Obesity and its complications

are a worldwide epidemic

Poor Nutrition A Global Problem

Many basics of our food have now deteriorated in
quality:
Poor storage, long transport, irradiation,
processing
Fast food, unhealthy foods
The environment
Commercial pressure to buy sugared products
Mass retail products with no science full of
additives, flavorings etc.

HERBALIFE

INTRODUCTION:
Herbalife International is an American multilevel marketing company that develops markets
and sells nutrition, weight management and skincare products globally. The company was founded
in 1980, and it employs around 7,400 people
worldwide.
Herbalife reported net sales of US$4.072 billion in
2012, an 18% increase over 2011, and net
income of $477.19 million, a 16% increase over
2011. Incorporated in the Cayman Islands, its
corporate headquarters is in Los Angeles,
California, United States.
The company distributes its products in 91
countries (as of November 2013) through a
network of approximately 3.2 million independent
distributors, some of who earn profit on product
sales and additional commission from a multilevel marketing (MLM) compensation structure.

HISTORY OF

HERBALIFE

In 1980, Mark Hughes founded

Herbalife, selling products out of
the boot of his car.

His stated goal was to change the nutritional

habits of the world.
His first product was a protein shake designed to
help people manage their weight. He structured
his company using a direct-selling, multi-level
marketing model which attracted thousands of
distributors (Herbalife Independent Distributors)
who sold its products door-to-door or through
word-of-mouth, without relying on commercial
distribution in retail stores.
The company's slogan, "Lose
Weight Now, Ask Me How,"
became a marketing theme for
distributors, featuring heavily on
badges, flyers and posters.

In 1985, the California Attorney General sued the

company for making inflated claims about the
efficacy of its products.
In 1986, Herbalife became a publicly traded
company on the NASDAQ, and in 1996 Herbalife
reached US$1 billion in annual sales.
Mark Hughes died at age 44 on May 20, 2000.
In April 2003, Michael O. Johnson
joined Herbalife as CEO following a
17-year career with The Walt
Disney Company, most recently as
president
of
Walt
Disney
International.

In April 2005, the company celebrated its 25th

anniversary with a four-day event attended by
35,000 Herbalife Independent Distributors from
around the world.
Under the direction of Michael O. Johnson, the
company had five years of double-digit sales
growth and has doubled from net sales of $1.1
billion in 2003 to $2.7 billion in 2010 as well as
building a global brand through its sponsorship of
more than 100 teams, athletes and fitness events
around the world, including the LA Galaxy and FC
Barcelona!

Top 7 Competitors for Herbalife Ltd:

Herbalife Ltd faces competition

from:
Nestle SA: $140.6B

Unilever NV: $41.6B

Kraft Foods Inc.: $37.5B

 Danone: $28.1B

General Mills Inc.: $17.3B

Kellogg Co: $16.7B

Amway: $11.8B

HERBALIFE

Product Line of Herbalife:

Herbalife's products include protein
shakes;
protein
snacks;
nutrition,
energy and fitness supplements; and
personal care products.
Weight Management / Nutritional Food
Products:
An appropriate
nutrition plan is
essential for
providing our
bodies with the
nutrients required
to help them
function properly.

Energy And Fitness:

Energy-enhancing
products Complete: 5
product customizable
line Credible: Based on
science Confidence
developed for everyone;
from those who are just
starting out, to
Herbalifes sponsored
athletes and teams
around the world.

Personal Care:

Targeted Nutrition:

The Herbalife Targeted Nutrition range

makes staying on top of your health easier
by giving your body the specific targeted
nutritional support it needs.

Mission of Herbalife:
Their Mission is to change peoples life by
providing the best business opportunity and
the best nutrition and weight management
products in the world.

Herbalifes
Herbalifes
mission is to mission is to
change peoples
change peoples
lives by providing lives by
the best nutritionproviding the
and weight best business
management opportunity in
products in the direct selling.
world.

Vision of Herbalife:

Mark Hughes passed away in 2000, but

his vision for changing peoples lives
helping people manage their weight,
regain their health and find financial
prosperity continues to thrive.

Corporate Social Responsibility Of

Herbalife:
From how Herbalife do business to the
commitment they make to their communities
to how they treat their employees and
independent
Distributors,
Herbalifes
Corporate Social Responsibility program is
best summed up by their value, We do the
right, honest and ethical thing.

Corporate Governance:
The methods and policies that relate to directing
and administering our shortterm and long-term goals as
a company are in place to
ensure accountability and
economic efficiency for our
stakeholders. With consistent
focus in these areas, we met
independence criteria almost
one year early, and we
meet all NYSE-listed public company requirements
for transparency.
To ensure continuing gains in this area, we
created the independent post, director-in-charge
of executive sessions, which will be held on a
rotating, annual basis by an independent director,
and will facilitate executive meetings of the
boards independent directors.

Business Ethics:
Herbalife
uphold
the
highest ethical standards in
the
operation
of
our
company. Herbalife do the
right, honest and ethical
thing, always taking the
high road. Herbalife strive
for consistent enforcement
of compliance regulations
and are committed to providing a level playing
field for all our independent Distributors. Those
who do not comply are disciplined, suspended or
terminated. Herbalife require annual ethics
training for all employees, worldwide.

Employee Wellness:
Herbalife walk the talk
Herbalife Inner Nutrition and
Outer Nutrition support a
healthy, active lifestyle, and
they strive to help their
employees get healthy and
fit.
From
complimentary
products
to
lowering
individual health insurance costs, Herbalife
support and encourage their efforts. Herbalife has
been recognized by Mens Fitness magazine as
One of the 15 Fittest Companies in America'.

Live Green:
Through
environmentally
conscious initiatives, Live
Green and the 3Rs reduce,
reuse and recycle Herbalife
focuses on ways to protect
our environment. Herbalife
believe in taking personal
responsibility and in making
decisions based not only on financial factors but
also
on
the
social
and
environmental
consequences of our activities.
Herbalifes downtown Los Angeles office was
created using recycled,
rapidly renewable
materials and has earned its Leadership in Energy
and Environmental Design certification for its
environmentally friendly design. Herbalife earned
credits for efforts in Sustainable Sites, Water
Efficiency, Energy and Atmosphere, Materials and
Resources and Indoor Environmental Quality.
Herbalife works on an ongoing basis to encourage
its employees and independent Distributors to
Live Green through a variety of programs and
education. These include car and vanpools, using
biodegradable
and
recycled
materials,
conservation, and reusing and eliminating
hazardous materials such as plastic bags and
Styrofoam cups.

Strength
The company has an extensive supply chain of
Herbalife distributors. The company has over 2.7 million
independent distributors worldwide, and these
distributors are currently operating in 88 different
countries.
Finally, the Herbalife brand name holds a lot of
significance to customers. Regardless of the negative
publicity over the past year, the companys loyal
customers have continued to purchase Herbalife
products, and they will not be easily convinced to
switch to new brands.
Once customers are hooked on a certain brand of
nutritional shakes, it is difficult to persuade them to try
different brands.

Weakness
The main weakness that Herbalife faces is the
overwhelmingly negative publicity that it has received
from its stock scandals. Bill Ackman seems to be intent
on ruining Herbalifes reputation.
Also, the allegations that Herbalife is nothing more than
a pyramid scheme have greatly demoralized their
network of independent distributors.
These distributors are an essential part of their supply
chain, but there has been a reduction in the number of
new distributors during the past year.

Opportunity
Nutritional shakes are now considered a commodity
product, since many companies are competing on price
for market share.
The industry has entered a shake-out phase, which has
left many companies crippled and in need of financial
support.
Herbalife has a well maintained cash balance, so
Herbalife has the means to acquire these weaker
companies.

Threats
The threats that Herbalife faces are numerous. A
struggling economy has drained consumers of
discretionary income, and nutritional shakes are not
often a priority purchase.
In addition, Herbalife is still reeling from a recent
product recall, after milk proteins were found in a line of
shake mix labeled non-dairy.

Although their brand reputation is the strongest in the

industry, trust in Herbalife is waning. Overall, Herbalife
faces a much harsher competitive environment than
was the case several decades ago.

Consumer Behavior of Herbalife:

Herbalife identify the need of the costumer,
whether they are purchasing for their own
benefit or for their family members. They
exactly know what kind of product is needed
for people to stay healthy in an easy way.
Herbalife
is
a
multi-level
marketing
(sometimes
called
MLM
or
network
marketing) company. In addition to profits
from product sales, Herbalife distributors can
earn additional commissions from sales by
other distributors they recruited, called their
downline distributors.

Take the
Business
Opportunity

Purchase
International
Business Pack

Register with
the company

How does this Business create

opportunities for the Prospective
Costumers to gain profit by
becoming a Distributer after
becoming a consumer?
You can buy
products at 25%42% profit
You are an
Individual
Herbalife
Distributor

Harshit

Anjesh

Rajji

Amit

As a Wellness Consultant Help 4 people

improve their health with Herbalife

Minimum stock
maximum
discount

In other
words you
are making
more money

I want to
make a
success
builder order

1000 volume points =

A Success Builder order of 1000VP from the

warehouse entitles you to 42% profit.

Your profit is
now 42%

You are an
Individual
Herbalife
Distributor
You make a retail
profit by selling to
customers

Amit
Harshit

Anjesh

Rajji

Some of your customers decide they want some

of the action. Well concentrate on Amit. Or you
may recruit and train more consultants.

Remember you
bought your
product at 42%

You make a
wholesale profit
by selling to Amit

You are an
independent
Herbalife
distributor

Amit

Harshit

Anjesh

Rajji

Amit buys
products from
you at 25% to sell
to his customers

Amit has decided to get involved in the

business. She must buy the International
Business Pack and register.

Achieve 4,000
Volume Points in one
calendar month or
2,500Volume Points
over 2 consecutive
months to qualify as
SUPERVISOR

Harshit

Anjesh

You are an
independent
Herbalife
distributor

Rajji

Amit

Volume
points from
your
organization
count
Towards
your
Personal
Volume

Supervisors get a profit of 50% on products!!

You are a
Supervisor

Harshit

Anjesh

Rajji

Amit new
supervisor

Amits Organization

Amit has decided to become a

SUPERVISOR -what does this mean to
you - and your pocket?

You earn up to 5%
Sales Royalty on your
First level Supervisor
(Amit).

Amit new
supervisor

You are a
Supervisor

Harshit

Anjesh

Rajji

Amits Organization

If someone from Amit's organisation

qualifies as Supervisor you will earn a
Royalty also.

The same
follows until your
third level
Supervisors.

You earn up to 5%
Sales Royalty on
your
First and Second
level Supervisor.

You are an
independent
Herbalife
distributor

Basic Level Of Marketing Plan:

Supervisor

Qualified
Producer

Success
Builder
Senior
Consultant
(VIP
Distributor)

500 VP
Distributor

35%
Permanent

25%

1ooo VP

42%
Temporary

25oo VP in 3
months
42%

Permanent

4000 VP in
1 month
50%
Permanent

Organizational Structure of
Herbalife:
CEO
Michael Johnson

CFO
John DeSimone

Director
Leroy Barnes

President
Des Walsh

Director
Richard Bermingham

COO
Richard Goudis

Director
Padro Cardoso

Legal
David Heber

Director
Richard Carmona

Scientific
Rocio Medina

Director
Jonathan Christodoro

Corporate Affairs
Diahanna Brown

Director
Keith Cozza

Advisor to Chairman and CEO

John Tartol

Director
Jeffrey Dunn
Director
Hunter Gary
Director
Jesse Lynn
Director
James Nelson
Director
Maria Otero

Sponsorships:
Herbalife sponsors a number of athletes,
sports teams and sporting events around the
world, including:
Sergey Konyushok (Broke 7
Guinness Records at Strongman
competitions)

Christiano Ronaldo

Los Angeles Galaxy soccer

team

Virat Kohli

News about Herbalife:

Herbalife, Common Threads Partner to Provide

Nutrition Curriculum in Schools Across the
Country - Sep 9, 2014
Herbalife Becomes First Official Nutrition Sponsor
of the 2013 Billboard Latin Music Conference and
Awards - April 8, 2013
Herbalife's Distributor Bonus Awards Celebration
Pays over $50 Million - Mar 24, 2012
Herbalife Family Foundation Provides Nutrition
Grants in Houston and Mumbai - Nov 3, 2011
Herbalife Family Foundation Provides Nutrition
Grants in Houston and Mumbai - Nov 3, 2011
Herbalife Expands Brand Presence in Russia and
India - Dec 14, 2010
Herbalife Family Foundation Expands Successful
Nutrition Programs for Children in UK and Mexico
- Sept 2, 2010
Herbalife CEO Launches Mission for Nutrition Jan 13, 2009

C
O
N
C
L
U
S
I
O
N
In Summary Herbalife offers a ready to
go success formula
Exciting Global Branding
Ethical Leadership, and Support System
trainings and information for your success
Products backed by science new, cutting
edge, attractive products coming through
Dedicated Distributors working together
Amazing growth, based on Daily Personal
Consumption
An Income Opportunity like no other: Parttime or full- time its always your choice

Recommendation:
Being a BBA student and doing a detailed study
on Herbalife, as they are one of the most famous
brands around the world in terms of Nutrition &
Skin Care products.
After facing some loss and loosing some market
share only due to the controversies that Herbalife
is following a Pyramid Scheme model as their
business model, which is just an allegations by
the corporate sectors and some of the problems
occurring in their products which is creating a
negative effects on the consumers health.
Herbalife should overcome with such hindrance in
their business so as to remain at the top in their
field.
They should also do media advertising to create
more awareness about their products and its
benefits, as we are not seeing any advertisement
on television, as it is the most successful channel
to get into peoples mind apparently.
Herbalife should also come up with the festival
offers as well. Depending on the location and
culture. Like in India, they can come up with
Diwali discount offers, or bumper offers or may be
in terms of discount coupons, So as to attract
more and more costumers.