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Presentation Presented By: Passion of Finance

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STRATEGIC GOALS OF COMPANY To be the best & quality brand. To build mutual trust with consumers, governmental authorities and business partners. To ensure continuous improvement. Conservation of natural resources and minimization of waste. To establish the benchmark for good business practice.

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Employing new technologies and processing. To be the leading FMCG company around the world. Measuring the cost and benefits to business of its activities. To maintain and respect all applicable laws. STRATEGIC GOALS OF COMPANY (CONTD)

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PORTER FIVE FORCES MODEL THREAT OF NEW ENTRY The food processing industry is very large and competitive. Nestle has obtained a considerable share of the market. As the industry is growing so new entrants have potential in the market. THREAT OF SUBSTITUTES Nestle is afflicted with the threat of substitute goods. Find new ways to improve its products and generate new sources of growth. Nestle has focused on the health and wellness aspects of its products to maintain its competitive edge in the market

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POWER OF SUPPLIERS With more brands the switching cost is low as buyers have increased choices. The power of suppliers is stronger than powers of buyers Nestle prefers to create and preserve long term relationships with its suppliers. POWER OF BUYERS Previously the buyers have only one choice that was K& Ns Now, the buyers have more choices now with the entry of new brands. There is a cut throat competition and each of them is striving for its market share. Customers have a large amount of bargaining power regarding to their consumption. PORTER FIVE FORCES MODEL (CONTD)

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RIVALRY This is very high in this industry There are many promotions and marketing campaigns capture the market share. Nestle was facing strong competition at the national and regional level. As long as these companies continue striving to one up one another, consumers will continue to enjoy ever-improving product lines PORTER FIVE FORCES MODEL (CONTD)

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POLITICAL AND LEGAL FACTORS Taxation laws Labor laws Foreign trade regulations Political instability ECONOMIC FACTORS Inflation rate Economic growth rate Unemployment PEST ANALYSIS

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SOCIAL FACTORS Health consciousness Demographic trend Work life quality Lifestyle changes TECHNOLOGICAL FACTORS New products Research and Development New communication technology PEST ANALYSIS (CONTD)

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GOALS FOR NES CHICK To create awareness about our product to at least 50% of the target market within three months of launch. To capture 60 % of target market within 1 year by promotional activities. To make good relations with our customers. To Open different outlets so that accessibility of our customers can be increased.

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SWOT ANALYSIS OF NESTLE STRENGTHS Brand image. Innovative and attractive marketing strategies. Capability of acquiring weaker firms by throwing them out of competition. Major shareholder in the food industry of Pakistan. Aggressive Marketing. Strong supply chain network

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WEAKNESS The target market of Nestle MilkPak is upper middle and high class. Low advertising and marketing. Substitutes in market which are giving the same quality on cheaper prices. SWOT ANALYSIS OF NESTLE

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OPPORTUNITIES The overall milk market in Pakistan is 20 billion liters, out of which processed milk contributes only 3 million liters. Nestl MilkPak along with other processed milk businesses contributes only 2% to this large market. To expand the cold dairy products range, Nestl fruit yogurt is the latest addition to this group. The cold dairy market offers many opportunities for the company which can capitalize these products by banking on its superior quality milk. The coffee brand also offers many opportunities for the company to Expand by tuning the taste of the masses towards coffee. Credit policy can be adopted to increase sales

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THREATS Uncertainty of economic conditions. Present economic crisis. Effect of Seasonalitys upon sales. Market segment growth could attract new entrants. Economic slowdown can reduce demand. Taste of consumer has already developed which is hard to change.

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THE MATCHING STAGE

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More market penetration through effective sales force. To develop and to promote dairy products. Create awareness among target market. To create online system for retailers or big shops to make order easily OS STRATEGIES

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OW STRATEGIES Availability of quality products in our all outlets Availability of products in rural areas as well To increase sales of confectioneries items through more credit sales to retailers to increase their profit margin

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ST STRATEGIES To make logistics strong by market development. Related diversification helps to expand business globally.

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TW STRATEGIES Strong advertisement campaigns better than competitors. Increase promotional activities with more web development. To fulfill and participate in social responsibility.

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Financial Strength Nestles net sales increased by 230% in 2013 as compared to 2012 Net profit increased by 94% in 2013 as compared to 2008 Debt equity ratio changes from 63:37 to 66:34 Price earnings ratio in 2013 was 18.8 as compared to 2012 38.9 Return on capital employed increases by 40% Average financial strength.

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Industry Strength Increase in consumer food industry by 16%. All companies contribute only 6% to processed milk market. Market segment growth has attracted new entrants to increase profit potential. Due to ease of entry in market, Engro foods, Shezand foods and ShakarGanj are properly utilizing their resources. Average Industry Strength.

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Competitive Advantage Nestle enjoys strong customer loyalty. Quality product distribution networks in country. Nestle extended product life cycle is being ensured due to quality brand extension strategy. Nestle product are market leaders in many product categories. Average competitive advantage.

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Environmental Stability Economic slowdown can reduce the demand. Fluctuating rate of inflation in the country. Price range of competing products. Average Environmental Stability.

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SPACE MATRIX

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THE DECISION STAGE

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Alternative Strategies PrioritiesStrategiesApply 1 Back ward integration 2 Forward integration 3 Horizontal integration 4 Product Development 5 Market Penetration 6 Market Development 7 Related Diversification 8 Unrelated diversification X 9 Retrenchment X 10 Divestiture X 11 Liquidation X

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Making it sure that customer get Quality products We will give Energy saved Refrigerator to big retailers and shopping malls. Producing a informative and Persuasive kind of advertisement by following the Aida Plan. Launching a website which will be user friendly and secure for online transactions. Availability of products in rural areas to grab the maximum share. To launch various campaigns and seminars. To keep our price comparatively low to have the maximum share of market ACTION PLAN

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Having a good sale force which can effectively sell our products. Retailers believe on our products that customer will buy it because of quality and low price Our sale should reach to this extent. Our market share should be this 30% Increase the customer loyalty which they have on Nestle Brand. Having a unique position in distribution channel. Be the market leader in the SBU as we are in other products. Annual objectives

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Recruiting a good staff in sales Managing SBU either taken from outside market or internal job rotation and incentives for best seller. Having a good up-to-date Freezing vans to deliver our products with safety especially when delivering to long distance. POLICIES

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