"Nestle's aim is to meet the various needs of the

consumer everyday by marketing and selling foods of a

consistently high quality."

1 | Page

History of Nestle
In the 1860s Henri Nestl, a pharmacist, developed a food for babies who were unable to breastfeed. His
first success was a premature infant who could not tolerate his mother's milk or any of the usual
substitutes. People quickly recognized the value of the new product, after Nestl's new formula saved the
child's life, and soon, Farine Lacte Henri Nestl was being sold in much of Europe.
Nestle is the largest food company in the world. It is present in all five continents, has an annual turnover
of 74.7 billion Swiss Frances. There are 509 factories are running in 83 countries, having 231,000
employs.
Nestle is the world largest food company and nestle Milkpak is Nestls famous UHT milk brand. Nestle
Milkpak has south Asias biggest Plant at Kabir wala. It is targeting upper and middle class. It is
differentiating its brand by adding Iron and vitamin C.The Nestle Milkpak is following growth strategy.
The immense competition is going in the market; it is recommended that Nestle Milkpak should invest
more in milk business and other value added milk products.
In this way Nestle Milkpak can fulfill the local demand by locally processed milk and milk products
instead of the imported milk products. Nestle has brand recognition throughout the world and they can
export milk powder and other value added products in future.
1905-1918: In 1905 Nestl merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s,
the company was operating factories in the United States, Britain, Germanyand Spain. World War I
created new demand for dairy products in the form of government contracts. By the end of the war,
Nestl's production had more than doubled.
1918 -1938: After the war Government contracts dried up and consumers switched back to fresh milk.
However, Nestl's management responded quickly, streamlining operations and reducing debt. The 1920s
saw Nestl's first expansion into new products, with chocolate the Company's second most important
activity
1938 -1944: Nestl felt the effects of World War II immediately. Profits dropped from $20 million in 1938
to $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, Nescafe, which was a
staple drink of the US military. Nestl's production and sales rose in the wartime economy.1944
-1975: The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated and
companies were acquired. In 1947 came the merger with Magi seasonings and soups.
Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's (1973).
Diversification came with a shareholding in LOreal in 1974.
2 | Page

1975 -1981: Nestl's growth in the developing world partially offset a slowdown in the Company's
traditional markets. Nestl made its second venture outside the food industry by acquiring Alcona
Laboratories Inc...

1981 -1996: Nestl divested a number of businesses1980 / 1984. In 1984, Nestl's improved bottom line
allowed the Company to launch a new round of acquisitions, the most important being American food
giant Carnation.
1996-2002 The first half of the 1990s proved to be favorable for Nestl: trade barriers crumbled and
world markets developed into more or less integrated trading areas. Since 1996 there have been
acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina (2002). There
were two major acquisitions in North America, both in 2002: in July, Nestl merged its U.S. ice cream
business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.

2006

Nestl articulates its Creating Shared Value approach to doing business, whereby any action for
shareholders must also create value for the communities where it operates and wider society. Nestl
acquires weight management business Jenny Craig and Australian breakfast cereals company Uncle
Tobys.

2007

A growing focus on medical nutrition leads Nestl to the acquire Novartis Medical Nutrition. It also buys
baby food company Gerber and Swiss mineral waters concern Sources Minrales Henniez.

2009

The first Creating Shared Value Forum in New York brings together experts to discuss global challenges
in the areas of nutrition, water and rural development, and the role of business in helping to solve them.
The Forum becomes an annual event. Nestl creates a foodservice business division, named Nestl
Professional from 2009

3 | Page

2010

Nestl acquires Kraft Foods frozen pizza business. The Nestl Cocoa Plan and Nescaf Plan are both
launched to develop the companys sustainable supply chains in cocoa and coffee, improve social
conditions in farming communities, and ensure their profitability.

2011

Nestl Health Science and the Nestl Institute of Health Sciences are established, to research sciencebased nutritional products aimed at preventing and treating chronic medical conditions. Nestl becomes
the first food company to work with the Fair Labor Association (FLA), to help tackle child labour in the
cocoa supply chain.

2012

Nestl acquires Wyeth Nutrition, formerly Pfizer Nutrition, for USD 11.9 billion, to strengthen its
position in infant nutrition.

2013

Nestl Health Science buys US-based medical foods company Pamlab, which specialises in medical
nutrition for patients with conditions including mild cognitive impairment and depression. Weight
management business Jenny Craig is sold in America and Oceania.

2014

With the creation of Nestl Skin Health, Nestl takes full control of the Galderma dermatology joint
venture which it created with LOral in 1981. The companies also end their joint venture Innov, a
cosmetic nutritional supplements business launched in 2002. Galderma subsequently acquires some of its
assets.

2015

4 | Page

Nestl launches Cailler, the oldest surviving Swiss chocolate brand, as its first super-premium global
chocolate. French frozen foods business Davigel is sold.

Issues of working:
However, every company has its weakest links, so is Nestle. The weakest links are matters they are
unable to control (Labs. 2010). Firstly, the most usual problem is the sources of supply of raw materials.
This is due to an unexpected and sudden increase in demand, which will cause extreme supply shortages
for merchandises that will result in major price increases. For example, bad natural disaster and bad
weather have always been an issue affecting incoming raw materials. Secondly, the mistakenness of
orders received in record. No company can ever achieve the requirement of zero imperfections especially
in foods and beverages industry. For example, when the purchasing department of Nestle ordered 15,000
of mixed yoghurt from its dealer, but what the retailer received was only 12,000 of them, or on another
case they might receive lacking records. Another example is, when Nestle tells its dealer that they needed
extra orders of a particular product to be shipped right away because of unpredicted increase in demand,
but in fact, the supplier may already has orders from other customers. This usually happen during special
occasion. (Mashabale2012)

Thirdly, although Nestle has a logistics department but it does not deal with transportation logistics.
Nestle subcontracted its supply chain transport to the third-party logistics as Nestle tries to cut their
supply chain costs and to concentrate more on their in-plant operations. Although Nestle does not have, a
transportation logistics department but they do have a delivery team to cooperate with the third-party
logistics in routing protocol. Nestle is using a Dynamic Source Routing (DSR), which is a simple and
efficient routing protocol designed specifically for use in multi-hop wireless ad hoc networks of mobile
nodes. The protocol is composed of the two main mechanisms of "Route Discovery" and "Route
Maintenance", which work together to allow nodes to discover and maintain routes on-demand to
arbitrary destinations in the ad hoc network. (Maltz. 2003). Therefore, the delivery team is there to help
Nestle and the third party Logistic that DSR is working as per company direction as well as DSR
performance.
Nestl is not new to controversies. One of the world's largest instant food companies, likes to be
addressed as the worlds leading nutrition, health and wellness company. Long before the MSG and
excessive lead in Maggi furore, Nestl has for long, invited flak over promoting baby food formula in
5 | Page

third world nations for babies as young as a six-month-old, bottled water, poor labour practices in poor
nations and misleading advertising on foods like Maggi.

The baby food controversy

The countries where baby milk powder was promoted most were countries in Asia, Africa and Latin
America. Third world nations were soft targets where Nestl marketed baby food by salesgirls dressed as
nurses who emphasized the importance of supplementary baby food, like the one they were marketing, for
a baby's health. Third world nations had mothers mixing 'infant formula' with water they had access to
which was particularly unclean leading to diarrhea and malnutrition.
Despite research emphasising that babies need to be breastfed mother's milk at least up to six months,
such foods were marketed and toddlers were prone to infection from the bottles in which they were
supplied the milk from.
According to World Health Organisation, six months of exclusive breastfeeding increases a child's chance
of survival by six times. For such practices of encouraging mothers to the expensive baby food packets
and discouraging breastfeeding, leading to problems of kwashiorkor and marasmus among infants, Nestl
faced boycotts of its products in places like Switzerland, Britain and the US.
Bottled Water Controversy
Nestl began selling less expensive water in poor countries in the late 1990s. According to reports, Nestl
currently controls 67 different brands of bottled water. Nestl deepened it's roots in the booming water
business by taking over corporations like Perrier, San Pellegrino and Vittel. Nestl's Pure Life brand of
bottled water fetches it 10 billion Swiss Francs per year.
In order to own water, Nestl started owning land and acquiring leasing rights to land. With pumping of
water for 'water production', Nestl used to pump out gallons of water from their land. For instance in the
rural areas like Maine, Fryeburg, Newfield and Shapleigh, Nestl purchased many water rights and
resources. With water extraction, nearby farmers and families raise their voices against the depleting
groundwater in those regions.

The companys 383,000 square feet bottling plant in Millard Canyon, California packages water for the
Nestl Pure Life brand. The plant was easily bottling spring water and reaping huge profits, when the
Governor of California declared an emergency state of drought in the nation in 2014. Nestl in that state
of drought did not have to heed the restrictions on water usage or the emergency measures imposed in
California. In poor markets like Pakistan where there is a shortage of clean water supply, Nestle Pure Life
is a promoted as a healthier alternative and an expensive one too, making it inaccessible to lower middle
class and poor people.
6 | Page

Horsemeat in Nestl Beef Products

Nestl pasta products, Buitoni Beef Ravioli and Beef Tortellini, were taken off markets in Italy and Spain
after tests found horse DNA present in large quantities than the permissible amount which is 1 per cent in
Britain. Nestl blamed the adulteration on the beef procured from HJ Schypke. They also said that tests
on products in UK and Ireland markets, proved absence of horse meat.
Child Labour

The instant food giant was one of three companies which faced a lawsuit for not running a background
check on child labour violation on it's cocoa suppliers. The cocoa supplied by the company was used to
manufacture the famous KitKat chocolate bars. Children were reportedly found on cocoa farms in Ivory
Coast working for low wages and for 14 hours a day. Once the child labour violation was exposed in
Nestl's cocoa supply chain, Nestl had regretted and went on to promise on starting schools and raising
awareness against child labour in Ivory Coast.

Labour Law Irregularities

Nestl had locked horns with unions in countries situated in the southern hemisphere and the United
States. In late 1970's migrant farm workers in the Midwest campaigned for high wages and better working
conditions. In 2003, IUF protested against the labour policy of Nestl and its subsidiary companies for
their labour practices and 'artificial promotion' of workers into managerial positions which would keep
them away from membership in labour unions. In last few years, Nestl has seen massive protests by
workforce over low wages in India, Hong Kong, Tunisia and Russia.

SUCCESS & FAILIURE OF DIFFERENT PRODUCTS VS CONSUMER

BUYING BEHAVIOR
In buying Nestl products no Complex or Dissonance buying behavior
Is under taken as Nestl products are not very expensive, risky, infrequent
purchased, less difference in brands and highly self expressive; but products
are of daily use less in price and purchased frequently.

7 | Page

Nestle department and products:

Nestle is a Swiss multinational nutritional and health-related consumer goods company headquartered
in Vevey, Switzerland. It is the largest food company in the world. Nestle's products include baby food,
coffee, confectionery, bottled water, breakfast cereals, dairy products, ice cream, pet foods and snacks. 29
of Nestle's brands have annual sales of over 1 billion CHF (about US$ 1.1 billion),
including, Nescafe, Kit Kat, Nespresso, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestle has
around 450 factories in 86 countries, and employs around 328,000 people all around the world. It is one
of the main stockholders of L'Oreal, the world's largest cosmetics company. Nestle was formed in 1905
by the merger of the Anglo Swiss Milk Company, established in 1866 by brothers George Page and
Charles Page. The company grew significantly during the First World War and again following the
Second World War, increasing its offerings beyond its early condensed milk and infant formula products.
The company has made a number of corporate acquisitions, including Crosse & Blackwell in
1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988 and Gerber in 2007. In 2011, Nestle
was listed Number one in the Fortune Global 500 as the world's most profitable corporation. With a
market capitalization of $ 200 billion, Nestle ranked Number 13 in the FT Global 2011. (Nestle2011)of
the work written by our professional essay writers.

Flow and success:

Nestl Pakistan now operates the biggest milk collection system in Pakistan, Currently; Nestl Pakistan
collects milk from an estimated 190,000 farmers spread over 146,000 sq Kms in the province of Punjab
and Sindh. Nestl believes in creating shared value and is committed to the communities it works and
lives with. In Pakistan, the company is working closely with the communities in areas related to Nutrition,
Water and Rural Development and continues to enhance the quality of life of people throughout its value
chain. Till date (in 22 years) Nestl Pakistan has invested over 50 Billion PKR and had an annual turnover
of Rs 51 Billion PKR in 2010. Nestl is committed to Pakistan and will continue to invest and work in the
future as well.

Nestle System and Organization 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
8 | Page

A company's organizational chart typically demonstrates relations between people within an organization.
Such relations might include managers to sub-workers, directors to managing directors, chief executive
officer to various departments, and so forth. When an organization chart grows too large it can be split
into smaller charts for separate departments within the organization.
The different types of organization charts include:
Hierarchical
Matrix
Flat (also known as horizontal)
Nestle Company is a decentralized organization that is organized according to the matrix structure. Nestle
as a decentralized organization permits to subordinate branches to enjoy a proportionately high-level of
independence. Although it still makes major strategy decisions at the headquarter level, daily operations
are left up to subordinate branches to derive and perform. The responsibility for operating decisions is
push down to local units (Broeckx & Hooijberg 2008).
In organization structure, Complex system is a system that is comprises a large number of entities that
display a high level of nonlinear interactivity. There are number of basic observations that have been
made through the examination of complex systems, mainly using computer simulation and the
mathematic of non-linearity. (Unden 2001)
Complex systems are usually open systems. Nestle, over its long historical development from a small
village operation to the worlds leading food Company, has illustrate an excellent capability to adjust to
an ever-changing external environment, without losing its basic beliefs and core values, so important for
long-term success. Over the years to come, this capability will continue to be challenge even more as
Nestle is growing in size and complexity up to a dimension, which demands a continuous development of
its organisation and of the way in which it run (Christopher & Yannicrumar 2008).
(D.Rigby 2009)

Nestle Organization Chart:

Similar to most global companies, Nestls management is the Annual General Meeting of
Shareholders (AGM). According to the official website of Nestl, the companys executives are the Board
of Directors. The Chairman of the Board and Chief Executive Officer lead the companys operations.
There are four committees that support the Board of Directors in corporate governance, including
Chairmans and Corporate Governance Committee, Compensation and Nomination Committee, Audit

9 | Page

Committee, and Finance Committee. Led by Chairman Peter Brabeck-Letmathe, the Board has 14
members to handle different parts of the global business.

10 | P a g e

11 | P a g e

In Organization chart, we can see that the management of Nestle is also divided into 3 types top-level
management, middle level of management and low-level management.

Top Level of Management:

It contains of board of directors, chief executive or managing director. The top management is the final
source of authority and it manages aims and policies for an initiative. It dedicates more time on planning
and coordinating functions.

The role of the top management can be summarized as follows:

Top management broad policies of the enterprise and lays down the objectives.

It issues necessary instructions for preparation of subdivision procedures, schedules, budgets, etc.

It prepares strategic policies & plans for the initiative.

It appoints the executive for middle level for instance departmental managers.

It coordinates & controls the activities of all the departments.

It is also responsible for maintaining a contact with the outside world.

It provides direction and guidance.

The top management is also responsible towards the stockholders for the performance of the
initiative.

Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top
management for the operative of their department. They devote more time to directional and
organizational functions. Their role can be highlighted as:

12 | P a g e

They execute the plans of the organization in accordance with the policies and directives of the top
management.

They make plans for the sub-units of the organization.

They participate in training & employment of lower level management.

They understand and explain policies from top-level management to lower level.

They are also responsible for inspiring lower level managers towards better performance.

Lower Level of Management

Lower level is also known as operative/supervisory level of management. It contains of supervisors,
superintendent section, officers etc. Their activities include Assigning of jobs and tasks to various workers.

They instruct and guide workers for day-to-day activities.

They are responsible for the quality as well as quantity of production.

They are also entrusted with the responsibility of maintaining good relation in the organization.

They communicate workers problems, suggestions, and recommendatory appeals etc to the higher
level and higher-level goals and objectives to the workers.

They help to solve the complaints of the workers

External Environment
An organizations strategic analysis usually starts with an external environment analysis. The purpose is
to identify the possible opportunities and threats to the whole industry. PEST analysis is one of the macro
13 | P a g e

environment analyses that investigate the external environment in political, economic, socio-cultural and
technological aspects.

Political
Political issues are one of the major concerns for global companies to operate internationally. Political
stability, bureaucratic regulations and taxation policies play a vital role in international business
operations. In one aspect, with the political stability in one country, Nestl can generate steady sales in
targeted markets. In another aspect, government laws and regulation in certifying natural and safe raw
materials, public financial disclosure, bribery or fraud highly influence every phase of Nestls
organizational life and strategic planning. As far as Chinese market is concerned,

Economical
Economic condition varies from country to country. The economic component is related to policies,
regulations and changes in a wider economy, such as economic growth, interest rate, exchange rate, and
inflation rate, which will impact the business strategies and decision-making processes. For one, Nestl is
greatly benefited from the rapid economic development and the improvement of investment environment
especially in developing countries. For another, Nestl has taken consumers income level and purchasing
power into consideration when entering a new market or launching a new product in a specific region.
With operations around the globe, Nestl has adjusted for variations in consumers demand and price
sensitivities.

Socio-cultural
Generally, there are lots of issues that need to be considered by the company when doing international
business out of the home country. These issues include demographics, language and education, tradition,
religion and aesthetics, consumer living and diet habit, preference, and consumption patterns. Nowadays,
the change in life style, urbanization and globalization have increased peoples acceptance of new
different products. Therefore, with a clear picture of socio-cultural environment, Nestl can capture the
consumer behavior in order to plan out good and effective business strategies in worldwide markets. Here
is an example of Nestls success of respecting the socio-culture in African countries. The chicken
bouillon cube produced by Nestl is widely used to increase dish flavor in developed countries, however,
Technological
Greatly benefiting from the availability and capacity of strong research centers and associations, Nestl
owns the largest R&D network of any food company in the world. This enables the company to
continuously produce nutritious and healthy food. Advanced technologies also create opportunities for
new product lines, current product improvement, and new marketing promotion strategies, such as ecommerce and online stores. By gathering all the research and development resource available in the
countries where it operates, Nestl expects to use this competitive advantage to become a world-class
leader in food and beverage industry.
14 | P a g e

Internal Environment
Nestls effective performance in terms of R&D, learning and growth serves as a foundation to help
achieve excellent internal business processes. Excellent business processes enable the organization to
achieve product diversity, high customer service and satisfaction, and thus to realize its financial goals
and optimize its values to all stakeholders (Daft, 2009, p207).17
17 Richard L. Daft, Theory and Design of Organization, 10 ed., Cengage Learning, 207.

Strong brands recognition

Nestl is one of the most recognized and renowned brands in the world. Nestls logo depicts a loving
mother feeding and nurturing her young with rich and healthy nutrition. The company emphasizes this
message through communicating with consumers, launching promotions and marketing campaigns, and
building and improving public relations. For instance, Nestl carried out a project of "Nestl Healthy Kids
Global Plan" in China, which covered five cities and four rural areas with about 60 primary schools. More
than 60,000 students and their parents, teachers, and Public Health Administration have proactively
involved in the project. This
social activity significantly improved the brand recognition of Nestl in Chinese market.
Organizational decentralization, differentiation and localization
Nestls decentralized structure makes it possible for each business unit to become decision-makers for
their specific business operations. The fact that Nestls products are diverse and can satisfy customers
need will prevent competitors from entering the unoccupied markets. Nestl perseveres in learning about
local customers through market research. This enables the company to develop new product lines with
local adaptation and distinct features. Business units are also able to evaluate any possible market
opportunities and to try to make successful long-term projects in local contexts.

Large investment in R&D and innovation

It is estimated that approximately 98% of Nestl sales come from international markets.18 All these
achievements are derived from continuous innovation in new product lines, R&D development and
marketing strategies. As a result, Nestl gains tremendous competitive advantages. The company claims
that carefully planned brands will allow the company to stay competitive in the market. For instance,
Nestl invented the manufacturing method of instant coffee in the year of 1938. This unprecedented
innovation made coffee open a broader market in the world. Product innovation and diversification equip
Nestl to capture as much of the market share as possible.
Strong financial performance
In 2013, Nestl achieved outstanding performance, and shareholders received a satisfactory dividend.
Nestl is expected to continue to be disciplined in driving its performance in line with the companys
model of profitable growth and resource efficiency.22 Nestl is committed to make its 2014 performance
similar to 2013. Compared to the second half of 2013, Nestl outperformed the market, with a growth of
around 5% and improvements in margins, underlying earnings per share in constant currencies and capital
efficiency. Below two graphs showed that Nestl has reached excellent performance in the past few
years.23 The stable and healthy financial performance will provide strong assurance for Nestls
development in the future.
15 | P a g e

Nestle Vision Statement

"Nestle's aim is to meet the various needs of the consumer everyday by marketing
and selling foods of a consistently high quality."

Nestle's Mission Statement

"We strive to bring consumers foods that are safe, of high quality and provide
optimal nutrient to meet physiological need. Nestle helps provide selections for all
individual taste and lifestyle preferences."

They Believe in:

A prerequisite for dealing with people is respect and trust.
Transparency and honesty in dealing with people are a sine qua non for efficient communication. This is
complemented by open dialogue with the purpose of sharing competencies and boosting creativity.
To communicate is not only to inform; it is also to listen and to engage in dialogue.

16 | P a g e

Objectives:
Designing and producing the products of such quality so that they can create value for shareholders and
consumers, employees and business partners, and the local communities and national economies in which
Nestl operates.
Not to focus on short term profits, but to develop business for long term.
Top priority is consumer. They believe that they cannot exist without their customers. So while designing
their products they first think about the need of customer.
Generally there are no specific laws and legislation set, rather than the general laws of the company, but
still as operation through the globe, that is operating in a lot of different countries, there are rules and
guidelines which might vary according to the country and the environment they are operating in so
sometime there are specific laws and rules set for those sort of environmental conditions which might
vary to each and every country of the members of the staff.
They are very conscious on the professionalism that they have as they believe that if the company are
professional and that means that follow certain law and ethics and they abide to it, or stick to it no matter
what the situation is so that this will help the company to gain good reputation within the employees of
the company, they will not hesitate if something is going wrong within the company. Corporate Level
Strategy

Reason to follow A&M strategy are:

Diversifying business

Expansion of size of company

Selling: They sold their milk manufacturing industry BAVI to Anco.

Reasons: They can use this money to focus in any other business which is more profitable.

17 | P a g e

Business level Strategy

Their main business level strategy is the integrated cost leadership/ differentiation, by producing 10,000
of different products with low cost as compared to others.

Recruitment process and Pay Structure at Nestle

The recruitment process at Nestle is clearly defined. People with qualities like dynamism, realism,
pragmatism, hard work, honesty and trustworthiness.
Match between candidate's values & company's culture.
Recruitment for management levels takes place in the head office and all others at the branch level. The
existing employees are promoted to higher posts as per the requirements. There are no lateral
recruitments. Another source of recruitment is campus placements and human resource consultancies.

Pay structure at Nestle

This essay is an example of a student's work
Nestle strives to offer fair remuneration. Remuneration level is above the average in industry.
The variable component of the salary is comparatively big to reward individual performance.
In case of higher management level, the variable part is linked to individual & team target achievements

People management policies, basic values & principles elaborated in Nestle

Nestle management & leadership principles- The Nestl Management and Leadership Principles describe
the management style and the corporate values of the Nestl Group, specifically in the area of
interpersonal relations.
Nestle human resources policy- the policies designed for the Nestl's human resources are well defined to
the employees with proper guidance's and guidelines given to them so that they can operate in the right
manner and be more effective and efficient.
Nestle people development review-this policy throws light on Nestle's culture and core values, different
training programs and life of employees after work.

18 | P a g e

Nestle: Job Design

Selection-Combination of written test, GD & interview (Interviews for top management posts).
The company incorporates practices like Job Enrichment and Job Enlargement, to motivate employees
and to break the monotony of their job tasks. The correspondent herself works in both sales and brand
management departments, which is an example of job enlargement
Training Program in Nestle
From the factory floor to the top management, training at Nestl is continuous. And because it is mainly
given by Nestl people, it is always relevant to the professional life.
Throughout the world, each country runs its own training programs (e-Learning, classroom courses,
external courses), and it has five training centers in France, UK, Spain, Mexico and Brazil.
Nestle runs following training programs
Literacy training Programs: this is run by nestle to improve skills in employees who are given new
machines or equipment to work. The objective is to prepare workers to operate new equipment and
production methods. This requires the ability to read, write and do basic calculations. This process is part
of what is called the Mission-directed Work Team Approach. In addition to increasing productivity, the
process helps to empower the teams to take responsibility for their performance and maintain a positive
attitude to their work.
Nestle Apprenticeship Programs: It is an intensive four-year programs. Technical classes are given.
Apprentices take a series of exams leading to a Technician Diploma or an Advanced Technician Diploma.
Local Training Programs - The local training programs means a lot of employees work in the Nestl's,
in other words the Nestl's 2/3 of the employees who work for the Nestl's arrange and organize the
training programs to share the experience of whatever the problems being faced by each employees and
that they are trying to train them in such a manner that when any problem occurs they can themselves be
aware of it and can take the right decision when need, these are sort of being run in every different
countries where Nestl's operate and it is a unique programs, in other word it is termed as Nestl's people
development activities and continuously been followed throughout

19 | P a g e

Rive-Reined International Training programs: They have allocated different programs for training
different people; they have specially designed training programs in which they run more than 70 courses.
Which are around the word and something like 1700 to 1800 manager and senior manager attend this sort
of courses this includes from around the world and over 70 to 80 countries are participating in this sort of
courses. The staff that is training them is a highly qualified and with a lot of them being those from the
Nestles senior managers who have tones of experience and have a lot of expertise in the field and can take
care of the precise things that need to be handled, they put their experience into play and train the staff, so
that not only the company benefit but also the staff benefit from the training. The sometimes have the top
management participating in the programs it might sometimes even include the CEO if the Nestl's who is
interested in the

Nestle Rewards:
Earn money as a Freelance Writer!
'Passion to Win' awards: These quarterly awards have been institutionalized to reward those who overachieve their targets.
Long-service Awards- To recognize employees who have been with the company for more than 30 years.
'Nestle Idea Award'It was found from the correspondent that the company institutes Nestle Idea Award every quarter to
recognize and award employees who come up with relevant and innovative ideas which have the potential
of being implemented at Nestle.
For all aspects of Reward Nestle apply the fundamental principles outlined below.
There rewards are based on following principles
Performance Driven
The hard work each employees put in the more are the chances of their getting the reward, reward is
strictly based on the way each employee perform. The more the hard work put in by the employees more
will be reward, in some sort performance is directly linked to the rewards they are going to earn. In this
way they motivate the employees, to get the better out of them, and in way both the company as well as
the employees are benefited. The reward they each employees are offered is quite attractive so that the
employees get attracted to it and try and perform to the best of their calibre.
Inclusive

20 | P a g e

The reward system is unique and it is included for each of the employees and not only the junior
manager, it includes all the employees and in that way all are employees are included.
Flexible
They are more of a sort of flexible on the reward system if the employees are performing and if they want
their reward in some other form if it is possible then they might give the reward that the employee asks
for and not what they have already decided.
Benefits given to employees in Nestle
The following benefits are provided to all employees, with no discrimination

Leave-Personal & Medical (fixed no. per year)

Children Education Assistance Scheme

Provident fund

Retirement Gratuity Scheme

Group Insurance & Accidental Insurance Scheme

Conveyance Reimbursements

Employee Relationship
Nestle provides a very healthy working environment which is one of the reasons why Nestl's employees
state their commitment level to be very high.
Employee turnover is less than 5%., which is considered to be very low for a multinational corporation.
Nestle has an open culture & upward communication especially in case of grievance redressal is
encouraged.
Work/Life balance is given importance, as illustrated in the Nestle Human Resource Policy document.
'Nestle Family' annual events are organized by their HR department whereby employees along with their
families are invited.
Emphasis is laid on safety of employees (Nestle Policy on Health and Safety at Work)

21 | P a g e

Organizational Culture
We found a very strong organizational culture in Nestl. The same as other European companies, Nestl
typically adopts a decentralized organization approach in which international divisions have a high level
of independence and decision-making autonomy. Each division focuses on its local markets to meet
diverse needs. Nestl also relies on a strong mission, shared values, and informal personal relationships.
Nestl runs their businesses with strong characteristics of effectiveness, reliability, diligence and
innovation. In compliance with the headquarters guidelines and budget control, regional managers are
completely independent in making respective plans and strategies that fit to local markets. Through
systematically organizing its intellectual properties, Nestl makes great efforts to foster a corporate
culture of continuous learning and knowledge sharing. For example, every year Nestl provides
employees with various training programs, and R&D and innovation programs. 44 Making human capital
a high priority, Nestl cares about their employees and focuses on team work. As the Director of Human
Resource and Training Department for Greater China Yunque Chen says that, Employees are the most
important assets, the soul and carrier of Nestls spirit and the most precious wealth of Nestl(Staffers,
2011). 45 In Nestl, there is an open and close working atmosphere existing among top management and
factory-floor employees. People are encouraged for upward communication and effective coordination
and cooperation. Nestl also addresses the importance of employee safety and work-life balance.

SWOT Analysis of Nestle

Strength: BRAND IMAGE

Marketing strategies established by the company are innovative and lure customers.
Financial, marketing and sales strategies are formulated by gauging the Periodic research carried
out to judge market trends.
Multinational.
Growing Sales and profits.
22 | P a g e

Major shareholder in the food industry of Pakistan.

Aggressive Marketing.
Efficient Distribution networks throughout the country.
Quality Products.
Environment Friendly.
Skilled labor.
Educated staff.
Large number of offerings.
Pre purchase virtual display.
Good background of the company.
Easy to approach outlets.
Solid Financial position
Strong supply chain network
Focus on research and development Estimations of UHT Milk Production
Consumption up to 2008 09
Year Annual Production
(million liters) Annual Consumption

Weaknesses :

The target market of Nestle MilkPak is upper middle and high class because lower middle and
poor class cannot afford to buy UHT milk due to its premium price.

It is a main weakness of MilkPak that there are different companies of milk but the name of nestle
MilkPak is always stand in the last because of low advertising and marketing.

Opportunities :

There are substantial growth opportunities considering the average yield of Pakistani animals
at only 1,100 liters/annum as compared to 6,000 liters/annum for animals in Europe and
USA. There are nearly 20 million milk producing animals in the country, mostly in Punjab
(80%).
The overall milk market in Pakistan is 20 billion liters, out of which processed milk
contributes only 3 million liters. Nestl MilkPak along with other processed milk businesses
contributes only 2% to this large market. Nestl MilkPak has expanded its product range by
entering the cold dairy market recently by launching Nestl plain yogurt and now fruit yogurt
is also added to it.

23 | P a g e

To expand the cold dairy products range, Nestl fruit yogurt is the latest addition to this
group.
The cold dairy market offers many opportunities for the company which can capitalize these
products by banking on its superior quality milk.
The coffee brand also offers many opportunities for the company to expand by tuning the
taste of the masses towards coffee.
Credit policy can be adopted to increase sales

Threats :Price fluctuations due to rupee devaluation as raw material are imported. The uncertainty of economic
conditions poses a great threat as the major funds invested in the country come from outside Pakistan.
The present economic crisis in the world, led to the withdrawal of foreign management from the
company and the investment has come to a halt.
Competition with Nestls owns smuggled brands.
Effect of Seasonalitys upon sales.

Imported raw material, in some of the companys products.

Major Player may enter target market Legal and ethical issues.

Market segment growth could attract new entrants.

Economic slowdown can reduce demand.
Two main competitors Haleeb and Olpers are main threat for MilkPak especially the Olpers is
growing very fast.

Inflation is getting higher and higher so the purchasing power of the people is decreasing day by
day.

There is no entry barrier for new entrants as the Olpers has come in the market.

Taste of consumer has already developed which is hard to change.

Current market situation

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

Internal
24 | P a g e

TYPE OF FACTOR

Favorable

Unfavorable

Strengths

Weaknesses

Ability to leverage strong brand

name to generate sales
Ability to customize products to
the local market conditions

Increasing
instances
of
product recalls hampering
brand equity

Strong global operations with

diversified revenue base
Research
and
capabilities

External

development

Opportunities

Threats

Transition to a 'nutrition and wellbeing' company

Compliance issue resulting in

penalty payments

Focus on developing
emerging Economies

Macro economic factors

and

Booming out of home eating

market

Allegations
of
business activities

unethical

Nestles LC1 division has many strengths. Their first 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. His explanation of renovation is that to just keep
pace in the industry, you need to change at least as fast as consumer expectations.(Hitt, 2005) And
his explanation of innovation is to maintain a leadership position, you also need to leapfrog, to move
faster and go beyond what consumers will tell you. Brabeck has led Nestle into a position to better
achieve the internal growth targets with his. Another strength that Nestle has is that they are low cost
operators. This allows them to not only beat the competition by producing low cost products, but by
also edging ahead with low operating costs.

25 | P a g e

Nestl Reviews
Updated 23 January 2016
960 reviews filtered by
3.5
StarStarStarStarStar
Rating Trends Rating Trends
69%
Recommend to a friend
89%
Pros

"I find work-life balance also quite reasonable" (in 57 reviews)

"work environment, quality of working life, many various benefits" (in 55 reviews)
"Great employees and managers and good benefits and working conditions" (in 49 reviews)
"Great company to work for with great benefits" (in 28 reviews)
"good company to work for will provide help when asked for" (in 25 reviews)
Cons

"Having a work-life balance can be challenging" (in 60 reviews)

"no work life balance can be achieved" (in 17 reviews)
"Long hours, ridiculous inflexible corporate requirements that often add little value other than
additional work" (in 18 reviews)
"Depending on the direct supervisor one may or may not get further exposure/visibility tosenior
management" (in 15 reviews)
"In fact, they just care about the quality in the decision making as well" (in 14 reviews)
Less Pros and Cons
Close
Your trust is our top concern, so companies can't alter or remove reviews.

1.

960 Employee Reviews

21 Oct 2015
Sales Assis
StarStarStarStarStar

26 | P a g e

Former Employee - Sales Representative

Recommends
Positive Outlook
Pros
Great team and wonderful oppertunity. love to working with the people
Cons
No enough help as a beginner and have less benifts than other peer.

Advice to Management
Using the online source all the time and all are just not that simple.
Helpful
Flag as Inappropriate
2.

7 Oct 2015

Nestle feedback
StarStarStarStarStar
Former Employee - Anonymous Employee
Recommends
Approves of CEO
I worked at Nestl full-time
Pros
Great company to work for in terms of career development world wide, they are working hard at gender
balance and take CSR very seriously.

27 | P a g e

Cons
Work - Life balance is very tough, you need to create the boundaries in order to be sustainable in your
role. If you do not wish to travel nationally or internationally or do not like a fast pace competitive
environment, then this would be a challenge when working here.

Advice to Management
Continue to listen to the employees, improve on the work-life balance by adopting more flexible,
shorten weeks and continue innovation.

NEXT 10 YEAR COPMANY POSITION:

STRENGTHS

BRAND STRENGTH

Nestle has some very strong brands like Nescafe, Meggiand Cerelec. These brands are almost generic to
their product categories.

PRODUCT INNOVATION

The company has been continuously introducing new products for its Pakistani patterns on frequent basis,
thus expanding its product offerings.

RESEARCH & DEVELOPMENT:

Nestle has a worldwide network of centers in 17 locations on four continents. An international staff of
3500 engaged in the search for innovative new products and the renovation of existing ones.

MARKET SHARE:
Another thing is high level of market share and that people all over the world trust and recognizes
Nestle as a big brand name.

LOW COST
they are low cost operators which allow them to not only beat competition but also edging ahead
operating excellence, innovation, renovation, product availability and communication are major
strengths

28 | P a g e

WEAKNESSES

MATURE MARKETS:
One major weakness of Nestle is that it is entering into markets that are already mature and can
give a tough competition to new entrants.
PLAIN YOGURT:

Nestle Plain Yogurt has proved to be a Nestle weakness because it has been unable to make its market
place in USA. But Nestle by analyzing the sensitive areas can overcome its weaknesses.
Less consumer research in few areas.

EXPORTS:

The company's exports stood at Rs 2,571 mat the end of 2003 (11% of revenues
a major portion of this comprises of Coffee (around 67% of the exports were that of Nescafe instant to Russia
this constitutes a big chunk of the total exports to a single location

Conclusions
Nestl should consider decreasing costs that are incurred due to intensive distribution that it takes up for
the most of its products. For example, Nestl Pure Life is found even in outlets such as the local
khokhas in Pakistan. Placing it here is not quite beneficial as the poor localities can hardly afford to
buy it. Therefore, the firm is incurring cost without the sales being increased at this certain distribution
channel.

29 | P a g e