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Nestle MilkPak

STRATEGIC MANAGEMENT
REPORT

NESTLE MILKPAK


GROUP MEMBERS
Aza Ahmad
Madeeha Mansoor
Sehr Jamil
Wajiha Mansoor








Nestle MilkPak




TABLE OF CONTENTS
CHAPTER 1: Introduction
CHAPTER 2: Vision Statement/Mission Statement
CHAPTER 3: External Audit
CHAPTER 4: Internal Audit
CHAPTER 5: Financial Ratio Analysis
CHAPTER 6: External Profile Matrix (EFE)
CHAPTER 7: Internal Factor Evaluation (IFE)
CHAPTER 8: SWOT Strategies
CHAPTER 9: Space Matrix
CHAPTER 10: Internal/External Matrix (I/E)
CHAPTER 11: The Quantitative Strategic Planning Matrix (QSPM)
CHAPTER 12: Grand Strategy Matrix
CHAPTER 12: Recommendations










Nestle MilkPak




CHAPTER 1: INTRODUCTION
Nestl Pakistan Limited (NPL) is a company that manufactures, processes and sells food
products and ancillary equipment. The food products include dairy, confectionery, infant
nutrition and culinary products, coffee, beverages and drinking water. The major brands include
MilkPak UHT, Nestle Everyday, Lactogen, Maggie, Nestle Pure Life, Milo, NIDO, Cerelac,
Polo, Fruita Vitals, Nesvita, Fruit Yogurt, Kit Kat, Nestle Raita, Yogurt, MilkPak Cream,
MilkPak Desi Ghee, Nestle Cornflakes and Nescafe.
HISTORY:
Nestle MilkPak came into being when Nestle S.A of Switzerland made a joint venture agreement
with MilkPak Ltd in 1988. Before this arrangement MilkPak Sheikhupura factory was the
producer of UHT milk, butter, cream and desighee all under the brand name of MilkPak. The
factory also produced juice drinks under the brand name FROST. After the joint venture Nestle
MilkPak reorganized and reinforced the production of existing brands and gave shape to new
production lines. Nestle immediately began investing in milk cooling tanks which MilkPak Ltd
had not because these milk cooling tanks were very expensive. Between 1988 and 1992, 100
milk tanks were installed. From1992, with full support from the Nestl headquarters in
Switzerland, Nestle began to reorganize the milk collection operation and the provision of
agricultural technical assistance became top priorities. The investment paid off. Within a decade,
Nestl's purchase of fresh milk had quadrupled, and the number of small farmers selling milk to
Nestl tripled. In 2008 the market share of Nestl Pakistan in the dairy milk category has been
estimated at 50 percent.
MilkPak is produced in two factories. One factory is situated in Sheikhupura which has been in
operation since 1981 when MilkPak Ltd was a separate entity from Nestle. The factory has the
most modern and efficient and high speed equipment that is available in dairy industry. The
National distribution centre was also constructed in 2000 with capacity to store 8300 pallets. The
other factory is located in Kabirwala which was first acquired by Nestl MilkPak in 1990 as a
subsidiary. By 1997 it was a fully owned unit of Nestl Pakistan Ltd. Nestle MilkPak is available
in 1000, 500 and 250 ml sizes and is a brand which is widely recognized in Pakistan.





Nestle MilkPak




MILK COLLECTION SYSTEM


The total urban milk consumption is 6.86 billion liters. In cities, milk is largely consumed for tea
whitening (2.3 billion liters), drinking (2.3 billion liters), and desserts etc. (2.2 billion liters). In
Pakistan, loose milk still occupies 96% of the total milk market share. While buying loose milk,
a consumer may pay less than that of UHT milk, but there is serious health risk, and the
consumer is also paying for milk containing up to fifty per cent of water.
The milk is collected in the following steps:
Step 1
A small farmer in rural Sheikhupura district milks his buffalo twice a day and takes about 4 liters
to one of Nestl's 500 Village Milk Collection Centers.
Step 2
At the Village Milk Collection Centre the farmer's milk is poured into aluminum churns. The
agent checks the milk's freshness and purity, and enters the quantity into the farmer's logbook.
He takes it to one of Nestl's 1308 Secondary Reception and Cooling Stations, about 2-4
kilometers away.
Step 3
Nestle MilkPak




The Secondary Reception Station has a large electrically powered cooling tank. A milk inspector
measures the fat content, the non-fat solids content, and the milk's acidity. Once satisfied, he
takes the milk to one of 27 Main Reception and Cooling Stations.
Step 4
At the Main Reception and Cooling Stations the milk is poured into huge tanks and is thoroughly
checked for quality. The milk is dispatched to the factories.
Step 5
At the Sheikhupura and Kabirwala factories, the milk is processed and packed into. It is checked
for quality thrice before being released for sale. Some is processed into yoghurt, powdered milk,
or other dairy products.

















Nestle MilkPak




VISION STATEMENT/MISSION STATEMENT


VISION STATEMENT

To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved
shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier
selling preferred products.
MISSION STATEMENT

Nestle is dedicated to providing the best foods to people throughout t hei r
day, t hr oughout t hei r l i ves , t hr oughout t he wor l d. Wi t h
our uni que exper i ence of ant i ci pat i ng consumer s ' needs and cr eat i ng
sol ut i ons , Nest l e cont r i but es t o your wel l - bei ng and enhances your quality of
life.


PORTERS FIVE FORCES MODEL

THREAT OF NEW ENTRY.
In the case of Nestle there is a lot of potential as the consumers are switching their preferences
from conventional loose milk to packaged milk. The new entrants who have some
resources or experience are entering into milk industry. According to Mr. Asif Ali
Khan 15 years ago there were only two dominant brands of packaged milk available
in Pakistan which were Nestle MilkPak and Haleeb Milk. But recently new brands
like Nirala milk, Olpers and Nurpur milk have captured the market. There is a threat
of new entrants as Pakistan has the resources of producing milk and many farmers
are setting up dairy farms and producing milk so not a lot of investment is re quired.

BARGAINING POWER OF BUYERS
The bargaining power of buyer is high when there are only few firms in the industry providing
their services. In the milk industry the buyers have more choices now with the entry of new
brands like Olpers and Gourmet milk the consumers have various choices to switch to other
brands if they are not satisfied with one brand or if they think that one brand is too expensive.



Nestle MilkPak




BARGAINING POWER OF SUPPLIERS
The bargaining power of suppliers is high because the dairy farms who supply milk to packaged
milk brands have more choices now as they can sell their milk to any packaged milk brands and
can bargain the prices and favorable terms of payment. The reason for this is that milk is the
necessity and unless the companies dont have their own dairy farms or milk collection units
they have to pay what the suppliers wants them to pay.

THREAT OF SUBSTITUTES.
Milk is a necessity therefore its substitutes are hard to exist . The only substitute of
packaged milk is loose milk or powdered milk. Its a generic product so in order to
make its substitutes its a difficult thing therefore threat of substitute is low.
THE COMPETITIVE RIVALRY.
The competition is very high in milk industry. Nestle MilkPak not only faces competition from
other companies such as Olpers or Haleeb but they now face competition from Gourmet, Adams,
Halla and Nirala too. Moreover many dairy farms are now selling milk under their own brand
name such as Sapphair Diaries. The competition is intense because milk industry has lot of
growth potential.

STRATEGIES USED BY MILKPAK
When MilkPak Ltd. was established in 1981 it adopted focus strategy by focusing only on
producing UHT milk. After the joint venture MilkPak introduced new products which included
butter, cream, desi ghee and fruit juices. In 1990 the company adopted retrenchment strategy by
discontinuing its fruit juices under the brand name of Frost and butter and focused itself on
producing milk, cream and desi ghee which are in the market to date. Recently the company has
decided to launch MilkPak in power form in 1 Litre pack, thus adopting related diversification
strategy, to avoid the milk being expired too quickly as it does in liquid milk.





Nestle MilkPak





BOSTON CONSULTING GROUP MATRIX



Nestle MilkPak fall into the Star category of the BCG because it has high market share of about
50% in a high growth rate industry. This brand requires lots of investment to compete in the
growing market which is provided by the cash cows.

Nestle MilkPak




PEST ANALYSIS

:
POLITICAL FACTORS:
So far as, political environment is concerned, here in Pakistan, it is not stable one. Almost every
government is changing biannually, due to which the policies are unsteady and inconsistent but
this does not directly influence the trends and spending patterns of the customers. There are no
restrictions or barriers on the growth of dairy industry. So these political conditions are favorable
for Nestle and other dairy industries because food and dairy chain products are generic products
which customer has to purchase in any conditions.
ECONOMIC FACTORS:
Inflation rate of Pakistan is increasing this thing is really hurting the purchasing power of
Pakistani consumers. PLM which is already considered as more costly compared to open milk is
becoming out of reach of general public. As a result, there is an increased pressure on PLM
companies to either decrease their prices or at least keep prices stable

Competition is also increasing with the entrance of new domestic players in the dairy
sector especially Olper and Haleeb are the major threat for the Nestle.
Despite these gloomy picture of economy of Pakistan, Nestle MilkPak has its plant in Kabirwala
which has processing capacity of 2 million liters of milk per day which is the Nestls largest
milk reception facility in the world.
SOCIAL FACTORS
Nestle MilkPak




Urban population is increasing due to this growth rate life style of people is changing and quality
consciousness is increasing in minds of people. So they are switching toward processed milk and
other dairy product also due to the increased literacy rate, the hygiene and health consciousness
among people is increasing

Area Total Pop (Mn) Urban Pop %
Punjab 47.3 31.3%
Sindh 19.0 48.9%
NWFP 11.0 16.9%
Balochistan 4.3 N/A
FATA 2.1 N/A
Federal Capital 0.3 100% approx.

But that switching rate is low because some people are not willing to change their mind set
However, these changing treads are increasing the potential customers and consumers for the
dairy industry and Nestle MilkPak.

TECHNOLOGICAL FACTORS
High technology is the basic requirement of dairy and food industry. The companies that are
using latest technology have some cost benefits over the companies, which are not using high
technology. The key to survival for companies in this industry is using high technology for
quality and cost purposes.
As due to technological advancement milk yields per animal have been increased through
scientific feeding & breeding. Currently, most equipment for storage and processing is being
imported due to which nestle import the technology from foreign countries


EXTERNAL AUDIT
OPPORTUNITIES
Nestle MilkPak




INCREASE IN MILK CONSUMPTION:
The milk consumption in Pakistan is increasing because people are becoming more literate and
they now the benefits of drinking milk. Moreover the promotions and advertisements of
companies selling milk is influencing people to buy milk.

CUSTOMERS CONCERN ABOUT MILK QUALITY IS INCREASING:
Because of the literacy customers are becoming more aware about the benefits of packaged milk.
They need to be ensured that the milk they are getting is of high quality and delivers its promise
of healthy drink.

UNTAPPED RURAL MARKET:
There is lot of potential to cater untapped market where people are still using unpackaged milk.
Especially in rural areas where people prefer loose milk.

OPPORTUNITY OF LARGE MARKET SHARE:
Growth of processed milk is increasing with 20% annually so Nestle MilkPak has the
opportunity to capture a large share of market.

PEOPLE ARE BECOMING MORE HEALTH CONSIOUS:
Now people are more becoming more health conscious and they prefer packaged milk so there is
great shift from loose milk to packaged milk.

MARKET FOR LOW FAT MILK IS INCREASING :
There is a growth opportunity in milk industry for low fat milk since people are becoming more
health conscious. They are willing to buy milk which is healthy and fresh.

THREATS
ECONOMIC UNCERTANITY:
The uncertainty of economic conditions poses a great threat as the major funds invested
in the country come from outside Pakistan.

STRONG RETAILERS POWER:
Nestle MilkPak is struggle a lot with retailers like Metro and Macro because they have
more power then Nestle. They are the ones who can influence the sales of MilkPak
because they can decide that on which side of refrigerator should they place MilkPak. If
MilkPak doesnt do what the retailers ask of them then they can lose on sales.

Nestle MilkPak




INTENSITY OF COMPETITION:
And Olpers are main threat for Nestle MilkPak especially the Olpers is growing very fast
it is focusing more on its advertisements in order to create awareness.

LESS ENTRY BARRIERS:
There are no entry barriers because it is easy to set up a dairy farm since the investment is
comparatively low.

PURCHASING POWER IS DECREASING:
Inflation is getting higher and higher so the purchasing power of the people is decreasing
and is spending less on packaged milk

TASTE OF CONSUMER IS HARD TO CHANGE:
Because of illiteracy rate people are unaware of the health issues regarding unpackaged
milk and their taste has already developed and they still prefer loose milk which is hard to
change.











Nestle MilkPak




EXTERNAL FACTOR EVALUATION (EFE)


The EFE score of 2.86 indicates that Nestle MilkPak is taking advantage of its opportunities and
trying to minimize threats. There is a room for improvement because the score is above average.



Key External Factors

Weight Rating Weighted-
Score

Opportunities


1. Increase in milk consumption 0.07 3 0.21
2. Customers concern about quality
of milk is increasing

0.10 3 0.3
3. Untapped rural market


0.15

4

0.6
4. Opportunity of large market share 0.08 2 0.16
5. People are becoming health
conscious
0.09 3 0.27
6. Market for low fat milk is increasing 0.06 2 0.12


Threats


1. Uncertainty of economic
conditions
0.10 4 0.4
2. Less entry barriers 0.09 3 0.27
3. Intensity of competition 0.08 2 0.16
4. Decrease in purchasing power 0.07 2 0.14
5. Already developed taste is hard to
change
0.05 1 0.05
6. Strong Retailers power 0.06 3 0.18

Total 1.00 2.86
Nestle MilkPak




INTERNAL AUDIT
STRENGTHS:
STRONG BRAND NAME:
Nestle is one of the oldest and profitable corporation in the world and it has been serving
the Pakistani consumers since 1988. It has made a strong brand image due to its quality
products. It is known for honesty, integrity, full compliance with all applicable laws, and
fair dealing. This strong brand image is created by advertising and using promotional
tools.

ENVIORNMENTAL FRIENDLY PACKAGING:
Nestle MilkPak is also committed to reducing the environmental impact of packaging,
without jeopardizing the safety and quality of the products .special care is taken to avoid
the use of substance that may adversely impact the environment during packaging,
production and disposal.
HIGH QUALITY PRODUCTS:
Nestle MilkPak is known as the best UHT milk in Pakistan due to consistency in quality.
This quality is achieved by checking milk several times from the moment the milk is
collected to final packaging.
STRONG FINANCIAL POSITION:
Nestle MilkPaks annual turnover is Rs.30 Billion which provides it a financial edge over
its competitors because its financial position is strong.
STRONG DISTRIBUTION NETWORKS:
Nestle functions in 86 countries all over the world and has nearly 283,000 employees.
There are many authorized distributors of MilkPak. The company has its own network of
vans which deliver the milk to all the retail outlets early morning.
STRONG SUPPLY CHAIN NETWORK:
Nestle collects Milk directly from the farmers instead of relying on the contractors. And
it distribution is also very strong. In this way it has a complete control over its supply
chain.

Nestle MilkPak




DIFFERENT SIZES Of NESTLE MILKPAK:
Nestle MilkPak is available in four convenient sizes, depending on family
need.i.e.1500ml, 1000ml, 500ml and single serve 250ml packing. So the company has
different SKUs.

WEAKNESSES
WEAK RELATIONSHIP WITH MILK COLLECTION UNITS:
Nestle MilkPak pay less money to milk collectors and dairy farmers as compare to its
competitors. MilkPak claims that they focus more on building relationship rather than
paying more money to milk collectors.
MINIMUM DIVERSIFIED PRODUCTS AS COMPARED TO COMPETITORS:
Nestle MilkPak has minimum number of products than its competitors. Gourmet for
example has now introduced tea whitener under its own brand name. Powdered milk has
been introduced in the market also. But there has been no product under the brand name
of MilkPak.
LIMITED PLANT CAPACITY:
They have limited capacity where they produce milk. The two factories are not enough
and in an attempt to lower their costs they buy milk from farmers or dairy farms like
Sapphire dairies.
LESS ADVERTISING:
There is weak marketing of MilkPak as there is less outdoor advertisement and there are
not any advertisements on official website. It is the main weakness of MilkPak because
its competitors are engaging in intense advertising but there are no advertisements of
MilkPak. Consumers should be recalled towards a brand irrespective of the fact that the
brand is well known.
NARROW TARGET MARKET:
The target market of Nestle MilkPak is urban class because the rural class still prefers to
buy loose milk .And even in urban areas there are still many people who buy loose milk.

SLOW RESPONSE TO CHANGING CONDITIONS:
MilkPak doesnt have a strong presence in market as compared to its competitors because
it doesnt respond to changing conditions in the market. Nestle has the same strategy of
advertising products which are new to market. Moreover other companies have already
extended their product line while MilkPak is still selling packaged milk only.


Nestle MilkPak




INTERNAL FACTOR EVALUATION (IFE)


The score of 3.1 indicates that Nestle MilkPak has enough strengths which can overcome the
weaknesses of the brand.

Key Internal Factors

Weight Rating Weighted-
Score

Strengths


1. Strong brand name

0.08 4 0.32
2. Environmental friendly packaging

0.09 3 0.27
3. Quality product

0.10 3 0.3
4. Strong financial position.

0.10 3 0.3
5. Strong Distribution networks

0.07 3 0.21
6. Strong supply chain networks

0.06 3 0.18
7. Different size packaging 0.08 3 0.24



Weaknesses


1. Weak relationship with milk collection
units

0.10 3 0.3
2. Minimum Diversified Products

0.09 3 0.27
3. Limited plant capacity

0.05 4 0.2
4. Narrow target market

0.08 2 0.16
5. Less advertising

0.05 4 0.2
6. Slow response to changing conditions 0.05 3 0.15

Total 1.00 3.1
Nestle MilkPak




SWOT STRATEGIES
SO Strategies:
1. Go for untapped rural markets since they have strong financial position (S4, O3).
2. Can extend the product line because of its strong brand name (S1, O6).
WO Strategies:
1. Can segment to rural areas where the competitors havent entered. (W4, O3).
2. Cater to untapped rural markets to reduce competition. (W6, O3).
ST Strategies:
1. Open own retail stores to distribute MilkPak and rely less on retailers. (S5, T6).
2. Differentiate themselves from competitors by selling MilkPak in packages which doesnt
harm the environment (S2, T3).
WT Strategies:
1. Respond quickly to external conditions so that they can compete with their competitors
(W6, T3).
2. Create customer awareness about the benefits of the product through advertising. (W5,
T5).




Nestle MilkPak





INTERNAL/EXTERNAL MATRIX

THE IFE TOTAL WEIGHTED SCORES

STRONG[3.0 to 4.0] AVERAGE[2.0 to 2.99] WEAK[1.0 to 1.99]

HIGH I II III
[3.0 to 4.0]

MEDIUM
IV V VI
[2.0 to 2.99]

LOW VII VIII IX
[1.0 to 1.99]

The EFE and IFE total weighted scores of MilkPak falls in the IV cell of the I/E Matrix.
Divisions that fall into this category can be managed best with Grow and Build Strategies which
are Market Penetration, Market Development and Product Development. The company can also
follow integrative strategies which include Backward Integration, Forward Integration and
Horizontal Integration.


THE EFE
TOTAL
WEIGHTED
SCORES
Nestle MilkPak




THE QUANTITATIVE STRATEGIC PLANNING
MATRIX (QSPM)
Strategic Alternatives
Key Factors
Focus on outdoor
advertising
Increase scope of
packaged milk
towards rural area
Key External
Factors
Weight AS TAS AS TAS
Opportunities
Increase in milk
consumption

0.07 3 0.21 2 0.14
Customers concern
about quality of milk is
increasing

0.10 - - - -
Untapped rural
market

0.15 4 0.6 1 0.15
Opportunity of gaining
huge market share

0.08 2 0.16 2 0.16
People are becoming
health conscious

0.09 3 0.27 1 0.09
Market for low fat
milk is increasing
0.06 - - - -


Threats


Uncertain economic
conditions

0.10 - - - -
Less entry barriers
0.09 - - - -
Intense competition

0.08 3 0.24 3 0.24
Decrease in
purchasing power

0.07 - - - -
Already developed
taste is hard to change

0.05 - - - -
Nestle MilkPak




Strong retailers power

0.06 - - - -
Total

1.00
Key Internal Factors
Strengths


Strong brand name

0.08 3 0.24 2 0.16
Environmental
friendly packaging

0.09 1 0.09 1 0.09
Quality product

0.10 2 0.2 2 0.2
Strong financial
position.

0.10 2 0.2 2 0.2
Strong Distribution
networks

0.07 1 0.07 2 0.14
Strong supply chain
networks

0.06 - - - -
Different size
packaging
0.08 4 0.32 3 0.24

Weaknesses


Weak relationship
with milk collection
units

0.10 - - - -
Minimum diversified
products

0.09 - -
Limited plant capacity

0.05 - - - -
Narrow target market
0.08 - - - -
Less advertising

0.05 - - - -
Slow response to
changing conditions
0.05 - - - -
1.00 2.6 1.81


Nestle MilkPak






The total attractiveness score of Alternative 1 versus Alternative 2 (2.6 vs. 1.81) suggests that
Nestle MilkPak should go for focusing on outdoor advertising
This is an excellent way to boost sales and promote the brand. Nestle is already a market leader
and people are aware of the brand. However, through more aggressive outdoor advertisement
campaigns, sales promotions, and bill boards they can further heighten brand awareness, build
customer loyalty and create appeal for MilkPak by new and existing customers.



















Nestle MilkPak




GRAND STRATEGY MATRIX

The market for milk is growing. Therefore according to Grand Strategy Matrix MilkPak lies in
Quadrant I. According to this quadrant MilkPak needs to pursue strategies like Market
Development, Market Penetration, Product Development, Horizontal Integration, Backward
Integration, Forward Integration , and Related Diversification to be successful.


Nestle MilkPak




SPACE MATRIX FOR MILKPAK







Nestle MilkPak






Financial Strengths (FS) Ratings

Operating income 4.0
Net income 4.0
Working capital 3.0
Leverage 4.0
Inventory turnover 5.0
Earnings per share 4.0
24.0
Industry Strengths (IS)

Growth potential 4.0
Profit potential 3.0
Ease of entry into the market 3.0
Resource utilization 4.0
14.0
Environmental Stability (ES) Ratings

Price elasticity of demand -4.0
Competitive pressure -4.0
Demand variability -4.0
Price range of competing firms -3.0
Nestle MilkPak




Risk involved in business -2.0
-17.0

Competitive Advantage (CA)

Control over supplier and distributors -3.0
Market share -4.0
Customer loyalty -3.0
Product life cycle -4.0
Product price -3.0
-17.0


ES average is -17/ 5 = -3.4 IS average is +14/ 4 = +3.50
CA average is -17/5 = -3.40 FS average is +24/ 6 = +4

x-axes : -3.40 + (+3.50) = +0.10
y-axes : -3.40 + (+4)= +0.6



Nestle MilkPak




Conclusion
From the above analysis and diagram it can be seen that the best strategy for MilkPak is
aggressive strategy which contains backward, forward and horizontal integrations, market
penetration, market development, product development and diversification (related or unrelated).





















Nestle MilkPak




FINANCIAL RATIO ANALYSIS
Liquidity ratio 2009 2008
Current ratio 0.94 0.89
Quick ratio
Leverage ratio
0.47 0.46
Debt-to-total asset ratio 0.80 0.74
Long term debt-to-equity ratio
Activity ratio
2.04 1.40
Fixed Assets turnover ratio 3.00 2.95
Total Assets turnover
Profitability ratio
1.78 1.70
Gross Profit Margin 28.14% 28.38%
Net Profit Margin 6.39% 6.19%
Return on Total Assets 11.39% 10.55%
Return on Total Equity 53.9% 53.86%
Earnings Per share (EPS) 39.81 30.06



Net Sales 28235393 22030958
Gross Profit 7944123 6252628
Net Income 1805212 1363290

Nestle MilkPak





Profitability ratios measure the effectiveness shown by returns on sales and investment.
The above analysis shows that net profit margin has increased slightly but gross profit margin
has decreased to a small extent. This may be because the prices of fresh milk have increased. Net
profit margin ratio has increased because both the sales and net profit have risen. The return on
total assets has increased which indicates that the total assets are giving good returns on
investment. Return on total equity has remained almost the same. The earnings per share have
improved which indicates that the Nestle is financially strong enough to make shareholders
happy by giving them good return on investment.
Leverage ratios measure the extent of debt financing. Both the ratios indicate that the reliance
on debt has increased because Nestle has been taking long term loans and is bearing a high
interest rate cost than it was before.
Activity ratios measure the use of firms resources in an effective manner. Both the fixed asset
turnover and total asset turnover ratios have increased which indicates that the company is using
its assets efficiently. This may be the reason that the company has started to use its plant and
equipment more efficiently while the current assets have also increased.
Liquidity ratios measure the firms ability to meet its short term obligations. The current ratio
has improved which means that the company can meet its short term obligations. This maybe
because of increase in accounts receivables. The quick ratio on the other hand has remained the
same.










Nestle MilkPak






RECOMMENDATION
After applying the tools and techniques of strategic management the following
recommendations are made:
1) Nestle MilkPak should use innovative tools to make customers brand loyal towards itself. This
can be done by making a documentary about the benefits of using packaged milk as compared to
used milk etc.
2) The company should take the strategies of competitors into account when they make a
decision so that they can respond to external conditions rapidly.
3) Advertising should be the main way of recalling the customers back to the MilkPak brand.
Nestle should do enough advertising to make customers realize that MilkPak still exists in
market.
4). The company should open its retail outlets to reduce the bargaining power of retailers.
5) Nestle should focus on maintaining relationships with suppliers but they should also take into
account what the suppliers need. If they want Nestle to pay them more then Nestle should pay
them so that they can trust Nestle MilkPak and there would be less disagreement in future.











Nestle MilkPak




REFERENCES
http://www.nestle.pk/Brand/AmbientDairy/Pages/MILKPAK.aspx
http://www.scribd.com/doc/16108950/Research-on-Nestle-Milkpak-
Asif Ali Khan (Category Manager Chilled Dairy)