M PRA

Munich Personal RePEc Archive

Present and Future of Nestlé Bangladesh

Limited

Haradhan Mohajan

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

Present and Future of Nestlé Bangladesh Limited

Haradhan Kumar Mohajan*
Assistant Professor, Premier University, Chittagong, Bangladesh
*Corresponding author: haradhan1971@gmail.com

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 ▪ Respect for and integration with diverse

cultures.
Nestlé is the world’s largest health, nutrition and ▪ Proper conduct and ethical values as basic
wellness company (measured by revenues). Its requirements for management and
Headquartered is in Vevey, Switzerland. In the food employees.
industry Nestlé is the most trusted name with high ▪ Recognition that consumers deserve
quality products. Nestlé produces a diversified information about the products they buy and
portfolio of product categories ranging from baby the company behind the brand.
foods, bottled water, chocolate, coffee, dairy to Nestlé is in the developing stage in Bangladesh.
healthcare and sports nutrition. From the start of But recently it has experienced an organic growth of
Nestlé, nutrition has been at the core of its business. 40% and this trend predicted to continue in the near
According to the company’s Annual Report [1], it has future. Nestlé Bangladesh Limited (NBL) is not a
employed about 339,000 people in over 196 countries listed company in the stock exchange of Bangladesh.
and over 450 factories in more than 86 countries “Good Food Good Life” is the mission of Nestlé,
around the world. Employees of Nestlé by which drives the company to provide consumers with
geographic area are; 28.0% in Europe (10,175 the best tasting and most nutritious choices in a wide
employees in Switzerland in 2013), 32.5% in range of food and beverage categories. Its business
Americas and 39.5% in Asia, Oceania and Africa. practices have been governed by integrity, honesty,
Factories of Nestlé by geographic area are; about 140 fair dealing and full compliance with all applicable
in Europe, about 164 in Americas and about 143 in laws [20].
Asia, Oceania and Africa [24]. In Bangladesh Nestlé’s vision is to establish the
Nestlé has more than 250,000 shareholders most successful food and drink Company in
worldwide (42% Swiss, 22% US Citizens, 10% Bangladesh by generating sustainable, profitable
British, 8% French and 5% German). It applies the growth and continuously improving results to the
principle of “one share–one vote” up to a maximum benefit of shareholders and employees.
of 3% of the total shares [11]. Some of the basic
Nestlé values and principles are [33]: 2. Methodology of the Study
▪ Favoring long-term development over short-
term profit. The article is prepared on the basis of secondary data
▪ Long-term commitments and relationships. of Nestlé S.A. and Nestlé Bangladesh Limited
(NBL). We have used Nestlé websites, previous
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 American Journal of Food and Nutrition, 2015, Vol. 3, No. 2, 34-43

published articles and various research reports. We launched his ‘Farine lactée’, a combination of cow’s
have also collected information from the employees milk, wheat flour and sugar, which is the world’s first
of NBL, wholesalers of various departmental stores infant food. This food helps to nurture and to save the
and consumers of Bangladesh. NBL has strong rules lives of young babies. He developed and produced
and regulation of sharing information. It is not a this milk-based food for babies whose mothers could
listed company in stock exchange of Bangladesh. The not nurse them. His ultimate goal helped to combat
data of NBL is not widely available to explain the the problem of infant mortality due to malnutrition
present financial situation properly. [30,34].
Thinking for mothers and their babies he decided
3. Objectives of the Study 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
The objective of the study is to express a brief as far afield as Egypt, Russia, Mexico and Indonesia.
summary about business structure of Nestlé The Company formed by the 1905 merger was called
Bangladesh Limited (NBL). The purpose of the the Nestlé and Anglo-Swiss Milk Company. In 1907,
research approach is to discuss the present and future the Company began full-scale manufacturing in
situation of various foods and beverages of NBL. At Australia. It has operated the business in Brazil since
the start we have discussed the history, market 1921 and in South Africa since 1927. Nestlé
structure and strategy and business principle of established the world’s largest milk processing plant
Nestlé S.A. We stress current mission, vision, in Kabirwala, Pakistan and total investment was CHF
objectives and strategies of Nestlé in Bangladesh. (Swiss franc) 90 million ($1= CHF 1.25) in 2007
NBL has some Corporate Social Responsibility [12].
(CSR) activities in, which it call Creating Shared In 1921, the Company recorded its first loss due to
Value (CSV). We have tried to explain briefly the economic slowdown and declining exchange rates
CSV of the Company. during and after the First World War. In 1929
Company Nestlé and Anglo Swiss Condensed Milk
We have briefly discussed general management, Co. had merger with the Peter, Kohler Chocolats
finance and control, human resource management, Suisses S.A. In 1934 the Company launched Milo, in
supply chain management and marketing, and their 1938 launched Nescafé, in 1947 it merged with
performance in Bangladesh. We have also Maggi and changed the name to Nestlé Alimentana
highlighted the efficiency and effectiveness of S.A., in 1948 it launched Nestea and Nesquik, in
working capital management system and food market 1969 it opened Vittel (initially equity interest only),
for Nestlé in Bangladesh. in 1971 it Merge with Ursina-Franck, in 1973 it
started Stouffer (with Lean Cuisine) and in 1974 it
Bangladesh is a densely populated and developing initiated L’Oréal (associate). In 1977 company
country in the Southern Asia. The article highlights changed its name to Nestlé S.A. [26].
present and future of Nestlé in Bangladesh. The During the World War II (1938–1945) the
public health consciousness of the country has Company faced difficulties for the second time.
increased in the 21st century. On the other hand Profits dropped from $20 million in 1938 to $6
economic development of Bangladesh makes the million in 1939. Thinking this the Company
popularity of Nestlé products to the people of established factories in developing countries. As a
Bangladesh. We have simply discussed the SWOT result the Company developed day by day and
analysis and BCG growth sharing matrix to develop recently it covers almost every food and beverage
the market structure of Nestlé in Bangladesh. 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].
4. Brief History of Nestlé
In 1849, Henri Nestlé (10 August 1814–7 July
1890), a German pharmacist, set up his laboratory in 5. Global Market Structure of
the small Swiss town of Vevey on the shores of Lake Nestlé
Geneva, Switzerland. In 1866, the Company was
founded by Henri Nestlé in Switzerland. In 1867, he
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 American Journal of Food and Nutrition, 2015, Vol. 3, No. 2, 34-43

Nestlé has divided its worldwide operations into 1. Baby foods: Cerelac, Gerber, Gerber
three zones: i) Europe Regions (Adriatic, Benelux, Graduates, NaturNes and Nestum.
Iberian and Russia), ii) Americas Regions 2. Food service: Chef, Chef-Mate, Maggi,
(Austral‐America, Bolivarian, Caribbean and Central Milo, Minor’s, Nescafé, Nestea, Sjora, Lean
American), and iii) AOA Regions (Asia, Africa and Cuisine and Stouffer’s.
Oceania). “Good Food Good Life” is the mission of 3. Cereals: Chocapic, Cini Minis, Cookie
Nestlé, which drives the company to provide Crisp, Estrelitas, Fitness and Nesquik
consumers with the best tasting and most nutritious Cereal.
choices in a wide range of food and beverage 4. Culinary, chilled and frozen food: Buitoni,
categories and eating occasions [23]. Herta, Hot Pockets, Lean Cuisine, Maggi,
In 2014, Nestlé has employed about 339,000 Stouffer’s and Thomy.
people in over 196 countries and over 450 factories in 5. Bottled water: Nestlé Pure Life, Perrier,
more than 86 countries around the world with a total Poland Spring and S. Pellegrino.
equity of CHF 110 billion. It has 2,000 brands and 6. Drinks: Juicy Juice, Milo, Nesquik and
10,000 different products and more than one billion Nestea.
products sold every day worldwide. The average 7. Coffee: Nescafé, Nescafé 3 in 1, Nescafé
number of employees in the factories of Nestlé is Cappuccino, Nescafé Classic, Nescafé
270, and the average number of employees in any Decaff, Nescafé Dolce Gusto, Nescafé Gold
single country is around 2,000. Nestlé interacts with and Nespresso.
some 165,000 direct suppliers and cooperates directly 8. Chocolate & confectionery: Aero,
with over 690,000 farmers worldwide [1]. Butterfinger, Cailler, Crunch, Kit Kat,
About one-fourth of the employees of Nestlé are Orion, Smarties and Wonka.
trained medical delegates. They work closely with 9. Healthcare nutrition: Boost, Nutren Junior,
health care professionals such as doctors, nurses and Peptamen and Resource.
dietitians to provide them with relevant information 10. Ice cream: Dreyer’s, Extrême, Häagen-Dazs,
as well as products and services to help their patients Mövenpick and Nestlé Ice Cream.
[34]. 11. Pet care: Alpo, Bakers Complete, Beneful,
At present processing milk foods are still Nestlé’s Cat Chow, Chef Michael’s Canine
chief products. The other products are chocolates and Creations, Dog Chow, Fancy Feast, Felix,
confectionery, instant milk-based drinks culinary Friskies, Gourmet, Purina, Purina ONE and
products, frozen ready-made meals, instant coffee, Pro Plan.
ice cream, dairy products, infant foods, mineral water 12. Sports nutrition: Power Bar.
etc. Nestlé’s expertise as the world’s leading infant 13. Weight management: Jenny Craig.
food manufacturer, gained over more than 125 years,
is put at the disposal of health authorities, the medical
profession and mothers and children everywhere 7. Corporate Business Principles of
[25]. Nestlé is the world’s largest milk Company,
sourcing 11.8 million tons of milk from more than 30 Nestlé
countries. Coffee is the 2nd most traded commodity in
the world after oil, and grows best within the “coffee Nestlé provides nutritionally sound products
belt” between the tropics of Cancer and Capricorn designed for children and helps to reduce risk of
that spans Latin America, Africa and Asia. Nestlé malnutrition through micronutrient fortification.
purchased 750,000 tons of green coffee in 2006 [12]. 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
6. Global Products of Nestlé of Nestlé, which comply with all applicable legal
At present Nestlé covers almost every food and requirements and international norms, ensure
beverage category globally. It always provides the activities are environmentally sustainable and create
consumers tastier and healthier products. It is the significant value for society. These 10 corporate
trust and effort of the Nestlé professionals which business principles are as follows [21]:
created the win and wining scenario globally. The 1. nutrition, health and wellness,
main products of Nestlé are as follows [16,25]: 2. quality assurance and product safety,
3. consumer communication,
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4. human rights in business activities (eliminate • Nutrition, health and wellness: These are the
child labor), main goals that the Company is aiming to
5. leadership and personal responsibility, achieve through science‐based nutritional
6. safety and health at work, expertise and all of its activities.
7. supplier and customer relations, • Emerging markets and popularly positioned
8. agriculture and rural development, products: Nestlé’s operations in emerging
9. environmental sustainability, and markets are both well developed and rich
10. improvement of water efficiency. with opportunity.
The 1st three principles are in reference to Nestlé’s • Out‐of‐home consumption: Nestlé
consumer. The Company works to improve the Professional is the largest branded
nutritional value, taste, and enjoyment of its products manufacturer in the out‐of‐home segment,
while guaranteeing a safe product that fully informs and this segment has two divisions: Branded
the consumer about the benefits and pitfalls of its Beverages and Customized Food Solutions.
products. The 4th principle is about the necessity of • Premiumisation: Increasing incomes and
human rights and exercising and promoting good leisure time are positive trends for this
human rights practices. Principles 5 and 6 are about sector.
requiring that employees respect each other and their
management while also ensuring healthy and safe Four operational pillars
conditions for all employees worldwide. Principles 7 ▪ Innovation and renovation to ensure
and 8 require that Company’s customers and products are new or remain relevant to the
suppliers stay to the same high standards of honesty, customers.
integrity and fairness that it expects of itself. The 9 th ▪ Operational efficiency to ensure the highest
and 10th principles expressed environmental quality, the lowest cost and the best
sustainability and Nestlé continuing attempts to customer service.
advance its environmentally safe practices and ▪ Whenever, wherever, however...to have the
sustainability initiatives [10]. products always in an arm’s reached of the
consumers.
▪ Consumer communication to excite and to
8. Strategy of Nestlé learn from the consumers.

Strategy of the Nestlé Company is as follows [2]:

9. The Nestlé Nutrition Council
Four competitive advantages
❖ Unmatched product and brand portfolio: The Nestlé Nutrition Council was founded in
Focused and diverse product portfolio, with 1978. It is composed of 10 internationally renowned
75% of sales accounted for by around 30 nutritional scientists with a spread of nationalities and
brands and an understanding of local needs. specialties. It reviews current and developing
❖ Unmatched research and development nutritional issues, and provide the Company with
capability: An impetus from R&D that relevant information and continuous advice related to
supports growth through consumer‐centric its business, policies and strategy. It also operates as
innovation and renovation. a medical and scientific network to provide health
❖ Unmatched geographic presence: Company professionals with the most current and appropriate
presence in many markets, including nutritional education, information and tools [25].
emerging markets, which created close
relationships between the Company and the
consumers.
❖ People, culture, values and attitude: 10. Future Attempt of Nestlé
Decentralized structure with devolved
responsibilities as well as cohesive strategic Every year Nestlé invests around CHF 1.5 billion
directions to encourage entrepreneurial in Research and Development (R&D). R&D plays a
spirit. pivotal role, and looking ahead, will play an even
greater role. It is also working on scientific
Four growth drivers innovations to reduce obesity and diabetes. It works

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for special nutritional needs of patients with Donations are provided at humanitarian relief during
Alzheimer’s disease and illness related to ageing. It natural disasters. The Company constructs storage
does not favor short-term profit at the expense of tanks and installs submersible water pumps at village
successful long-term business development [34]. schools near factories [34].

11. Environment Friendly Products 13. Nestlé Bangladesh Limited

of Nestlé
After the independence of Bangladesh in 1971,
Nestlé invests at an average of CHF 100 million Nestlé initiated only some limited brands such as,
each year for the protection of the environment in the Nespray, Cerelac, Lactogen, and Blue Cross etc. It
factories. It reduces waste and emissions when it started its commercial operation in Bangladesh in
produces products in the factory. It pioneered the 1994. Its total authorized capital was Tk. 1.5 billion
Clean Development Mechanism which is part of the and total paid up capital was Tk. 1.1 billion. The only
‘Kyoto Protocol 1997’ to control carbon dioxide factory of the Company in Bangladesh is situated at
(CO2) emissions to combat global warming. During Sreepur (55 km north of Dhaka). The factory
2004–05 periods it reduced water consumption in produces the instant noodles, cereals and repacks
factories by 42%, energy consumption by 30%, and milks, soups, beverages and infant nutrition products.
emissions of greenhouse gases by 34%. It buys milk, At present it is a strongly positioned organization in
coffee, cocoa, cereals, vegetables, fruit, herbs, sugar Bangladesh. The Company is continuously growing
and spices directly from local farmers. For example, through the policy of constant innovation,
in China, Nestlé buys milk from some 40,000 farmers concentrating on its core competencies and its
and contributes directly or indirectly to the welfare of commitment to high quality food to the people of
about 200,000 people in the country. More than 800 Bangladesh. The vision of Nestlé Bangladesh
of agronomists, technical advisers and field Limited is to survive as the most successful food and
technicians of Nestlé provide technical assistance to drink Company in Bangladesh, generating
more than 400,000 farmers throughout the world to sustainable, profitable growth and continuously
improve their production quality [34]. improving results to the benefit of shareholders and
The Nestlé Policy on the environment helps employees [1].
Nestlé to achieve continuous performance
improvement and contributes towards sustainable 14. Products of Nestlé Bangladesh
development. More than 18% of factories of Nestlé Limited
are certified to ISO 14001 and/or OHSAS 18001
[12]. 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
12. Social Works of Nestlé and beverages can be enjoyable and play an
important role in a balanced and healthy diet and
Long-term objective of Nestlé is to create lifestyle. As a result no matter how short the product
sustainable value for its shareholders. It works to line may be but it ensures the same quality in
achieve the UN Millennium Development Goals in compare to the other countries [10].
developing countries. For example, it funds schools
in rural areas in Morocco to designing and The products of Nestlé Bangladesh Limited
maintaining a water supply system for refugees in (NBL) are [22];
Ethiopia. In India it finances and helps to organize • Beverage: Shad-Nescafé, Nescafé 3 in 1,
deep bore wells and sourcing of clean water. It works Coffee Mate, Gold e-Magic Nestea, and
for the poverty reduction, education, health for Nesfuta.
women and children, and the reduction of pandemics • Culinary: Maggi Noodles, Shad-e-Magic,
like HIV/AIDS and malaria. More than 800,000 Maggi Healthy Soup, Magic Cube.
Nigerians have received HIV/AIDS education from • Dairy: Nido Fortified, Nido 2+, Nido 3+,
Nestlé with 2,600 peer educators reaching youth in Nido Growing up Milk.
twelve states with high HIV/AIDS prevalence.

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• Breakfast Cereal: Cornflex, Koko Crunch In 2014, NBL directly employed more than 650
and Huny Gold. people and many more with indirect contracts with its
• Nutrition: Lectozen, Lactogen Recover, own factory in Sreepur. More than 1,000 people are
Prelactogen, NAN, All 110, BABY & Me employed by suppliers and distributors in connection
and Cerelac (Different flavors). to Nestlé.
• Confectionary: Nestlé Munch Rolls.
Nestlé NAN is the first nutrient system clinically Manpower is considered by NBL to be its best asset
proven to enhance a baby’s immune defenses which and prefer people to work with enthusiasm, wit and
reduce allergic symptoms by 50%. efficiency to enhance productivity and sustainable
growth to the organization.
15. Business Functions of NBL Supply Chain Management: The Supply Chain
ensures the stable supply of the products of NBL
Demand and trust on the Nestlé products are growing according to the demand of the customers.
day by day in Bangladesh. The products of Nestlé are
distributed throughout the country with the help of Marketing: The marketing department of NBL looks
the distributors. There are currently 80 distributors of after the existing brands, market share and product
its products of which 76 are retail distributors and development of the products. It is divided into
remaining 4 are Nestlé Professional’s distributors different sub-departments like, Corporate Affairs and
providing products for the out of home Communication, Regulatory Affairs, Nestlé
consumptions. The whole country is divided into 7 Professional etc.
regions: Dhaka North, Dhaka South, Chittagong,
Bogra, Khulna, Sylhet and Barisal [20].
Sales and Nestlé Professionals are responsible for
earning revenue for the company, but sales goes for
Nestlé has 10 functions in Bangladesh, among which
the retail distributors and Nestlé Professionals looks
the Managing Director controls 3 and the rest are
after the institutional sales.
controlled by their individual directors. Among 10
functions, 5 functional areas of NBL are as follows
Every function of NBL contributes from their end to
[20]:
meet the corporate goal and main aim of every
function is to gain ultimate excellence.
General Management: The General Management
takes cares of the overall operation of the Company,
by maintaining regular governmental affairs and by 15.1 Success of NBL
taking the key decisions. The General Management
also deals the manufacturing function, where some Key success factors of NBL are as follows [25]:
products are made and some are packed. 1. Strong brands/relationships with consumers.
2. Research and development (R&D).
Finance and Control: The Finance and Control 3. Innovation and renovation.
department of NBL deals with the financial 4. Product availability.
transactions and most importantly it also applies the 5. Building relations with medical and
control mechanism to remain the Company complaint scientific community.
financially and procedurally.

Human Resource Management: Human resource 16. Creating Shared Value (CSV) of
management (HRM) is a function in organizations
designed to maximize employee performance in NBL
service of their employer’s strategic objectives. It is
primarily concerned with how people are managed
within organizations, focusing on policies and Nestlé Bangladesh Limited (NBL) has some
systems. It is typically responsible for a number of Corporate Social Responsibility (CSR) activities in,
activities, including employee recruitment, training which it call Creating Shared Value (CSV). Nestlé
and development, performance appraisal, and always focuses on long-term, sustainable and
rewarding. 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 nutrition facilities to more than eighteen thousand
CSR activities are one of the inevitable parts of any school children. It is carefully designed for children
organization. In Bangladesh CSR is very between the ages of 13 to 17 years. The programme
philanthropic work. Most of the organizations consists of six modules and is of six week duration
perform their CSR activities as a charitable work. [31].
Almost all the renowned organizations perform CSR
activities for the sake of society. Tax exemption It provides school students in rural communities’
(10% of the actual expenditure of CSR) is another guidance on living a healthy lifestyle. It educates
cause for performing CSR at a high rate in school students on good food habits, nutritional
Bangladesh [9]. But NBL follows its own way to do deficiencies, food related disorders, food hygiene,
CSV, which is very aligned with its business. It and techniques to safeguard the nutritional value of
neither does charitable work nor rigidly follows the food during preparation [20].
top ten issues of CSR [15].
In Bangladesh till 2014, about 4,000 kids are enrolled
NBL first puts emphasis on the compliance, where in NHK training and shared nutrition knowledge
they remain compliant to the local and international among 15,000 kids through this pilot initiative.
law then it focuses on its sustainability as a business Comparison of CSV in nutrition is given in table 1
organization and finally contributes for CSV. NBL [20].
has three areas where it is working extensively as a
part of CSV: Nutrition (mainly Healthy Kids CSV (Nutrition) 2012
(Past)
2013
(Past)
2014
(Present)
2015
(Future)
2016
(Future)
Programme), Water and Rural Development. Nestlé
Healthy
Nutrition is the first and leading CSR among school Kids 2,000 3,000 4,000 5,000 6,000
kids so that they can ensure balanced food value in Programme
Nutrition (NHK)
their regular meal. At present NBL is arranging the Knowledge
Sharing 0 10,000 15,000 25,000 30,000
safe drinking water, where the sources of the pure Programme
drinking water are rare. It is establishing water tank
to provide pure drinking water to the children and Table1: Nutrition programme of NBL. Source: [20].
nearby community [31].
Water
NBL emphasizes the compliance with laws, rules and
Codes of Conduct. For the sustainability of the Water programme of NBL is divided into two parts:
company it meets the needs of present without i) Construct water tank in rural schools to provide
compromising for future generations. CSV is created clean drinking water, ii) Water education [21].
for farmers, consumers, employees, communities,
and shareholders [21]. To support the community in the rural area, NBL has
constructed several water tanks of the highest
16.1 Three Areas of NBL as a Part of hygiene and quality to supply clean drinking water,
CSV which are built by drilling and constructing water
tanks that store clean drinking water allowing the
NBL has started its CSV operation parallel to other school children regular access to drinking water.
operating countries around the world. NBL is increasing awareness regarding the depletion
of water and advice farmers on the optimal use of
Nutrition water in agriculture and dairy [31].

Nutrition programme of NBL is divided into two In Bangladesh till 2014, NBL constructed 40 water
parts: i) Nestlé Healthy Kids (NHK) Programmes in tanks to provide clean drinking water and 4,000
rural schools, and ii) Knowledge sharing programmes students are provided with water training to rural
[21]. school children [20].

Thinking nutritional deficiencies of children NBL Rural Development

initiated NHK model in Bangladesh. The programme
was launched in April 2010 in the Sreepur factory NBL believes that education and empowerment of
area in the Gazipur district. At present it provides students can enhance the quality of life in
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communities. In Bangladesh, majority of the girl • To be recognized as the leader in nutrition,

students in the rural areas drop-outs from schools due health and wellness, trusted by all its
to early marriage and absence of a separate or any stakeholders, and to be the reference for
sanitation. Thinking these NBL has set up 21 financial performance in its industry.
sanitation facilities in village schools in the Gazipur • To create long-term sustainable value for the
district till 2013, which benefited about 11,000 girl shareholders if their behavior, strategies and
students. In Bangladesh till 2014, NBL constructed operations are also creating value for the
24 girls’ toilets in Gazipur district [31]. communities in Bangladesh.
• To develop safe and wholesome packaged
NBL has taken initiative to collect the raw materials foods using the most efficient and
from farmers directly rather than importing from appropriate packaging materials available in
abroad. It trains the farmers about modern Bangladesh.
methodology of cultivation, use of seed and fertilizer • To build long-term inspiration for the future
etc. and then buys raw materials from the farmers and short-term entrepreneurial actions by
[31]. delivering the necessary level of
performance.
17. Mission, Vision, Objectives and • To provide only foods which satisfy
Strategies of NBL consumer requirements and expectations.
• To provide lowest possible weight and
The missions of NBL are as follows [28]: volume of packages.
• To achieve leadership and earn the trust by
satisfying the expectations of consumers,
• Provide nutrition, health and wellness to the whose daily choices drive their performance,
people of Bangladesh. of shareholders, of the communities in
• As “Good Food, Good Life” is the mission which they operate and of society as a
of Nestlé S.A., its mission is also same as whole.
for Bangladesh. • New packaging materials and processes that
• The aim of the Company by providing will reduce the environment pollution.
consumers with the best tasting, most • Increase the use of recycled materials in the
nutritious choices in a wide range of food whole process wherever possible.
and beverage categories and eating
occasions in Bangladesh. The strategies of NBL are as follows:
• Its mission is to produce foods for the • To offer strong brands to the consumers.
consumers of Bangladesh from morning to
• To keep the best relationships with
night.
consumers.
• To invest in Research and Development
The visions of NBL are as follows [29]:
(R&D) for the development of the products.
• To be a leading and competitive food
• To maintain innovation and renovation of
Company in Bangladesh.
the products.
• To build the respected and trustworthy
• For the product availability to all type of
leading food, beverage, nutrition, health and
consumers.
wellness Company in Bangladesh ensuring
long-term sustainable and profitable growth.
• To improve shareholder value by being a
preferred corporate citizen preferred 18. Marketing Structure of NBL
employer in Bangladesh.
• Its aim is to preferred supplier selling Marketing structure of NBL is as follows [20]:
preferred products in Bangladesh. • It is more people, product and brand
• It focuses to ensure that the vision is oriented than system oriented.
implemented in every aspect. • It seeks to earn consumer’s confidence,
loyalty and preference and anticipate their
The objectives of NBL are as follows [20]: demands through innovation and
renovations.
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• It remains conscious of satisfying the wants • Decides on direction that will be most
needs and demands of its consumers. effective.
• It is always committed to the concept of • To revise plans to the best navigate systems,
continuous improvement of its activities and communities, and organizations.
customer satisfaction through market • As a brainstorming and recording device as
segmentation, positioning and target a means of communication.
marketing. • To enhance credibility of interpretation to be
• It favors long-term successful business utilized in presentation to leaders or key
development and even to greater extent, supporters.
customer life-time value. • Makes decisions about the best path for
• It is driven by an acute sense of performance initiative. Identify opportunities for success
adhering to quality and customer in context of threats to success can clarify
satisfaction. directions and choices.
• It does not lose sight of the necessity to • Determines where change is possible. In the
improve in terms of quality, price and turning point, an inventory of an
distribution. organization’s strengths and weaknesses can
• It is always aware of the need to generate a reveal priorities as well as possibilities.
sound profit annually. • Adjusts and refines plans mid-course. A new
opportunity might open wider avenues,
while a new threat could close a path that
19. Strengths, Weaknesses, once existed.

Opportunities, and Threats

(SWOT) Analysis 20. SWOT Analysis of NBL
SWOT is the type of analysis which represents
A SWOT analysis is a structured planning good overview of Company’s internal and external
method used to evaluate the strengths, weaknesses, situation. SWOT analysis of NBL is as follows [20]:
opportunities, and threats involved in an
organization. The technique is credited to Albert Strengths
Humphrey, who led a convention at the Stanford 1. A portfolio of products which responds to
Research Institute in the 1960s and 1970s using data the consumer always.
from Fortune 500 companies [14]. 2. A unique strategic position which combines
Strength is something or some capability that can powerful local brands with strong global
help the team be successful and sustaining. It could product brands.
be something that the team would share with other 3. Strong internal growth and internal
teams. Weakness is something that is a disadvantage emphasis on innovation.
or significant additional challenge to the team. An 4. Carefully selected employees who are
opportunity is something the team may be able to do dedicative and understand company’s
to help be more competitive or improve culture and values, and are willing to
sustainability. Threat is something that poses a risk to provide significant labor hours to
the team and the ability of the team to sustain itself. accomplish any project efficiently.
The strengths and weaknesses are internal factors 5. Operational efficiency makes the company
and the opportunities and threats are the environment competitive in the market.
external of an organization. SWOT analysis helps 6. Strong cultural environment.
organizations to set achievable goals, objectives, and 7. Heavy emphasis on quality and benefit of
steps to further the social change or community the products.
development effort [27]. 8. Centralized organization that helps in easier
A SWOT analysis can be used to for the coordination of business activities.
following purposes [8,36]: 9. Highly diversified product and brand
• Explores possibilities for new efforts or portfolio, which decreases the fluctuation of
solutions to problems. company’s performance and increases
• Identifies barriers that will limit competitiveness.
goals/objectives.
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10. Well developed and performing R&D • Changing economic and political situation,
project which is one of the main drivers to which pushes the company to make future
ensure company’s growth and constantly predictions and forecasts.
increasing performance. • Different needs and habits of customers in
every market. Company is operating in the
Weaknesses markets where people have different taste,
➢ Warehouse storage problems. habits, income, which is hard to evaluate
➢ Diversified portfolio at times makes and predict.
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
21. BCG Matrix Analysis
more expensive than its competitors.
BCG matrix is a chart that was created by Bruce
➢ Unable to control raw material prices.
Doolin Henderson (1915–1992) for the Boston
Consulting Group (in the USA) in 1970 to help
Opportunities
corporations to analyze their business units [3,4]. It is
❖ Good reputation, well-known brand leads to
a growth-share 2×2 matrix. It is a 2-dimentional
customer’s loyalty.
analysis on management Strategic Business Units
❖ Increasing demand for healthier food
(SBUs): i) industry growth rate (in the vertical axis),
products.
which attempted to capture the potential cash usage
❖ Can establish new joint ventures.
of a single business, and ii) relative market share (in
❖ Launch the products with integration of
the horizontal axis), which was a surrogate for overall
social and cultural factors by matching the
competitive strength and hence the cash generation
taste buds of Bangladeshi consumers.
potential. SBU is a unit of the company that has a
❖ Can enhance distribution of Infant Nutrition
separate mission and objectives. It can be planned
Products in Bangladesh where malnutrition
independently from the other businesses. A SBU can
already exists.
be a company division, a product line or even
❖ Can make certain products available in the
individual brands [32].
market at a relatively lower price so that a
It is the most famous and simple corporate
larger number of consumers can buy it.
portfolio planning matrix. BCG matrix methods are
❖ Leader in the most of the markets that show
judged to be successful by those who use them [18].
the strength to the future development.
It gives us a graphical representation for an
❖ Nestlé has footprints and may improve its
organization to examine different business in its
presence in emerging markets.
portfolio on the basis of the organization’s related
market share and industry growth rates [19].
Threats
It chooses volume growth in demand as the single
• Rivals doing more vigorous advertisements
measure of the future business units prospects
and campaigns.
(vertical dimension) and the firm’s market share in
• Controversies. relation to the share of the leading competitor
• Product pricing not preferred by many (horizontal dimension). It helps the company allocate
customers. resources and is used as an analytical tool in brand
• Far fewer staffs than actually required in marketing, product management and portfolio
terms of tasks to be completed. analysis. According to this matrix business could be
• Significantly less customer support services classified as high or low according to their industry
than is required in terms of the number of growth rate and relative market share [5,7].
customers and the complexity of the services The BCG matrix is useful for two purposes:
offered. • decisions on the desirable market share
• Few local manufacturers who tend to sale positions, and
their products at a relatively lower price • the assigning of the strategic funds among
through various unethical means. the business units.
• Uncertainty of the new market. Entering
new market company cannot mitigate all the 21.1 Description of BCG Matrix
risks.
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The BCG matrix makes a series of key profits. As leaders in a mature market, cash cows
assumptions as follows [6]: exhibit a return on assets that is greater than the
▪ Market share can be gained by investment in market growth rate, so they generate more cash than
marketing. they consume.
▪ Market share gains will always generate Because of the low growth industry, promotion
cash surpluses. and placement investments are low and capital
▪ Cash surpluses will be generated when the reinvestment and competitive maneuvers are needed
product is in the maturity stage of the life to sustain its present market share. Investment into
cycle. supporting infrastructure can improve efficiency and
▪ The best opportunity to build a dominant increase cash flow more. Every effort is needed to
market position is during the growth phase. keep cash cows in a healthy condition to preserve
Resources are allocated to business units their cash generating capabilities over the long-term.
according to where they are situated on the grid as When cash cows lose their appeal and move towards
follows: deterioration, then a retrenchment policy may be
pursued. Many of today’s cash cows were
Stars: Stars are defined by having large market share yesterday’s stars (Figure 2). Cash cows, though less
in a fast growing market/industry (Figure 1). They attractive from a growth standpoint are, valuable
represent the organization’s best long run businesses.
opportunities for growth and profitability [35]. They Cash cows tend to have very high capacity
are the leaders in the business but still need a lot of utilization, dated plant and equipment, low capital
support for promotion a placement. They generate intensity, low sales per employee, low R&D and
large sums of cash because of their strong relative marketing expenditures, broad domains, and
market share, but also consume large amounts of cash superiority on essentially all competitive devices
because of their high growth rate. Stars tend to examined [13].
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]. Figure 1: BCG growth share matrix.
They are called Cash Cows because they generate
cash in excess of their needs, they often are milked Question Marks: Question marks (also known as
(milk these products as much as possible without problem children or wild cats) represent a business
killing the cow!). Cash cows require little investment unit that has a small market share in a high growth
and generate substantial cash that can be utilized for market and they do not generate much cash (Figure
investment in other business units (Figure 1). Product 1). These businesses are called Question Marks
development or concentric diversification may be because the organization must decide whether to
attractive strategies for strong cash cows. If strengthen them by pursuing an intensive strategy
competitive advantage has been achieved, cash cows (market penetration, market development, or product
have high profit margins and generate a lot of cash development) or to sell them, i.e., it is not known if
flow. Because of the business’s relative high market they will become a Star or drop into the Dog. They
share and industry leadership position, it has high consume resources and initially have low profit
sales volumes and reputation to earn attractive margins. They have high demand and low return due
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to low market share. They require huge amount of could better be deployed elsewhere. Due to low
cash to maintain or gain market share. They require market share, these business units face cost
attention to determine if the venture can be viable. disadvantages. Generally retrenchment strategies are
Question marks are generally new goods where adopted because these firms can gain market share
buyers have yet to discover them. There is no specific only at the expense of competitor’s/rival firms. These
strategy which can be adopted. If the firm thinks it business firms have weak market share because of
has dominant market share, then it can adopt high costs, poor quality, ineffective marketing, etc.
expansion strategy, else retrenchment strategy can be Unless a dog has some other strategic purpose, it
adopted. Most businesses start as question marks as should be liquidated if there are fewer prospects for it
the company tries to enter a high growth market in to gain market share. Number of dogs should be
which there is already a market-share. If ignored, avoided and minimized in an organization and
then question marks may become dogs, while if huge savings to turn Question Marks into Stars (Figure 2).
investment is made, and then they have potential of Dogs must deliver cash, otherwise they must be
becoming stars and eventually a cash cow when the liquidated.
market growth slows (Figure 2). These business units Dogs tend to have dated plant and equipment,
require resources to grow market share, but whether medium capital intensity, high inventory levels, low
they will succeed and become stars is unknown. The R&D expenses, moderate marketing expenses,
best way to handle question marks is way to either narrow domains, low value added, and competitive
invest heavily in them to gain market share or to sell devices that lag Cow competitors on all fronts [13].
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 Figure 2: Flow chart of BCG matrix.
are called Dogs (more charitably called pets) because
of their weak internal and external position; these 21.2 BCG Matrix of Nestlé Bangladesh
businesses often are liquidated, divested, or trimmed
down through retrenchment. These are a drain on
Limited
resources and management energy. Dogs typically
The BCG matrix structures of NBL are as follows
‘break even’, generating barely enough cash to
maintain the business’s market share. Weak dog [20]:
businesses often cannot generate attractive long-term
cash flows. When a division first becomes a dog, Stars
Nascafé, Cerelac are stars in Bangladesh. Nascafé
retrenchment can be the best strategy to pursue
is one of the leading coffee brands in the Bangladeshi
because many dogs have bounced back, after
market, which is unparalleled by any other brand in
strenuous asset and cost reduction, to become viable,
profitable divisions. They neither generate cash nor the country. It has a high market share and its growth
require huge amount of cash but it ties up capital that rate is significantly high. Cerelac has become one of
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the leading baby food products in the country. Its consumers of Bangladesh. But its market share is not
different variants are available and it is a major satisfactory [17].
contributor for NBL revenues. Its market share with
its sales is increasing on a continuous basis from the
start of its marketing. Dogs
Munch, Koko Crunch, Nestea are dogs in
It has witnessed a substantial growth of Nascafé, Bangladesh. Though these items have been
Cerelac in the market of Bangladesh at present and popularized worldwide but they have not been
seems to continue dominating the market for some popularized to the Bangladeshi customers [20].
time. At present these two products are very popular Nestea is also not accepted cordially to the customers
in Dhaka and Chittagong. NBL must try to expand because Ispahani, Taza and Shelon tea are popular to
market of these in all districts of Bangladesh equally. the consumers of Bangladesh. Munch is a very cheap
It must be sincere in bringing new variants in order to snack bar in Bangladesh but it is not well known to
hold on to their positions. Although they are stars but the children of the country. Koko Crunch is a tasty
it can do much better in terms of expanding their nutritious food but it is very costly and only very rich
shares by adopting market development strategies customers can buy it. Nestle should take necessary
[17]. steps to make these items as stars in Bangladesh.

Cash cows
The cash cows are children food items in 22. Conclusion
Bangladesh, such as, Maggi Noodles. It is the first
preference of Bangladeshi children in terms of instant In the study we have found that at present NBL is
food but market growth rate of it is not very high. using and developing their market strategy properly
Though the number of repeat purchasers is high in with gradual success. The ambition of Nestlé is to
case of Maggi Noodles, the rate of increase among enhance the quality of consumer’s lives through
the new purchasers is not too high. Company has to nutrition, health and wellness. Nestlé Nutrition
take measures to make these products as stars [17]. develops science-based nutrition products and
services that improve the quality of life for people
Maggi Noodles of NBL has targeted only for the with specific nutritional needs. It is always very
children, it should now also concentrate on placing careful for infant nutrition, healthcare nutrition and
the products for Office Executives, Mid wives, performance nutrition. It produces foods with
Young adults, and the elite wing of the society [17]. different cultures, different geographies, different
needs, tastes, flavors and habits that all consumers eat
Cocola Noodles and Products of Pran are competitors and drink. It does not discriminate on the basis of
of NBL. origin, nationality, religion, race, gender or age. It is
not involved with politics in any country. In the 150-
Question marks year life of Nestlé, its fundamental approach to
Maggi Soup, Kit Kat and Nestlé Milk are question business has been the creation of long-term
marks in Bangladesh. Though these items are of sustainable value for our consumers, customers,
superior quality but market share are not sufficient. employees, shareholders, and society as a whole.
These items are comparatively higher prices than the Nestlé, as global company that has many known
competitors and they are not turning up that size of brands, have good possibilities to create a permanent
revenues as like the other popular products of NBL. market in Bangladesh. Company has a wide variety
According to the sellers’ experience, the demand of of suppliers and customers that are based on trust and
Maggi Soup is underdeveloped, because of high long-term relationships.
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 References
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