Transcript Stare Into Time

NESTLE The Global
Giant
Good Food Good Life
Khuram
Shakeel
Abrar
Fahad
Ali Qurashi
Ahmad
Shahzad
Insha
Anjum
083268
083222
083277
081105
081126
Outline
Introduction
Industry Analysis
Business
Purpose
DEEP-LIST
Target Market
Competitive
Positioning
Competitors
Four P’s
Marketing Mix
Financial
Analysis
Conclusion
Other
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Nestlé with headquarters in Vevey, Switzerland
Nestlé is today the world's leading nutrition,
health food company
“Nestlé” is a Swiss-German word which means
“Little Nest” which is its trademark
2 million 31 thousand people employed from
all over the world and 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
Henri Nestlé
established Nestlé
in 1867 in
Switzerland (Vevey
HQ)
His first product was
lactogen formula for
infants by the name
”Farine Lactee”
Figure K e y D a t e s
1866
Foundation of Anglo-Swiss Condensed Milk Co.
1867
Henry Nestlé's Infant cereal developed
1905
Nestlé and Anglo Swiss Condensed Milk Co. (new
name after merger)
1934
Launch of Milo 1938, Launch of Nescafé
1947
Nestlé Alimentana S.A. (new name after merger
with Maggi)
1948
Launch of Nestea and Nesquik
1973
Stouffer (with Lean Cuisine)
1977
Nestlé S.A. (new company name)
1981
Galderma (joint venture with L'Oréal)
1990
Cereal Partners Worldwide (joint venture with
General Mills)
1991
Beverage Partners Worldwide (joint venture with
Coca-Cola)
1992
Perrier (with Poland Spring)
1997
Creation of Nutrition Strategic Business Division
1998
Launch of Nestlé Pure Life
2001
Ralston Purina
2002
Joint venture with L'Oréal
2010
Kraft Pizza
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Nestlé MilkPak Limited 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
DEEP-LIST Analysis
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More the education more will be the awareness
about brand and quality food.
If the income level of people is high then
purchasing power will be high so they will purchase
more
Nestle products are made for people belonging
from all age groups
Both male/female are included equally in its target
market
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If the inflation rate is high then there will be
decrease in purchasing power. so inflation
indirectly affects the company’s sale.
Nation varies greatly in its level and distribution of
income
Changes in major economic variables such as
income, cost of living, interest rate and savings
have a large impact on the market place
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Government regulations to protect interest of
society and from unfair business practices
Unstable political conditions
Law order situation getting worse
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Registered in the stock exchanges of Pakistan
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Consumption behavior of Pakistani people is high
so they consume more goods
As Pakistan is Muslim country so we cannot add
any ingredient which is prohibited in Islam or
which is not “Halal”.
As nestle water is the branded item so the people
who are brand conscious will prefer to use nestle
water .so nestle is focusing more on the posh
areas.
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Technological environment is changing
rapidly
Most dramatic force shaping company’s
offerings and the way product is marketed
Company’s must keep up with technological
changes to match up with its enviroment
Porter’s five Forces Model
Figure P o r t e r ’ s F i v e F o r c e s
Threat of New
Entrants
Bargaining
Power of
Suppliers
Internal
Rivalry
Threat of
Substitutes
Bargaining
Power of Buyer
Table
Impact & signs of porter’s
forces
Sign
Impact
Bargaining power of buyer
High
Negative
Bargaining power of supplier
Low
Positive
Threat of substitutes
Low
Positive
Threat of new entrants
Moderate
Moderate
Internal rivalry
High
Negative
Note:- attractive industry
Nestlé’s mission is to provide the
best food to people throughout the
world.
The Nestlé global vision is to be the leading
health, wellness, and nutrition company in the
world
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Nestlé’s objective Is to consolidate and
strengthen its leading position at the cutting
edge of innovation in the food area in order
to meet the needs and desires of customers
around the world, for pleasure, convenience,
health and well being.
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Haleeb
Trang
Tea Max
Olpers
Milkman
Nestele Milk Pack
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Aquafina
Kinley
Sufi
Gourmet Water
Green Water
Nestle Pure Life
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Divided whole country into north, east, west,
south.
Targeted at every age group
Easily assess ability of product
Improve the brand image with use of these
variables like
◦ Quality
◦ Price
◦ Packaging
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Nestle is targeting mainly on those city in
which density of population is high such as
Lahore, Karachi, Faisalabad etc.
Nestle is also focusing on educated class
because they know the values of health in
life.
Positioning
We position our products
as a high quality product,
consumer focused with
messages like;
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“Who knows your taste better
than us”,
“Nestle ice-cream now at your
door step”;
“Add additional flavors’ to your
life”
Figure N e s t l e B r a n d s
Milk,
dairy
and
chilled
dairy
Bever
ages
Bottle
d
water
Baby
foods
Food
Break
fast
cerea
ls
Choc
olate
&
confe
ction
ery
Milk, dairy and chilled
dairy
Beverages
Bottled water
Baby foods
Food
Breakfast cereals
Chocolate &
confectionery
•MILKPAK, NESVITA, NIDO, NESLAC, EVERYDAY, NESTLE
DAHI, FRUIT YOUGURT, RAITA, MILKPAK CREAM
•NESCAFE, MILO, NESTLE FRUITA VITALS
•NESTLE PURE LIFE
•CERELAC
•MAGGI 2-MINUTES NOODLES
•NESTLÉ CORNFLAKES, NESTLÉ KOKOCRUNCH
•KITKAT, KITKAT CHUNKY
MILKPAK, NESVITA, NIDO, NESLAC,
EVERYDAY, NESTLE DAHI, NESTLE
FRUIT YOUGURT, NESTLE RAITA,
MILKPAK CREAM
NESTLE MILKPAK For A Stronger Home
Bones strong tou mein strong!
NIDO
NESTLE EVERYDAY
Mazaidar chai har bar
Perfect cup of tea, every time
Nestle Fresh n Natural Dahi
Sehat Mehfooz
NESTLE Fruit Yogurt
NESTLE Raita
Sehat bhara rawaaiti mazaa
NESTLE Cream
Mazaidar Riwayat
NESCAFE, MILO, NESTLE
FRUITA VITALS
NESCAFE
Jaago!
Come Alive!
MILO
NESTLE FRUITA VITALS
Rise & shine with NESTLE FRUITA VITALS
NESTLÉ FRUITA VITALS Orange Juice
NESTLÉ FRUITA VITALS Apple Nectar
NESTLÉ FRUITA VITALS Red Grape Nectar
NESTLÉ FRUITA VITALS Pineapple Nectar
NESTLÉ FRUITA VITALS Chaunsa Nectar
NESTLÉ FRUITA VITALS Guava Nectar
NESTLÉ Mango drink
NESTLÉ Orange Mango drink
NESTLE PURE LIFE
Pakistan’s Favorite Water
CERELAC
CERELAC
Bharpoor nashvonuma!
Sehatmand mustakbil ka behtrin aghaz!
Best start to healthier future!
MAGGI 2-MINUTES NOODLES
MAAGI 2-Minutes Noodles
Main, ami aur MAAGI, fun kay real
parteners
NESTLÉ CORNFLAKES, NESTLÉ
KOKOCRUNCH
NESTLÉ CORNFLAKES
NESTLÉ KOKOCRUNCH
KITKAT, KITKAT CHUNKY, POLO
KITKAT AND KITKAT Chunky
Have a break, have a KITKAT
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Milk reception
Mixing
Heating & cooling
Standardization
Pasteurization
UHT-treatment
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Profit Earning:
Customer satisfaction:
TRATIGIES FOR FIXING THE PRICE:
In nestle prices are set on cost basis as given
below:
◦ Price = Cost + Profit
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Break even or Target price:
◦ Per Unit Price = variable cost + fixed cost / units of
sale
South Zone
Central Zone
North Zone
Islamabad and
north
outstations
Peshawar
Jhelum
Lahore
Faisalabad
Gujranwala
Multan
Sahiwal
Karachi
Hyderabad
Quetta
Sukker
“Our ambition is to achieve a high level of customers satisfaction
through low cost ,brightly Efficient operations driven by value creation
and continuous improvement”
Our mission is to:
Optimize and consolidate
resources and processes for
a low-cost but efficient
Develop and manage
simplified and effective
supply network to achieve a
high level of service
Create a continuous
improvement culture driven
by performance measures
and reward
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Television
Radio
News Paper
Bill Board
Hoarding etc.
Sometime company also makes free sampling,
held stalls at different programs like Health
Mela.
ILC: Industry Life Cycle
CLC: Company Life Cycle
PLC: Product Life Cycle
Figure P L C / C L C / I L C
NESTLE Company (CLC)
NESTLE Products
Sales
Profit
($)
Industry (ILC)
Sales
Profit
Loss
($)
Development
Introduction
Growth
Maturity
Decline
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Quality products
Packaging
Latest technology
Research and development
Distribution network
Innovation
Better equipment
Partnership with suppliers
Strength, weakness, opportunity, threat
Figure S t r e n g t h v e r s u s T h r e a t
Strong supply chain network
Strengths
Compete more
aggressively with Olpers
and haleeb using its
strong supply chain
network
Weaknesses
Opportunities
Haleeb and Olpers
are growing very fast
Threats
Figure S t r e n g t h v e r s u s O p p o r t u n i t y
Distribution networks
throughout the country
Strengths
Increase the scope of its
product towards smaller
cities of pakistan
Pakistan is the
seventh largest
producer of milk
Weaknesses
Opportunities
Threats
Figure W e a k n e s s v e r s u s T h r e a t
Strengths
Feasibility of new
products e.g. Nestea
Weaknesses
Re launch Nestea with
more features and
strong marketing
(Advertising)
Market segment
growth could
attract new
entrants
Opportunities
Threats
Figure W e a k n e s s v e r s u s O p p o r t u n i t y
More advertising of Milkpack Brand
Strengths
Weak marketing
(Advertising) of MilkPak
Weaknesses
Nestlé MilkPak has entered
the cold dairy market by
launching Nestlé plain
yogurt and now fruit
Opportunities
Threats
Table
IFE Matrix
Key Internal Factors
(Strengths)
Weight
Rating
Weighted
Score
Strong brand image and market pull
0.06
4
0.24
Large scale organization, Multinational
0.04
3
0.12
Distribution networks throughout the country
0.07
3
0.21
Quality Products
0.08
4
0.32
Environment Friendly
0.06
3
0.18
Strong supply chain network
0.05
3
0.15
Easy to approach outlets
0.04
4
0.16
Focus on research and development
0.08
4
0.32
Arrangement of events
0.06
3
0.18
Key Internal Factors
(Weaknesses)
Weight
Rating
Weighted
Score
Feasibility of new products e.g. Nestea
0.05
1
0.05
Relatively a new company in comparison to its rivals
0.04
2
0.08
Low levels of inventory maintained
0.05
2
0.10
Low sales margins due to highly value added products
0.06
2
0.12
Weak marketing (Advertising) of MilkPak
0.08
1
0.18
No credit sales
0.05
2
0.10
Dependency on others (govt. & sponsors)
0.06
2
0.12
Total
2.63
Table
EFE Matrix
Key Internal Factors
(Opportunities)
Weight
Rating
Weighted
Score
Pakistan is the seventh largest producer of milk
0.08
4
0.32
Average yield of Pakistani animals with Europe and USA
0.09
3
0.27
Pakistani milk market is 20 billion liters
0.08
4
0.32
Nestlé MilkPak has entered the cold dairy market
0.06
3
0.18
Capitalize on its superior quality milk
0.07
3
0.21
The coffee brand
0.09
4
0.36
Credit policy can be adopted to increase sales
0.05
2
0.10
Key Internal Factors
(Threats)
Weight
Rating
Weighted
Score
Price fluctuations, Raw material are imported
0.05
2
0.10
The uncertainty of economic conditions
0.06
3
0.18
The present economic crisis in the world
0.05
4
0.20
Competition with Nestlé’s owns smuggled brands
0.06
2
0.12
Market segment growth could attract new entrants
0.07
3
0.21
Decrease in purchasing power of the people
0.06
2
0.12
Effect of Seasonality’s upon sales
0.05
1
0.05
No entry barrier
0.08
3
0.24
Total
2.98
Figure A n s o f f ’ s E x p a n s i o n G r i d
Market-penetration
strategy
Product
development
strategy
Market development
strategy
Diversification
strategy
ES average is -4.125
 FS average is 4.72
 CA average is -1.83
 IS average is 4.71
 Directional vector coordinates
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◦ X-axis : 4.71+(-1.83)=2.88
◦ Y-axis : 4.72+(-4.125)=0.595
Figure S p a c e A n a l y s i s M a p
Conservative
Financial
Strength
Market penetration
Market development
Product development
Related diversification
Aggressive
Strategic
postures
Backward, forward, horizontal
integration
Market penetration
Market development
Product development
Diversification (unrelated or
related)
Competitive
advantage
Industry
strength
Defensive
Competitive
Retrenchment
Divestiture
Liquidation
Backward, forward, horizontal
integration
Market penetration
Market development
Product development
Environmental
stability
Figure B C G F r a m e w o r k
High
Nestle Pure Life Water
Prepared Foods
Confectioneries
Fruit Drinks
Milk pack
% age
of
market
Growth
Milk Products
Nestle Ice Cream
Chocolate Drinks
Coffee
Nestle Milo
Low
High
Nestle corn flakes
Market Share
Low
Figure G r a n d S t r a t e g y M a t r i x
RAPID MARKET GROWTH
Quadrant II
Quadrant I
Market development
Market penetration
Product development
Horizontal integration
Divestiture
Liquidation
Market development
Market penetration
Product development
Forward integration
Backward integration
Horizontal integration
Concentric diversification
WEAK
COMPETITIVE
POSITION
STRONG
COMPETITIVE
POSITION
Quadrant III
Quadrant IV
Retrenchment
Concentric diversification
Horizontal diversification
Conglomerate diversification
Liquidation
Concentric diversification
Horizontal diversification
Conglomerate diversification
Joint ventures
SLOW MARKET GROWTH
Nestle Pure Life
20%
30%
Nestle
60%
Sparkle
Others
Figure N E S T L E S a l e s B y P r o d u c t
Group
Beverages
Milk Products & Ice Cream
Prepared Food
Chocolate & Confectionery
Petcare
Pharmaceutical Products
12%
6%
26%
12%
18%
26%
Chart
NESTLE Pakistan Sales
Sales (in million of rupees)
Sales (in million of rupees)
12857
2004
17142
2005
22031
2006
28235
2007
34184
2008
41156
2009
Millions
Chart
0
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0
P r o f i t A f t e r Ta x & p e r c e n t a g e
of Sales
33%
0.003005
8%
7% 0.001363
6%
0.001153
0.000988
0.001805
6%
0.001553
7%
5%
0%
2004
2005
2006
Profit After Tax
2007
2008
Percentage Of Sales
2009
Millions
Chart
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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0
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0
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0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Operating Profit & Percentage
of Sales
33%
12%
0.001547
13%
0.002121
12%
0.00264
13%
0.003511
12%
0.004105
0.005575
14%
0%
2004
2005
2006
Operating Profit
2007
2008
Percentage Of Sales
2009
Millions
Chart
0
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0
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0
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0
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0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Dividend Payout Ratio
661%
628%
600% 595%
562%
529%
496%
463%
430%
415%
397%
364%
331%
0.002721 298%
265%
250%
231%
0.001882
198%
165%
150%
132%
0.001134
99%
100%
0.000679
66%
50% 0.000453
33%
0.000227
0%
2004
2005
Dividend
2006
2007
2008
Dividend Payout Ratio
2009
Chart
30%
Gross Profit Ratio
29%
28%
28%
28%
28%
26%
26%
28%
24%
2009
2008
2007
2006
Gross Profit Ratio
2005
2004
Chart
14%
Operating Profit Ratio
14%
13%
12%
12%
12%
12%
12%
12%
11%
2009
2008
2007
2006
Operating Profit Ratio
2005
2004
Chart
10%
P r o f i t A f t e r Ta x R a t i o
7%
5%
5%
6%
6%
7%
8%
0%
2009
2008
2007
2006
Profit After Tax Ratio
2005
2004
Chart
I n v e n t o r y Tu r n o v e r R a t i o
12
10
9.2
10.3
9.4
9.3
7.7
8
7.2
6
4
2
0
2009
2008
2007
2006
2005
Inventory Turnover Ratio
2004
Chart
3
To t a l A s s e t Tu r n o v e r R a t i o
2.3
2
2.1
2
2
2.4
2.7
1
0
2009
2008
2007
2006
2005
Total Asset Turnover Ratio
2004
Chart
Price Earning Ratio
60
40
20
38.9
45.2
34.8
18.8
30.3
23.9
0
2009
2008
2007
2006
Price Earning Ratio
2005
2004
Chart
Return On Capital Employed
60%
40%
40%
20%
20%
26%
26%
37%
44%
0%
2009
2008
2007
2006
2005
Return On Capital Employed
2004
Chart
M a r k e t Va l u e P e r S h a r e
1800
2000
1500
1246
1334
1045
1000
770
520
500
0
2009
2008
2007
2006
Market Value Per Share
2005
2004
Chart
1.5
Current Ratio
1.1
1.1
1
0.9
0.9
1.1
1.1
0.5
0
2009
2008
2007
2006
Current Ratio
2005
2004
Chart
Interest Cover Ratio
25
20
15
22.5
10
5
10.5
10.1
5
5.4
5.5
2008
2007
2006
0
2009
Interest Cover Ratio
2005
2004
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Enhance its investments in Pakistan
Latest milk plant with cost of $70 million
within couple of months
Investing $70 million in milk production by
increasing capacity of milk powder by 40,000
tones annually
◦ $44 million would be injected in Sheikhupura
factory, $12 has been allocated for expanding milk
collection, and $31 million in bottled water plants
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Nestle is a market leader
Higher price against competitors but matches
with its quality
Its packaging is good.
We can easily find Nestle from any retailer
shop
NESTLE must continue promoting its products
as it is doing now
It has always maintained the quality of its
products
Behavior of employees is not professional and
every department should be treated equally
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Marketing policies in line with International
Code and Resolutions
Nestle Milk Pack should concentrate on all
age groups
Try to create strong brand loyalty among
customers
keep aware of its competitive environment
Improve their customer services
Try to exploit the loopholes of their
competitor’s products.
Creating some attractive jingle like Haleeb:
Chai banaye khoob haleeb…..
We would welcome your
questions