History of Nestle 1905-1918 In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. both in 2002: in July.S. In 1984. the most important being American food giant Carnation. There were two major acquisitions in North America. and in August. 1996-2002 The 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. The 1920s saw Nestlé's first expansion into new products. Factories were established in developing countries. Since 1996 there have been acquisitions including San Pellegrino (1997). Ironically.. Nestlé's management responded quickly. streamlining operations and reducing debt. Nescafe. Nestlé merged its U. which was a staple drink of the US military. the war helped with the introduction of the Company's newest product. developed a food for babies who were unable to breastfeed.• • 1866-1905 In the 1860s Henri Nestlé. • • • • • • • • • • • . with chocolate the Company's second most important activity 1938-1944 Nestlé felt the effects of World War II immediately. a pharmacist. However. Sold in much of Europe. 1981-1995 Nestlé divested a number of businesses1980 / 1984. particularly Latin America. Britain. ice cream business into Dreyer's. Nestlé's production and sales rose in the wartime economy.6bn acquisition was announced of Chef America. Profits dropped from $20 million in 1938 to $6 million in 1939. 1918-1938 After the war Government contracts dried up and consumers switched back to fresh milk. Germany and Spain. Spillers Petfoods (1998) and Ralston Purina (2002). the company was operating factories in the United States. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc. a USD 2. Inc. By the early 1900s. 1944-1981 Nestlé's growth in the developing world partially offset a slowdown in the Company's traditional markets. His first success was a premature infant who could not tolerate his mother's milk or any of the usual substitutes. Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions. Jenny Craig and Uncle Toby's were added to the Nestlé portfolio and 2007 saw Novartis Medical Nutrition. enhancing Nestlé's position as one of the world market leaders in this product category. Gerber and Henniez join the Company. . In 2006.• • 2007+s The year 2003 started well with the acquisition of Mövenpick Ice Cream. Strength: Socially responsible company. Lack of awareness among target market. Qualified work force. Population density increased by 2. There is a weak marketing of MILKPak as there is no advertisement of MILKPak on official website. Increase in consumer food industry by 14%. Opportunities: Pakistan as 7 largest milk producing country with milk output of 200 billion liters. Sales force as a major physical resource strength. Aggressive marketing. NML’sproducts enjoy strong brand image and market pull. All companies contribute only 2% to processed milk market. Solid financial position. Weaknesses: Selective investment due to uncertain economic and political situation. There are substantial growth opportunities. Increase export sales. Growing sales and profit. Can’t launch expensive brand due to low income groups. Revenue from confectionary decreased by 14%. th .18% (per sq. Credit policy can be adopted to increase sales. Strong supply chain network.km). Quality product. Threats : Price fluctuation due to rupee devaluation as a raw material imported. Inflation is getting higher and higher so the purchasing power of the people is decrease day by day. Make segment growth attract new entrants. Taste of consumer has already developed which is hard to change. Strong advertisement by major competitors. Legal and ethical issue. Economic slow down can reduce demand two new competitor Engro and Shakergang for MILKPak especially Engro is growing fast. . 9 to 18.16 0.07 0. Revenue from confectionary decreased by 14% Low credit sales and profit margin to retailers Weak promotional activities through websites Cant launch expensive brand due to low income groups 0.3 billion Weight Rating Weighted Score 0.03 0.16 0.05 0.15 0.04 0.03 1.IFE Internal Factor Evaluation Matrix: Key Internal Factors Strengths Socially Responsible Company Nestle products enjoy strong brand image Sales force as a major physical resource strength Quality product distribution networks in country Net Profit increased by 94% in 2009.21 0.08 0.20 0.03 2.05 0.08 0.18 3 3 3 2 4 3 4 0.09 2 2 0. Price earning ratio decreased from 38.10 0.05 0.72 Weaknesses Lack of awareness among target market Nestle milk always stands at last because of low advertisement.99 Total .15 0.18 0.8 Export Sales increased by 48% to PKR 3.05 0.15 0.08 0.00 2 2 3 1 0.09 0.80 0. 03 0.24 .09 0.08 0.42 0.6% Consumer expenditure on food has increased by 3.01 0.08 1.04 0.02 0.km) Credit policy can be adopted to increase sales Potential in cold dairy market All companies contribute only 2% to processed milk market th 0.09 0.05 0.04 0.12 0.05 4 0.02 0.20 0.36 0.48 Pakistan as 7 largest milk producing country with milk output of 200 billion liters Increase in consumer food industry by 14% Threats Engro and Shakarganj as major competitors Market segment growth could attract new entrants Taste of the consumer has already developed Legal & ethical issues Economic slow down can reduce demand Effect of seasonality upon sales Strong advertisement by major competitors Total 0.21 0.15 0.06 0.02 0.15 0.02 0.EFE External Factor Evaluation Matrix: Key External Factors Weight Rating Weighted Score Opportunities Few and weak competitors in the market Disposable income increased by 3.24 0.02 0.00 3 2 2 2 2 3 3 3.36 0.05 0.6% Population density increased by 2.18% (per sq.12 0.12 2 3 4 3 3 3 4 3 0.07 0.01 0.14 0. IMPLEMENTATION STAGE: . and CERELAC fruit cereals. NIDO BUN YAD.Decision: • This seemed to an important step where we had to choose either to go for a horizontal integration or more product development. LACTOGEN GOLD. 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 2012. The interesting fact was that from 2009-200 Nestle Pakistan introduced three new products into the market • The major new product launches the year 2009 • Included: NESQUIK milk enhancer. .