INTRODUCTION

Nestlé was founded in 1867 by pharmacist Henri Nestlé on the shores of Lake Geneva in Vesey,
Switzerland. One hundred and thirty-four years later, our headquarters are still in Vesey,
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

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:

Engro foods and Haleeb foods are the main competitors of Nestle in Pakistan
& the main strong competitor is Shezan. Nestle produces wide range of food and medical items. The
main competitors of Pakistan are Unilever and Proctor and Gamble.
Competition typically is defined as among forms within an industry producing products that are
substitutes for one another. Therefore, the identification and evaluation of marketplace competitors is
a key element of strategic marketing and a vital element of the corporate survival.

Nestlé is the market leader in the water industry. It is the first company which launched bottled water
for first time in Pakistan and that’s why it has maximum market share than others because of being
pioneer in this industry. It is also leading the other firms in new product introductions, distribution
coverage, and promotional intensity.

For different product categories there are different competitors of Nestlé. Nestle pure life (NPL)
major competitors at this time who are also offering their water product in market are following:

 Pepsi is offering Aqua Fina

 Askari water

There are also other small competitors as well e.g. Classic, Nova etc which have very low market
segements.

According to market view, competition is defined as:

The competition between the firms, which are satisfying the same customer, needs.

So according to concept the competitors of NPL are all those companies, which are satisfying the
need of thrust of the customers. Beverages companies like unilever, Tapal danedar, Pepsi, Coca cola
etc. also come in this kind of the competition.