Class Discussion of Nestle Case:

External Problems: Cost were very high, lots of standard to maintain in production in R&D. Lots of
Competition from local and foreign brands that were cheaper options. Consumption patterns were
changing. Cocoa pricing stability challenge. Sugar labeling requirements were changing consistently. Bad
reputation when partnering with Thai union (Forced Slave/child labor allegations).

Internal: Lack of gender diversity in higher position (One woman in top 16 executives) which is against
their values, mission, and vision.

Issues in Pakistan:

 For MnCs in Pakistan, Pakistan isn’t a very revenue generating market because of price points
and resource allocation difficulties as compared to other countries. In recent boycotts, there is a
very high emotional sentiment. There are extremist views and retail distribution teams might
face problems because of that although nestle has a no engagement policy. BDS movement
keeps Nestle in their second page but people haven’t researched enough on their involvement.
 Economic fluctuations and pricing sensitivity. Currency fluctuation and price exchanges. Supply
distribution problems. Problems with producing profits for MNCs in general.
 Health and nutrition conscious people don’t like frozen food items. Nestle should cater to this
problem.
 Cultural sensitivity and religious norms. Halal certification problem that affects these companies.
 Import bans disrupt raw material supply chain for Nestle.
 Lawsuit related issues because of depleting water bodies. Also, regulatory problems intellectual
property rights being stolen.

Strategies that can be used in Pakistan:

 When it comes to costs and imports, look for alternates in countries that Pakistan has trade
agreements with such as China. Can help reduce costs, duties.
 For boycott related issues, every mnc is being targeted. Nestle like Unilever should do
something to related with the consumer. Create a sense of belonging with the country they are
operating in. Many people don’t know that nestle pure life came from Pakistan. Change the
perception of the brand.
 Change consumer perception about Frozen foods. Through marketing campaign, pr, changing
the packaging.
 Increase gender inclusivity, create diversity within the organisation. Remove the quota system
for gender inclusivity.
 In terms of pricing, nestle has a certain few standards and quality control that they need to
maintain. They can identify where to segment and target more essentially so they can cut costs
from other non-essential areas.
 Saturations in the food and beverage industry. To counter that, nestle should do market
research and try to relate with the local market. For e.ge dairy milk change their positioning as
such to replace sweets on events and festivals.
 In terms of regulatory issues, nestle can contribute with local authorities, communities and
NGOs to implement water saving measures and this can also be used to strengthen their CSR
missions.
 Launch specify campaigns like Pepsi has a campaign where they light up a whole village with
electricity during Ramadan. Coca-Cola also has done similar campaign. Do something to build
your image and build a relationship with your stakeholders too.
 Nestle should expand their distribution network to rural areas through CSR initiatives like
Unilever Guddi baji programs. Promote women and stuff