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Nestle Project Case Solution & Answer

Nestle Project Case Solution

Opportunities

The competition in the industry is high and Nestle need to provide clear labelling and mention harmful products. And provide transparent information about material sourcing. Company have opportunity to invest in ready to drink tea and coffee market. Nestle is constantly seeking acquisition opportunities, and is not afraid to take risks. To grow, a company must take strategic decisions and partner with others. In business, foresight is more important than emotional responses, and in the European market, foresight is everything. In most companies, it takes approximately two years to establish their local and global markets. Foresight is key. It takes the organization several years to build a global brand.

Threats

There are many potential threats to Nestle in the European market. These include increased competition, consumer trends, and government policies. The company must consider all of these challenges before making any strategic decisions. Here are some of the threats. The global competitive environment continues to become more complex. This will place greater pressure on the company to develop new products and increase efficiency. The company must also consider its long-term financial prospects and the impact of regulatory changes.

Climate change is one of the most important threats to Nestle in the European market. The company depends on the price of raw materials, which can rise or fall depending on the supply and demand. If these prices fluctuate, Nestle could lose its brand presence in the region. In addition, social media is a threat to Nestle. Moreover, the company is dependent on commodity prices for raw material inputs, which can affect its profitability.

Lack of awareness among consumers. Nestle relies heavily on a few types of products. This leaves it vulnerable to shortages and market changes. It is also susceptible to consumer distrust. In addition, controversies regarding artificial growth hormones and misleading advertising have impacted the company’s reputation. Despite these challenges, Nestle is likely to stay a dominant name in packaged food for several decades.

External Analysis

PESTLE Analysis

Political

The political environment for Nestle in the European market is quite volatile. The company is a multinational and operates in several countries. The group has to create different economic policies to make it competitive in each country. Its Swiss network is crucial for this. It also has to be able to maintain its presence in various countries if it wants to stay ahead of the competition.

The political environment in which Nestle operates is crucial for its business. It must be aware of the local economic, cultural, and political factors that affect its business. With its strong Swiss connections, the company has direct links with the federal government. The corporate tax rate in India is lowered to encourage the production of cheaper products and meet social needs. The company’s executives have the connections to the Swiss elite and must manage these relations with government officials in a way that is most beneficial for its business.

Environmental

The company has a better record of recycling, with over a 26% decrease in indirect greenhouse gas emissions per tonne of product. In Europe, only 293 companies claim zero waste. In the U.S., Nestle has a poor environmental reputation, but it does have an excellent record for recycling and promoting sustainable nutrition throughout its operations. Moreover, the company focuses on water efficiency and stewardship to make its operations more efficient.

In the European market, Nestle’s products and packaging must be eco-friendly. By reducing the use of plastic, Nestle strives to reduce its carbon footprint. The company has ambitious plans to use 100 percent recyclable plastic in its products and packaging. Currently, Nestle is one of the largest producers of plastic, producing over six million metric tons annually. In addition, Nestle must keep abreast of policy changes that affect sustainability in countries. If the company misses a major policy change, it can experience huge setbacks. For instance, the company was suspended from the RSPO when it failed to report palm oil sustainability reports.

Social

The social factors that affect Nestle in the European market can be divided into three categories. The first focuses on the general development of Nestle in the nineteenth century. During this time, it enjoyed free trade in the first half of the twentieth century. In the second half of the nineteenth century, it faced a new period of risk posed by custom protectionism and war. In the third category, Nestle faced new political risks after 1945. In the fourth category, it analyzed the role of the Swiss federal government in helping Nestle overcome these risks.

The first category is the broader market. Nestle’s success in the European market depends on the increasing cost of raw materials and other ingredients, especially chocolate. This is one of the many social factors that affect the company. In the third category, the company is affected by fluctuations in the foreign exchange. A weak currency means that Nestle will lose money while a stronger currency means cheaper exports and imports.

Technological

While the chief executive of Nestle likes to believe his company is different and its approach is timeless, the company is still adapting to the rapidly changing world around it. For more than a century, Nestle has been at the forefront of globalization and innovation. Three events have altered the traditional picture of the food and beverage giant. The first occurred when the Czechoslovak Republic declared itself a socialist state. In the following years, it has lost its market in the country and has stopped all activities in Yugoslavia and Poland.

The second factor that can affect Nestle’s position in the European market is its reliance on innovation on a short timeline. The strategy has proved to be successful for Nestle, as the company reported organic sales growth of 3.6% in 2020, its highest rate in five years. However, Nestle needs to improve on its performance in the next few years to keep the pace of innovation high. As a result, it is crucial for the company to invest in new technologies that will help it achieve these goals.

Secondly, the company’s decentralized approach to manufacturing became redundant in the Uruguay round of trade negotiations. This led Nestle to concentrate production on fewer regional factories in regional blocs and a more localized approach to production. The strategy has been rewarded: in 2020, Nestle posted an organic sales increase of 3.6%, the fastest rate in five years. As a result of these changes, the company’s growth strategy is now more effective and more profitable than ever before…………………………

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