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EXECUTIVE SUMMARY

Nestle was founded in 1866 by Henri Nestle. It started off with one mans initiative to produce
infant formula (for infants who are intolerant to their mothers milk) and grew into a multi-
national cooperation worldwide. Nestle has more than 250,000 employees worldwide and
factories all around globally. The infant product was so successful that it created demand all over
Europe. Eventually this success brought in many business joint ventures and the company
underwent many name changes along the way. Nestle started to enhance its product varieties and
started to introduce baby cereals, breakfast cereals, chocolates, bottled drinks, beverages, ice
creams, dairy products, food seasoning , pet food and many more. Nestle in the world largest
food and Beverage Company. The strong brand name gain widespread popularity and acceptance
from all over the world. It has over 500 factories globally. Only about 3% of their staff is
stationed in home country, Switzerland. Nestle has penetrated into most of the Western and
European markets with growth and profitabilitys. Nestle has since turned its attention to the
emerging markets, like Pakistan in Asia, Latin American countries and Eastern Europe. Nestle
strategy is to emerge into markets ahead of competition and build a substantial position in the
food industries. As lifestyle changes with Macro Environmental forces, Nestle has also moved
into more niche and upscale products to meet the growing needs. It also takes in stock of the
culture of the country and localizes its distribution and marketing strategy to the requirements of
the local markets and needs. The strategy is to decentralized so that it can adapt as much as
possible to regional situations.
INTRODUCTION OF NESTLE

Nestl was founded in 1866 by Henri Nestl and is today the worlds biggest food and beverage
company. Sales at the end of 2005 were CHF 91 bn, with a net profit of CHF 8 bn. Nestl
employee around 250,000 people from more than 70 countries and have 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 the years
have passed, the Nestl family has grown to include chocolates, soups, coffee, cereals, frozen
products, yoghurts, mineral water and other food products. Beginning in the 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:
the high quality for which Nestl has become renowned throughout the world The Company's
strategy is guided by several fundamental principles. Nestl's existing products grow through
innovation and renovation while maintaining a balance in geographic activities and product lines.
Long-term potential is never sacrificed for short-term performance. The Company's priority is to
bring the best and most relevant products to 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
efficient running of its business - including the recruitment of its staff. Thats 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 and unique motto to deal in all over the world. Nestl believes that they
should think about their organizations globally but they deal with people by interacting with
them locally. In recent years, Nestl Health Science has made several acquisitions. It acquired
Vitaflo, which makes clinical nutritional products for people with genetic disorders; CM&D
Pharma Ltd., a company that specializes in the development of products for patients with chronic
conditions like kidney disease; and Prometheus Laboratories, a firm specializing in treatments
for gastrointestinal diseases and cancer. It also holds a minority stake in Vital Foods, a New
Zealand-based company that develops kiwifruit-based solutions for gastrointestinal conditions as
of 2012. Another recent purchase included the Jenny Craig weight-loss program,
for US$600 million. Nestl sold the Jenny Craig business unit to North Castle Partners in 2013.
In February 2013, Nestl Health Science bought Pamlab, which makes medical foods based on
L-methyl folate targeting depression, diabetes, and memory loss. In February 2014, Nestl sold
its Power Bar sports nutrition business to Post Holdings, Inc. Later, in November 2014, Nestl
announced that it was exploring strategic options for its frozen food subsidiary, Davigel. In
December 2014, Nestl announced that it was opening 10 skin care research centers worldwide,
deepening its investment in a faster-growing market for healthcare products. That year, Nestl
spent about $350 million on dermatology research and development. The first of the research
hubs, Nestl Skin Health Investigation, Education and Longevity Development (SHIELD)
centers, will open mid 2015 in New York, followed by Hong Kong and So Paulo, and later
others in North America, Asia, and Europe. The initiative is being launched in partnership with
the Global Coalition on Aging (GCOA), a consortium that includes companies such
as Intel and Bank of America.
VISION STATEMENT OF NESTLE
People understand that food is a source of nourishment and satisfaction, but also pleasure, health,
happiness and peace of mind. They are increasingly aware that their food and beverage choices
can impact their quality of life and affect the lives of others.

Innovation has been at the heart of our company since its beginning. Ever since Henri Nestl
invented Farine Lacte to alleviate infant mortality, we have been dedicated to enhance peoples
lives.

Each day we strive to make our products tastier and healthier choices that help consumers care
for themselves and their families. This would not be possible without our
unmatched R&D capability, nutrition science and passion for quality in everything we do.

We have the largest R&D network of any food company in the world, with 34 R&D facilities (3
Science & Research centers and 31 Product Technology Centers and R&D centers worldwide),
and over 5,000 people involved in R&D. In 2016, 64% of the R&D budget was used to develop
more nutritious products. For a number of categories, such as Nestl Nutrition, Nestl Health
Science, this is already 100% of the R&D spend.

Behind every one of Nestls products there is a team of scientists, engineers, nutritionists,
designers, regulatory specialists and consumer care representatives dedicated to earn our
consumers trust with safe products of the highest quality: at Nestl, safety and quality are non-
negotiable.

Whether it is in terms of convenience, health or pleasure, we are able and committed to create
trustworthy products, systems and services that contribute to improving the quality of
consumers lives.

Mission statement of nestle


Nestl 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, Nestl contributes to your well-being and enhances your quality of life.
Environmental Analysis (SWOT analysis)

Strengths Weaknesses

World Renowned brand


Extensive distribution system Maggi Controversy
Broad Product portfolio Brand structure
Large workforce Legal & consumer issues
R & D centers
Brand equity

Opportunities Threats

Healthy breakfast
Expanding market
Competition in the market
Increasing Income levels
Price of commodities
Strategic Alliances
Buyers power
Focusing more on R & D to
handle ethical issues
Strengths in the SWOT analysis of Nestle

1. World Renowned brand:

It is fortune 500 Company and is worlds largest food company


measured by revenues (2014). Nestle does individual branding of their different food brands
which help them in creating awareness about their various food brands. This also helps them
because if a brand like Maggi is affected, it does not affect the sale of Coffee.

2. Extensive distribution system:

With its diversified product portfolio Nestle has been


successful in penetrating Urban as well as rural markets. Locally adapted distribution methods
& decentralization in supply chain, including street markets, mobile street vendors, door-to-
door distributors & Medical outlets has helped the company in making its products visible in
the market. If you just look at the

3. Broad Product portfolio:

Nestle has more than 8000 brands / products under its name
which ranges from beverages like Coffee & Mineral water, Breakfast cereals, Soups & sauces
etc. Under each product categories Nestle have deep assortments to satisfy different needs &
wants of the consumers.

4. Large workforce:

Nestle have engaged 340000 odd global workforce who are continuously
working to make its products available in every nook & corner of the world.

5. R & D centers:

Nestle have the worlds largest food & nutrition research organization, with
about 5000 people involved in R & D, as well as corporate venture funds and research
partnerships with business partners and universities. It has 21 research centers globally.

Brand equity

As of 2016, it is the 37th highest rank brand in the world which says a lot
about its brand equity.
Weaknesses in the SWOT analysis of Nestle

Maggi Controversy

In India, Maggi was recently banned because it was found to contain


additives which were harmful. This affected the brand name of Nestle as well as Maggi big
time. However, it has been launched recently and Nestle is trying to convince people about
the quality of Maggi.

Brand structure:

It has many brands under the same umbrella group so managing such
large number of individual brands can create conflict of interest.

Legal & consumer issues:

Although Nestle is global food giant but it got into


controversies over the years like Nestle baby formula boycott. Child labor by suppliers,
Chocolate price fixing etc. which resulted in negative word of mouth.

Opportunities in the SWOT analysis of Nestle

Healthy breakfast

Maggi oats or other such healthy breakfast alternatives have a big time
future as most breakfast alternatives are heavy and people are becoming more health
conscious. Nestle needs to do more market penetration with regards to its Cereals.

Expanding market:

By entering into other markets & penetrating more & more in the rural
markets through its robust supply chain and transition of spots of unorganized business to
organized one will lead to further expansion of the companys business.

Increasing Income levels

Due to stable political scenario, improved literacy rate &


controlled inflation, disposable income of the people is increasing there by resulting into
upsurge in demand & changing their lifestyle.

Strategic Alliances:

Nestle is already engaged in partnerships with a number of major


companies, such as Coca-Cola, and several others, opening doors of opportunities for the
company. It is one of the main shareholders of LOreal, the worlds largest cosmetics So
partnering with other food giants will help the company in further growth.
Focusing more on R & D to handle ethical issues:

Recent outcry of Maggi Noodles in


India for lead presence like issue will create hindrances in the future growth of the company.
So in order to handle these health issues Nestle must invest in R & D further to come up with
more hygienic food products.

Threats in the Marketing strategy of Nestle

Competition in the market:

With increasing number of local & national players its


becoming very hard for the companies to differentiate themselves from others. There is also
threat from counterfeit products destroying its brand image in the market.

Price of commodities:

Increasing price of commodities will result in further increase in


the price. Further increase in price will result in decrease in sales, margins & brand
switching.

Buyers power:

With highly diversified consumer goods market where there are lots of
brands claiming different sorts of benefits.