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Analysis of Nestle Company: Pestle Analysis and Porter's Five Forces Model

   

Added on  2019-09-30

11 Pages2459 Words104 Views
NESTLE COMPANYResearch Assignment

Table of ContentsIntroduction......................................................................................................................................2Pestle Analysis.................................................................................................................................31.Political segment...................................................................................................................32.Economic segment................................................................................................................33.Social segment......................................................................................................................34.Technological segment.........................................................................................................35.Legal segment.......................................................................................................................36.Environmental segment........................................................................................................3Porter’s five forces Model...............................................................................................................31.Bargaining power of buyers..................................................................................................32.Bargaining power of Suppliers.............................................................................................33.Threat of substitute...............................................................................................................34.Threat of new entrants..........................................................................................................35.Threat of existing competitors..............................................................................................3Recommendation.............................................................................................................................3Conclusion.......................................................................................................................................3References........................................................................................................................................4

IntroductionIn this present paper, we will discuss the analysis of nestling company. The paper also analyzes the company by pestle analysis and porters five forces model. On the basis of the analysis, recommendations have been made.Nestle company is a transnational drink and food company which lies in food processing industry. Headquarter of the company is in Switzerland, and it is the largest food processor company according to the revenue of the company. The company produces medical food,coffee, breakfast cereals, ice cream, tea, and others. The total revenue of the company in 2015 is 88.8 Billion. The company was founded in 1905 by the merger of Anglo-Swiss Milk Company (v et al., 2016) .The company is primarily listed on the SIX Swiss exchange and then secondary listed on the Euro next. The company is having a wide range of portfolio which includes the huge range of products such as Nesquik, Nescafe, and others. The total employees of the company in 2015 were 335,000. The company serves its product across the world. The company operates in eighty countries, and the most profitable market is North America. The company has strong internationalization strategy which shows the commitment of the company towards its resources and development of the capability to the external environment.Pestle AnalysisThe pestle analysis reflects the various external forces which influence the dynamics of an industry. These forces impact on the behavior of the consumers. The company has the ability to ensure a level of adoption, which is required for the various markets driven by different consumer behavior and cultures.

1.Political segmentThe political segment of the company is changing regulation which is surrounded by the actions of markets and foods standards. The international process is facing the risk due to the government stability in new emerging economies. The changes in the standardized practice of global regulation lead to the adoption by various political forces. The company faces various problems due to regulations in various countries which do not allow come products in various markets. The company has to follow different political changes in the developing countries due to which the price of the product become expensive and citizens of developing country are not capable of buying various products (Steger et al., 2015).2.Economic segmentThe knowledge of the change in economic rate, inflation rate, a level of income is required because it impacts on the economic stability of the company. The alteration in the budget of consumers and increase in the cost conscious consumer impacts on the profit margin of the company. The rise in the cost of raw material or increase in the demand of suppliers due to which price increases it leads to decrease the profitability of the company. The company faces the problem of economic changes in different countries due to which the problem of supplying the products to the consumers is faced by them. The price of raw material also increase due to which can cost of raw material also increases and selling price of the product is not afford by the consumers in developing countries (Loughlin et al., 2015).3.Social segmentIt includes the change in the attitude of the consumers towards the nutrition and healthier products within the same product line by the initiatives of the government. The change in the

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