Nestl in Malaysia

Having gained the trust of generations of Malaysians, Nestl is one of the oldest brands in the
country, has grown together with the nation and was listed on the Bursa Malaysia in 1989. The
Company has since grown in depth and magnitude, taking its place as part of the Malaysian psyche
and part of the community.

ENVIRONMENT
In this research work the company chosen by me is Nestle Malaysia. I have tried to cover the
brief history of the company, vision, mission and objectives of the company. This brief history
and other sub heading under company background is compulsory to be understood and
researched well as they form the basis for marketing plan of the company. We have also tried
to cover the internal and external micro and macro environments for the company and country
for its future growth and further marketing planning strategy. At the end we have proceeded to
the 7 Ps of the marketing for Nestle.
Company Background
Today, Nestle is one of the leading Food and Nutrition Company in the world. Nestle has
headquarters in Vesey, Switzerland. The business of nestle is supported by its strong network
in more than 86 countries with more than 500 factories. Along with that the business also gets
the benefit of its international R&D network. The Nestle factories are operating in the different
countries of:
1.
2. America

Asia

3.Africa
4.

Europe

5. Oceania
As the company is in the sector of food and nutrition, it remains sensitive to
Being a company dedicated to food from the beginning, Nestle remains sensitive to culinary
and eating habits, and responds to specific nutritional problems, whilst also setting and
matching new trends such as growing out-of-home consumption and caring about the
wellbeing of its consumers.
Objective
Nestle aim is to become global leader in Food and Nutrition Company in the world and
sustain that position. This objective of the company signifies that they need to work hard to
stay ahead of Cadbury which is recently being acquired by Kraft food. Kraft is world leader in
todays chocolate business and food and nutrition business.
Vision
Nestl Nordens aim is to meet the various needs of the consumer every day by marketing
and

selling

food

of

consistently

high

quality.

To achieve this vision Nestle has two steps to follow, first is High quality and collaboration,
which is integral part of any food business to flourish and second is Focus on e-business and
websites. Nestle has started investing heavy in development of e business and its promotion
so as to capture clients in e business sphere also.
Mission
Nestle is dedicated to providing the best foods to people throughout their day, throughout
their lives, throughout the world. With our unique experience of anticipating consumers needs
and creating solutions, Nestle contributes to your well-being and enhances your quality of
life.
The mission statement of Nestle is well articulated and reflects the long term objective for
doing the business. It has mentioned in the mission statement that the company will provide
consistently the best food product with the best quality throughout the life of their customers,
which will ultimately enhance the quality of the life of its customers. The mission statement
put the emphasis on the presence of the company in nearly every country. It promises in its
mission statement that the company will understand the need of its customers and provide

the best products to fulfill the needs. The mission also shows the high quality which is
maintained in the wide range of products of Nestle. The company reassures that they provide
the best range of food products to remain the first preference of its consumers.
Internal and External Micro Environment
Internal Environment
Nestle has a rich working culture which motivates its employees to serve best to its customers
with

the

help

of

the

variety

present

in

their

product

range.

Nestle has included the benefits of the employees in the goal statement of the organization as
the management of the company strongly believe that the productivity, quality and the
dependability will reflect on the product only if the employees will take care of all these
factors.
Different departments of the company work to contribute in the growth of the organization and
these departments not only keep the customers needs and demand in mind but also keep
the

same

type

of

attention

for

the

internal

customers

of

Nestle.

The company believes if the internal market of the company is fully satisfied than only the
internal market will be able to serve to its customers and able to understand their needs and
able

to

manufacture

the

products

which

can

fulfill

these

needs.

Nestle has a strong top management team which runs on strong values and principles of the
company. The values of the company give strong focus to integrity, loyalty and team work.
The efficient top management of the company is able to run finance, operation, marketing,
logistics, sales, and research and development departments with great success which
ultimately leads to the fulfillment of the goal of the organization.
Micro

Environment

The micro environment of Nestle includes three divisions:

a) Suppliers
Suppliers provide the raw material resources, unfinished goods and labors to the company in
order to produce goods and services. The effectiveness of suppliers determines the efficiency
of the company in terms of producing the goods. In addition to that the quality of the finished
product has a strong with the suppliers of the firm especially in case of food products. As the
presence of the company is in more than hundred companies, it is a challenge for the
company to maintain its standard all over the world and provide the consistency to its
customers in the taste and quality of the product.

Further we can divide the supplier of Nestle into two parts: Labor suppliers and material
suppliers. Labor suppliers deal with the quantity of labor is required at the optimum level in
order to prevent the loss of labor force and prevent the company from the shortage of labor
which again can lead building of inventory as a cost for the company. The skills of labor is
again maintained by the labor suppliers, wherein the labors of different skills are managed in
such a way that the operation of the firm can run smoothly. Labor strikes and labor relations
are other factors which we cannot ignore in the current scenario as the efficiency of the
business depends largely on the factors like attrition and employee satisfaction.
Material supplies handle all the material required by the firm in order to manufacture the
finished product for sale. Nestle is in the food and quality markets and the quality of such item
plays

an

major

role

in

its

success

in

the

market.

Nestle has maintained a high quality efficiency in handling the quality and quantity of the two
different supplies i.e. labor supplies and material supplies and hence the company has been
able to run its business smoothly for more than 100 years in spite of the different business
trends in the world market.
b) Marketing Intermediaries
The market intermediaries of the company help to advertise, sell and distribute its product to
the end customers. The physical distribution network of the company decides the medium by
which the finished product is delivered to the end customer on time and with safety. This
department also ensures the proper storage of the firm that prevents the product from getting
any king of damage.
The marketing service department of the firm helps in the promotion of the product and acts
as a communication channel between the company and customers. It not only communicates
the features of the product to its customers but also get the feedback with the help of survey,
which helps the research and development department to develop a product according to the
need

of

the

customers.

The other intermediaries of the company like banks help to provide the funds to the
companies and play an important role in the continuity of the business. Insurance companies
insure the property and the goods of the company against the risk involved in various
operations,

buying

and

selling

of

the

product.

Nestle has the differential advantage of working in a smooth coordination with all its marketing
intermediaries which helps in providing the best and pure food products to its valuable
customers in the different parts of the world.

c)

Customers

The immediate customers of Nestle are retail and grocery stores which provide the products
of the company to the end customers at a reasonable price and a reasonable profit. The end
customers of Nestle are the consumers who consume its wide range of product. The
company has a bright brand image in its big pool of end customers.
d)

Competitors

Although Nestle is leader in packaged food industry of Malaysia but the other competitors
who are giving tough competition to Nestle are

Petra

Chocoladefabriken

Foods
Lindt

Yeo

Limited

&

Spruengli

Heap

Sang

AG
Limited

Mail Dairy Industry Co., Ltd

Nestle has a clear advantage over the above mentioned companies is its presence in
Malaysia for over a century now. Nestle has been able to setup a good and trusted
distribution channel and a huge retail network. The trust worthiness gained by Nestle among
the Malaysian people is build in decades on hard work and quality products and varied range
of prices, thus even after facing stiff competition with the above mentioned companies in
chocolates, dairy products and other packaged food products the company is able to maintain
the bottom lines of its profit and loss statements attractive for its investors and good image in
public.
e)

Marketing

The basic marketing strategy of the Nestle was to develop brands for each their product
instead of focusing on making brand value for the entire company, thus never allowing
cannibalization of products and gaining multiple brand value for the entire company. The
vision

of

the

Be

the

company

leading

could

multinational

be

summarized

company

in

food,

in

following

nutrition

and

statements
wellness.

Produce and sell world-class products of the highest consistent quality, reliability and
convenience based

Maximize

on

the

business
use

excellence
of

good

principles
quality

throughout
local

our
raw

operations.
materials

Be an exemplary employer with a progressive human resource and social policy; with a
management style that is based on Management Commitment and People Involvement
Be a responsible corporate citizen, fulfilling all obligations to Government, shareholders,
customers,

communities

and

consumers.

Protect the environment by being committed to environmentally sound business practices,

and taking into account the need to preserve natural resources and save energy.
Guarantee that all products manufactured, imported and distributed by Nestl Malaysia are
certified

HALAL

by

authorized

Islamic

certification

bodies.

Deliver shareholder value through the achievement of sustainable and profitable long-term
growth.
Adhering to the above vision statements the company has been able to maintain the
marketing and branding unique and ahead of the competitors.
Macro Environment

Macro

environment

include

following

environment

of

the

country

Political Environment: government of Malaysia has never imposed any political pressure in
fact they have always supported foreign investment and foreign businesses to grow in
Malaysia. As the company is into food and nutrition business they have to just adhere to the
laws of food and nutrition policies of government and constantly provide good quality which is
the vision and mission of the company thus Nestle never faces any problems on political front.
Cultural Environment: Malaysian culture is no doubt of having light food at constant
intervals and young crowd of Malaysia likes to have good nutritional food thus Nestle has
great

scope

there.

Economic Environment: the disposable income of country and the high living standard of
Malaysia

always

give

better

bigger

business

opportunities

for

Nestle.

Technological Environment: Malaysia is technologically rich country both in terms of

availability of technology and also the technological work force the highly skilled and educated
manpower

is

abundant

in

Malaysia.

In case of Nestle and the product offered by the company these factors do not create much
impact in general scenario. However as we have seen the major events like World War had
created a positive impact on the sale of confectionary products of the company. The culture
has some impact in this company as whether the country has most people as vegetarian or
non vegetarian the consumption of milk products is always there. However the countries
where the people are more dependent on milk products are profitable market for Nestle.
Key Success Factors
Consumer Insight: To sustain success the company must have insight of the customers changing
needs, you have to be dynamic and innovate and Nestle has been able to do this for last couple of
decades.

 Continuous Improvement Programs: Continuous improvement includes innovation in

launching new products but equally important is improvement in quality to be better than
competitors, improvement in distribution channel which will help Nestle to be at the top.
Regionalization: the regionalization means the regionalization of products and raw resources
procurement which means that the company will run like independent entity in each divided
region

with

its

own

targets

and

resources.

Development of People: Every companys responsibility is the development of its employees

as that brings good will factor among the employees and which results into lower attrition and
higher

productivity.

Social Responsibility: this is about creating good will among the people where you operate,
about the society which helps and allows you to grow and use its resources and at last the
protection and responsibility regarding environment.

SWOT ANALYSIS
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Nestl SWOT analysis

SWOT analysis of Nestle

By Ovidijus Jurevicius | 15.02.2013

in Share6

This is Nestl S.A. SWOT analysis for 2013. For more information on how to do
SWOT analysis please refer to our article.

Company Background
Name

Nestl S.A.

Logo

Industries
served

Food processing

Geographic
areas served

Worldwide

Headquarters

Switzerland

Current CEO

Paul Bulcke

Revenue

CHF 92.2 billion (2012)

Profit

CHF 10.6 billion (2012)

Employees

328,000 (2012)

Main
Competitors

Unilever NV, Hershey Foods, Kraft Foods, Cadbury Schweppes,

GROUPE DANONE and many other automotive companies.

Nestl is the world's leading nutrition, health and wellness company based in
Switzerland. It is the largest food company in the world measured by revenues.
Nestl's sells baby food, breakfast cereals, coffee, confectionery, dairy products,
frozen food, pet foods, yoghurt and snacks. It owns several major consumer brands
such as Stouffers, Nescafe, Kit-Kat, Carnation, Nestl Water, and many others.
You can find more information about the business in its official website or Wikipedias
article.

SWOT

Nestle SWOT analysis 2013

Strengths

Weaknesses

Unmatched product and

brand portfolio
R&D capabilities
Distribution channels and
geographic presence

Inability to provide
consistent quality in food
products

2.

Weaknes
ses

Weak implementation of
CSR

Competency in mergers
and acquisitions

5.

Brand reputation valued

at $7 billion

Opportunities
Increasing demand for
healthier food products

Threats
Threats

Food contamination
Trend towards healthy

Acquiring startups
specializing in producing wellbeing products

3.

Establishing new joint

eating
Growth of private labels

4.

Rising raw food prices

ventures
Strengths
1.

Unmatched product and brand portfolio. The business offers one of the widest
portfolio of food and brewery products in its sector. It also operates 29 brands that earn more
than $1 billion in annual revenues. With more than 8,000 products it is hard for any other
corporate to compete against Nestl.

2.

R&D capabilities. Nestl invested more than $2 billion in R&D in 2011. Its
introducing new and redesigned products every year, strengthening firms competitive
advantage.

3.

Distribution channels and geographic presence. Nestl runs in more than 100
countries and has extensive distribution channel all over the world, which supports its
operations globally.

4.

Competency in mergers and acquisitions. Over the years Nestl has been
forming successful partnerships and acquiring other companies in order to grow and
maintain its leadership in the market.

5.

Brand reputation valued at $7 billion. Nestl is known almost everywhere and has
a reputable brand for its products that are used by millions every day.
Weaknesses

1.

Inability to provide consistent quality in food products. Nestl has been recalling
many products from trade due to food contamination or poor quality supplies. This does not
only hurt firms sales but its image as well as the business is unable to control quality of the
products.

2.

Weak implementation of CSR. The company has announced and is involved in

many programs that aim to make company more eco-friendly and improving the working
conditions of its suppliers. Still, Nestl receives a lot criticism over the effectiveness of its
programs.
Opportunities

1.

Increasing demand for healthier food products. The trend of buying and
consuming only healthy food products is a major shift in consumer tastes and opens up an
immense market for companies. Currently, Nestl tries to introduce more healthy food
products in response to the trend.

2.

Acquiring startups specializing in producing well-being products. Many new

startups are forming and introducing new products for well-being or revolutionizing the ways
those products are made. Startups are cheap and can easily be acquired. Nestl is focusing
on providing more well-being products and this is a great opportunity to expand its portfolio.

3.

Establishing new joint ventures. Nestle is already involved in many successful

partnerships with major world companies like The Coca-Cola Company and ColgatePalmolive.

Threats
1.

Food contamination. Although it is Nestles responsibility to run thorough quality

checks of its products, the company had been reportedly providing contaminated food or
other products to the market. Such actions hurt companys reputation and result in losses.

2.

Trend towards healthy eating. Nestl is a major supplier of chocolate and

chocolate drinks that have high level of calories and due to changing customer habits, will
experience decline in demand.

3.

Growth of private labels. The growing number of supermarkets and other retailers
are introducing their own label products that cost less and can easily compete with Nestls
product portfolio.

4.

Rising raw food prices. With an overall growth of world economy and population,
the demand for raw food will rise. The result of that will be higher material costs and
squeezed margin for Nestl.

Sources
1.

Nestle (2011). 2011 Annual report English. Available at: http://www.nestle.com/assetlibrary/Documents/Library/Documents/Annual_Reports/2011-Annual-Report-EN.pdf

2.

Nestle (2013). About us. Available at: http://www.nestle.com/aboutus

3.

Wikipedia (2013). Nestl. Available at: http://en.wikipedia.org/wiki/Nestl%C3%A9

4.

Interbrand (2013). Best Global Brands 2012. Available at:

http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx

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SWOT Analysis Nestl

Would you like a lesson on SWOT analysis?

Strengths

Global food producer, located in over 100 countries. Consistently one of

the worlds largest producers of food products, with sales in the USA in
2008 of $10 billion; sales and earnings in 2008 were better than
expected, even in a downturned economy. Global sales in 2008 topped
$101 billion.

Weaknesses

Their LC-1 division was not as successful as they thought it would be in

France. In the late 1980s, Dannon entered the market with a healthbased yogurt, and become the top selling brand of yogurt; Nestls 1994
launch was behind the product life cycle curve in an already mature
market and could not compete against a strong, established brand.

Growth in their organic food sales division was flat in 2008, even
though the industry grew 8.9%.

Since 2004 the breakfast cereal industry has been under fire from the
FDA and the American Medical Association, both of which say that false
claims of "heart healthy" and "lower cholesterol" need to be removed
from packaging and advertising. They have also been forced to reduce
the amount of sugar in their products, as parents advocates groups
claimed they were contributing to the diabetes epidemic among
American children.

General Mills is an experienced, established brand and are the market

leader in the USA, however, they have been lacking in innovation, have
not cashed in on the booming health food craze and have been behind
in creating new, niche products, especially in their yogurt division,
where Yoplait is the only brand making a profit.

In 2008, although their products did not carry the recalled pistachios,
several of their ice cream brands, Dryers, Edys and Haagen-Dazs, were
still plagued with bad PR and loss of sales.

Opportunities

In todays health conscious societies, they can introduce more healthbased products, and because they are a market leader, they would likely
be more successful.

Provide allergen free food items, such as gluten free and peanut free.

They launched a new premium line of higher cacao content chocolates

dubbed Nestl Treasures Gold, in order to cash in on the "recession
economy" in which consumers cut back on luxury goods, but regularly
indulge in candy and chocolate. Americans want luxury chocolates, and
high-end chocolate is immune to the recession (so far), because it is an
inexpensive indulgence.

Open Nestl Cafs in major cities to feature Nestl products.

Threats

Any contamination of the food supply, especially e-coli. Their Toll House
brand cookie dough was recalled in March of 2009 because of e-coli.
Outbreaks were linked to 28 states and the product had to be recalled
globally. Nestl has yet to find out how this happened, and is still
investigating.

They were affected by the pet food recall in 2007, in which 95 different
brands of dog and cat food were recalled due to contamination with rat
poison. Also in 2007, FDA learned that certain pet foods were sickening
and killing cats and dogs. FDA found contaminants in vegetable proteins
imported into the United States from China and used as ingredients in
pet food.

Raw chocolate ingredient prices are soaring; dairy costs alone rose
50% in 2008, this cuts heavily into their profit margins and often gets
passed on to consumers, by shrinking the packaging in a way that is
almost unnoticeable-therefore the consumer is paying the same prices
for less product.

They have major competitors, like Hersheys, Cadbury-Schweppes

(owned by Pepsi), Lindt and Ghirardelli, Kelloggs, Post, Starbucks,
Beech-Nut, Quaker, Kraft Foods, Dannon, Del-Monte, Iams, Earths Best,
Heinz, Frito-Lay (owned by Pepsi).

References
Boyle, M. (2008). Meet Googles Willy Wonka. Retrieved on July 12, 2009.
Entrereneur Magazine. (n.d.). Flood of Fun-Hungry. Retrieved on July 12, 2009.
Nestl. (2009). Good Food, Good Life. Retrieved on July 12, 2009.
Slideshare. (2009). Nestl 2008 Q3 Earnings. Retrieved July 12, 2009.
Disclaimer:
This case study has been compiled from information freely available from public sources.
It is merely intended to be used for educational purposes only.

Repeatedly ranked as the worlds largest bottled water company and

have set up facilities to operate water resources in a responsible
manner.

In 2008, Nestl was named one of "Americas Most Admired Food

Companies" in Fortune magazine for the twelfth consecutive year.

Nestl provides quality brands and products and line extensions that
are well-known, top-selling brands including:

Lean Cuisine, Yoplait, Maggi, Dryers/Edys, Haagen-Dazs, Stouffers,

Boost, Dibs, Hot Pockets.

Chocolate and Candy: Kit Kat, Toll House, Butterfinger, Baby Ruth,
Crunch Bar, the Willy Wonka Candy line.