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Nestle Strategic Model
This document provides an overview of strategic planning for Nestle Pakistan. It includes a list of team members working on the case study, histories of Nestle and its brands. It also analyzes Nestle's internal and external factors, competitors, and potential strategies. The team recommended that Nestle Pakistan acquire Shangrila foods and young's food in 2010 to become a market leader, citing Nestle SA's strategy of global expansion through acquisitions. Progress will be evaluated through annual financial reports and management meetings.
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Nestle Strategic Model
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- 3. Case-Study OverviewInternal: History,Nike overview, Key Facts, Our Brands and Stock InformationNike Actual & Proposed Vision and MissionEconomic PerformanceEvolution of Financial RatiosStrengths and weaknessesAnalysis: IFEExternal:Industry overview and comparison of financial ratiosManufacturingOpportunities and threatsAnalysis: EFECompetitorsMarket ShareAnalysis: CPMAnalysisSWOT MatrixSPACEBCGIE matrixGrand Strategy MatrixQSPM Possible strategies: Matrix AnalysisDecisionsWhy our decision?Strategic implementationActionsEvaluation ProcedureCurrent Update
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- 5. History1866-1905In the 1860sHenri Nestlé, a pharmacist, developed a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother's milk or any of the usual substitutes. sold in much of Europe. 1905-1918In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain. 1918-1938After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestlé's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the Company's second most important activity 1938-1944Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company's newest product, Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the wartime economy.
- 6. 1944-1981Nestlé's growth inthe developing world partially offset a slowdown in the Company's traditional markets. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc..1981-1995Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation.1996-2002The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.2003 +The year 2003 started well with the acquisition of Mövenpick Ice Cream, enhancing Nestlé's position as one of the world market leaders in this product category. In 2006, Jenny Craig and Uncle Toby's were added to the Nestlé portfolio and 2007 saw Novartis Medical Nutrition, Gerber and Henniez join the Company.
- 7. OverviewNestlé is theworld's leading Nutrition, Health and Wellness Company. It is committed to increasing the nutritional value of our products while improving the taste. The Nestlé Company has aimed to build a business as the world's leading nutrition, health and wellness company based on sound human values and principlesWhile Nestlé Corporate Business Principles will continue to evolve and adapt to a changing world, basic foundation is unchanged from the time of the origins of their Company, and the basic ideas of fairness, honesty, and a general concern for people. In the 140 years since then, we have expanded around the world and developed a range of products designed to suit every taste, need and cultural preference. Our distinctive seal is recognised everywhere as a guarantee of quality and healthfulness
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- 9. Our BrandsWe believethat food plays a key role in achieving a well-balanced person. And so our philosophy is Good Food for a Good Life! At Nestlé, our products are developed keeping our consumers, their preferences and health in mind. Millions of consumers the world over trust Nestlé products for good reason: when they choose a Nestlé product they have the satisfaction of choosing quality, taste, variety, convenience and the good nutrition.Brand NamesMilk, Dairy and Chilled DairyBeveragesBottled WaterBaby FoodFoodBreakfast CerealsChocolate and Confectionary
- 11. Vision“The Nestlé globalvision is to be the leading health, wellness, and Nutrition Company in the world”
- 12. Mission Statement“Good Foodis 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, Nestlé products bring consumers the vital ingredients of taste and pleasure”
- 13. Mission Statement (Proposed)“Good Foodis 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 with the best technology around the globe. In addition to Nutrition, Health and Wellness, Nestlé products bring consumers the vital ingredients of taste and pleasure that is matched by none. We want to excel as market leader in the industry with an ethical culture and care for its employees.”
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- 16. Investment ProjectsTotal capitalexpenditure for the year reached P KR 2.3 billion, with the most significant projects listed below:Investments in 2010 of approximately P KR 2.6 billion are planned for milk collection field development, and upgrading of existing production facilities as part of our long-term infrastructure plan.
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- 18. IFE Internal FactorEvaluation Matrix
- 19. Key Ratios: OverallComparison (2009)
- 20. EFE External FactorEvaluation Matrix
- 21. CPM Competitive Profile Matrix
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- 34. DecisionThis seemed toan important step where we had to choose either to go for a horizontal integration or more product development. The interesting fact was that from 2008-2009 Nestle Pakistan introduced three new products into the market The major new product launches the year 2009Included: NESQUIK milk enhancer, NIDO BUN YAD, LACTOGEN GOLD, and CERELAC fruit cereals. Our Recommendation:Considering this fact now we recommended Nestle Pakistan to Acquire Shangrila foods and young’s food to excel as a market leader for the year 2010.
- 35. Why Horizontal strategyReasonBehindNestle SA expands globally either through its own brand or the acquisitions of National brands, considering this fact it seems a critical time for Nestle SA to expand through a National brand.
- 36. EvaluationsNESTLE annual financialreportsSales and profits reports (on-line and off-line) based on sales of newly acquired companies.Frequent management meetings between the Top Management at the cooperate levels through Evaluation reports
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