nestle International business management slides

Group Members

Maryam Khalid 2014-ag-4205

Tehreem Ashraf 2014-ag-4195

Maryam Rabia Zafar 2014-ag-4132

Aqsa Tabbasum 2014-ag-4122

Nestle Company

LOGO• “Nestle” is a Swiss-German

word which means “little nest”.

• The Nestlé logo was launched by Henri Nestlé in 1868 on the basis of the meaning of his name.

SLOGAN

INTRODUCTION:

• Headquarter in Vevey Switzerland.

NESTLE WORLDWIDE

Swiss multinational company.

Worlds number one food company.

2000 brands ranging from global icons to local favorites.

They are present in 191 countries around the world.

Have 447 factories and 339,000 employees.

INTRODUCTION:

Ranked 72 on the Fortune Global 500 in 2014

Ranked 33 on 2016 edition of the Forbes Global 2000 list of largest public companies.

Twenty-nine of Nestlé's brands have annual sales of over CHF1 billion (about US$1.1 billion).

Shareholders of L'Oreal.

Nestle productsNestlé's products include

Baby food

Medical food

Bottled water

Breakfast cereals

Coffee and tea

Confectionery

Dairy products

Ice cream

Frozen food

Pet foods

Snacks.

HISTORY:

Henri Nestle, born Heinrich Nestle on 10 August 1814 was a German who immigrated to Switzerland.

Nestle was founded in 1866 by Henri Nestle.

HISTORY:

First productLactogen formula for infants by the name “Farine Lacteé”

Nestle old building

OBJECTIVE:

Combine and strengthen its position

Meet the needs of customers

Create good will

• MISSION STATEMENT:

“…positively influence the social environment in which we operate as responsible corporate citizens, with due regard for those environmental standards and societal aspirations which improve quality of life.” — Henri Nestlé

• VISION STATEMENT:

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.

OTHER NESTLE BUSINESS:

Nestle Health Science

Health science Institute

Nestle Nespresso

Nestle Nutrition Institute

Nestle Purina Pet care

Nestle Skin Health

Nestle water

SHARE CAPITAL DISTRIBUTION GEOGRAPHY:

Strategy Implementation

There are several strategies

Environmental Strategy

Growth Strategy

Nestles Marketing Strategy

Nestles HRM strategy

Strategy ImplementationO Environmental Strategy

Environmental sustainability strategy

Natural resources efficiently in order to produce environmental friendly products.

Uses in all stages of product life cycle

Renewable resources, and mark zero leftover.

Strategy Implementation

o Growth Strategy • “Creating Shared Value”

• Investing for the future

• This includes:

Capacity.

Technologies.

Capabilities.

People.

Brands.

R&D.

Strategy Implementation

-Purpose of growth strategy

i. Meet today’s needs without compromising the capacity of future generations to meet the needs.

ii. Do this in a way, which will guarantee profitable growth in the future.

iii. Also to provide a high level of returns for shareholders and society at large over the long-term.

Strategy Implementation

o Nestle’s Marketing Strategy

Marketing strategy mix

‘’Product, Distribution, Promotion and Price’’

Main strategy and way of business, “innovation and renovation”

Internationally taking into consideration local legislation, cultural and religious practices

Main element of marketing,

“provide quality and cheaper priced products”

Strategy Implementation

o Strategic HRM at Nestle

Nestle believes that:

Employees are strength of company

Success is impossible to achieve without its employees

Important assets of company

And everyone is invited to share their views and opinions

Strategy Implementation

o Strategic HRM at Nestle

The recruitment process at Nestle is clearly defined.

People with qualities like dynamism, realism, loyalty, hard work, honesty and reliable.

Match between candidate's values & company's culture.

Recruitment for management levels takes place in the head office and all others at the branch level.

The existing employees are promoted to higher posts as per the requirements.

Another source of recruitment is campus placements and human resource consultancies.

Other StrategiesNestle maintain its mission and goals through three different strategies (Operational Pillars, Growth drivers, and Competitive advantage).

• Operational Pillars

-Innovation and renovation

-Operational Efficiency

-Whenever, Wherever, However

-Consumer communication

Other Strategies

• Growth Drivers:

Nutrition, Health, and Wellness

Emerging markets and popularity positioned products

Out-of-home consumption

Other Strategies

• Competitive Advantage:

Unmatched Product and Brand

Unmatched Research and Development

capability

Unmatched geographic presence

People, culture, values and attitude

Paurpose of StrategiesaTo ensure the success in market

Strong brands to create competitive barriers

Partnered with other large companies, for example: Coca Cola

Purchases local companies

Each brand of Nestle business has the same strategy since Nestle is a food organization

Create low-cost, highly efficient operations

Creating value over a long period of time for stakeholders, employees, consumers and business partners

Organizational Structure of Nestle

Improved Organizational Structure

Perhaps an improved version of the organizational structure could be

Departments divided according to genre of the product

Individual unit

Operation under each location’s requirement as working worldwide

Maintaining the values of original company

1990–2011: Growth internationally

1990s: Favorable , barriers smashed, world market developed

Spillers Pet foods (1998), and Ralston Purina (2002)

2002: Ralston Purina, in June, Nestlé merged its US ice cream business into Dreyer's, and in August, a US$2.6 billion acquisition was announced of Chef America, the creator of Hot Pockets

In the same time-frame, Nestlé entered in a joint bid with Cadbury

2005: Nestlé bought the Greek company Delta Ice Cream for €240 million

2006: it took full ownership of Dreyer's, thus becoming the world's largest ice cream maker, with a 17.5% market share

1990–2011: Growth internationally

2007:Nestle developed the Medical Nutrition division of Novartis Pharmaceutical for US$2.5 billion, Nestlé bought US baby-food manufacturer Gerber for US$5.5 billion

2010: Purchase of Kraft Foods's North American frozen pizza business for US$3.7 billion

2012: Nestle agreed to acquire infant-nutrition, formerly Wyeth Nutrition, unit for US$11.9 billion

Nestle in Pakistan

Nestle in Pakistan is operating since 1988 under a joint venture with Milk Pak ltd and took over management in 1992.

Butter, cream, desighee under brand name MILK PAK

Juice drink under brand name FROST

1990 it start producing NIDO, Everyday, CERELAC

1991 LACTOGEN 1 & 2

1994 MILO and NESCAFE 3 in 1

1998 sweet treats (POLO)

1999 fruit drops, NESTLE PURE LIFE

NESTLE fruita vitals

STRENGTH

o Strong brand name. o Socially responsible company. o Innovative. o Multinational.o Quality products. o The world’s largest processed food and Beverage Company. o Presence in almost every country. o Strong brands like Nescafe, Maggi and Cereal. o High quality and strong R&D team. o Dedicated and focused company.

WEAKNESS

o Selective investment due to uncertain economic and political conditions.

o Lack of awareness among the target market.

o Complex supply chain management.

o Subsidiaries difficult to manage.

o Too much product distracts from core business

OPPORTUNITIES

o Pakistan is the 7th largest producer of milk in the world.

o Credit policy can be adopted to increase sale.

o Potential to expand to smaller towns and other geographies.

o Expansion of product folio.

o Further development of global brand.

o Emerging market penetration.

o More health based products.

THREATS

o Global image may harm all brands if one brand fails.

o New diet trends.

oThere is no entry barrier for new entrants.

o Taste of consumer is difficult to change.

o Inflation is getting higher and purchasing power of people is decreasing.

CHANELS OF COMMUNICATION

-INTERNAL COMMUNICATION

PERFORMANCE AWARD

PROMOTION

INCREASES

EID BOUNS

FREE RITURN TICKETS

INCREASES IN SALARIS OF EMPLOYESS

CHANELS OF COMMUNICATION

-EXTERNAL COMMUNICATION

INTERNET

ADVERTISEMENT

T.V.ADDS

RADIO

SIGNS BOARDS

NEWS PAPER

PUMPHLETS

BROUCHERS etc.

BRANCHES IN PAKISTAN

Nestle in Pakistan has its branches in fallowing major cities.

LAHORE

ISLAMABAD

FAISALABAD

SHEIKHUPURA (factory)

KARACHI

Strategies in Pakistan

Internationally accepted best practices and ethical performance culture

Nestles existing products raise through innovation and renovation

while maintaining a balance in geographic activities and product lines

Long-term potential is never sacrificed for short-term performance

The Company’s priority is to bring the best and most relevant

products to people, wherever they are, whatever their needs are, and

for all age groups.

Controversy and criticisms

Status of Potable WaterEthiopian debt (2002)Child laborChocolate price fixingFood safetyMilk products and baby foodCookie doughMaggi noodles

Controversy and criticisms

• Status of Potable Water

“Right" to a "need.“, Nestle chairman and former CEO Peter Brabeck-Letmathe stated that "access to water should not be a public right. PeterBrabeck-Letmathe later changed his statement.

• Ethiopian debt (2002)

In 2002, Nestle demanded that the nation of Ethiopia repay US $6million of debt to the company at a time when Ethiopia was suffering asevere famine.

Controversy and criticisms

Child labor

The International Labor Rights Fund filed a claim in 2005 under the Alien Tort

Claims Act against Nestle and others on behalf of three Malian children. Children

were worked to Ivory Coast, forced into slavery, and experienced frequent

beatings on a cocoa plantation. In September 2001, Bradley Alford, Chairman and

CEO of Nestle USA, signed the Harkin–Engel Protocol (commonly called the Cocoa

Protocol), an international agreement aimed at ending child labor in the

production of cocoa.

Controversy and criticisms

Chocolate price fixing

The Bureau alleged that competitors' executives met in restaurants, coffee shops

and at conventions, and that Nestle Canada CEO, Robert Leonidas once handed a

competitor an envelope containing his company’s pricing information, saying: "I

want you to hear it from the top – I take my pricing seriously.“ Former Nestle

Canada CEO Robert Leonidas is under threat of a criminal charge for his role in

the price fixing of chocolates in Canada when he was at the helm of Nestle

Canada from 2006 to 2010.

Controversy and criticisms

Food safety Milk products and baby food

In late September 2008, the Hong Kong government found melamine in a

Chinese-made Nestle milk product. Six infants died from kidney damage, and a

further 860 babies were hospitalized. As of 2013, Nestle has implemented

initiatives to prevent corruption and farmers bring milk directly to a network of

Nestle-owned collection centers, where a computerized system samples, tests,

and tags each batch of milk. In 2014, the company opened the Nestle Food Safety

Institute (NFSI) in Beijing that will help meet China's growing demand for healthy

and safe food, one of the top three concerns among Chinese consumers

Controversy and criticisms

• Cookie Dough

In June 2009, an outbreak of E. coli O157:H7 was linked to nestle refrigerated

cookie dough originating in a plant in Danville, Virginia. In the US, it caused sickness

in more than 50 people in 30 states, half of whom required hospitalization.

Following the outbreak, Nestle voluntarily recalled 30,000 cases of the cookie

dough. The cause was strong-minded to be polluted flour obtained from a raw

material supplier. When operations resumed, the flour used was heat-treated to kill

bacteria.

Controversy and criticisms

Maggi Noodles

• On 3 June 2015, New Delhi Government banned the sale of Maggi in New Delhi

stores for 15 days because it found lead and monosodium glutamate in the

eatable beyond permissible limit. In June 2015, nestles share fell down by 11%

and then 3%. On 5 June 2015, Food Safety and Standards Authority of India

(FSSAI) orders banned all nine approved variants of Maggi instant noodles from

India, terming them "unsafe and hazardous" for human consumption. Nestle

has already destroyed 400 million packets of Maggi products.

Recommendations:

Use of organic products

Use of science technology

Forbid the unhealthy products

Diversify product range

Should increase the distribution Network

Diversified their portfolio.