International business management Nestle slides

2. Group Members
Maryam Khalid 2014-ag-4205
Tehreem Ashraf 2014-ag-4195
Maryam Rabia Zafar 2014-ag-4132
Aqsa Tabbasum 2014-ag-4122

3. Nestle Company

4. LOGO
• “Nestle” is a Swiss-German
word which means “little nest”.
• The Nestlé logo was launched by
Henri Nestlé in 1868 on the
basis of the meaning of his
name.

5. SLOGAN

6. INTRODUCTION:
• Headquarter in
Vevey Switzerland.

7. NESTLE WORLDWIDE
Swiss multinational company.
Worlds number one food company.
2000 brands ranging from global icons to local
favorites.
 They are present in 191 countries around the
world.
Have 447 factories and 339,000 employees.

8. INTRODUCTION:
Ranked 72 on the Fortune Global 500 in 2014
Ranked 33 on 2016 edition of the Forbes Global 2000 list
of largest public companies.
Twenty-nine of Nestlé's brands have annual sales of over
CHF1 billion (about US$1.1 billion).
Shareholders of L'Oreal.

9. Nestle products
Nestlé's products include
 Baby food
 Medical food
 Bottled water
 Breakfast cereals
 Coffee and tea
 Confectionery
 Dairy products
 Ice cream
 Frozen food
 Pet foods
 Snacks.

10. HISTORY:
Henri Nestle, born Heinrich
Nestle on 10 August 1814 was a
German who immigrated to
Switzerland.
Nestle was founded in 1866 by
Henri Nestle.

11. HISTORY:
First product
Lactogen formula for infants
by the name “Farine Lacteé”

12. Nestle old building

13. OBJECTIVE:
Combine and strengthen its
position
Meet the needs of customers
Create good will

14. • MISSION STATEMENT:
“…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
• 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.

15. OTHER NESTLE BUSINESS:
Nestle Health Science
Health science Institute
Nestle Nespresso
Nestle Nutrition Institute
Nestle Purina Pet care
Nestle Skin Health
Nestle water

16. SHARE CAPITAL DISTRIBUTION GEOGRAPHY:

17. Strategy Implementation
There are several strategies
Environmental Strategy
Growth Strategy
Nestles Marketing Strategy
Nestles HRM strategy

18. Strategy Implementation
O Environmental Strategy
 Environmental sustainability strategy
 Natural resources efficiently in order to
produce environmental friendly products.
 Uses in all stages of product life cycle
 Renewable resources, and mark zero
leftover.

19. Strategy Implementation
o Growth Strategy
• “Creating Shared Value”
• Investing for the future
• This includes:
 Capacity.
 Technologies.
 Capabilities.
 People.
 Brands.
 R&D.

20. Strategy Implementation
-Purpose of growth strategy
i. Meet today’s needs without compromising the capacity of future
generations to meet the needs.
ii. Do this in a way, which will guarantee profitable growth in the
future.
iii. Also to provide a high level of returns for shareholders and society
at large over the long-term.

21. Strategy Implementation
o Nestle’s Marketing Strategy
 Marketing strategy mix
 ‘’Product, Distribution, Promotion and Price’’
 Main strategy and way of business, “innovation and renovation”
 Internationally taking into consideration local legislation, cultural and
religious practices
 Main element of marketing,
“provide quality and cheaper priced products”

22. Strategy Implementation
o Strategic HRM at Nestle
Nestle believes that:
Employees are strength of company
Success is impossible to achieve without its employees
Important assets of company
And everyone is invited to share their views and opinions

23. Strategy Implementation
o Strategic HRM at Nestle
The recruitment process at Nestle is clearly defined.
 People with qualities like dynamism, realism, loyalty, hard work,
honesty and reliable.
 Match between candidate's values & company's culture.
 Recruitment for management levels takes place in the head office and
all others at the branch level.
 The existing employees are promoted to higher posts as per the
requirements.
 Another source of recruitment is campus placements and human
resource consultancies.

24. Other Strategies
Nestle maintain its mission and goals through
three different strategies (Operational Pillars,
Growth drivers, and Competitive advantage).
• Operational Pillars
-Innovation and renovation
-Operational Efficiency
-Whenever, Wherever, However
-Consumer communication

25. Other Strategies
• Growth Drivers:
Nutrition, Health, and Wellness
Emerging markets and popularity
positioned products
Out-of-home consumption

26. Other Strategies
• Competitive Advantage:
 Unmatched Product and Brand
 Unmatched Research and Development
capability
Unmatched geographic presence
 People, culture, values and attitude

27. Paurpose of Strategiesa
To ensure the success in market
Strong brands to create competitive barriers
Partnered with other large companies, for example: Coca Cola
Purchases local companies
Each brand of Nestle business has the same strategy since Nestle is a
food organization
Create low-cost, highly efficient operations
Creating value over a long period of time for stakeholders,
employees, consumers and business partners

28. Organizational Structure of Nestle

29. Improved Organizational Structure
Perhaps an improved version of the organizational structure
could be
Departments divided according to genre of the product
Individual unit
Operation under each location’s requirement as working
worldwide
Maintaining the values of original company

30. 1990–2011: Growth internationally
1990s: Favorable , barriers smashed, world market developed
Spillers Pet foods (1998), and Ralston Purina (2002)
2002: Ralston Purina, in June, Nestlé merged its US ice cream
business into Dreyer's, and in August, a US$2.6 billion acquisition was
announced of Chef America, the creator of Hot Pockets
 In the same time-frame, Nestlé entered in a joint bid with Cadbury
2005: Nestlé bought the Greek company Delta Ice Cream for €240
million
2006: it took full ownership of Dreyer's, thus becoming the world's
largest ice cream maker, with a 17.5% market share

31. 1990–2011: Growth internationally
2007:Nestle developed the Medical Nutrition division of Novartis
Pharmaceutical for US$2.5 billion, Nestlé bought US baby-food
manufacturer Gerber for US$5.5 billion
2010: Purchase of Kraft Foods's North American frozen pizza business
for US$3.7 billion
2012: Nestle agreed to acquire infant-nutrition, formerly Wyeth
Nutrition, unit for US$11.9 billion

32. Nestle in Pakistan
Nestle in Pakistan is operating since 1988 under a joint venture with Milk Pak
ltd and took over management in 1992.
 Butter, cream, desighee under brand name MILK PAK
 Juice drink under brand name FROST
 1990 it start producing NIDO, Everyday, CERELAC
 1991 LACTOGEN 1 & 2
 1994 MILO and NESCAFE 3 in 1
 1998 sweet treats (POLO)
 1999 fruit drops, NESTLE PURE LIFE
 NESTLE fruita vitals

33. STRENGTH
o Strong brand name.
o Socially responsible company.
o Innovative.
o Multinational.
o Quality products.
o The world’s largest processed food and Beverage Company.
o Presence in almost every country.
o Strong brands like Nescafe, Maggi and Cereal.
o High quality and strong R&D team.
o Dedicated and focused company.

34. WEAKNESS
o Selective investment due to uncertain economic and political
conditions.
o Lack of awareness among the target market.
o Complex supply chain management.
o Subsidiaries difficult to manage.
o Too much product distracts from core business

35. OPPORTUNITIES
o Pakistan is the 7th largest producer of milk in the world.
o Credit policy can be adopted to increase sale.
o Potential to expand to smaller towns and other geographies.
o Expansion of product folio.
o Further development of global brand.
o Emerging market penetration.
o More health based products.

36. THREATS
o Global image may harm all brands if one brand
fails.
o New diet trends.
oThere is no entry barrier for new entrants.
o Taste of consumer is difficult to change.
o Inflation is getting higher and purchasing power
of people is decreasing.

37. CHANELS OF COMMUNICATION
-INTERNAL COMMUNICATION
PERFORMANCE AWARD
PROMOTION
INCREASES
EID BOUNS
 FREE RITURN TICKETS
 INCREASES IN SALARIS OF EMPLOYESS

38. CHANELS OF COMMUNICATION
-EXTERNAL COMMUNICATION
INTERNET
ADVERTISEMENT
T.V.ADDS
RADIO
 SIGNS BOARDS
NEWS PAPER
PUMPHLETS
BROUCHERS etc.

39. BRANCHES IN PAKISTAN
Nestle in Pakistan has its branches in fallowing major cities.
 LAHORE
 ISLAMABAD
 FAISALABAD
 SHEIKHUPURA (factory)
 KARACHI

40. Strategies in Pakistan
 Internationally accepted best practices and ethical performance
culture
 Nestles existing products raise 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 are, and
for all age groups.

41. Controversy and criticisms
Status of Potable Water
Ethiopian debt (2002)
Child labor
Chocolate price fixing
Food safety
Milk products and baby food
Cookie dough
Maggi noodles

42. Controversy and criticisms
• Status of Potable Water
“Right" to a "need.“, Nestle chairman and former CEO Peter Brabeck-
Letmathe stated that "access to water should not be a public right. Peter
Brabeck-Letmathe later changed his statement.
• Ethiopian debt (2002)
In 2002, Nestle demanded that the nation of Ethiopia repay US $6
million of debt to the company at a time when Ethiopia was suffering a
severe famine.

43. Controversy and criticisms
 Child labor
The International Labor Rights Fund filed a claim in 2005 under the Alien Tort
Claims Act against Nestle and others on behalf of three Malian children. Children
were worked to Ivory Coast, forced into slavery, and experienced frequent
beatings on a cocoa plantation. In September 2001, Bradley Alford, Chairman and
CEO of Nestle USA, signed the Harkin–Engel Protocol (commonly called the Cocoa
Protocol), an international agreement aimed at ending child labor in the
production of cocoa.

44. Controversy and criticisms
 Chocolate price fixing
The Bureau alleged that competitors' executives met in restaurants, coffee shops
and at conventions, and that Nestle Canada CEO, Robert Leonidas once handed a
competitor an envelope containing his company’s pricing information, saying: "I
want you to hear it from the top – I take my pricing seriously.“ Former Nestle
Canada CEO Robert Leonidas is under threat of a criminal charge for his role in
the price fixing of chocolates in Canada when he was at the helm of Nestle
Canada from 2006 to 2010.

45. Controversy and criticisms
 Food safety
 Milk products and baby food
In late September 2008, the Hong Kong government found melamine in a
Chinese-made Nestle milk product. Six infants died from kidney damage, and a
further 860 babies were hospitalized. As of 2013, Nestle has implemented
initiatives to prevent corruption and farmers bring milk directly to a network of
Nestle-owned collection centers, where a computerized system samples, tests,
and tags each batch of milk. In 2014, the company opened the Nestle Food Safety
Institute (NFSI) in Beijing that will help meet China's growing demand for healthy
and safe food, one of the top three concerns among Chinese consumers

46. Controversy and criticisms
• Cookie Dough
In June 2009, an outbreak of E. coli O157:H7 was linked to nestle refrigerated
cookie dough originating in a plant in Danville, Virginia. In the US, it caused sickness
in more than 50 people in 30 states, half of whom required hospitalization.
Following the outbreak, Nestle voluntarily recalled 30,000 cases of the cookie
dough. The cause was strong-minded to be polluted flour obtained from a raw
material supplier. When operations resumed, the flour used was heat-treated to kill
bacteria.

47. Controversy and criticisms
 Maggi Noodles
• On 3 June 2015, New Delhi Government banned the sale of Maggi in New Delhi
stores for 15 days because it found lead and monosodium glutamate in the
eatable beyond permissible limit. In June 2015, nestles share fell down by 11%
and then 3%. On 5 June 2015, Food Safety and Standards Authority of India
(FSSAI) orders banned all nine approved variants of Maggi instant noodles from
India, terming them "unsafe and hazardous" for human consumption. Nestle
has already destroyed 400 million packets of Maggi products.

48. Recommendations:
Use of organic products
Use of science technology
Forbid the unhealthy products
Diversify product range
Should increase the distribution Network
Diversified their portfolio.