PROFILE OF THE COMPANY

Nestle with headquarters in Vevy,Switzerland was founded in 1866 by Henri Nestle and is today
the world’s biggest food and beverage company. Sales at the end of 2004 were CHF 87 bn ,with
a net profit of CHF 6.7 bn.We employ around 247,000 people have factories or operations in
almost every country in the world.

The company’s strategyvis guided by several fundamental principles.Nestle’s existing products

grow through innovation and renovation while maintaining a balance in geographic activities
and product lines .Long-term potential is never sacrified for short-term performance.The
Company’s priority is to bring the best and most relevant products to people ,wherever they
are,whatever they are.whatever their needs ,throughout their lives .

BACKGROUND
Nestle was promoted by Nestle Alimentana ,Switzerland, a wholly owned subsidiary of Nestle
Holdings Ltd.,Nassau,Bahama Island. Nestle is one of the oldest food MNC operating in India,
with a presence of over a century.For a long time , Nestle India’s operations were restricted to
importing and trading of condensed milk and infant food. Over the years, the Company
expanded its product range with new products in instant coffee, noodles, sauces, pickles ,
culinary aids, chocolates and confectionery, dairy products and mineral water.

Nestle was incorporated as a limited company in 1959.In 1987, the Company issued shares to
the Indian public to reduce its foreign holdings to 40%. Its name was changed from Foods
Speacialties Ltd.to the current name in 1981. The parent held 51% stake in the company as at
2000 end. It has FIPB approval to hike stake by 10% and has been gradually acquiring shares
from the open market . Parent stake in the company as at 2001 end stood at 53.8%. The parent
plans to continue hiking stake through open market purchases.

Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded food player in the
country. It has a broad based presence in the country .It has a broad based presence in the
foods sector with leading market shares in instant coffee, instant foods, milk products and
noodles. It has also strengthened its presence in chocolates, confectioneries and other semi
processed food products during the last few years. The company has launched Dairy Produts
like UHT Milk ,Butter and Curd and also ventured into the mineral water segment in 2001.
Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Pure
Life.

Vision
Being the best in everything we touch and handle.
Mission
Continuously excel to achieve and maintain leadership position in
the chosen businesses; and delight all stakeholders by making
economic value additions in all corporate functions.
Our Competitive advantages:

 A pool of qualified suppliers that understand and support Nestlé’s commitment to excellence.

 A pool of qualified suppliers that are directly aligned with underrepresented and emerging
communities and can promote positive relationships with our customers .

 Better quality goods and services at a lower price as a result of increased competition and an
extended supply base

 Access to new capabilities and innovations

 A competitive advantage as we seek government contracts, and assurance that we are

incompliance with the diversity ,
 SWOT ANALYSIS
Strengths:
- Very long history (over 140 years)

-Operated factories in 77 countries (all six continents), a truly global company.

-Considered the innovation leader in the global food and nutrition sector(3500 scientistin
company R&D network)

- Low cost operators (beat the competition by producing low cost products, edging ahead
with low operating costs)

-Offering thousands of local products.

- Have a greatCEO, Peter Brabeck, and a very strong

workforces.

SWOT ANALYSIS
Weaknesses
-Not as successful as they thought they
- would be in some market (i.e.france)
- Some of their product were positioned as too scientific, and consumers did not quite
understand (i.e.  LC-1 was a food and not a drug)

SWOT analysis
Opportunities:

- Well-known company and strong brandname

- Health-based products are becoming more popular in the world, including in the United
State

- Ranked first in nearly all the product segments in which it operated (market leader)

- Unaffected by current economic conditions (its share of the UK confectionery market

rise to15.6 per cent with a 0.5 per cent growth this year.
SWOT analysis
‡ Threats:

- Some markets they are entering are already mature

- Global competitors.

- There are intense competitions in the United States, especially yogurt

market (General Mills)

Problem
 High market share
 Low growt
 ompetitive pressure
 want to expand
 do not have enough resources

PLANT LOCATIONS
Nestle started its manufacturing operations with Milkmaid in 1962 at Moga factory.
Manufacturing of Nescafe started in 1964 at the same factory. The company set up another
factory at Cherambadi in Tamil Nadu, for manufacture of instant foods, coffee etc. For almost
two decades there were no new additions of manufacturing facilities due to restrictive policy
environment. The company set up its Nanjangad (Karnataka) factory in 1989 and the and the
Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory started operations in 1995. The
Company set up its sixth manufacturing unit in 1997 at Bicholim in Goa

BUSINESS PRINCIPLES
Since Henri Nestle developed the first milk food for infants in 1987, and save the life of a
neighbor’s child, the Nestle Company has a aimed to build a business based on sound human
values and principles.
While our Nestle Corporate Business Principles will continue to evolve and adapt to a changing
world, our basic foundation is unchanged from the time of the origins of the Company, and
reflects the basic ideas of fairness, honesty, and a general concern for people.

PEOPLE FIRST
Employees, people and products are more important at Nestle than systems.Systems and
methods, while necessary and valuable in running a complex organization, should remain
managerial and operational aids but should not bcome ends in themselves. It is a question of
priorites. A strong orientation toward human beings, employees and executives is a decisive, if
not the decisive, compenent of long-terms succsess.

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 VIEWS
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 interest 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 and the registered office of Nestle 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 executives and employees and a greater sense of
identification with Nestle business. It is not Nestle 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”.

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

Nestle is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:

Nestle business objectives 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.
 Nestle does not favor short-term profit at the expenses of successful long-term business
development.
Nestle 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.
Nestle belives 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.
Nestle 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.
Nestle continues to maintain its commitment to follow and respect all applicable local
laws in each of its.

UNIFORMITY
A very important concern at Nestle has to do with uniformity: how consistent nestle principle,
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.

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 and 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

FORESIGHT
At present, the world faces daunting questions about its ability to provide enough wholesome
food for everyone. Malnutrition and poor eating habits are still serious problems I many
developing countries . By 2100, the world’s population will double. Will it be possible to feed a
world with so many inhabitants ? At Nestle , the big picture ,is all about feeding the world and
providing food and nutrition for an ever-growing population. Our response this situation is to
intensify research, strive for innovations and improve quality.

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 investment 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 factories
has its own management and responsibility.

HANDLING OF RAW MATERIALS

The Nestle Group s in principle not directly involved in primary production or 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 diary farm management.
We support plant growing and livestock husbandry methods which:

 Preserve and improve natural soil productivity and economize and protect lwater
resources.
 Allow the lowest, most appropriate and safe use of agro-chemicals
 Use the least energy.

PACKAGING
Manufacturing comprises all unit operations necessary to transform perishable raw materials
into finished products, with the aim to make them safe and convenient for the consumers. The
manufacturing activities of the Nestle Group:

 Respects natural resources by efficient use of raw materials and energy

 Minimize waste generation and emissions
 Ensure environmentally safe disposal of all waste which cannot be recycled.

Regular assessments of processing practices are carried out. These assessments include :

 Evaluation of individual plant performance with regard to operation which have an

impact on the environment.
 Definition of targets for improvement
 Review of plant compliance with local government regulations, company environmental
standards, as well as results achieved in comparison with targets for improvement
 Full investigation of incidents which may effect the environment.

Information on developments in environmental protection technology and practices is

disseminated as required to ensure that all plants are using the most effective environmental
practices for their types of processing. This applies also for co packers

MARKETING AND DISTRIBUTION

Marketing is based on the principles of satisfying consumer needs. This is the foundation also
the environmental marketing approach of Nestle.

Environmental product claims in advertising , promotional material and on packaging are in

accordance with legal requirements, based on solid scientific evidence and used in a serious
and reasonable manner.

Our aim is to minimize wastage in communication, publicity and promotional material, in

particular through more precise targeting of marketing activities.
Consumer promotions and merchandising material such as consumer offers, instore
promotions, display material, leaflets, printed matter, etc. take environmental aspects into
accounts.

This means due consideration of environmental impact in selecting both materials and printing
methods.

In distribution, energy efficient and pollution controlled methods are encouraged wherever
possible.

INFORMATON, COMMUNICATION AND EDUCATION

Nestle policy is designed to provide correct and coherent information on the activities of the
groups.

Activities related to the environment benefit from the same treatment and their
communication is secured through all currently available means inside and outsides the
group.It is furthermore Nestle duty to create awareness, to tarin and motivate employess an
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 organizations,
governments representatives , industry, the scientific world and consumer association. We also
apply this policy to environment related matters.

In doing so, we cooperate with legislators through local industry associations in order to
promote laws and regulations in the field of environment which are reasonable, rational ,
realistic , applicable and enforceable. We oppose unjustified bans and any other discriminatory
measures.

We favor the harmonization of food regulations in orders to remove existing trade barriers and
the creation of news ones. This applies also to environmental issues. We favor the exchange of
information, of experience and of knowledge between the various interested parties.

Thanks to all these synergies, we can contribute to valuable discussions and be recognized as
an active partner in helping authorities to formulate comprehensive strategies in the field of
the environment.

THE NESTLE POLICY O 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
standards. 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 influences.

NESTLE’S BRANDS
Quality and nutritional value are the essential ingredients in all of the nestle brands. Millions of
the people prefer Nestle products every day, happy with the addition to their wellness that
they bring. If you are looking for specific brands our products, just the alphabetical index below
to jump straight to a listing. Or you can explore by category.