. The same day, the management team left to visit the affected areas, and by 11 October, the first six Nestlé trucks left factories, bearing bottled water, powdered and UHT milk and ready-to-cook MAGGI noodles. (2) Instead of burdening the government and relief agencies, they aggressively reactivated their own shattered distribution channels to bring supplies to the people who needed them most and established six camps to distribute relief goods. Despite blocked roads, grave logistical challenges & an atmosphere of fear and suffering, nestle teams, consisting of about forty Nestlé employees and distributors, went out and distributed Nestlé products to the affectees.
  28. 28. Within two days Nestle teams reached the worst-hit areas around Muzaffarabad, Bagh and Mansehra. They worked in collaboration with the Pakistan Air Force and arranged for supplies to be airdropped to the most inaccessible areas. Other teams of Nestlé volunteers supported relief work undertaken by other agencies around the affected areas. They also distributed 80 trucks of goods, worth Rs 20 million. Two 10-ton trucks of drinking water were dispatched to Muzaffarabad Hospital, and volunteer teams ensured that goods were distributed fairly and efficiently to those who needed them most. B) Aftermaths: After the crisis came a time for rebuilding shattered lives. Among the reconstruction efforts some are the following initiatives: • They have allocated an amount of Rs 20 million, raised through employee contributions, matching grants and contributions from other Nestlé markets. This amount is to be used to adopt and reconstruct a model village in Azad Kashmir. • They also intend to build an orphanage in the affected areas for the hundreds of children who lost their parents in this disaster. • Nestle is initiating a livestock health improvement program to help the locals rebuild their shattered lives.
  29. 29. • The parent company, Nestlé SA has donated an additional Rs 16 million for reconstruction and rehabilitation work. C) Pitching: Nestlé employees worked tirelessly to bring aid to earthquake victims. • Nestlé employees donated Rs 3.3 million from their own salaries. • Nestlé employees in other countries also stepped forward and donated to the Nestlé relief fund. • Five teams of staff volunteers worked day and night in the affected areas to ensure that relief goods got where they were needed. • A medical detailing team worked with the students of King Edward Medical University, Lahore, to collect medicines worth Rs 175,000. Society: Taking the Nestlé concept of corporate Social Responsibility to heart, they are deeply involved in social investment and humanitarian aid. • They are committed to Pakistan's long-term betterment, and strictly follow the code of corporate governance. • They deal fairly with stakeholders.
  30. 30. • They serve their consumers through safe, high quality products & communicate with them responsibly. • They benefit consumers by spreading awareness about healthy nutrition and lifestyles as well as constantly developing or improving existing products for health, nutrition and wellness. Nestle is actively involved in several social action programs (SAPs) to improve the lives of our country's under-privileged people. Nestle offer generous financial support to hospitals and organizations that are dedicated to providing services to the poor. Only recently, they donated a mobile dispensary to APWA for its medical outreach program in a remote community near Hub, Sindh. They have always responded generously with assistance to victims of natural disasters, such as floods, earthquakes and droughts. Partnership for success: In efforts to provide pure, high quality milk to consumers in distant towns, Nestlé entered into an unprecedented partnership with local farmers. A complex network of collection centers ensures that no farmer has to go far to deliver his daily produce. His payment is prompt and transparent. Advanced chilling systems are in place so as milk travels to factories in Sheikhupura and Kabirwala, its quality is not degraded. To improve the quality of milk and the lives of suppliers, Nestle have established a unique technical assistance team that trains farmers in modern techniques. The milk collection system has an economic and social impact far beyond the farmers themselves. Through this Nestle has created hundreds of jobs, instituted a communications and transport network. More than 900,000 farmers and their dependants have been directly affected by milk purchases. Today, 14 years after Nestlé first entered the milk district in force, the hard work and determination of Nestlé’s milk collection & technical assistance teams and their dedication to Corporate Social Responsibility have raised the bar for dairy concerns in Pakistan
  31. 31. Quality Assurance: Nestle takes the motto of Good Food, Good Life very seriously. At every step, from collecting raw materials from rural farmers to distributing finished goods in city supermarkets, employees are trained and retrained to understand their role in ensuring that consumers enjoy food and beverage items of the highest quality. The Nestlé name on a product is a promise to consumers that: • It is safe to consume It complies with all relevant laws and regulations and meets high standards of quality. In addition, they constantly try to improve and tighten existing regulations. They ensure the highest possible benefits and protection for the consumers. For this reason, Nestle actively participate in the revision of food standards with the government. • Quality is to win consumer trust and preference Nestle is committed in offering products and services to its customers that meet their needs and/or preference and provide sound nutrition. • Quality is everybody’s commitment All Nestlé functions across the Value Chain are fully responsible to follow mandatory norms and instructions for maintaining agreed quality standards. Nestle follows the international standards of the World Health Organization’s Codex Aliment Arius on food production. All factory laboratories operate according to “Good Laboratory Practices” guidelines. Sheikhupura and Kabirwala laboratories have long enjoyed an 'Excellent' rating in the worldwide proficiency tests conducted by Nestlé SA (Switzerland), and attest to the worldclass quality of factories.
  32. 32. • Quality is to strive for zero defects and no waste Nestle focuses on facts and results and strive for zero defect and excellence in everything they do. They constantly look for competitiveness and opportunities for Continuous Improvement of the quality standards delivered to their consumers. Safety, Health and Environment Policy: Nestlé Pakistan Ltd. is one of the leading Food and Beverage Companies and aims to provide consumers with the best quality food products by incorporating safe and environmentally sound practices into its daily business activities. Their commitment to sustainable development will be accomplished by integrating occupational safety, health and risk management programs at all workplaces to provide a healthy and safe work environment for employees, contractors and Corporate Internal audit: Visitors, Exercising this commitment and reflecting its benefit to the community remains central to business strategy for today and tomorrow. In the process of transforming raw material into finished products, Nestle aims to make the best possible use of them by minimizing wastage, adopting safe working methods, efficient use of natural resources and minimizing the impact on the environment. Nestlé Pakistan Ltd. is also committed to communicate Safety, Health and Environmental Performance to its stakeholders. (6)
  33. 33. Legal Responsibility Corporate Governance Principles: We are dedicated to following the best practices laid down by our parent company, Nestlé SA. We have implemented the Corporate Governance Principles established by Nestlé SA, covering four core areas: • Rights and responsibilities of shareholders • Equitable treatment of shareholders • Duties and responsibilities of the board of directors • Disclosure and transparency Recognizing the need to maintain transparency and verify the application of corporate standards, Nestlé Pakistan has established an internal audit department that monitors administrative and operational functions throughout the company. Thanks to its operations, we can be assured that adequate internal controls are in place, management information is reliable, resources are used effectively, and company assets are safeguarded. Real life Stories Story of a small farmer: Asif Ikram is a typical small farmer. He owns two hectares of land and lives in a mud house in a village of 1800 people. He has electricity but no running water. Asif and his family work their land themselves. The only equipment they own are hand tools, though Asif hires a tractor when needed. He recently bought himself a bicycle and a television. Asif owns three buffaloes, of which two are in lactation. With Nestlé's help he plans to apply for a loan to build a cowshed, but for now, the animals live in his courtyard. Asif's buffalos produce ten
  34. 34. liters of milk a day. He takes six liters on his new bicycle to a Village Milk Collection Centre a kilometer away. Every Tuesday, he receives payment at published rates. 60% of the family income derives from Nestlé's milk pay. "I thank God that now, for the first time in my life, I sleep in peace. I no longer fear for my family's future,” he says. The above excerpt is an extract from 'Nestlé in Pakistan 1988-2004: The Development of a Milk District', by Rémy Montavon. A Quiet revolution: In 2005 Nestle restructured agricultural services so that they now consist of over thirty fulltime agronomists, vets and agricultural engineers to help the farmers of the Punjab with their milk production. Yet there is another crucial stakeholder in every milk-producing farm: the farmer's wife. Nestle has created seven teams of three women each, all trained vets, sociologists and specialists in animal husbandry. Their task is to meet farmers' wives and empower then through training in milk production, animal husbandry, and hygiene, and to give them an understanding of Nestlé's milk collection system. In effect, there's a quiet revolution going on in Pakistan's milk district. (9) Helping the farmer Improving Feed: Even before calling Nestlé in, Milkpak Ltd. had tried to ensure that milk cows were given fresh fodder during the summer. Nestle teams are always prepared to offer practical advice. They have planted a variety of fodder crops, which they demonstrated to farmers on field days. Nestle gives stress on the importance of giving cattle enough water, and train farmers in hygiene and milking.
  35. 35. Better Equipment: Agricultural services staff have drawn up technical plans for cowsheds, which are provided free of charge. Nestle mechanics have also developed prototypes of machines to cut fodder quickly and inexpensively. Starting 2004, Nestle went a step further and proposed a system of small loans for farmers who wanted to make improvements to their farms, such as building cowsheds. They drew up the sample specifications for a model farm to be presented to the banks disbursing the loans. The Service even helps farmers fill out applications for loans. HUMAN RESOURCE HR is dedicated to their employees, and ensures that they have all the right people with the right skills, in the right places at the right time. Understanding that their people are the bedrock of all their business strategies, it is their mandate to enhance their skills with cutting edge training and provide them with world-standard facilities. They select flexible, innovative people who are ready to confront new challenges and make a difference. Their groundbreaking Management Trainee Programmed aims to develop talented young men and women and help them achieve their potential in a dynamic and enabling environment. Over a hundred people travel out of the country every year to take advantage of their international training and development events. WHAT THEY BELIEVE IN: They are a people company. Their people are their greatest strength, and nothing can be achieved without their commitment and energy. At Nestlé Pakistan their opinion counts. Here you'll fit into a corporate culture that's based on a set of fundamental principles and values. These are: • High commitment to quality products and brands • Respect of other cultures and traditions • Commitment to strong work ethic
  36. 36. • Personal relations based on trust and mutual respect • Proactive cooperation • Being pragmatic rather than dogmatic • Favoring decentralization and networking • Being committed to work and quality • Preferring the long-term perspective to short-term thinking • They're proud of their traditions and heritage, and as times change, these core values keep evolving. RECRUITMENT WHAT THEY LOOK FOR: It takes a special sort of person to come and work at Nestlé Pakistan. That's why, when selecting candidates, they look for a set of interrelated characteristics encompassing three key areas: knowledge, personality and motivation. Professional Knowledge: They look for good academic results at university or equivalent qualifications. However, the class of the degree you have obtained, though very important, is not the only criterion for selection. Other experiences during their studies, previous jobs, assignments, language theses and any other significant extracurricular activities and achievements, are also given the right. They look for candidates who can identify a problem, analyze it, look at different options, and come to reasoned conclusions. They want people with drive and tenacity, energy and enthusiasm, who can initiate a project and follow through to the end. All these skills are vital during a career at Nestlé Pakistan. Personality: To succeed at Nestlé Pakistan, you need more than professional knowledge. You need a flair
  37. 37. for the field of activity of their choice, an open mind, and a willingness to dig in and learn new skills and ideas. They're looking for applicants who are dynamic and communicative. People, who can listen, understand and integrate the opinion of others, people who can express their ideas clearly, both verbally and on paper. They want people who like to negotiate, even with very different partners, and to solve problems in complex situations .They like candidates who show leadership, inspire others, and are self-confident, yet realistic. People who have a positive attitude to work and willing to work hard, even under pressure. They seek people who can be objective in their assessment of themselves and of others. Motivation: While they expect loyalty to their company, they expect their people to be critical and suggest improvements wherever necessary. They like people who are motivated themselves & can motivate others. A Nestlé employee is characterized by creativity and dynamism. They don't only look for specialists, but people who have knowledge and skills in more than one field, with broad interests. To sum up, they want people with purpose and ambition, though not at the expense of others. They want people who take responsibility for their actions, who consider Nestlé their own business, and who show an entrepreneurial spirit. Recruiting process: Applying for a current job / graduate program / internship Please look through the vacancies and choose which you are interested in. Create your CV by filling out the online form. Once the application is complete, you will receive a confirmation message telling you that it has been received and is being processed.
  38. 38. Receiving CVs: They will review and select CVs that best match open jobs. Please note that only completed CVs will be taken into account. Register for our talent pool: If there is no job opening suitable for you, you can still register your details in our database. You will then be considered as a potential candidate for new up coming positions. The Interview Process: Graduate Program Applicants: Regular group interview sessions are held throughout the year for most of the Graduate Programs. This is a one-day sessions that consists of discussions about potential jobs and career developments, individual interviews with HR and line managers, group and/or individual case studies. If you are successful at the group stage, you will be invited for an individual interview day with HR and line managers. Professional applicants: You should expect a series of individual interviews with HR and line managers. These will generally focus on your background and motivation as they’ll as how you likely fit Nestlé's culture and values. Internships applicants: You will be interviewed by HR as they’ll as a line manager. These interviews will generally focus on your background and motivation as they’ll as how you likely fit Nestlé's culture and values.
  39. 39. TRAINING Management Trainee Programmed: If you're young, bright and hard working, the Management Trainee Program may be the place for you. They hire fresh graduates as potential managers to develop new competencies and skills through on-the-job development. You'll be hired in one of various departments at inductee level on a 12-month training program. Once you've completed the program, you will be assigned independent responsibilities supporting the company's business needs. They begin sourcing Management Trainees in January. Preliminary interviews and screening is organized according to the graduation schedules of Pakistani and foreign universities, and are followed by interviews with senior management. Employee Nutrition Training: Building a continuous nutrition learning culture within Nestlé is a key element in our journey to become a nutrition, health and wellness company, to provide profitable growth in the future. To support this objective, they have developed the NQ (Nutritional Quotient) training program for employees, based on the principle that nutrition is everybody’s business at Nestlé, irrespective of the area in which employees work. Nestlé’s expert nutrition knowledge is long-established, centered on the activities of Nestlé Nutrition and our R&D network. The NQ program is designed to widen and increase the knowledge base among employees in other job functions, giving everyone the confidence to apply this knowledge in their work. The program combines nutritional knowledge with commercial application. For example, when communicating with consumers about balanced diets, the knowledge gained by Nestlé employees through the NQ program will help make nutrition and wellness tangible to consumers, ensuring that Nestlé is regarded as a knowledgeable partner in nutrition matters. Not only this - a major aim of the program is also to help employees make informed and healthy nutrition choices for themselves and their own families.
  40. 40. A modular program: NQ training comprises engaging modules suitable for all employees, from the Executive Board to plant operators, and leverages the nutrition expertise of Nestlé scientists and health marketing specialists. Implementation began in 2007, with Nestlé nutrition experts and marketing specialists taking part in "train the trainer" sessions across our zones to support the cascade of knowledge to all employees. Key to the success of the NQ training are interactive, customized modules designed to encourage people to participate and put knowledge into action. These are tailored to specific needs: • Foundation module: a stand-alone program of learning and development for Nestlé employees whose jobs are principally non consumer or customer facing. • Advanced module: core learning for staff who are engaged with external bodies and consumers/customers. • Specialist modules: place particular emphasis on understanding the consumer and application of the Nestlé nutrition and wellness strategy in specific product categories. A complete toolkit: The NQ program toolkit comprises a suite of materials for trainers, including training manuals and slide sets. For trainees themselves, learning takes place in an engaging way using a variety of media and formats, including interactive games, motivational video content and an on-line quiz. This is used to measure collective progress and to allow each trainee to evaluate, in an entirely confidential way, his or her personal lifestyle choices. The toolkit also comprises awareness-raising and motivational material that can be used and adapted to meet local needs, including posters, questionnaires and certificates. Ongoing development:
  41. 41. As nutrition and our insights into nutrition evolve, so too will our NQ Nutrition training, helping Nestlé employees to keep abreast of new developments and maintain a high level of credibility through the breadth and depth of our nutrition expertise. Internships: Internships are a great way to apply the knowledge and skills you are developing at university and get experience in a leading corporation. They offer project-based internship positions in various departments at Nestlé Pakistan. You may be hired as an intern at various points during their academic career: during undergraduate study or graduate school. Most internship assignments are offered during the summer months and generally run for 6 to 8 weeks. At the end of the internship you will be required to submit a project or program report to the company on the topic assigned to you at the beginning of the internship program. If you impress us with their talent & hard work, you may be considered for employment opportunities after you have completed their studies. The Nestlé Human Resource Policy This policy encompasses those guidelines which constitute a sound basis for efficient and effective HR Management in the Nestlé Group around the world. They are in essence flexible and dynamic and may require adjustment to a variety of Circumstances. Therefore its implementation will be inspired by sound judgment, compliance with local market laws and common sense, taking into accounts the specific context. Its spirit should be respected under all circumstances. As Nestlé is operating on a worldwide basis, it is essential that local legislation and practices be respected everywhere. Also to be considered is the degree of development of each market and its capacity to advance in the management of their human resource. Should any HR
  42. 42. policy conflict with local? Legislation, local legislation will prevail. These policies are addressed to all those who have a responsibility in managing? People as they will as to HR professionals?? The Nestlé Management and Leadership Principles include the guidelines inspiring all the Nestlé employees in their action and in their dealings with others. The Corporate Business Principles refer to all the basic principles which Nestlé endorses and subscribes to on a worldwide basis. Both these documents are the pillars on which the present policy has been built. A SHARED RESPONSIBILITY: HR managers and their staff are there to provide professional support in handling people matters but should not substitute themselves to the responsible manager. Their prime responsibility is to contribute actively to the quality of HR management throughout the organization by proposing adequate policies, ensuring their consistent application and coherent implementation with fairness. Acting as business partners, the HR manager advises and offers solutions which results in positive impact on the organization’s effectiveness. Furthermore, she/he proposes best practices and provides state-of-the-art support and counseling to her/his colleagues. Together they act as co-responsible partners for all HR matters. This partnership is the key for efficiency in people management. The communication skills of the HR staff must be appropriate to deal with all delicate matters as they occur frequently in human relations issues. They gain their credibility not only from their professional contribution but also through the care and the excellence of their communication skills. MOTIVATIONAL STRATEGIES Adoption Assistance: Family is an important part of who we are, which is why Tetra pack offers a valuable support for the families through various programs. Employee Discounts:
  43. 43. Tetra Pak offers discounts on a broad range of products to their employees also provide travel and quarters, electronics, gifts, financial services, clothing and more. Voluntary Benefits: Tetra Pak makes a number of voluntary benefits available to you through an outside service provider, including auto and home insurance, prepaid legal services and pet insurance. Scholarship Program: The Nestlé Scholarship Foundation is proud to sponsor a scholarship program that provides financial assistance. Scholarship recipients are selected based on academic record, demonstrated leadership skills, and participation in school and community activities. Long-Term Care: Long-Term Care insurance is available to protect employees and eligible family members from the potential cost of nursing homes or other long-term care. Employee Assistance Program (EAP): Nestlé provides EAP services at no cost to employees and their eligible family members for confidential access to professional counselors trained to help with a variety of personal and family issues. Pick and Drop Facilities: Nestle provide their employee pick and drop facility, the timing of employee come into the workplace is also not disturb. All employees are relatively on the time in their workplace. Good Working Environment: Working environment is very suitable for employees. Nestle is multi national company so they provide their employees effective working environment that encourage employee to done their work continues effectively. Games: According to the employee fitness, Nestle held gaming programs for their employees.
  44. 44. Human Resources Management Law SAFETY AT WORK: Nestlé is committed to being a leader in workplace safety and health. The Nestlé Occupational Health and Safety Management System (NSMS) was revised in line with the 2007 edition of the international standard OHSAS 18001 and reissued to all Nestlé operations, reinforcing our commitment that “Safety is non-negotiable”. They are also working towards external certification of our factories against OHSAS 18001. This will provide a common language around our health and safety management systems, and make it easier to demonstrate implementation of these standards to our stakeholders. The number of workplace injuries has been reduced. For example, in 2008 the number of injuries leading to one or more days away from work in Nestlé decreased to almost one quarter of that seen in 2001. Major focus on preventing accidents: Over the years, Nestlé has developed a strong network of local Safety, Health and Environment functions that develops and shares best practices in accident prevention across the world. Involving employees: Employees at all levels are employed to assume ownership of workplace safety. Behavior based safety programs are being implemented in all operational sites (including factories and distribution centers). Safety observations made by those most concerned are gathered and analyzed and measures to eliminate or manage risks are implemented. Tools to manage safety performance: Custom-made tools have been put in place to track workplace safety key performance indicators. Safety practitioners and managers have access to reports about their local performance and those of other sites, enabling easy internal benchmarking and identification of best practices.
  45. 45. Safety at Work Award: In order to reinforce a culture of safety in the company Nestlé has created a 'Nestlé Safety at Work Award' 2008. Nestlé country or market organizations worldwide presented applications to the jury. Each country or market organized an internal safety award competition and designates one champion team to participate in the Nestlé Safety Award. Local winners are recognized with Gold, Silver and Bronze awards and the global winners will be announced at the end of March. The winners are presented with their trophies at the Nestlé Market Conference. Nestlé Policy on Health and Safety at Work: Nestlé regards its people as its most valuable asset and places the highest priority on protecting them. The Nestle Policy on Health and Safety at Work is based on the Nestlé Corporate Business Principles, which are binding for the whole Nestlé Group. Prevention of work-related injury and illness Nestlé believes that work-related injuries and illnesses can be prevented. They integrate health and safety into management of the business by establishing local safety organizations that proactively advance a strong safety culture. Further, they implement worldwide our mandatory Nestlé. Operational Safety, Health and Risk – Management Strategy, which meets or surpasses the requirements of the health and safety laws applicable in the countries in which they operate conduct risk assessments and take appropriate corrective action to minimize threats to human health and safety. Furthermore, they establish emergency and contingency plans to deal with residual risks. This approach also minimizes threats to the business, protecting our shareholders’ interests; continuously improve our performance by adapting processes, work practices and systems as a result of monitoring safety performance and analyzing accidents or occupational health problems.
  46. 46. Nestlé regards its people as its most valuable asset and places the highest priority on protecting them. In every country where we operate, our company emphasizes the need for safe working environments, which must meet our strict global corporate standards. We are determined to provide a safe working environment for all our employees, contractors and visitors and we are vigilant in continuing to implement Health and Safety practices and programs at all our sites. • Valuing our people by providing a safe place to work. • Identifying, assessing and reducing risk and preventing injury or illness to our employees, contractors and visitors. • Operating our business to meet health, safety, legislative and other requirements applicable to Nestlé. • Continually monitoring, reviewing and establishing new objectives aimed at eliminating or minimizing work related injury or illness. • Developing and implementing effective and efficient injury management systems which enable a safe and sustainable return to work for affected employees. • Providing information, training and supervision to employees and contractors to ensure they understand their roles and responsibilities in eliminating or minimizing the risk of workplace injury or illness. • Encouraging a similar Health and Safety commitment from our suppliers and contractors. • Consulting with employees and other stakeholders on Health and Safety Matters. S.W.O.T. ANALYSIS OF NESTLE STRENGHTS
  47. 47. The strengths of Nestlé confectionary products including Kit Kat, Polo & Fox are as follows:  Company’s name Nestlé” signifies the quality image high standard and quality product.  Loyalty from customers is also the major strength for the company.  Employees are also loyal due to the decentralized culture of company.  People trust on products due to the proper health and safety measures.  The strength of Nestlé confectionary is its imported chocolates and candies, which strengthens its image.  Being a multinational company it has the capability to attract more customer than the local companies.  Company has the ability to compete in a dynamic environment.  Company always adapts the new technology. WEAKNESSES The weaknesses are as follows:  There is not much margins for retailers to prefer it’s sales.  They need to improve the facilities like chillers.  The distribution cost is high as compared to the competition in the local market.  Company mostly advertises its milk products, advertisement of confectionary products is not so better. OPPORTUNITIES:  They have an opportunity to expand or capture the market by adding its product line.  They have the opportunity to offer snacks.
  48. 48.  They can also capture the market of home appliances.  Company can open separate stores to eliminate retailers.  Recently, they have created an opportunity for themselves by introducing chillers in the market.  Company is trying to open stores in universities.  They can provide incentives to retailers to increase sales volume.  Company can enter in ice cream products/ THREATS  Existing companies are increasing their product lines that can prove to be a threat in the coming years.  Company like Cadbury is giving more discounts to retailers as compared to distributors due to which retailers prefer its products for sale.  As compared to the local competitors, our distributor cost is very high. As Nestlé confectionary Products has to maintain and obey the Nestlé standards.  Some companies are competing on the basis of cost. BCG Matrix
  49. 49. Stars The stars are the high relative market share and high market growth. Nestle beverages i.e. are somewhat the stars in their business, because with the high quality and new designs which comes every now and then makes them more popular among the customers, because customer with upper class wants the quality and nestle offers the best quality food items. Cash Cows The cash cows are their baby food items i.e. nestle cerelace and other baby food products. Company has to take measures to make these products as stars.
  50. 50. Dogs The pharmaceutical products are nestle Dog, because it has low-share business with low growth market especially when we talk about Pakistani market. The company has to think on what it can do by improving the low share and growth market. Question Marks The question marks are the breakfast cereals. They have high market growth but low market share. The company has to decide about which question mark they should try to build into the stars and which one of these should be phased out. Competitive Strategy “What makes competitive” The hallmark of the nestle′ is the quality of the products which the company offers. Competitive Edge of nestle The companies all over the world get some competitive edge based on some features which other companies don’t have. For example, as the Dell has the competitive edge over other computer manufacturer companies, because they use Built-to-order Strategy while no other company in computer industry use this strategy. Similarly in Pakistan nestle has their Competitive edge based on these Strategies:  Product Differentiation
  51. 51.  Customer Oriented Product differentiation Strategy Nestle is using the product differentiation strategy by providing the superior quality products. Their main focus is to keep the customers loyal. They bought shelve space in different departmental stores to attract the customers. They tried to reach each group of people in which they have succeeded. Customer Oriented Customer satisfaction is the focal point for the company. They provide hygienic products to their customers. Products are also verified by health and safety measures and international quality standards. MARKETING MIX Marketing Mix is defined as a set of controllable tactical marketing tools that firm blends to produce the response it wants in the target market. The marketing mix consists of every thing the firm can do to influence the demand for its products. The many possibilities can be collected into four groups of variables known as the four P's that are as follows: 1. Product 2. Price 3. Place 4. Promotion 1-PRODUCT
  52. 52. Product stands for goods and services that the company offers to target market. Nestlé kit Kat is in four sizes including K.K Chunky, while Polo is in three sizes. The shape and the color of the Kit Kat and Polo are quite attractive for the customers. The labeling, packaging of the Kit Kat and Polo includes the Nestlé brand and logo. The packaging includes an expiry date and time along with a manufacture date. Second part of labeling includes the quantity of product in grams along with ingredients and contents of chocolates and candies. 2- PRICE The amount of money charged for a product or service, or sums of the values that consumers exchange for the benefits of having or using the product or services. The price of Nestlé Kit Kat and Polo varies increases with the increase in its size. 3- PLACING Placing stands for company's activities that make the product available to the target consumer. Nestlé' distribution is using the direct distribution channel to supply confectionary products weekly to the retailers. 4- PROMOTION Producing a quality product, pricing it attractively and making it available for the target consumer is not the only problem companies need to solve. Modern era is the era of communication with customer, assuring customer satisfaction, demands for personal and nonpersonal communication with the target customer to build a relationship with them. In an area-storming activity, giving out products free, gift hampers, attracts new customers; kites depending on the season (for existing and potential customers) are given. The basic purpose is to explore the area that is being unexposed and to bring awareness in the people.
  53. 53. Porter Five Forces: • Threat of New Entrants • Substitute • Bargaining Power of Supplier • Bargaining Power of Customer • Competitive Rivalry Threat of New Entrants: In Pakistan the competition among the multinational companies is very small. Currently 2-3 companies are doing the business of dairy products out which one brand is international and other two brands are local’s, from this it can be concluded that there would be a lot of chances of other international famous brands of dairy products to start their businesses in Pakistan. Example: Business of Ice cream Substitutes: The major substitutes of Nestle ice cream would be Walls ice cream, Hico ice cream and eat more ice cream. In the same way the substitute for Nestle Beverages would be Nestle Bottled water. Hence Nestle provides wide variety of substitute products to meet the needs and wants of customers.
  54. 54. Bargaining Power of Suppliers: As Nestle came in Pakistan in 1988 and they are the market leaders in the dairy products. Nestle Pakistan is already in the business of dairy so the companies’ bargaining power of supplier would be moderate. Bargaining Power of Customer: Bargaining power of customers would be very low because the price of Nestle dairy products would be fixed and customer has to buy a particular product at standardized fixed price. Competitive Rivalry: Although Nestle has major competitors in Pakistan such as Haleeb Foods, Engro Foods and Shezan, still it is leading market. The strategies applied by Nestle include Cost leadership, differentiation in products; strong and intimate relationship with suppliers and customers etc. Strategy for Launching the Product: Goals & Objectives: • Creating awareness about the Nestlé’s products to at least 50% of the target market within three months of launch. The objectives are achieved through intense promotional activities, developed to get to the target market in the best possible manner. • Creating 60% of target market within one year. The promotional activities of company will develop interest for the people thus compelling them to approach it and in return good relations with customers will be created, so they create good word of mouth for Nestle and strive to approach it again and refer others. • Launching the product in summers Nestlé will be launching the product in summers to capture most of the target customers and as well as market share. • Opening different outlets
  55. 55. Nestle will be opening different outlets initially in major two cities and after gaining primarily success it will be available in all big and small cites of Pakistan. Marketing Strategy: The products include features that contain the combination of both health and hygiene keeping in mind the individuals requirements in terms of taste. However the marketing will be done considering the concept of mass percentage. Products will be tailored to individual needs (desired taste) but promotion will attract all of them collectively. Furthermore Nestlé will be following pull strategy and approach its end users itself with the help of various promotional activities. For the distribution of products, no intermediary (whole sellers) is involved. The distribution channel is direct. Nestle Direct Channel Retailors Target Market: Knowing the fact that Nestle cannot be everything for everyone, it will be targeting only those segments that can provide best possible returns so that it may reach its goals effectively and efficiently. The target market collectively consists of males and females in Lahore and Karachi of age group less than 18-30 belonging to middle class, not finding any other provider on terms of quality, hygiene and taste. Market Segmentation:Nestle has divided its market into geographic, demographic, psychographic and behavioral segments. These segments will help to understand the market better and in implementation of marketing strategies.
  56. 56. • Geographic Segmentation: The geographic segmentation is based on the weather conditions as enjoying ice cream is popular mostly all over the Pakistan but keeping in mind the market conditions and secondly to reduce the initial expenses (not to over load the business). • Demographic Segmentation: Nestlé has demographic segmentation for its products that comprises of following variables: Age: Below 18. 18-30, 30+ Gender: Male, female • Psychographic Segmentation: The psychographic segmentation of Nestle is based on the classes such as lower class, middle class and upper class. • Behavioral Segmentation:  Firstly, the segment includes people who are interested and like enjoying Nestlé products.  Secondly, it includes people who are willing to buy but not finding any other in the region up to the level they desire with respect to quality, hygiene and taste.  Thirdly, there are people who are not interested in the concept at all. Core Distinctive Competency of the company: To pose our product against the competitors Nestlé will be using differentiation strategy which will not only differentiate it from others but also given an edge over others. Company’s core products will be very beneficial especially in terms of quality, health and hygiene and most important consumer satisfaction. The segmented products of Nestlé will
  57. 57. include consumers’ satisfaction as warranty to retailers in terms of expire, delivery and after sales services. Product Market Expansion Grid: Nestlé will be following the same strategy for its expansion: • Low Cost operator: Nestlé will be low cost operator in terms of using minimum initial investment to not to overload the business with expensive assets. Assets will be utilized in such a way that ensure full use of existing assets at a regional level before acquiring additional ones. Selection of ingredients is done which will give desired consumer perception at lower cost • Innovation/ Renovation: Using strong innovation system which will able to provide each year a new product range in a timely manner, while making best use of existing assets. • Product availability (“with in arms reach”): Nestlé strives to provide maximum availability at the right cost at all channels. • Communication: By making Nestlé’s products the most visible brands in the street, placing a priority on visibility and will also be ensuring that the company has reinforce the availability and attractiveness of its brand in locations of high traffic flow. STRATEGIC MANGEMENT AT NESTLÉ PAKISTAN LIMITED There are sets of policies which are uniform for everyone and strictly enforced. The procedure for policy formulation is transparent; where everyone is given a chance to express
  58. 58. one's opinion. The ultimate approval is given by the Chief Executive. Policies are formulated in the various meetings as outlined below. POLICY FORMULATION Regular meetings are organized at each level of the organization to keep the company moving in a systematic manner. The main objective behind these meetings is to bring forth the employees at a forum, where they can discuss their problems, give suggestions for improvement and development. Also they can share their experiences with each other. Some meetings are held at periodic basis which are necessary to keep a check on the progress of the company. These are: Senior Management Meetings Cycle Meetings Department Wise Scheduled Meetings SENIOR MANAGEMENT MEETINGS Every month, the Divisional heads and the Senior Managers hold a meeting to discuss major policy issues facing the management. The Human Resources Manager plays the role of a guardian for establishment and development of the policies. At the Senior Management meetings, the suggested policies are presented before the Divisional Heads and Senior Management. The Senior Management discusses the feasibility of these policies. The recommended policy is the one that has the approval of all members. Only after, the whole of this exercise has been done, it is presented before the Chief Executive. He takes the ultimate decision which is always in the best interest of the company and its employees. CYCLE MEETINGS Sales personnel of Nestlé Milkpak Ltd. from all over Pakistan hold a meeting or a bi-monthly
  59. 59. sales review. The major force behind a giant food company like Nestlé is its sales. Therefore it is extremely necessary to keep a check upon the progress of the various brands and their sales profitability. Information regarding the sales is required at each division of the company. Marketing Managers need it to design methods for stabilizing and building the sales of prosperous brands. The Finance and Control Division needs it to judge the viability of the investments being made and the budget allocation, also for managing the supply against the demand of various brands. Similarly, Technical Purchase Division too needs requisite information for purchasing equipment for product innovations which is based mainly on the sales. At this meeting the Zonal and Regional Sales Managers make presentations and provide figures necessary to make interpretations. DEPARTMENT WISE SCHEDULED MEETINGS In addition to the high level meetings and sales preview; every department holds several scheduled and non-scheduled meetings. Scheduled meetings are organized to keep all members of the department up to date about the complete workings of the department. Members discuss their problems; give suggestions for improvements, generate ideas for development of their department and share experiences with each other as well the respective bosses. This helps develop communication through all levels of the hierarchy. And management remains aware of the work being done by the sub-ordinates. Non-scheduled meetings can be called anytime to discuss urgent issues. These do not have any prescribed date/day/time as compared to the scheduled meetings. MANAGERIAL STYLE One of the most difficult responsibilities that any manager assumes is that of managing people even if he is responsible for managing a homogeneous group. The difficulty of this task is magnified with the size of the organization and as diversity is introduced to the group (cultural diversity, gender, age, beliefs, disabilities etc.). Nestlé Milkpak Limited is an example of such an organization which is large in size and diverse in culture. The original culture of Milkpak Limited still prevails and the key managers face a tough task of managing the people and making them adapt to the culture the Nestlé team wants to incorporate in the company. No formal data could be obtained on the managerial style for managers at Nestlé Milkpak, the following detail rests on my personal observation.
  60. 60. The relation observed by me, of the managers at different levels with their sub ordinates was that of an "open-door policy". The key to success in managing a diverse work group is encouraging open, two way communications. The employees of a particular department and the organization as a whole knew that not only are they valued, but their opinion is also welcome. The more they feel that their input is valued, the greater the sense of ownership they'll have in their department's mission. This was exactly the case observed at NML. Therefore, it can be said that a "democratic style" of leadership was observed at the organization. This style describes a leader who tends to involve sub ordinates in decision making, delegates authority, encourages participation in deciding work methods and goals, and uses feedback as an opportunity for coaching. The use of feedback was a very important element observed by me during my training. Being an internee, I was also asked by one of my department heads to give a feedback stating the good and bad points of the employees I was working with including the Incharge himself. Such elements go a long way in the success of a large scale and diverse organization like Nestlé Milkpak Limited and the appropriate management style is mandatory in the achievement of targets for the company. MANAGERIAL POLICY Managerial policy guidelines are made in consultation with the senior executives of the company. "A Policy and Procedure Forum" is held for the line managers who are responsible to implement the policies approved in their respective departments. If any changes are made regarding the policies or procedures, it is the responsibility of the Human Resources Manager to convey the change to the line managers. Apart from the policies, the managerial styles vary from person to person
  61. 61. References: Phase 1: Size of nestle in 2009 and 2010 http://www.wikinvest.com/stock/Nestle_(NSRGY) Nestle in corporate scenario http://www.nestle.com/Pages/Nestle.aspx Competitors http://www.conagrafoods.com/
  62. 62. http://www.danone.com/en/brands/business/fresh-dairy-products.html http://www.kraftfoodscompany.com/Brands/largest-brands/brands-O/Pages/index.aspx? letter=o http://www.hersheys.com/pure-products.aspx http://www.habibfood.com/ http://www.olpers.com.pk/ Type of business http://www.nestle.com/Common/NestleDocuments/Documents/Library/Documents/Corporat e_Governance/Corporate-Business-Principles-EN.pdf Phase 2: Corporate Social Responsibility http://www.nestle.pk/community/education.aspx http://www.nestle.pk/community/earthquake-relief.aspx http://www.nestle.pk/community/earthquake-relief.aspx http://www.nestle.pk/community/society.aspx http://www.nestle.pk/community/quality-assurance.aspx http://www.nestle.pk/community/she-policy.aspx http://www.nestle.pk/index/corporate-legal.aspx
  63. 63. Table of Contents MANAGEMENT PRACTICES...............................................................................................................2 PHASE...............................................................................................................................................3 Executive summary:...........................................................................................................................4 History:.............................................................................................................................................5 Company Information......................................................................................................................6 Mission Statement:..........................................................................................................................7 Vision statement:.............................................................................................................................7 Goals of Nestle:................................................................................................................................8 Objectives of Nestle:........................................................................................................................8 Philosophy of Nestle:........................................................................................................................8 Products: .........................................................................................................................................9 Business Lines in Pakistan:.................................................................................................................9 Pakistan - key positions occupied by:..............................................................................................14 Registered and Corporate Offices in Pakistan..................................................................................14 Type of Business:............................................................................................................................16 Customers......................................................................................................................................18 SWOT Analysis................................................................................................................................20 Environment:..................................................................................................................................21 Managerial Implications:................................................................................................................22 Recommendations:..........................................................................................................................23 Corporate Social Responsibility......................................................................................................25 Education.........................................................................................................................................26 Earthquake Relief:...........................................................................................................................26 Partnership for success:...................................................................................................................30
  64. 64. Quality Assurance: .........................................................................................................................31 Safety, Health and Environment Policy:...........................................................................................32 Legal Responsibility........................................................................................................................33 Corporate Governance Principles:...................................................................................................33 Real life Stories...............................................................................................................................33 Story of a small farmer:...................................................................................................................33 RECRUITMENT.................................................................................................................................36 Recruiting process: ..........................................................................................................................37 The Interview Process:.....................................................................................................................38 TRAINING.........................................................................................................................................39 The Nestlé Human Resource Policy.................................................................................................41 MOTIVATIONAL STRATEGIES...........................................................................................................42 Human Resources Management Law..............................................................................................44 S.W.O.T. ANALYSIS OF NESTLE .............................................................................................46 BCG Matrix...............................................................................................................48 Competitive Strategy....................................................................................................................50 Competitive Edge of nestle.........................................................................................................50 MARKETING MIX..............................................................................................................51 Porter Five Forces:...........................................................................................................................53 STRATEGIC MANGEMENT AT NESTLÉ PAKISTAN LIMITED...............................................................57 References:......................................................................................................................................61 Table of Contents...........................................................................................................................63

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