Environment and Nestle

Topics: Environment, Coffee, Natural environment Pages: 7 (1957 words) Published: May 31, 2013
Environmental analysis about Nestle Company
Nestle company, whose headquarter is located in Geneva, Switzerland, was set up by Henri Nestle in 1867 and it is the biggest food manufacturer in the world. Chocolate bar and instant coffee, as its star products, are well-known to the world. In this essay, firstly, we analyze two types of environments the Nestle company deals with. Then, its environmental uncertainty and how to manage the environmental uncertainty are stated. Lastly, adaptive and non-adaptive cultures about Nestle company are discussed.

Two types of environments
External Environment
The external environment comprises of two environments, the Mega and Task environments. The Mega environment is the general external environment in which organizations operate and exerts pressure on the organizations ability to achieve its Vision, Mission and Goals. The Task environment is also comprised of elements from the external environment which can directly affect the operations of the organization.(Business Management student manual, December 2011) Here are external environment that Nestle deal with.

Political environment.
Political issues are one of the major concerns for the company to operate in the country. Political status in many countries that Nestle entered is belongs to stability although there are existence of different language groups and cultural regions. With the political stability in the market, Nestle can actually maintain the sales or even boost up the sales, as the stability will actually bring economic growth, therefore, the consumer purchasing power will eventually growth due the improvement of living standard. For example, Nestle can actually enjoy the tax benefit compare to most countries of the EU and USA and can be enjoy by Nestle is the company can actually deduct the taxes from the income as an expense that relatively lower effective tax rate compare to most other countries where the taxes are not deductible(Colin, M, 2011).

Economic environment.  Demand for basic food supplies persists even in times of economic downturn.  However, the patterns of eating and drinking changes, with full meals more likely to be prepared and consumed at home.  With operations around the globe, Nestle had to make adjustments for variations in demand fluctuations and price sensitivities in different countries and geographic regions.  Although Nestle was based in Switzerland and most of its key leaders were from the United States and the European continent, one third of 2007 sales came from the developing world and analysts projected that by 2010, 90% of the world's population would live in developing and emerging countries.

Technological environment. Throughout the industry, technologies are vital to defining recipes, producing food and beverages, locating and purifying water. As the company’s own GLOBE initiative demonstrates, internal technologies are vital to coordinating operations.

Internal Environment
The internal environment refers to the environment inside the organization. It forces acting on the organization from within and take a similar from to those discussed under external forces. (Business Management student manual, December 2011) Here are internal environment that Nestle deal with.

The internal economic element. Nestle has some very strong brands like Nescafe, Meggiand Cerelec. These brands are almost generic to their product categories and the company has been continuously introducing new products for its Pakistani patterns on frequent basis, thus expanding its product offerings. (Porter, M.E, 2008)

The internal technology environment. Nestle not only has Well-developed supply chain, but also good relations with suppliers and farmers. The company also has ability to customize and localize products.

The human environment. Nestle concerned with employee competence productivity. Wherever employees work in Nestlé, they'll enjoy a selection of core benefits, including...

Bibliography: Castillo, G. 2007. How do enterprise adapt external environment. America: Greenwood Publishing Group, vo2.1, no.5, pp.67-89.
Colin, M. April 14, 2011, ‘Nestle external environment’, Available from: http://www.studymode.com/subjects/external-and-internal-environment-of-nestle-company-page1.html. [Accessed 25 May 2013]
Porter, M.E
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