BTEC HND Business Unit 1: Nestle's Environment and Strategy Analysis

This report provides a comprehensive analysis of Nestle's business environment, examining both internal and external factors impacting the company. The analysis begins with an introduction outlining the report's objectives, followed by a detailed discussion of the external environment using the PESTEL framework, covering political, economic, social, technological, environmental, and legal factors. The report then delves into the internal environment, utilizing Porter's Five Forces model to assess competitive dynamics. A thorough examination of Nestle's strengths and weaknesses, including its brand name, mission, organizational structure, human resources, financial strength, fixed assets, market resources, and research and development, is provided. The report culminates in a SWOT analysis, summarizing Nestle's strengths, weaknesses, opportunities, and threats. The report concludes with a concise overview of the organization's size and scope, and a final conclusion summarizing key findings. The report also includes a list of references.

1
ASSIGNMENT 2
Qualification BTEC Level 4 HND Diploma in Business
Unit number and titleUnit 1: Business and Business Environment
Submission date 2nd November DateReceived1stsubmission
Re-submissionDate DateReceived2ndsubmission
Student Name Lê Trần Uyên Thảo Student ID GBS200505
Class Assessor name Nguyễn Ngọc Danh
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A. INTRODUCTION ...................................................................................... 6
B. BODY ...................................................................................................... 6
I. External environment ......................................................................................... 6
* PESTEL ............................................................................................................ 6
1. Political factors .................................................
2. Economic factors .................................................
3. Social factors ............................................................
4. Technology factors .................................................
5. Environment factors .................................................
6. Legal factors ............................................................
II. Internal environment ........................................................................................ 15
* 5 FORCES MODEL .......................................................................................... 15
1. Threat of New Entrants ................
2. Bargaining Power of Suppliers ................
3. Bargaining Power of Buyers ...........................
4. Threat of Substitute Products or Ser
5. Rivalry AmongExisting Firms ...........................
TABLE OF CONTENT

III. Strengths and Weaknessesof Nestlé ................................................................... 25
1. Brand name ............................................................
2. Mission ............................................................
3. Organization structure ......................................
4. Human Resources ......................................
5. Financial strength/ factors ...........................
6. Fixed assets ............................................................
7. Market Resources ......................................
8. Research and Development ...........................
IV. SWOT................................................................................................................. 35
1. Strengths ............................................................
2. Weeknesses ............................................................
2. Opportunities ............................................................
2. Threats ............................................................
V. Organization size and scope .............................................................................. 22
1. Organization size .................................................
2. Scope of Nestlé .................................................
C. CONCLUSION ........................................................................................ 40
D. REFERENCES ......................................................................................... 41

A. INTRODUCTION:
Every company has their own strengths and weaknesses, also internal and external environment play a
important role in the world marketas well as for a company's products.
Nestle face variouschallenges in their operations both internal and external and to develop the right
strategy, these issues need to be addressed.
Furthermore, Nestle is believed this firm has an occasion to be a productive venture. This report
more about competitive environment (Porter’s Five Forces model), PESTEL, SWOT, advantages and
disadvantages of Nestle Corporation.
B. BODY:
I. External environment:
In the external environment, there are 6 factors that affect a company, including political, economic,
technology, environment and legal. In addiction, this report will discuss in more depth about these factors.
*PESTEL
1. Political factors - The company’s abilityto impact the government
Although political changes regularly influence the organization, moving tasks out of the nation influenc
insecure climate for England. Losing Nestlé implies lost more than 300 positions, affecting the effectiv
dubious political British atmosphere. Remember, very few organizations can affect political soundness,
however Nestlé can.
à For instance, the Brexit circumstance messed up Nestlé's arrangements. The change undermines

• Transparency: Recently, we chose to uncover the rundown of providers close by an assortment
information of our need crude materials that are essential for our Dependable Sourcing program.
is the main divulgence of its sort in the business and aims at increasing transparency in
sector. This spreads 95 percent of our organization's yearly sourcing of crude materials.
è Nestle is a transparent company about all its production chains, and Nestle is free of internal
corruption.
Figure 2: How we work on responsible sourcing of palm oil through our upstream supply chain
https://www.nestle.com/sites/default/files/2020-01/responsible-palm-oil-sourcing-2019.pdf
In 2019, 62% of the palm oil volumes we sourced were discernible to manor and 93% were detecta
process. The palm oil we sourced came to us through 88 providers, starting from at any
nations. The vast majority of the palm oil that we source starts in Malaysia and Indonesia, anyway

Figure 3: Locations of Nestlé Palm Oil Responsible Sourcing Transformation Activities in 2019.
https://www.nestle.com/sites/default/files/2020-01/responsible-palm-oil-sourcing-2019.pdf
https://www.heritage.org/index/country/switzerland
è Switzerland's economic freedom score is 82.0, makingit is economy the fifth freest in the 2020
general score has expanded by 0.1 points because of somewhat higher scores for property rights and
government trustworthiness. Switzerland is positioned first among 45 nations in the European district,
general score is well over the provincial and world midpoints.

https://www.heritage.org/index/pdf/2020/countries/switzerland.pdf
2. Economic factors: A surprising increase of profits after a slow year:
Inside the most recent few years, Nestlé has been in a rise for benefit. Truth be told, in 2018, the
benefits expanded by in excess of 40%. As indicated by the organization, benefits changed from
$10 billion. A lot of this achievement is because of three things: The US market, the Chinese
auctioning off its candy store business.
• Inflation: Margin expansion was upheld by auxiliary cost decreases, portfolio the executives,
and improved blend, which more than balance input cost inflation. Buyer confronting advertising costs
expanded by 3.4% in steady money.

The Zone's basic exchanging working net revenue was unaltered. Auxiliary cost decreases, valuingand
great blend counterbalance cost increments from product inflation. Advertising speculations expanded
to help development and brand building.
https://www.nestle.com/media/pressreleases/allpressreleases/full-year-results-2019
• GDP: The GDP (Gross domestic product) proportions of public pay and yield for a given nation's
economy. The GDP (Gross domestic product) is equivalent to the all out uses for every last
administrations delivered inside the nation in a specified timeframe.

Table 2: https://tradingeconomics.com/switzerland/gdp
Economic Indicators for Switzerland including actual values, historical data charts, an economic calendar, time-
series statistics, business news, long term forecasts and short-term predictions for Switzerland economy.
• Population size:

Nestlé has emphatically and adversely affected the economy of numerous nations.
*Positive:
- The organization gave work and preparing occasions to individuals.
è Eg: Nestlé has been underlying Vietnam to fulfill the needs for its Nescafe espresso items, and
more than 200 new openings in the zone.
è Situated in the Dong Nai area, the organization fabricates the items and gives them to the near
and trades them abroad.
- The American Office of Trade in Vietnam reportsthat Nestlé prepared more than 19,600 espresso rancher
in Vietnam in 2012 and expects to draw in with 20,000 Vietnamese espresso rancher families
* Negative:
- Nestlé carried work to individuals living in different nations, it has likewise energized kid work
nations.
- A report by the Reasonable Work Affiliation educated that 1.8 million kids in West Africa are in
maltreatment through perilous kid work.
à Even though Nestlé consented to an arrangement in 2001 to end the utilization of kid work
ranches, Nestlé disregarded the agreement.
3. Social factors: The food is adored, the company… not so much:
- In the 21st century, the part of sociocultural elements with regards to business has likewise kep
further. It is because society and social factors are fundamental to business. Globally society
starting with one area then on the next. These elements additionally definitely affect interest and how
what individuals buy. Because of the developing effect of socio-social factors, integrating them into the
marketing strategy helps establish a better connection with the customers in varioussocieties and cultures
- Individuals' tastes and styles likewise shift from societyto societyand cultureto culture. Because of

Figure 4: https://www.vectorstock.com
The social climate, including the perspectives, purchasing practices, and evolving socioeconomics, all influenc
a business. What's influenced food and drink organizations like Nestlé is the public's fixation on smart
Individuals need to devour less sugar and lower calorie nourishments.
è For example: Kit – Kat’s formular is almost different everytwhere. A Russian Kit – Kat
Bulgarian, but less sweet than Germany’s Kit – Kat. While in Japan, the strawberry Kit – Kat is