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 Nestlé has been serving Pakistani consumers since 1988, when

its parent company first acquired 40% shares in Milkpak Ltd.

 Then in 1990 the Sheikhupura factory starts the production of

NESTLE NIDO milk powder and cereals.

 A milestone was achieved in 1998 when “NESTLE PURE LIFE”

bottled water was premiered in Pakistan. Within a few years it
becomes one of the world’s leading brands of bottled water.

 In 2005 the GLOBE project is successfully launched, and is

intended to further cooperation and information sharing with
Nestlé companies around the world.

 Today Nestlé is fully integrated in Pakistani life, and are

recognized as producers of safe, nutritious and tasty food.
“We envision Nestlé 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.

We envision the company to develop an extremely

motivated and professionally trained workforce, which
would drive growth through innovation and renovation.

We aspire, as a respected corporate citizen, to continue

playing our due role in the social and environmental sectors of the country.”
In analyzing an organization it is very important to begin with
what the organization stands for and why it exists, thus
leading us to the mission statements of Nestle, which states;
“Nestlé 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,
Nestlé contributes to your well-being and enhances
your quality of life.”
Major joint ventures 1981 Galderma
1905 Merger between Nestlé and Anglo-Swiss Condensed Milk
1929 Merger with Peter, Cailler, Kohler Chocolates Suisses S.A.
1947 Merger with Alimentana S.A. (Maggi)
2000 Acquisition of Power Bar
1969 Vittel (equity interest)
2001 Acquisition of Ralston Purina
1971 Merger with Ursina-Franck
1974 L'Oreal (equity interest) 2002 Acquisition of Schöller and Chef
1977 Acquisition of Alcon (2002: partial IPO)
2002 Dairy Partners Americas and
1985 Acquisition of Carnation Laboratories innéov

1988 Acquisition of Buitoni-Perugina 2003 Acquisition of Move pick, Powwow and

1988 Acquisition of Rowntree
2004 Acquisition of Valio (ice cream
1990 Cereal Partners Worldwide activities)

1991 Beverage Partners Worldwide (formerly Acquisition of Wagner, Protéika,
1992 Acquisition of Perrier

1998 Acquisitions of San Pellegrino and Spillers Pet foods

 Nestle is operating in a society which is very large in
nature thus placing the organization in an external
environment where there is a huge number of forces which
can potentially influence the functioning of nestle in many

 The external elements with which the Nestle has to deal

are the elements that are directly related to it in
conducting its daily operations and the forces that may
create uncertainties that can not be predicted. These
elements may have differentiated impact on Nestle in
different countries of the world

Following are the components of Nestlé's Mega

 Nestlé’s mega environment in Pakistan initially consists
of the political restraints and the objections that the
Pakistan Government has placed on Nestle on the way it
conduct its business in the country.

 Another way in which the Pakistan government may

influence the way nestle conducts it’s business is by
placing quotas on the amount of products that it can
supply, which will limit the amount of revenue that nestle
can generate.

 These constrains may include the amount of a specific

tax that nestle pays to the government in order to conduct
the business and this may have a resulting impact on the
consumers of nestle products in the shape of higher prices,
than what it may be offering to the other countries mainly
because of a lower tax it has to pay, and it is depended on
the policy of the country.
 The second mega external environmental factor that influences the
organization is the economical factor, which controls the mechanism
(contraction and expansion) of production, consumption and

 Nestlé makes a significant contribution to the economic sector of


 Through generation of tax revenue, import substitution of milk

powder, export and infusion of over 2.3 billion rupees in the rural
economy through milk purchases, the company plays an active role in
promoting economic growth.

 The capitalist economic system consists of firms owned privately by

individuals or by corporations. In such an economy there is a great
scope for the company to take favorable decisions and move towards a
better organizational environment.

 Social economic structure, then the rights of owner ship and decision
making (policy making) will be transferred to the state (government)
 In analyzing the social factors that can influence Nestlé’s course of
business activities in Pakistan, we come across the demographical
statistic of Pakistan which includes, gender specification, age
specification and religious specification, how a social and cultural
values of a certain geographical area can influence the important
shifts in the demand of the product, which may result in nestle
changing some of its strategies accordingly in order to maintain it’s
sales in Pakistan.

 Nestle lays a great emphasis in penetrating into the market by

keeping the cultural and traditional values of the geographic area in
which it is conducting its operation.

 Before nestle begins its operations in any country its main emphasis
is on studying the cultural values of that country, in order to get it’s
products warmly welcomed and make it highly preferred among other
company’s operating at the same level.
 Research indicates that technology tend to evolve through
periods of incremental change through technology
breakthroughs that either enhance or destroy the competence
of firms in an industry.

 At nestle technological factor is of vital importance since

many new techniques may change the methods of production of
food and make them more efficient.

 Therefore nestle have to spend some of its earnings in the

search of new technologies. If it ignores this factor and do not
respond to it accordingly then there is a possibility that rival
firms may take its place.
 This includes the fluctuation in the foreign currency rates and also
the relationship between the countries, favorable trade agreement with
the countries and also the free trade zones, government rebates, tax
free zones and a better infrastructure.

 Nestlé entered the export market in 1993 with the export of infant
Cereals to Afghanistan. In 1994 export to Afghanistan was expanded to
products to urban consumers.

 Nestle provides different range of products in the different countries

that it is operating inn.
 Moving towards the second type of external environment of nestle, which is
categorized as the task external environment, it includes the specific elements
outside the organization’s environment with which the organization interfaces
while it conducts the course of it’s business.

 Following are elements included in Nestlé’s task environment;

 Competitors
 Customers
 Supplier.
 Nestle has an extensive marketing network to figure out the target
customers, it has marketing specialist to understand the market place
and the customer needs, secondly to is spending a lot to figure out the
customer’s preferences regarding the substitutes of its products in order
to bring the customers on board and retain them.

 Nestle has an extensive market share, due to the reason that it’s
customers are brand loyal and do not compromise over quality and
same is the case with the company’s quality assurance (QA) team.

 One of the principle strategies that nestle utilizes is to produce

differentiated products for each age group in order to get a high market
share and preferences over other
 Competitors also play a vital role in effecting the way in which
the organization operates, competitors are basically the rival
firms in the same market which is providing the same product,
in the case of nestle the are many competitors since there is a
wide range of products offered by nestle in Pakistan.

 Olpers came after nestle with a brand new strategy in order

to attract new customers and some of the customers from
nestle but did not manage to accomplish it completely since
nestle had already gained and retained many of its customers
and faces a relative low level of competition.
 Suppliers, which are the individuals or the firms that provide resources
required by a company to conduct and maintain it’s operations in order to
produce an ever lasting range of goods and services in which
organizations/companies specializes.

 Nestle has an extensive network of suppliers like packaging suppliers,

labor supplier, vendors that over looks after it’s machinery and finally the
specialized people like engineers and the policy makers that helps to run
the business most efficiently at the minimum cost.
 Nestle being a multi-national has a great scope for
betterment through analyzing the environment and then
managing it through different strategies.

 Nestle principle strategies to manage its environment is to

design methodologies to cut down the uncertainties that may
be caused to its environment as it interfaces with many outside
elements of the task and the mega environment.

 Sometimes organizations are in the dire need to alter its

external elements to make them more compatible with the
company’s need, that may involve creating massive awareness
to the public may be through advertisement or if Nestle thinks
that it can prosper well through creating a specialized roles that
can be related to any department.
There are many factors that are included in the internal
environment of nestle and the ways that they effect the
company is also analyzed.

 Nestlé’s internal environment consists all the elements with

in the company, particularly the employees, management and
the corporate culture, that defines employee behavior.

 Although some elements affect the organization as a whole,

others affect only the manager. A manager's philosophical or
leadership style directly impacts employees.

 Traditional managers give explicit instructions to employees,

while progressive managers empower employees to make
many of their own decisions.
 This may include how the employees at nestle are to behave
and the way they communicate within the organization and
outside the organization. Managerial policy guidelines are made
in consultation with the senior executives of the company.

 "A Policy and Procedure Forum" is held for the line managers
who are responsible to implement the policies approved in their
respective departments.

 If any changes are made regarding the policies or procedures

of Nestle, it is the responsibility of the Human Resources
Manager to convey the change to the line managers.
 Nestle, the employees share some values which are within
the organization and reflects what nestle is about, nestle have
some employees that have set some standards for other
employees and are known as heroes.

 It is understood that the performance of any organization is

depended on the overall performances of its employees, and
they could only perform well when they are motivated and
have an example (hero) from within the organization that sets
a benchmark.

 Along with nestle providing food products to its customers

and generating revenues and commitment to safety and
quality, it is also committed to a number of cultural values.
These values come partly from its Swiss roots and have been
developed during its history. They are also evolving so as to
support the permanent reshaping of the Company. They can be
described as follows:

 Commitment to a strong work ethic, integrity, honesty and

quality. Personal relations based on trust and mutual respect.

 This implies a sociable attitude towards others, combined

with an ability to communicate openly and frankly. A
personalized and direct way of dealing with each other.

 This implies a high level of tolerance for other ideas and

opinions, as well as a relentless commitment to co-operate
proactively with others. A more pragmatic than dogmatic
approach to business. This implies being realistic and basing
decisions on facts.
 Openness and curiosity for dynamic and future trends in
technology, changes in consumer habits, new business ideas
and opportunities, while maintaining respect for basic human
values, attitudes and behavior. Pride in contributing to the
reputation and the performance of the Company.

 This calls especially for nurturing a sense of quality and long-

term achievement in the daily work beyond fashion and
shortsighted gain.

 Loyalty to and identification with the Company and other

such factors creates a strong sense of the organization’s
internal environment and express what the organization stands
 After giving some time to analyze all the elements of Nestle
including the external and the internal environment of the organization,
many factors came up and were discussed, even though the
organization is very successful as a whole and was very difficult to
point out some of the weakness how ever some factors were
discovered that the organization should take under consideration,
following are some of the problems which were found and their
possible solutions.

 Commencing with some of the problems revealed within the

organization first point that came up existed internally which included
the Human Recourse department of the organization and it was found
that HRM department is not giving good salaries to the employees, so
employees are de-motivated and don’t work with the company for very

 This problem can be solved by providing bonus packages and

increment in salaries for a selective level of work and efficiency should
be awarded to attract the employees’ concern.
 It also came to our knowledge that the staff at nestle is not as
responsible as it should be, therefore the staff should be made more
responsible by implementing strict rules and regulations and taking
disciplinary actions against any un-professional behavior.

 Thirdly, There are not much security measures in the office, which
could be taken care of by having the skilled workers of the company
join the security department to enhance the system.

 More over, there is a constant threat to the company’s economic

balance due to unstable government policies, A possible solution to this
problem is that Long term agreements should be signed with
governmental departments to eliminate the threat.

 It was also discovered that there was a shortage of certain products

like Nestle ghee, which is a significant demand in the market. It can be
suggested that Inventory should be maintained and a possible
implementation of stock buffering in order to maintain the supply.
 Nestlé is a gigantic organization. Basically it is a food concern
emphasizing on producing good food for good health. The seed Henri
Nestlé had planted in 1866 is now a tree which provides extremely
qualitative food to billions of people all around the world. It is also
providing jobs to millions of people in more than 479 factories in 81

 The fact can be judged by this that it is the number one food
manufacturing and processing company of the world. It is bigger than
Kraft foods and Cadburys international.

Management of Nestlé Pakistan is mostly foreign. the top

management involves MD and three senior mangers (Production,
marketing, Finance). They all are expatriate with only one exception
which is that for the first time in the history of Nestlé Pakistan one
Pakistani has gained position among these four management seats. It
is the Marketing Manager Mr. Rashid Aleem Qureshi. The most
important fact about this is that Mr. Rashid Aleem Qureshi is a graduate
of IBA University of the Punjab.
It is a relatively new Multinational on the Pakistani front as
compared to its competitor Unilever which has a lot bigger area of
operation and also manufactures food items. But it has established a
strong footing for itself in the food industry. Apparently, there are no
loop holes in the working of the organization, but still some areas
require more attention.

Management has designed rules and regulations which are

supposed to be followed by everyone. Policies have been formulated
for major and minor issues both. Relationship with the employees is
maintained at a cordial level. Employees work with commitment and
dedication to achieve the best for the organization. Job satisfaction
soars at a high level.