EXECUTIVE SUMMARY

Nestle is a multinational corporation , headquarted in Switzerland, is one of the largest food

company in the world measured by revenues. Though various controversies revolves around
this multinational company, one of the most confusing and prolonged one is the Breast
milk substitute infant formula. This controversy has turned up the heads of millions of
people all around the world, as several infants died in developing countries after using
Nestles breast subsitute milk for infants. Babies died because their mothers were not literate
enough to use the prodcut. They didnt even have the proper means of making that infant
formula because of shortage of various basic necessties in developing countries such as clean
water, electricity, fuel and etc.
Leading organizations all around the world took part in the boycott of Nestles products
during the late 1970s. Nestle admitted its mistake of doing aggressive marketing in
developing countries and obeyed to follow the code of conducts in its marketing practices,
recommended by World Health organization. The boycott was first initiated by USA, which
gain its momentum worldwide. Also in Pakistan this controversy gained ground when one of
the employee of Nestle , accused the company that it uses malpractices to promote its infant
formula. Several pamplets named as Baby Killers were distrubuted in UK and Nestle sued
the publisher of German-language translation and after two year trials court advocated in
favor of Nestle because they could not be held responsible for the infant deaths in terms of
criminal law.
The controversy did exist even after the company accepted the codes of WHO. Some
organizations condemned Nestle, that it has been selling free samples to the mothers of new
born children while they are in hospital, and the family has to purchase new packets from the
market because the intial dose of it has made their children addictive to it. However Nestle
denied such allegations.
The International Nestl Boycott Committee, the secretariat for which is the UK GROUP
Baby Milk Action, currently coordinates the Nestl boycott. Company practices are
monitored by the International Baby Food Action Network (IBFAN), which consists of more
than 200 groups in over 100 countries.
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Though this controversy had badly impacted the image of Nestle, but still Nestle is one of the
leading multi national corporation and has its huge market share all over the world.

INTRODUCTION OF NESTLE:
Nestle is the world's leading nutrition, health and wellness company. "Good Food, Good
Life" is the promise we commit to everyday, everywhere to enhance lives, throughout life,
with good food and beverages.
Nestle is a Swiss multinational nutritional and health-related consumer goods company
headquartered in Vevey, Switzerland. It is the largest food company in the world measured by
revenues.
In 1866, the first European condensed milk factory was opened in Cham, Switzerland, by the
Anglo-Swiss Condensed Milk Company.
In Vevey, Switzerland, our founder Henri Nestl, a German pharmacist, launched his Farine
lacte, a combination of cows milk, wheat flour and sugar, saving the life of a neighbours
child. Nutrition has been the cornerstone of our company ever since.
Henri Nestl, himself an immigrant from Germany, was instrumental in turning his
Company towards international expansion from the very start. We owe more than our name,
our logo and our first infant-food product to our founder. Henri Nestl embodied many of the
key attitudes and values that form part and parcel of our corporate culture: pragmatism,
flexibility, the willingness to learn an open mind and respect for other people and cultures.
Peter Brabeck-Letmathe, Nestl Chairman
Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in
1866 by brothers George Page and Charles Page, and Farine Lactee Henri Nestle, founded in
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1866 by Henri Nestl. The company grew significantly during the First World War and again
following the Second World War, expanding its offerings beyond its early condensed milk
and infant formula products. The company has made a number of corporate acquisitions,
including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971,
Rowntree Mackintosh in 1988 and Gerber in 2007.
Nestl has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss
Market Index. It has a secondary listing on Euro next.
Nestl's products include baby food, bottled water, breakfast cereals, coffee, confectionery,
dairy products, ice cream, pet foods and snacks. 29 of Nestl's brands have annual sales of
over 1 billion Swiss francs (about $ 1.1 billion),
Nestl has around 450 factories, operates in 86 countries, and employs around 328,000
people. It is one of the main shareholders of LOreal, the world's largest cosmetics company.

Strategic Purpose:
Mission Statement:
"Nestl is the largest food company in the world. But, more important to them is to be the
world's leading food company.

At Nestl, 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, Nestl products bring
consumers the vital ingredients of taste and pleasure.
Vision statement:
Nestl aim is to meet the various needs of the consumer every day by marketing and selling

food of a consistently high quality. The confidences that consumers have in our brands is a
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result

of

our companys many years of knowledge in marketing, research and development, as well as
continuity consumers relate to this and feel they can trust our products.
In particular, we envision to;
Lead a dynamic, motivated and professional workforce proud of our heritage and positive
about the future.
Meet the nutrition needs of consumers of all ages from infancy to old age, from nutrition
to pleasure, through an innovative portfolio of branded food and beverage products of the
highest quality.
Deliver shareholder value through profitable long term growth, while continuing to play a
significant and responsible role in the social, economic, and environmental sectors of
Pakistan.
Goals of Nestle:
The main goals as described by Nestle are as follows:
Good Food, Good Life, the key to health, nutrition and wellness. With over 140
years of experience and expertise, we take great pride in bringing you the best
products because happy, healthy consumers are important to us. We develop our
products keeping your preferences, tastes and needs in mind. We understand
that you, along with millions of other consumers, know that you can trust our
products to deliver purity,

quality, convenience and nutrition. Our products

are carefully aligned to Pakistani tastes and needs. We're always trying hard to
develop new products and improve existing ones, and serve our consumers
better. That's why through constant renovation and innovation we're always
testing or launching value added products and making them available in sizes
that will suit every requirement. So explore the world of health with Nestl
products, and find out what suits your family's needs

Objectives of Nestle:
Marketing objectives are compatible with the overall corporate objectives of nestle.
Companys objective is to be the worlds largest and best branded food manufacturer while
insuring that nestle name is synonymous with the products of the highest quality.
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Organization Chart

CHAIRMAN
P.Barbeckletmathe
CEO
Corporate
governance

P.Bulcke

D.P FRICK

Operations
J.Lopez

Pharma &

Corporate
communications

cosmetics HR

R.Ramsauer

F.Castaner

Finance &
control

SBUs marketing
&sales

Innovation
technology & R&D

J.Singh

W.Bauer

W.Bauer

Nestle nutrition

Nestle waters

R.T.Laube

J.J.Harris

Nestle
Professional
M.Caira

Zone EUR:
EUROPE

Zone AOA:
ASIA/AFRICA

Zone AMS:
Americas

L.Freixe

F.Van Dijk

L.Cantarell

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Environment:
In line with Nestl's global commitment, Nestl Pakistan is dedicated to playing its role in
helping to protect the environment.
We comply with the Environmental Act (1997), and try to ensure that at every stage of our
operations, the environmental impact is minimal.
Learn more about our Responsibility to the Environment projects:
Our Environmental Commitment in Action:
Our environmental commitment extends to every part of our value chain.
Thus, at the raw materials stage, we support sustainable agricultural and dairy farming
practices, including environmental protection.
When it comes to production, all our factories try to maximize eco-efficiency, i.e. increase
production while minimizing resource consumption, waste and emissions.
Our factories are equipped with complete testing and monitoring facilities for waste and air
emissions.
To eliminate air pollution, we have stopped using heavy fuel oil in our factories, which are
now run on clean natural gas. This has reduced our emissions into the atmosphere to well
below the legal limits.
Our Sheikhupura & Kabirwala factories have elaborate water treatment systems to prevent
wastewater from polluting the environment.
In 2005, we upgraded our wastewater treatment plants in both factories. That's not all; we are
continually reducing our consumption of raw water per ton of production.
Irresponsible packaging can have a heavy impact on the environment. To reduce the amount
of material used without jeopardizing the safety and quality of our products, we are always
working on new packaging solutions that have minimal weight and volume and can be easily
recycled.

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We even operate a collection system for used packaging. Solid waste is collected at source
and then reused, recycled or disposed in an environmentally friendly way.
Natural gas incinerators at our Sheikhupura & Kabirwala factories are used to safely dispose
of material that cannot be recycled & dumped.
Our factories have environment committees to manage routine environment issues and
review performance. Environmental impact assessment is done in advance for every new
project and measures are adopted to minimize adverse impacts on the environment.
Our employees regularly undergo training to inculcate awareness about environment-friendly
practices.

Managerial Implications:
The problems faced by Nestle in todays world are the claims faced by it as being charged
with the responsibility of violating the International Marketing Codes. Nestle claims that I
is doing nothing wrong and unethical in the way it markets is baby foods around the world.
Baby milk action has raised the case of Syed Aamar Raza who has publicizes evidence of
Nestle malpractice in Pakistan as well. It has been claimed that company marketing is
causing unnecessary deaths and suffering of babies, largely among poor because they do not
use the proper amount of powder in order to save some volume for future use which causes
great danger to baby life.

Corporate Social Responsibility:

Nestle believes that every single company, no matter where in the world it operates, ought to
be fully integrated into the local social, cultural & economic life. Company must be good
corporate citizens, and give back to the societies to which it belongs.
There are two ways of fulfilling the responsibility and practicing corporate Social
Responsibility:
1- Through social investments: giving to charities, leading and supporting cultural or
welfare initiatives.
2- Through the realization that businesses create social and environmental impacts, both
positive & negative, through the daily operations of their value chain.

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The operations of Nestle throughout the world are committed to making full use of the above
tools. Thus Nestl people everywhere are involved in the many programs and projects we
have designed to strengthen local communities and nations.
Nestle is heavily involved in projects relating to its areas of expertise, such as nutrition,
education & research, health projects, and agricultural assistance. In times of crisis Nestle is
amongst the first on the scene to help with humanitarian relief aid and food donations.
To help culture & society flourish, Nestle does its best to encourage a host of other activities:
they support charities, education and training initiatives, art and cultural events, sport events
and HIV/AIDS prevention. Following are the major contributions of Nestle in being social
responsible:
Education
Nestl Pakistan is involved in a wide range of programs and projects intended to improve the
lives of underprivileged Pakistanis.
Our efforts are focused on:
1- Social Rehabilitation and education advancement:
To help improve education in rural areas, they undertook the rehabilitation of several primary
and middle schools, focusing especially on schools for girls.
In 2004, in partnership with an NGO, they adopted a school in Pindi Dhallon, Sheikhupura,
and achieved such an improvement of educational facilities, including teaching aids and
teacher training, that school attendance doubled.
Three schools were rehabilitated in 2004-05, and also donated over 100 computers to schools
in poor rural and urban community. (1)
2- Research and Development Initiatives:
In the 21st century, no country can hope to progress without a strong commitment to
scientific training and research.
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Demonstrating our investment in Pakistan's long-term future, they have committed to help set
up a School of Science and Engineering at the world-renowned Lahore University of
Management Sciences (LUMS).

Earthquake Relief:
1- The Shocks:
In October 2005, the biggest natural calamity in our history struck Pakistan. Thousands died
and millions were left homeless after a massive earthquake hit mountainous northern areas.
In step with the rest of the nation, Nestl Pakistan responded immediately, putting its
infrastructure and resources to work in the affected areas.
A) First Responses:

When the earthquake struck, Nestl Pakistan responded instantly, even before the magnitude
of the disaster had dawned upon the nation. They immediately donated food and beverage
items.
Within two days, they had established a crisis committee under the supervision of Managing
Director. The same day, the management team left to visit the affected areas, and by 11
October, the first six Nestl trucks left factories, bearing bottled water, powdered and UHT
milk and ready-to-cook MAGGI noodles. (2)

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Instead of burdening the government and relief agencies, they aggressively

reactivated their own shattered distribution channels to bring supplies to the people who
needed them most and established six camps to distribute relief goods.
Despite blocked roads, grave logistical challenges & an atmosphere of fear
and suffering, nestle teams, consisting of about forty Nestl employees and distributors, went
out and distributed Nestl products to the affectees.
Within two days Nestle teams reached the worst-hit areas around Muzaffarabad, Bagh and
Mansehra. They worked in collaboration with the Pakistan Air Force and arranged for
supplies to be airdropped to the most inaccessible areas.
Other teams of Nestl volunteers supported relief work undertaken by other agencies around
the affected areas.
They also distributed 80 trucks of goods, worth Rs 20 million. Two 10-ton trucks of drinking
water were dispatched to Muzaffarabad Hospital, and volunteer teams ensured that goods
were distributed fairly and efficiently to those who needed them most.

B) Aftermaths:

After the crisis came a time for rebuilding shattered lives. Among the reconstruction efforts
some are the following initiatives:

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They have allocated an amount of Rs 20 million, raised through employee

contributions, matching grants and contributions from other Nestl markets. This
amount is to be used to adopt and reconstruct a model village in Azad Kashmir.

They also intend to build an orphanage in the affected areas for the hundreds of
children who lost their parents in this disaster.

Nestle is initiating a livestock health improvement program to help the locals rebuild
their shattered lives.

The parent company, Nestl SA has donated an additional Rs 16 million for

reconstruction and rehabilitation work.

C) Pitching:

Nestl employees worked tirelessly to bring aid to earthquake victims.

Nestl employees donated Rs 3.3 million from their own salaries.

Nestl employees in other countries also stepped forward and donated to the Nestl
relief fund.

Five teams of staff volunteers worked day and night in the affected areas to ensure
that relief goods got where they were needed.

A medical detailing team worked with the students of King Edward Medical
University, Lahore, to collect medicines worth Rs 175,000.
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Society:
Taking the Nestl concept of corporate Social Responsibility to heart, they are deeply
involved in social investment and humanitarian aid.

They are committed to Pakistan's long-term betterment, and strictly follow the code of
corporate governance.

They deal fairly with stakeholders.

They serve their consumers through safe, high quality products & communicate with
them responsibly.

They benefit consumers by spreading awareness about healthy nutrition and lifestyles
as well as constantly developing or improving existing products for health, nutrition
and wellness.

Nestle is actively involved in several social action programs (SAPs) to improve the lives of
our country's under-privileged people. Nestle offer generous financial support to hospitals
and organizations that are dedicated to providing services to the poor. Only recently, they
donated a mobile dispensary to APWA for its medical outreach program in a remote
community near Hub, Sindh. They have always responded generously with assistance to
victims of natural disasters, such as floods, earthquakes and droughts.
Partnership for success:
In efforts to provide pure, high quality milk to consumers in distant towns, Nestl entered
into an unprecedented partnership with local farmers. A complex network of collection
centers ensures that no farmer has to go far to deliver his daily produce. His payment is
prompt and transparent. Advanced chilling systems are in place so as milk travels to factories
in Sheikhupura and Kabirwala, its quality is not degraded.
To improve the quality of milk and the lives of suppliers, Nestle have established a unique
technical assistance team that trains farmers in modern techniques. The milk collection
system has an economic and social impact far beyond the farmers themselves. Through this
Nestle has created hundreds of jobs, instituted a communications and transport network.
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More than 900,000 farmers and their dependants have been directly affected by milk
purchases.
Today, 14 years after Nestl first entered the milk district in force, the hard work and
determination of Nestls milk collection & technical assistance teams and their dedication to
Corporate Social Responsibility have raised the bar for dairy concerns in Pakistan
Safety, Health and Environment Policy:
Nestl Pakistan Ltd. is one of the leading Food and Beverage Companies and aims to provide
consumers with the best quality food products by incorporating safe and environmentally
sound practices into its daily business activities. Their commitment to sustainable
development will be accomplished by integrating occupational safety, health and risk
management programs at all workplaces to provide a healthy and safe work environment for
employees, contractors and Corporate Internal audit: Visitors, Exercising this commitment
and reflecting its benefit to the community remains central to business strategy for today and
tomorrow.

In the process of transforming raw material into finished products, Nestle aims to
make the best possible use of them by minimizing wastage, adopting safe working methods,
efficient use of natural resources and minimizing the impact on the environment. Nestl
Pakistan Ltd. is also committed to communicate Safety, Health and Environmental
Performance to its stakeholders. (6)

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Legal Responsibility:
Corporate Governance Principles:
We are dedicated to following the best practices laid down by our parent company, Nestl
SA. We have implemented the Corporate Governance Principles established by Nestl SA,
covering four core areas:

Rights and responsibilities of shareholders

Equitable treatment of shareholders

Duties and responsibilities of the board of directors

Disclosure and transparency

Recognizing the need to maintain transparency and verify the application of corporate
standards, Nestl Pakistan has established an internal audit department that monitors
administrative and operational functions throughout the company. Thanks to its operations,
we can be assured that adequate internal controls are in place, management information is
reliable, resources are used effectively, and company assets are safeguarded.
A Quiet revolution:
In 2005 Nestle restructured agricultural services so that they now consist of over thirty fulltime agronomists, vets and agricultural engineers to help the farmers of the Punjab with their
milk production. Yet there is another crucial stakeholder in every milk-producing farm: the
farmer's wife.
Nestle has created seven teams of three women each, all trained vets, sociologists and
specialists in animal husbandry.
Their task is to meet farmers' wives and empower then through training in milk production,
animal husbandry, and hygiene, and to give them an understanding of Nestl's milk collection
system. In effect, there's a quiet revolution going on in Pakistan's milk district. (9)

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Helping the farmer

Improving Feed:
Even before calling Nestl in, Milkpak Ltd. had tried to ensure that milk cows were given
fresh fodder during the summer. Nestle teams are always prepared to offer practical advice.
They have planted a variety of fodder crops, which they demonstrated to farmers on field
days. Nestle gives stress on the importance of giving cattle enough water, and train farmers in
hygiene and milking.
Better Equipment:
Agricultural services staff have drawn up technical plans for cowsheds, which are provided
free of charge. Nestle mechanics have also developed prototypes of machines to cut fodder
quickly and inexpensively.
Starting 2004, Nestle went a step further and proposed a system of small loans for farmers
who wanted to make improvements to their farms, such as building cowsheds. They drew up
the sample specifications for a model farm to be presented to the banks disbursing the loans.
The Service even helps farmers fill out applications for loans.
HUMAN RESOURCE
HR is dedicated to their employees, and ensures that they have all the right people with the
right skills, in the right places at the right time. Understanding that their people are the
bedrock of all their business strategies, it is their mandate to enhance their skills with cutting
edge training and provide them with world-standard facilities. They select flexible, innovative
people who are ready to confront new challenges and make a difference. Their
groundbreaking Management Trainee Programmed aims to develop talented young men and
women and help them achieve their potential in a dynamic and enabling environment.
Over a hundred people travel out of the country every year to take advantage of their
international training and development events.

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WHAT THEY BELIEVE IN:

They are a people company. Their people are their greatest strength, and nothing can be
achieved without their commitment and energy. At Nestl Pakistan their opinion counts.
Here you'll fit into a corporate culture that's based on a set of fundamental principles and
values. These are:

High commitment to quality products and brands

Respect of other cultures and traditions

Commitment to strong work ethic

Personal relations based on trust and mutual respect

Proactive cooperation

Being pragmatic rather than dogmatic

Favoring decentralization and networking

Being committed to work and quality

Preferring the long-term perspective to short-term thinking

They're proud of their traditions and heritage, and as times change, these core values
keep evolving.

RECRUITMENT:
WHAT THEY LOOK FOR:

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It takes a special sort of person to come and work at Nestl Pakistan. That's why, when
selecting candidates, they look for a set of interrelated characteristics encompassing three key
areas: knowledge, personality and motivation.

Professional Knowledge:
They look for good academic results at university or equivalent qualifications. However, the
class of the degree you have obtained, though very important, is not the only criterion for
selection.
Other experiences during their studies, previous jobs, assignments, language theses and any
other significant extracurricular activities and achievements, are also given the right.
They look for candidates who can identify a problem, analyze it, look at different options,
and come to reasoned conclusions. They want people with drive and tenacity, energy and
enthusiasm, who can initiate a project and follow through
to the end. All these skills are vital during a career at Nestl Pakistan.
Personality:
To succeed at Nestl Pakistan, you need more than professional knowledge. You need a flair
for the field of activity of their choice, an open mind, and a willingness to dig in and learn
new skills and ideas. They're looking for applicants who are dynamic and communicative.
People, who can listen, understand and integrate the opinion of others, people who can
express their ideas clearly, both verbally and on paper.
They want people who like to negotiate, even with very different partners, and to solve
problems in complex situations .They like candidates who show leadership, inspire others,
and are self-confident, yet realistic. People who have a positive attitude to work and willing
to work hard, even under pressure. They seek people who can be objective in their assessment
of themselves and of others.
Motivation:
While they expect loyalty to their company, they expect their people to be critical and suggest

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improvements wherever necessary. They like people who are motivated themselves & can
motivate others.

A Nestl employee is characterized by creativity and dynamism. They don't only look for
specialists, but people who have knowledge and skills in more than one field, with broad
interests. To sum up, they want people with purpose and ambition, though not at the expense
of others.
They want people who take responsibility for their actions, who consider Nestl their own
business, and who show an entrepreneurial spirit.

Philosophy of Nestle:
Nestls philosophy is summed up in four words:
Good Food, Good Life.
In their quest to become the world's leading health, nutrition and wellness company, they
do everything they can to help people live more fulfilling lives.
Good Food, Good Life
Henri Nestl chose his own coat of arms to represent the company's philosophy:
a bird's nest, with a mother feeding her young.
The image represents Nestl core values: care, family values, nutrition, healthy growth, safety
and comfort. It is a guarantee of quality and a commitment to responsibilities as a food
company and experts in nutrition.
Over the years Nestl has reaffirmed its commitment to wellness, helping consumers to live
longer, healthier, and more productive lives, no matter their age, gender or socioeconomic
status.
Good Ingredients
Three vital ingredients lie at the heart of Nestl and come together in their brands:
Their people, their research and development, and their commitment to quality.

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The 250,000 dedicated people who make up the Nestl family are their source of strength and
energy. Realizing this, Nestl offer them constant professional development, and feel their
cultural diversity is one of greatest assets.

Products:
Business Lines in Pakistan:

Milked dairy and chilled dairy:

MILKPAK
NESVITA
NIDO
NESLAC
EVERYDAY
NESTLE Dahi
NESTLE Fruit Yogurt
NESTLE Raita
MILKPAK Cream
Beverages:
NESCAFE
NEQUICK
MILO
NESTLE Fruita Vitals
Bottled Water:
NESTLE Pure Life
Baby Food:
CERELAC
Food:
MAGGI-2 Minute Noodles

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Break Fast Cereals:

Corn Flakes
Honey Gold Flakes
KOKO Crunch
Chocolate & Confectionary:
KITKAT
KITKAT Chunky
Polo

Target market of Nestle:

Milk, dairy and Chilled dairy: wide variety of dairy products is available to cater
almost every segment of customer. Liquid Milk especially Nesvita is produced
especially for the females as it contains high content of iron, beneficial for them.

Beverages: it includes Nescafe, Milo, Nesquik, and Nestle Friuta Vitals. Their main
target market includes people of all ages.

Bottled water: businesses, students, for the people who do not have access to clean
drinking water.

Baby food: target market of baby food is all the parents

Food: it includes Maggie noodles which mostly caters children and teenagers.

Breakfast cereals: children, teens and adults benefits from it

Chocolates and confectionary: people of all ages.

Sports nutrition: it specifically targets sports persons for a nutritive protein diet.

Size of the organization:

2010: Nestls first quarter revenues in 2010, increased by 6.5% compared to the previous
year. The company's food and drinks segment revenues increased by 5.1% in Europe and
more than 10% in emerging markets.
In the first half of 2010, Nestls revenues increased 6.1% compared to the first half of 2009;
net profits increased 7.5%
2009: Nestle is the world's largest food and beverage company, with 2009 sales of over 107
billion CHF ($101 billion USD).
2008: With sales of CHF 109.9 billion (Swiss currency) in 2008, Nestl is the world's leading
nutrition, health and wellness company. The company employs more than 280,000 people and
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has 456 factories in 84 countries. Nestl products are sold in almost every country in the
world.
Only about 1.5 percent of its sales are generated in its home country, and all but 12 of its
factories are situated abroad. Nestl is a truly public company with over 250,000 shareholders
of which around one third are Swiss. No single shareholder owns more than 3% of the stock.
US investors, who, together, hold over 30% of the capital.

Competitors:
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

SWOT ANALYSIS OF NESTLE

STRENGTHS

--------

TO

BUILD

ON WEAKNESESS

----------

TO

COVER

ONOPPORTUNITIES

-------------

TO

CAPTURE

THREATS ----------------------------- TO DEFEND ON

STRENGHTS

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The greatest strength of nestle is that it includes a culture that is team focused and an open door policy.
Nestle focus on collectivism and performance orientation attitude, which encourages employees to work
harder. Another thing is high level of market share and that people all over the world trust and recognizes
Nestle as a big brand name. Strength is that people trust on Nestle. It looks at achieving higher
volumes by renovating existing products and innovating new products. Strength is that they are low
cost operators which allow them to not only beat competition but also edging ahead operating
excellence, innovation, renovation, product availability and communication are major
strengths. IT is an important aspect that people all around the world are becoming more conscious about
health, thats why they prefer Nestle.

WEAKNESESS
One major weakness of Nestle is that it is entering into markets that are already mature and can give a tough
competition to new entrants. Nestle Plain Yogurt has proved to be a Nestle weakness because it has been
unable to make its market place in USA. But Nestle by analyzing the sensitive areas can overcome its
weaknesses.

OPPORTUNITIES
Nestle in Pakistan has a great opportunity for expanding its markets because in Pakistan there is a large ready
market of food and beverages due to trends of eating and the increasing .I t also has opportunities
largely in China and India as well. Through proper marketing research Nestle can cash on to these
opportunities.
Threats
Nestle is facing the threats by worldwide community due to its violation of international marketing standards.
Many conferences and campaigns have been held against Nestle in this regard which can damage the name
and trust of its customers. Another threat is due to the increasing popularity of its competitor OLPERS
in local and international markets.

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PROBLEM STATEMENT
Worldwide boycott of nestle products after the
company failed to properly communicate and market
its breast milk substitute (infant formula) product,
which has resulted in the deaths of millions of infants.
PROBLEMS FACED BY NESTLE
The problems for Nestle in todays world are the claims
faced by it as being charged with the responsibility of violating the
International Marketing Codes. Nestle claims that I is doing nothing
wrong and unethical in the way it markets is baby foods around the
world. Baby milk action has raised the case of SYED AAMAR
RAZA who has publicizes evidence of Nestls malpractice in Pakistan also as well. It has been claimed that
company marketing is causing unnecessary deaths and sufferings of babies, largely among poor because they
do not use the proper amount of powder in order to save some volume for future use which
causes great danger to baby life.

BACKGROUND OF THE PROBLEM:

Beginning in the late 1970s Nestl began to attract global criticism for its infant-formula
marketing policies, especially those conducted in developing countries. Public outcry peaked
with the Nestle boycott of 1977 which (though suspended for several years in the mid-1980s)
remains in effect today. Nestle is the most boycotted company in the world as a result

Entitled with Baby Killer in 1970 in developing countries

Nestl advertised and still advertises its formula as a risk-free substitute (or even a preferable

alternative) to breast milk, resulting in increased use and often replacing available breast milk.
Nestle advertised widely infant product was valuable in its nutrients which have complete

benefits for baby from birth to one year

Formula was contaminated in poor countries, leading to disease in vulnerable infants.
Because of the high illiteracy rates in developing nations many mothers are not aware of the
sanitation methods needed in the preparation of bottles

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UNICEF estimates that a non-breastfed child living in disease-ridden and unhygienic

conditions is between six and 25 times more likely to die of diarrhea and four times more likely to die

of pneumonia than a breastfed child

Many poor mothers try to save money by economizing on the formula by using less than the
recommended dose or substituting it with other inferior alternatives such as cows milk, rice
water or corn starch with
Nestle, among other companies that market infant
formulas, has been the focus of attack from different
groups. The source of this controversy sprang from the
number of deaths of babies from Third World countries that
are alleged to have been the result of aggressive advertising
of the Nestle infant formula. Nestle stands by its position
that it has been responsible in its product marketing
stressing, among other things, that (1) it has never
advocated bottle feeding instead of breast feeding and (2)
that the infant formula has a vital role in proper infant
nutrition as a supplement. Nevertheless, Nestle adopted measures to address the concerns of
different groups, like WHO, by discontinuing its mass media advertising of infant formula,
carrying out comprehensive health education programs, and supported the WHO code. By
late 1990s, Nestle was again accused of continuously violating the WHO code and concerned
groups have called for the boycott of Nestle products. By 2001, the HIV crisis in certain parts
of the world, like South Africa, has caused a shift in preference from breast-feeding to infant
formula. Consequently, Nestle faces the challenge of addressing such high demand. Finally,
Nestle, as an MNC, carries new responsibilities that come along with marketing its products
like participating in the fight against HIV and AIDS especially in developing countries.
NESTLE CONTROVERSIES:-

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There are many criticism on the nestle company such as

Ethiopian debt, Melamine in Chinese milk, Green washing,
Zimbabwe farms, Child labor but one of the most prominent
controversies involving Nestle concerns the promotion of
the use of infant formula to mothers across the world,
including developing countries an issue that attracted
significant attention in 1977 as a result of the Nestle boycott,
which is still ongoing.

NESTLE BOYCOTT:The Nestle boycott is a boycott launched on July 7, 1977, in the United States against the
Swiss- based Nestle Corporation. It spread in the United States, and expanded into Europe in
the early 1980s. It was prompted by concern about Nestls "aggressive marketing" of breast
milk substitutes (infant formula), particularly in less economically developed countries
(LEDCs), which campaigners claim contributes to the unnecessary suffering and deaths of
babies, largely among the poor.
The newly formed Infant Formula Action Coalition (INFACT) started a consumer boycott
against Nestl and demanded the end of infant formula
promotion. They also lobbied U.S. Senator Edward
Kennedy, chair of the Subcommittee on Health and
Scientific Research of the Committee of Human
Resources, to hold Public Hearings on the infant
formula issue.
The Public Hearings took place in May 1978. In July,
Kennedy met with representatives from the industry,
including Nestl, to determine what to do next. At the
request of the Infant Council of Infant Food Industries,
and with a support letter from Nestl, Kennedy asked
the director general of the World Health Organization (WHO) to sponsor an international
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conference to discuss the issue and come up with an international recommendation for
marketing infant formula in developing countries.
In 1979, Nestl developed internal guidelines limiting advertising and sales promotions,
curbing free samples and supplies, spelling out the content of informational materials and
ending all financial incentives for health professionals to sell formula. In the same year,
WHO and UNICEF held a meeting on Infant and Young Child Feeding.

IBFAN CRITICISM ON NESTLE:Groups such as the International Baby Food Action

Network (IBFAN) and Save the Children, advocacy
groups and charities claim nestle unethical methods of
promoting infant formula over breastfeeding that has led
to health problems and deaths among infants in less
economically developed countries. They claim that Nestl
distributes free formula samples to hospitals and maternity wards; after leaving the hospital,
the formula is no longer free, but because the supplementation has interfered with lactation,
the family must continue to buy the formula. IBFAN also allege that Nestl uses
"humanitarian aid" to create markets, does not label its products in a language appropriate to
the countries where they are sold, and offers gifts and sponsorship to influence health
workers to promote its products. Nestl denies these allegations.
There are four problems that can arise when poor mothers in developing countries switch to
formula:

Formula must normally be mixed with water, which is often contaminated in poor countries,
leading to disease in vulnerable infants. Because of the low literacy rates in developing
nations, many mothers are not aware of the sanitation methods needed in the preparation of
bottles. Even mothers able to read in their native tongue may be unable to read the language
in which sterilization directions are written.

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Although some mothers can understand the sanitation standards required, they often do not
have the means to perform them: fuel to boil water, electric (or other reliable) light to enable
sterilization at night. UNICEF estimates that a formula-fed child living in disease-ridden and
unhygienic conditions is between six and 25 times more likely to die of diarrhea and four
times more likely to die of pneumonia than a breastfed child.

Many poor mothers use less formula powder than is necessary, in order to make a container
of formula last longer. As a result, some infants receive inadequate nutrition from weak
solutions of formula.

Breast milk has many natural benefits lacking in formula. Nutrients and antibodies are passed
to the baby while hormones are released into the mother's body. Breastfed babies are
protected, in varying degrees, from a number of illnesses, including diarrhea, bacterial
meningitis, gastroenteritis, ear infection, and respiratory infection. Breast milk contains the
right amount of the nutrients essential for neuronal (brain and nerve) development. The bond
between baby and mother can be strengthened during breastfeeding. Frequent and exclusive
breastfeeding can also delay the return of fertility, which can help women in developing
countries to space their births. The World Health Organization recommends that, in the
majority of cases, babies should be exclusively breast fed for the first six months.

Artificial baby milk controversy: 2006

As the world's largest artificial baby milk producer,

Nestl has been pinpointed as a leading cause of the
increasing worldwide infant mortality rates. The World
Health Organization (WHO) estimates that 1.5 million
infants die each year because of inappropriate feeding, given the fact that children vulnerable
to disease are being fed with artificial breast milk substitutes rather than naturally breastfed.

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"A World Health Organization (WHO) International Code governing the marketing of
artificial baby milk, drawn up in 1981 and agreed by 118
countries, says breastfeeding should be promoted above
all other products and that leaflets and labels relating to
breast milk substitutes should do nothing to undermine
this. But Nestl and other companies have been accused
of flouting the rules with advertising, free samples,
promotions and sponsorships. The latest monitoring report
from the International Baby Food Action Network
(IBFAN) uncovered about 2,000 violations of the code in 69 countries, with Nestl
responsible for more violations than any other of the big 16 baby food companies studied"
MAIN PLAYERS:Following are the main players involved in the boycott of nestle milk which is greatly
affecting the born babies so they play a significant role to give awareness to the people or
especially mothers not to take nestle infant formula;

In parallel with the boycott, campaigners work for implementation of the Code and

Resolutions in legislation.
Many European universities, colleges, and schools have banned the sale of Nestl products

from their shops and vending machines

Media also play a major role in the boycott of the unethical behavior of nestle
International Baby Food Action Network (IBFAN)
Infant Formula Action Coalition (INFACT)
World health organization (WHO)

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LITERATURE REVIEW:
Nestled in controversy
Issue 436
International Nestl-Free Week takes place from 25 to
31 October. Ian Fitzpatrick looks back at the boycott
and explains why challenging the aggressive marketing
of babymilk formula is still so important.
John Birdsall/Press Association Images
In August 1973, New Internationalist published an interview with leading child nutrition
experts who talked of a worrying swing away from breastfeeding in favour of commercial
breast-milk substitutes. The Baby Food Tragedy article, along with a 1974 War on Want
report called The Baby Killer and the 1975 documentary film Bottle Babies, drew
widespread attention to the issue and led to an international campaign that continues today.
Henri Nestls Milk Food was invented around 1867 and was soon being exported to
European colonies. In the 1930s Dr Cecily Williams described the alarming rise in illness and
death amongst babies whose mothers had been persuaded not to breastfeed and by the 1960s
Dr

Derrick

Jelliffe,

an

expert

in

infant

nutrition,

had

coined

the

term

commerciogenic malnutrition.
Launched on 4 July 1977, the US Nestl Boycott demanded that Nestl stop promoting infant
formulas in developing countries. In 1979, the campaign went global.
That same year, the World Health Organization hosted a meeting to develop a code regulating
the marketing of infant formula, and in 1981, 118 countries voted in favour of the
International Code with only the US voting against it. The Codes aim was to contribute to
the provision of safe and adequate nutrition for infants, by the protection and promotion of
breastfeeding, and by ensuring the proper use of breast-milk substitutes. Today, it is national
law in over 60 countries. In 1984 Nestl agreed to abide by the Code and the boycott was
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called off, but it was relaunched in 1988 with boycott co-ordinators saying the agreement had
not been honoured.
Nestl is the market leader in sales of breast-milk substitutes and controls nearly 30 per cent
of the babyfood market. The UK-based campaign Baby Milk Action is currently asking the
public to email Nestl over its latest global marketing strategy: the company has added logos
to its packaging claiming its formula protects babies and is promoting it to health workers,
with claims that it reduces diarrhoea and is the new Gold Standard in infant nutrition. Yet
the World Health Assembly reiterated in May 2010 that improved breastfeeding practices
could save 1.5 million babies every year.
Nestl is an aggressive company in all areas of its business, says Mike Brady from Baby
Milk Action. It promises shareholders five to six per cent growth per year and evaluates the
profit from pushing its babymilk in violation of the Code against how this fuels the
boycott, harms its image and loses it sales of other products. Boycotters have forced changes
in Nestl policies and practices for example, compelling it to add warnings to labels in the
appropriate language about the importance of breastfeeding but more pressure is needed.
International Nestl-Free Week is an opportunity to spread the word. Our aim this year is to
have Nestl remove the claims that its formula protects babies, which undermine the
message that breastfeeding protects.
Nestle Policy

Breastfeeding is Best

We believe that breastfeeding is the best start a baby can have in life. We support the World
Health Organizations recommendation calling for exclusive breastfeeding for the first six
months of life, followed by continued breastfeeding along with the introduction of
complementary foods as advised by a healthcare professional or health authority.
We manufacture high-quality infant formula for babies who are not breastfed, and it is our
commitment to make these products available in a responsible manner. Infant formula is a
vital product for infants who are not breastfed. It is in fact the only product recognized to be a
suitable breast-milk substitute by the World Health Organization (WHO).
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The Nestl Policy and Instructions on implementing the WHO Code

We learned a great deal from our experience concerning breast-milk substitutes marketing in
lower and middle-income countries, recognizing our responsibility to go beyond what were
accepted marketing standards at the time.
Following the adoption of the International Code for the Marketing of Breast-milk Substitutes
- English (pdf, 128 Kb) (WHO Code) by the World Health Assembly in 1981, Nestl was
the first company to develop policies based on the WHO Code and apply them across our
entire operations in developing countries.
152 higher-risk countries: The designation of a country as higher-risk is based on UNICEF's
data on levels of mortality and rates of acute malnutrition of children less than 5 years of age.
It is our strong commitment to apply the WHO Code as implemented by national
governments everywhere in the world. In addition, we follow the WHO Code as a minimum
requirement in 152 higher-risk countries. For this purpose we have voluntarily issued the
Nestl Policy and Instructions on implementing the WHO Code - English (pdf, 2 Mb), which
provide implementing instructions for aligning our marketing practices with the WHO Code.
We have put in place rigorous internal procedures to ensure compliance with our policy,
including internal and external audits, whistle-blowing procedures and reporting.

Addressing key challenges: Marketing of breast-milk substitutes and the WHO

Code

Nestl supports the World Health Organization recommendation of exclusive breastfeeding

followed by continued breastfeeding for the first six months of life along with the
introduction of complementary foods as advised by a health professional. We seek to promote
safe, adequate nutrition for infants by encouraging breastfeeding as the best start in life, and
by manufacturing high-quality breast-milk substitutes (BMS) when a safe alternative is
needed.

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We have developed a strong policy articulating our commitment to and implementation of the
World Health Organizations International Code of Marketing of Breast-milk Substitutes
(WHO Code), and applies a detailed global Management System, comprising explicit
procedure manuals, an internal Ombudsman System, internal and external audits, training of
staff and reporting on breast-milk substitute marketing and compliance. Corporate internal
auditors audited some 22 countries in 2011, and Bureau Veritas conducted independent Code
compliance audits in Laos, Cameroon and Jamaica.

Additional materials have been developed to facilitate guidance to marketing staff, including
a web-based training and testing tool.

22 internal audits were carried out in 2011, and Bureau Veritas conducted independent Code
compliance audits in Laos, Cameroon and Jamaica.

19 concerns about non-compliance with the WHO Code, attributable to Nestl and requiring
remediation, were raised in 2011; corrective action was taken in all instances.

We will continually work to improve our

practices and encourage all stakeholders to
communicate their concerns to us.

ALTERNATIVE SOLUTIONS:
If we are in place of NESTLE we would reply to the boycott by the following:

We must support WHO's global public health recommendation calling for exclusive
breastfeeding for six months and introduction of safe and appropriate complementary foods
there after
We support efforts by governments to implement the International Code through legislation,
regulation, or other appropriate measures
We must respond to all allegations of non-compliance
We would encourage Breastfeeding at the time of giving free samples
Give stress on communication
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 Give Live demonstration in public through media

We would clearly mentioned in packages that Breastfeeding is an ultimate best
We would follow the international code of conduct for advertisement and promotion
We would give the necessary instruction to be required in the regional language for the
benefit of illiterate mother
Not labeling, promoting or selling of complementary foods or drinks for infants under six
months of age unless otherwise mandatory required by local code or measures;
Issuing detailed Procedure manuals containing internal Instructions for the implementation
of WHO recommendations both at the corporate level and at the regional and country level;
Aligning its marketing practices in detail on the recommendations of the WHO Code and
relevant subsequent WHA Resolutions, and providing systematic training towards Code
compliance to its marketing personnel;
Auditing on a regular basis its subsidiaries INFANT FORMULA marketing practices by
corporate as well as local auditors, and submitting summary reports of those audits to
review by the Audit Committee of the Nestl Board of Directors;
Putting in place an Internal WHO Code Ombudsman System allowing Nestl employees to
alert the Company on potential non-compliance with the WHO Code in a confidential way,
outside line management
Commissioning regular audits by an independent external auditor and making a summary
of the audit findings publicly available;
Implementing a system for investigating all allegations of non-compliance, externally or
internally reported, when sufficient information has been received, as well as taking
corrective action on all substantiated non-compliance cases;
Commissioning independent external audits in case of allegations of multiple and/or serious
non-compliance with the WHO Code by Nestl;

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 Using results of information from Stakeholder input, as well as

the recommendations deriving from internal and external audits
to identify opportunities to improve our Code management
system.

IMPLICATION FOR FUTURE USE:

INFANT FORMULAS must not be advertised or promoted
directly to mothers or the general public either through public
media or by personal contact between company representatives
and the public. This restriction also applies to Nestl websites.
General information on infant feeding and baby care, which includes information on the
proper use of INFANT FORMULA (such as mother books and posters) may only be
distributed to mothers by health workers or displayed by them in health care facilities subject
to the provisions of Art. 4.2, 4.3, 6.2 and 7.2.Such information may not feature
INFANTFORMULA brands and may not be used as advertising or promotion aimed at the
general public.

No samples of INFANT FORMULAS should be given to the general public. Such samples
may only be given to health workers,

We must investigate all of our product before launching the product

We must warn mother of the consequences of incorrect or inappropriate use of infant formula

A product should be promoted according to the people but which should not be harmful to
them

NESTLE DOES NOT advertise or promote infant formula and follow-on formula for infants
up to 12 months to the public

NESTLE DOES NOT market complementary foods and drinks for infants younger than 6
months

NESTLE DOES NOT permit staff whose responsibilities include the marketing of infant
formula to make direct contact with mothers, except in response to consumer complaints

NESTLE DOES NOT use pictures of babies on its infant formula packs
Page 34 of 37

NESTLE DOES NOT distribute free infant formula samples to mothers

NESTLE DOES NOT allow educational material relating to the use of infant formula to be
displayed publicly in hospitals and clinics

NESTLE DOES NOT give financial or material incentives to health professionals for the
purpose of promoting infant formula

NESTLE DOES NOT donates free infant formula to health care facilities for use by healthy
newborn babies. Free infant formula may exceptionally be given to bona fide social welfare
institutions upon their request to serve social or humanitarian purposes (e.g. where the
government policy allows manufacturers to respond to a specific social request, for example
if the mother dies in child birth)

NESTLE DOES NOT give incentives to its staff based on infant formula sales

CONCLUSION:
It is clear from the case presented that the reputation of a company is decided not in terms of
its sales or profits maximization but in terms of the good will it earns by adopting morals and
values in its production, marketing and pricing.

The product and marketing should not violate the societal standards

Should not promote or undermine breastfeeding

The organization is responsible for any happenings or consequences in the society

The issue of mixed feeding before six (6) months should be investigated and discouraged
through sensitization programs at the community level not only at the facility level. The
breastfeeding advocacy should adequately reflect the need for continuous breastfeeding after
the six months period as well as the timely and appropriate introduction of complementary
foods. Regulatory bodies must begin to extend enforcement to cover feeding bottles teats and
condensed milks. To be effective the Regulations must be adequately disseminated. Besides,
there is the need for health workers particularly nurses who manage health facilities in the
rural areas to understand the circumstances under which infant formula could be used since
under some conditions it becomes very relevant to offer artificial formula to save a life.
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Expression of breast milk should also be made part of antenatal grooming rather than the
case-to-case basis.
In response to the controversies mentioned above Nestle has affirmed that, In order to
continually improve our practices, we call on our stakeholders and the general public to
directly communicate to us in detail any concern or allegation of non-compliance with our
commitments. We commit to investigate and respond to all concerns raised by external
stakeholders directly with us, provided that we receive enough information to carry out an
investigation.
This interaction with our external stakeholders helps us improve our monitoring of our WHO
Code compliance, and through this external report we aim at providing to those stakeholders
a feedback on their concerns, as well as giving to the general public better insights into our
Code compliance record.

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