Intoduction

The first idea of establishing the company

In 1866 Vevey, Switzerland Nestlé was founded by Henri Nestlé

and is today the world's leading nutrition, health and
.wellness company

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. It'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
.'his German dialect, Nestlé means 'little nest

Since Henri Nestlé developed the first milk food for infants in 1867,
and saved the life of a neighbor’s child, the Nestlé Company has
aimed to build a business as the world's leading nutrition, health
and wellness company based on sound human values and principles
. The company has been in business for over 130 years

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 Q 1 :Search for the code of conduct of any real world

.organization

Now a day’s Nestlé with all its branches all over the world , huge
factories , a lot of employees , need to regulate itself and make a
reference for any single action or any problem that face managers
employees in their daily work. And like any successful corporate it
has a code of conduct which is" a formal written set of ethical
standards guiding an organizations actions" by which the company
.has committed to the world wide

Compliance with laws, rules and regulations•

We respect the law at all times

Conflicts of Interest•

We will always act in the best interests

of Nestlé

Outside directorships and•

other outside activities

We take pride in Nestlé’s reputation and

consider Nestlé’s best interests also in our
outside engagements and activities

Families and Relatives•

Our hiring and people development decisions

will be fair and objective

Corporate opportunities•

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 We are committed to advance Nestlé’sbusiness
Insider trading•

We respect and follow the Insider Trading

Rules when buying or selling Nestlé securities

Antitrust and fair dealing•

We believe in the importance of free

Competition

Confidential information•

We value and protect our confidential

information and we respect the confidential
information of others

,Fraud, protection of company assets•

Accounting

We insist on honesty and we respect the

Company’s assets and property

Bribery and corruption•

We condemn any form of bribery andcorruption

Gifts, meals, entertainment•

We compete and do business based only on quality and

competence

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 Discrimination and harassment•

We embrace diversity and respect the

personal dignity of our fellow employees

Failure to comply•

We will consult the Code, comply with its

provisions and seek guidance where needed

Reporting illegal or non-compliant conduct•

We take responsibility for ensuring that

we all act with integrity in all situations

Every conduct from the previous ones is mentioned in Nestlé 's

Website in long details and AS I said it is a reference for all
.employees and managers including the companies ethical values

4
 Q 2 : use the company's website and code of conduct to

identify the mission statement , vision statement , values and

: key objective Nestle 's mission

: Mission

Nestlé’s long term success depends on the water resources and if it

will exist in the future. It is concerned about the future of water in
. the world

The company recognize that effective water resource management

is essential to create shared value for itself and society in the 21st
.century

Nestlé relies on having clean water to make quality products. It has

.adopted a restricted standards to reduce consumption of water

The Agriculture uses two thirds of the world’s available fresh water,
so Nestlé support programs that teach it's suppliers a better ways
. in how to use water and not to lose it

Nestlé is supporting the water resource awareness and the

education that it has programs to teach consumers, and the
children everything about the value of water . The company also
participates in global dialogue on water with the government and
.the management issues with leading experts and policymakers

Nestlé says : " Since 1997, we have almost doubled our food
" production while reducing our water consumption by 29 percent

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 : Nestle 's vision

The company's vision is represented in focusing on the research and

development sector. The vision of Nestlé R&D is long term It has 27
research, development and technology facilities worldwide. Without
its R&D Nestlé could not have become the food industry leader in
.nutrition, health and wellness

R&D is also critical in ensuring regulatory compliance of all Nestlé

products. Nestlé is able to launch new products quickly and
efficiently, in countries all over the world, by integrating regulatory
.affairs in all its R&D activities, from start to finish

Also the future of food will be driven by science , so that the

company taking care for the nutritionist side in making the food.
:Nestlé R&D is translating nutrition and food science in two ways

From consumer needs into research priorities•

.From emerging science into consumer benefits, and services•

: Nestle 's values

Nestlé is committed to the following Business values in all countries,
:taking the account of local legislation, cultural and religion

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 Nestlé's business objective is to manufacture and market the•
Company's products in such a way as to create value that can
be sustained over the long term for shareholders, employees,
.consumers, and business partners

Nestlé does not favor short term profit it prefers long-term•

.business success

Nestlé recognizes that its consumers have a sincere and•

legitimate interest in the behavior, beliefs and actions of the
Company behind brands in which they place their trust, and
.that without its consumers the Company would not exist

Nestlé believes that, as a general rule, legislation is the most•

effective safeguard of responsible conduct, although in certain
areas, additional guidance to staff in the form of voluntary
business principles is beneficial in order to ensure that the
.highest standards are met throughout the organization

Nestlé is conscious of the fact that the success of a•

corporation is a reflection of the professionalism, conduct and
the responsible attitude of its management and employees.
Therefore recruitment of the right people and ongoing training
.and development are crucial

Nestlé continues to maintain its commitment to follow and•

.respect all applicable local laws in each of its markets

Nestlé calls this commitment Creating Shared Value and she focus
her efforts in three key areas:1. Nutrition 2.water and 3. rural
development. Those areas are core to our company’s business
strategy and essential to creating a healthier world in the 21st
.century

: Nestle key objectives

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 Nestlé's corporate objective is to be the world's largest and•
best branded food manufacturer, whilst ensuring that the
Nestlé name is synonymous with products of the highest
.quality

the company has pursued a policy of expansion and•

diversification through acquisition and divestment to achieve
a more balanced structure to the business

Nestle objective is to be recognized as the leader in Nutrition,•

Health & Wellness and as the reference for financial
.performance, trusted by all stakeholders

Nestlé is dedicated to a long–term strategy putting business•

development above short–term returns, meaning that they
have become a source of stability and economic growth in the
.developing world

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 Q3 : Identify 2 main external stakeholders and 1 main internal

. stake holder of the organization

: ( Internal stakeholder ( employees•

As the success of any corporation is reflected from having
good employees , and putting the appropriate employee in
the right place , so a main internal stake holder is its
employees. Such as managers , nutritionists , doctors , and
.employees working in various sectors

: (External stakeholders (Costumers•

who are the most important external stakeholders for any
company , who consumes Nestle's products in r eturn of profit
and are from different ages , children , teenagers, mothers ,
.and old people around the world

: (External stakeholders (Distributers •

this is the second external stakeholder which comes after
having the finished product to distribute it by distribution
. (centers and retail customers and Grocery distribution ( IGD

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 Q 4 : Explain the way the organization understands its

responsibilities towards the aforementioned stakeholders and

.the strategis it employs to achieve their objectives

Employees The responsibilities of Nestle toward employees(a

:from the internal environment are
Listening and responding to employee views by running•
.structured workshops to help translate opinions into action
Nestlé’s overarching principle is that each employee should•
have the opportunity to develop to the maximum of his or her
.potential
Believe that it is important to give employees the•
.opportunities for life-long learning

All employees are called upon to upgrade their skills in a fast-•

.changing world

Believe that by offering opportunities to develop the •

employee, not only enrich itself as a company, also make
.itself individually more autonomous and confident

Employable and open new positions within the company and •

enhancing this virtuous circle are the ultimate goal of their
training efforts at many different levels through the thousands
.of training programs

Helping employees grow in their personal capabilities on an•

.(ongoing basis making turnover so low (less than 5% per year

Nestle development personal schemes by literacy training,•

apprenticeship programs, technology, scientific knowledge
.transfer and cultural programs

Encourage continuous improvement through training and the•

improvement of professional skills at all levels in the
.organization

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 create a safe and healthy working environment for each•
.employee

b) customers : The second element from the external

environment that I aforementioned of the stakeholders is

They want to win and keep customers and the final consumers•
.which have very different requirements

Trade customers expect excellent service•

.correct information and timely delivery •

Consumers consider taste, appearance and price when they•

.make their choice

Understand what consumers want and respond to their•

.expectations rapidly and effectively

All expect value for their money – good quality at a reasonable•

price

Nestlé shares society’s concern for the environment and is •

committed to environmentally sound business practices
.throughout the world

Consumers are central to their business and they always•

.respect needs and preferences of them

• Nestlé aims to create value that can be sustained over the

long term by meeting consumer needs for nutrition,
enjoyment, and quality they can trust.

• Nestlé is a consumer-driven company, and they tailor their

products to suit local tastes and desires in the 100-plus
countries where they present.

• they are committed to listening to their consumers, and

interact with hundreds of thousands of consumers per year
through their consumer hotlines, websites, Additionally, they
are committed to meeting consumer preferences, and they

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 carry out extensive consumer testing on their products to
make sure that consumers will prefer their products to those
of the competition.

• Communication with Consumers: Nestlé is very conscious of

its role in communicating responsibly to consumers,
particularly as it influences following a healthy diet and
lifestyle. They are particularly sensitive to the need to help
children develop sound dietary habits.

• Nestlé responsibility toward children through moderation in

food consumption, and not encourage over-eating and they
would show children in healthy energetic pursuits and avoid
the portrayal of an inactive lifestyle. Nestlé take care of
children by advertise them about unsafe situations nor
encourage them to accept invitations from people they do not
know

• Nestlé responsibility towards consumer communication is

congruent with healthy, balanced diets. their advertising is
not imply the replacement of meals with indulgence or snack
foods, nor encourage heavy snacking.

• Nestlé consumer communication about health benefits of

products must have a sound nutritional basis.

• Nestlé consumer communication should not exploit violence,

bad manners, or profanity. Its content must reflect good taste
in a given country and culture. It should not depict attitudes
that are discriminatory or offensive to religious, ethnic,
political, cultural, or social groups.

• Regarding advertising placement, it is against our principles

to sponsor television and radio programs or magazines whose
strategy for attracting viewers or readers relies on exploiting

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 violence, sex, or encouraging offensive behavior toward
others.
Nestlé consumer communication should not portray•
.competitors’ products inaccurately, nor denigrate them

:c) Distributers

We know that there are a lot of elements in the internal•

environment, and one of them that I identified
aforementioned is distributor, and Nestle organization
understands its responsibilities by transporting the products
to distribution centers and retail customers "ensuring that
they reach their consumers safely and efficiently". and they
improve new ways to reduce the impact on the environment
such as fitting road-friendly suspension and low-rolling
resistance tires and, of course, purchase the most efficient
equipment available, so they are working with the Institute of
Grocery Distribution (IGD) to find ways to reduce distribution
impacts, in particular through a collaborative distribution
initiative, led by the IGD’s Efficient Consumer Response (ECR)
program , through which Nestlé partners with customers,
suppliers and competitors to utilize vehicle fleets in the most
efficient way. They focus on the Efficiency in transport

So they began to regionalize their delivery network which has•

optimized central planning and local delivery and reduced the
distance of their products travel by ensuring that their lorries
carry more stock and reducing their annual travel so they

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 have introduced new double-decker trailers for some routes
.which carry more pallets per load
Their packaging is reverse engineering". This means that" •
they calculate the dimensions of each of their packaging
types to maximize the number of packs per case and the
number of cases per pallet, so they maximize the number of
.pallets transported and reduce the total number of trips
They always look for ways to improve the use of fuel in their•
transport and monitor the fuel consumption of individual
vehicles carefully. Special devices on their lorries are
designed to promote the complete burning of fuel in the
engine and the lorries that they purchase are bought with fuel
.efficiency

AS FOR THE STRATEGIES THAT NESTLE'S COMPANY IS

:FOLLOWING

They see that the most important thing for the business to be•
successful in the long term, it must create value not only for
.its shareholders but also for society

Focus on their efforts at three key areas: nutrition, water and•

rural development. Those areas are core to their company’s
business strategy and essential to creating a better and
. healthier world

Believe that to achieve their strategies, they must go beyond •

a commitment to complying with laws, sustaining the
.environment and conserving energy

Developing healthier and more affordable foods and•

;beverages for consumers around the world

Reducing water use, working with farmers to improve their•

use of water resources and strengthening rural access to
.clean water and sanitation

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 Helping rural communities grow by helping their suppliers•
.enhance the value and quality of the product

Communicating reliable environmental information to•

.consumers in a meaningful and straightforward way

Water treatment plant that gives direct benefits for their•

.business

The company’s commitment to working directly with farmers•

in rural development is central to its business strategy, to
ensure a stable, high quality and safe supply of agricultural
.raw materials

Nestlé supports the charity by redistributes in–date surplus•

food from the food and beverage industry to homeless and
.vulnerable people via community organizations

Nestlé 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

Q 5 : (MERIT) Explain how the above company or its

managers are responding to the challenges they face in
terms of managing

: A) The competitive advantage

Nestlé, like any other corporation,fights hard to remain competitive.

It has taken a long-term view of its business development - contrary
.to many of its competitors

Nestlé has four clear competitive advantages, which are the envy of
our competitors. The first is it's portfolio of products and brands.
Nestlé are the only food manufacturer who is capable of

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 accompanying someone throughout his or her entire life, from
morning to night of every day. The Second competitive advantage is
it's research and development capabilities, that No other company
in this industry have 23 research centers, as Nestle do. No one is as
networked with universities and other research as she are. Thirdly, it
has branches around the globe. For Nestlé, presence is more than
simply being there, it makes many years of experience in sales, in
local production, and depth knowledge of its markets. Nestlé fourth
and most important competitive advantage is the workforce. Nestlé
value and appreciate the 280 000 men and women who work for it,
. those who represent talents and give value to the company

Also

For a company to be able to face the competitive challenge it

should take care of many important and major things ,such as its
consumers , innovation, in order to develop the quality of its
products and try to work efficiently by having high quality with less
.cost and raw materials

:Consumers

The customer comes first

Nestlé wants to win and keep customers: distributors,
supermarkets, hotels, shopkeepers and the final consumers. As they
have very different requirements. And all of them expect excellent
service, and a correct information and timely delivery. Also the
consumers consider 3 things taste, appearance and price when they
are making their choice .So the company's task comes to
understand what consumers want and to respond to their
expectations in a quick and effective way. All of Nestlé cosumers
.expect value for their money ,good quality at a reasonable price

Nestlé says : Consumers are central to our business and we must

.always respect their needs and preferences

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 : Quality

We live in a competitive world and must never forget that

consumers have a choice. If they are not satisfied with Nestlé
products, they will choose another brand. Nestlé's goal is to provide
value in every product and market sector in which it compete, but
focusing on the quality and ignoring the price is not a guarantee for
success, the lasting competitive advantage is gained from the
balance between the quality and cost , by improving the quality and
.reducing the cost

In order to be able to give this quality and safety assurance, Nestlé

developed a Quality Management System, which collects the
experience of the Research & Development sector, on which it
.spend CHF 800 million a year

:Innovation

Innovation is one of Nestlé’s key competitive advantages. We have

more than 140 years of research, development and scientific know-
how. While there is a great deal of pure and applied science
research that takes place in our global R&D centers, Nestlé ensures
that the consumer, and the consumer benefit, remains at the core of
.all our activities

Open Innovation

Opening the door of innovation has helped to create popularly

positioned products (PPP) for emerging consumers around the

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 world. For several years Nestlé has been working with researchers
and designers to develop new products and branch out to new
.audiences

Example of Innovation in the past 140 years

Nescafe - The first drinkable instant coffee 1938

Key consumer benefits: Taste and Convenience

Present

The last years of the 20 century saw a change in Nestlé’s business

strategy. The company moved from being a technology led
company that produced convenient, tasty foods and beverages for
sustenance, to being a science driven, nutrition, health and wellness
.company

Affordable fortified milks

Key consumer benefits: Affordable nutrition

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 World-wide, malnutrition in children includes micronutrient
.deficiencies in iron, iodine, vitamin A and zinc

Maggi noodles: Less fat, less salt – same great taste

(Key consumer benefits: Health (Weight management

Experts working at the Nestlé R&D centre in Singapore identified

two conflicting demands: consumers wanted healthy foods, but they
also wanted noodles with the same salty and fried taste. A new
recipe was developed that replaced part of the sodium with
potassium. Additional ingredients were also added to enhance the
taste of the remaining lower salt level.And totally new drying
.process was developed to replace the frying method

In the future

Reduction in environmental impact of

packaging
Key consumer benefit: Lightweight packaging

Nestlé is committed to reducing the

environmental impact of packaging without

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 jeopardizing the safety, quality or consumer acceptance of its
products

Personalized nutrition – Getting to know the consumer

better
Key consumer benefits: Health

In the past Nestlé has segmented the consumers by their age and by
their taste. Today she knows more about consumers, their desires,
physiology and nutritional requirements . By learning more about
individual groups or sectors of society we can tailor our products to
.meet exact needs

? Nestle says about pricing if it limits it's competitiveness

The value we create justifies higher prices, which our customers

accept. If we can make our procurement, production and sales
operations more efficient than those of our competitors, we can
keep the competitive advantages on our side. Nestlé must focus on
innovation, and production and sales – Nestle want to bring minds
.and hands together

:In my opinion
Any company must watch and learn from it's competitors. If they do
something better, the company must improve it's own
performance. it can also achieve competitive advantage through
.using competitors mistakes to make the right choices

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 :B ) The effects of globalization

As a multinational company present in more than 80•

countries with over 265,000 employees Nestlé is able to gain
from obvious global benefits. Although it is ass Swiss
company, general management represents nine different
countries, and less than 2% of our sales are generated in
.Switzerland

Nestlé also believes strongly in decentralization and has•

.always strived to centralize where it can

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 Thinking globally - acting locally•

In spite of globalization, food remains a local business, based

on local cultures, tastes and habits. As the early Nestlé
pioneers knew very well, it is absolutely vital today to stay
close to consumers around the world, and to develop
relevant, added-value products to meet their specific needs.
Therefore, you'll get a different taste of Nestlé in each of the
.countries where we sell products

:(Product Technology Centers (PTCs

each aligned with particular Nestlé businesses to provide

expertise for specific product categories, and together forming
.a hub for global product and process development

:(Research and Development Centers (R&D Centers

working in close collaboration with the Product Technology

Centers to meet regional R&D requirements and provide input
.to local application groups

: Application Groups

these are located in Nestlé factories and ensure that products

comply with local taste preferences. They also work closely
with the R&D centers and the Product Technology Centers to
test scientific applications as close to the end consumer as
.possible

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 : C) Information technology

Nestlé sees that the most important way to responding to

challenges of information technology by focus on internet market as
:follows

Nestlé S.A and Danone Group, world leaders in the food•

industry, are to set up Europe's first Internet market-place for
.e-procurement in the consumer goods sector
Nestle is using CPGmarket.com that enhance the efficiency of•
logistics while at the same time reducing procurement costs
for businesses producing, distributing and selling consumer
.goods

Nestlé cuts supply costs through automated processing of•

orders and sales. Buyers and suppliers will be able to place
orders on catalogue offers, call for bids and participate in
.auctions

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 They will also have access to sourcing services for raw•
materials and packaging, as well as capital goods and
.services

Participants will benefit from a more efficient market and•

lower costs through higher transaction efficiency and
.simplified procedures

Services through CPGmarket.com may later be extended to•

allow links between all parties involved in the production and
marketing of a product at every stage from market surveys to
.logistics, planning and forward management

For Nestle this is a significant step forward in the process of

using new technologies to support our purchasing efficiency.
It is also part of our overall 'business-to-business' and
'business-to-consumer' internet strategy

Swot analysis

Strengths

Their first strength is that they have a great CEO, Peter•

Brabeck. Brabeck emphasizes internal growth, meaning he
wants to achieve higher volumes by renovating existing
.products, and innovating new products

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Nestle is a global food producer , which is located in over 100•
countries. And it is the largest producers of food products ,
.it's sales reached the number of $ 101 billion
. Nestle is the world's largest bottled water company•
Nestle provides brands and products with high quality ,these•
brands such as: Lean Cuisine , Yoplait , Maggi , Haagen
.Daze ,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,
.Coffee Mate , Taster's Choice, juice
General Mills : Subsidiary which makes Betty Crocers,Bisquik,
Hamburger helper, pillsbury, old El paso ,cereals. Fruit snaks ,
frozen pizza,canned soups,frozen fegetables,ready made
.frozen meals
Gerbar: baby formula, prepared baby foods for infants ,
.toddlers and preschoolers
These Professional brands sold to restaurants ,
.colledges,hotels
The company's successful due in part to their ability to keep
major brands consistently in the forefront of consumers’
. minds

: Strong R&D Team •

They have a great research and development team. James

Gallagher and Andrea Pfeifer were the masterminds behind
the research on the La-1 cultures in the LC-1 yogurt. They
were also the two that decided on selling LC-1 as a functional
food. This enabled Nestle to position the product in a way that
differentiated it among the other products in the market

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 : Weakness

The main weakness of the LC-1 division of Nestle is that they were
not as successful as they thought they would be in France. The
launch in France was in 1994, but since the late 1980s, Danone had
.already entered the market with a health-based yogurt

The second weakness is that LC-1 was positioned as too scientific,

and consumers didn’t quite understand that LC-1 was a food and not
.a drug

Little Differentiation between Nestle Brands •

They have Too Much Products distract from Core business •

they also have Large Workforce Difficult to Manage •

Subsidiaries companies Difficult to Manage •

Rising Prices of Raw Materials •

:Opportunities

Nestle opportunity that it has health based products which•

.are becoming more popular in the world
Expansion - The company has the potential to expand to•
. smaller towns
One of the daily mirror report shows that 30% people of UK•
are random soft drink user. So Cadbury has a huge
.opportunity of increase their market share of beverage sector

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 Because of their huge market share they can provide credit•
.card facilities to the customer
They can launch new varieties of food in market. Like: Bread,
.various Ice cream etc

Threats

One of their major threats is their strong competitors.•

Although they have the biggest market share
One of their major threats is their strong competitors. .•
Although they have the biggest market share but
competitor like NESTLE, MARSH can beat

conclusion

The Company's strategy will continue to be guided by several

fundamental principles. Nestlé's existing products will grow through
innovation and renovation while maintaining a balance in
geographic activities and product lines. Long-term potential will
never be sacrificed for short-term performance. The Company's
priority will be to bring the best and most relevant products to
people, wherever they are, whatever their needs, throughout their
lives, and to satisfy the growing need of nutrition, health and
.wellness that food and beverages can bring

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