Nestle: Macro Environment and Micro Environment Analysis

Topics: Porter five forces analysis, Strategic management, Food Pages: 3 (1015 words) Published: May 10, 2013
External Analysis of Nestle:
Nestle in the Global Environment:
Nestle operates in over 130 countries and in order to understand the business environment they operate in analysis on the external factors that lie outside the control of Nestle has to be conducted (Grant et al. 2011, 101). The tool tasked with conducting an external analysis of the macro environment is PEST while the external micro environment will be analysed with the help of Porter's Five Forces. However it is worth mentioning that Nestle is not however exclusively influenced by the mentioned factors below (Shaw 2004). Macro Environment Analysis:

PEST Analysis:
Political: Nestlé is a global company and in the food and beverage industry one of the most important factors to consider is globalization. According to Jose Lopez, Nestlé's Vice President of operations explained the impact of globalization on Nestle to has been very different from first expected initially we thought it meant developing countries opening up their markets but on hindsight it turned out that rather than being globalized we had to understand how to react to global markets (Bell 2009, 10). Another factor to consider is the impact regulations has had on Nestle. The global food and beverage industry is one of the most highly regulated industries in the world. Nestle for example has had to face multiple tiers of regulations when have inevitably affected their products (Nestle 2008). Economic: Food is a basic human need and is therefore a necessity for survival. In economic terms this means that the basic demand for food will always be high. Although food eating patterns might change and vary from place to place. Nestle has adjusted to these variations in preference and sensitivity to price in different places that it operated. One of Nestlé's example is opening up factories in different places that caters to the local market from its packaging, to pricing, to taste. Majority of these new factories are located in developing...
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