Operation Management in Nestle company - Report

Added on - 28 May 2020

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Running head: Operation managementOperationManagement
1Table of ContentsIntroduction.................................................................................................................................................1Pestle analysis of Nestle..............................................................................................................................2Political factors........................................................................................................................................2Economic Factors....................................................................................................................................2Social factors...........................................................................................................................................2Technological factors..............................................................................................................................3Legal Factors...........................................................................................................................................3Environmental factors..............................................................................................................................3Porter Five Force Analysis of Nestle...........................................................................................................3Threat of New entrants – low..................................................................................................................4Competitive rivalry- High........................................................................................................................4Bargaining Power of Suppliers – Low.....................................................................................................4Bargaining Power of Buyers – High........................................................................................................5Threat of Substitutes- High......................................................................................................................5Five competitive forces that determine industry profitability......................................................................5Conclusion...................................................................................................................................................6References...................................................................................................................................................7Appendix.....................................................................................................................................................9
2IntroductionIn this report the company which is taken is Nestle. Nestle is one of the famous brands inthe market. The founder of the company is Henri Nestle and it was founded in 1866 inSwitzerland. So, in the first phase of the report, the PESTEL Analysis will be discussed. Thesecond phase of the report will take into consideration Porter Five Forces Model.Pestle analysis of NestlePolitical factorsIt is analyzed that the company is conducting the operations in diversified communitiesand at the time of conducting the operations the company has to face many changes in rules andregulations. Various products and services are also offered by Nestle but there are variousreasons due to which many products are not allowed in many countries. The stability ismaintained in many economies like India and China. Nestle has to take into consideration thepolitical changes in the developing countries so that the operations can be conducted smoothly.The activities of Nestle are also affected by the instability of the government and it givesnegative impact on the overall operations of the company (Loughlin, 2015).Economic FactorsThe company has also maintained a proper network of research and development so thatproducts can be introduced according to the demand of the customers. Change in economicpolicies of various countries the company has to deal with the problems related to supply of itsproducts to the customers. It is analyzed that the customers are aware of the changes in inflationand economic growth. Change in economic policies gives direct impact on the target segments
3of the company. The decision related to price is one of the essential factors that give directimpact on the inflation rate and buying power. In enhancing the economic growth of the farmersthe organization is emphasizing on contributing to enhance the satisfaction level of the customers(Nestle, 2013).Social factorsThe operations of the company are influenced by the thoughts and beliefs of thecustomers. The culture and lifestyle of the individual influence the company to provide specificproduct to the proper segment group. Social perspective is the factor that is taken intoconsideration by the organization. It is seen that the change in the attitude of the customers playsa great role in conducting the activities of the company (Rezaeegiglo et al., 2014). In the recentscenario, the people focus on their health and also consume those products that are beneficial fortheir health. The organization has also attained goodwill in the market by evaluating the behaviorof the consumers. Nestle is a global brand but the products are produced locally so that properquality can be offered to customers (Krafft et al., 2015).Technological factorsTechnology provides many opportunities to the organization so that new products can becreated in a proper manner. Nestle considers the latest technology in conducting the operationsof the company like to maintain the proper database by considering latest softwares. Socialmedia has minimized the gap between the consumers and the organization. Nestle takes intoconsideration the state of art technology for creating new products and to attain proper standardsglobally (Moura et al., 2015).Legal FactorsNestle has to face many labor laws that are related to minimum wages. It is analyzed thatthe organization has to follow many promotion laws as it is one of the assets of the organization.Nestle has to consider the foreign trade regulations so that products can be supplied to othercountries. These laws assist to provide food and beverages to the consumers at international anddomestic level by considering rules and regulations of the transportation products. Nestle has tofollow the global regulations so that the changes can be taken into consideration in theinternational markets. It is evaluated that many countries focus on making changes so that the
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