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Present and Future of Nestle Bangladesh
Limited
Haradhan Moha jan
Assistant Professor, Premier University, Chittagong, Bangladesh
24 March 2015
Online at https://mpra.ub.uni-muenchen.de/82850/
MPRA Paper No. 82850, posted 23 November 2017 06:58 UTC
0 3 5 $

American Journal of Food and Nutrition, 2015, Vol. 3, No. 2, 34-43

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Present and Future of Nestlé Bangladesh Limited

Haradhan Kumar Mohajan*
Assistant Professor, Premier University, Chittagong, Bangladesh
*Corresponding author: [email protected]

Abstract In the food industry Nestlé is the leading multinational company and the most trusted name with high
quality products. It offers healthier and tastier choices throughout all stages of a consumer’s life and at any time of
the day. Based on science and Research and Development, the Company permanently innovate its portfolio of food
and beverages. The aim of the Company is to build strong foundations of compliance and sustainable business
practices globally. This paper discusses the marketing strategy, competition structure and other strategies of Nestlé
S.A. Creating Shared Value is a philanthropic act of Nestlé in Bangladesh. An attempt has been taken here to
represent present situation and future attempts of Nestlé Bangladesh Limited with the help of SWOT analysis and
BCG growth sharing matrix. Due to the substantial growth and the other business perspective, the Company has
developed its own functional areas in Bangladesh.

Keywords: BCG Matrix, CSV, Nestlé, SWOT analysis.

1. Introduction

Nestlé is the world’s largest health, nutrition and
wellness company (measured by revenues). Its
Headquartered is in Vevey, Switzerland. In the food
industry Nestlé is the most trusted name with high
quality products. Nestlé produces a diversified
portfolio of product categories ranging from baby
foods, bottled water, chocolate, coffee, dairy to
healthcare and sports nutrition. From the start of
Nestlé, nutrition has been at the core of its business.
According to the company’s Annual Report 1, it has
employed about 339,000 people in over 196 countries
and over 450 factories in more than 86 countries
around the world. Employees of Nestlé by
geographic area are; 28.0% in Europe (10,175
employees in Switzerland in 2013), 32.5% in
Americas and 39.5% in Asia, Oceania and Africa.
Factories of Nestlé by geographic area are; about 140
in Europe, about 164 in Americas and about 143 in
Asia, Oceania and Africa 24.
Nestlé has more than 250,000 shareholders
worldwide (42% Swiss, 22% US Citizens, 10%
British, 8% French and 5% German). It applies the
principle of “one share–one vote” up to a maximum
of 3% of the total shares 11. Some of the basic
Nestlé values and principles are 33:
? Favoring long-term development over short-
term profit.
? Long-term commitments and relationships.
? Respect for and integration with diverse
cultures.
? Proper conduct and ethical values as basic
requirements for management and
employees.
? Recognition that consumers deserve
information about the products they buy and
the company behind the brand.
Nestlé is in the developing stage in Bangladesh.
But recently it has experienced an organic growth of
40% and this trend predicted to continue in the near
future. Nestlé Bangladesh Limited (NBL) is not a
listed company in the stock exchange of Bangladesh.
“Good Food Good Life” is the mission of Nestlé,
which drives the company to provide consumers with
the best tasting and most nutritious choices in a wide
range of food and beverage categories. Its business
practices have been governed by integrity, honesty,
fair dealing and full compliance with all applicable
laws 20.
In Bangladesh Nestlé’s vision is to establish the
most successful food and drink Company in
Bangladesh by generating sustainable, profitable
growth and continuously improving results to the
benefit of shareholders and employees.

2. Methodology of the Study

The article is prepared on the basis of secondary data
of Nestlé S.A. and Nestlé Bangladesh Limited
(NBL). We have used Nestlé websites, previous

American Journal of Food and Nutrition, 2015, Vol. 3, No. 2, 34-43

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published articles and various research reports. We
have also collected information from the employees
of NBL, wholesalers of various departmental stores
and consumers of Bangladesh. NBL has strong rules
and regulation of sharing information. It is not a
listed company in stock exchange of Bangladesh. The
data of NBL is not widely available to explain the
present financial situation properly.

3. Objectives of the Study

The objective of the study is to express a brief
summary about business structure of Nestlé
Bangladesh Limited (NBL). The purpose of the
research approach is to discuss the present and future
situation of various foods and beverages of NBL. At
the start we have discussed the history, market
structure and strategy and business principle of
Nestlé S.A. We stress current mission, vision,
objectives and strategies of Nestlé in Bangladesh.
NBL has some Corporate Social Responsibility
(CSR) activities in, which it call Creating Shared
Value (CSV). We have tried to explain briefly the
CSV of the Company.

We have briefly discussed general management,
finance and control, human resource management,
supply chain management and marketing, and their
performance in Bangladesh. We have also
highlighted the efficiency and effectiveness of
working capital management system and food market
for Nestlé in Bangladesh.

Bangladesh is a densely populated and developing
country in the Southern Asia. The article highlights
present and future of Nestlé in Bangladesh. The
public health consciousness of the country has
increased in the 21st century. On the other hand
economic development of Bangladesh makes the
popularity of Nestlé products to the people of
Bangladesh. We have simply discussed the SWOT
analysis and BCG growth sharing matrix to develop
the market structure of Nestlé in Bangladesh.

4. Brief History of Nestlé

In 1849, Henri Nestlé (10 August 1814–7 July
1890), a German pharmacist, set up his laboratory in
the small Swiss town of Vevey on the shores of Lake
Geneva, Switzerland. In 1866, the Company was
founded by Henri Nestlé in Switzerland. In 1867, he
launched his ‘Farine lactée’, a combination of cow’s
milk, wheat flour and sugar, which is the world’s first
infant food. This food helps to nurture and to save the
lives of young babies. He developed and produced
this milk-based food for babies whose mothers could
not nurse them. His ultimate goal helped to combat
the problem of infant mortality due to malnutrition
30,34.
Thinking for mothers and their babies he decided
to export his successful new product to other
countries and distributed to Europe, Australia and
South America. By the 1870s it was selling in places
as far afield as Egypt, Russia, Mexico and Indonesia.
The Company formed by the 1905 merger was called
the Nestlé and Anglo-Swiss Milk Company. In 1907,
the Company began full-scale manufacturing in
Australia. It has operated the business in Brazil since
1921 and in South Africa since 1927. Nestlé
established the world’s largest milk processing plant
in Kabirwala, Pakistan and total investment was CHF
(Swiss franc) 90 million ($1= CHF 1.25) in 2007
12.
In 1921, the Company recorded its first loss due to
economic slowdown and declining exchange rates
during and after the First World War. In 1929
Company Nestlé and Anglo Swiss Condensed Milk
Co. had merger with the Peter, Kohler Chocolats
Suisses S.A. In 1934 the Company launched Milo, in
1938 launched Nescafé, in 1947 it merged with
Maggi and changed the name to Nestlé Alimentana
S.A., in 1948 it launched Nestea and Nesquik, in
1969 it opened Vittel (initially equity interest only),
in 1971 it Merge with Ursina-Franck, in 1973 it
started Stouffer (with Lean Cuisine) and in 1974 it
initiated L’Oréal (associate). In 1977 company
changed its name to Nestlé S.A. 26.
During the World War II (1938–1945) the
Company faced difficulties for the second time.
Profits dropped from $20 million in 1938 to $6
million in 1939. Thinking this the Company
established factories in developing countries. As a
result the Company developed day by day and
recently it covers almost every food and beverage
category globally. At present Nestlé become world’s
biggest health, nutrition and wellness Company. In
the food industry Nestlé is the most trusted name
globally with high quality products 25.

5. Global Market Structure of
Nestlé

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Nestlé has divided its worldwide operations into
three zones: i) Europe Regions (Adriatic, Benelux,
Iberian and Russia), ii) Americas Regions
(Austral?America, Bolivarian, Caribbean and Central
American), and iii) AOA Regions (Asia, Africa and
Oceania). “Good Food Good Life” is the mission of
Nestlé, which drives the company to provide
consumers with the best tasting and most nutritious
choices in a wide range of food and beverage
categories and eating occasions 23.
In 2014, Nestlé has employed about 339,000
people in over 196 countries and over 450 factories in
more than 86 countries around the world with a total
equity of CHF 110 billion. It has 2,000 brands and
10,000 different products and more than one billion
products sold every day worldwide. The average
number of employees in the factories of Nestlé is
270, and the average number of employees in any
single country is around 2,000. Nestlé interacts with
some 165,000 direct suppliers and cooperates directly
with over 690,000 farmers worldwide 1.
About one-fourth of the employees of Nestlé are
trained medical delegates. They work closely with
health care professionals such as doctors, nurses and
dietitians to provide them with relevant information
as well as products and services to help their patients
34.
At present processing milk foods are still Nestlé’s
chief products. The other products are chocolates and
confectionery, instant milk-based drinks culinary
products, frozen ready-made meals, instant coffee,
ice cream, dairy products, infant foods, mineral water
etc. Nestlé’s expertise as the world’s leading infant
food manufacturer, gained over more than 125 years,
is put at the disposal of health authorities, the medical
profession and mothers and children everywhere
25. Nestlé is the world’s largest milk Company,
sourcing 11.8 million tons of milk from more than 30
countries. Coffee is the 2nd most traded commodity in
the world after oil, and grows best within the “coffee
belt” between the tropics of Cancer and Capricorn
that spans Latin America, Africa and Asia. Nestlé
purchased 750,000 tons of green coffee in 2006 12.

6. Global Products of Nestlé
At present Nestlé covers almost every food and
beverage category globally. It always provides the
consumers tastier and healthier products. It is the
trust and effort of the Nestlé professionals which
created the win and wining scenario globally. The
main products of Nestlé are as follows 16,25:
1. Baby foods: Cerelac, Gerber, Gerber
Graduates, NaturNes and Nestum.
2. Food service: Chef, Chef-Mate, Maggi,
Milo, Minor’s, Nescafé, Nestea, Sjora, Lean
Cuisine and Stouffer’s.
3. Cereals: Chocapic, Cini Minis, Cookie
Crisp, Estrelitas, Fitness and Nesquik
Cereal.
4. Culinary, chilled and frozen food: Buitoni,
Herta, Hot Pockets, Lean Cuisine, Maggi,
Stouffer’s and Thomy.
5. Bottled water: Nestlé Pure Life, Perrier,
Poland Spring and S. Pellegrino.
6. Drinks: Juicy Juice, Milo, Nesquik and
Nestea.
7. Coffee: Nescafé, Nescafé 3 in 1, Nescafé
Cappuccino, Nescafé Classic, Nescafé
Decaff, Nescafé Dolce Gusto, Nescafé Gold
and Nespresso.
8. Chocolate & confectionery: Aero,
Butterfinger, Cailler, Crunch, Kit Kat,
Orion, Smarties and Wonka.
9. Healthcare nutrition: Boost, Nutren Junior,
Peptamen and Resource.
10. Ice cream: Dreyer’s, Extrême, Häagen-Dazs,
Mövenpick and Nestlé Ice Cream.
11. Pet care: Alpo, Bakers Complete, Beneful,
Cat Chow, Chef Michael’s Canine
Creations, Dog Chow, Fancy Feast, Felix,
Friskies, Gourmet, Purina, Purina ONE and
Pro Plan.
12. Sports nutrition: Power Bar.
13. Weight management: Jenny Craig.

7. Corporate Business Principles of
Nestlé

Nestlé provides nutritionally sound products
designed for children and helps to reduce risk of
malnutrition through micronutrient fortification.
Nestlé reduces sugars, salts, saturated fats and trans
fats. It helps to increase consumption of whole grains
and vegetables, including via healthier home
cooking. There are 10 corporate business principles
of Nestlé, which comply with all applicable legal
requirements and international norms, ensure
activities are environmentally sustainable and create
significant value for society. These 10 corporate
business principles are as follows 21:
1. nutrition, health and wellness,
2. quality assurance and product safety,
3. consumer communication,

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4. human rights in business activities (eliminate
child labor),
5. leadership and personal responsibility,
6. safety and health at work,
7. supplier and customer relations,
8. agriculture and rural development,
9. environmental sustainability, and
10. improvement of water efficiency.
The 1st three principles are in reference to Nestlé’s
consumer. The Company works to improve the
nutritional value, taste, and enjoyment of its products
while guaranteeing a safe product that fully informs
the consumer about the benefits and pitfalls of its
products. The 4th principle is about the necessity of
human rights and exercising and promoting good
human rights practices. Principles 5 and 6 are about
requiring that employees respect each other and their
management while also ensuring healthy and safe
conditions for all employees worldwide. Principles 7
and 8 require that Company’s customers and
suppliers stay to the same high standards of honesty,
integrity and fairness that it expects of itself. The 9th
and 10th principles expressed environmental
sustainability and Nestlé continuing attempts to
advance its environmentally safe practices and
sustainability initiatives 10.

8. Strategy of Nestlé

Strategy of the Nestlé Company is as follows 2:

Four competitive advantages
? Unmatched product and brand portfolio:
Focused and diverse product portfolio, with
75% of sales accounted for by around 30
brands and an understanding of local needs.
? Unmatched research and development
capability: An impetus from R&D that
supports growth through consumer?centric
innovation and renovation.
? Unmatched geographic presence: Company
presence in many markets, including
emerging markets, which created close
relationships between the Company and the
consumers.
? People, culture, values and attitude:
Decentralized structure with devolved
responsibilities as well as cohesive strategic
directions to encourage entrepreneurial
spirit.

Four growth drivers
• Nutrition, health and wellness: These are the
main goals that the Company is aiming to
achieve through science?based nutritional
expertise and all of its activities.
• Emerging markets and popularly positioned
products: Nestlé’s operations in emerging
markets are both well developed and rich
with opportunity.
• Out?of?home consumption: Nestlé
Professional is the largest branded
manufacturer in the out?of?home segment,
and this segment has two divisions: Branded
Beverages and Customized Food Solutions.
• Premiumisation: Increasing incomes and
leisure time are positive trends for this
sector.

Four operational pillars
? Innovation and renovation to ensure
products are new or remain relevant to the
customers.
? Operational efficiency to ensure the highest
quality, the lowest cost and the best
customer service.
? Whenever, wherever, however…to have the
products always in an arm’s reached of the
consumers.
? Consumer communication to excite and to
learn from the consumers.

9. The Nestlé Nutrition Council

The Nestlé Nutrition Council was founded in
1978. It is composed of 10 internationally renowned
nutritional scientists with a spread of nationalities and
specialties. It reviews current and developing
nutritional issues, and provide the Company with
relevant information and continuous advice related to
its business, policies and strategy. It also operates as
a medical and scientific network to provide health
professionals with the most current and appropriate
nutritional education, information and tools 25.

10. Future Attempt of Nestlé

Every year Nestlé invests around CHF 1.5 billion
in Research and Development (R&D). R&D plays a
pivotal role, and looking ahead, will play an even
greater role. It is also working on scientific
innovations to reduce obesity and diabetes. It works

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for special nutritional needs of patients with
Alzheimer’s disease and illness related to ageing. It
does not favor short-term profit at the expense of
successful long-term business development 34.

11. Environment Friendly Products
of Nestlé

Nestlé invests at an average of CHF 100 million
each year for the protection of the environment in the
factories. It reduces waste and emissions when it
produces products in the factory. It pioneered the
Clean Development Mechanism which is part of the
‘Kyoto Protocol 1997′ to control carbon dioxide
(CO2) emissions to combat global warming. During
2004–05 periods it reduced water consumption in
factories by 42%, energy consumption by 30%, and
emissions of greenhouse gases by 34%. It buys milk,
coffee, cocoa, cereals, vegetables, fruit, herbs, sugar
and spices directly from local farmers. For example,
in China, Nestlé buys milk from some 40,000 farmers
and contributes directly or indirectly to the welfare of
about 200,000 people in the country. More than 800
of agronomists, technical advisers and field
technicians of Nestlé provide technical assistance to
more than 400,000 farmers throughout the world to
improve their production quality 34.
The Nestlé Policy on the environment helps
Nestlé to achieve continuous performance
improvement and contributes towards sustainable
development. More than 18% of factories of Nestlé
are certified to ISO 14001 and/or OHSAS 18001
12.

12. Social Works of Nestlé

Long-term objective of Nestlé is to create
sustainable value for its shareholders. It works to
achieve the UN Millennium Development Goals in
developing countries. For example, it funds schools
in rural areas in Morocco to designing and
maintaining a water supply system for refugees in
Ethiopia. In India it finances and helps to organize
deep bore wells and sourcing of clean water. It works
for the poverty reduction, education, health for
women and children, and the reduction of pandemics
like HIV/AIDS and malaria. More than 800,000
Nigerians have received HIV/AIDS education from
Nestlé with 2,600 peer educators reaching youth in
twelve states with high HIV/AIDS prevalence.
Donations are provided at humanitarian relief during
natural disasters. The Company constructs storage
tanks and installs submersible water pumps at village
schools near factories 34.

13. Nestlé Bangladesh Limited

After the independence of Bangladesh in 1971,
Nestlé initiated only some limited brands such as,
Nespray, Cerelac, Lactogen, and Blue Cross etc. It
started its commercial operation in Bangladesh in
1994. Its total authorized capital was Tk. 1.5 billion
and total paid up capital was Tk. 1.1 billion. The only
factory of the Company in Bangladesh is situated at
Sreepur (55 km north of Dhaka). The factory
produces the instant noodles, cereals and repacks
milks, soups, beverages and infant nutrition products.
At present it is a strongly positioned organization in
Bangladesh. The Company is continuously growing
through the policy of constant innovation,
concentrating on its core competencies and its
commitment to high quality food to the people of
Bangladesh. The vision of Nestlé Bangladesh
Limited is to survive as the most successful food and
drink Company in Bangladesh, generating
sustainable, profitable growth and continuously
improving results to the benefit of shareholders and
employees 1.

14. Products of Nestlé Bangladesh
Limited

Although globally the product line of Nestlé is very
large, in Bangladesh currently there are only 12
products of Nestlé. The Company believes all foods
and beverages can be enjoyable and play an
important role in a balanced and healthy diet and
lifestyle. As a result no matter how short the product
line may be but it ensures the same quality in
compare to the other countries 10.

The products of Nestlé Bangladesh Limited
(NBL) are 22;
• Beverage: Shad-Nescafé, Nescafé 3 in 1,
Coffee Mate, Gold e-Magic Nestea, and
Nesfuta.
• Culinary: Maggi Noodles, Shad-e-Magic,
Maggi Healthy Soup, Magic Cube.
• Dairy: Nido Fortified, Nido 2+, Nido 3+,
Nido Growing up Milk.

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• Breakfast Cereal: Cornflex, Koko Crunch
and Huny Gold.
• Nutrition: Lectozen, Lactogen Recover,
Prelactogen, NAN, All 110, BABY ; Me
and Cerelac (Different flavors).
• Confectionary: Nestlé Munch Rolls.
Nestlé NAN is the first nutrient system clinically
proven to enhance a baby’s immune defenses which
reduce allergic symptoms by 50%.

15. Business Functions of NBL

Demand and trust on the Nestlé products are growing
day by day in Bangladesh. The products of Nestlé are
distributed throughout the country with the help of
the distributors. There are currently 80 distributors of
its products of which 76 are retail distributors and
remaining 4 are Nestlé Professional’s distributors
providing products for the out of home
consumptions. The whole country is divided into 7
regions: Dhaka North, Dhaka South, Chittagong,
Bogra, Khulna, Sylhet and Barisal 20.

Nestlé has 10 functions in Bangladesh, among which
the Managing Director controls 3 and the rest are
controlled by their individual directors. Among 10
functions, 5 functional areas of NBL are as follows
20:

General Management: The General Management
takes cares of the overall operation of the Company,
by maintaining regular governmental affairs and by
taking the key decisions. The General Management
also deals the manufacturing function, where some
products are made and some are packed.

Finance and Control: The Finance and Control
department of NBL deals with the financial
transactions and most importantly it also applies the
control mechanism to remain the Company complaint
financially and procedurally.

Human Resource Management: Human resource
management (HRM) is a function in organizations
designed to maximize employee performance in
service of their employer’s strategic objectives. It is
primarily concerned with how people are managed
within organizations, focusing on policies and
systems. It is typically responsible for a number of
activities, including employee recruitment, training
and development, performance appraisal, and
rewarding.

In 2014, NBL directly employed more than 650
people and many more with indirect contracts with its
own factory in Sreepur. More than 1,000 people are
employed by suppliers and distributors in connection
to Nestlé.

Manpower is considered by NBL to be its best asset
and prefer people to work with enthusiasm, wit and
efficiency to enhance productivity and sustainable
growth to the organization.

Supply Chain Management: The Supply Chain
ensures the stable supply of the products of NBL
according to the demand of the customers.

Marketing: The marketing department of NBL looks
after the existing brands, market share and product
development of the products. It is divided into
different sub-departments like, Corporate Affairs and
Communication, Regulatory Affairs, Nestlé
Professional etc.

Sales and Nestlé Professionals are responsible for
earning revenue for the company, but sales goes for
the retail distributors and Nestlé Professionals looks
after the institutional sales.

Every function of NBL contributes from their end to
meet the corporate goal and main aim of every
function is to gain ultimate excellence.

15.1 Success of NBL

Key success factors of NBL are as follows 25:
1. Strong brands/relationships with consumers.
2. Research and development (R&D).
3. Innovation and renovation.
4. Product availability.
5. Building relations with medical and
scientific community.

16. Creating Shared Value (CSV) of
NBL

Nestlé Bangladesh Limited (NBL) has some
Corporate Social Responsibility (CSR) activities in,
which it call Creating Shared Value (CSV). Nestlé
always focuses on long-term, sustainable and
profitable growth and helps communities around its
operation to improve their quality of life in a similar

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manner. So, NBL calls CSR as CSV 31. At present
CSR activities are one of the inevitable parts of any
organization. In Bangladesh CSR is very
philanthropic work. Most of the organizations
perform their CSR activities as a charitable work.
Almost all the renowned organizations perform CSR
activities for the sake of society. Tax exemption
(10% of the actual expenditure of CSR) is another
cause for performing CSR at a high rate in
Bangladesh 9. But NBL follows its own way to do
CSV, which is very aligned with its business. It
neither does charitable work nor rigidly follows the
top ten issues of CSR 15.

NBL first puts emphasis on the compliance, where
they remain compliant to the local and international
law then it focuses on its sustainability as a business
organization and finally contributes for CSV. NBL
has three areas where it is working extensively as a
part of CSV: Nutrition (mainly Healthy Kids
Programme), Water and Rural Development.
Nutrition is the first and leading CSR among school
kids so that they can ensure balanced food value in
their regular meal. At present NBL is arranging the
safe drinking water, where the sources of the pure
drinking water are rare. It is establishing water tank
to provide pure drinking water to the children and
nearby community 31.

NBL emphasizes the compliance with laws, rules and
Codes of Conduct. For the sustainability of the
company it meets the needs of present without
compromising for future generations. CSV is created
for farmers, consumers, employees, communities,
and shareholders 21.

16.1 Three Areas of NBL as a Part of
CSV

NBL has started its CSV operation parallel to other
operating countries around the world.

Nutrition

Nutrition programme of NBL is divided into two
parts: i) Nestlé Healthy Kids (NHK) Programmes in
rural schools, and ii) Knowledge sharing programmes
21.

Thinking nutritional deficiencies of children NBL
initiated NHK model in Bangladesh. The programme
was launched in April 2010 in the Sreepur factory
area in the Gazipur district. At present it provides
nutrition facilities to more than eighteen thousand
school children. It is carefully designed for children
between the ages of 13 to 17 years. The programme
consists of six modules and is of six week duration
31.

It provides school students in rural communities’
guidance on living a healthy lifestyle. It educates
school students on good food habits, nutritional
deficiencies, food related disorders, food hygiene,
and techniques to safeguard the nutritional value of
food during preparation 20.

In Bangladesh till 2014, about 4,000 kids are enrolled
in NHK training and shared nutrition knowledge
among 15,000 kids through this pilot initiative.
Comparison of CSV in nutrition is given in table 1
20.
CSV (Nutrition) 2012 (Past) 2013 (Past) 2014 (Present) 2015 (Future) 2016 (Future) Nutrition
Nestlé Healthy Kids Programme (NHK)
2,000
3,000
4,000
5,000
6,000
Knowledge Sharing Programme
0 10,000 15,000 25,000 30,000

Table1: Nutrition programme of NBL. Source: 20.

Water

Water programme of NBL is divided into two parts:
i) Construct water tank in rural schools to provide
clean drinking water, ii) Water education 21.

To support the community in the rural area, NBL has
constructed several water tanks of the highest
hygiene and quality to supply clean drinking water,
which are built by drilling and constructing water
tanks that store clean drinking water allowing the
school children regular access to drinking water.
NBL is increasing awareness regarding the depletion
of water and advice farmers on the optimal use of
water in agriculture and dairy 31.

In Bangladesh till 2014, NBL constructed 40 water
tanks to provide clean drinking water and 4,000
students are provided with water training to rural
school children 20.

Rural Development

NBL believes that education and empowerment of
students can enhance the quality of life in

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communities. In Bangladesh, majority of the girl
students in the rural areas drop-outs from schools due
to early marriage and absence of a separate or any
sanitation. Thinking these NBL has set up 21
sanitation facilities in village schools in the Gazipur
district till 2013, which benefited about 11,000 girl
students. In Bangladesh till 2014, NBL constructed
24 girls’ toilets in Gazipur district 31.

NBL has taken initiative to collect the raw materials
from farmers directly rather than importing from
abroad. It trains the farmers about modern
methodology of cultivation, use of seed and fertilizer
etc. and then buys raw materials from the farmers
31.

17. Mission, Vision, Objectives and
Strategies of NBL

The missions of NBL are as follows 28:

• Provide nutrition, health and wellness to the
people of Bangladesh.
• As “Good Food, Good Life” is the mission
of Nestlé S.A., its mission is also same as
for Bangladesh.
• The aim of the Company by providing
consumers with the best tasting, most
nutritious choices in a wide range of food
and beverage categories and eating
occasions in Bangladesh.
• Its mission is to produce foods for the
consumers of Bangladesh from morning to
night.

The visions of NBL are as follows 29:
• To be a leading and competitive food
Company in Bangladesh.
• To build the respected and trustworthy
leading food, beverage, nutrition, health and
wellness Company in Bangladesh ensuring
long-term sustainable and profitable growth.
• To improve shareholder value by being a
preferred corporate citizen preferred
employer in Bangladesh.
• Its aim is to preferred supplier selling
preferred products in Bangladesh.
• It focuses to ensure that the vision is
implemented in every aspect.

The objectives of NBL are as follows 20:
• To be recognized as the leader in nutrition,
health and wellness, trusted by all its
stakeholders, and to be the reference for
financial performance in its industry.
• To create long-term sustainable value for the
shareholders if their behavior, strategies and
operations are also creating value for the
communities in Bangladesh.
• To develop safe and wholesome packaged
foods using the most efficient and
appropriate packaging materials available in
Bangladesh.
• To build long-term inspiration for the future
and short-term entrepreneurial actions by
delivering the necessary level of
performance.
• To provide only foods which satisfy
consumer requirements and expectations.
• To provide lowest possible weight and
volume of packages.
• To achieve leadership and earn the trust by
satisfying the expectations of consumers,
whose daily choices drive their performance,
of shareholders, of the communities in
which they operate and of society as a
whole.
• New packaging materials and processes that
will reduce the environment pollution.
• Increase the use of recycled materials in the
whole process wherever possible.

The strategies of NBL are as follows:
• To offer strong brands to the consumers.
• To keep the best relationships with
consumers.
• To invest in Research and Development
(R&D) for the development of the products.
• To maintain innovation and renovation of
the products.
• For the product availability to all type of
consumers.

18. Marketing Structure of NBL

Marketing structure of NBL is as follows 20:
• It is more people, product and brand
oriented than system oriented.
• It seeks to earn consumer’s confidence,
loyalty and preference and anticipate their
demands through innovation and
renovations.

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• It remains conscious of satisfying the wants
needs and demands of its consumers.
• It is always committed to the concept of
continuous improvement of its activities and
customer satisfaction through market
segmentation, positioning and target
marketing.
• It favors long-term successful business
development and even to greater extent,
customer life-time value.
• It is driven by an acute sense of performance
adhering to quality and customer
satisfaction.
• It does not lose sight of the necessity to
improve in terms of quality, price and
distribution.
• It is always aware of the need to generate a
sound profit annually.

19. Strengths, Weaknesses,
Opportunities, and Threats
(SWOT) Analysis

A SWOT analysis is a structured planning
method used to evaluate the strengths, weaknesses,
opportunities, and threats involved in an
organization. The technique is credited to Albert
Humphrey, who led a convention at the Stanford
Research Institute in the 1960s and 1970s using data
from Fortune 500 companies 14.
Strength is something or some capability that can
help the team be successful and sustaining. It could
be something that the team would share with other
teams. Weakness is something that is a disadvantage
or significant additional challenge to the team. An
opportunity is something the team may be able to do
to help be more competitive or improve
sustainability. Threat is something that poses a risk to
the team and the ability of the team to sustain itself.
The strengths and weaknesses are internal factors
and the opportunities and threats are the environment
external of an organization. SWOT analysis helps
organizations to set achievable goals, objectives, and
steps to further the social change or community
development effort 27.
A SWOT analysis can be used to for the
following purposes 8,36:
• Explores possibilities for new efforts or
solutions to problems.
• Identifies barriers that will limit
goals/objectives.
• Decides on direction that will be most
effective.
• To revise plans to the best navigate systems,
communities, and organizations.
• As a brainstorming and recording device as
a means of communication.
• To enhance credibility of interpretation to be
utilized in presentation to leaders or key
supporters.
• Makes decisions about the best path for
initiative. Identify opportunities for success
in context of threats to success can clarify
directions and choices.
• Determines where change is possible. In the
turning point, an inventory of an
organization’s strengths and weaknesses can
reveal priorities as well as possibilities.
• Adjusts and refines plans mid-course. A new
opportunity might open wider avenues,
while a new threat could close a path that
once existed.

20. SWOT Analysis of NBL
SWOT is the type of analysis which represents
good overview of Company’s internal and external
situation. SWOT analysis of NBL is as follows 20:

Strengths
1. A portfolio of products which responds to
the consumer always.
2. A unique strategic position which combines
powerful local brands with strong global
product brands.
3. Strong internal growth and internal
emphasis on innovation.
4. Carefully selected employees who are
dedicative and understand company’s
culture and values, and are willing to
provide significant labor hours to
accomplish any project efficiently.
5. Operational efficiency makes the company
competitive in the market.
6. Strong cultural environment.
7. Heavy emphasis on quality and benefit of
the products.
8. Centralized organization that helps in easier
coordination of business activities.
9. Highly diversified product and brand
portfolio, which decreases the fluctuation of
company’s performance and increases
competitiveness.

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10

10. Well developed and performing R;D
project which is one of the main drivers to
ensure company’s growth and constantly
increasing performance.

Weaknesses
? Warehouse storage problems.
? Diversified portfolio at times makes
decision process difficult.
? Nestlé is less well-known and only specialist
products are marketed by Nestlé Nutrition.
? Prices of some of the Nestlé products are
more expensive than its competitors.
? Unable to control raw material prices.

Opportunities
? Good reputation, well-known brand leads to
customer’s loyalty.
? Increasing demand for healthier food
products.
? Can establish new joint ventures.
? Launch the products with integration of
social and cultural factors by matching the
taste buds of Bangladeshi consumers.
? Can enhance distribution of Infant Nutrition
Products in Bangladesh where malnutrition
already exists.
? Can make certain products available in the
market at a relatively lower price so that a
larger number of consumers can buy it.
? Leader in the most of the markets that show
the strength to the future development.
? Nestlé has footprints and may improve its
presence in emerging markets.

Threats
• Rivals doing more vigorous advertisements
and campaigns.
• Controversies.
• Product pricing not preferred by many
customers.
• Far fewer staffs than actually required in
terms of tasks to be completed.
• Significantly less customer support services
than is required in terms of the number of
customers and the complexity of the services
offered.
• Few local manufacturers who tend to sale
their products at a relatively lower price
through various unethical means.
• Uncertainty of the new market. Entering
new market company cannot mitigate all the
risks.
• Changing economic and political situation,
which pushes the company to make future
predictions and forecasts.
• Different needs and habits of customers in
every market. Company is operating in the
markets where people have different taste,
habits, income, which is hard to evaluate
and predict.

21. BCG Matrix Analysis

BCG matrix is a chart that was created by Bruce
Doolin Henderson (1915–1992) for the Boston
Consulting Group (in the USA) in 1970 to help
corporations to analyze their business units 3,4. It is
a growth-share 2×2 matrix. It is a 2-dimentional
analysis on management Strategic Business Units
(SBUs): i) industry growth rate (in the vertical axis),
which attempted to capture the potential cash usage
of a single business, and ii) relative market share (in
the horizontal axis), which was a surrogate for overall
competitive strength and hence the cash generation
potential. SBU is a unit of the company that has a
separate mission and objectives. It can be planned
independently from the other businesses. A SBU can
be a company division, a product line or even
individual brands 32.
It is the most famous and simple corporate
portfolio planning matrix. BCG matrix methods are
judged to be successful by those who use them 18.
It gives us a graphical representation for an
organization to examine different business in its
portfolio on the basis of the organization’s related
market share and industry growth rates 19.
It chooses volume growth in demand as the single
measure of the future business units prospects
(vertical dimension) and the firm’s market share in
relation to the share of the leading competitor
(horizontal dimension). It helps the company allocate
resources and is used as an analytical tool in brand
marketing, product management and portfolio
analysis. According to this matrix business could be
classified as high or low according to their industry
growth rate and relative market share 5,7.
The BCG matrix is useful for two purposes:
• decisions on the desirable market share
positions, and
• the assigning of the strategic funds among
the business units.

21.1 Description of BCG Matrix

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11

The BCG matrix makes a series of key
assumptions as follows 6:
? Market share can be gained by investment in
marketing.
? Market share gains will always generate
cash surpluses.
? Cash surpluses will be generated when the
product is in the maturity stage of the life
cycle.
? The best opportunity to build a dominant
market position is during the growth phase.
Resources are allocated to business units
according to where they are situated on the grid as
follows:

Stars: Stars are defined by having large market share
in a fast growing market/industry (Figure 1). They
represent the organization’s best long run
opportunities for growth and profitability 35. They
are the leaders in the business but still need a lot of
support for promotion a placement. They generate
large sums of cash because of their strong relative
market share, but also consume large amounts of cash
because of their high growth rate. Stars tend to
generate high amounts of income. The cash being
spent and brought in approximately nets out. If a star
can maintain its large market share it will become a
cash cow when the market growth rate declines and
when the industry matures (Figure 2). Forward,
backward and horizontal integration, market
penetration, market development, product
development and joint ventures are appropriate
strategies for these divisions to consider.
Stars tend to have new plant and equipment, high
capacity utilization, high R&D expenses, broad
domains, high sales per employee, high value added,
and superiority on a number of competitive devices
13.

Cash Cows: Cash cows are in a position of large
market share in a mature, slow growing industry 35.
They are called Cash Cows because they generate
cash in excess of their needs, they often are milked
(milk these products as much as possible without
killing the cow!). Cash cows require little investment
and generate substantial cash that can be utilized for
investment in other business units (Figure 1). Product
development or concentric diversification may be
attractive strategies for strong cash cows. If
competitive advantage has been achieved, cash cows
have high profit margins and generate a lot of cash
flow. Because of the business’s relative high market
share and industry leadership position, it has high
sales volumes and reputation to earn attractive
profits. As leaders in a mature market, cash cows
exhibit a return on assets that is greater than the
market growth rate, so they generate more cash than
they consume.
Because of the low growth industry, promotion
and placement investments are low and capital
reinvestment and competitive maneuvers are needed
to sustain its present market share. Investment into
supporting infrastructure can improve efficiency and
increase cash flow more. Every effort is needed to
keep cash cows in a healthy condition to preserve
their cash generating capabilities over the long-term.
When cash cows lose their appeal and move towards
deterioration, then a retrenchment policy may be
pursued. Many of today’s cash cows were
yesterday’s stars (Figure 2). Cash cows, though less
attractive from a growth standpoint are, valuable
businesses.
Cash cows tend to have very high capacity
utilization, dated plant and equipment, low capital
intensity, low sales per employee, low R;D and
marketing expenditures, broad domains, and
superiority on essentially all competitive devices
examined 13.

Figure 1: BCG growth share matrix.

Question Marks: Question marks (also known as
problem children or wild cats) represent a business
unit that has a small market share in a high growth
market and they do not generate much cash (Figure
1). These businesses are called Question Marks
because the organization must decide whether to
strengthen them by pursuing an intensive strategy
(market penetration, market development, or product
development) or to sell them, i.e., it is not known if
they will become a Star or drop into the Dog. They
consume resources and initially have low profit
margins. They have high demand and low return due

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12

to low market share. They require huge amount of
cash to maintain or gain market share. They require
attention to determine if the venture can be viable.
Question marks are generally new goods where
buyers have yet to discover them. There is no specific
strategy which can be adopted. If the firm thinks it
has dominant market share, then it can adopt
expansion strategy, else retrenchment strategy can be
adopted. Most businesses start as question marks as
the company tries to enter a high growth market in
which there is already a market-share. If ignored,
then question marks may become dogs, while if huge
investment is made, and then they have potential of
becoming stars and eventually a cash cow when the
market growth slows (Figure 2). These business units
require resources to grow market share, but whether
they will succeed and become stars is unknown. The
best way to handle question marks is way to either
invest heavily in them to gain market share or to sell
them.
Question marks tend to have low capacity
utilization, new plant and equipment, high current
asset levels, high capital intensity, high R;D
expenses, high marketing expenses, narrow domains,
heavy new product activity, high direct costs, and
competitive devices that lag Star competitors on all
fronts 13.
Question marks have the worst cash characteristics
of all, because they have high cash demands and
generate low returns, because of their low market
share. If the market share remains unchanged, it will
simply absorb great amounts of cash. Question marks
must be analyzed carefully in order to determine
whether they are worth the investment required to
grow market share.

Dogs: Dogs represent businesses having weak market
shares in low-growth or no-market-growth mature
industries (Figure 1). So that they can neither
generate nor consume a large amount of cash. They
are called Dogs (more charitably called pets) because
of their weak internal and external position; these
businesses often are liquidated, divested, or trimmed
down through retrenchment. These are a drain on
resources and management energy. Dogs typically
‘break even’, generating barely enough cash to
maintain the business’s market share. Weak dog
businesses often cannot generate attractive long-term
cash flows. When a division first becomes a dog,
retrenchment can be the best strategy to pursue
because many dogs have bounced back, after
strenuous asset and cost reduction, to become viable,
profitable divisions. They neither generate cash nor
require huge amount of cash but it ties up capital that
could better be deployed elsewhere. Due to low
market share, these business units face cost
disadvantages. Generally retrenchment strategies are
adopted because these firms can gain market share
only at the expense of competitor’s/rival firms. These
business firms have weak market share because of
high costs, poor quality, ineffective marketing, etc.
Unless a dog has some other strategic purpose, it
should be liquidated if there are fewer prospects for it
to gain market share. Number of dogs should be
avoided and minimized in an organization and
savings to turn Question Marks into Stars (Figure 2).
Dogs must deliver cash, otherwise they must be
liquidated.
Dogs tend to have dated plant and equipment,
medium capital intensity, high inventory levels, low
R;D expenses, moderate marketing expenses,
narrow domains, low value added, and competitive
devices that lag Cow competitors on all fronts 13.

Figure 2: Flow chart of BCG matrix.

21.2 BCG Matrix of Nestlé Bangladesh
Limited

The BCG matrix structures of NBL are as follows
20:

Stars
Nascafé, Cerelac are stars in Bangladesh. Nascafé
is one of the leading coffee brands in the Bangladeshi
market, which is unparalleled by any other brand in
the country. It has a high market share and its growth
rate is significantly high. Cerelac has become one of

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13

the leading baby food products in the country. Its
different variants are available and it is a major
contributor for NBL revenues. Its market share with
its sales is increasing on a continuous basis from the
start of its marketing.

It has witnessed a substantial growth of Nascafé,
Cerelac in the market of Bangladesh at present and
seems to continue dominating the market for some
time. At present these two products are very popular
in Dhaka and Chittagong. NBL must try to expand
market of these in all districts of Bangladesh equally.
It must be sincere in bringing new variants in order to
hold on to their positions. Although they are stars but
it can do much better in terms of expanding their
shares by adopting market development strategies
17.

Cash cows
The cash cows are children food items in
Bangladesh, such as, Maggi Noodles. It is the first
preference of Bangladeshi children in terms of instant
food but market growth rate of it is not very high.
Though the number of repeat purchasers is high in
case of Maggi Noodles, the rate of increase among
the new purchasers is not too high. Company has to
take measures to make these products as stars 17.

Maggi Noodles of NBL has targeted only for the
children, it should now also concentrate on placing
the products for Office Executives, Mid wives,
Young adults, and the elite wing of the society 17.

Cocola Noodles and Products of Pran are competitors
of NBL.

Question marks
Maggi Soup, Kit Kat and Nestlé Milk are question
marks in Bangladesh. Though these items are of
superior quality but market share are not sufficient.
These items are comparatively higher prices than the
competitors and they are not turning up that size of
revenues as like the other popular products of NBL.
According to the sellers’ experience, the demand of
Maggi Soup is underdeveloped, because of high
demand of other soups. Kit Kat has an upper edge
over its competitors because of to crispiness and
superior quality but it suffers lack a significant
market share. It is not produced in Bangladesh,
instead imported from India. NBL can take necessary
market strategies, such as, capitalize for the Kit Kat
to make it popular to the people of all age levels of
Bangladesh. Nestlé Milk (Nido) is popular to the
consumers of Bangladesh. But its market share is not
satisfactory 17.

Dogs
Munch, Koko Crunch, Nestea are dogs in
Bangladesh. Though these items have been
popularized worldwide but they have not been
popularized to the Bangladeshi customers 20.
Nestea is also not accepted cordially to the customers
because Ispahani, Taza and Shelon tea are popular to
the consumers of Bangladesh. Munch is a very cheap
snack bar in Bangladesh but it is not well known to
the children of the country. Koko Crunch is a tasty
nutritious food but it is very costly and only very rich
customers can buy it. Nestle should take necessary
steps to make these items as stars in Bangladesh.

22. Conclusion

In the study we have found that at present NBL is
using and developing their market strategy properly
with gradual success. The ambition of Nestlé is to
enhance the quality of consumer’s lives through
nutrition, health and wellness. Nestlé Nutrition
develops science-based nutrition products and
services that improve the quality of life for people
with specific nutritional needs. It is always very
careful for infant nutrition, healthcare nutrition and
performance nutrition. It produces foods with
different cultures, different geographies, different
needs, tastes, flavors and habits that all consumers eat
and drink. It does not discriminate on the basis of
origin, nationality, religion, race, gender or age. It is
not involved with politics in any country. In the 150-
year life of Nestlé, its fundamental approach to
business has been the creation of long-term
sustainable value for our consumers, customers,
employees, shareholders, and society as a whole.
Nestlé, as global company that has many known
brands, have good possibilities to create a permanent
market in Bangladesh. Company has a wide variety
of suppliers and customers that are based on trust and
long-term relationships.

References
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