Keywords: nestle key competencies, nestle five makes, nestle swot analysis

Milkpak will position Nestlé product as a superior quality product consumer focused. Text messages like “They recognizes your taste much better than us”, “Nestle Milkpak now in your door step”; “Add additional flavours’ to your daily life” will portray Nestlé picture clearly and distinctly. Milkpak will position Nestlé product contrary to the competitors and gain competitive edge through the successful promotional methods, using inventions, and by reaching closer to the target market through the set up of happenings like Basant, Valentine day and etc. In a nutshell consumers will view Nestlé as something providing highly quality, in conditions of preference, customer targeted and, at the same time reasonably priced as compared to others.

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3. 0 Central Competency of Nestlé

To present Nestlé product contrary to the competitors, the business will be using differentiation strategy that may not only identify their own from others but also give an advantage over others. Nestlé main products will be very beneficial especially in conditions of quality, health, and cleanliness & most important consumer satisfaction. Nestlé augmented products includes consumer satisfaction, warranty to suppliers in terms of expire, delivery and after sales services.

The companies around the globe get some competitive edge predicated on some features which other companies don’t have. For example, as the Dell has the competitive border over other computer company companies, because they use built-to-order Strategy while no other company in computer industry use this strategy. Similarly in Pakistan nestle has their competitive edge based on the strategies like product differentiation and customer focused.

Nestlé is using the product differentiation strategy by giving the superior quality products. Their main target is to keep the customers dedicated. They bought shelve space in different departmental stores to draw in the clients. They tried to attain each group of folks in which they have got succeeded. Besides, customer satisfaction is the focal point for the company. They provide hygienic products with their customers. Products are also verified by health and safety precautions and international quality expectations.

Porter Five Forces

3. 1. 1 Threat of New Entrants:

There is big volume of food companies on the planet; in the meantime the competitive between food companies are happened. Some companies have carved out role in which they support to dairy resource. These food companies are fearful of being squeezed out by the best players. Another threat for many food companies is other food services companies stepping into the marketplace. 15 Competing in a new industry requires resources to invest. Production of stuffed products requires huge investment of financial, human being, technical, and marketing resources.

Bargaining Electricity of Suppliers:

The suppliers of food may not pose a major threat, due to quantity of suppliers. Raw milk is standard commodity and is available in the available market from a huge amount of milkmen. If anyone refuses to sell its product then company can buy it from other people who are already prepared to sell to company. On the other hand, the value of size to supplier also regarded as a hazard. Suppliers also have less leverage to bargain over price because the company is purchasing the large level of their milk and suppliers don’t possess much option to sell dairy to others.

Bargaining Ability of Buyers

The buyers will not post much of a threat to the food industry. Large clients have their own bargaining vitality with food companies. Large corporate clients like airlines and suppliers pay huge amount of money a year. There are large numbers of vendors, who are buying and distributing the merchandise, so their bargaining power is low and company have leverage to determine implement its conditions and conditions to vendors.

Availability of Alternative

There are handful of substitutes in the food industry. Most of the food companies have similar suites of services. Companies focusing on their role usually have a competitive benefit, but this benefits will depend on whether there are any barriers that avoiding other organizations from coming into. 15

Competitive Rivalry

The food industry is highly competitive in nowadays. As a result, food industry is becoming similar to a commodity, a location where the food company with the low cost structure, higher efficiency and better customer support will overcome out competition. In long run, larger companies would prefer to take over or combine with other companies alternatively than spend the money to advertise and advertise to people. 15

Source of Cost Efficiency

3. 2. 1 Overall economy of scale

Economy of scale decides cost efficiency based on time, and processing of the businesses and labour cost. Nestlé used new high-technology system machines to process all the merchandise, like high-speed bottling system, packaging machine for increasing the end result of the merchandise so, it might save time of the operation in process, and save labour cost. The company need not work with more labour to operate the procedure, which is one of the main element to save lots of cost.

3. 2. 2 Experience

Nestlé has been offering Pakistani consumers since 1988, when parent company, the Switzerland-based Nestlé SA, first received a show in Milkpak Ltd. Today Nestlé is totally integrated in Pakistani life, and is regarded as the designer of safe, wholesome and delicious food, and leaders in developing and uplifting the areas in which they operate. Nestlé Pakistan means that their products are created open to consumers wherever in the united states they might be. Convenience reaches the heart and soul of the Nestlé viewpoint, and there target is to bring products to people’s doorsteps.


3. 3. 1 Tangible resources

Nestlé Milkpak produces in over 81 countries and achieves 98% of its turnover outside European countries. Nestlé Milkpak is the world’s greatest dairy company, which will 98% of its business. It has an twelve-monthly turnover of 70 billion Swiss francs, 522 new factories in 81 countries, 200 operating companies, 1 preliminary research outer and 20 technological development groupings, has more than 231, 000 employees and more than 8000 products around the world. A couple of three companies co-ordinate the actions of some 200 operating companies around the globe.

Intangible resources

There are three different functions, Nestlé Milkpak, contains the financial shares in the allied companies. In addition, it checks the profitability of the companies and to ensure the profitability of the group as whole. Second, Nestlé Milkpak, has two regions of activities that are research and scientific development, and technical assistance. Beside this, it offers know-how in anatomist, marketing, production, corporation, management and employees training on a continuing basis. The third company is Nestlé World Trade Corporation that oversees the transfer and export of products worldwide.

3. 4 BCG Matrix

Relative Market Growth

Low High









3. 4. 1 Stars

The stars will be the high relative market share and high market growth. Nestlé beverages will be the actors in their business, because with the high quality and new designs which comes every now and then makes them more popular among the clients, because customer with upper class wants the product quality and nestle offers the best quality foods. Besides, Nestlé major products such as Nestlé milk load up and Nestlé drinking water will is based on the category of star products, because of the needs of individual in their life.

3. 4. 2 Question Marks

The product which have high anticipated progress rate but low market share would be looked at as question marks. The product which the company launch first-time in Pakistan is Nestlé Ice-cream would come under the question grades because of the unknown final result whether successful or failed in the progress of business in future.

3. 4. 3 Cash Cows

The cash cows are Nestlé cereal and other baby foods. There exists less competitive brand on these specific of products and Nestle was regarded as a top quality and reliable brand, so almost all of the consumers opt to obtain Nestle.

3. 4. 4 Dogs

The pharmaceutical products are Nestlé Dog; because it has low-share business with low development market particularly when speak about Pakistani market. The business must think on what it can do by increasing the low share and development market.

3. 5 Product Life Cycle

The product life routine has been used to analyse the merchandise development refer by the BCG matrix. Product life pattern has 4 levels consist of release, progress, maturity and drop. Nestlé Ice-cream has been stated on the advantages stage because it is launched the very first time in Pakistan. Next, the progress level would be the food items like milk pack, water and etc, scheduled to individuals need as Nestlé has provided.

On the other hands, Nestlé cereal and baby food were explained in the maturity level, scheduled to less rivals. Last but not least, Nestlé pharmaceutical product is on the decline stage, due to low share in business and low demand. In the merchandise life pattern, it demonstrates Nestlé Milkpak industry is now on the maturity stage, the business has been identified by consumers.

3. 6 SWOT Research (TOW Matrix)


  • Worldwide fame of Nestlé.
  • Efficient dairy collection system.
  • Keeping high quality requirements.
  • Integrated circulation and warehousing facilities.
  • Large market show of progressive.
  • Having Good reputation on the market by strong brand i. e. Nestlé.
  • Strong R&D.


  • Unable to compete in price hypersensitive portion of UHT milk market.
  • Under-utilization of the capability.
  • Unable to fulfil the demand of local powder dairy market.


  • Improving Current economic climate.
  • Population growth rate.
  • High urbanization rate.
  • High literacy rate.
  • Flexible federal government policies for food industry.
  • Have significant progress opportunities.
  • May merge with other global businesses to eliminate competitors.
  • Having Capable of expanding into other markets of the world.


  • Increase creation of quality dairy to serve the unsatisfied demand.
  • They should go in the product line of powdered milk.
  • They should increase their exports.
  • They should serve the wide range of unsatisfied demand by increasing their distribution sites.


  • As per the increase demand of the milk they should match the demand as Nestlé be capable of extend.
  • They should make a solid circulation system to focus on avail the full benefit of the growing market.
  • They should choose affective marketing approaches for the promotion of their product.


  • High inflation rate.
  • Low purchasing electric power.
  • Decrease in GDP growth rate.
  • Increasing interest levels.
  • Recessionary period running a business pattern.
  • Competition with the new entrants.


  • Invest more on the dairy products as there is still a large chunk of the market which require modernization.
  • Introduce new technology for quality guarantee and better output.


  • The co-ordination between different departments should be advanced it will lessen the bureaucratic cost and increase the efficiency of the business.