TASK 1:

Introduction of Nestle:

Nestle company is the multinational company which produce food and beverages. The Nestle
Company is the largest global company. The Nestle Company head quarter are located in
Switzerland. The Nestle Company has 447 factories all over the world and almost 339,000
workers work in the Nestle Company and Nestle has also the largest shareholder value for the
shareholders. The advertisements of the Nestle Company create a good image and make a
powerful strong brand image in the mind of the people. Nestle target all segment of the market
for example baby food, bottled, water, cereals, and coffee, culinary, dairy, heath nutrition and pet
care products. The slogan line for nestle is also unique and every consumer trust by seeing their
tagline that is GOOD FOOD GOOD LIFE.
The Nestle Company is large so they have a strong stakeholder value in the market. The internal
stakeholder of Nestle are their employees, managers and the owner of the Nestle Company. The
external stakeholders of the Nestle Company are the government, their suppliers, customers,
society and the non-governmental organizations.
LO1
Macro environment effecting Nestle:
Nestle is the largest food industry in the over 130 countries. So there are many factors which are
effecting the Nestle company operations. To do the in depth analysis of the macro environment
effecting the Nestle operation is the PEST analysis. This help us to look the external factors
which are effecting the Nestle.
Pest analysis:
Political As we know that Nestle is a largest food and beverages company that is operating
globally so there are many political factors that are effecting the sales of the Nestle.
The change in the standards of the food industry effecting the Nestle. The government
stabilities in the emerging economies effecting Nestle. Americans have the largets
market share of the Nestle so the taxes and the government regulations are effecting
the sales of the Nestle.
Economical The basic food demand in the market is always high although the food eating
behavior of the people may change with the time but the demand always remain high.
So the Nestle is fulfilling the demand of the people. The Nestle is also making the
packages which are the ecofriendly and can be easily recycle. Unemployment rates in
the countries is also increasing so the Nestle should provide the jobs to the people in

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 their factories.
Social The people are obsessed with the Nestle because they are delivering the healthy
eating to their customers. The Nestling is reducing the sugar, salt and fats in their
products because the people are demanding the healthy food. That helps the Nestle to
open the doors to introduce the new food items in their product lines. So nestle
produce the juices that has low sugar than the other juices. Through the past couple of
years the Nestle is facing the controversy that the extraction of drinking Nestle water
is not good. The people says that the Nestle takes the spring water and just put them
in the bottles without cleaning it and this is risking the lives of the people.
Technological The Nestle need to spend more money and time on the research and development
sector because there that sector is weak. The Nestle need to pay attention towards
their technological factor like in the social media, their digital surveys, the email
marketing and the digital discounts offering to their customers. It is much easier to
connect digitally with your customers globally with the use of the technology. That
cab also help nestle to increase the productions, food quality and their sales globally.
By using new technologies in their factories can also increase the production time in
the Nestle. This also helps them to reduce the labor cost.

Stakeholder’s analysis:
As nestle is the biggest food and beverages industry so there are many stakeholders of the nestle
Company. The people or the group of people that are affected by the operations of the Nestle
Company are their Stakeholders. The stakeholders of the Nestle always supports the Company.
The people or the group of people that are effected directly by the operations are the internal
stakeholders and the people that are effected indirectly are the external stakeholders of the
Nestle. The internal stakeholders of the Nestle are the employees, managers and the owners of
the company or the shareholders. The external stakeholders of the Nestle are the government,
society, customers and the suppliers.
The stakeholders meetings in the Nestle are helping them to understand the societal issues. There
are many meeting, workshops and the events that the Nestle arranged with their stakeholders to
keep the good relationships with them. This also help them to make trust and mutual respect
between them. The stakeholders of the Nestle are the Academia, Communities, consumers and
the general public, customers, civil society organizations, non-governmental organizations etc.
LO2
SWOT analysis:
The SWOT analysis help you to do the analysis of the internal and the external environment. The
SWOT analysis of the Nestle Company are given below:

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Internal Strength  The Nestle has a strong brand name and brand image in the world.
environment The Nestle has developed a respected reputation in the food and
beverages sector.
 The Nestle is providing high quality of products for everyday use.
 Nestle is one of the top valuable company.
 It has a well-established relationship with the brands like coca
cola, Pepsi, and Palmolive etc.
 Nestle has owns more than 2000 brands globally all over the
world and selling their products in many countries.
 They have a strong customer relationship.
 Nestle is the world largest food and nutrition research organization
with 5000 people involved in the research and development.

Internal Weakness  The Nestle is highly depend on the marketing and advertising of
environment the company which requires the too much cost.
 The Nestle sales are effected by the large retail store like metro,
Carrefour, Walmart because any reduction and increase in the
prices of the products effect the nestle sales.
 The many controversies also affect the Nestle like the water
controversy that the Nestle is pumping the millions of water
illegally.
 The all brands of the Nestle are working under the one line if these
is loss in one product line the remaining brands are also affected
by it.

External Opportunities  Nestle has a great opportunities to do the business ventures with
environment the new startups that can help the Nestle to make a good brand
name.
 Nestle has the opportunity to increase their sales by using the e
commerce platform because there are many people who are
preferring the online shopping more now a days.
 The nestle is already selling the ready to eat products but there are
some products which has the high demand in the market like the
tea and coffee so Nestle should also increase the product line in it.
 Nestle can also do the strategic alliances with the other companies
to increase their profits and sales.

External Threats  The biggest threat for Nestle is that there is a high competition in
environment the market which can affect the sales of the Nestle.
 The large retail store cut the prices of the products which is
effecting the sales of the Nestle.
 The government regulations and prices are also effecting the
operations of the Nestle.
 The consumer behavior also changes with the time which is
effecting the Nestle.
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  The Nestle portfolio is diversified and large. So they face
problems in their operations of each of their product line.

Value chain analysis:

The detailed value chain analysis of Nestle Company are given below:

Primary activities:
Inbound logistics:
The inbound logistics of the Nestle are the raw material that are used to make the food items in
the Nestle Company.
Operations:
The operations of Nestle are running in well-mannered and according to the plan. The human
resource department are helping the Nestle to run their operations more effectively. The sales of
the Nestle is highly depended on their operations.
Outbound logistics:
The Nestle is achieving the business growth by their outbound logistics. The outbound logistics
of the Nestle are the order processing, delivering etc. The suppliers of the Nestle are helping
them to reach their end consumers.
Marketing and sales:

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The Nestle brand is mainly depends on their marketing. They are doing the different
advertisements and the promotions which are helping Nestle to increase their sales. The Nestle is
mainly depends on their suppliers and the marketing.
Services:
The Nestle is delivering a good services to their customers. They are providing a healthy food to
the customers. The services which the Nestle is providing helping the company to make a good
brand image in the market.
Support activities:
Firm infrastructure:
The infra-structure of the Nestle is good and well managed. There is a separate department for all
of the important functions in the organization like the finance, sales, and marketing departments.
Human resource:
The human resource department of the Nestle is so strong that it is hiring the most skilled and the
talented people in the company to run the operations effectively. The human resource department
is also helping Nestle to increase their productivity.
Technology:
The Nestle need to pay attention towards their technological factor like in the social media, their
digital surveys, the email marketing and the digital discounts offering to their customers. It is
much easier to connect digitally with your customers globally with the use of the technology.
Procurement:
The procurement of the Nestle includes the raw material, machinery, supplies, equipment and the
other necessary items.
LO3
Porter’s 5 forces:

The detail of nestle porter 5 forces are given below:

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Competitive rivalry:
The Nestle is the food industry so it has many competitors like Kraft foods, P&G etc. The Nestle
brand has the 150 years of experience but still face the competition from the several brands. The
competition the Nestle is facing is not just the price or sales, it also includes the product variety,
creativity, advertisements etc. So the competitive rivalry of Nestle is high.
Threat of new entrants:
The Nestle has a large, market share and the variety of the products they are offering. So there is
a low chance of the threat of new entrants. The Nestle has created a great customer relationship
and good brand image over the time which make the threat of new entrant low for Nestle.
Bargaining power of Supplier:
The Nestle make the long term relationship with their suppliers and take care of them. As, we
know that Nestle is a large Company so they need the several suppliers. So when any supplier
stat supplying the nestle products they never bargain about the price. So the bargaining power of
supplier in Nestle is also low.
Bargaining power of buyer:
There are many companies which are selling the similar products as the Nestle. So the people
can easily switch the companies and start buying from the other brand products. This is because
of the high competition that the Nestle is facing in the market. So the bargaining power of buyer
is high in Nestle.
Threat of Substitutes:
There are several products of the Nestle that has the substitutes like the baby food which the
people can made easily in homes, the fresh juices which the Nestle is proving can be made at
home, the water bottles and milk also have the substitutes. But the Nestle is trying to highlight
the healthy factor of their product so people prefer to buy their products other than their
substitutes.
Competitive edge and marketing positioning:
The Nestle is using the different positioning strategies to market their product. They have the
positioning strategy according to their product lines. Like they have different distribution
channels through which they deliver their final product to the customer. The Nestle logo is
totally different from their competitors. The competitive edge they are delivering to the
customers is the
 Partnership with the big companies.
 The research and development
 Plant based meals
 Healthy food
 Product availability.

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Unique selling point:
The unique selling point of the Nestle is that their product is for the all of the ages. The every
people in their life need the product of the Nestle.
TASK 2:
LO4
Different types of strategic directions of Nestle:
The strategic direction gives the foundation of the Nestle to run its operations. The strategic
direction in the Nestle unite the different strategies and provide a stability in the organization.
The different types of the strategic directions of Nestle are given below:
Mission statement:
The mission statement of the Nestle is:
“The world's leading nutrition, health and Wellness Company. Our mission of "Good Food,
Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range
of food and beverage categories and eating occasions, from morning to night.”
Vision and value statement:
The vision of the Nestle Company is:
“To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved
shareholder value by being a preferred corporate citizen preferred employer preferred supplier
selling preferred products.”
Culture:
The logo of the Nestle is elaborating the culture of the Company that is Good Food Good Life.
This tells that the culture of the Nestle is the corporate culture which is attached to its products
and the value they are creating for their customers. Nestle has following the team culture for
their employees and the open door policy.
Ideology:
The ideology of the Nestle Pakistan is to work globally and provide the full healthy, nutritious
and hygienic food to the people. They have done the several researches on the food before
launching in into the market. The founder of the Nestle Henri Nestle says that the nutrition is
our core value. They are enhancing the quality of the life and contributing to a healthier future.
Principles:
The corporate business principles of the Nestle Company are given below:
 They are providing the Nutritious, healthy and the wellness of food to make the life good
of the people.

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  They are giving the high quality products to their customers and not compromising on the
life of the human beings.
 Their products are safely packed and they used the packaging material that is recycle
able.
 Nestle is making the good relationships with their customers by communicating them.
 The Nestle is also focusing on the human rights of the people.
 The human resource department of the Nestle is taking care of the safety and health of the
workers.
Grand strategy:
The Nestle is well known company which are working from the several years and has a great
name in the market. The Nestle has also the great market and the leading brand. The Nestle is
running their operations effectively by making the great strategies in their organization. The
grand strategy of the Nestle is given below:

Fast market Growth

quadrant 2
quadrant 1

Weak competitive Strong competitive

position position

quadrant 3 quadrant 4

Slow Market growth

Product expansion strategy:

The Nestle has the large product line and the large portfolio which is helping the Nestle
Company to increase their profits and sales. There are many brands which are working under the
name of the Nestle like the Nescafe, Kit Kat, Lipton, different cereals, baby food etc. There are
many examples of the Nestle in which they expand their product line according to the consumer
needs. The Nestle launch the baked Kit Kat when they see that the normal Kit Kat is melting due
to the summer season.
Diversification strategy:

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The Nestle is also using the diversification strategy for their growth in the market. They are
diversified their product which are helping them to increase their sales and the profits. They use
their diversification strategy in the milk products that they buy the dairy farms at the start to start
launching the packed milk. The other diversification strategy they adopt is the water plant they
install to provide the full mineral water to the people for their healthier life style.
Planning strategy:
Basically nestle company focus on eco-friendly environment and give health lifestyle to their
entire consumer and also help people, families and pets to stay healthy and happy life. Meet all
consumers need and want by giving fitting product and time constrained life style.
Packaging of the product will also save from bacteria and protect and safe from environment. -
Offering more plant-based food and beverage options to enable us to be the consumers’ preferred
choice as they diversify their diets. Advertising Objectives and Plan the objectives of the
advertisement of nestle are not only increasing market share in Pakistan but rather building long-
term relationship with customers through the use of emotional strategy. Another objective
includes increasing demand of nestle by increasing its liking among people Creative Strategy of
Nestle is having a way that everyone drinks nestle and it’s a milk of nation; which is liked by
everyone focusing its target market which is middle and upper class with a way that.
Financial strategy:
The Nestle Company revise its financial management strategies according to the market
conditions and needs of the company. The Nestle financial strategy keeps the balance between the
earning per share, external growth and the shareholder return to gain the target market and
financial markets. The Nestle spend their large capital on the high growth beverages and food like
nestle water, coffee etc. to expand in the geographic market. Nestle plan their financial strategy by
looking at providing the full healthy food to the people and invest their large capital in the line
where people can buy more healthy products. The Nestle launches its target efficiency program to
access the opportunities for the margin improvement. This helps the Nestle Company to manage
the company long term performance.
Porter’s generic strategies:
The Nestle is a multinational firm that has targeting the people according to their product lines.
There is a high competition in the market for the Nestle through which they are facing the
difficulty in maintain the leadership position. The Nestle is a global brand which is maintaining
its market position by using the generic strategies in their company. The Michael porter’s generic
strategies of the Nestle are given below:

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The cost leadership strategy:
The cost leadership strategy involves the gaining of the competitive advantage by lowering the
cost than your competitors. As, we know that the Nestle is providing a healthy food to the
customers so they are setting the cost according to the products. The cost leadership strategy of
the Nestle is helping them to increase their market share by targeting the middle class people.
There are many products of the Nestle which have the low prices and they are full filling the
needs of the consumers.
The Nestle is focusing on the product availability and the easy accessible to the people. When
the products are easily available to the customers and full filling the demands of the consumers it
helps the Nestle to increase their sales globally.
The Nestle is frequently offering the coupons and the discounts to their customers which is also a
great cost leadership strategy of the Nestle is adopting. Through the coupons and the discounts
many people attract towards the company and their sales increases. The Nestle is also lowering
their production cost and work effectively to increase the productivity and to produce more
products. The promotional campaigns is also held by the Nestle which is helping them to
increase their brand popularity.
The differentiation strategy:
The differentiation strategy is the strategy which is helping the company to increase their growth.
The differentiation strategy that the Nestle is adopting is helping them to increase their
customer’s base and the unique product line. The Nestle is using the innovation in their products
from the start which is making their products different from another products. The Nestle looks
at the consumer behavior and the demands in the market. Then they launch an innovation in their
product which make the different it from the other competitors. The innovation in the products of
the Nestle are helping them to target the more people and increase their sales.
The Nestle present their products differently from their competitors in the market by using the
advertisements which is helping them to grow more in the market. The differentiation strategy of

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the Nestle is putting pressure on their competitors and making a strong brand image. The Nestle
is an old brand and working globally with the high name is the market making it different from
the other brands in the market. The logo of the Nestle is also different from their competitors that
says that the GOOD FOOD GOOD LIFE. It means that they are providing the healthier food to
the people according to their life styles. The differentiation strategy is helping the Nestle to grow
more in the market.
The focus strategy:
The focus strategy is helping the Nestle to focus on their resources to expand their products in
the market. When the companies is adopting the focus strategy they only serve the particular
market segments. The focus strategy of the Nestle Company is that offering the low cost
products and creating the best value for the customers. The Nestle is adopting the low cost focus
strategy to target the middle class people also. Through their low cost focus strategy they are
targeting the niche market. On the other hand they are also adopting the best value focus strategy
in which they are giving the best taste, size, healthier products and design of the products that are
matching with the needs and requirements of the customers.
The Nestle is mainly focusing on their brand name and the brand image. They made the several
strategies for branding their products. The Nestle packing is satisfying the needs of the customers
and the meeting their expectations from the brand by maximizing the cost of the products.
Vertical and horizontal integration:
The Nestle uses the vertical integration in the 2002 in which the Nestle is decided to develop the
vertical supply chain to increase the brand name value and the revenues with the selected
suppliers to increase their growth.
The Nestle growth came into being because of the horizontal integration in the company. The
Nestle uses the horizontal integration by increasing their product line in the food sector with the
emerging trends in the market. The Nestle Company main operations are depended on the
horizontal integration.
Market development strategy:
The Nestle uses the market development strategy to support the market penetration and product
development. The Nestle enters the new consumer markets and made a strong brand become in
the markets. As we know that the Nestle is an organization which is selling their products
globally. That is because of the Nestle has the strong market development strategy they are
adopting. The main reason of the market that the Nestle is developed is the affordable prices, the
strong brand name and the healthier products that they are offering.
They are also doing the ongoing research on the food products which is also helping the Nestle
to make a strong position in the market. The Nestle Company is already entered in the world
famous countries and make a great market share in these countries. The Nestle is adopting the
market development strategy to increase its value chain which helps the Nestle to run their

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operations more effectively. Nestle when entering into the new market it pay importance to the
culture and norms of that region and launches their products according to the consumer needs.
Competitive advantage:
The competitive advantage that the Nestle are delivering to the customers is given below:
 There are many brands which are working under the name of the Nestle and delivering
the competitive advantage to the customers.
 The Nestle is doing the partnership with the big companies to increase their sales and
growth in the market.
 The research and development sector of the Nestle is giving the advantage to the
customers that they launch their food products after the detail research and the analysis.
They are giving the healthier products to the people to attract them.
 The Nestle is offering their customers thee plant based meals.
 The Nestle is giving the healthy food products to the customers to maintain their life
styles.
 The Nestle products are easily available to all of the countries in the world.

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