Nestle

Task 1 (a):

Nestlé’s Mission Statement (R1)

Nestlé’s mission, in the words of our founder Henri Nestlé, is to: “...positively influence the social
environment in which we operate as responsible corporate citizens, with due regard for those
environmental standards and societal aspirations which improve quality of life.” -- Henri Nestlé, 1857. 

Nestlé’s vision and values

To be a top, competitive, Nutrition, Health and Wellness Company providing better shareholder value by
being an ideal corporate multinational company, preferred employer, ideal supplier selling top notch
products. To fully take care of its vision of being the number one Nutrition, Health, and Wellness
Company in the World. In particular, Nestle visualizes itself to lead a self-motivated, passionate and
professional workforce, proud of it heritage and positive about the future
To meet the nutrition needs of consumers of all ages – from start to old age, from nutrition to pleasure,
through an innovative portfolio of branded food and beverage products of the highest quality.
To deliver shareholder value through profitable long-term growth, while continuing to play a significant
and responsible role in the social, economic, and environmental factors of the world.

Objectives (R2)
Nestlé’s objective is to be the world’s leading and finest branded food manufacturer while insuring that
Nestlé’s name is one and the same with the products of the highest quality. Nestle business objective is
to manufacture and advertise its items in a way that creates value that can be carried over the long term
for shareholders, employees, consumers, business partners and national economies in which Nestlé
Operates. Nestle doesn’t agree for a short-term profit at the cost of successful long-term business
development. Nestlé is aware that its consumers have a genuine and sincere interest in the behavior,
beliefs and actions of the Company behind brands in which they place their trust, and that if its consumers
weren’t there, the Company would fail and would not exist. The company believes that, as a general rule,
legislation is the most active safety measure of responsible conduct, although in certain areas, additional
guidance to staff in the form of voluntary business principles is valuable in order to guarantee that the
maximum standards are met all over the organization.  The aim of the Creating values for the company
include with improve business condition for the firm. To attain more reliable and top quality source of raw
materials, enhanced government functioning and Regulatory, employed skill and loyal workforce and
superior quality products. Nestle knows that the success of a company is based on the hiring of the right
people and ongoing training and development are essential plus it obeys and follows all the applicable
local laws in each of its markets to show its commitment.

Nestlé’s Current Business Position (R3)

 Strong Sales. Operating Cash Flow, and returns to shareholders

 Continued momentum, but with volatile currency values and raw material prices
 Consumer confidence shaky but balanced by emerging markets
 2015 goal of 5-6% organic growth and EBIT margin improvement
 Focus on functional foods with higher margin, which means increased spending in R&D

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.
Nestle is 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 preferenc

In recent years we have reinforced and expanded our Nutrition, Health and Wellness strategy with the
creation of Nestlé Health Science and Nestlé Skin Health. Nestlé Health Science is advancing the role of
nutritional therapy to change the course of health for consumers, patients and for our partners in
healthcare.
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 behavior wherever we operate
is at the very heart of what we do.
Conclusion

Keeping in view of our objectives and vision Vita Water is the most suitable product to launch to cater
better market share and increase revenue through new developed market and will provide edge over our
nearest competition who has not yet launched any such product line or if they have don’t have the brand
image, pre-owned market share.
Launching Vita Water will definitely promote the brand’s name and its image as a Nutrition, Health and
Wellness Company. Overall sales of energy drinks worldwide have doubled in the last five years. Clever
marketing and product positioning will give us an edge to boost the sale of the new product. Plus, there is
a huge un-catered market that could be provided with this new Vita Water as there are only a few
competitors and there is a major market share that can be attained and it will increase revenue in order to
expand and carry out current and future business objectives.
By targeting consumers who were ready to pay a premium for healthy alternatives to soft drinks thus
defending the higher pricing of Vita Water than regular fizzy drinks. Energy Foods had always maintained
a close contact with the consumers in order to understand their tastes and preferences and Vita Water
will not only enhance a better relationship with the consumer, but will also provide consumers with a
healthier day to day drinking alternate.
Task 1 (b)

PESTLE analysis (R4)

A PESTLE analysis is used as a strategic tool to measure industry dynamics through recognition of the
core political, economic, social, technological, legal and environmental forces/changes having influence
on the. Below presents a PESTLE analysis for the industry Nestlé are present within and this information
is then used to form a critical discussion for the future strategic options available to the firm.

Political

1. Changing regulation surrounding food standards and marketing actions.

2. Government stability in new emerging economies – question of risk as part of the
internationalization process.
3. Changing global regulations – standardized practice yet adaptation to different political
forces.

Economic

1. Awareness and knowledge of changing inflation, economic growth rates and income levels.
2. Changing consumer budgets, rise of the cost conscious consumer.
3. Rising price of raw material goods in relation to the need to source from sustainable
suppliers.

Social

1. Changing consumer attitudes – move towards healthier products in line with government
initiatives supporting balanced diets and the dangers of sugar.
2. Changing lifestyle – return back to home cooking and the promotion of family time in a world
of convenience.
3. The need to adapt to different cultural settings i.e. language, religious beliefs and family
settings.
 4. Understanding of consumer behavior is crucial to ensuring a personal approach to
marketing.
5. Consumers viewing the firm as an agency for power in the wider external environment.

Technological

1. Rise of social media, consumers interacting with firms and being able to do so across a
range of platforms.
2. Innovation fueled by technological developments.
3. E-commerce as a platform for development.

Legal

1.Changing nature of regulation.

2. Need to adhere to global regulations and changes across different international markets.

Environmental

1. Increased attention directed towards corporate social responsibility.

2. Environmental concerns from consumers including concerns over packaging/recycling.

SWOT Analysis of Nestle

STRENGHTS:

The greatest strength of nestle is that it includes a culture that is team focused and an open door policy.
Nestle focus on collectivism and performance orientation attitude which encourages employees to work
harder. Another thing is high level of market share and that people all over the world trust and recognizes
Nestle as a big brand name. Strength is that people trust on Nestle. It looks at achieving higher volumes
by renovating existing products and innovating new products. Strength is that they are low cost operators
which allow them to not only beat competition but also edging ahead operating excellence, innovation,
renovation, product availability and communication are major strengths.IT is an important aspect that
people all around the world are becoming more conscious about health, that’s why they prefer Nestle.

The only huge brand in the world maintaining its quality and taste and having the same impact on its
customer
  Economical yet a Leading Brand

 Pure Drinking Water in market (Free of chemicals)

 Strong Brand Name

 Customer Loyalty

 Quality Production

 Supplier Relationship

Weaknesses
One major weakness of Nestle is that it is entering into markets that are already mature and can give
a tough competition to new entrants. Nestle Plain Yogurt has proved to be a Nestle weakness
because it has been unable to make its market place in USA. But Nestle by analyzing the sensitive
areas can overcome its weaknesses.

 Absence of important skills

 Communication is weak

 Lack of Awareness

 Other products may have more desirable features

 Low Customer Retention

OPPORTUNITIES:
Opportunities are situations that occur but must be acted upon as to benefit the organization.
Opportunities most relevant to a company are those that offer important revenues for profitable growth,
those where a company has the most potential for competitive development, and those that match up well
with the financial and organizational resource capabilities that the company already possesses or can
acquire. Nestle has a great opportunity for expanding its markets because there is a large ready market
of food and beverages due to trends of eating processed food and beverage is increasing. Through
proper marketing research Nestle can cash on to these opportunities.

 Concentrating on these areas can increase sales

 Increase in product line

 Attaining new Markets

 Changes in Government policies

 Technological Advances

 Lower taxes

 Less Competition

 New Distribution Channels

 Demographic Changes

Threats:
Threats refer to external conditions or obstacles that may stop a company from achieving its objectives .
Nestle has to face the threats by worldwide community due to its violation of international marketing
standards. Many conferences and campaigns have been held against Nestle in this regard which can
damage the name and trust of its customers. Another threat is due to the increasing popularity of its
competitor Unilever in local and international markets.

 Segments are being shared by competitors

 Uncertain conditions will affect the sales (e.g. diseases of animals)

 Under cutting by competitors

 Competition from Competitors with better product design

  Technological Advances

 The consumer market may not have faith in the product

 Food Contamination

 Trend towards Healthy eating

Looking at the Opportunities and Threats that Nestlé has to face has a direct impact on the organization’s
strategic objectives and competitive position. Leading overall market position and number one or two
brands in most areas. The extraordinarily large scope of Nestlé’s business provides for significant
economies of scale in manufacturing, marketing and administration. The research and development
capabilities allow the Company to lead the way in innovation and provides for maximum portfolio
flexibility. Barriers to Entry for Nestle: Economies of scale - To be successful in today’s food and
beverage sector the cost component is critical and economies of scale are a main cost driver Shelf space.
Between the shelf share of multi-billionaire brands and the recent push of retailer driven private-label
products a new entrant would be challenged into executing a successful distribution strategy.

References:

R 1: http://www.nestle.pk/aboutus/nestleinpakistan/missionandvision
R 2: https://monamajeed.wordpress.com/home/objectives-and-goals-of-nestle/
R 3: http://www.slideshare.net/LaurenDPerry/nestl-case-study
 R 4: http://www.ukessays.com/essays/marketing/swot-and-pestel-analysis-of-nestle-
marketing- essay.php#ixzz42ZS2YZ5n

IFE (INTERNAL FACTOR EVALUATION) MATRIX

Key Internal Factors Weights Rating Weighted

Score
Strengths

Total Sales grew by 22% to PKR 79Billion 0.02 4 0.08

Export Sales grew by 15% to PKR 6Billion 0.02 4 0.08
Net Profits increased by 25.6% 0.04 4 0.16
Reliable Distribution Network around the country 0.05 3 0.15
Strong Financial Background 0.06 4 0.24
Strong supply chain network 0.05 4 0.20
Workforce composed of one of the Best People 0.05 3 0.15
Working under an Established International Brand Image 0.04 3 0.12
Easy access to International Markets for Exports 0.05 4 0.20
Manufacturer of Quality Products 0.05 4 0.20
Holding Major Market Share in FMCG Industry of Pakistan 0.08 4 0.32
Low Cost Operators 0.08 3 0.24
Socially Responsible Company 0.03 3 0.09

Weaknesses

Revenue from Confectionaries decreased by 14% 0.06 3 0.18

Sales of Dairy Products decreased by 5% 0.11 2 0.22
Target Market focused on High Income Groups Only 0.06 1 0.06
Weak Marketing Campaign and Advertisements 0.10 2 0.20
Low Credit Sales and Profit Margin to Retailers 0.03 2 0.06
Cant launch expensive brand due to low income groups 0.02 1 0.02
Total 1.00 2.97

 According to the above given IFE Score of 2.97, It shows that Nestlé
Pakistan is doing really well in managing its strength and weaknesses.
It is a Good Score.