NESTLE PROJECT

TABLE OF CONTENTS






SERIAL #

PARTICULARS
PAGE #
01
TABLE OF CONTENTS
02
02
ACKNOWLEDGMENT
03
03
INTRODUCTION TO NESTLE
04
04
HISTORY OF NESTLE
05
05
VISION OF NESTLE
07
06
MISSION STATEMENT & OBJECTIVES OF NESTLE
08
07
ORGANIZATIONAL CHART
09
08
BRANDS
11
09
EARNINGS
12
10
SWOT ANALYSIS
13
11
MARKETING
14
12
STRATEGIES ADOPTED BY NESTLE
15
13
COMPANY ENVIORNMENT
20
14
CO-OPERATE GOVERNANCE
21
15
PORTER FIVE FORCES ANALYSIS OF NESTLE
22
16
APPENDIX
23













ACKNOWLEDGEMENT







First and foremost, we would like to thank Almighty Allah for giving us the ability and strength to complete this project. Secondly, we are also thankful to our respective parents for providing us with the opportunity to receive higher education in such an accomplished institution that required us to carry out such projects that expand the dimensions of our mind. We are definitely not forgetting to recognize the efforts and support of our teacher SIR S.M FAHEEM, without whom this project would not have been possible. Who give us the opportunity to work on a project, which not only enlarged our vision but also show, us the real picture of the market Management? Our special thanks to the group members, who have whole-heartedly work for the completion of this report. All of us have earned a valuable and worthy experience during the project.














INTRODUCTION






Nestlé was founded in 1867 by pharmacist Henri Nestlé on the shores of Lake Geneva in Vevey, Switzerland. One hundred and thirty-four years later, our headquarters are still in Vevey, surrounded by the Swiss Alps in one of the world’s best-preserved environmental settings. As they have grown from humble beginnings into the world’s largest food company, they have attempted to take the fundamental cultural values of environmental preservation and cleanliness into every country where they operate. Company has 468 Nestlé factories currently in operation.
-Company’s facilities reflect the environmental values basic to Nestle Company.
-Top management follow the Company’s environmental performance
-Company’s Environmental Officer reports directly to General Management to ensure there is on-going awareness regarding environmental affairs.
Nestlé Environmental Advisory Group meets regularly to review current environmental issues and to anticipate potential concerns. This allows them to maximize control over their activities and contribute to sustainable development in the countries where they operate. The Nestlé Environment – Progress Report 2000 describes the results of continuous improvement in its environmental practices and being a leader in environmental performance













HISTORY




1866-1905
In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother's milk or any of the usual substitutes. People quickly recognized the value of the new product, after Nestlé's new formula saved the child's life, and soon, Farine Lactée Henri Nestlé was being sold in much of Europe.
1905-1918
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain. World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestlé's production had more than doubled.
1918-1938
After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestlé's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the Company's second most important activity
1938-1944
Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company's newest product, Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the wartime economy.
1944-1975
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974.





1975-1981
Nestlé's growth in the developing world partially offset a slowdown in the Company's traditional markets. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc..
1981-1995
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation.
1996-2002
The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.
2003 +
The year 2003 started well with the acquisition of Mövenpick Ice Cream, enhancing Nestlé's position as one of the world market leaders in this product category. In 2006, Jenny Craig and Uncle Toby's were added to the Nestlé portfolio and 2007 saw Novartis Medical Nutrition, Gerber and Henniez join the Company.















“VISION”


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.
High quality and collaboration
Our objectives are to deliver the very best quality in everything we do, from primary produce, choice of suppliers and transport, to recipes and packaging materials. Our operations and collaboration in the Nordic countries gives us greater opportunities to be efficient and strategic and to function well as an organization, both when it comes to the distribution chain and to concentrating on joint product launches and campaigns.
Vision Statement of Nestle Milkpak:
The strategic priorities of Nestle Milkpak are focused on delivering shareholder value through the achievement of sustainable, capital efficient and profitable long term growth. Improvements in profitability will be achieved while respecting quality and safety standards at all times. In line with this objective, Nestle Milkpak envisions to grow in the shortest possible time into the number one food company in Pakistan with the unique ability to meet the needs of consumers of every age group - from infancy to old age, for nutrition and pleasure, through development of a large variety of food categories of the highest quality. Nestle Milkpak envisions the company to develop an extremely motivated and professionally trained work force, which would drive growth through innovation and renovation. It aspires, as a respected corporate citizen, to continue playing a significant role in the social and environmental sectors of the country.





CORPORATE “MISSION”





Nestlé’s brands and products are the focus of continual innovation and renovation so that they meet and exceed our consumers' expectations. We seek to ensure that our products are available whenever, wherever and however our consumers want them.






OBJECTIVES






Nestlé’s purpose is to offer safe, tasty, convenient and nutritious foods to improve health and well-being of consumers of all ages all over the world. To meet the needs and desires of today’s and tomorrow’s consumers, Nestlé is strongly committed to Research and Development (R&D) to improve existing products and develop new foods with specific health benefits.
















Organizational Chart




Details of activities / responsibilities which are included in the different departments shown in the General Organizational Chart.
Zone EUR
Food & Beverages Europe
Zone AMS
Food & Beverages Americas: United States of America, Canada, Latin America and Caribbean
Zone AOA
Food & Beverages Asia, Oceania, Africa and Middle East
Nestlé Waters
The water business is managed on a global basis.
Nestlé Nutrition
The Nutrition business is managed on a global basis.
Nestlé Professional
Strategic Business Division
Finance & Control
Group Control, Group Accounting & Reporting, Legal, Intellectual Property, Acquisitions & Business Development, Pensions & Group Risk Services, Treasury, Investor Relations, Audit, Tax, Global Nestlé Business Services (GNBS), F&C Business Excellence


Strategic Business Units (SBUs) and Marketing
Strategic Generating Demand Unit, Business Excellence Generating Demand, Corporate Wellness Unit, Dairy SBU, Coffee & Beverages SBU, Chocolate, Confectionery & Biscuits SBU, Ice Cream SBU, Food (Culinary and Frozen food) SBU, Pet Care SBU, Nespresso, Nescafe RTD
Innovation, Technology, R&D
Science & Research, Regulatory, PTCs and R&DCs, Innovation Acceleration Teams, Technology Intellectual Property, Innovation Partnership Management, Packaging & Design, Business Excellence, R&D Nestlé Waters, R&D Nutrition, R&D Nestlé Purina
Operations
Procurement, Production, Supply Chain, Engineering, Quality Management, Safety, Health & Environment, Agriculture, Operations performance, Business Excellence Operations, Technical Personnel Coordination, GLOBE & Business Excellence.
Pharma / Cosmetics / Human Resources
Pharmaceutical and Cosmetic products, Liaison with L’Oreal, Human Resources
Corporate Communications
Corporate Media Relations, Public Affairs, Economic and International Relations
Corporate Governance, Compliance and Corporate Services
Center Counsel, Group Compliance, General Secretariat, Group Governance















BRANDS





Today Nestlé is present in different markets with the following main brands:
Coffee
Nescafe, Nespresso, Taster’s Choice, Ricoré, Ricoffy, Bonka, Zoégas, Loumidis
Water
Poland Spring, Nestlé Pure Life, Arrowhead, Vittel, Deer Park, Levissima, Perrier, S.Pellegrino, Ozarka, Contrex, Ice Mountain, Zephyrhills, Nestlé Aquarel, Hépar, Acqua Panna,
Other beverages
Nestea, Nesquik, Nescau, Milo, Carnation, Libby’s, Caro, Nestomalt, Nestlé
Dairy - Shelf stable
Nestlé, Nido, Nespray, Ninho, Carnation, Milkmaid, La Lechera, Moça, Klim, Gloria, Svelty, Molico, Nestlé Omega Plus, Bear Brand, Coffee-Mate
Dairy - Chilled
Nestlé, Sveltesse, La Laitière, La Lechera, Ski, Yoco, Svelty, Molico, LC1, Chiquitin
Ice cream
Nestlé, Antica Gelateria del Corso, Dreyer's/Edy's, Drumstick/Extrême, Maxibon/Tandem, Mega, Mövenpick, Sin Parar/Sem Parar/Non Stop, Delta
Infant nutrition
Nestlé, Nan, Lactogen, Beba, Nestogen, Cerelac, Nestum, Neslac, Guigoz, Good Start
Performance nutrition
PowerBar, Pria, Musashi
HealthCare nutrition
Nutren, Clinutren, Peptamen, Modulen
Bouillons, soups, seasonings, pasta, sauces
Maggi, Buitoni, Thomy, Winiary,Torchin, Osem, Totole, Haoji
Frozen foods (prepared dishes, pizzas, small meals)
Stouffer’s, Lean Cuisine, Hot Pockets, Buitoni, Maggi, Wagner, La Cocinera
Refrigerated products (cold meat products, dough, pasta, pizzas, sauces, snacks)
Nestlé, Buitoni, Herta, Toll House, Sabra
Chocolate, confectionery and biscuits
Nestlé, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties, Butterfinger, Aero, Polo
Nestlé Professional
Chef, Davigel, Minor’s
Petcare
Purina, Friskies, Fancy Feast, Alpo, Gourmet, Mon Petit, Felix, Dog Chow, Cat Chow, Pro Plan, Purina ONE, Beneful, Tidy Cats







EARNINGS





In 2003, consolidated sales were CHF87.979 billion and net profit was CHF6.213 billion. Research and development investment was CHF1.205 billion.
Sales by activity breakdown: 27% from drinks, 26% from dairy and food products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from chocolate, 11% from pet products, 6% from pharmaceutical products.
Sales by geographic area breakdown: 32% from Europe, 31% from Americas (26% from US), 16% from Asia, 21% from rest of the world.










SWOT ANALYSIS



“STRENGTH”
It’s a company that does not depend on personalities.
Leaders in Dairy Products.
Long term experience.
Innovative products.
Designative packaging.
Innovative planning and ideas.
Wide variety of brands.
“WEAKNESSES”
Supply Chain
Exports
“OPPORTUNITIES”
High credibility
Ability to secure more credit.
Available means for expansion.
Improving trends
Industry leadership.
Consumer preference.
Fewer competitors.


Dedicated workforce
Untapped rural market.
“THREATS”
Highly competitive market (multinational companies are very organized and financially strong).
Increasing prices of raw materials.
Competitors like Haleeb, Halla, Askari, Pure water, Nurpur dairies, and Prime yogurt.

MARKETING




Nestle hold strong reputation for high quality brands. In major markets, trade marketers are frequently rated highly in customer surveys on professionalism and service. They don't believe in 'one brand fits all', but with a strong, diversified global portfolio – well focused and defined – offers a brand for all key consumer and market sectors.
They aim to satisfy consumers' demands, better and more profitably than their competitors.





STRATEGIES ADOPTED BY NESTLE



Business principle:
Nestlé is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices:
Nestlé's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners.
Nestlé does not favor short-term profit at the expense of successful long-term business development.
Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not exist.
Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.
Nestlé is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial.
Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets.
Consumer perceptions and the future needs of society: As a global food manufacturer and marketer, Nestlé takes into consideration local needs, cultural differences and consumer preferences as well as attitudes concerning the use of ingredients derived from genetically modified crops. Nestlé will continue to use ingredients derived from genetically modified crops wherever appropriate.

Global commitment:
Nestlé firmly supports the principles of the United Nations Global Compact and is committed to reflecting these in its business principles and practices. Search for trust:
Nestlé is the world's leading food and beverage company, with sales of about CHF 72 billion. It has 230,000 employees world-wide and operates 520 factories in 82 countries. Its products are available universally, including such remote markets as North Korea, and they are sold under a number of brands such as Nestlé, Nescafe, Nestea, Maggie, Buitoni, Perrier and Friskies. Company belongs to more than 200,000 shareholders, today; Nestlé is about twice the size of its nearest competitor in the food and beverage sector. The company is in business for over 130 years. Since the days of its founder, brands have been a mainstay of company’s development and its management strongly believes that is one of the key elements of company success. A basic reason company has grown to be the world's largest food company is that consumers have learned to trust its brands. The Nestlé’s challenge was the establishment of a clear hierarchy of very few corporate strategic global brands that now cover almost all products, as well as the parallel usage of regional and local product brands and product denominations.
Additionally company introduced the Nestlé Seal of Guarantee and emphasized corporate logo. This Seal of Guarantee is a visible sign of company’s corporate responsibility for the safety and quality of every product, which leads to maintain consumer confidence and trust in this corporation. In order to be able to give this quality and safety assurance, company developed a Nestlé Quality Management System, which collects the experience of our Research & Development, on which we spend CHF 800 million a year. For a company such as Nestlé, economic success depends on winning the public's approval every day in every country where our products are sold.
They have always believed strongly that tobacco should never be marketed to youth. It should only be marketed to adult smokers, in an appropriate way that takes account of the risks posed to health. They also believe adults who have chosen to smoke should be able to receive information about what they buy, and should be able to communicate responsibly with them about their brands.


Nestle company’s Success is built on quality :
Quality is the cornerstone of company’s success. Everyday, millions of people all over the world show their confidence in company by choosing Nestlé products. This confidence is based on our quality image and a reputation for high standards that has been built up over many years.
Every product on the shelf, every service and every customer contact helps to shape this image. A Nestlé brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Customers expect company to keep this promise every time.
Under no circumstances company compromise on the safety of a product and every effort must be made to avoid hazards to health. People, equipment and instruments are made available to ensure safety and conformity of Nestlé products at all times.
The customer comes first:
Company does want to win and keep customers, distributors, supermarkets, hotels, shopkeepers and the final consumers. They have very different requirements. Trade customers expect excellent service, correct information and timely delivery. Consumers consider taste, appearance and price when they make their choice. Company’s task is to understand what customers want and respond to their expectations rapidly and effectively.
Company serves various groups of consumers and there is demand for products at different levels of perceived quality and price. All customers expect good quality at a reasonable price.
Customers are central to company’s business and company always respects their needs and preferences.
Quality is a competitive advantage:
Company lives in a competitive world and must never forget that their customers have a choice. If they are not satisfied with a Nestlé product, they will switch to another brand. Company’s goal is to provide superior value in every product category and market sector in which it competes.



The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded cost-cutting approach. Lasting competitive advantage is gained

from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction cost.
Quality units at different levels of the organization provide specific support, promote quality awareness, assume guardianship and audit the system. Quality departments monitor operations against agreed standards and must intervene in case of non-conformity.
Training and teamwork are crucial to the successful implementation of high quality standards. Continuous training ensures that everyone understands his tasks and has the necessary skills to carry them out. Teamwork allows us to achieve results that are greater than the sum of individual efforts.
We motivate employees by demonstrating management commitment to Quality, by setting challenging goals and by giving them responsibility and recognition. It is through employee involvement that goals and targets can be achieved in the shortest time.
Quality must be a way of life for everyone in the company.
Progress is followed by listening to our customers and by measuring our performance.
Nestlé's Position on Gene Technology: From its inception more than 130 years ago, Nestlé has built its business on successfully applying scientific breakthroughs and technological innovations while taking full responsibility for the quality and the safety of its products. Throughout these years Nestlé has been manufacturing and marketing products tailored to meet the diverse needs and preferences of consumers all over the world. Nestlé has always strived to respect these differences and to take them into account in its activities. Nestlé supports a responsible application of gene technology for food production based on sound scientific research.
Consumer information and labeling: Consumers confidence in the food they are buying is supported by having access to information. Nestlé's Consumer Services are well equipped to provide this access and thus are the first source of information, including the use of ingredients, derived from genetically modified crops, in Nestlé products. Many governments now have implemented or are considering regulations for the use

and labeling of these ingredients. In the absence of a global agreement on the labeling of ingredients, derived from genetically modified crops, and recognizing governments responsibility for the regulatory process, Nestlé strictly adheres to national laws and regulations regarding their labeling.





























ENVIRMENT OF THE COMPANY






MANAGEMENT
The executive board, a distinct entity from the board of directors, includes:

Peter Brabeck-Letmathe, Chairman & CEO
Carlo Donati, EVP, Chairman, and CEO of Nestlé Waters
Frits van Dijk, EVP of Asia, Oceania, Africa, Middle East divisions
Lars Olofsson, EVP of Strategic Business Units and Marketing
Francisco Castañer, EVP of Pharmaceutical and Cosmetic Products, Liaison with L'Oréal Human Resources
Michael Powell, EVP of United Kingdoms Diivision
Paul Bulcke, EVP of Americas divisions
Paul Polman, EVP of Finance, Control, Legal, Tax, Purchasing, Export
Luis Cantarell, EVP of Europe divisions
Richard T. Laube, Deputy EVP of Nutrition Strategic Business units
Werner J. Bauer, EVP of Research and Development, Technical, Production, Environment.

Current members of the board of directors of Nestlé are: Günter Blobel, Peter Böckli, Daniel Borel, Peter Brabeck-Letmathe, Edward George, Rolf Hänggi, Nobuyuki Idei, Andreas Koopmann, André Kudelski, Jean Pierre Meyers, Carolina Müller-Möhl, Kaspar Villiger. Secretary to the Board Bernard Daniel.



Corporate Governance




Nestlé's commitment to sound Corporate Governance goes back to its very early days.
This commitment is reflected and explained in several publications, such as the Corporate Governance Report, Articles of Association, Committee charters etc. It is also visible in Nestlé's day-to-day business behavior.
The Corporate Governance Report covers the following areas:
Group structure and shareholders
Capital structure
Board of Directors
Executive Board
Compensations, shareholdings and loans
Shareholders’ participation
Changes of control and defence measures
Auditors
Information policy






PORTER’S FIVE FORCES ANALYSIS







Five Forces Analysis helps the us to contrast a competitive environment. We analyze these five forces for NESTLE.
Five forces analysis looks at five key areas namely the
q Threat of entry
q The power of buyers
q The power of suppliers
q The threat of substitutes and
q Competitive rivalry

CUSTOMERS:

Favorable

COMPETITORS:

Unfavorable

SUPPLIERS:

Favorable

SUBSTITUES:

Favorable

NEW ENTRANT:

Favorable