Group members

Muhammad Asif
01-222192-011
Shabahat Ali
01-222192-015

Strategic Muhammad Nouman

01-222192-011

management
 Nestle Pakistan

Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A, - a

company of Swiss origin headquartered in Vevey,
Switzerland. It is a food processing company,
registered on the Karachi and Lahore stock exchanges
and operating in Pakistan since 1988 under a joint
venture with Milk Pak ltd and took over management in
1992. For ten years in a row, the company has won a
place among the top 25 companies of the Karachi
Stock Exchange
 Brief History

1. Founded in 1866, Nestle is the largest food and beverage company in the world.
Initially
2. the company sold only infant’s cereal
3. they quickly diversified to include a variety of products including chocolate, coffee,
soup, yogurt, water and frozen foods
4. The organization employs nearly a quarter of a million people from 70 different
countries around the world
5. Henri Nestlé, the company’s founder, worked as an assistant to a local pharmacist
early in his career.
6. The first Nestlé logo was created in 1868
7. The first major acquisition during this period was in 2001
8. Nestle operating in Pakistan since 1988 under a joint venture with Milk Pak ltd
9. Nestlé Pakistan now operates the biggest milk collection system in Pakistan
 Organizational
Hierarchy
Organizational structure is the formal
framework by which jobs tasks are
divided, grouped, and coordinated.
Nestlé is a function-based
organization. The tasks are divided
into separate jobs and then these jobs
are grouped together under different
departments i.e. functional
departmentalization is found in
organization. Each major area is kept
under the manager who is specialist in
that concerned field and is responsible
for all activities, which that department
performs.
 Location of factories
Product Line
Nestlé is giving its products in 10
different categories of food with 75
brands
Number of total employees
Total number of employees in nestle
worldwide are 352,000
The number of employees in nestle in
Pakistan are 4000
2. Lahore - Sheikhupura - Faisalabad
Rd, Sheikhupura, Punjab
There are 3 factories
1. Street 3, I-10/3 I 10/3 I-10,
3. Khanewal-Kabir Wala Rd, Nestle
Islamabad, Islamabad Capital Colony, Allahabad, Kabirwala, Khanewal,
Territor Punjab
Nature of business Type of Ownership
Principally the Company is engaged Nestle has a
in manufacturing, processing and corporation type of
sale of dairy, nutrition, beverages ownership
and food products
 Key Players

Syed Badar Ali Syed Hyder Ali

Syed Yawir Ali Syed Saif ul islam
Chief Financing
Officer

Fahad Yousaf

Marketing Director
Chairman of the Director
Director
Board
 Mission

Nestlé's purpose is enhancing quality of life and contributing to a healthier future. We want to

help shape a better and healthier world. We also want to inspire people to live healthier lives.
This is how we contribute to society while ensuring the long-term success of our company

Vision
To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved
shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier
selling preferred products.

Objectives
Nestlé's purpose is enhancing quality of life and contributing to a healthier future. We
want to help shape a better and healthier world. We also want to inspire people to
live healthier lives. This is how we contribute to society while ensuring the long-
term success of our company.
 STEPLE Analysis

Political
• Political environment is usually unstable due to active opposition and multiple power centres in the
country.
• For the first time in the history two successive governments completed their terms with a civilian transfer
of power.
• Government currently doesn't have simple majority in the parliament.
• Lack of continuity among successive government regarding policy decisions

Economic
● GDP of Pakistan is $320 billion, with per capita income of $1,355 ranking 42 nd in the world
● Infilation rate is 8.3% infilation rate is currently set at 7
● Pakistan has personal saving rate 8.3% v very low, investment to GDP rate is 12% ranking 151 st In the
world
 STEPLE Analysis

Environmental
• Increasing focus on environment preservation, both on government and individual level
● Shifts towards renewable by 2030, 60% of the energy will be from renewable sources
• EV policy 2020 approved to incentivize production and import electronic vehicle

Social
● Pakistan is the 5th most populous country in the world with 220
million inhabitants.
● Population mostly concentrated in mostly the basin of Indus river
● Pakistan ranks 133 in gender equality
● Work life balance generally not in focus
● Cultural shifts toward consumerism with easy access to
Consumer financing.
 STEPLE Analysis

Technological
● Pakistan is becoming a regional software powerhouse companies like NETSOL system limited,
Avaneceon provide enterprise software solution across the globe
● Container and tanker tracking facilities provided by TPL to reduce uncertainty in movement in sensitive
areas
● Increasing tertiary education and improving research output landscape
● Local availability of competent engineers, marketers, accountants make companies self-sufficient in
leading

Legal
● Food Safety is a global concern that refers to handling, preparing and storing food in a way to best
reduce the risk of individuals becoming sick from foodborne illnesses.
● There are various laws about food safety and food hygiene
● West Pakistan Pure Food Ordinance 1960 • Cantonments Pure Food Act 1966 • Pakistan Hotels and
Restaurants act 1976 • PSQCA Act 1996
● Computation commission of Pakistan and federal and provincial agencies of Pakistan also exercise
jurisdiction
 SWOT Analysis

strengthes
weakness Threats
Opportunities
• Strong cultural values
stemming from the firms 1. A number of Nestlé’s • Higher levels of buyer
integrated to their products have faced power within the
stakeholders. criticism as a result of • Ability to reach new
consumer markets industry fuelled by
• Current strategic position their nutritional value greater choice and
of Nestlé supported by 2. The past of Nestlé is lower loyalty.
three key areas of tainted in parts by • Development of
intangible capabilities
• Variability in raw
business ‘quality negative public material prices
leadership, customer 3. Recognizing the need to aid competitive
advantage
• Technological
satisfaction and for stability and change driving both
sustainability. consistency in the
• Backwards integration innovation and
• Nestlé have a strong processes found within
to gain more control associated
commitment to corporate the company’s global
over the supply chain challenges
social responsibility with supply chain
of the firm • Ageing population
reference being made to
‘long term commitment shifting the
ever being sacrificed for • Innovative demographics of the
short-term performance. development of workforce
• Diversified and varied distribution channels.
brand portfolio.
 Strategies
Undertaken
Corporate level Strategies
• Growth strategy
• Stability
Business level strategies
• Low Coast leadership
• Differentiation strategy
Functional Strategy
• Marketing strategy
• Financial
• Research & Development
• Human Resource

Management Strategies
• Human Resource Management
• Administration
• Decision Making
• Total Quality Management
• Motivation
 Corporate level Strategies
• Growth strategy
Nestle is one of the world largest food and beverages
manufacturers. It has expended its business operation in 130
countries with more than 500 production units and strategic
relationship with thousands of business associates partners and
investors
Current growth rate strategies divided into horizontal and vertical
growth strategy
Stability
Growth strategies are not only preferred in all types of market
condition nestle also has suspended its growth when there are
unfavourable economic conditions, poor industrial growth, or high
market saturation. In order to survive and more forward cautiously,
nestle waits for the condition to turn favourable for its business
conditions. Under stability strategies Nestle does not undertake any
type of business expansion, brand extensions
 Business level strategies
Low Cost leadership
We purchases high quality of raw material from large scale suppliers from the market. There for its cost of production is
comparatively higher than those other small scale and low quality manufacturers
However its business level strategies largely focused on achieving this goal through cost coefficient operation, quality assurance.
Current strategy of the company is to achieve the operational efficiency by purchasing the best quality ingredients and raw
materials from the most reliable supplier
Differentiation strategy
The second core business level strategy of Nestle is to differentiate its products from their competitor products. The
purpose behind this strategy is to build unique brand image in the mind of potential consumers. Currently Nestle
manufacturers 10,000 products under 8,500 different brands names.
 Functional strategy
Marketing strategy
Nestle is one of the largest company in food processing industry
in terms of revenue & profitability. It is fortune 500 company
which is serving different customer segment all over the world
and have the market capitalization of the US $250 billion
The Marketing mix of Nestle discusses the 4P’s of one of the
strong FMCG companies of the world
Product Mix has four dimensions,
Width (Product Line)
Length(number of items)
Depth(Offered models)
Consistency(Relationship of product)
Product Mix of Nestle are
Beverages
Baby Food
Coffee
Maggi
Milk Products
Bottled Water
 Financial
The finance team drives our growth platforms, supports
our operational pillars, leverages our competitive
advantage and always delivers. We support sound
business decision-making and innovation planning. Of
course, they also help optimise our growth, cash flow and
return to shareholders. We’re true change agents – aiming
for long-term value creation.

  Jan – Mar Jan – Mar change

2020 PKR 2019 PKR
Million Million
Sale 29,883 29,136 +2.6%
Gross profit 8,840 8,870 +0.8%
% of sale 29.6% 30.1%  
Operating profit 4,054 4,027 +0.7%
% of sales 13.6% 13.8%  
Net profit of sale 1,939 2,274 -14.7%
% of sales 6.5% 7.8%  
Earnings per 42.76 50.15 -14.7%
share
Research & Development
Product Development
• Our R&D network is the largest in the food industry with 23
R&D Centres, 3,900 scientists and researchers working
across the world
• The Product Technology Centres (PTCs) provide technical
development expertise for our product, manufacturing and
packaging processes.
• The licence document should set out the terms and conditions
that apply to using the patent, including any payment or
royalties to be made by the person using the patent (‘the
licensee’). The licence should also show the geographical
area and field of use in which a licensee may sell your product
and how long the licence will last
 A Picture Is Worth a Thousand Words

The day-to-day management of the Nestlé business is taken

care of by our Executive Board. The designated Board
Human Members manage diverse parts of the global business.
Resource
 Management strategies

Human Resource Management

Nestlé’s HR offers opportunity in three key areas.
• 1.You can join career in HR business partnership.
• 2.You can join the devoted specialist team.
• 3.You can also join the centre of scales

Administration:
Nestle is a diverse company where you meet people from different
ethnicity, age group and also vast experience, So working with
Nestle team you will feel like you are surrounded by those people
who are born for some purpose

Decision Making
Nestle the food and beverages major are decentralizing its decision
making. The aim is better consumer insight, more focused offerings to
different sets of consumers and to revamp market penetration.
TQM:
Nestlé’s top priority is quality for their consumers. Their actions to
ensure quality and food safety are guided by the Nestle quality policy
(company), which also conclude their commitments.

Incentives and motivation

Market Analysis

Segments & Target Market

Segmentation
Geographic
Demographic

Psycho-graphic
Social Class
Lifestyle
Class
Venus has a beautiful name and is
the second planet from the Sun
Behavioral
Product Mix (4P’s)
 Market shares
Group sales Organic Growth (%) Real Internal Growth (%)
92.6 Billion 3.25% 2.9%
 
Underlying Trading Underlying Trading Underlying Trading
Operating Profit Operating Profit Margin Operating Profit
16.3 Billion 17.6% Margin(Basic)
  +60 (Basic points)
Trading Operating Profit Trading Operating Profit Trading Operating Profit
13.7 Billion Margin Margin (Basic)
  14.8% -40 (Basic Points)
Earnings Per Share Earnings Per Share (%) Underlying Earnings Per
4.3 +28% Share
  +11.1%
Operating Cash Flow Proposed Dividend Proposed Dividend
15.8 Billion (58.4% of net 2.7 Increased
financial debt) 10.2%
 
 Competitors

No of countries we sell 187

Number of Employees 291000

Total Group salaries & Social welfare Expenses 16 Billion

Corporate Taxes Paid in 2019 2.9 Billion

 competative Analysis

Primary Competitors
• Nestlé faces a tight competition from its close rival Unilever .
Indirect Competitors
• Engro Food Limited
• Murree Brewery company Limited
• Mitchells
Functional Strategy
• Marketing strategy
• 4 p’s
• Research & Development
• Human Resource
Main Marketing Strategies
• Market Positioning
• Financial Strategies
Other strategies nestle
• Procurement
• Procurement Vision
• Procurement Mission
 Production strategy

Capacity of plantl
The manufacturing facility is spread over 1m ft² and the
building covers an area of 515,000ft². The facility currently
employs 555 people. The production capacity of the plant is
expected to be more than 100,000t a year
Quality and safety
Build trust by offering products and services that match
consumer expectation and preference
Comply with all internal and external food safety,
regulatory and quality requirements
Gain a zero-defect, no-waste attitude by everyone in our
company Make quality a group-wide objective
 Production strategy

Production Staff Product line of nestle

In 2019, Nestlé employed
approximately 291,000 people around
the world. Nestlé is a multinational
consumer goods company,
headquartered in Vevey, Switzerland
Laboratory
Beverages, Coffee, Water, Cereals, Chilled, Chocolate,
confectionery and baked goods ,Food service products
Frozen food, Frozen Dessert, Healthcare nutrition, Instant foods,
Performance nutrition, Pet care, Nestlé, Purina pet care products,
Refrigerated products
Seasonings, Shelf stable Yogurt, As shareholder. Former brands,
Beverages, Bottled water, Confectionery, Eye care, Frozen food,
Health and nutrition, Pet care

The laboratories perform analyses on raw and packaging

materials, intermediate and finished products to support product
release and monitoring as well as R&D projects. All laboratories
are accredited to ISO 17025 ad have systems in place to ensure
data confidentially requirements are adhered to.
 Control procedures
Marketing control
Market Leadership Strategy
Market Challenger Strategy
Market Follower Strategy
Market Niche Strategy
Alliance Strategy
Component Parts of a Marketing
Plan
Situation Analysis
Taxation
Taxation is an important and material topic for Nestlé and for our
stakeholders, in terms of compliance, and our Nestlé Creating
Shared Value, and therefore we actively manage, monitor and
control our Group tax affairs.
We believe it is good practice to voluntarily disclose information
about our tax management and our tax contributions, as
provided in the following sections
Principles of Responsible & Sustainable Tax Management &
Strategy
 Inaccuracy of orders receives in inventory or
Problem identification stocks in hands
Top-down approach may serve an organization well but not
suitable for uneducated and uninformed employees who need
supervisors to manage them carefully. Nestle had use image
Management issues of nestle
of manager as coach. Coaching works best for developmental
1 RAW MATERIALSPROBLEM purposes. Promote opportunities to develop skills that will
2.nexpected demand by customers enable people to move to different areas of the business.
3.Bad weather and natural disaster
4.Inaccuracy of orders receives in inventory or stocks in hands Bad weather and natural disaster
Every company have its own problem whether small orbig
CHILD LABOUR ISSUE PROBLEM company. This also including Nestle company either internal or
external problems. You can have slow and steady change, and
1.The use of child labour in cocoa production Because of the that is nothing to be ashamed of”, - CEO Brebeck Lemathe
poverty and a lack of schools Violation of child labour law
Enslaved children and child trafficking
2. Introduces the nestle supplier code Monitoring all
participants in its supply chain and set clearer labour
standards Give special training on how to address child labour
problem
3.The manager had created Nestle Supplier Code to guide
and maintain the relationship between supplier and company

Unexpected demand by customers

Free sampling, Advertisement, Supporting WHO campaign in
introducing complementary foods, Coordinated by the
International Nestlé Boycott Committee

Strategic Alternative
Focus on nutrition, health and wellness
“ strategic pillars” (“low cost, efficient operations, renovation and
innovation of the Nestle product line, universal availability and
improved communication with consumers through better
branding”)
Structure
Decentralized and relatively flat organizational structure which
helps to cater for local needs thus increasing flexibility.
organized by country/ every country is like “a small kingdom”
It has operations worldwide through strategic business units
Staff
Nestlé maintains local companies with regional staff in local
markets as they better understand the needs of customers.
Regional organizations had more than 275,000 employees. It
has a pool of experts- its staff consists of scientists,
technologists from top universities (Bell and Shelman, 2009,
Skills
Nestlé’s competitive advantage is its R&D. It has a high level of
technology (23 Product Technology Centres), and a network of
experts around the world. (Bell and Shelman, 2009, p. 9).
Shared Values
Deliver long term value to shareholders.
Focus on long term results.
Unwritten culture – Strong personal culture

System
Comprehensive information system:  the GLOBE
Employees move from the bottom up in the organization.

Style
Democratic leadership style: managers are given autonomy to
take decisions. As such, they feel a sense of belonging in the
organization
 Nestlé 5 year future plan

Nestlé, the food group, is focusing on innovation, local

production and improving the health Speaking to the Daily
Telegraph, Paul Bulcke, Nestlé's chief executive, reported that
approximately 95% of the products it sells around the world are
now manufactured locally.
"We don't build structures for weak or strong currencies," he
said. "We set ourselves up to work with local materials, which is
why we have 470 factories around the world. We are in for the
long term. Other core priorities for the Swiss multinational
include creating a "worldwide competency of products".
Innovation is central to this process, especially in Europe, where
organic growth is muted. "We are definitely strong believers in
true R&D, that we can grow, and has been the base of our
growth in Europe," said Bulcke. Creating healthy new products
and modifying existing parts of its portfolio to improve their
credentials in this area is also important for Nestlé, even in
categories like confectionery. Chocolate is an interesting
business. It has all sorts of qualities you can mould. Air is a key
one - you could build air into chocolate,"
Thank you