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1. INTRODUCTION......................................................................................................
1.1. Brief History........................................................................................................
1.2. Location of Offices & Factories............................................................................
Registered & Corporate offices...............................................................................
Factories.................................................................................................................
Regional Sales Offices............................................................................................
1.3. Number of Total employees................................................................................
1.4. Nature of the Business........................................................................................
1.5. Key Players or Corporate Governess...................................................................
2. MISSION & VISION STATEMENT...............................................................................
2.1. Mission Statement..............................................................................................
2.2. Vision Statement.................................................................................................
3. GOALS & OBJECTIVES.............................................................................................
4. EXTERNAL (PESTLE) & INTERNAL ASSESSMENT.....................................................
4.1. PESTLE Analysis..................................................................................................
4.1.1. Political & Legal Forces....................................................................................
Taxation Law....................................................................................................
Labor Laws.......................................................................................................
Laws on hiring & promotions...........................................................................
Environmental Protection Laws........................................................................
Foreign trade Regulations................................................................................
Attitudes towards foreign companies...............................................................
Political instability............................................................................................
4.1.2. Economic Forces..............................................................................................
Inflation Rate...................................................................................................
Economic growth rate......................................................................................
4.1.3. Social Forces & Cultural...................................................................................
Health Consciousness......................................................................................
Demographic Trend..........................................................................................
Environmental concerns..................................................................................
Work life quality...............................................................................................
Lifestyle Changes.............................................................................................
4.1.4. Technological forces.........................................................................................
New Products...................................................................................................
Product innovation...........................................................................................
Productivity improvement through automation...............................................
Total spending on R&D.....................................................................................
New communication technology......................................................................
4.2. SWOT Analysis....................................................................................................
4.2.1. STRENGTHS.....................................................................................................
Parent support.................................................................................................
Company Image...............................................................................................
High Quality Products......................................................................................
Well-developed strategy..................................................................................
Market Share....................................................................................................
Good marketing skills and services..................................................................
Brand strength.................................................................................................
Research & Development Team.......................................................................
Product innovation...........................................................................................
HR department................................................................................................
4.2.2. WEAKNESSES...................................................................................................
Less Proactive..................................................................................................
Limited Distribution Channel............................................................................
No outlets in Pakistan......................................................................................
More concerned about profit............................................................................
4.2.3. OPPORTUNITES................................................................................................
Support from Foreign Investors........................................................................
Enhance Distribution Channel..........................................................................
Changing Social Trend......................................................................................
Health conscious..............................................................................................
Market growth..................................................................................................
4.2.4. THREATS..........................................................................................................
Government Regulation...................................................................................
Increase in Competition among Competitor.....................................................
No Entry Barrier...............................................................................................
Inflation rate....................................................................................................
Unfavorable Changes in Consumer Demand...................................................
Loss of Market Share........................................................................................
4.3. Porter’s five forces Analysis................................................................................
4.3.1. Threat of New Entrants....................................................................................
4.3.2. Bargaining Power of Suppliers.........................................................................
4.3.3. Bargaining Power of Buyers.............................................................................
4.3.4. Threats from Substitutes..................................................................................
4.3.5. Competitive Rivalry..........................................................................................
5. Competitive Analysis or Competitors Analysis.........................................................
6. PROBLEM SECTION FOR NESTLE............................................................................
7. STRATEGIC SOLUTION TO PROBLEMS.....................................................................
8. FUTURE PREDICTION & IMPLEMENTATION PLAN.....................................................
9. CONCLUSION & RECOMMENDATIONS.....................................................................
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GROUP MEMBERS
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“ACKNOWLEDGEMENT”
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NESTLE PAKISTAN
INTRODUCTION
Nestle is the world's leading nutrition, health and wellness company today
and was founded in 1866 by Henri Nestlé. It has employed around 250,000
people and has factories or operations in almost every country in the world.
Nestle is the world's leading nutrition, health and wellness company today.
Being the world's leading bottled water company is based on a firm
economic model: strong brands, global presence, innovation capacity,
environmental stewardship and passionate people.
Brief History
After the major invention in 1874, Jules Monnerat purchased Nestle and
collectively they launched the condensed milk. In 1905 Nestle merged with
Anglo-Swiss which was an condensed milk company. Soon after Nestle
established its roots all over Europe to cater the need of the customers of
Europe, as Nestle fame was on the top so Nestle thought to start the
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production function all over the world to increase the customer demand and
meet or capture more markets.
Pakistan
Factories
Sheikupura
Sheikupura Punjab.
Kabirwala
Khanewal Pakistan.
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Islamabad
Karachi
Karachi
North Zone:
Central Zone:
South Zone:
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Number of Total employees
Nestle Pakistan is the FMCG company which has major industry to cater
food & beverages. Which has sub industry of Diversified goods for food and
its major industry is FMCG industry.
Top Management:
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Ian J. Donald (Managing director)
Management Committee:
Mission Statement
Vision Statement
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“The Nestlé global vision is to be the leading health, wellness, and
Nutrition Company in the world. Nestlé Pakistan subscribes fully to this
vision. In particular, we envision to:
Goals & Objective of Nestle Pakistan is Simple & well designed with the
core strategy to meet the demand of the consumers & to fulfill the needs of
the customers. The goals & objectives are;
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To be the socially responsible company & be helpful in bad times.
Nestle aims to have fully integrated systems with suppliers & retailers
so that every single market can be tapped & focused.
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EXTERNAL (PESTLE) & INTERNAL ASSESSMENT
PESTLE Analysis
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your business. So for understanding Nestle’s position in the market & to
visualize the Nestle’s position among its competitor Pestle analysis is the
best technique to understand the external forces.
Taxation Law
Labor Laws
Labor is being privileged here having all the laws. Nestle company also
follow these law like government announce minimum salaries of an employ
Rs 6000. But if any labor laws changes it will affect the Nestlé’s management
all to gather because it’s difficult to get potential labor now a days. Nestle’s
main aim to or key potential factor is to keep their employees happy &
contended because as one said happy employees happy management & it
leads to prosperity.
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Laws on hiring & promotions
They do concern for environment and contribute more and more for
the betterment of environment. Nestle’s considers a lot about CSR, Nestle is
worldwide a environmental company so as Nestle Pakistan, Nestle care for
poor & urban areas, in the start Nestle gave the concept about friendly
environment & to care for your environment.
Foreign trade regulation does not affect the overall policy and the
working of the Nestle because they operate nationally not internationally.
However it affect when the condition get so worst. But as the last two years
whole the world is suffering from great depression so any economy of the
world.
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Political instability
The government stability also plays a great role for any industry. In
Pakistan government face lot of difficulty from the side of terrorism and also
its activity that badly effect environment of the country which is totally very
upset. Recently in Punjab instability of government creates lot of problem for
the industry like shortage of electricity that badly affects the industry
operational process. Nestle have not much affect this condition but in future
it may be face some difficulty for operating.
Economic Forces
Inflation Rate
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Social Forces & Cultural
Health Consciousness
Environmental concerns
Quality of work life is very safer & environment friendly company of the
world as every MNC is maintaining the same standards abroad with a slight
cultural changes.
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Technological forces
New Products
Product innovation
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maintain the efficient scale of production which normally called economies of
scale.
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4.2. SWOT Analysis
4.2.1. STRENGTHS
Parent support
Nestle Pakistan has a strong support from its parent company, which is
the world’s largest processed food and beverage company, with a presence
in almost every country. The company has access to the parent’s hugely
successful global folio of products and brands.
Company Image
Nestle company has a great image in the mind of people. Nestle company
has worldwide reputation which helps them to retain the market even in bad
situations & unfavorable conditions.
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High Quality Products
Well-developed strategy
Nestle has recognizes there is a right time and place for their product;
therefore, their strategy makes room for adjustments, Nestle captured a
market with great sweep with the developed strategy.
Market Share
Nestle juices has a highest market share almost in every SBU’s line,
such as in Milk pack & Nestle pure life. High market share always depicts the
quality of the firm & its strong management decisions.
Brand strength
In Pakistan Nestle has some very strong brands like Nescafe, Maggie,
Cereals, Nestle water and these brands are almost generic to their product
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categories. So when a brand becomes generic then it creates the feel of
strong brand in the eyes of customers. Such as Google.com etc.
Product innovation
HR department
WEAKNESSES
Less Proactive
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Limited Distribution Channel
Nestle’s major & bad factor is the limited distribution channel because
they distributes their products to whole seller in their own factory vehicles.
As compare to their major competitor they have limited distribution channel
but they are maintaining to penetrate the market as far.
No outlets in Pakistan
They don’t have direct outlets to whole sellers to create less burden on
the factory distribution channels however their competitors give them a
major threat by this.
As being less proactive they are more concerned about profits, & their
market share the main objective of every company is to gain profits but as
compare to competitors it’s a drawback.
OPPORTUNITES
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Enhance Distribution Channel
Health conscious
Market growth
Nestle market expands very fast. A new research proves that in future
(2012) every person use 85.5 liters juices per years & uses more hygienic
products because of the low hygienic conditions of the environment.
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THREATS
Government Regulation
No Entry Barrier
Inflation rate
Increase inflation rate very fast .In 2008 expected inflation rate 23.3%
so with the increasing inflation rate the prices will go down which creates the
market slump, so inflation is very true bad factor which can affect Nestle.
When the market saturates the loss of the market share of Nestle’s
products is there major threat to Nestle.
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In a conclusion we can say that whether the company is international
or local both of the organizations have strengths & weaknesses which lead
them to avail opportunities & remove threats. So for nestle it important or
recommended that they should pay more attention to their weaknesses &
threats in order to compete for a long time & maintain the sustainable
competitive advantage. Nestle is doing so far in a good way they compete
with their competitor with full & strong response. They are proactive but less
reactive which is not good for the firms or organizations that are reactive.
The threat of new entrance means when any other company that is not
operate in that product category but operate in the other product market
or the company that start it new venture see a opportunity in this field like
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juices and they decided to enter in this market. So the current company
that is operating in the market has a Low threat for the new entrance.
New entry can raise the threat of competition. But however the Nestle is
big organization being it competitor is not an easy task. There is some
barrier for stop the new entrance
Economies of Scale
Product Differentiation
Capital Requirements
Switching Costs
Government Policy
If all these things present in the market then no company want to enter in
that market because they know there is no any opportunity for it.
The company needs raw material, labors, component and other supplies.
These requirement leads to buyers-suppliers relationships between industry
and the suppliers. Suppliers, if powerful can exert an influence on the
producing industry, such as selling raw materials at high price to capture
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some of the industry profits. Suppliers have great bargaining power if the
company cannot produce its raw materials or other ingredients. Suppliers
have weak bargaining powers, if in the market many suppliers and demand
of raw material is low.
The bargaining power is low because Nestle doesn’t rely on any supplier
they produce there on raw material or import it from parent company, even
they have no reliance on the distributors they have their own factory trucks
to supply the material.
Buyer power is the most important factor of porter’s fiver forces model,
because buyer are the consumers of the product, for nestle it’s a major
impact factor because the competition is intense & competitors have the
same products may differs in quality but providing the same needs. For that
particular reason we can say that Nestle have high bargaining power from
buyers. They can lose the customer if the prices & quality form the
competitor meet their products.
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Threats from Substitutes
Competitive Rivalry
The big factors determining the strength of rivalry is how actively and
aggressively are rivals employing the various weapons of competition in
jockeying for a stronger market position and seeking bigger sales. In the
market rival create a great threat. Many companies introduce same products
such as milk, water, cereals & many more items to hamper the nestle’s
impact in market and increase threat. Many local company enter in market,
there is also great threat for establish company. Nestle also face lot of HIGH
competitor rivalry.
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In a nutshell now we can conclude whether the company is MNC or local it
will face the tough competition from its competitors because competitive
edge is the most volatile thing in business world now-a-days companies are
reactive & they react to the change. We can conclude that the FMCG industry
is unfavorable for the new entrant to enter in the market. However existing
firms can control these five forces & attain the edge over their competitors
as nestle is following a sound strategy.
Nestle Pakistan have many competitors in market to cut their market &
capture the market they have. These competitors are;
Haleeb Ltd.
Shezan Ltd.
Others
They have to face many hurdles in order to be the best & deliver
because they cutthroat competition with all of the competitors.
“Do not Compete with your Rivals just make them Irrelevant”
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Haleeb Ltd
Strengths
2.Taste
3.Nutritious
4.Hygienic
5.Packaging
Weaknesses
3.Weak distribution
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Engro Foods LTD
Strenghts
Weaknesses
1.Packaging
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PROBLEM SECTION FOR NESTLE
According to the analysis we did nestle only have few problem otherwise
company is doing their best in the industry so far. They have attained the
highest market share for their brands. The only problem they can face is
from “pressure groups” & “limited Distribution Channel”.
Pressure groups or religious groups are the major threats to the Nestle’s
management & their targets. So to control the threats from the pressure
groups good marketing strategy can be adopt to eliminate the threat. Nestle
should work on the distribution channel & expands the distribution channel
to control the market & untapped areas, which eventually give them an edge
to increase the market share of Nestle.
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STRATEGIC SOLUTION TO PROBLEMS
These are two extensive solutions for the problem faced by the
management of Nestle, & this should be taken in to account for the more
market share.
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FUTURE PREDICTION & IMPLEMENTATION PLAN
Nestle can enhance the production capacity to control the demand &
increase the more demand with help of pull strategy. Going on Globe
strategy can help them to increase the market share & profits for the
company.
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highly committed & they do not compromise on their tasks. Quality &
sustainability is another factor that is giving nestle an edge against its
competitors & Nestle Pakistan is at top because of high demand & promising
quality they provide.