This is the in-depth PESTEL-PESTLE analysis of Nestle. This tool perform the analysis of the political, economical, social, technological, environmental and ethical factors. The analysis of mentioned factors will determine the level of impact on Nestle.
Introduction and Background
Nestle is the world known brand, which is engaged with the business of preparing food product, beverages, chocolate and sweets. This company has developed its business in almost all big and small countries of the world. This food company is based in Switzerland and it has started its business in Pakistan in 1988. The food company has given special emphasis to its clients and it has built relationships with them.
Political Factors
The company is working in diversified communities and it has to face change in regulations in different countries and its some products are not allowed in different countries due to various reasons. The company has shown its stability in various new emerging economies including China and India, as they have to compete with the local companies. When it started its process of internationalization, then it had to face different risks.
The global regulations are changed from time to time and they have to initiate the standardized practices. The company has to follow different political changes in the developing countries and it provides its products at the comparatively higher rates, which most of the people in the developing countries cannot afford to buy.
Economical factors
This brand has started preparation of beverages, baby food, pet food, dairy products, confectionaries and pharmaceuticals. The company is working across the world in about 86 countries, which has shown its strength in its business. It has introduced various subsidiaries like Maggi, Kit Kat, Nescafe and many more. This brand has maintained large network of R&D and it has done the research and development work and it has introduced innovative products in the market.
The clients can find vast range of its products in the cities and in the rural areas because this brand has vast and most effective supply chain network. Due to different economic policies of the different countries, the company has to face problems in supplying its products to the customers. Now most of its clients become aware of changing inflation, economic growth and income and raises the number of cost conscious customers. Now the price of the raw material is also increased which resulted into increase in the cost of the products.
Social Factors
Now the education level in most of the developed and developing countries is increased and people have great awareness about the quality of the products and they ask for the healthy products, which are prepared with wholesome ingredients. The social media has given awareness to people about the uses of some ingredients in various products of the food companies and now they want to probe in to the manufacturing process of the products. Nestle has international standard of manufacturing of the products and the healthy ingredients are used in all of the products, which ensure its quality and there are few reports against their products.
Most of the people have great trust over their products and they like to buy its products with great confidence. The change in lifestyle of the people has turned them to their homes and they want to use their home made products but the products of this company are the necessary part of their lunch or dinner. Now it becomes necessary to understand the behavior of customers and they can have personal approach to the market to know the changing marketing trends.
Technological Factors
The introduction of IT technology in the market has created new approach among the people and social media has contributed in the awareness of the people. Now the consumers want to know about the products, their ingredients and they want to make interact with the firms. The technology has created the innovation and people like to use soft drinks, juices and other readymade food products of the company while working on the internet. The technology development told upon the business but also increased awareness about the quality of the food products, and they rely on the foods of this company. E-commerce is massively used for the supply and production of the products and people are adopting the new behavior to understand the nature of the products.
Environmental Factors
The company has introduced some healthcare products, which are used in almost all of the countries across the world. Some healthcare cream and powders have great demand in hot and tropical countries. The baby care products are equally important for the kids of all countries, so they are useful in all atmospheres. The change in weather can affect the supply of its products as clients demand their product in the particular weather.
The consumers have some concerns over the packaging of the products and they need to make them more protected so that the products can have longer effects for the users. The policies of this brand are user friendly and it follows the local rules and regulations while doing business in any country. When the brand sends its products, it ensures that these products are according to the local demands.
Legal Factors
Nestle has to face the labor laws and it has to fixed the minimum wages of the labor under the provision of these laws. The hiring and promotion laws are to be followed and the people are being privileged to get the facilities, which are the asset of the company. The environment law is prepared for the protection of environment and makes the product environment friendly so that they can give them health. Importantly, the company has to follow the foreign trade regulations while sending its products to other countries. But these laws do not affect its overall policy and its all food and beverages are provided to the clients at the domestic and international level abiding by the rules and regulations govern over the transportation of these products.
The brand needs to follow the global regulations and it makes changes in its working in the international markets. Some countries make changes in their trade and business regulations from time and time and the executives of the company should be aware of these regulations, so that they can show their response in time while transporting their products.