Financial Analysis Of Nestle

1. Introduction
This is the project about financial statement analysis of two companies in Pakistan, dealing in the same industry. The companies chosen to be analyzed are NESTLÉ PAKISTAN and ENGRO FOODS LIMITED. Both the companies are of food industry and have been dealing in food business for many years. Both the companies deal in a very wide range of food products and are well reputed in the market as well.
NESTLÉ, a very well-known brand started its business life with only one product, which was condensed milk for infants. And now it has captured the market of products like as chocolates, coffee, bottled water, powdered milk, flavored milk, tea whitener and many more. It has targeted all of its potential customers of all age groups. The

To be the leading FMCG company around the world as well as in Pakistan.
7. Nestlé aims to be proactive innovation and renovation culture, which is the key to Nestlé’s success in the marketplace.

SWOT Analysis
Strengths
Strength of Nestlé is the presence of its factories and its operations in almost every country in the world, employing around 283000 people. The sales values have touched 109.9 billion, with a net profit of 18.0 billion. It has recorded a financial growth even in times of recession only by promoting the sales of smaller and cheaper type of products in developing economies.
Weaknesses
Nestlé do not have direct market outlets and this can be one of the weaknesses as it can cause difference in profit made. It does not have enough raw material production units; they depend on either local raw material producers or through other trade channels.
Opportunities
Nestlé’s weakness of not having a direct outlet can be converted as an opportunity by introduction of new direct outlets. The acquisition of Cadburys for an example is an opportunity since they are one of the main competitors for Nestlé. Setting up their personal farms and raw material production units is an opportunity as it would reduce the cost for Nestlé.

To focus on individual growth and development.
4. Enthusiastic pursuit of profit.
5. To promote safety, health and pure environment.
SWOT Analysis
Strengths
• Engro Foods is a well-established brand name; customers have a brand association.
• They can easily afford research and development costs in order to introduce new products.
• They have strong supply chain (good PR with farmers provides world class supply chain management).
• Engro Foods is having strong relationship with global research partners like AC Nielsen, JWT Asiatic.
• Company is not relying on third parties for sale and distribution and has its own sale and distributing network.
• Engro Foods Limited only has the third-generation UHT milk plant in the country.
• Engro Foods Limited plant is the only plant in Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium quality and hygiene.

Weaknesses
• One major weakness of Engro Foods in dairy products, which is that 85% of its milk collection centers are in Punjab, while processing unit is in Sindh.
• Higher transportation cost.
• Dependency on TETRA PAK for the entire packing of its dairy products.
• The product range of Engro Foods narrows as compared to its competitors.