Operation Management in Nestle company - Report

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Added on 2020-05-28

Operation Management in Nestle company - Report

Added on 2020-05-28

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Running head: Operation management Operation Management

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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

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2Introduction In this report the company which is taken is Nestle. Nestle is one of the famous brands in the market. The founder of the company is Henri Nestle and it was founded in 1866 in Switzerland. So, in the first phase of the report, the PESTEL Analysis will be discussed. The second phase of the report will take into consideration Porter Five Forces Model. Pestle analysis of Nestle Political factors It is analyzed that the company is conducting the operations in diversified communities and at the time of conducting the operations the company has to face many changes in rules and regulations. Various products and services are also offered by Nestle but there are various reasons due to which many products are not allowed in many countries. The stability is maintained in many economies like India and China. Nestle has to take into consideration the political 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 gives negative impact on the overall operations of the company (Loughlin, 2015).Economic FactorsThe company has also maintained a proper network of research and development so that products can be introduced according to the demand of the customers. Change in economic policies of various countries the company has to deal with the problems related to supply of its products to the customers. It is analyzed that the customers are aware of the changes in inflation and economic growth. Change in economic policies gives direct impact on the target segments

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3of the company. The decision related to price is one of the essential factors that give direct impact 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 factors The operations of the company are influenced by the thoughts and beliefs of the customers. The culture and lifestyle of the individual influence the company to provide specific product to the proper segment group. Social perspective is the factor that is taken into consideration by the organization. It is seen that the change in the attitude of the customers plays a great role in conducting the activities of the company (Rezaeegiglo et al., 2014). In the recent scenario, the people focus on their health and also consume those products that are beneficial for their 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 proper quality can be offered to customers (Krafft et al., 2015). Technological factors Technology provides many opportunities to the organization so that new products can be created in a proper manner. Nestle considers the latest technology in conducting the operations of the company like to maintain the proper database by considering latest softwares. Social media has minimized the gap between the consumers and the organization. Nestle takes into consideration the state of art technology for creating new products and to attain proper standards globally (Moura et al., 2015).Legal Factors Nestle 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 other countries. These laws assist to provide food and beverages to the consumers at international and domestic level by considering rules and regulations of the transportation products. Nestle has to follow the global regulations so that the changes can be taken into consideration in the international markets. It is evaluated that many countries focus on making changes so that the

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