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Nestle Insight Business Principles

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SUBMITTED TO,
SIR AFFAN




SUBMITTED BY,
WAQAS YOUSAF SP-09-108
BILAWAL KHAN   SP-09-74
MUDASSIR MEHMOOD SP-09-32
FARHAN ASLAM SP-09-30
             Good food good life




HISTORY:



Nestlé is a Switzerland Based International Food Group and is a merger of two companies:


     Henri Nestlé (1867)   + Anglo Swiss (1886) = Merged (1905)




The company dates to 1867, when two separate Swiss enterprises were founded that
would later form the core of Nestlé. In the succeeding decades the two competing
enterprises aggressively expanded their businesses throughout Europe and the United
States.

In August 1867 Charles A and George Page, two brothers from Lee County, Illinois,
USA established the Anglo-Swiss Condensed Milk Company in Cham. Their first British
operation was opened at Chippenham, Wiltshire in 1873.
In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following
year the Nestlé company added condensed milk, so that the firms became direct and
fierce rivals.



In 1905 the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk
Company, retaining that name until 1947, when the name Nestlé Alimentana SA was
taken as a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884)
and its holding company, Alimentana SA of Kempttal, Switzerland. Maggi was a major
manufacturer of soup mixes and related foodstuffs. The company’s current name was
adopted in 1977. By the early 1900s, the company was operating factories in the United
States, United Kingdom, Germany and Spain. World War I created new demand for
dairy products in the form of government contracts; by the end of the war, Nestlé's
production had more than doubled.



After the war, government contracts dried up and consumers switched back to fresh
milk. However, Nestlé's management responded quickly, streamlining operations and
reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate
the company's second most important activity.




                     Henry nestle is the man behind this great company which is now become
world’s recognized group of companies… the name NESTLE had taken from his name for the
company..
Nestlé felt the effects of World War II immediately. Profits dropped from US$20 million
in 1938 to US$6 million in 1939. Factories were established in developing countries,
particularly Latin America. Ironically, the war helped with the introduction of the
company's newest product, Nescafé, which was a staple drink of the US military.
Nestlé's production and sales rose in the wartime economy.

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth
accelerated and companies were acquired. In 1947 came the merger
with Maggi seasonings and soups. Crosse & Blackwell followed in 1950, as
did Findus (1963),Libby's (1971) and Stouffer's (1973). Diversification came with a
shareholding in L'Oréal in 1974. In 1977, Nestlé made its second venture outside the
food industry by acquiring Alcon Laboratories Inc.

In 1984, Nestlé's improved bottom line allowed the company to launch a new round of
acquisitions, notably American food giant Carnation and the British confectionery
company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to
Nestlé.

In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and soon
began marketing it. Henri Nestlé retired in 1875, but the company, under new
ownership, retained his name as Farine Lactée Henri Nestlé.




  Type           Société Anonyme (SIX: NESN)


  Industry       Food processing


  Founded        Vevey, Switzerland (1866)


  Founder(s)     Henri Nestlé
Headquarters Vevey, Switzerland


Area served    Worldwide


Key people     Peter Brabeck-
               Letmathe(Chairman), Paul
               Bulcke (CEO)


Products       Baby food, coffee, dairy
               products, breakfast
               cereals,confectionery, bottled
               water, ice cream, pet foods (list...)


Revenue        CHF 107.6 billion (2009)


Operating      CHF 15.70 billion (2009)
income


Profit         CHF 10.43 billion (2009)


Total assets   CHF 110.9 billion (2009)


Total equity   CHF 53.63 billion (2009)


Employees      278,000 (2009)


Website        www.nestle.com
 NESTLE IN DIFFERENT PERIODS


1860-1905:

      In the 1860s Henri Nestlé, a pharmacist, developed a food for babieswho were
unable to breastfeed. His first success was a premature infant whocould not tolerate
his mother's milk or any of the usual substitutes. Peoplequickly recognized
the value of the new product, after Nestlé's new formulasaved the child's life,
and soon, Farine Lactée Henri Nestlé was being sold inmuch of Europe.
      family that are so essential to life.Henri Nestlé endowed his company with
the symbol derived from hisname. His family coat of arms, the nest with a mother
bird protecting heryoung, became the Company's logo and a symbol of
the Company's care andattitude to life-long nutrition.


In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company.By
the early          1900s the company was           operating factories   in
the UnitedStates, Britain, Germany and Spain. World War I created new
demand fordairy products in the form of government contracts. By the end of
the war,Nestlé's production had more than doubled. After the war
Governmentcontracts dried up and consumers switched back to fresh milk.

The 1920s saw Nestlé's first expansion into new products,with chocolate
the Company's second most important activity



1938-1975:

Nestlé felt the effects of World War II immediately. Profits dropped from$20
million in 1938 to $6 million in 1939. Factories were established
indeveloping countries, particularly Latin America. Ironically, the war helpedwith
the introduction of the Company's newest product, Nescafé, which wasa staple
drink of the US military. Nestlé's production and sales rose in thewartime
economy. The end of World War II was the beginning of a dynamic
phase forNestlé. Growth accelerated and companies were acquired. In 1947 came
alot of mergers. Diversification came with a shareholding in L'Oréal in 1974.
1975-1996:

     Nestlé divested a number of businesses1980 / 1984. In 1984,
Nestlé'simproved bottom line allowed the Company to launch a new round
ofacquisitions, the most important being American food giant Carnation.


1996-2000:

The first half of the 1990s proved to be a favorable time for Nestlé:trade barriers
crumbled and world economic markets developed into a seriesof more or
less integrated trading areas. The opening of Central and EasternEurope, as well as
China, and a general trend towards liberalization of directforeign investment was
good news for a company with interests as far-flungand diverse as Nestlé. While
progress since then has not been asencouraging, the overall trends remain positive.
Nestlé opened the 20th century by merging with the Anglo-Swiss CondensedMilk
Company to broaden its product range and widen its geographical scope.

Nestle has been called the most multinational of multinational companies.
So ubiquitous is the Nestle brand name in the United States that most
consumers assume it is an American firm. The Swiss-based giant has
established manufacturing operations in all major markets, with a
concentration of facilities in Europe, North America, and Latin America.
Only a fraction of Nestle's sales are made in its home market.

Nestle has more than 400 plants in 60 countries and employs almost one-
quarter of a million employees. The company's origins can be traced back
to 1866 with the Anglo-Swiss Condensed Milk Corp. (the first condensed
milk factory in Europe) and 1867 with the Nestle manufactured infant
milk food company. The two companies merged in 1905. The company
immediately embarked on its global expansion agenda, establishing
operations in Europe, the United States and Latin America between the
1900s and the 1930s.

Nestle is Switzerland's largest industrial company and the world's leading
food processor. The food giant ranks as one of the 100 largest companies
in the world. Its principal products include beverages (coffee, chocolate
drinks, mineral water, and soft drinks), dairy products, infant formula,
                VISION AND MISSION
                       OF
                    COMPANY
Nestlé, over its long historical development from a small village operation to the world’s
leading food Company, has demonstrated an enviable capability to adjust to an
everchanging external environment, without losing its fundamental beliefs and core
values, so important for long-term success.Over the years to come, this capability will
continue to be challenged even more as. Nestlé is growing in size and complexityup to
a dimension which demands a continuous evolution of its organization and of the way in
which it is run. This permanent transformation will be driven by the need to manage
complexity with a high level of efficiency, leveraging all the intangibles which enhance
our competitive edge. Our personal motivation based on willingness to learn and to
question what we are doing and why we are doing it, combined with our longstanding
respect for certain Nestlé values, will assure our success.
In such a setting, every employee of Nestlé has both an individual and
complementary role to play in building the Company of tomorrow.

The Basic Nestlé Management and Leadership Principles were issued in 1997.
The first version reflected the specificsituation of the Company at that time, and
intended to build a bridge at a moment when it was essential to ensure that our Nestlé
values were recorded for future reference. The new version not only re-emphasises
the values that have been and always will be those of Nestlé, but focuses strongly on
the skills that will ensure Nestlé’s future over the years to come. It is also aligned
with the Corporate Business Principles, which have been revised in 2002.

We wish that each of you carefully read this document, share it with your
collaborators, take pride in adhering to its principles and implement them with
conviction and enthusiasm. We believe indeed that these principles
are there to be lived not only through discussions with colleagues and during
training sessions but mainly by taking concrete action in the workplace. These
principles should be applied everywhere and at all times in our organisation, thus
becoming a tangible expression of our corporate culture and a key component of
oursuccess.

P. Brabeck-Letmathe
Chief Executive Officer
MD’S MESSAGE,
Commitment to excellence, good food & good life are words that best describe Nestlé.
We at Nestlé Pakistan are a team of people committed to adding value to the lives of
the Pakistani people by helping them live a life full of wellness & vitality .
We welcome you to this life.
Nestlé with its operational excellence, best management practicesand total commitment
to quality has you our consumer at the heart of everything we do.
We sincerely thank you for believing in Nestlé and our products & making our journey to
success ever more possible.
Our aim is to make our consumers well aware of what they eat and how to take care of
their nutritional needs. We, therefore, invite you to get to know our products better and
to look at our unique features on this website where you will discover informative pieces
that will help you make healthier and balanced choices in your and your families lives.
Nestlé is on accelerated growth with a motto to celebrate life by providing its consumers
quality food products that are essential to good living.
Enjoy your visit to our Nestlé Pakistan website and we hope you will visit again often.
We wish you Good Food Good Life

Ian James Donald
Managing Director
  NESTLE IN PAKISTAN
NESTLÉ IN PAKISTAN
Nestlé came to Pakistan in 1989, before 1989 there was a whole seller of Nestlé in
Karachi named “Sultan Chawala”. In 1992 Nestlé made a Joint Venture with “MilkPak
Ltd.” And named as “Nestlé MilkPak Ltd’s.

Now a day’s company is running in profit. According to Nestlé they never face
slump in normal days, because food products are the demand of every time either it is
slump or boom.




                    Organizational Structure
Main Offices

Head Office

308, Upper Mall, Lahore, 54000, Pakistan

Phone - 042 - 5757082 – 95, Fax - 042-5711820

Sub Offices

1. Islamabad
2. Karachi
3. Peshawar
4. Sheikhupura


PROFILE OF THE EMPLOYEES

No of Employees ………………………………….Nestle Pakistan LTD
Designation ………………………………………No. of Employees
Chief Manager……………………………………….. 02
Manager ……………………………………………… 06
Accounts Officer ……………………………………... 05
Marketing Officer…………………………………….. 04
Customer Service Officer…………………………….. 25
Cashier(s) ……………………………………………. 15
Tea Boy ……………………………………………… 16
Qasid(s)/Guard(s) ……………………………………. 10
GEOGRAPHIC
Region     Middle East, China, India,
           Canada, Mexico, Western
           Europe, North America

Density          Urban, Suburban, Rural

Metro Size        Under 5,000; 5,000-20,000;
                 20,000-50,000; 50,000-
                 100,000; 100,000-500,000;
                 500,000-1,000,000;
                 1,000,000-4,000,000; Over
                 4,000,000;




          DEVELOPMENT AND MERGER
                   OF
                 NESTLE


COMPANY FROM FOUNDATION TILL NOW


1866 Company's foundation

1905
Merger between Nestlé and Anglo-Swiss Condensed Milk Company

1929
Merger with Peter-Cailler-Kohler Chocolate Suisse's S.A.

1947
Merger with Alimentana S.A. (Maggi)

1971
Merger with Ursina-Franck (Switzerland)
1985
Acquisition of Carnation (USA)

1988

Acquisition of Buitoni-Perugina (Italy)

1988

Acquisition of Rowntree (GB)

1992

Acquisition of Perrier (France)

1995

Nestlé acquires Victor Schmidt & Söhne, Austria's oldest producer of confectionery,
including the famous 'Mozartkugeln'.

1997

Nestlé, through the Perrier Vittel Group, expands its mineral water activities with the
outright acquisition of San Pellegrino.

1998

Nestlé acquires Spillers Petfoods of the UK and strengthens position in the petfood business
which began in 1985 with the acquisition of the Carnation Friskies brand.

1999
Divestiture of Findus brand (except in Switzerland and Italy) and parts of Nestlé's frozen
food business in Europe.
Divestiture of Hills Bros, MJB and Chase & Sanborn roast and ground coffee brands
(USA).

2000
Acquisition of PowerBar.

2001
Nestlé acquires Ralston Purina - Nestlé Purina PetCare Company established.

2002
Perrier Vittel Group re-named as Nestlé Waters.
The key factor which drove the early history of the enterprise that would become The
Nestlé Company was Henri Nestlé's search for a healthy, economical alternative to
breastfeeding for mothers who could not feed their infants at the breast.
In the mid-1860s Nestlé, a trained pharmacist, began experimenting with various
combinations of cow's milk, wheat flour and sugar in an attempt to develop an alternative
source of infant nutrition for mothers who were unable to breast feed. His ultimate goal
was to help combat the problem of infant mortality due to malnutrition.

He called the new product Farine Lactée Henri Nestlé.
Nestlé's first customer was a premature infant who could tolerate neither his mother's milk
nor any of the conventional substitutes, and had been given up for lost by local physicians.
People quickly recognized the value of the new product, after Nestlé's new formula saved
the child's life and within a few years, Farine Lactée Nestlé was being marketed in much of
Europe.


Henri Nestlé also showed early understanding of the power of branding. He had adopted
his own coat of arms as a trademark; in Swiss German, Nestlé means 'little nest'. One of his
agents suggested that the nest could be exchanged for the white cross of the Swiss flag. His
response was firm: "I regret that I cannot allow you to change my nest for a Swiss cross ....
I cannot have a different trademark in every country; anyone can make use of a cross, but
no-one else may use my coat of arms."


Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans
Charles and George Page, broadened its product line in the mid-1870s to include cheese
and infant formulas. The Nestlé Company, which had been purchased from Henri Nestlé
by Jules Monnerat in 1874, responded by launching a condensed milk product of its own.
The two companies remained fierce competitors until their merger in 1905.
                  PRODUCTS AND SERVISE

    Here is the list of products that NESTLE serves to the costumers…




    OUR BRANDS


      We believe that food plays a key role in achieving a well-balanced person. And so our
philosophy is Good Food for a Good Life!
At Nestlé, our products are developed keeping our consumers, their preferences and health in
mind. Millions of consumers the world over trust Nestlé products for good reason: when they
choose a Nestlé product they have the satisfaction of choosing quality, taste, variety, convenience
and the good nutrition.

With over 140 years of experience and expertise, we take great pride in bringing you a portfolio of
health and wellness because happy, healthy consumers are important to us




       Nestle has 600 brand with a wide range of products across a number of markets including
THE MANAGEMENT   .
Nestlé Milkpak Pakistan Limited is headed by the Chief Executive of the company. Presently
Mr. Friedrich. G. Mahler is performing the services of the Chief Executive. Directly reporting to
the Chief Executive are the six major groups:



1. Nestlé Business Excellence Group.

2. Supply Chain Group.

3. Milk Collection and Agricultural Services Group.

4. Human Resources Group.

5. Corporate Affairs Group.

6. Water Group.

Along with these, Nestl has the following divisions directly under the Chief Executive:

• Technical Operations Division.

• Finance and Control Division.

• Marketing and Sales Division.

The further sub-division of the above three, are shown in the organizational chart. A thorough
explanation of the, divisions and sub-divisions can be gathered from the pages to follow.
STRUCTURE OF A COMPANY
STRATEGIC MANGEMENT AT NESTLÉ MILKPAK LIMITED


There are sets of policies which are uniform for everyone and strictly enforced. The procedure
for policy formulation is transparent; where everyone is given a chance to express one's opinion.
The ultimate approval is given by the Chief Executive. Policies are formulated in the various
meetings as outlined below.




POLICY FORMULATION
Regular meetings are organized at each level of the organization to keep the company moving in
a systematic manner. The main objective behind these meetings is to bring forth the employees at
a forum, where they can discuss their problems, give suggestions for improvement and
development. Also they can share their experiences with each other.

Some meetings are held at periodic basis which are necessary to keep a check on the progress of
the company. These are:



. Senior Management Meetings

. Cycle Meetings

. Department Wise Scheduled Meetings

. SENIOR MANAGEMET MNEETINGS



Every month, the Divisional heads and the Senior Managers hold a meeting to discuss major
policy issues facing the management. The Human Resources Manager plays the role of a
guardian for establishment and development of the policies. At the Senior Management
meetings, the suggested policies are presented before the Divisional Heads and Senior
Management. The Senior Management discusses the feasibility of these policies.

The recommended policy is the one that has the approval of all members. Only after, the whole
of this exercise has been done, it is presented before the Chief Executive. He takes the ultimate
decision which is always in the best interest of the company and its employees.
CYCLE MEETINGS
Sales personnel of Nestlé Milkpak Ltd. from all over Pakistan hold a meeting or a bi-monthly
sales review. The major force behind a giant food company like Nestlé are its sales. Therefore it
is extremely necessary to keep a check upon the progress of the various brands and their sales
profitability. Information regarding the sales is required at each division of the company.
Marketing Managers need it to design methods for stabilizing and building the sales of
prosperous brands. The Finance and Control Division needs it to judge the viability of the
investments being made and the budget allocation, also for managing the supply against the
demand of various brands. Similarly, Technical Purchase Division too needs requisite
information for purchasing equipment for product innovations which is based mainly on the
sales. At this meeting the Zonal and Regional Sales Managers make presentations and provide
figures necessary to make interpretations.

DEPARTMENT WISE SCHEDULED MEETINGS
In addition to the high level meetings and sales preview; every department holds several
scheduled and non-scheduled meetings. Scheduled meetings are organized to keep all members
of the department up to date about the complete workings of the department. Members discuss
their problems; give suggestions for improvements, generate ideas for development of their
department and share experiences with each other as well the respective bosses. This helps
develop communication through all levels of the hierarchy. And management remains aware of
the work being done by the sub-ordinates. Non-scheduled meetings can be called anytime to
discuss urgent issues. These do not have any prescribed date/day/time as compared to the
scheduled meetings.
       DEPATMENTALIZATION OF NESTLE

Customer Service

Looking to gain Customer Service experience where you will develop your financial skills? Try
exploring the opportunities in Order Revenue Management.

Engineering
Can you see yourself working directly with the technical applications that allow our Company to
produce our high-quality pet products? Take a closer look at engineering.

Finance, Planning & Audit
Do you want to work on the financial side of our business? Our finance, audit and planning,
reporting, and analysis opportunities may be right for you.

Human Resources
The Nestlé Purina Human Resources team is first and foremost a business team. Embedded
into the strategy and execution of all company departments our HR professional define our core
activities as finding, developing, keeping and challenging individuals of diverse backgrounds
that exemplify our core values.

Manufacturing & Supply
Interested in working directly with the production and supply of our products? Manufacturing and
product supply may be right for you.

Marketing
Want to build successful brands? Nestlé Purina may have the marketing positions you’re
looking for, from brand management internships to marketing careers in brand management.

Product Technology Center
The Nestlé Purina PetCare Product Technology Center (PTC) is a global Research and
Development Center. Nestlé Purina PetCare PTC has research facilities around the world,
including three in the United States, one in Europe and one in Asia. The central role of the PTC
is the development of new products and processes crucial to advancing the nutritional needs of
dogs and cats.

Sales / Customer Development
Want to interact with our key customers and build the business through relationships and
strategic planning? Find out what opportunities are available with our sales team!
        INOVATIVE CULTURE

A new edition of the Innovation Day was held at Nestle Spain headquarters in Barcelona.

The Innovation Day has been created by the initiative of Nestle Spain to involve its main
suppliers in the business of providing samples of products, new materials and ideas, always with
the innovation as common denominator. This way allows people at Nestle, either from
departments in direct contact with the suppliers or from more remote areas, to see, touch, ask and
understand from first-hand how the packaging is on the inside and how the suppliers collaborate
with Nestle.

This present edition of last April 1st was a success. We got numerous visits of people from many
different areas and departments. As many of these Nestle attendees have remarked: The general
feeling they got was that VALLSGRAPHIC-GRAFOPACK is a highly creative supplier, state-
of-the-art in investigation, development and innovation on packaging and Point of Sale displays.


There is an innovative culture in Nestle . They promote innovative ideas and research base work
to get excellence in society and also to provide some different variety to the customers as
compare to others.
GLOBAL OPERATION OF ORGANIZATION




                  Nestle: Global Strategy

Q:Does it make sense for Nestle to focus its growth on emerging markets? Why?

Due to saturation and increased competition in the European and North American
markets , it make sense for Nestle to focus its growth on emerging markets.
These markets have a huge potential, as they were closed to foreign companies
because of their political system (China, Russia). Thus, there are only a few consumer
industries in these markets and Nestle can benefit from first-mover advantages.

Nestle can earn greater return from its distinctive competencies, i.e. unique strengths
that allow a company to achieve superior efficiency, quality, innovation and customer
responsiveness. By applying those competencies, and the products they produce, to
foreign markets where indigenous competitors lack similar competencies and products,
Nestle can realize enormous returns.

Furthermore, Nestle can take advantage of location economies. Location economies
arise from performing a value creation activity in the optimal location for that activity,
anywhere in the world. The optimal location for a value creating activity lowers the costs
of value creation therefore helping the company achieve a low-cost position.
Nestle Insight: Business Principles

Guidelines
At Nestle, we try to take the mentality and customs of individual countries into
account, but there are some general guidelines that we apply everywhere. Those
include:

      A positive attitude toward work
      A pragmatic, realistic approach to doing business
      An open-minded approach to the world
      A minimal number of systems and written guidelines
      A personal style of management
      An atmosphere of mutual trust
      An avoidance of showing off, windy rhetoric and hypocritical remarks
      An emphasis on practical experience and on the setting of good examples.

Principles


People first

Employees, people and products are more important at Nestl� than systems. Systems
and methods, while necessary and valuable in running a complex organization, should
remain managerial and operational aids but should not become ends in themselves. It
is a question of priorities. A strong orientation toward human beings, employees and
executives is a decisive, if not the decisive, component of long-term success.




Quality products

Our focus is on products. The ultimate justification for a company is its ability to offer
products that are appealing because of their quality, convenience, variety and price --
products that can stand their ground even in the face of fierce competition.
Long-term view

Nestle makes clear a distinction between strategy and tactics. It gives priority to the
long-range view. Long-term thinking defuses many of the conflicts and contentions
among groups -- this applies to employment conditions and relations with employees
as well as to the conflicts and opposing interests of the trade and the industry. Of
course, our ability to focus on long-term considerations is only possible if the
company is successful in the struggle for short-term survival. This is why Nestle
strives to maintain a satisfactory level of profits every year.

Decentralization

Switzerland is home to Nestle's Swiss subsidiary, its international headquarters and
the registered office of Nestle's holding company, but Nestle does not regard its
Swiss headquarters as the center of the universe. Decentralization is a basic principle
of Nestle. Our policy is to adapt as much as possible to regional circumstances,
mentalities and situations. By decentralizing operational responsibility, we create
strength and flexibility and are able to make decisions that are better attuned to
specific situations in a given country. Policies and decisions concerning personnel,
marketing and products are largely determined locally. This policy creates stronger
motivation for Nestle's executives and employees and a greater sense of identification
with Nestle's business. It is not Nestle's policy to generate most of its sales in
Switzerland, supplemented by a few satellite subsidiaries abroad. Nestle strives to be
an "insider" in every country in which it operates, not an "outsider."

Uniformity

A very important concern at Nestle has to do with uniformity: how consistent Nestle's
principles, policies, rules of conduct and strategies should be, and to what extent they
should differ depending on the country, subsidiary, region, branch or group of
products. In general, Nestle tries to limit the uniformity of its policy to a requisite
minimum. This minimum is then systematically enforced, unless there are compelling
reasons in a given market that justify deviation from policy.
Diversification

Nestle does not want to become either a conglomerate or a portfolio manager. Nestle
wants to operate only those businesses about which it has some special knowledge
and expertise. Nestle is a global company, not a conglomerate hodgepodge. We
regard acquisitions and efforts at diversification as logical ways to supplement our
business, but only in the context of a carefully considered corporate marketing policy.

Flexibility and simplicity

The public's sense of the power and size of a corporation is often inaccurate, for a
company's power is limited by a host of factors including legislation, competition,
regulatory bodies and publicity. From a business point of view, it is desirable for a
firm to achieve the size best suited to a specific industry or mode of production. To be
competitive internationally and make significant investments in research and
technology, a larger company has an advantage. From a strictly organizational point
of view, flexible, simple structures work best and excessively large units should be
avoided whenever possible. In both respects Nestle has a natural advantage: Although
it is a big company, it is spread out over many countries and each of Nestle's factories
has its own management and responsibility.

Research and development

Nestle is probably unique in the food industry in having an integrated research and
development program that engages in applied and basic research in the fields of
human physiology, health, nutrition and raw materials. Our research and development
program gives us the capacity to create new types of products that we cannot even
imagine today, especially in the critical area where preventive medicine and food
products overlap. In addition, as concern for the environment grows, research will
play an important role in overcoming environmental problems. For Nestle, this is
particularly important in packaging. Concern for the effects of packaging on the
environment is forcing us to look for new solutions and to consider their interaction
with our biological product -- food.
The Nestle Policy on the Environment

Nestle respects the environment and is committed to environmentally sound business
practices throughout the world, thus taking into account the need to preserve natural
resources and save energy.

This commitment is put into practice by considering local legal requirements as a
minimum standard. If these do not exist, our internal rules, adjusted to local
conditions, apply. Research and Development and new investments include an
evaluation to ensure environmentally appropriate products, packaging and processes.

Management and personnel within the Nestle organization worldwide are encouraged
to help resolve environmental problems within their own sphere of influence.

In order to achieve this, the Nestle Group, while maintaining its commitment to
supply the consumer with products and services of high quality and safety, will
continue to apply a series of general principles. Within the Group, relevant decisions
take protection of the environment into account in the following areas:

Research and development

The Nestle research and development centers have two main tasks: to create new
products and manufacturing processes and to improve those that already exist. These
centers play a key role in product safety and quality and also have their role in
conserving resources and protecting the environment. Environmental concerns are an
integral part of any development process to ensure that our future commercial
operations meet the desired criteria.

The Nestle Research Center provides the scientific support needed to prevent and
solve environmental problems arising in the development groups as well as
manufacturing. In addition, studies are carried out to find new ways of using industrial
residues to create value added by products. This will reduce total emissions and
effluents.

The Nestle development centers prepare environmental impact studies for new
products and manufacturing processes. These cover all aspects, from raw materials,
through processing, to the final packed product. These analyses provide additional
elements for use in deciding whether to commercialize a new product, or to introduce
a new or modified process.

Handling of raw materials

The Nestle Group is in principle not directly involved in primary production of raw
materials and other food ingredients. In general we use locally available raw materials
and purchase them either directly from producers or through existing trade channels.

Raw materials have to meet clearly established quality criteria and are checked for
possible contaminants including environmental contaminants. Our purchasing
specifications comply not only with legal requirements but go further to ensure
highest safety and wholesomeness of our products.

Whenever possible we give preference to those goods for which environmental
aspects have been taken into consideration. In those cases where the required
agricultural raw materials are not available locally, but the natural production
conditions exist, we encourage local production and provide assistance for cultivation
and dairy farm management.

We support plant growing and livestock husbandry methods which:

      preserve and improve natural soil productivity and economize and protect
       water resources
      allow the lowest, most appropriate and safe use of agro-chemicals
      use the least energy.



Information, communication and education

Nestle's policy is designed to provide correct and coherent information on the
activities of the Group. Activities related to the environment benefit from the same
treatment and their communication is secured through all currently available means
inside and outside the Group. It is furthermore Nestle's duty to create awareness, to
train and motivate employees on their personal responsibility with regard to the
protection of the environment.

Legislation and regulations
It is the policy of the Nestle Group to strictly comply with all laws and regulations
relevant to our activities. We participate in discussions on food legislation and
regulations between international organizations, government representatives, industry,
the scientific world and consumer associations. We also apply this policy to
environment related matters.

All the elements of The Nestle Policy on the Environment are part of the technical
assistance process which provides for a permanent transfer of know how and
technology from the Central Service Company (NESTEC) to all Nestle subsidiaries in
the world.




SWOT ANALYSIS

This SWOT analysis is about Nestlé.




Strengths:
Global food producer, located in over 100 countries. Consistently one of the world's 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.

Repeatedly ranked as the world's largest bottled water company and have set up facilities to
operate water resources in a responsible manner.

In 2008, Nestlé was named one of "America's Most Admired Food Companies" in Fortune
magazine for the twelfth consecutive year.

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

Lean Cuisine, Yoplait, Maggi, Dryer's/Edy's, Haagen-Dazs, Stouffer's, Boost, Dibs, Hot Pockets.
Chocolate and Candy: Kit Kat, Toll House, Butterfinger, Baby Ruth, Crunch Bar, the Willy
Wonka Candy line.

Pet Products: Purina, Alpo, Cat Chow, Fancy Feast, Friskies, Tidy Cat.

Drinks: Carnation, Perrier, Nesquik, S. Pellegrino, Nescafe, CoffeeMate, Taster's Choice, Juicy
Juice.

General Mills: subsidiary which makes Betty Crocker, Bisquick, Hamburger Helper, Pillsbury,
Old El Paso, cereals, fruit snacks, frozen pizza, canned soups, frozen vegetables, ready-made
frozen meals.

Gerber: baby formula, prepared baby foods, baby cereals, water, juice, yogurt, foods for infants,
toddlers and preschoolers.

Professional brands sold to restaurants, colleges, hotels, and food professionals including Jenny
Craig meals, Impact liquid meals for trauma patients, liquid meals for diabetics, and OptiFast
weight loss products.

Successful due in part to their unquestionable ability to keep major brands consistently in the
forefront of consumer's minds (and in their shopping carts) by renovating existing product lines,
keeping major brands from slipping into saturation/decline and having superior access to
distribution channels.




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 health-based yogurt, and become the top selling brand
of yogurt; Nestlé's 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 parent's 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, Dryer's, Edy's and Haagen-Dazs, were still plagued with bad PR and loss of sales.




Opportunities:


In today's health conscious societies, they can introduce more health-based 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 Nestlé 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.

Opened Nestlé Café's in major cities to feature Nestlé 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. Nestlé 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.

Boyle, M. (2008). Meet Google's Willy Wonka. Retrieved on July 12, 2009.

They have major competitors like Hershey's, Cadbury-Schweppes (owned by Pepsi), Lindt
and Ghirardelli, Kellogg's, Post, Starbucks, Beech-Nut, Quaker, Kraft Foods, Dannon, Del-
Monte, Iams, Earth's Best,

Heinz, Frito-Lay (owned by Pepsi).




References
www.nestle.com

www.nestlecom.pk

www.wikipedia.com

www.google.com

Entrereneur Magazine. (n.d.). Flood of Fun-Hungry. Retrieved on July 12, 2009.

Nestlé. (2009). Good Food, Good Life. Retrieved on July 12, 2009.

Slideshare. (2009). Nestlé 2008 Q3 Earnings. Retrieved July 12, 2009.

				
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