Overview of Nestle Nestle

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Overview of Nestle
Nestle is the transnational food and drink company having headquarter in Vevey, Vaud,
Switzerland. The company is one of the leading player in food processing industry and it is
earning huge amount revenue. The Nestle is listed among the fortune 500 company at the
rank of 72 (Nestle, 2015). Being the leading player of industry, the Nestle has number of
unique resources, of which the most important is human resource. The Human resource
management report of the Nestle has suggested that people are considered as key source of
success in Nestle and their engagement if considered as highly advantageous for the long
term competence of company (The Nestle, 2012). The reason for choosing Nestle as the case
for current study lies in the fact that company is dealing with diverse range of human
resources and is claiming to have effective human resource management system. The closer
investigation of human resource management system of company will be of huge assistance
in recognizing the human resource polices that are contributing to the success of the
company (Wright, Gardner and Moynihan, 2003). Along with this, the information of human
resource management of Nestle can be readily availed by the author and it will serve as the
basis of finding gaps to recommend improvements in human resource management system
of Nestle.

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Environmental Analysis of Nestle
The analysis of the environment of the company is an important tool for recognizing the
competitive position of company in industry (Freeman, 2010)). Being operating at global level,
the Nestle is exposed to diverse range of environmental factors both internal and external
(Paul and Anantharaman, 2003). The effective inclusion of and dealing with environmental
forces is enabling the Nestle to become the leading actor in food processing industry.
1. External Environmental Analysis
The external environment refers to the forces that lie outside of the organization and have the
potential to influence internal operations of the business (Hunger and Wheelen, 2003). The
forces in external environment could include the following; political forces, economic forces,
social forces, technological forces, environmental forces and legal forces.
PESTEL Analysis of Nestle: PESTEL framework is considered as a significant strategic tool
that can be implied to assess the external environment of the organization (Gupta, 2013)). The
PESTEL framework investigates five dimensions of the external environment encompassing
the following; political, economic, social, technological, environmental and legal (Freeman,
2010). The table 1 mentioned below is clearly indicating the forces in external environment
that are having an impact of operations of Nestle. Being an international player, the Nestle
requires higher level of adaptability in its approach of operating with an aim of complying with
cultural variations and standards and regulation of different international markets.
2. Internal Environmental Analysis
The internal environment of the firm constitutes the resource sand capabilities of the firm that
are highly significant for shaping the ability of company to deal with external forces with an
aim of competing in the market (Sweller, Ayres and Kalyuga, 2011). The analysis of internal
environment of the organization can be carried out by implying SWOT Analysis. The SWOT is
an effective strategic tools that is helpful in identifying the combination of resources, and
dynamic capability that can help in gaining competitive advantage (Yüksel, 2012). The table 2
mentioned below is successfully presenting the strengths, weaknesses, opportunities and
threats of Nestle.

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Table 1. PESTEL Analysis of Nestle
Political Forces Economic Forces
1. Unstable regulations regarding food standards
and actions of market
2. The internationalization is subject to risk due to
changing policies of varying nations.
3. Foreign trade policies, global trade regulations
and global tax laws are important to consider while
entering into international market.
4. Adaptation to various political factors is highly
inevitable.
1. Changing inflation rates, income levels and
economic growth of the focal country of operations
is important to consider.
2. Fluctuating budget of consumers and
preferences of consumers regarding cost are
necessary to consider.
3. Rising prices of material.
4. Need to rely on sustainable supply sources.
Social Forces Technological Forces
1. Increasing awareness among consumers
regarding the usage of healthier products
2. Changing life style of consumers require easy
to cook products.
3. Consideration of cultural values and
preferences is important while offering food items.
1. The involvement of social media has offered
high discretion to consumers to affect the business
operations.
2. Technology is constantly innovating, requiring
effective research and development.
3. Trend of relying on mobile commerce is
increasing.
Environmental Forces Legal Forces
1. Increasing demand of consumers to consider
environmental concerns.
2. Rapid trend of relating brand image with
fulfillment of corporate social responsibility by the
firm.
3. Requires sustainable production, packaging
and recycling.
1. Compliance with global regulations is crucial.
2. The regulations are constantly changing and
require higher level of adaptability.
3. The regulations in different international
markets are relatively different from their other
counter parts that demands for flexible approach.

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Table 2. SWOT Analysis of Nestle
Strengths Weaknesses
1. The Nestle has strong cultural values that are
based on its integrated management approach
and high commitment to stakeholder’s concerns.
2. Highly competitive strategic position based of
customer satisfaction, sustainability and quality.
3. High commitment to corporate social
responsibility.
4. Extended brand portfolio and strong brand
value.
5. Globally recognized.
6. The Nestle has an estimated brand reputation
of $ 7 billion.
7. Highly trusted and have gained loyalty of
consumers.
8. High reliance on team work that has offer
employee satisfaction and commitment.
1. Nestle has faced criticism for its products. For
instance; Instant Maggie Noodles of Nestle have
been criticized in India.
2. Increasing awareness among consumers
regarding health have reflected that company
needs to reshape its product to fit with the mission
of “good food and good life”.
3. The Nestle has faced negative public relations
due to baby milk scandal.
Opportunities Threats
1. Ability to emerge in new market at international
level, specifically emerging economies.
2. Opportunity to emerge in new growth spots
that is BRICS (Brazil, Russia, India, China and
South Africa).
3. Immobile and inimitable capabilities of Nestle
can offer competitive advantage in new markets.
4. The Nestle can integrate backward with its
supplier to gain control over availability of raw
material.
5. Developing highly innovating distribution
channels.
1. Increasing level of buying power within
industry.
2. Huge level of variability in raw material prices.
3. Increasing level of dynamism in external
environment of the Nestle.
4. Highly changing technological interventions.