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Strategic Management Report on

Nestle Pakistan
2022
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Final Project
On
STRATEGIC MANAGEMENT REPORT ON
NESTLE PAKISTAN

Submitted to:
Prof. Dory Dow
Submitted by:
Muhammad Inam Uddin (10919)
Muhammad Shahzaib (10438)
Saud Alvi (10920)
Syed Danish Masood Zaidi (10439)
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EXECUTIVE SUMMARY
Nestle is one of the best food companies not only in Pakistan but all over the world. It has been
serving this world for over one hundred and thirty years. It has differentiated itself through its
high-quality product mix and positioned itself as health and Nutrition Company while targeting
the health-conscious people throughout the world. Nestle started its operations in Pakistan back
in1988, by acquiring a diary company Milkpak ltd. when people of Pakistan actually needed it.
The Members working in the Organization are concern about developing the high standards in
the Market. They basically focus on making sure that their products are best to use.
Since Pakistan is the fifth world’s largest milk producing country therefore Nestle deals mainly
in dairy products. Moreover, it also sells juices, chocolates, prepared food like noodles, baby
food, infant formula milk and breakfast cereals in Pakistan.
Nestle is a low-cost leader with its efficient operations hence it provides its customers with high
quality products and sells them at a premium price. Therefore, it is earning good profits. Nestle
has set its manufacturing plants at in Karachi, Lahore, Islamabad and Kabirwala. The milk
processing plant at Kabirwala district is the Nestlé’s world largest milk processing plant.
When nestle introduced its products in Pakistan people were neither aware nor accustomed to
them. Therefore, nestle ran an extensive marketing campaign to educate people and create a need
for its products. Pakistan is a land where fresh eatables are readily available. Nestle should sell
the same quality of products in Pakistan as it sells abroad. It should also introduce more brands
in Pakistani market which it offers in other markets of the world since consumers in Pakistan are
becoming more demanding day by day.
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Table of Contents

S.No. Topic Name Page No.

1. Organization’s Introduction 5

2. Vision, Mission and Core Values 4-7

3. Role of management 7

4. Competitive Advantage 8

5. Competitors 9-10

6. SWOT Analysis 10-12

7. Porter’s Five Forces 12-14

8. Competitive profile matrix 14

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INTRODUCTION
Nestle Pakistan Limited is a Pakistan- based food and
beverages company. The Company is engaged in
manufacturing, processing and sale of food products.
Nestle has been serving Pakistani consumers since
1988, when their parent company, the Swiveled- based
Nestle SA first acquired a share in Milkpak Ltd.
Nestle Pakistan Limited is registered on the Karachi
and Lahore stock exchanges for the past ten years.
Company has been declared one of the top 25 companies on the Karachi Stock Exchange by
2014. Nestle Pakistan aims to be a Rs.100 billion company. Nestle, as a social company, offers
tremendous opportunities for career growth and learning at domestic and international levels.
With over 8000 brands preferred for their good quality, taste and health benefits. Nestle is the
number one food company in the world.
Nestle is leading the change in the food industry as it is also the leading food company in terms
of having the largest set up of research and development in food science and nutrition. They are
uniquely positioned to provide products that help consumers live a good life. Many Nestle
brands have benefited from the active ingredients developed by Nestle research and with over
130 years of expertise, consumers know they are getting the best in quality when they choose a
Nestle brand. Happy and healthy consumers are at the heart of what they do. Their philosophy is
summed up in the phrase "Good Food, Good Life: and they remain committed to help consumers
choose better tasting and healthier products to help them enjoy happier, healthier lives.
CORE VALUES
The Company Core values are as follows:
 They focus on to develop a workforce which is highly motivated and can perform well in
the workplace.
 They focus to meet the requirements and needs of their consumer which comprises of all
age groups. They can be from small infant to older age. They focus on creating high
quality products and provide services which are helpful in capturing great customer
value.
 They also focus on maintaining the shareholder’s wealth but keeping in mind that to
perform their operations well with environmental and social responsibilities.
 Their brands are preferred in comparison of High quality food and Beverage products.
 They Communicate with their customer and provide them with the relevant information
they need.
 They promote their employees and motivate them to compete and to become specialized
in their work.
 They also have milk collection services which help to develop dairy sector in the rural
areas of Pakistan.
 The organization follows proactive approach which helps them to compete in the market.
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VISION & MISSION

As the company continued its growth so they also develop new plans and strategies focusing on
their Mission Statement which is “Good Food, Good Life”. These are not just Simple words
there is a meaning of Existence of the Nestle Company which describes the purpose of
company’s existence. That is, they focus on making an influence to the social environment and
operate responsibly and making food which is good for health and utilizing the resources
carefully keeping the environment safe produces good healthy food.
Nestle wants to become a company which is preferred always, like among its competitors the
customer should choose their company. So, keeping their vision and mission in mind they focus
their products and its availability in the market and which is easily accessed by their valuable
consumer.

Existing vision statement

“Nestles global vision is to be the recognized leading nutrition, health and wellness company.
Nestle Pakistan subscribes fully to this vision of being the number one nutrition, health and
wellness company in Pakistan. Envision to:
 Lead a dynamic, passionate and professional work force – proud of our heritage and
positive about the future.
 Meet the nutrition needs of consumers of all ages - from infancy to old age, from
beverage products of the highest quality.
 Deliver shareholder value through profitable long – turn growth, while continuing to play
a significant and responsible role in the social, economic, and environmental sectors of
Pakistan.”
Existing mission statement
“To positively enhance the quality of life of the people of Pakistan by all that we do through our
problem, our brands and products and our CSV activities.”
At Nestlé, we believe that research can help us make better food so that people live a better life.
Good Food is the primary source of Good Health throughout life. We strive to bring consumers
foods that are safe, of high quality and provide optimal nutrition to meet physiological needs. In
addition to nutrition, health and wellness, Nestlé products bring consumers the vital ingredients
of taste and pleasure. As consumers continue to make choices regarding foods and beverages
they consume, Nestlé helps provide selections for all individual taste and lifestyle preferences.
Nestlé is dedicated to providing the best foods to people throughout their day, throughout their
lives, throughout the country. With our unique experience of anticipating consumers’ needs and
creating solutions, Nestlé contributes to your well-being and enhances your quality of life.
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“Research is a key part of our heritage at Nestlé and an essential element of our future. We
know there is still much to discover about health, wellness and the role of food in our lives, and
we continue to search for answers to bring consumers Good Food for Good Life.”

Role of 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:
 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.
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 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.

COMPETITIVE ADVANTAGE
For a company to survive the company must maintain and sustain its competitive advantage. So,
these are the major 10 reasons why Nestle Pakistan is still competing and is successful.
Nutrition, Health and Wellness: Nestlé’s core aim is to enhance the quality of consumer’s
lives every day, everywhere by offering tastier and healthier food and beverage choices and
encouraging a healthy lifestyle. Nestle express this via their corporate proposition ‘Good Food,
Good Life’. Nestlé Nutritional Profiling System
Quality Assurance and product safety: Everywhere in the world, the Nestlé name
represents a promise to the consumer that the product is safe and of high standard. Nestlé Quality
Policy
Consumer Communication: Nestle Pakistan is committed to responsible, reliable consumer
communication that empowers consumers to exercise their right to informed choice and
promotes healthier diets. Nestle respect consumer privacy. Nestlé Consumer Communications
Principles Nestlé Policy and Instructions for Implementation of the WHO International Code of
Marketing of Breast-milk Substitutes.
Human rights in Nestlé’s business activities: Nestle fully support the United Nations
Global Compact’s (UNGC) guiding principles on human rights and labor and aim to provide an
example of good human rights’ and labor practices throughout our business activities.
International Labor Organization
Nestlé’s success is based on Nestlé’s people: Nestlé’s treat each other with respect and
dignity and expect everyone to promote a sense of personal responsibility. The Company recruit
competent and motivated people who respect their values, provide equal opportunities for their
development and advancement, protect their privacy and do not tolerate any form of harassment
or discrimination.
Safety and health at work: Company is committed to prevent accidents, injuries and illness
related to work, and to protect employees, contractors and others involved along the value chain.
Supplier and customer relations: The Company require their suppliers, agents,
subcontractors and their employees to demonstrate honesty, integrity and fairness, and to adhere
to their non-negotiable standards. In the same way, they are committed towards their own
customers.
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Agriculture and rural development: The Company is contributed towards improvements in

agricultural production, the social and economic status of farmers, rural communities and in
production systems to make them more environmentally sustainable.
Environmental sustainability: The Company is committed to environmental sustainability.
At all stages of the product life cycle they strive to use natural resources efficiently, favor the use
of sustainably-managed renewable resources, and target zero waste.
Continuous improvement in water management: The Company recognize that the world
faces a growing water challenge and that responsible management of the world’s resources by all
water users is an absolute necessity. Nestlé Water report Nestlé continues to maintain its
commitment to follow and respect all applicable local laws in each of its markets.

COMPETITORS
Nestlé is the market leader in the water industry. It is the first company which launched bottled
water for first time in Pakistan and that’s why it has maximum market share than others because
of being pioneer in this industry. Nestle Pure Life introduce the bottled water culture. No doubt
Nestle pure life is currently a dominant leader in Pakistan market in Mineral Water Industry.
Nestle Pure Life is currently dominating more than 80% of bottled water market share. It is also
leading the other firms in new product introductions, distribution coverage, and promotional intensity.
Competition typically is defined as among forms within an industry producing products
that are substitutes for one another. Therefore, the identification and evaluation of
marketplace competitors is a key element of strategic marketing and a vital element of the
corporate survival.
For different product categories there are different competitors of Nestlé. Nestle pure life (NPL)
major competitors at this time who are also offering their water product in market are following:
 Pepsi is offering Aqua Fina
 Askari water
There are also other small competitors as well e.g. Classic, Nova etc., which have very low
market segments.
According to market view, competition is defined as:
The competition between the firms, which are satisfying the same customer, needs.
So according to concept the competitors of NPL are all those companies, which are satisfying the
need of thrust of the customers are the competitors of the Nestle.

Main Competitors:
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Engro foods and Haleeb foods are the main competitors of Nestle in Pakistan
& the main strong competitor is Shezan.
 Engro Foods Pakistan Major product lines: Olpers milk, Olwell, Olper Cream, Tarang
Tea whitener, Tarkka Ghee
 Haleeb Foods Major product lines: Bread, snacks, desserts and meals.
 Shezan Foods Pakistan Major product lines: Food Products, Jams Jellies &
Marmalades, Tomato Ketchup, Sauces & Pickles, Fruit Juices Syrups & Squashes
The other main competitors of Nestle Pakistan are:
 Unilever
 Proctor and Gamble
 Tapal danedar
 Pepsi
 Coca cola
 Gourmet is also giving a very tough competition to Nestle pure life as their price is less than
Nestle pure life. Moreover, gourmet is approaching the other cities and rural areas of the
country and possibly will emerge as a strong competitor of Nestle pure life in near future.
 There are also other competitors found within a local market which include Sparklet,
Acqacare, Pure, Aafi, Oura, Aabshar and many other local brands, but their market share is
very low as compare to the Nestle Pure Life.

SWOT ANALYSIS
This section presents a SWOT analysis to review the micro environment of the frim reflecting
specifically upon the strengths and weaknesses of Nestle Pakistan and the opportunities and
threats the firm must respond to through an alignment of firm strengths to such forces. A SWOT
analysis is often used, as a strategic tool to allow a presentation of the firm’s resources and
capabilities, which can be further, developed to aid competitive advantage. A SWOT analysis
therefore underpins the development of future strategic options. A desirable competitive
advantage is one obtained through a minimization of threats aligned with the seizing of
opportunities.

Strengths

 Nestle is a highly diversified company operating in many different markets and sectors of
those markets.

 The variety of brands gives Nestle a strong ability to weather economics because it serves
many different segments of the market.
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 It has well-established relationships with other powerful brands, including Coca-Cola,

Colgate Palmolive.

 Nestle owns some of the world’s most recognized and trusted brands. Some families have
used its products for generations.

 It has strong research and development capabilities that are growing.

 Nestle has strong relationships with retailers.

 It includes well-established brands with a large amount of market share in some of the
largest national economies, including Europe and the United States.

Weaknesses

 Much of its sales depend upon a few well-recognized brands. This makes the company
vulnerable to any sudden changes in consumer behavior.

 Grocery sales in some major markets are increasingly concentrated in the hands of a few
giant retailers. These companies have the ability to force sharp reductions in price. Some
of these retailers are intent on supplementing name brand products with more-profitable
house brands.

 Some of its brands, such as Carnation milk, are not tailored to modern lifestyles and are
seen as old-fashioned by some customers.

 The company is heavily dependent upon advertising to shape consumer opinion and drive
traditional sales. This can lead to high marketing costs with a questionable return on
investment.

 There is a high cost for launching new brands to supplement older, less-fashionable food
products.

Opportunities

 Growth in online retail could open up new distribution channels..

 Increased disposable income  could increase the demand for luxury items like bottled
water, ice cream and pet food.

 Changes in lifestyle, such as longer work hours, more women in the workforce, and more
single-person households, increase the demand for prepackaged foods.

 Increased mobility and car ownership increase the demand for candy, bottled water and
snack foods in nations like China.
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 Increased interest in health and nutrition could increase demand for some Nestle products,
such as energy drinks.

Threats

 There is pressure from large retailers such as Imtiaz to cut prices.

 They have experienced disruption of the traditional grocery industry by new players such
as Whole Foods Market and online retailers.

 There is a growing ineffectiveness of traditional advertising as new technologies such as

streaming video supplant traditional broadcast and print media.

 Consumers in some countries are eating fewer meals at home, which means less demand
for some Nestle products

 A growing suspicion of prepackaged foods as unnatural and unhealthy is becoming

common. This increases the demand for fresh and natural foods in some markets. It also
increases the demand for organic and other alternatives.

 There is a possibility of increased government oversight and regulations in markets.

Porter’s Five Forces and Nestle Pakistan

The entry of new food firms:

Every company wants its monopoly in the market to maximize its profits and market shares. The

entry of new companies in the market will create a hard competition because now the rivalry is

started among companies to gain the maximum shares. Nestle also fears new entries but nestle

have set a standard of its products which creates barriers for the new entrant and nestles market

share is secure regarding the threat of new entrants.

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Competition:
The rival companies are creating tough competition for Nestle in the Pakistan food market.
Companies like Pepsi, Cock, Engro foods, Tarang are major competitors in different food

products. Nestle standardizes the product’s utility, effectiveness and quality measures which

keep it leading in the market because other companies have not reached that level yet. Nestle

Pakistan is growing with a 13.8% growth rate annually according to its annual first-quarter

reports. Nestle has to improve consistently to sustain its worth in the market.

  Substitution Threat:
Substitutes of Nestle products are available in the market as the rival companies are producing

the products to gain market share, as bottled water, dairy products, and juices are available in the

market at low prices.  So the substitution threat for Nestle Pakistan is alarming as the Pakistani

food market will accept them easily due to low prices, but the quality products of Nestle could be

improved in the pricing context to reduce the profit hazards from substitute products as it has

strong research and development department.

Bargaining power of the Supplier:

Nestle has low bargaining power for suppliers of food products as it has worth in food market.

People trust their products in daily use because of their quality and characteristics which Nestle

maintains. It has diverse distribution channels that provide information about its products and

have strong customer relationships. So the bargaining power threat for the nestle is no issue for

it.

Bargaining power of Buyers:

Nestle has strong customers network as Nestlé’s customers are powerful as nestle relies on the

appreciation of its customers. In Pakistan, consumers could afford low price products so Nestle

has to keep in mind that it should keep its prices low to maintain the market shares. So high

bargaining power of the buyers is in favor of Nestle. 

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Conclusion:
Nestle Pakistan is following the five forces model to maximize its profits and defeat is

competitors in all ways of production, marketing, and quality assurance. The country like

Pakistan is the key user of nestles products, nestle has strong consumer relations and consistent

R&D is reducing the threats for the company’s sustainability and profitability. So nestle have a

lot of opportunities to contain its worth in the market.

STRATEGIES REQUIRED AND EXPECTED IN FUTURE

Competitive profile matrix

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External factor evaluation matrix

Internal factor evaluation matrix

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SWOT matrix

STRATEGIES AFTER ANALYSIS OF ALL THESE MATRIXES

1. Increase sales by allowing retailers to pay a large portion of purchases on credit

2. Capitalize on logistics and distribution channels to help counter the intense competition from
Engro Foods and Haleeb foods
3. Related diversification to increase product variety and hedge against heavy fluctuations in
due to climate and seasonal changes
4. Build a strong advertisement campaign to communicate the values of nestle products to
target consumer, to strength advantage over competitors.
5. Increase promotional activities, specially e-promotion, to further strengthen brand image and
market position

Implementing strategies
1. Allow retailer to acquire 20% of stock on credit and negotiation similar credit terms from
own suppliers to prevent liquidity issues
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2. Develop logistic network in rural areas by building secondary collection centres in strategic
towns, focusing on one province at a time
3. Retain 30% of net income and invest in R&D to develop heat resistant FMCG products,
4. Focus advertising to communicate the nutritional aspects of Nestles products, increase
advertising frequency in summer holidays to boost demand for dairy products and beverages
5. Develop joint venture with, or outsource e-marketing to local leading e-marketing firm that
would assist in developing, implementing, monitoring, and evaluating e-marketing
initiatives.