Nestl USA

Come for the Opportunity. Stay for the People. WERE LOOKING FOR THE VERY BEST! For OPERATIONS MANAGEMENT DEVELOPMENT PROGRAM Business: Operations, Industrial, Manufacturing, Production,
food Industry and Supply Chain Management

Agriculture: Food Science, Food Processing, Food

Manufacturing

Engineering: Industrial, Mechanical, Chemical, Electrical,

Biosystems, and Agricultural Engineering *Applicants must be US citizens or permanent residents

Nestl Information Session Thursday, Oct. 06 @ 6:00 p.m.-7:30 p.m. MU 219 Navajo Refreshments and Snacks
Deadline for resume submission is 10/10/2005.
All resumes must be submitted via the ASU Career Services Website. Info Session for preselected applicants will take place on Monday October 17th, with interviews the following day.

Please contact your Office of Career Services for details on how to sign-up for interviews.
To learn more about Nestl USA, please visit:

www.nestleusa.com

ASU OMT F05

RANKING
FORTUNE 500:
NESTLE IS RANKED AS 48TH COMPANY

BEST GLOBAL BRANDS:

NESCAFE IS PLACED AT 26TH RANK NESTLE FOODS IS PLACED AT 58TH RANK

HISTORY
Nestle began in Switzerland in mid 1860s by HENRI NESTLE. Its first product was FARINE LACTEE (Cornflour Gruel in French). It was a baby product. In 1874 the Nestle Co. was purchased by Jules Monnerat, enters the condensed milk market. In 1905 it merged with its biggest competitor Anglo-Swiss Condensed Milk company.

(contd)
Nescafe was developed in 1930 and it became a main beverage for the American serving in Europe and Asia. Total sales increased by $125 million from 1938 to 1945. It expand its product line outside food market and acquire LOreal the cosmetic company in 1974. Presently it holds 26.4% share in the company.

MISSION
Nestle is dedicated to providing the best foods to people throughout their day,throughout their lives,throughout the world.With our unique experience of anticipating consumers needs and creating solutions.Nestle contributes to your well being and enhances your quality of life.

VISION
To be the leading food and beverage compay in the world providing customers with healthy food at affordable prices.

PRODUCT LINE
Coffee Water and other beverages Dairy products Ice cream Infant nutrition Soups, seasonings, pasta, sauces. Refrigerated products Chocolate, confectionary goods and biscuits. Nestle professionals Pet care.

COMPETITIVE ADVANTAGE
UNMATCHED PRODUCT PORTFOLIO

PEOPLE, CULTURE,VALUE AND ATTITUDE

NESTLE
UNMATCHED GEOGRAPHIC PRESENCE

UNMATCHED R&D

SALES AND GROWTH

PRODUCT CATEGORY SALES (CHF BILLION) ORGANIC GROWTH

POWERED AND LIQUID BEVERAGES

NESTLE WATERS MILK PRODUCTS AND ICE CREAM NESTLE NUTRITION PREPARED DISHES AND COOKING AIDS CONFECTIONERY PET CARE PHARMACEUTICAL PRODUCTS

18,885
9,589 20,561 10,375 18,117 12,370 12,467 7,544

12.8%
-1.6% 9.2% 7.7% 6.1% 8.0% 12.1% 8.8%

OVERALL GROWTH RATE OF NESTLE IS 8.3%

GROWTH RATE OF VARIOUS BRANDS

NESTLE BABY PRODUCTS

NESTLE GOOD START

Good Start Infant Formulas are specially designed to be easier to digest for baby's still-developing tummy because they're made with 100% partially hydrolyzed (broken down)

GERBER 1st FOOD It is for babies who are 6+ months of age Comes in fruit and vegetable flavors

GERBER GRADUATE LIL ENTREES It is for babies between the age group of 12-36 months Real vegetables, wholesome pastas, and tender meats

GERBER GRADUATES SNAKES It is for babies between the age group of 9-24 months Real fruit and whole grains A source of vitamins and minerals

OTHER BRANDS

MARKET SHARE OF NESTLE

COUNTRY
USA CHINA RUSSIA
MARKET SHARE OF NESTLE AS A % OF TOTAL BABY FOOD MARKET

12 30 16.3

INDIA

80

COMPETITORS
HEINZ: It has a worldwide share of 17% in baby food. Best Global Brand: 48th rank. MEAD JOHNSON: (Acquired Bristol myers,squibb) Biggest competitor in US,Hong Kong It has a market share of 52% in US

STRATEGY IN BABY FOOD MARKET

Concentrate more on India GDP Growth: 7.09% Birth Rate:21/1000 Concentrate in US market.(Because of low share market) Birth Rate:13/1000 Capture the African,China and Hong Kong market. Less focus on Japan and Romania as they have ve population growth.

NESCAFE

COFFEE PRODUCTION

SOLUBLE COFFEE VARIETIES

Decaffe Everyday Choice Caf Menu Super premium Dolco Gusto

Nescafe Cappuccino , skinny smooth, creamy flavour and Caf Menu rich, milky froth,Vanilla, Hazelnut or Caramel Cappuccino. Skinny(low fat alternative),foaming

Nescafe Classic

The world's favourite coffee! Every Day You will find it in just about every country around the globe.

Nescaf Dolce Gusto

multi-coffee capsule system Premium that will change the way you make, drink and think about coffee. golden roasted beans Arabica and robusta ,exquisite rich aroma , smooth coffee taste Decaffe

Nescafe Gold Blend

Nescafe Green Blend

Unroasted green coffee beans ,rich in polyphenol antioxidents, aroma fresh and smooth Rich blend of Arabica and robusta beans, Medium Dark Roasted , Non foaming

Every day Choice

Nescafe original

Every day choice

Nescafe Espresso Nescafe Frappe

100% Arabican , fully roasted Premium , A Refreshing cold coffee , targeted at young adults Flavoured Coffee All the dark-roasted qualities of Alta Rica without all the caffeine. Premium

Nescafe Tasters choice Nescafe Alta rica

Only for US Market Premium

Powdered and Liquid Beverages had an excellent year, with organic growth of 12.8%
ZONES 2007 IN MILLION CHF 2008 IN MILLION CHF GROWTH RATE

Europe America Asia, Africa Soluble Coffee

6168 4007 5685 10371

6254 4115 6019 10688

22 12.4 35.1 37.5

MULTI TIER STRATEGY

PPP

Premurisation

Covers Major segment of Population

EXPECTED GROWTH IN COFFEE MARKET

CRISIL Research (world wide) Per capita consumption CAGR of 3.5% between 2002 and 2007, Expected CAGR of 4.5% during 2008-2012.

COMPETITORS
China

Kraft(20% Market Share) President Coffee Co. ( joint venture between Starbucks and the Taiwan based company Uni-President)90 outlets Blenz Coffee(Canadian chain) Shanghai Xing bake Nestle Has 46% Market Share Coffee Market Expected to grow by 70 % from 2008 to 2012. The popularity of instant coffee can also be attributable to its convenient preparation. This appeals particularly to white-collar workers who have busy lifestyles and cannot afford the time to prepare fresh coffee. Price-wise, fresh coffee is expensive when compared with instant coffee.

USA
Nescafe has small Market Share People like Roast and ground flavour Competitors : Folgers(J M Smucker Co.) (38% Market Share) Maxwell coffee house(Krafts Food) (33% Market Share) Superior Coffee, Douwe-Egberts (coffee)(Yuban and Sara Lee)(10% Market Share) Starbucks(5.6 billion in 2009) has major share Mcdonald coffee (1.4 billion in 2009) Mexico-Nescafe Classico is the most trusted brand
UK Starbucks Via Ready Brew(Recently launched in london) Jacobs(Krafts food) Folgers Instant Crystal

India
HUL Bru(44% Market Share) Nestle (52.6%)

Australia
Australian instant coffee market is worth about $425M a year Nescafe is the instant coffee market leader with around 70% market share Decaff coffees are more popular

BEVERAGE MARKET
(Share of Different Products as a %age of sales)

28.80%

37.50%

SOLUBLE COFFEE

WATERS
OTHERS

33.70%

NESTLE CHOCOLATE

NESTLE PRODUCTS
Aero KitKat Butterfinger Crunch Wonka Smarties Callier

Hershey Products
Hershey, Pennsylvania, USA Hersheys cookies and creamy candy bar. KitKat wafer bar. Hersheys kisses brand chocolate. Hersheys chocolate. Hersheys chocolate bar with almonds. Hersheys Mr.Good Bar chocolate bar. Reeses peanut buttercups. Reeses pieces candy. Skor Toffee Bar. Hersheys special dark chocolate bar.

Kraft Foods
Northfield, Illinois, USA Chocolate orange Toblerone Cote dOr All Gold Daim

Chocolate Loving Nations

Switzerland Austria Ireland Germany Norway

Differential Basis of Nestle

Variety of customers. Variety of products.

Global Market share of Chocolates & Confectionary

20%

Nestle 34%
20%

Hershey Kraft Foods

26%

Others

CONFECTIONERY MARKET
(Share Of Different Products as a %age of sales)

11.50%

9.30%

CHOCOLATE SUGAR CONFECTIONERY BISCUITS 79.20%

COMPETITIVE STRATEGY
Nestle nutrition Aims to balance the sales between low risk but low growth companies of the developed world and high risk and high risk markets of Africa and Latin America. In developed markets, foreign direct investments in big companies. In developing markets, nestle grows by manipulating ingredients & processing technologies according to local conditions and employ appropriate brand. Our alliance with coca-cola New markets and new businesses for growth Acquiring Indofood

Planning to acquire Kraft foods frozen pizza business

Business in U.S & Canada for USD 3.7 billion cash. Includes brands as Digiomo, Tombstone, California Pizza kitchen, Jacks & Delissio. With total sales of 3 billion, Nestle will become the fastest growing frozen pizza category. This acquisition will increase our presence in European Pizza market. This will also enhance the EPS in the first full year of its ownership.

NEW R & D CENTRE

On 5th Jan 2010, we opened a R&D centre in Santiago, Chile. It focuses on biscuits and cereal based products. It will help in innovation & renovation of products.

Nestle to sell remaining Alcon shares to Novartis

It sells 156,076,263 shares in Alcon. It represents 52% of outstanding share capital. It is for USD 28 billion in cash. The transaction will be completed around in the middle of 2010. Steps of gradual divestment of ALCON: IPO of 23.25% in 2002. 24.8% in 2008. This gradual divestment has insured that Nestle has achieved full and fair value of its shareholders.

NEW PRODUCT
LC 1, powder mixed with foods & beverages. It has probiotic cultures in this product. Offered in Japan & Germany in the form of yogurt. Not successful in European markets, UK and France. Focuses on health conscious people. We used print ads, direct mailing campaign & heavy internet advertising.

PROPOSED STRATEGY FOR LC 1

Areas of food & beverage industry. To educate the north American about the benefits of probiotics. Strong advertising & marketing campaign. To gain maximum market share. To reinvest all profits,

COMPETITORS
NAME OF THE COMPANY LOCATION CATEGORY LEVEL OF COMPETITION International competitor

Unilever

Dutch company

Packaged foods & products for home & personal care products. Packaged food products Chocolate & sugar confectionary products Packaged foods & beverages

Kraft Foods Hershey Foods

U.S company U.S company

U.S based competitor North America competitor International competitor

Groupe DANONE

French company

Cadbury Schweppes U.K company

Confectionary & non alcoholic beverages

International competitor

SALES BY GEOGRAPHIC AREA BREAKDOWN

Sales
32%, Europe 31%, america(26% from u.s)

16%,Asia
21%,rest of the world

SALES BY ACTIVITY BREAKDOWN

Sales
27%, drinks 26%, dairy&food products 18%, ready prepared&cooked dishes

12%, chocolate
11%, pet products 6%, pharmaceutical products

SIX principles for success

Win all without fighting. Avoid strength/attack weakness. Deception& fore knowledge. Shape your integration. Speed and preparation. Leadership, reinforcing success and starving failure.

Recmmendations
Focus on BRIC Countries

China

Population growthConsumption rate0.55% Coffee is increasing 15% every year Present population is 1325 Million

Brazil

Per Capita Coffee Consumption is 5.64kg Population growth is .97% Present Population is 191.97 Million GDP growth rate-5.1%

Russia
India

Per Capita Consumption is 1.7kg Present Population is 141.8 Million Population growth rate is 0.21 Per Capita Consumption is 100gm Population growth is 1.26% GDP growth rate is 7.9%

FUNCTIONAL FOODS
Intentionally modified to provide health benefits. PricewaterhouseCoopers :Functional foods will grow in value from $78 billion in 2007 to $128 billion in 2013. Incorporating healthier ingredients into its products . These ingredients include live bacteria in yogurt, extra calcium More easily absorbed by childrens bodies, and sterols (a kind of plant fat) that reduce blood cholesterol

BCG MATRIX

MARKET GROWTH RATE

Coffee
Chocolates

Pizza

RELATIVE MARKET SHARE