Situation Analysis, Business Definition and Scope

3. PRESENTED TO:
MR.SOHAIL ISLAM
PRESENTED BY:
ROHMA IMRAN
AYESHA JAMIL
ZUNAIRA TALIB
ANEELA SHAHEEN
RUBAB QAMAR

4. INTRODUCTION
“Nestlé” is a Swiss-German word which means “Little
Nest” which is its trademark
Nestlé is the worlds’ number one food company
5th largest company of the world according to its turn
over
2 million 31 thousand people employed from all over
the world
Present in 81 countries of the globe having 522
factories
Over 700 products renovated or innovated in the past
five years, with wellness in mind

5. HISTORY
Henri Nestlé established
Nestlé in 1867 in
Switzerland (Vevey HQ)
His first product was
lactogen formula for
infants by the name
“Farine Lacteé”

6. KEY DATES 1866 COMPANY
FOUNDATION
Major joint ventures 1981 Galderma
1905 Merger between Nestlé and Anglo-Swiss Condensed Milk
Company
1929 Merger with Peter, Cailler, Kohler Chocolates Suisses S.A.
1947 Merger with Alimentana S.A. (Maggi)
1969 Vittel (equity interest)
1971 Merger with Ursina-Franck
1974 L'Oreal (equity interest)
1977 Acquisition of Alcon (2002: partial IPO)

7. 1985 Acquisition of Carnation
1988 Acquisition of Buitoni-Perugina
1988 Acquisition of Rowntree
1990 Cereal Partners Worldwide
1991 Beverage Partners Worldwide (formerly CCNR)
1992 Acquisition of Perrier
1998 Acquisitions of San Pellegrino and Spillers Pet
foods

8. 2000 Acquisition of Power Bar
2001 Acquisition of Ralston Purina
2002 Acquisition of Schöller and Chef America
2002 Dairy Partners Americas and Laboratories
innéov
2003 Acquisition of Mövenpick, Powwow and
Dreyer's
2004 Acquisition of Valio (ice cream activities)
2005 Acquisition of Wagner, Protéika, Musashi

9. BUSINESS DEFINITION AND
SCOPE

10. MISSION STATEMENT
"Nestlé is the largest food company in the world. But,
more important to them is to be the world's leading
food company”.

11. PRODUCT DEFINITION
Nestle, a multinational company has acquired
& merged with various companies.
Factors behind its success are multifarious,
quality, improved technology, innovation
which have created brand loyalty amongst its
customers.
SBU’s like Pharmacy, Breakfast Cereals and
Cosmetics, Ice cream, Frozen Foods, Sauces.

12. BRANDS
Quality and nutritional value are the essential
ingredients in all of its brands.
Millions of people prefer Nestlé products
every day, happy with the addition to their
wellness that they bring.
Today Nestlé is present in different markets
with the following main brands:-

13. Baby Foods
Breakfast Cereals
Beverages
Bottled Water
Chocolate & Confectionery
Dairy Products
Food Services
Ice Cream
Prepared Foods
Petcare
Pharmaceuticals
Cosmetics

14. BABY FOODS
Infant nutrition
Nestlé,
Lactogen,
Nestogen,
Cerelac,
Neslac,
PowerBar,
Pria etc..

15. BREAKFAST CEREALS
Chocapic
Shreddies
Cheerios
Cookie Crisp
Lucky Charms,
Cinnamon Toast
etc..

16. BEVERAGES
Coffee Nescafé
Ricoré
Ricoffy
Nespresso
Bonka
Loumidis
Fruity fruits
Nestlé fruit juices

17. Nestea
Nesquik
Milo
Carnation
Nido
Nestlé Omega Plus
Coffee-Mate etc..

18. BOTTLED WATER
Nestlé Pure Life
Nestlé Aquarel
Contrex
Acqua Panna
Arrowhead
Poland Spring
Deer Park,
Ice Mountain etc..

19. CHOCOLATE &
CONFECTIONERY
Chocolate confectionery and
biscuits
Nestlé
Crunch
Galak/Milkybar
Kit Kat
Smarties
Butterfinger
Aero
Polo

20. DAIRY PRODUCTS
Nido
Nespray
Carnation
La Lechera etc..

21. FOOD SERVICES
Food Services and
professional
products Chef
Davigel
Minor’s Petcare
Purina
Friskies
Fancy Feast, Alpo,
Gourmet etc..

22. ICE CREAM
Antica Gelateria del
Corso
Dreyer's/Edy's
Drumstick/Extrême
Maxibon/Tandem
Mega
Mövenpick
Sin Parar/Sem
Parar/Non Stop

23. PREPARED FOOD
Lean Cuisine
Hot Pockets
Maggi
Refrigerated
products (cold meat
products, dough,
pasta, pizzas,
sauces, snacks) etc..

24. PET CARE
Friskies
Fancy Feast
Dog Chow
Cat Chow
Tidy cats etc..

25. PHARMACEUTICALS
Alcon
Pharmaceutical and
cosmetic joint
ventures Galderma
Laboratoires innéov
Patanol

26. COSMETICS
L’Oréal

27. CUSTOMERS
Every person, of any age group,
gender etc is the target customer of
Nestle
Nestle target its customers by knowing
customer needs & demands. For this
purpose it made customer profile.
Customer profile based on two
criteria:

28. Qualitative research:-
This involves setting up small focus groups of
consumers who express their ideas and opinions
about their needs and views on different
products.
At one level, this might involve asking groups of
athletes to talk about their lifestyles, dietary
habits and training regimes.
At another level, it could involve a consumer
focus group discussing the quality of the
nutritional labeling on a yogurt drink.

29. Quantitative research:-
This involves only relatively few people like
professional market researchers may interview
thousands of people through postal or
telephone interviewing.
Nestlé regularly uses both forms of research to
gain a clear idea of consumer opinions and
trends.
Using these customer profile techniques, Nestle
developed its different product strategies to
target the customers.

33. COUNTRIES
Bangladesh
China
Hong Kong
India
Indonesia
Iran
Israel
Japan
Jordan
Kazakhstan
Kuwait
Lebanon
Malaysia
Pakistan
Philippines
Republic of Korea
Saudi Arabia
Singapore
Sri Lanka
Syria
Taiwan
Thailand
United Arab Emirates
Uzbekistan
Vietnam

34. • Nestlé Waters is number one in Vietnam with
its La Vie brand.
• Annual consumption per person varies in Asia,
from 1.2 L in Pakistan to 47 L in Thailand.

36. INTRODUCTION
Nestlé MilkPak Limited (NML) was
incorporated in Pakistan under the Companies
Ordinance, 1984 & listed on Karachi and
Lahore stock exchanges since 1980.
Joint venture between Nestle Switzerland and
MilkPak Limited came about in 1988.
Nestlé Pure Life was launched in Pakistan in
1998

37. SEGMENTATION
Segmentation of world in three zones
 US
 Asia
 Oceania & Africa
Nestle has divided the whole Pakistan in to three zones:
 Northern Zone
 Central Zone
 Southern Zone

38. REGIONAL SALES OFFICES
Nestle has 10 Regional Sales Offices in all over the
Pakistan.:
Karachi F - 77/1, Block 7,Clifton, KDA Scheme
5,Karachi, Sind, Pakistan Phone: (021) 5833935-6
Fax: (021) 5833937
Hyderabad 178, Block C, Unit 2Latifabad, Hyderabad,
Sind, Pakistan Phone: (0221) 860403Fax: (0221) 863202
Sukkur F - 33/5 - CWorkshop RoadSukkur, Sind,
Pakistan.Phone: (071) 615946Fax: (071) 615946
Lahore 29-B, Main Gulberg,Lahore, Punjab,
PakistanPhone: (042) 5754335-6, 5761484Fax: (042)
515061

39. Faisalabad House No. 24-Y-103 Madina
Town,Faisalabad, Punjab, Pakistan Phone:
(041)726993Fax: (041) 47438
Gujranwala Plot No: 144-A, First Floor Satellite-
Town Market, Gujranwala, Punjab, Pakistan.Phone:
(055) 3733415 Fax: (055) 3733415
Peshawar 201, 2nd Floor, City Tower, Jamrud Road,
B Block,Peshawar, N.W.F.P., Pakistan Phone: (091)
840859, 842415Fax: (091)45516
Multan Surij Miani Road, Chungi No.1,Multan,
Punjab, Pakistan Phone: (061) 515061Fax: (061)
515061

40. Quetta 63 B - D, Chaman Housing Scheme, Opposite
Askari Park Quetta, Baluchistan, Pakistan Phone:
(081) 834887Fax: (081) 822297
Islamabad 74-W, Yaseen Plaza, 1st Floor, Blue Area,
Islamabad, Pakistan Phone: (051) 271874-75,824328,
824384, 274376
These offices work under their respective zonal offices
Registered & Corporate Office Is in Lahore 308 -
Upper Mall, Lahore PABX: 5757082-95 Fax: 5711820

41. FACTORIES
Nestle has two factories in Pakistan for the production
of different food items.
One in Sheikhupura near Lahore and other in
Kabirwala near Multan

42. REGIONAL OFFICE

43. INTRODUCTION
Gujranwala Plot No: 144-A, First Floor
Satellite-Town Market, Gujranwala, Punjab,
Pakistan. Phone: (055) 3733415 Fax: (055)
3733415

44. HIERARCHY
REGIONAL
MANAGER (1)
SALES
ADMINISTRATION
EXECUTIVE (1)
AREA SALES
MANAGERS (3)
TERRITORY
INCHARGES (10)
SALES
DISTRIBUTION
STAFF

46. MANAGEMENT

47. CEO
MANAGEMENT DIECTOR
FINANCE MANAGER MARKETING MANAGER PRODUCTION MANAGER
NATIONAL SALES MAANGER
ZONAL SALES MANAGER ZONAL SALESMANAGER ZONAL SALES MANEGER
NORTH CENTER SOUTH
SALES DEPT
A/C DEPT
SALES PROMOTION DEPT
REGONAL SALES MAANGER
SALES DEPT A/C DEPT
AREA SLAES SUPERVISOR
SALES FORCE

48. MANAGEMENT PROCESS
PLANNING ORGANIZING CONTROLLING
LEADING
•Recognition
• R&D
•Plan
•Formulation
•Estimation
•People
•Process
•Situation
•Decentralized
•People oriented
•Motivating
activities
•Comparing of
Manufactured
products

49. Nestlé has very strong flexible liberal
structure with tight internal control with strict
check & balances.
Zonal and regional managers are told budget
limitations & targets guidelines from Vevy
(HQ)

50. SWOT ANALYSIS
STRENGHTS:
 Value added products
 Brand name
 Six brands having
 70% group sales
 R&D department
 Unique features and technologies
 40 & 60% test result criteria

51. Weakness:
Less consumer research in few areas.
Opportunity:
Market expansion by using bio-
technology.
Threats:
 Baby milk action
 New and indirect competitors
 Product acceptance

52. COMMITMENT
The continuous progress and leadership is made
possible through the collective commitment of the tens
of thousands of individual Nestlé employees who, on a
daily basis, work to make this a better planet on which
to live.

53. RECRUITMENT
Each year, number of top young graduates are
recruited. All have strong academic
qualifications, essential language skills &
relevant internships or professional
experience.

54. RECRUITMENT CRITERIA
Graduates with a degree in Business
Administration or Economics with professional
experience.
High degree of adaptability and mobility.
Unquenchable thirst for knowledge.
Superb communication skills.
The ability to assume control anywhere in the
world.

55. TRAINING OF EMPLOYEES
New employees are prepared to gain
experience in sales and marketing-related
activities & other areas of the business.
Activities include:-
 Production,
 Supply chain & information systems,
 Finance & control,
 Purchasing,
 Communication & Market Research.

56. MOTIVATION
Employees get Motivation by:-
 Immediate job satisfaction
 Long-term career development
 Superior pay and benefits
 The personal growth that comes from
experience and training
 Materialistic as well as internal motivation

57. REWARDS & BENEFITS
Health screening/on-site occupational health facilities
Sick pay
25 days' holiday
Mobile phone on a business need basis
Company bonus scheme
Contributory final salary pension scheme
Childcare vouchers (dependant on salary)
Gym facilities at larger sites
Staff shop at most sites
Flex time at some sites

58. LEADERSHIP PRINCIPLES
Their motto is:
"Teamwork with responsible leadership".
Nestlé is people & product oriented.
Value for its stake holder but would not favor
short term profit at expense of long term business
development.
As decentralized as possible.
Concept of Continuous improvement of
activities.

59. Nestlé FAVORS
Flat organization structure
Clear level of responsibility
Function responsibilities
Team with its leader

62. GENERAL INFORMATION
Name of the agency: Regional Sales Office,
Satellite Town, Gujranwala.
Postal address: Plot No: 144-A, First Floor,
Satellite Town Market, Gujranwala, Pakistan.
Postal code and City: 52250.
Country: Pakistan.
Phone: 92-055-3733415, 92-055-3733243

63. Fax: 92-055-3733379
E-mail: nestle_gj_se@brain.net.pk
WWW-address: www.Nestle.com
Contact person: Mr. Ikram Elahi
Function contact person: Sales Administration
Executive
Founding date: April 1997

64. SECURITY AND ENVIRONMENTAL
MANAGEMENT
Different actions like emergency exit signs,
training sessions on safety are taken by the
SEM committee.
SEM training records are updated on monthly
basis. It’s the duty of reporting safety officer
in every region/area.
Department is established for safety policies
according to job description and according to
the sensitivity of area.

65. Goal of safety department is “No Accident” and all
the equipments and tools are working according to
the safety measures.
Department ensures that required medical
surveillance, monitoring, removal, and reporting
responsibilities for applicable exposure standards are
assigned and carried out.
Security and security procedures in every
department is very strict. All the employees have to
work under specific security rules.
Budget is given to SEM committee by the head
office.

66. Human Resource Security
Management Audit
All the employees and contractors are well
informed about their responsibilities and
company’s rules and regulations before they are
hired.
All third-party users are fully aware and are told
their limits i.e. up to that extent they are eligible
and allowed to use the facilities.
All the employees are assigned to perform duties
and responsibilities that they can perform.

67. Third party users are provided those facilities which
they actually deserve.
Job description is provided clearly to understand the
responsibilities in a proper way and to perform up to
required standards.
All the employees have to face interviews that totally
reflect each and everything regarding their personality
and character.
Prospective employees and contractors are asked to
sign agreements that specify what their security roles
and responsibilities are.

68. Third party users are asked to sign the agreements about
their duties and responsibilities as a proof to make sure
that they are fulfilling their promise/duties.
Organizations security role and responsibilities are
according to information security policies in order to
avoid any violation.
Implementation of security policies is according to
security requirements.
Security roles and responsibilities are documented for
the guidance of organizations new associates.

69. All personnel implement our organization’s information
security policy as they are given in-depth information
about our security policies.
Security policies are developed as there is no risk to
face for any sort of un-authorized destruction.
Security events must be reported to the organization in
order to achieve protection and establish security
policies according to requirements.

70. Security roles are not communicated to job
applicants during the pre-employment process
and neither to non-staff members.
Job description is linked with security policies
so they are documented and communicated
properly.

71. ORGANIZATIONAL STRUCTURE
Organizational chart clearly indicates the,
responsibilities, authorities and accountability
for each function.
Employees in the organization has clearly
written job description according to the
designation.
When delegations occurs, agreement is
written with the mutual understanding.

72. HUMAN RESOURCE
MANAGEMENT
Evaluation of the employee is done quarterly in a year.
Wages, salaries and fringe benefits increases with the
working duration of employees in the organization.
Training programs are offered primarily and frequently
to improve the skills of employees.
Company’s policies and procedures are displayed as a
chart in every office of Nestle and they are also
accessible at net

73. BUDGETING AND EXPENSE
CONTROL
Limited budget is given annually to every
office of Nestle’.
If extra budget is required then that particular
office put forward the request to the CEO of
head office and CEO approves the budget
according to the need and situation.
Amount and rate of expenditures are made
according to the budget given.

74. TAXES AND LEGAL OBLIGATIONS
Tax, finance and accounting department is
responsible for all tax reports and payments.
Company has its own multiple distribution
channels which enables company to supply any
critical items.
Before any purchases, comparison market
statement is made and according to the prices in
that statement purchases are made.

75. MARKETING AND SALES
PROMOTION
Nestle knows the specific segment of
the market, its business is attempting
to serve.
It determines the sales of its products
against those of its competitors with
the help of research.

76. LOCATION
Nestle always make sure that all of
its operations are convenient and
easily accessible to its target market.
Product handling is responsibility of
company.

78. PRICING
All the prices are totally based on quality,
services and organization makes sure that
prices should be affordable by all the
customers.

79. [A] Segregation of Duties IC Questions:
Head office payroll department controls paychecks.
Checks are transferred to the banks in respective
accounts of the employees.
[B] General internal Controls:
Accounting system is handled by accounts department.
Finance department approves/reviews bank
reconciliations, monthly financials/P&Ls & reviews
monthly budgets to actual monthly expenditures.

80. Personals of finance department has a
password to access the financial system.
Finance department of Head Office has
custody of blank checks.
Sales operation department of each region
reviews monthly/year end accruals.

81. There are 15 working leaves and 22 official leaves given
to employees in a year.
Every person is responsible for reviewing policies and
procedures for compliance with Commission rules.
[C] Control Over Expenditures:
Purchase requests are made by concerned purchase
department by the head of regional office and then put
forward to the head office for approval.
Venders entered into the accounting system on
contractual basis.

82. Purchase requests matched to invoices when paid &
time sheets approved by supervisors.
Human Resource department of head office approves
the executive directors' bonuses.
Payroll department of head office has custody of
unclaimed payroll checks.
[D] Control Environment Controls:
Environment committee of the factories regularly
manages routine environment issues and review with
the factory management their past performance and
future objectives

83. Termination, detention etc. are the disciplinary
actions taken against employees which depends
on the sever-ness of violation and handled by
legal department.
Strict confidentiality of the names of
employees. Gain it depends upon the sever-ness
of situation.
]E] Commitment to Competence:
Detailed job description is given and it’s revised
time after time.

84. [F] Board Direction:
Annual General Meeting is held every year other then
that it depends on the situation.
[G] Assignment of Authority and Responsibility:
Employees are evaluated according to the company
policies.
[H] Risk Assessment Controls:
Policies and procedures address the safeguarding of
assets as company is very strict about the safeguarding
of assets

85. [I] Communication Controls:
Polices & procedures made available to staff and revised
time to time.
Budget requirements, expenditures etc. reports are
provided to management & board in annual meeting or
when asked by the head office.
There is a process in place for communicating changes
in accounting methods, regulations, and rules.
Policies describe the process for communicating
changes in accounting methods and rules to staff.

86. There are established internal and external
communication channels.
Employees are free to communicate to
any authority. There is no particular
established channel. Authorities are bound
to listen to the employees.

87. [J] Monitoring:
Management periodically reviews the
accounting processes to recommend
changes needed for improvement.
[K] Information system controls:
The financial system password is only
known to the personals of finance
department.

89. PROBLEMS
HRM department is not giving good salaries to the
employees, so employees are de-motivated and don’t
work with the company for very long.
Staff is not as responsible as it should be.
There are not much security measures in the office.
A constant threat to the company’s economic balance
due to unstable government policies.

90. Shortage of certain products like Nestle ghee,
which is a significant demand in the market.
The regional office is not managed properly
e.g. no board is placed to mention the identity
of the office.

91. SOLUTIONS/SUGGESTIONS
Bonus packages and increment in salaries for a
selective level of work and efficiency should be
awarded to attract the employees’ concern.
Staff should be made more responsible by
implementing strict rules and regulations and taking
disciplinary actions against any un-professional
behavior.
Skilled workers of the company should join the
security department to enhance the system.

92. Long term agreements to be signed with
governmental departments.
A small part of the budget should be spent for
the management of the office.
Inventory should be maintained.

93. CONCLUSION
Nestle is a market leader due to different reasons:
 Its price is high against its competitors but it matches
its quality with its competitors.
 Nestle is using its brand name to promote its products
& it’s very popular as compared to its competitors.
 Its packaging is good.
 We can easily find Nestle from any retailer shop.

94.  Due to its advertisement, Nestle attracts more customers
& has very prosperous future if it continues to promote its
products and bring all the possible innovational aspects
using different product line strategies.
 It has always maintained the quality of its products.
 Despite of all the facts, there’s need to maintain the
condition of office and enhance the security.
 Behavior of employees is not professional and every
department should treat equally.

96. • PLANNING
• ORGANIZING
• LEADING
• CONTROLLING
• PROBLEMS
• SOLUTIONS