Introduction: Nestl was founded in 1866 by Henri Nestl and is today theworld's biggest

food and beverage company. Sales at the end of 2005 were CHF 91 bn, with a
net profit of CHF 8 bn. Nestlemploy around 250,000 people from more than 70
countries andhave factories or operations in almost every country in the
world.The history of Nestl began in Switzerland in 1867 when Henri Nestl,
the pharmacist,launched his product Farine Lacte Nestl, a nutritious gruel for
children. Henri used hissurname, which means little nest, in both the company
name and the logotype. The nest,which symbolizes security, family and
nourishment, still plays a central role in Nestls profile.Since it began over 130
years ago, Nestls success with product innovations and business acquisitions
has turned it into the largest Food Company in the world. As theyears have
passed, the Nestl family has grown to include chocolates, soups, coffee,cereals,
frozen products, yoghurts, mineral water and other food products. Beginning
inthe 70s, Nestl has continued to expand its product portfolio to include pet
foods, pharmaceutical products and cosmetics too.Today, Nestl markets a great
number of products, all with one thing in common: thehigh quality for which
Nestl has become renowned throughout the worldThe Company's strategy is
guided by several fundamental principles. Nestl's existing products grow
through innovation and renovation while maintaining a balance ingeographic
activities and product lines. Long-term potential is never sacrificed for shortterm performance. The Company's priority is to bring the best and most relevant
productsto people, wherever they are, whatever their needs, throughout their
lives.Taste of Nestl in each of the countries where Nestl sell products. Nestl
is based on the principle of decentralization, which means each country is
responsible for the efficientrunning of its business - including the recruitment of
its staff

That's not to say that every operating company can do as it wishes.

Headquarters inVevey sets the overall strategy and ensures that it is carried out.
It's an approach that is best summed up as: 'centralize what you must,
decentralize what you can'. Nestl is a company which is present in all over the
world but It has difference andunique motto to deal in all over the world. Nestl
believes that they should think abouttheir organizations globally but they deal
with people by interacting with them locally.
Thinking globally - acting locallyEvolution of Nestl: 1867

Henri Nestl founded the company in Vevey, Switzerland.

1898
Nestl purchases its first factory outside of Switzerland - Viking Milk factory
in Norway.
1905
Nestl merges with Anglo-Swiss Condensed Milk Company.
1929
Nestl merges with Peter-Cailler-Kohler Chocolates Suisses S.A.
1938
Nestl launches Nescaf - the worlds first instant coffee.
1947
Nestl merges with Alimentana S.A. with the brand Maggi.
1962
Nestl purchases Findus.
1974
Nestl becomes a significant shareholder in the Cosmetics Company LOral.
1977
Nestl purchases Alcon, manufacturer of eye care products and kits.
1985
Nestl purchases the Food Company Carnation.
1988
Nestl purchases the confectionary company Rowntree Mackintosh and the
pastacompany Buitoni-Perugina.
1992
Nestl purchases the mineral water Company Perrier.
1998
Nestl purchases Spillers pet foods business.
2000

Nestl sells the Findus brand in all countries except for Switzerland.
2001
Nestl merges with Ralston Purina, the premier petfood company in North
America,and with unique expertise in the dry dog food area.
Vision of Nestl
Nestl's vision of making good food central to enjoying a good healthy life for
consumerseverywhere. This implies gaining a deeper understanding in many
areas of nutrition andfood research and transforming the scientific advances into
applications for the company.Having a broad vision the company is doing its
best for their consumers to show the greatsense of responsibility.
Nestls aim is to meet the various needs of the consumer every day by
marketingand selling food of a consistently high quality.
The confidences that consumers have in our brands is a result of our companys
manyyears 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 ma
terials. Our operations and collaboration in the Nordic countries gives us greater
opportunities to beefficient and strategic and to function well as an organization,
both when it comes to thedistribution chain and to concentrating on joint
product launches and campaigns.
Focus on e-business and websites
Increased investments in the sphere of e-business give us swifter business and
directcontact with trade. Our website is a forum for consumers, students, future
employees andthe media. We hope that through a sincere approach and by
conducting dialogues, we will be able to improve, change and satisfy the
demands and wishes of the people of today

History of Nestl: Nestl started its work as a multinational company in 1866. From that time they
providedtheir best to their customers and the history of the Nestl is given
below:
1866 -1918
In the 1860s Henri Nestl, 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'smilk or any of the usual substitutes. People quickly
recognized the value of the new product, after Nestl's new formula saved the
child's life, and soon, Farine Lacte Henri Nestl was being sold in much of
Europe.In 1905 Nestl merged with the Anglo-Swiss Condensed Milk
Company. By the early1900s, the company was operating factories in the
United States, Britain, Germany andSpain. World War I created new demand for
dairy products in the form of governmentcontracts. By the end of the war,
Nestl's production had more than doubled.
1918 -1944
After the war Government contracts dried up and consumers switched back to
fresh milk.However, Nestl's management responded quickly, streamlining
operations and reducingdebt. The 1920s saw Nestl's first expansion into new
products, with chocolate theCompany's second most important activity4History
of Nestle1866-19181918-19441944-19751975-19811981-19961996NowFoodProductsfor babies& Powder Milk Chocolate,Coffeeand
FreshMilk Fast FoodMaggiFast FoodProductsYogurtand Butter IceCreams

Nestl felt the effects of World War II immediately. Profits dropped from $20
million
in1938 to $6 million in 1939. Factories were established in developing countries
, particularly Latin America. Ironically, the war helped with the introduction of t
heCompany's newest product, Nescaf, which was a staple
drink of the US military. Nestl'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 Nestl.
Growthaccelerated and companies were acquired. In 1947 came the merger with
Maggiseasonings 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'Oralin 1974.
1975 -1981
Nestl's growth in the developing world partially offset a slowdown in the
Company'straditional markets. Nestl made its second venture outside the food
industry by acquiringAlcon Laboratories Inc.
1981 -1996
Nestl divested a number of businesses1980 / 1984. In 1984, Nestl's
improved bottomline allowed the Company to launch a new round of
acquisitions, the most important being American food giant Carnation. Nestl
introduce yogurt and butter in this time period.
1996 Onwards
The first half of the 1990s proved to be favorable for Nestl: trade barriers
crumbled andworld markets developed into more or less integrated trading
areas. Since 1996 therehave been acquisitions including San Pellegrino (1997),
Spillers Petfoods (1998) andRalston Purina (2002). There were two major
acquisitions in North America, both in2002: in July, Nestl merged its U.S. ice

cream business into Dreyer's, and in August, aUSD 2.6bn acquisition was
announced of Chef America, Inc

Nestl has long been a major player in the dairy industry, originally with well
knownshelf stable brands such as Nido, Nespray, La Lechera and Carnation,
then building astrong international presence in Chilled dairy and Ice cream
under the Nestl brand.Innovation and renovation play a major role in the
development of milk based products aswell as of breakfast cereals, managed as
a joint venture with General Mills.The area of Nutrition, with its benefits to
health and wellbeing, is having a significantimpact on the development of our
business. A wide range of proven, science basedsolutions such as starter and
follow-up formulas, growing-up milks, cereals, enteral diets,oral supplements
and performance foods are actively developed and successfully broughtto
market under the Nestl brand.
Breakfast Cereals: Although cereals have been with mankind in one form or another for millennia,
it was notuntil the mid 19th century that scientific research, technological
innovation, and theinfluence of a group of American health reformers, gave rise
to the crunchy foodstuff weknow today as breakfast cereal. Nestl has a joint
venture with General Mills outside North America, Cereal PartnersWorldwide,
which is active in more than 80 countries.The joint venture began in 1990, and
its rapid growth has been characterized by strong branding and lately the
launching of breakfast cereal brands into the fast-growing cereal bar market.
Ice Cream: Ice Cream is also one of the major products of Nestl.
Chocolate & Confectionery: Chocolates and confectionery are also present in the list of Nestls products.
Nestl has
Kit Kat, polo, Toffo, Butter scotch, Fruit drops
and
Soothers
in this section of products.9

Prepared Foods: In this section of production Nestl has

Maggi
and
Buitoni
. Maggi merged with Nestl in1947. Buitoni
,
the authentic Italian brand, which has been producing pasta and sauces inItaly
since 1827, became part of the Nestl Group in 1988
Beverages: In 1937, Nestl scientists perfected a powdered coffee product that was
introduced in1938 under the brand name
Nescaf
the world's first commercially successful solublecoffee.It became so popular
during World War II that for one full year the entire output of the Nescaf plant
in the United States (more than 1 million cases) was reserved for militaryuse
only. Since then, Nescaf has become one of the world's best-known brands.
Inaddition, Nestl is a major producer of chocolate-based and malted drinks.Its
leading brands,
Nesquik
,
Milo
and Nescau are very popular with a growing number of young people around
the world. Nestl's ready-to-drink beverages Nestea and Nescaf aresold in
various forms (cans, bottles). These are distributed by Nestl's joint-venture
withthe Coca-Cola Company, Beverage Partners Worldwide. Nestl is also
present in fruit juices (
Libby's
), as well as espresso coffee in capsules (

Nespresso
).
Bottled Water:Nestl began its entry into the water business in 1969 with a 30% stake in the
owners of the Socit Gnrale des Eaux Minrales de Vittel. It acquired a
controlling interest inSGEMV in January 1992, and went on in May of the same
year to buy out the entirePerrier Group.In 1992, Nestl was the first company to
dare to launch a mineral water, Valvert, in fivedifferent countries at once. Its
originality lay in the use of an all-new plastic, P.E.T.(polyethylene
teraphthalate), which is stronger and more elastic than the PVC used since1968.
Besides, P.E.T. is recyclable. 10

By the end of 1997, the Group was present on every continent, and the purchase
of SanPellegrino gave it the leadership in the Italian market. In 1998, for the
first time in itshistory, Nestl associated its name with a bottled water: Nestl
Pure Life.The brand was launched in Pakistan and soon appeared in Brazil,
followed by Argentina,Thailand, the
Philippines, China, and Mexico in 2000. In 2001, India, Jordan, andLebanon
followed, and in 2002, Egypt, Uzbekistan and the United States. Nestl Pure
Life is drinking water that has been treated and rematerialized using
astandardized industrial process to ensure purity and quality and is marketed in
emergingcountries.A second product with the Nestl name was launched in May
2000, this time in sixEuropean countries: Nestl Aquarel. Natural spring water
currently from nine differentsprings in France, Germany, Belgium, Hungary,
Italy and Spain, Nestl Aquarel also usesthe multi-source concept to satisfy new
consumer expectations, especially for water witha low mineral content that the
whole family can drink.In April 2002, the Group changed its name to Nestl
Waters, a token of Nestl's decisivecommitment to the bottled water market,
which now represents 9% of its sales. Today, Nestl Waters are established in
130 countries and markets about 70 different brands. TheGroup is able to offer
top quality brands and innovative packaging to meet the individualneeds of the
water consumer all over the world, whenever, wherever and however thanksto
the wide variety of its offer in terms of distribution and product mix.
L'Oreal (France):
L'Oreal

is the global #1 in cosmetics with a portfolio that contains many of the

world's biggest hair and beauty products, including such brands as Garnier,
Maybelline
andLancome. It also markets fragrances and cosmetics under license for other
companiessuch as Giorgio Armani and Ralph Lauren. More than 80% of group
sales are generatedoutside France, with operations in every major territory.
Since the 1980s the group hasmade North America a particular focus of
attention, wrong-footing domestic rivals withdynamic marketing and a series of
smart launches and clever acquisitions. The
mostrecent of these is the 2006 deal to acquire ethical beauty products retailer B
odyShop. Advertising Age estimated global measured advertising expenditure
of $2.8bn in2005, making L'Oreal the world's #5 advertiser

vThe Spirit of Nestle

Organisational excellence is never achieved through a one
timeeffort; It is always a process of continuousimprovement across anumber of
areas of operation.
A key factor for Nestles success has been its quest for continuous improvement
through ushering in greater productivity andmore efficiency in everyday
operations. Despite the infrastructureimpediments in India, Nestle has set itself
high standards of businessperformance. This is reflected through the essence of
the company - itsmission statement.
Nestles mission
To be in every way the leading company in the Indian foodindustry and a good
corporate citizen by providing our consumers withsuperior quality products, our
shareholders with rapid growth &
fair returns and our employees with a challenging
and satisfying workenvironment.To translate this spirit into a planned and
measurable process,Nestle has set up key objectives across all divisions
Key Objectives
Production

To optimise production costs while enhancing product quality so

asto make Nestle products even more competitive in the marketplace.
Sales and marketing

To reach a sales turnover of 3000 crores by the year 2003

To double the turnover every three years

People

To help employees to retain a long term perspective and integratethem fully

with the companys business goals

To retain a broad perspective while addressing individual needs

To view growth as a continuous process

To concentrate on attitudinal changes by developing leadershipskills, an

appreciation of interdependence between units and theenhancement of a sense
of belonging to Nestle.
14

Finance

To maintain profit levels above the average for the food industry inIndia.The
Business Excellence and Common Application (BECA) initiativeessentially
translates the spirit of the Journey towards excellence intoan organised,
systematic and measurable approach. The aim is to aidthe achievements of the
companys key objectives of rapid growth

byensuring that all operations incorporate the spirit of meaningfulplanning,

effective cost control and efficient implementation. BECA isabout
planned improvement in everything we do

Factories
Nestle has 6 factories in India. These are
1. Moga (punjab) :
The Nestle factory in Moga has the pride of beingthe first and most
comprehensive factory of Nestle India. Set up
in1962, it represents the core competence of Nestle India in themanufacture of
milk products (Everyday, Milkmaid), beverages,culinary products (Maggi sauce
s, noodles, soups etc.), weaningcereals (Cerelac) and infant milk formulae.
2. Choladi ( Tamil Nadu):
The factory in Choladi started productionin 1967. Situated about 60 miles from
Calicut, the factory today has 81

employees and produces 1.5% of the total turnover of Nestle India. It isa 100
percent export oriented unit which processes freshly picked tealeaves into
soluble instant tea.
3. Nanjagud (Karnataka):
Production in this factory began in 1989with the manufacture of Nestle instant
coffee and Sunrise. Today
inaddition to instant coffee the factory also manufactures healthbeverages. The
plant to manufacture MILO was also commissioned atthis factory. This factory
employs 145 people and is cited as a model
interms of environment protection for its installations to purify wastewater as
well as for its provisions for recycling coffee wastes.
4.Samalakha (Haryana):
This factory was set up in 1993. Located 70kilometres from Delhi , it
manufactures weaning cereals , culinaryproducts ,health beverages and
milk products. Recently the expansionof manufacturing capacity for Milkmaid

Dessert Mixes was undertakenat this factory as this new and unique product
category is viewed tohave great potential in the future.
5.Ponda (Goa):
This Kit-Kat factory was set up in Goa in 1995 at acost of Rs. 50 crores. It
represented a major step by Nestle towardsbecoming the Number 1 Chocolates
and Confectionery Company inIndia.
6.Bicholim (Goa

The construction work at this new factory is progressing withspeed. This factory
will soon commence the manufacture of culinaryproducts, which is a key thrust
area for the company and will includelatest technological improvements relating
to this category of products.As a part of Nestles efforts towards continuous
improvementand excellence in Manufacturing operation, a Moga Improvement
team(MIT) was put in place at the Moga factory. The team comprised
of international experts from Nestle Technical Services (NESTEC) andthe local
staff. In 1996, it embarked on a program with the singleminded objective of
optimizing production costs while enhancing theproduct quality so as to make
Nestle products even more competitivein the market place. Drawing
upon Nestles global experience andmanufacturing expertise in 75 countries the
team identified thefollowing areas for detailed study
Process improvement to ensure the optimal usage of resources

Improvement of operational efficiency

Cost optimizationA series of small but critically important initiatives ranging

fromredesigning laboratories to palletisation of raw materials and
packagingmaterial utilization, manufacturing and filling loses and labour manho
urs resulting in substantial savings and improved productivity and

machine utilization. In addition, several non tangible benefits in

theform of systems for sustainable improvement
in areas like factorymaintenance planning tools , down time recording systems a
ndperformance measurement tools were also realized .This project was highly

successful and the company is nowimplementing its key learnings of MIT in its
other factories.In a country as vast and diverse as India,
supply chainmanagement
is absolutely critical to rapid growth. Through BECA,Nestle has concentrated
heavily on streamlining and improving their supply chain management in order
to make it more dependable, morecost effective and most importantly, more
responsive to market
needs.For better supply chain integration the planning of keyoperations - purcha
se, production, distribution and sales aresynchronised to ensure that everybody
works towards a commonbusiness plan. Monthly objectives are broken down
into weekly
and(wherever necessary) into daily plans and monitored regularly toensure smo
oth implementation and quick corrective action whenneeded . Major benefits
accrued thus far include reduction in workingcapital through lower inventories
of finished goods and materials, better stock availability and reduction in
obsolescence of materials.In addition to traditional
performance indicators, quantifiableperformance measures have been identified
and implemented in all
functional areas such as sales planning, production output, qualityassurance, ma
terial ordering transportation and warehousemanagement. These measures are
monitored regularly to gauge theextent of improvement and identify root
problems for taking correctiveactions.Teams have been put in place at all
factories and sales officesto ensure the implementation is continuous and selfsustaining. Areasof improvement are regularly identified and time bound action
plansestablished. For this purpose, standard tools such
a Total QualityManagement(TQM), Kaizen, 5S and Small Group improvement
activity(SGIA) are being extensively used.The efficacy of this hierarchical
structure is seen in Nestlesperformance over past few years of various
products.By 1989 the company had achieved a sales figure of approximately Rs.
258 crores. 1989 was the year of launches. Sevennew product lines were
launched in this year. This was also the year inwhich the Nanjagud factory was
set up. By the year 1992, this salesfigure was touching Rs 500 crores. In the
1995 the pace of launchesquickened and since the construction of the factory at
Samalakha, 20new products have been introduced. By 2003, Nestle had about
76different products in its portfolio with various new products in thepipeline as
well. The sales figure now touched Rs. 1214 crores. Thussales grew by 450%
over a period of one and a half decades
Marketing Strategy

Nestle has adopted a four pronged growth strategy: -1.Gunning the market with
new products and brand extensions.2.Expansion of the distribution network to
small towns for
extensiveavailability.3.Reduce prices and introduce smaller packages for produc
ts tomake them more affordable (a tool to enter price sensitive markets).4.Focus
on employ training and develop a positive attitude throughenhanced manpower
development.5.By year 2003 it expects chocolate & confectionery to account
for one in every third rupee in sale.In the late 1996 fear of breading
complacency by not having acontinuous improvement, gave birth to an
international sales &marketing improvement teams (SMIT).SMIT maps the
latest in helping towards the target of
year.2003. The SMIT exercise is a major global initiative of Nestle toenhance sa
les & marketing productivity. Linked with the alreadyexisting BECA project,
which in turn emphasises on excellence by
improving the distribution set up , this gave rise to the following
growthobjectives for the year 2003

Ensure direct coverage of all urban towns in India.

Expand distribution to reach 1 million retail outlets on a regular basis.

Work in partnership with the distributor for the achievement of theseobjectives.

Provide sustainable solution to optimize our secondary sales fromdistributor to

retailer.
NEW PRODUCT LAUNCHES
To put all the product launches into perspective, Nestle now has80 products
including various flavours and variants this awesome list of 80 products for
most companies is an overfull palate. Nestle India Ltd.Still have a variety of
new products in the pipelines. It believes in
slowlycolonizing as much territory as fast as it can, adapting to nativeconditions
and then work at holding off the advancing herds. Nestleproducts can be
broadly classified into 5 main ranges

Milk Products

Chocolate and Confectionery

Beverages

Culinary

Food service
Milk Products
22

T
his category which comprises of condensed milk, baby milkfoods , milk
powders , acidified infant food , and other milk products,showed a slump in
1996 as sale of milk products fell from Rs 31.4crores in 1995 to Rs 31.2 crores
in the said year. Consumer offtakeremained depressed throughout this year as a
consequence of
highprice increases necessitated by substantial increases(+50%) in thecost of
basic raw materials( fresh milk ) , over the past two years .However Nestle
retained its leadership in the infant food marketwith Cerelac, Lactogen and
Nestum and even introduced a new flavour of Cerelac - Cerelac Rice in 1996.
Chocolates and Confectionery
Nestle pursues the objective of accounting for one in every threerupees in its
sales figures through chocolates and confectionery. Thishas thus been one of the
thrust areas in Nestle. Nestle this
year widened its range of flavours in POLO, backed by its tremendoussuccess i
n the Indian Market by adding POLO Spearmint to itsPortfolio. This new
flavour has also received an encouragingresponse in the market according to
market
analysts.Milkybar also retained its position as the number one whitechocolate br

and in India, however it did not record a significantincrease in sales as a

majority of Indian tastes still do not accept thisflavour.
This year however, was a year of tremendous success for KitKat .This
internationally renowned brand gained a large increase in theMarket share in the
past year and Nestle officials are hopeful that thiswill further increase in the
coming years. However this Brand along withit success has brought with it its
share of Controversy as the Union of India has launched a Litigation against the
Kit Kat family pack.In 1997 Nestle added to its range of confectionery by
introducingSPLASH, A soft hearted, hard boiled sweet this is being
promoted asa sweet unique to India and is positioned to a target audience in
theage group of 4 to 12 years and anyone with a soft heart is
a potentialcustomer. Priced at Rs. 1 for a 7.5 gram candy splash has
beenintroduced selectively in the South and has been speculated to
repeatPolos performance. Nestles officials claim that this candy has thepotenti
al to grab a quarter of the 700 crores confectionery market.The most recent of
Nestle affairs with the confectionery markethas been the introduction of Mithai
Magic which is a little Mithai , alittle magic .This new product was launched
in September 1997
,intime for the Diwali purchases of sweets . This brand has beenpositioned
somewhere between chocolates and traditional sweets andthe company is
employing a push strategy to promote this brand.
24

Beverages
This year has been very

successful in the beverages market for Nestle .The sales of beverages has
increased from Rs 323.3 crores in2002 to Rs 398.8 crores in 2003.Nestles
Flagship Nescafe which was pegged at Rupees 1040per Kilogram before
the launch of Tata Cafe, met with stiff competitionfrom Tata Cafe priced at
Rupees 550 per Kg once it was introduced
.Tata cafe claimed to have garnered a market share of 17% byDecember 1996.
This forced Nestle to cut prices of Nescafe to Rupees840 per Kg. However
Nescafe still retains 83% market share in the Rs177 Crores market for pure
instant coffee.Nestle Sunrise also showed an increase in sales and captured20 %
of the Rs 253 crores market in Mixed instant
coffee.This year Nestle also launched MILO, an internationally renownedchocol

ate energy drink, and the response for this has beenencouraging.Nestle has also
introduced Tasters Choice tea bag pitched against Tajmahal tea bags
Culinary Products
The market in culinary products had witnessed a high growthconsequent to
aggressive pricing decisions on existing products andthe introduction of a
variety of new products to match the needs of theIndian Housewife. Encouraged
by this success Nestle launched MaggiMacoroni Snack in three flavors Chicken , Masala and Tomato. Nestleofficials say that this would consolidate
Maggis position as the number 1 culinary brand in India. The product focuses
on convenience andinnovation as its Unique Selling Proposition. This snack has
opened anew segment for the maggi brands. The brand is positioned as
youthfuland is represented by the twists and curls of the macaroni snack. It
isspeculated to be introduced in a phase manner nation-wide to beplaced in the
7.5 lakh outlets that Maggi noodles sells in .In the spirit of catering to Indian
tastes Maggi introduced maggipickles in five variants benchmarked to give
the ghar ka
swad. MaggiDosa Mix was also introduced to offer superior quality and added
convenience. Apart from this Milkmaid Kalakand Mix, a traditional northIndian
sweet of premium quality was added to the milkmaid dessertmixes. Maggi soup
also launched three new variants. Maggi Rassam inparticular was noticeable as
yet another attempt to make traditionalIndian cooking a little bit easier.

SWOT ANALYSIS OF NESTLE:

Strengths:
Nestls has much strength.1.Their first is that they have a great CEO,
Peter Brabeck. Brabeck emphasizes internal growth, meaning he wants to
achieve higher volumes by renovating existing products, and innovating
new products. His explanation of renovation is that to just keep pace in
theindustry, you need to change at least as fast as consumer expectations.(Hitt,
2005)2.His explanation of innovation is to maintain a leadership position,you
also need to leapfrog, to move faster and go beyond whatconsumers will tell
you. Brabeck has led Nestle into a position to better achieve the internal
growth targets with his.3.Another strength that Nestle has is that they are low
cost operators.This allows them to not only beat the competition by producing
lowcost products, but by also edging ahead with low operating costs.
Weakness:
1.The main weakness of Nestle is that they were not as successful asthey
thought they would be in France. The launch in France was in1994, but since
the late 1980s, Danone had already entered the marketwith a health-based
yogurt.2.The second weakness is that LC-1 was positioned as too scientific,
andconsumers didnt quite understand that LC-1 was a food and not
adrug.3.Nestle also has multiple critical resources. They have a great
researchand development team. James Gallagher and Andrea Pfeifer were
themasterminds behind the research on the La-1 cultures in the LC-1yogurt.
They were also the two that decided on selling LC-1 as afunctional food. This
enabled Nestle to position the product in a waythat differentiated it among the
other products in the market. They alsohave four pillars that Brabeck, Nestles
CEO has identified he believeswill help their internal growth worldwide. These
are operatingexcellence, innovation and renovation, product availability,
andcommunication

Opportunities:

1.One opportunity that Nestle has is that health-based products are becoming
more popular in the world, including in the United States.Consumers
are2.Becoming more health conscious, and realize that living longer isntonly
by luck and genetics. LC1 has not been introduced in the UnitedStates
yet.3.Nestle also has an opportunity of being even a larger market leader
inGermany with LC-1. Within two years of launching the product inGermany,
they had captured 60% of the market. This was due to thefact that they
differentiated the product, and Germans simply preferredthe taste.4.Another
opportunity of LC1 is that, because they are a market leader,they can introduce
more health-based products in Germany.5.As nestle has more then 9000
brands all over the world .they areincreasing their products day by day. With
very new changes. like nowthey are introducing Nestle LEMU Malta
Threats:
1.A threat to Nestle is the fact that some markets they are entering arealready
mature. Danone had an established leadership position in theyogurt market in
France. Since Danone was the first to arrive in themarket, they have always
been the market leader there.2.Also consumers in France liked the taste of LC1, but researchers believe they did not repurchase the yogurt because they
preferred thetaste of Danone products better.3.Another threat to Nestle is
that there is intense competition in theUnited States yogurt market. General
Mills Yoplait division is theleader in the yogurt market in the United States.
Yoplait has been theleader for years and is constantly innovating new health
products.4.The main threat of Nestle these days isthe campaign led by
theInternational Nestl Boycott Committee primarily targets
Nescafe, thecorporation's flagship product. To boycott Nestl products until
thecompany stops promoting its baby milk
.
5.Another threat now a days is in nestle pure life. as its the leading brand and
people prefer Nestle pure life but their may be a threat fromaqua fena which is
introduced by Pepsi.

Nestl India Corporate Social Responsibility Policy I. Corporate Social

Responsibility (CSR) Policy Nestl India Limited (the Company) is a leading
Nutrition, Health and Wellness Company. As a responsible Company, it has
since its inception, participated in business activities which help in improving
the quality of life for the communities where it operates. This also includes
creating better livelihood opportunities. In consultation with stakeholders, the
Company has decided to focus its activities on the following areas, where it is in
a position to create maximum value. These focus areas are: Nutrition: A large
part of our population is impacted by the double burden of malnutrition.
Improving nutrition awareness of communities particularly school children will
be a focus area. Water and Sanitation: India is among the worlds most water
stressed regions. Additionally, safe drinking water is a concern in many parts of
the country. The Company would focus on helping farmers reduce water usage
in agriculture, raising awareness on water conservation and providing access to
water and sanitation. Rural Development: Supporting the sustainable
development of farmers will be the third focus area. The Company will continue
to engage with stakeholders including farmers, experts, NGOs and the
Government and would take up such other CSR activities in line with
Governments intent and which are important for society. The above areas are
mapped with the activities as prescribed in Schedule VII to the Companies Act,
2013 in the Annexure. While the focus of CSR efforts will be in the local areas
and areas around it where the Company operates, the Company may also
undertake projects where societal needs are high or in special situations (such as
in the case of natural disasters etc.). CSR expenditure will include all
expenditure incurred by the Company on CSR Programmes undertaken in
accordance with the approved CSR Plan. Surplus arising out of the CSR
projects or programs or activities shall not form part of the business profit of the
Company. II. Implementation of CSR Activities Current CSR activities with
their execution modalities and implementation schedules are appended as
Annexure. The Company may also undertake other CSR activities as may be
appropriate from time to time. The Company would implement the CSR
programmes through Company personnel and partnerships with expert agencies,
NGOs and Government. In cases where the implementation is through external
implementing agencies, the Company would monitor the implementation. III.
Governance The Company follows a structured governance procedure to
monitor CSR activities. The CSR Policy is governed by the Board of Directors.
In terms of the Companies Act, 2013 the Board of Directors have constituted the
Corporate Governance and Social Responsibility Committee (CSR
Committee) to formulate and recommend to the Board of Directors the CSR
Policy indicating activities to be undertaken as specified in Schedule VII and

the amount of expenditure for the CSR activities. The CSR Committee monitors
the CSR Policy of the Company from time to time. The CSR Department
monitors the status of each project and reports its findings to the CSR
Committee periodically. In addition Independent Director(s) may visit one or
more projects, from time to time and report their findings to the CSR
Committee. The CSR Policy issued pursuant to the Act has been recommended
by the CSR Committee of the Board of Directors and approved by the Board of
Directors and shall be placed on the Companys website www.nestle.in. IV.
Amendments Amendments from time to time to the CSR Policy, if any, shall be
considered by the Board of Directors based on the recommendations of the CSR
Committee.

Nestl India Corporate Social Responsibility Activities

Programmes/Activities/Initiatives Schedule VII, Section 135 Companies Act,
2013 Modalities of Execution Implementation Schedule Key outcomes
Nutrition Awareness The Company aims to create awareness regarding
nutrition, good cooking practices, good hygiene and the importance of physical
activity among children in schools particularly village schools through various
programmes. The school based programme/s will involve students receiving
focused nutrition training and will be based on a multipartnership approach in

collaboration with leading regional universities, NGOs and other stakeholders.

This will enable joint development and regional customisation of the content. (i)
In collaboration with external agency: Academic Universities The programme is
conducted basis the school year starting Apr June and ending Dec- Jan.
Change in knowledge, attitudes and practices of students Number of students
covered The Company aims to create awareness about nutrition and healthy
habits, importance of food, water and personal hygiene, utilising health services
and the importance of physical activity. These programmes will be designed for
school going children and conducted in partnership with
NGOs/experts/government based on the learning through sports and conducted
in the schools. Each child will receive specified hours of training throughout the
year. (i) In collaboration with external agency: Universities; NGO The
programme is conducted in accordance with the school year starting Apr June
and ending Dec- Jan. Change in knowledge, attitudes and practices of students
Number of students covered The Company aims to reach out to children with
access to the internet and engage them in learning about nutrition and healthy
habits through various Programmes. The programme/s will be interspersed with
activities and quizzes which test the knowledge of students as they go through
it. (i) Directly; In collaboration with NGO Throughout the year Knowledge
increment Number of students covered The Company aims to improve the
nutrition, health and wellness of infants through early initiation of breastfeeding
and promotion of exclusive breastfeeding until 6 months of age among
marginalised communities in slum areas through its various Programmes. The
programme will be developed in partnership with NGOs and designed to reach
out primarily to pregnant women in the third trimester and lactating women. (i)
In collaboration with external agency: NGO Throughout the year Change in
breastfeeding behaviours Metrics including: number persons covered, number
of infants breastfed within first hour, number of infants exclusively breastfed for
6 months etc.

Strategy
With our Nutrition, Health and Wellness strategy we support people who want
to live a healthier lifestyle. Industry-leading research and development drives
innovation and supports the constant renovation of our food and beverage
portfolio. In addition, our researchers are exploring the role of nutritional
therapies to maintain or improve health and investigating how we can help
people look after their skin. By sharing our insights on global Nutrition, Health
and Wellness challenges, by building partnerships and by engaging with
policymakers, stakeholders and key opinion leaders we strive to have a positive
impact on the societies in which we operate.
We empower people to make informed decisions when they choose what to eat.
Through Start Healthy Stay Healthy, our interactive, sciencebased education
programme, we help parents and caregivers provide their children with the
nutrition they need in the crucial first 1000 days of life. Our United for
Healthier Kids programme, takes this further, helping parents and caregivers
establish healthier eating, drinking and lifestyle habits for children as they get
older, and our Nestl Healthy Kids programme is helping to deliver a healthier
lifestyle for children by teaching nutrition and encouraging physical activity.
We are on track to deliver on our commitments to reduce the amount of salt,
sugar and saturated fats in our products and remove trans fats, while
maintaining consumer preference. We are enhancing our portion guidance and
improving our labelling, printing GDAs (Guideline Daily Amounts) on the front
of packs, making it easier for people to read them.
In recent years we have reinforced and expanded our Nutrition, Health and
Wellness strategy with the creation of Nestl Health Science and Nestl Skin
Health. Nestl Health Science is advancing the role of nutritional therapy to

change the course of health for consumers, patients and for our partners in
healthcare. With Nestl Skin Health we are entering the field of specialised
medical skin treatment by offering science-based solutions for the health of
skin, hair and nails over the course of peoples lives.
We strive to meet the fast-changing expectations of our consumers because like
them, we care deeply about quality, food safety, the environment and
sustainability. Responsible behaviour wherever we operate is at the very heart of
what we do. It is our fundamental belief that for a company to prosper over the
long term we need to create value for shareholders while at the same time
creating value for society. We call this Creating Shared Value. Trusted
leadership in Nutrition, Health and Wellness is our strategic ambition, Creating
Shared Value is how we go about it. The inclusion of the Nestl in society
report, alongside this Annual Review and the Financial Statements in the 2015
Annual Report package, reflects how Creating Shared Value is fully embedded
into internal management processes and the way we do business.
The Nestl Strategic Roadmap is the compass that guides our organisation,
driving internal alignment behind our goals. The roadmap shows how we
deliver profitable growth, the competitive advantages that we leverage and the
organisation we have chosen, in order to be effective and efficient. It is the
framework that we use to establish priorities and drive execution.