Nestle's Global Operations: Challenges and Strategies

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GLOBALIZATION CONCEPT
Globalization concept explains that it is known as the process
through which the different people, companies and legal bodies of
different areas are interacting and integrating with each other. This
has increased because of the advancement in the technology and the
facilities of transportation. The growth in the global ideas, trade
culture etc. is growing because of the increased interaction in the
international world.
DRIVING FACTORS OF GLOBALIZATION
The major driving factors that impact the functioning of
the company directly are market, environment,
competition and the cost.
There are different aspects that affect the global market.
In context of the Nestle, it was easier in the domestic
market to maintain stability but in the global market
different factors affect the planning and implementation
of the strategies. The cost is one of the major factors
that affect the company’s operations because there are
different situations in different regions of the world and
the cost is decided according to the purchasing power of
the different countries. Other drivers are the
competition, as the market is growing and the
technological advancement is taking place the company
is forced to make changes in their strategies because to
maintain stability and position in the global, market,
Nestle has tom plan effective tactics that would be able
to fight with the competition. The global market also has
different environment because of the cross cultural
relationship and that also act as the driver for nestle.
Changes in the environmental factors are important
because these affect the brand image of the company.
The modern world is moving environmental conservation
and the company Nestle has to maintain their activities
according to the various environmental policies and the
rules. And another major factor that influences the
globalization or act as the driver for the company Nestle
is the market which is vast and has many variations. I the
global market, all the situations are different from
domestic market. The global brands have to consider the
various needs of the variety of customers that helps in
satisfying customers and taking competitive advantage in
the market.
Political Economical
There are many impacts of the political factors on the
operations of the Nestle. The factors are such as the
instability of the government, terrorist activities etc.
the Nestle is the strong player in the international
market but in spite of that there are many impacts of
the changing political factors or changing
government.
The various economic factors that could impact the
economic condition of the nestle are the fluctuations
in the level of the income in different countries,
decreasing the purchasing power of many customers
etc. these factors have affected the Nestlé’s
functioning to the greater extent. Also the position of
the company in financial term is also dependent
mostly on the stability of various economic factors.
Social Technological
Various social factors of the Nestle include the
changes in the preferenc4es and the taste of the
different customers and these variations occur
because of the different cultures and tradition
followed by different countries. The Nestle has
maintained their social factors through introducing
the vast range of the products to the customers
according to their different culture and their needs.
The Nestle make use of the social factor variations in
planning of the marketing strategies.
The advancement I the technology has helped many
multinational companies to grow and expand. The
Nestle has also improved their performance through
using the technology. The major advantage that
company got is the increased number of customers
with the help of internet. People prefer to buy online
through using social media and internet. This has
helped the Nestle in managing and improving their
performance in the recent years.
Environmental Legal
There is another concern for the global brands in the
global world that is the changes in the environmental
factors or impact on the environmental forces due to
company may also affect the company’s image. The
Nestle is already involved in the activities that they
make use of extra water and the natural resources
that is not good for environment and that is why the
company is trying to reduce the impact to minimize
the loss and the fines that company has to provide.
The legal factors in the environment also affect the
functioning of the company. the nestle has already
been involved many legal cases because of the flavors
and the taste of the product. apart from these issues
the Nestle is also facing problem in the environmental
legal issues and that is why company has to deal with
the various legal agreements.
PESTEL
ANALYSIS
STRATEGIC CVHALLNEGES FACED BY GLOBALIZATION
The different complexities that Nestle would face in the process of
globalization of their operations are difficulty in managing the
global supply chain, international trade rules, globalization
economic. The satisfaction level of the customers is different
according to their different cultures and because of that the
Company’s supply change management fluctuates and sometimes
there is internal issue from the company in their supply chain that
causes the complexities to the global world. Other difficulties are
the global trade laws and the global economic which is influenced
through the cross cultural activities. The trade laws are different
according to the variations in regions and that lead to difficulty. The
Nestle has been facing these challenges as the vast range of
products needs more strategic planning and the company has to
focus on reducing the different complexities.
RECOMMENDATIONS
The recommendations to the company Nestle is that for maintain
the supply chain, company must prepare the effective plan,
allocate the resource effectively and also hire the people who are
efficient enough to fulfill the strategic global needs of the
company. To maintain the stability in the global market, Nestle has
to focus on the HR team that will support in maintain the issues
and filling the gaps of the international markets. Nestle would
also focus on providing quality products to their customers and
also have to maintain the cultural differences occurred in the
different global markets.