Obesity and its complications are a worldwide epidemic

Poor Nutrition – A Global Problem

Many basics of our food have now deteriorated in quality:

• Poor storage, long transport, irradiation, processing

• Fast food, unhealthy foods • The environment

• Commercial pressure to buy sugared products • Mass retail products with no science – full of

additives, flavorings etc.

HERBALIFE®

INTRODUCTION:

Herbalife International is an American multi-level marketing company that develops markets and sells nutrition, weight management and skin-care products globally. The company was founded in 1980, and it employs around 7,400 people worldwide.

Herbalife reported net sales of US$4.072 billion in 2012, an 18% increase over 2011, and net income of $477.19 million, a 16% increase over 2011. Incorporated in the Cayman Islands, its corporate headquarters is in Los Angeles, California, United States.

The company distributes its products in 91 countries (as of November 2013) through a network of approximately 3.2 million independent distributors, some of who earn profit on product sales and additional commission from a multi-level marketing (MLM) compensation structure.

HISTORY OF

HERBALIFE®

In 1980, Mark Hughes founded Herbalife, selling products out of the boot of his car.

His stated goal was to change the nutritional habits of the world.

His first product was a protein shake designed to help people manage their weight. He structured his company using a direct-selling, multi-level marketing model which attracted thousands of distributors (Herbalife Independent Distributors) who sold its products door-to-door or through word-of-mouth, without relying on commercial distribution in retail stores.

The company's slogan, "Lose Weight Now, Ask Me How," became a marketing theme for distributors, featuring heavily on badges, flyers and posters.

In 1985, the California Attorney General sued the company for making inflated claims about the efficacy of its products.

In 1986, Herbalife became a publicly traded company on the

NASDAQ, and in 1996 Herbalife reached US$1 billion in annual sales.

Mark Hughes died at age 44 on May 20, 2000.

In April 2003, Michael O. Johnson joined Herbalife as CEO following a 17-year career with The Walt Disney Company, most recently as president of Walt Disney International.

In April 2005, the company celebrated its 25th anniversary with a four-day event attended by 35,000 Herbalife Independent Distributors from around the world.

Under the direction of Michael O. Johnson, the company had five years of double-digit sales growth and has doubled – from net sales of $1.1 billion in 2003 to $2.7 billion in 2010 – as well as building a global brand through its sponsorship of more than 100 teams, athletes and fitness events around the world, including the LA Galaxy and FC Barcelona!

Top 7 Competitors for Herbalife®

Ltd:

Herbalife ® Ltd faces competition from:

Nestle SA: $140.6B

Unilever NV: $41.6B

Kraft Foods Inc.: $37.5B

Danone: $28.1B

General Mills Inc.: $17.3B

Kellogg Co: $16.7B

Amway: $11.8B

HERBALIFE®

Product Line of Herbalife ®:

Herbalife's products include protein shakes; protein snacks; nutrition, energy and fitness supplements; and personal care products.

Weight Management / Nutritional Food Products:

Energy And Fitness:

Personal Care:

Targeted Nutrition:

An appropriate nutrition plan is essential for providing our bodies with the nutrients required to help them function properly.

Energy-enhancing products Complete: 5 product customizable line Credible: Based on science Confidence developed for everyone; from those who are just starting out, to Herbalife’s sponsored athletes and teams around the world.

Mission of Herbalife ® :

Their Mission is to change people’s life by providing the best business opportunity and the best nutrition and weight management products in the world.

The Herbalife Targeted Nutrition range makes staying on top of your health easier by giving your body the specific targeted nutritional support it needs.

BUSINESS OPPORTUNITYPRODUCT

COMPANY

Vision of Herbalife ® :

PRODUCT COMPANY

Herbalife’s mission is to

change people’s lives by

providing the best business opportunity in direct selling.

Herbalife’s mission is to

change people’s lives by providing the best nutrition

and weight management

products in the world.

Mark Hughes passed away in 2000, but his vision for changing people’s lives – helping people manage their weight, regain their health and find financial

prosperity – continues to thrive.

Corporate Social Responsibility Of Herbalife ® :

From how Herbalife do business to the commitment they make to their communities to how they treat their employees and independent Distributors, Herbalife’s Corporate Social Responsibility program is best summed up by their value, ‘We do the right, honest and ethical thing’.

Corporate Governance:The methods and policies that relate to directing and administering our short-term and long-term goals as a company are in place to ensure accountability and economic efficiency for our stakeholders. With consistent focus in these areas, we met independence criteria almost one year early, and we meet all NYSE-listed public company requirements for transparency.

To ensure continuing gains in this area, we created the independent post, director-in-charge of executive sessions, which will be held on a rotating, annual basis by an independent director, and will facilitate executive meetings of the board’s independent directors.

Business Ethics:

Herbalife uphold the highest ethical standards in the operation of our company. Herbalife do the right, honest and ethical thing, always taking the high road. Herbalife strive for consistent enforcement of compliance regulations and are committed to providing a level playing field for all our independent Distributors. Those who do not comply are disciplined, suspended or terminated. Herbalife require annual ethics training for all employees, worldwide.

Employee Wellness:

Herbalife walk the talk – Herbalife Inner Nutrition and Outer Nutrition support a healthy, active lifestyle, and they strive to help their employees get healthy and fit. From complimentary products to lowering individual health insurance costs, Herbalife support and encourage their efforts. Herbalife has been

recognized by Men’s Fitness magazine as ‘One of the 15 Fittest Companies in America'.

Live Green:

Through environmentally conscious initiatives, Live Green and the 3Rs – reduce, reuse and recycle – Herbalife focuses on ways to protect our environment. Herbalife believe in taking personal responsibility and in making decisions based not only on financial factors but also on the social and environmental consequences of our activities.Herbalife’s downtown Los Angeles office was created using recycled, rapidly renewable materials and has earned its Leadership in Energy and Environmental Design certification for its environmentally friendly design. Herbalife earned credits for efforts in Sustainable Sites, Water Efficiency, Energy and Atmosphere, Materials and Resources and Indoor Environmental Quality.Herbalife works on an ongoing basis to encourage its employees and independent Distributors to ‘Live Green’ through a variety of programs and education. These include car and vanpools, using biodegradable and recycled materials, conservation, and reusing and eliminating hazardous materials such as plastic bags and Styrofoam cups.

Strength

The company has an extensive supply chain of Herbalife distributors. The company has over 2.7 million independent distributors worldwide, and these distributors are currently operating in 88 different countries.

Finally, the Herbalife brand name holds a lot of significance to customers. Regardless of the negative publicity over the past year, the company’s loyal customers have continued to purchase Herbalife products, and they will not be easily convinced to switch to new brands.

Once customers are hooked on a certain brand of nutritional shakes, it is difficult to persuade them to try different brands.

Weakness

The main weakness that Herbalife faces is the overwhelmingly negative publicity that it has received from its stock scandals. Bill Ackman seems to be intent on ruining Herbalife’s reputation.

Also, the allegations that Herbalife is nothing more than a pyramid scheme have greatly demoralized their network of independent distributors.

These distributors are an essential part of their supply chain, but there has been a reduction in the number of new distributors during the past year.

Opportunity

Nutritional shakes are now considered a commodity product, since many companies are competing on price for market share.

The industry has entered a shake-out phase, which has left many companies crippled and in need of financial support.

Herbalife has a well maintained cash balance, so Herbalife has the means to acquire these weaker companies.

Threats

Consumer Behavior of Herbalife ® :

Herbalife identify the need of the costumer, whether they are purchasing for their own benefit or for their family members. They

The threats that Herbalife faces are numerous. A struggling economy has drained consumers of discretionary income, and nutritional shakes are not often a priority purchase.

In addition, Herbalife is still reeling from a recent product recall, after milk proteins were found in a line of shake mix labeled “non-dairy.”

Although their brand reputation is the strongest in the industry, trust in Herbalife is waning. Overall, Herbalife faces a much harsher competitive environment than was the case several decades ago.

exactly know what kind of product is needed for people to stay healthy in an easy way.

Herbalife is a multi-level marketing (sometimes called MLM or network marketing) company. In addition to profits from product sales, Herbalife distributors can earn additional commissions from sales by other distributors they recruited, called their downline distributors.

How does this Business create

opportunities for the Prospective Costumers to gain profit by becoming a Distributer after

becoming a consumer?

Take the Business

Opportunity

Purchase International

Business Pack

Register with the company

As a Wellness Consultant Help 4 people improve their health with Herbalife

You can buy products at 25%-

42% profit

HarshitAnjesh Rajji

Amit

You are an Individual Herbalife

Distributor

Minimum stock maximum discount

builder order

In other words you are making

more money

You make a retail profit by selling to

customers

A Success Builder order of 1000VP from the warehouse entitles you to 42% profit.

Your profit is now 42%

Amit

You are an Individual Herbalife

Distributor

You make a wholesale profit

by selling to Amit

Amit buys products from you at 25% to sell to his customers

Some of your customers decide they want some of the action. Well concentrate on Amit. Or you may recruit and train more consultants.

Anjesh Rajji

Remember you bought your

product at 42%

You are an independent

Herbalife distributor

Harshit

Anjesh Rajji

Achieve 4,000 Volume Points in one

calendar month or 2,500Volume Points over 2 consecutive

months to qualify as SUPERVISOR

Amit has decided to get involved in the business. She must buy the International Business Pack and register.

You are an independent

Herbalife distributor

Harshit

AnjeshRajji

Amit

Volume points from

your organization

countTowards

your Personal Volume

Supervisors get a profit of 50% on products!!

Amit has decided to become a SUPERVISOR -what does this mean to you - and your pocket?

HarshitAnjesh

You are a Supervisor

Rajji

Amit new supervisor

Amit’s Organization

You earn up to 5% Sales Royalty on yourFirst level Supervisor

(Amit).

If someone from Amit's organisation qualifies as Supervisor you will earn a Royalty also.

HarshitAnjesh

You are a Supervisor

Rajji

Amit new supervisor

Amit’s Organization

You earn up to 5% Sales Royalty on

yourFirst and Second level Supervisor.

The same follows until your

third level Supervisors.

Basic Level Of Marketing Plan:

You are an independent

Herbalife distributor

Distributor

Senior Consultant

(VIP Distributor)

Success

Builder

Qualified Producer

Supervisor

4000 VP in 1 month 50%

Permanent

Organizational Structure of Herbalife ® :

25%

500 VP35%

Permanent

1ooo VP42%

Temporary

25oo VP in 3 months

42%Permanent

CEOMichael Johnson

DirectorLeroy Barnes

DirectorRichard Bermingham

CFOJohn DeSimone

PresidentDes Walsh

COORichard Goudis

Sponsorships:

Herbalife sponsors a number of athletes, sports teams and sporting events around the world, including:

Sergey Konyushok (Broke 7 Guinness Records at Strongman competitions)

Padro Cardoso

DirectorRichard Carmona

DirectorJonathan Christodoro

DirectorKeith Cozza

Jeffrey Dunn

DirectorHunter Gary

DirectorJesse Lynn

DirectorJames Nelson

DirectorMaria Otero

LegalDavid Heber

ScientificRocio Medina

Corporate AffairsDiahanna Brown

Advisor to Chairman and CEOJohn Tartol

Christiano Ronaldo

Los Angeles Galaxy soccer team

Virat Kohli

News about Herbalife:

Herbalife Becomes First Official Nutrition Sponsor of the 2013 Billboard Latin Music Conference and Awards - April 8, 2013

Herbalife's Distributor Bonus Awards Celebration Pays over $50 Million - Mar 24, 2012

Herbalife Family Foundation Provides Nutrition Grants in Houston and Mumbai - Nov 3, 2011

Herbalife Family Foundation Provides Nutrition Grants in Houston and Mumbai - Nov 3, 2011

Herbalife Expands Brand Presence in Russia and India - Dec 14, 2010

Herbalife, Common Threads Partner to Provide Nutrition Curriculum in Schools Across the Country - Sep 9, 2014

In Summary Herbalife offers a ‘ready to go’ success formula

Exciting Global Branding

Ethical Leadership, and Support System trainings and information for your success

CONCLUSION

Recommendation:

Being a BBA student and doing a detailed study on Herbalife, as they are one of the most famous brands around the world in terms of Nutrition & Skin Care products.

After facing some loss and loosing some market share only due to the controversies that Herbalife is following a Pyramid Scheme model as their business model, which is just an allegations by the corporate sectors and some of the problems occurring in their products which is creating a negative effects on the consumer’s health.

Herbalife should overcome with such hindrance in their business so as to remain at the top in their field.

They should also do media advertising to create more awareness about their products and its benefits, as we are not seeing any advertisement on television, as it is the most successful channel to get into people’s mind apparently.

Products backed by science – new, cutting edge, attractive products coming through

Dedicated Distributors working together

Amazing growth, based on Daily Personal Consumption

An Income Opportunity like no other: Part-time or full- time –it’s always your choice

Herbalife should also come up with the festival offers as well. Depending on the location and culture. Like in India, they can come up with Diwali discount offers, or bumper offers or may be in terms of discount coupons, So as to attract more and more costumers.