“Nestlé” is a Swiss-German word which means “Little Nest” which

is its trademark.
Nestlé is the worlds’ number one food company, founded by
Henry Nestle in 1866 at Switzerland.
5th largest company of the world according to its turn over.
2 million 31 thousand people employed from all over the world.
Present in 81 countries of the globe having 522 factories.
Over 700 products renovated or innovated in the past five years,
with wellness in mind.
Henri Nestlé established Nestlé in 1867 in Switzerland (Vevey HQ)
His first product was lactogen formula for infants by the name
“Farine Lacteé”
 Nestlé has been serving Pakistani consumers since 1988, when its parent
company first acquired 40% shares in Milkpak Ltd.

 Then in 1990 the Sheikhupura factory starts the production of NESTLE NIDO
milk powder and cereals.

 A milestone was achieved in 1998 when “NESTLE PURE LIFE” bottled water was
premiered in Pakistan. Within a few years it becomes one of the world’s leading
brands of bottled water.

 In 2005 the GLOBE project is successfully launched, and is intended to further

cooperation and information sharing with Nestlé companies around the world.

 Today Nestlé is fully integrated in Pakistani life, and are recognized as

producers of safe, nutritious and tasty food.
 “We envision Nestlé to grow in the shortest
possible time into the number one food company in
Pakistan with the unique ability to meet the needs of consumers of
every age group from infancy to old age,
for nutrition and pleasure, through development of a large
variety of food categories of the highest quality.

We envision the company to develop an extremely

motivated and professionally trained workforce, which
would drive growth through innovation and renovation.

We aspire, as a respected corporate citizen, to continue

playing our due role in the social and environmental sectors of the country.”
In analyzing an organization it is very important to begin with
what the organization stands for and why it exists, thus
leading us to the mission statements of Nestle, which states;
“Nestlé is dedicated to providing the best foods to
people throughout their day, throughout their lives,
throughout the world. With our unique experience of
anticipating consumers’ needs and creating solutions,
Nestlé contributes to your well-being and enhances your
quality of life.”
Major joint ventures 1981 Galderma
1905 Merger between Nestlé and Anglo-Swiss Condensed Milk Company
1929 Merger with Peter, Cailler, Kohler Chocolates Suisses S.A.
1947 Merger with Alimentana S.A. (Maggi)
1969 Vittel (equity interest) 2000 Acquisition of Power Bar
1971 Merger with Ursina-Franck 2001 Acquisition of Ralston Purina
1974 L'Oreal (equity interest) 2002 Acquisition of Schöller and Chef America
1977 Acquisition of Alcon (2002: partial IPO)
2002 Dairy Partners Americas and Laboratories innéov
1985 Acquisition of Carnation
2003 Acquisition of Move pick, Powwow and Dreyer's
1988 Acquisition of Buitoni-Perugina
2004 Acquisition of Valio (ice cream activities)
1988 Acquisition of Rowntree
2005 Acquisition of Wagner, Protéika, Musashi
1990 Cereal Partners Worldwide

1991 Beverage Partners Worldwide (formerly CCNR)

1992 Acquisition of Perrier

1998 Acquisitions of San Pellegrino and Spillers Pet foods

 Nestle is operating in a society which is very large in nature thus
placing the organization in an external environment where there is a huge
number of forces which can potentially influence the functioning of nestle
in many ways.

 The external elements with which the Nestle has to deal are the
elements that are directly related to it in conducting its daily operations
and the forces that may create uncertainties that can not be predicted.
These elements may have differentiated impact on Nestle in different
countries of the world

Following are the components of Nestlé's Mega environment:

Political
Economic
Social
Technological and
International
 Nestlé’s mega environment in Pakistan initially consists of the political
restraints and the objections that the Pakistan Government has placed on
Nestle on the way it conduct its business in the country.

 Another way in which the Pakistan government may influence the way
nestle conducts it’s business is by placing quotas on the amount of
products that it can supply, which will limit the amount of revenue that
nestle can generate.

 These constrains may include the amount of a specific tax that nestle
pays to the government in order to conduct the business and this may
have a resulting impact on the consumers of nestle products in the shape
of higher prices, than what it may be offering to the other countries
mainly because of a lower tax it has to pay, and it is depended on the
policy of the country.
 The second mega external environmental factor that influences the organization is the
economical factor, which controls the mechanism (contraction and expansion) of
production, consumption and distribution.

 Nestlé makes a significant contribution to the economic sector of Pakistan.

 Through generation of tax revenue, import substitution of milk powder, export and
infusion of over 2.3 billion rupees in the rural economy through milk purchases, the
company plays an active role in promoting economic growth.

 The capitalist economic system consists of firms owned privately by individuals or by

corporations. In such an economy there is a great scope for the company to take
favorable decisions and move towards a better organizational environment.

 Social economic structure, then the rights of owner ship and decision making (policy
making) will be transferred to the state (government) and the company will have a lower
scope and less favorable environment, in this manner the political and economical elite
will operate the organization according to their own will.
 In analyzing the social factors that can influence Nestlé’s course of business activities
in Pakistan, we come across the demographical statistic of Pakistan which includes,
gender specification, age specification and religious specification, how a social and
cultural values of a certain geographical area can influence the important shifts in the
demand of the product, which may result in nestle changing some of its strategies
accordingly in order to maintain it’s sales in Pakistan.

 Nestle lays a great emphasis in penetrating into the market by keeping the cultural
and traditional values of the geographic area in which it is conducting its operation.

 Before nestle begins its operations in any country its main emphasis is on studying
the cultural values of that country, in order to get it’s products warmly welcomed and
make it highly preferred among other company’s operating at the same level.
 Research indicates that technology tend to evolve through periods of
incremental change through technology breakthroughs that either enhance or
destroy the competence of firms in an industry.

 At nestle technological factor is of vital importance since many new

techniques may change the methods of production of food and make them
more efficient.

 Therefore nestle have to spend some of its earnings in the search of new
technologies. If it ignores this factor and do not respond to it accordingly then
there is a possibility that rival firms may take its place.
 This includes the fluctuation in the foreign currency rates and also the
relationship between the countries, favorable trade agreement with the
countries and also the free trade zones, government rebates, tax free
zones and a better infrastructure.

 Nestlé entered the export market in 1993 with the export of infant
Cereals to Afghanistan. In 1994 export to Afghanistan was expanded to
products to urban consumers.

 Nestle provides different range of products in the different countries

that it is operating inn.
 Moving towards the second type of external environment of nestle, which is
categorized as the task external environment, it includes the specific elements
outside the organization’s environment with which the organization interfaces
while it conducts the course of it’s business.

 Following are elements included in Nestlé’s task environment;

 Competitors
 Customers
 Supplier.
 Nestle has an extensive marketing network to figure out the target
customers, it has marketing specialist to understand the market place
and the customer needs, secondly to is spending a lot to figure out the
customer’s preferences regarding the substitutes of its products in order
to bring the customers on board and retain them.

 Nestle has an extensive market share, due to the reason that it’s
customers are brand loyal and do not compromise over quality and same
is the case with the company’s quality assurance (QA) team.

 One of the principle strategies that nestle utilizes is to produce

differentiated products for each age group in order to get a high market
share and preferences over other
 Competitors also play a vital role in effecting the way in which the
organization operates, competitors are basically the rival firms in the same
market which is providing the same product, in the case of nestle the are many
competitors since there is a wide range of products offered by nestle in
Pakistan.

 Olpers came after nestle with a brand new strategy in order to attract new
customers and some of the customers from nestle but did not manage to
accomplish it completely since nestle had already gained and retained many of
its customers and faces a relative low level of competition.
 Suppliers, which are the individuals or the firms that provide resources
required by a company to conduct and maintain it’s operations in order to
produce an ever lasting range of goods and services in which
organizations/companies specializes.

 Nestle has an extensive network of suppliers like packaging suppliers,

labor supplier, vendors that over looks after it’s machinery and finally the
specialized people like engineers and the policy makers that helps to run
the business most efficiently at the minimum cost.
 Nestle being a multi-national has a great scope for betterment through
analyzing the environment and then managing it through different strategies.

 Nestle principle strategies to manage its environment is to design

methodologies to cut down the uncertainties that may be caused to its
environment as it interfaces with many outside elements of the task and the
mega environment.

 Sometimes organizations are in the dire need to alter its external elements
to make them more compatible with the company’s need, that may involve
creating massive awareness to the public may be through advertisement or if
Nestle thinks that it can prosper well through creating a specialized roles that
can be related to any department.
There are many factors that are included in the internal environment of
nestle and the ways that they effect the company is also analyzed.

 Nestlé’s internal environment consists all the elements with in the company,
particularly the employees, management and the corporate culture, that
defines employee behavior.

 Although some elements affect the organization as a whole, others affect

only the manager. A manager's philosophical or leadership style directly
impacts employees.

 Traditional managers give explicit instructions to employees, while

progressive managers empower employees to make many of their own
decisions.
 This may include how the employees at nestle are to behave and the way
they communicate within the organization and outside the organization.
Managerial policy guidelines are made in consultation with the senior
executives of the company.

 "A Policy and Procedure Forum" is held for the line managers who are
responsible to implement the policies approved in their respective
departments.

 If any changes are made regarding the policies or procedures of Nestle, it is

the responsibility of the Human Resources Manager to convey the change to
the line managers.
 Nestle, the employees share some values which are within the
organization and reflects what nestle is about, nestle have some employees
that have set some standards for other employees and are known as heroes.

 It is understood that the performance of any organization is depended on

the overall performances of its employees, and they could only perform well
when they are motivated and have an example (hero) from within the
organization that sets a benchmark.

 Along with nestle providing food products to its customers and generating
revenues and commitment to safety and quality, it is also committed to a
number of cultural values.
These values come partly from its Swiss roots and have been developed
during its history. They are also evolving so as to support the permanent
reshaping of the Company. They can be described as follows:

 Commitment to a strong work ethic, integrity, honesty and quality. Personal

relations based on trust and mutual respect.

 This implies a sociable attitude towards others, combined with an ability to

communicate openly and frankly. A personalized and direct way of dealing with
each other.

 This implies a high level of tolerance for other ideas and opinions, as well as a
relentless commitment to co-operate proactively with others. A more pragmatic
than dogmatic approach to business. This implies being realistic and basing
decisions on facts.
 Openness and curiosity for dynamic and future trends in technology,
changes in consumer habits, new business ideas and opportunities, while
maintaining respect for basic human values, attitudes and behavior. Pride in
contributing to the reputation and the performance of the Company.

 This calls especially for nurturing a sense of quality and long-term

achievement in the daily work beyond fashion and shortsighted gain.

 Loyalty to and identification with the Company and other such factors
creates a strong sense of the organization’s internal environment and express
what the organization stands for.
 After giving some time to analyze all the elements of Nestle including the external and
the internal environment of the organization, many factors came up and were discussed,
even though the organization is very successful as a whole and was very difficult to point
out some of the weakness how ever some factors were discovered that the organization
should take under consideration, following are some of the problems which were found
and their possible solutions.

 Commencing with some of the problems revealed within the organization first point
that came up existed internally which included the Human Recourse department of the
organization and it was found that HRM department is not giving good salaries to the
employees, so employees are de-motivated and don’t work with the company for very
long.

 This problem can be solved by providing bonus packages and increment in salaries for
a selective level of work and efficiency should be awarded to attract the employees’
concern.
 It also came to our knowledge that the staff at nestle is not as responsible as it should
be, therefore the staff should be made more responsible by implementing strict rules
and regulations and taking disciplinary actions against any un-professional behavior.

 Thirdly, There are not much security measures in the office, which could be taken care
of by having the skilled workers of the company join the security department to enhance
the system.

 More over, there is a constant threat to the company’s economic balance due to
unstable government policies, A possible solution to this problem is that Long term
agreements should be signed with governmental departments to eliminate the threat.

 It was also discovered that there was a shortage of certain products like Nestle ghee,
which is a significant demand in the market. It can be suggested that Inventory should be
maintained and a possible implementation of stock buffering in order to maintain the
supply.
 Nestlé is a gigantic organization. Basically it is a food concern emphasizing on
producing good food for good health. The seed Henri Nestlé had planted in 1866 is now
a tree which provides extremely qualitative food to billions of people all around the
world. It is also providing jobs to millions of people in more than 479 factories in 81
countries.

 The fact can be judged by this that it is the number one food manufacturing and
processing company of the world. It is bigger than Kraft foods and Cadburys
international.

Management of Nestlé Pakistan is mostly foreign. the top management involves MD

and three senior mangers (Production, marketing, Finance). They all are expatriate with
only one exception which is that for the first time in the history of Nestlé Pakistan one
Pakistani has gained position among these four management seats. It is the Marketing
Manager Mr. Rashid Aleem Qureshi. The most important fact about this is that Mr.
Rashid Aleem Qureshi is a graduate of IBA University of the Punjab.
 It is a relatively new Multinational on the Pakistani front as compared to its
competitor Unilever which has a lot bigger area of operation and also manufactures
food items. But it has established a strong footing for itself in the food industry.
Apparently, there are no loop holes in the working of the organization, but still some
areas require more attention.

 Management has designed rules and regulations which are supposed to be

followed by everyone. Policies have been formulated for major and minor issues both.
Relationship with the employees is maintained at a cordial level. Employees work with
commitment and dedication to achieve the best for the organization. Job satisfaction
soars at a high level.
 THANK YOU!
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