nestle project done

8/13/2019 Nestle Project Done

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ContentsCompany background ................................................................................................................................... 5

HISTORY IN PAKISTAN ............................................................................................................................... 6

Vision and mission statement ....................................................................................................................... 6

MISSION .................................................................................................................................................... 6

VISION ....................................................................................................................................................... 6

CORPORATE OBJECTIVES OF NESTLE: ....................................................................................................... 6

THE MAIN OBJECTIVES ARE:............................................................................................................. 7

Strategic planning process being process by the company .......................................................................... 8

Nestle: Strategic Plan Guidlines ............................................................................................................... 8

Strengths- .............................................................................................................................................. 8

Weaknesses- .......................................................................................................................................... 8

Opportunities- ....................................................................................................................................... 8

Threats- ................................................................................................................................................. 9

Stars: ..................................................................................................................................................... 9

Cash cows: ............................................................................................................................................ 9

Dogs: ..................................................................................................................................................... 9

Question Marks: .................................................................................................................................... 9

competitors weaknesses ...................................................................................................................... 10

Various strategy of the firm ....................................................................................................................... 13

Corporate level strategy .......................................................................................................................... 13

It is the path of a company to achieve a successful business .......................................................... 13

Think of acquiring distinctive competencies to be leader in the market ......................................... 13

Competitive level .................................................................................................................................... 13

MARKETING MIX ................................................................................................................................ 13

PRODUCT .................................................................................................................................. 13

PLACEMENT ............................................................................................................................. 13

PROMOTION ............................................................................................................................. 13

PRICE ......................................................................................................................................... 13



SWOT ANALYSIS OF NESTLE .................................................................................................................... 23

STRENGTHS ............................................................................................................................................. 24

WEAKNESSES:.......................................................................................................................................... 24

OPPORTUNITIES: ..................................................................................................................................... 24

THREATS .................................................................................................................................................. 25

Portfolio analysis ..................................................................................................................................... 25

RECOMMENDATIONS ................................................................................................................................. 27

FUTURE OF NESTLE ..................................................................................................................................... 27

CONCLUSION ............................................................................................................................................... 27



HISTORY IN PAKISTAN 1988: Started operations with MilkPak Ltd owned by Syed Babur Ali by entering in a joint

venture. At this point Syed Babur Ali was running the company.

1992: Nestle Milkpak Ltd was the new identity of the firm after a memorandum of understandingand the Swiss management moved in.

1998: First ever “Egron” operations in Pakistan as powdered milk.

1998: Pure life drinking water started under the direct tag of Nestle.

2001: Two companies bought AVA Bottlers and Fontalia.

2005: Name changed to Nestle Pakistan Ltd.

2007: Operations in Afghanistan. At this point “Nestle Pakistan Ltd” operates in both Pakistan

and Afghanistan.

Vision and mission statement

MISSION

“At Nestle, we believe that research can help us to make better food, so that people live a

better life.”

VISION

Vision of Nestle is to expand business according to the increasing demand of market.

CORPORATE OBJECTIVES OF NESTLE:

Marketing objectives and corporate objectives of nestle are compatible to each other.

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.



THE MAIN OBJECTIVES ARE:

• To achieve compatibility with international voluntary standards on environmental

management systems.

• To build mutual trust with consumers, governmental authorities and business

partners.

• To ensure continuous improvement of nestles environmental performance.

• Conservation of natural resources and minimization of waste.

• To establish the benchmark for good business practice.

• Employing new technologies and processing.

• Measuring the cost and benefits to business of it‟s activities.

• Monitor progress.

• Audit results.



Strategic planning process being process by the company

Nestle: Strategic Plan Guidlines

Step 1: Perform internal and external environmental scanning for the company.

Strengths-

1. Ability to leverage strong brand name to generate sales

2. Ability to customize products to the local market conditions

3. Strong global operations with diversified revenue base

4. Research and development capabilities

Weaknesses-

1. Increasing instances of product recalls hampering brand equity

Opportunities-

1. Transition to a 'nutrition and well-being' company

2. Focus on developing and emerging economies

3. Booming out of home eating market



Threats-

1. Compliance issue resulting in penalty payments

2. Macro economic factors

3. Allegations of unethical business activities

Step 2: Strategy Formulation is developed based on portfolio analysis findings.

Nestle Portfolio Analysis-

Stars:

Prepared Dishes and Cooking Aides 16% (33% of North Amer. Frozen foods)

Cash cows:

Beverages 18%

Milk Products, Nutritional and Ice Cream 18.7%

Dogs:

Confectionery segment -11%

Other Food & Beverages- 9.5%

Pet Care- 9.3%

Question Marks:

Pharmaceutical Products- 0.7%

Strategy Formulation-

Differentiation Strategy in combination with the First Mover strategy can be used to bring the

pharmaceutical products; which are the question marks of their product matrix; to the point of

becoming a cash cow for Nestle in the future.

Differentiation requires long-term customer relationships created out of close interaction with the

sales force.

Step 3: Strategy Implementation is accomplished through the use of policies, procedures and

programs.

How programs, budgets and procedures are developed:



to highlight the benefits of probiotic products in the course of their operations. Nestlé could also

“shape its competition” or integrate best attacks to unbalance the competition, to throw

competitors off. Because Nestlé is going to introduce LC1 products in several different areas of

the food and beverage industry, they could only advertise products in one or two markets. Then

as competitors design their defense in those particular markets, Nestlé would unleash theiroverall product launch across all the predetermined areas of the food and beverage industry. This

should catch competitors off guard, leaving them unprepared to defend against the scope of

Nestlés attack. Nestlé may choose not to focus a large amount of resources into the introduction

of products into markets in which they tricked their competitors into defend in. Nestlé should

then focus their resource in to markets where they had not previously hinted they wished to enter

into. These markets should be markets where Nestlé already has strong performing products like

their ice cream or chocolate bar products.

Nestlé could start employing the help of Professional athletes or movie stars. Nestlé shouldemphasizes, in their advertisements, the universal benefits that their LC1 products will bring to

all people, along with the fact that these products taste the same as similar products in the same

category. About one month to two weeks before product launch, Nestlé should release

advertisement revealing the full scope of the products in which they are planning to launch.

Between two weeks and product launch Nestlé should hold a party of sorts where they would

invite consumers, retailers, distributors, and manufactures from the food and beverage industry

to sample Nestlé‟s new LC1 enriched products. This would be done to create a positive word of

mouth and generate interest within the industry. Nestlé then should release all their LC1 enriched

products simultaneously across every food and beverage sector.

Step 4: Evaluation and Control

What is evaluation and control?

It is the process of by which corporate activities and performance results are monitored so that

actual performance can be compared with desired performance.

The five-step feedback model:

• Determine what to measure: Top managers and operational managers need to specify the

implementation processes and results that will be monitored and evaluated. The processes and

results must be measurable in a reasonably objective and consistent manner. The focus should be

on the most significant elements in a process, those that account for the highest proportion of

expense or the greatest number of problems. Measurements must be found for all important



areas, regardless of difficulty. Because quality often is hard to measure, this step is crucial for

implementing a Total Quality Management program.

• Establish standards of performance: Standards used to measure performance are detailed

expressions of strategic objectives. They are measures of acceptable performance results. Each

standard usually includes a tolerance range, which defines acceptable deviations. Standards can

be set not only for final output, but also for intermediate stages of production.

• Measure actual performance: Measurements must be made at predetermined times.

• Compare actual performance with the standard: If actual results are within the desired tolerance

range, the measurement process stops here.

• Take corrective action: If actual results fall outside the desired tolerance range, action must be

taken to correct the deviation. The following must be determined:

o Is the deviation only a chance fluctuation?

o Are the processes being carried out incorrectly?

o Are the processes appropriate to the achievement of the desired standard? Action must be taken

that will not only correct the deviation, but also will prevent its recurrence.

o Research indicates that top management often performs the first two steps better than the last

three follow-through steps. Top management tends to establish a control system and thendelegate implementation of this system to others, which can have unfortunate results.

Evaluation and Control for Nestle:

• For at least a year Nestlé should closely monitor all of its LC1 products, noting which products

are performing better than others and in what market sector.

• Nestlé should then reallocate resources from poor performers or dogs in the market, possibly

abandoning certain products or markets all together, to support products that are performing well

as stars in their markets.

• This would follow Sun Tzu‟s final principal which deals with leadership, reinforcing success

and starving failure.

• Smart leaders know when to put further assets into products and markets that are performing

well and when it would be better to retreat from them.



• Nestlé has a well-established management structure that is support by a strong reputation in the

industry. This, along with the fact that Nestlé is introducing many products into many markets

gives them the edge and flexibility to fine-tune their management, production and sale of their

LC1 enriched products.

Various strategy of the firm

Corporate level strategy

It is the path of a company to achieve a successful business

Think of acquiring distinctive competencies to be leader in the market

Competitive level

They believe strengthening their leadership in this market is the key element of their

corporate strategy

Nestlé created Nestlé Nutrition as an autonomous global business unit within the

organization, and charged it with the operational and profit and loss responsibility for the

claim-based business of Infant Nutrition, HealthCare Nutrition, and Performance

Nutrition

The Corporate Wellness Unit was designed to integrate nutritional value-added in their

food and beverage businesses

It encompasses a major communication effort, both internally and externally, and strives

to closely align Nestlé‟s scientific and R&D expertise with consumer benefits.

MARKETING MIX

PRODUCT

PLACEMENT

PROMOTION

PRICE



Factory

2 PLACEMENT

These are the sets of the interdependent organizations involved in the process of making a product or service available for the use of consumption.

Channel Level:

Ware House

Distributors

Retailer

Wholesaler

Consumer /

Food Services /



DISTRIBUTION SITUATION:

Company is using 2 channels for distribution of milkpak

Retail outlets (indirect channel)

Sales promotion officers (direct channel)

There are many retail outlets in all over pakistan, which provide every day consumable items tothe consumers.. 80 percent of the milk‟s sales would be through indirect channels.

Milkpak is being distributed to institutions like government institutes, offices, teashops, caters,

schools , colleges. This channel will constitute 10 percent of the total milk‟s sales.

DISTRIBUTION OUTLETS:

1. COMPANY SALES FORCES:

2. STALLS IN BAZAAR:

3. UNIQUE SELLING PROPOSITION:

DISTRIBUTION AREAS:

o Islamabad and north outstations

o Peshawar

o Jhelum

o Lahore

o Faisalabad

o Gujranwala

o Multan

o Sahiwal

o Karachi

o Hyderabado Quetta

o Sukker

There are many authorized distributors of milkpak. Company has its own network of vans, whichdeliver the milk to all the retail outlets early morning. The number of vans operational in

different cities and rather then this 135 local vans are also used to supply the milk in Pakistan



behaviour regarding price of the Milkpak, and if consumer is satisfy with the product then they

ask question to judge the behaviour of consumer that if the price of the Milkpak increased by the

company then what will they do. If consumer still satisfied then they increase the price of the

Milkpak.

SETTING PRICE BY LOOKING THE COMPETITORS:The competitors of milkpak are Haleeb milk, olphars and good milk but the biggest

competitor is open milk. Total requirement of milk in Pakistan is 31 billion litres in which only 3

billion litres are provided by packed milk. 28 billion litres are provided by milkmaid. So if thenestle want to set price according to their competitors then they have to set price according to the

price of open milk which is not possible.

MARKET SHARE OF NESTLE:

According to Karachi Stock Exchange, Market share of nestle Pakistan is 949 per

share.

Environmental analysis

External Environment Analysis



Technological

The last part of the twentieth century was the influx of IT capital investment in Europe. This rise

in IT spending which concerns the sale of hardwares, software, and related internal and externalservices, plus telecommunication has improved the efficiency of distribution channels between

the seller and the final customer. It also contributed to the enhancement of computer informationsystems of companies, especially those that operate in an industry that rely deeply on R&D.

Economic

1995 was the start of implementing environmental taxes on different sectors of the Europeaneconomy. These is in view of adjusting revenues in the national budget and in some extent,

produce incentives for a behavioural change among citizens by increasing certain product prices.

Though it benefited the natural environment, the business environment in Europe was partially

flooded with this tax burden. Profits were lessened by the implementation of the new tax.

Sociocultural

A good diet and adequate food supply, the central for promoting health and well-being, is thefocus of every person even these days; whether or not he/she belongs to a the Baby Boomers

cohorts generation. Western people tend to value products that incorporate with them healthy

benefits. Obviously, these types of goods are preferred more than that of junk foods and itsrelative products. Moreover, generation Y cohorts (those born from 1980s – 2000s) possess

characteristics such as acceptance to change and being technologically savvy. These kind of

characteristics should coincide to the firms aggressiveness of using technology especially that

this is also the time of the influx of technology in the Europe.

Global

Globalization was the buzzword of the 1990s, and in the twenty first century, there is no

evidence that globalization will diminish. Some premises of globalization are the ease and speedof communication and travel, and a growth in the international investment. However, besides its

positive effect, there had been also unfortunate events in the global environment. There was thefall of the Triad economies: Japan, United States, and Europe. These three giant experienced an

economic downturns that consequently created a negative impact to the word‟s economic

environment. The global environment condition did not promised benefits to the multinational

enterprises operating on different countries.



Industry Environment

Porter’s Five Forces Model

Bargaining Power of Suppliers:

Porter‟s Five Forces Model was created to act as a framework for industry analysis and business strategy

development. Porter singled out five different forces that impact competitive intensity which portrays an image

of the overall attractiveness and profitability of a market. To aid in our evaluation of Nestle and its status in the

industry, we will apply Porter‟s Five Forces Model to the company.

Threat of New Entrants

The food processing industry is very large and competitive; it is not uncommon for firms within the industry to

do quite well. As a result, many companies enter into the market every year in an attempt to gain a portion of

the profitable market. Luckily for Nestle, the company has been around for over a century and boasts a long

history of quality products and consumer satisfaction which has allowed the company to obtain a considerable

share of the market. As a result, new entrants into the industry must attempt to seize a portion of Nestlé‟s

market share in order to survive. Essentially, Nestle is constantly a target and so the threat of new entrants is

moderate.

Threat of Substitute Goods

Due to the nature of the industry, Nestle is beset with the threat of substitute goods. From bottled water to lean

pockets, there are arrays of similar products that compete directly with Nestle. It is vital for Nestle to

continuously find new ways to improve its products as the competition is so fierce. In recent years, Nestle has

focused on the health and wellness aspects of its products to maintain its competitive edge in the market.



Bargaining Power of Suppliers

Nestle prides itself on creating and maintaining positive relationships with its suppliers all over the world. Due

to the large purchasing power of Nestle and the fact that the suppliers of agricultural commodities offer a

product that is far from unique, Nestle holds more bargaining power than its suppliers. Aside from this, Nestle

does prefer to create and preserve long term relationships with its suppliers as this helps to ensure the quality

of the raw materials being purchased. In addition, Nestle also offers useful advice to its suppliers on how to

perform more efficiently to minimize unnecessary costs.

Bargaining Power of Customers

Customers have a large amount of bargaining power regarding their consumption of Nestle products. As stated

previously, there are close substitutes for Nestle products which allows for the preferences of the customer to

be very powerful. Nestle understands the power of the customer and has taken specific steps to meet the needs

of its products consumers. Specifically, Nestle is incorporating health and wellness into the creation of its

products as society has begun to grown more health conscious.

Competitive Rivalry within the Industry

Nestle is a powerhouse is the food processing industry but so are Kraft Foods and Groupe Danone. These

companies, among others, are in a constant and continuous battle to outperform one another. Regarding

advertising alone, these companies spend hundreds of millions of dollars in an attempt to appear more

desirable than the other companies. Rivalry is fierce in the food processing industry and this is a good thing for

consumers. As long as these companies continue striving to one up one other, consumers will continue to

enjoy ever improving product lines.

When applied to Nestle, Porter‟s Five Forces Model depicts a competitive but profitbale market for the food

processing industry. Furthermore, the model places Nestlé in a somewhat comfortable position within the food

processing industry, while acknowledging the threats to its market share. Specifically, the model notes a

moderate threat of new entrants into the market and a substantial threat of substitute goods. In addition, the

model shows that Nestle tends to maintain the upper hand over its suppliers as commodities have exact

substitutes in the market. Also according to the model, Customers have a considerable amount of bargaining

power, as Nestle must adhere to consumer wants and needs as there are so many close substitutes. For the final

force, the model depicts a large amount of rivalry within the food processing industry.

Competitive analysis

COMPETI TORS:



Haleeb Milk

Olpers milk

Good Milk

COMPETITORS ADVANTAGES:

We never compromise on quality and quantity

Our extensive milk collection system ensures that the Milk you get is of the finest quality.

Our products are available in every city and town

Company analysis

SWOT ANALYSIS OF NESTLE



STRENGTHS

Skilled labor.

Educated staff.

Large number of offerings.

Good background of the company.

Strong Brand image

Quality product

Solid Financial position

Strong supply chain network

Qualified work force

High research and development

WEAKNESSES:

Physically impossibility to have target market.

There is weak marketing of Milkpak as there is no advertisement of Milkpak on

official website.

Lack of awareness among the target market.

It Dependency on others (govt. & sponsors) for the arrangement of events. The target

market of Nestle Milkpak is upper middle and high class because lower middle and

poor class cannot afford to buy UHT milk due to its high price.

OPPORTUNITIES:

Increasing interest of people

31billion customers are there in Pakistan for milk. Upton now only 4 billion

customers are being facilitated.27 billion customer markets is still available to be

penetrated.

Few and weak competitors

More people are coming towards processed milk because loose milk is dangerous for

health due to a lot of contamination.



Growth of processed milk is increasing with 20% annually so Nestle Milkpak has the

opportunity to capture a large share of market.

THREATS

Legal and ethical issues.

Market segment growth could attract new entrants.

Economic slow down can reduce demand. Two main competitors Haleeb and Olpers

are main threat for Milkpak especially the Olpers is growing very fast.

Inflation is getting higher and higher so the purchasing power of the people is

decreasing day by day.

Taste of consumer has already developed which is hard to change

Portfolio analysis

The company named “Nestle” which is a Swiss word having mean “Little Nest” started

her working from the day when “Henri Nestle” was. Mr. Nestle was a pharmacist by profession.Behind all these efforts was Mr. Henri Nestlé‟s first customer. He was a pre-mature infant who

can‟t tolerate neither his mother‟s milk nor any of the other conventional substitutes. People

quickly recognized the worth of Mr. Nestlé‟s product after it saved the child‟s life.

Today “Nestle” is in a number of “Process Food” businesses other than “Baby Food” like Juices,Dairy Milk, Bottled Water, Coffee, Yogurt, Noodles, and chocolates.

http://thinking-brands.blogspot.com/2010/09/nestle-brand-portfolio.html




Nestle has eight (8) product lines or categories overall. The strategy used by Nestle is the Family

branding or Corporate branding in which word „Nestle‟ is attached to all the brands in all

Categories. Every product line meets the specified needs of target customers. But overall, themarket of Nestle based on consumers who want quality products and not compromise on price.



http://4.bp.blogspot.com/_DIPF2NH_r-w/TJ4ftIn1zCI/AAAAAAAAA4A/ER-KFj44uJo/s1600/Nestle.JPG





RECOMMENDATIONS

Nestle must state in writing that it accepts that the international code and the subsequent relevant

World Health Assembly Resolutions are minimum requirements for every country.

.

FUTURE OF NESTLE

Nestle is today the world‟s largest food and beverage company with its mission to provide

healthier lifestyle.

It has launched many products in Pakistan the majority of which are popular and among the

market leaders. Nestle is installing new plants and importing latest technologies to improve.

Moreover, innovation is one of its greatest strengths so it has a bright future in Pakistan.

CONCLUSION

Nestle Milk Pak is a market leader due to different reasons:

Its price is high against its competitors but it matches its quality with its competitors.

Nestle is using its brand name to promote its products & it‟s very popular as compared to

its competitors.

It has good packaging

We can easily find Nestle Milk Pak from any retailer shop.

Due to its advertisement, Nestle attracts more customers It has always maintained the

quality of its product.

nestle project done

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