Nestle final project

1 | P a g e

Online Projects, Reports, Presentations.. :)

www.studentsgoonline.blogspot.com

MANAGEMENT PRACTICES

FINAL REPORT



2 | P a g e



PHASE

13 | P a g e



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 | P a g e



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 | P a g e



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 | P a g e



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 | P a g e



• 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.

8 | P a g e



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.

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

NESTLE Raita

9 | P a g e



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

Target market of Nestle:

10 | P a g e



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



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



Organization Chart

13 | P a g e



CHAIRMAN

P.Barbeck-letmathe

Corporate governance

D.P FRICK

CEO

P.Bulcke Corporate communications

R.Ramsauer

Pharma & cosmetics HR

F.Castaner

Finance & control

J.Singh

Operations

J.Lopez

SBU’s marketing &sales

W.Bauer

Innovation technology & R&D

W.Bauer

Zone EUR: EUROPE

L.Freixe

Nestle Professional

M.Caira

Nestle nutrition

R.T.Laube

Zone AOA: ASIA/AFRICA

F.Van Dijk

Zone AMS: Americas

L.Cantarell

Nestle waters

J.J.Harris

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

304 – Upper Mall, Lahore

+92 042 111.637.853

14 | P a g e



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

Karachi Factory (Water)

15 | P a g e



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.

3. Consumer communication16 | P a g e



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



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 sustainably-

managed 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



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



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.

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.

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

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.

PHASE

II

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:

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:

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.

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.

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.

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

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 world-

class quality of factories.

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)

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

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 full-

time 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.

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

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.

RECRUITMENTWHAT 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

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.

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.

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.

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:

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

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:

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.

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.

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.

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

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.

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

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.

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

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

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 non-

personal 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.

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.

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

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.

Direct Channel

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.

Nestle Retailors

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

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

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

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.

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

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/

http://www.conagrafoods.com/

http://www.nestle.com/Pages/Nestle.aspx

http://www.wikinvest.com/stock/Nestle_(NSRGY)

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/

Corporate_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/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

http://www.nestle.pk/index/corporate-legal.aspx

http://www.nestle.pk/community/she-policy.aspx

http://www.nestle.pk/community/quality-assurance.aspx

http://www.nestle.pk/community/society.aspx



http://www.nestle.pk/community/education.aspx

http://www.olpers.com.pk/

http://www.habibfood.com/

http://www.hersheys.com/pure-products.aspx

http://www.kraftfoodscompany.com/Brands/largest-brands/brands-O/Pages/index.aspx?letter=o

http://www.kraftfoodscompany.com/Brands/largest-brands/brands-O/Pages/index.aspx?letter=o

http://www.danone.com/en/brands/business/fresh-dairy-products.html

Table of ContentsMANAGEMENT PRACTICES....................................................................................................2

PHASE..........................................................................................................................................3

Executive summary:......................................................................................................................4

History:.........................................................................................................................................5

Company Information....................................................................................................................6

Mission Statement:........................................................................................................................6

Vision statement:...........................................................................................................................7

Goals of Nestle:.............................................................................................................................7

Objectives of Nestle:......................................................................................................................8

Philosophy of Nestle:.....................................................................................................................8

Products:.......................................................................................................................................9

Business Lines in Pakistan:...............................................................................................................9

Pakistan - key positions occupied by:..............................................................................................12

Registered and Corporate Offices in Pakistan.................................................................................13

Type of Business:.........................................................................................................................14

Customers...................................................................................................................................17

SWOT Analysis...........................................................................................................................18

Environment:..............................................................................................................................19

Managerial Implications:............................................................................................................20

Recommendations:...........................................................................................................................21

Corporate Social Responsibility..................................................................................................23

Education........................................................................................................................................24

Earthquake Relief:...........................................................................................................................24

Partnership for success:..................................................................................................................28

Quality Assurance:......................................................................................................................28

Safety, Health and Environment Policy:..........................................................................................30

Legal Responsibility....................................................................................................................31

Corporate Governance Principles:..................................................................................................31

Real life Stories...........................................................................................................................31

Story of a small farmer:...................................................................................................................31

RECRUITMENT.................................................................................................................................34

Recruiting process:..........................................................................................................................35

The Interview Process:....................................................................................................................36

TRAINING......................................................................................................................................37

The Nestlé Human Resource Policy................................................................................................39

MOTIVATIONAL STRATEGIES..................................................................................................40

Human Resources Management Law..............................................................................................42

S.W.O.T. ANALYSIS OF NESTLE...............................................................................................45

BCG Matrix.....................................................................................................................................46

Competitive Strategy.......................................................................................................................48

Competitive Edge of nestle..............................................................................................................48

MARKETING MIX........................................................................................................................49

Porter Five Forces:...........................................................................................................................51

STRATEGIC MANGEMENT AT NESTLÉ PAKISTAN LIMITED.............................................55

References:......................................................................................................................................59