Solution
Preeti answered on
Jun 06 2021
Running Head: MARKETING
Environmental Analysis: Nestle
Introduction
Nestle is selected for discussion purpose and theories named SWOT, PESTLE, Porter Five force and BCG growth share matrix is used for assessing external environment attractiveness and market positioning of the firm. Nestle, incorporated in 1905 is emerged as one of the world’s largest food company selling its food products in around 189 countries. The product portfolio of Nestle includes every category of food and beverage targeted at all stages of life and enabling people caring for themselves and their families. ‘Good Food, Good Life’ is Nestle vision where it strives to deliver good quality food in more relevant, accessible and sustainable ways (Nestle: Our Websites and social media presence, 2020).
SWOT Analysis
Strength
· Reputed
and name with strong image of offering high quality products in food and beverages sector.
· Highly diversified company selling products in more than 189 countries.
· 2018 Fo
es Global recognised Nestle as world’s most valuable
and.
· Extensive product portfolio enabling Nestle owning more than 2000
ands and 8000 based on nutrition and health based considerations.
Weakness
· Price fluctuations by retail giants like Walmart, Tesco, Kroger, and many more.
· Owing large number of
ands under same um
ella makes it often difficult to manage.
· Social criticisms in terms of water controversy, Maggi Noodles controversy, etc.
Opportunities
· E-commerce sites and online shopping platform offering remarkable opportunity for boosting sales.
· Breakfast cereals and oats are reporting strong growth in recent years.
· Consistent expansion of ready-to-drink tea and coffee market.
Threats
· Increasing competition with several consumer moving goods companies like Unilever and Mondelez.
· Production of food and beverage products is highly dependent on clean water which proves as a costly source.
· Strict government regulations and prices led company facing rising prices of commodities, which might affect the business operations of Nestle.
(Source: Nestle: Strategy, 2020)
PESTEL Analysis
Political: As Nestle operates in several countries, any shift or changes in global political climate affect its operations. The government policies and changes pose threat to overall Nestlé’s plans and strategies; one such political reform is noticed in context of Brexit situation. The instability of Brexit has affected entire supply food chain of UK. Europe constitutes an important market for Nestle production, and, Brexit change has proved so catastrophic led Nestle replacing its production to Poland from Newcastle and York. In this way, unstable political environment of Britain forced Nestle in moving or shifting out its operations from the country (Nestle: Strategy, 2020).
Economic: A major economic issue for Nestle is the foreign exchange swings, while operating as a multinational firm, it is quite imperative for the firm to get affected by the fluctuation of foreign-exchange rates and prices. Any kind of weakening in cu
ency rates lead to profit loss, depending on countries and location. Reversely, it results in profit increase if cu
ency position gets stronger. The dynamism of importing and exporting of goods is also affected by foreign exchange swings. Positive economic climate contributes in upswing of profits in last couple of years, for example, in 2018, overall profits of Nestle increased by more than 40%, profit figure increased...