ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment
Submission date 2nd November DateReceived1stsubmission
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Student Name Lê Trần Uyên Thảo Student ID GBS200505

Class Assessor name Nguyễn Ngọc Danh

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A.
TABLE OF CONTENT
INTRODUCTION.........................................................................................6
B. BODY.....................................................................................................6
I. External environment...........................................................................................6
* PESTEL.............................................................................................................6
1. Political factors....................................................................................................................6
2. Economic factors.................................................................................................................9
3. Social factors.....................................................................................................................14
4. Technology factors............................................................................................................17
5. Environment factors..........................................................................................................18
6. Legal factors......................................................................................................................21

II. Internal environment..........................................................................................15

* 5 FORCES MODEL............................................................................................15
1. Threat of New Entrants .....................................................................................................19
2. Bargaining Power of Suppliers...........................................................................................20
3. Bargaining Power of Buyers...............................................................................................21
4. Threat of Substitute Products or Services...........................................................................22
5. Rivalry Among Existing Firms.............................................................................................24
III. Strengths and Weaknesses of Nestlé.....................................................................25
1. Brand name.......................................................................................................................25
2. Mission..............................................................................................................................26
3. Organization structure.......................................................................................................26
4. Human Resources..............................................................................................................28
5. Financial strength/ factors.................................................................................................29
6. Fixed assets.......................................................................................................................31
7. Market Resources..............................................................................................................33
8. Research and Development...............................................................................................34
IV. SWOT...................................................................................................................35
1. Strengths...........................................................................................................................36
2. Weeknesses.......................................................................................................................37
2. Opportunities....................................................................................................................38
2. Threats..............................................................................................................................39

V. Organization size and scope...............................................................................22

1. Organization size...............................................................................................................22
2. Scope of Nestlé..................................................................................................................24

C. CONCLUSION........................................................................................40
D. REFERENCES........................................................................................41
 A. INTRODUCTION:
Every company has their own strengths and weaknesses, also internal and external environment play a very
important role in the world market as well as for a company's products.
Nestle face various challenges in their operations both internal and external and to develop the right
business strategy, these issues need to be addressed.
Furthermore, Nestle is believed this firm has an occasion to be a productive venture. This report will discuss
more about competitive environment (Porter’s Five Forces model), PESTEL, SWOT, advantages and
disadvantages of Nestle Corporation.

B. BODY:
I. External environment:
In the external environment, there are 6 factors that affect a company, including political, economic, social,
technology, environment and legal. In addiction, this report will discuss in more depth about these factors.

*PESTEL
1. Political factors - The company’s ability to impact the government
Although political changes regularly influence the organization, moving tasks out of the nation influences the
insecure climate for England. Losing Nestlé implies lost more than 300 positions, affecting the effectively
dubious political British atmosphere. Remember, very few organizations can affect political soundness,
however Nestlé can.

 For instance, the Brexit circumstance messed up Nestlé's arrangements. The change undermines the
occupation of creation and food laborers. Europe is a significant market for Nestlé creation and benefits.
What's more, the unsteadiness of Brexit has upset the total of the UK food gracefully chain.
 Nestle’s political is stable and virtually no loss.
  Transparency: Recently, we chose to uncover the rundown of providers close by an assortment of
information of our need crude materials that are essential for our Dependable Sourcing program. This
is the main divulgence of its sort in the business and aims at increasing transparency in the agri-food
sector. This spreads 95 percent of our organization's yearly sourcing of crude materials.
 Nestle is a transparent company about all its production chains, and Nestle is free of internal
corruption.

Figure 2: How we work on responsible sourcing of palm oil through our upstream supply chains
https://www.nestle.com/sites/default/files/2020-01/responsible-palm-oil-sourcing-2019.pdf

In 2019, 62% of the palm oil volumes we sourced were discernible to manor and 93% were detectable to
process. The palm oil we sourced came to us through 88 providers, starting from at any rate 1,624 plants in
24 nations. The vast majority of the palm oil that we source starts in Malaysia and Indonesia, anyway there
are likewise inceptions across Latin America, West Africa, and different pieces of Asia.
 Figure 3: Locations of Nestlé Palm Oil Responsible Sourcing Transformation Activities in 2019.
https://www.nestle.com/sites/default/files/2020-01/responsible-palm-oil-sourcing-2019.pdf

https://www.heritage.org/index/country/switzerland

 Switzerland's economic freedom score is 82.0, making it is economy the fifth freest in the 2020 Record. Its
general score has expanded by 0.1 points because of somewhat higher scores for property rights and
government trustworthiness. Switzerland is positioned first among 45 nations in the European district, and its
general score is well over the provincial and world midpoints.
https://www.heritage.org/index/pdf/2020/countries/switzerland.pdf

2. Economic factors: A surprising increase of profits after a slow year:

Inside the most recent few years, Nestlé has been in a rise for benefit. Truth be told, in 2018, the
organization's benefits expanded by in excess of 40%. As indicated by the organization, benefits changed
from $7.6 billion to $10 billion. A lot of this achievement is because of three things: The US market, the
Chinese market, and auctioning off its candy store business.

 Inflation: Margin expansion was upheld by auxiliary cost decreases, portfolio the executives, valuing
and improved blend, which more than balance input cost inflation. Buyer confronting advertising
costs expanded by 3.4% in steady money.

https://www.nestle.com/media/pressreleases/allpressreleases/full-year-results-2019
 The Zone's basic exchanging working net revenue was unaltered. Auxiliary cost decreases, valuing and
great blend counterbalance cost increments from product inflation. Advertising speculations expanded
to help development and brand building.

https://www.nestle.com/media/pressreleases/allpressreleases/full-year-results-2019

 GDP: The GDP (Gross domestic product) proportions of public pay and yield for a given nation's
economy. The GDP (Gross domestic product) is equivalent to the all out uses for every last great and
administrations delivered inside the nation in a specified timeframe.

Table 1: 2010 – 2019 Switzerland’s GDP

https://tradingeconomics.com/switzerland/gdp
 Table 2: https://tradingeconomics.com/switzerland/gdp
Economic Indicators for Switzerland including actual values, historical data charts, an economic calendar,
time-series statistics, business news, long term forecasts and short-term predictions for Switzerland
economy.
 Population size:

Table 3: https://www.worldometers.info/world-population/switzerland-population/
- The current populace of Switzerland is 8,674,594 as of Sunday, October 25, 2020, based on Worldometer
elaboration of the latest United Nations data.
- 74.1 % of the populace is metropolitan (6,408,840 individuals in 2020)
Nestlé has emphatically and adversely affected the economy of numerous nations.

*Positive:
- The organization gave work and preparing occasions to individuals.
 Eg: Nestlé has been underlying Vietnam to fulfill the needs for its Nescafe espresso items, and has made
more than 200 new openings in the zone.
 Situated in the Dong Nai area, the organization fabricates the items and gives them to the nearby
individuals and trades them abroad.
- The American Office of Trade in Vietnam reports that Nestlé prepared more than 19,600 espresso ranchers
in Vietnam in 2012 and expects to draw in with 20,000 Vietnamese espresso rancher families inside five
years.

* Negative:
- Nestlé carried work to individuals living in different nations, it has likewise energized kid work in non-
industrial nations.
- A report by the Reasonable Work Affiliation educated that 1.8 million kids in West Africa are in danger of
maltreatment through perilous kid work.
 Even though Nestlé consented to an arrangement in 2001 to end the utilization of kid work on cocoa
ranches, Nestlé disregarded the agreement.

3. Social factors: The food is adored, the company… not so much:

In the 21st century, the part of sociocultural elements with regards to business has likewise kept on
developing further. It is because society and social factors are fundamental to business. Globally society and
cultures starting with one area then on the next. These elements additionally definitely affect interest and
how and what individuals buy. Because of the developing effect of socio-social factors, integrating them into
the marketing strategy helps establish a better connection with the customers in various societies and
cultures.
Individuals' tastes and styles likewise shift from society to society and culture to culture. Because of these
things, it is significant for organizations to consider these varieties to get their item and advertising
methodologies right. Nestle has brought an enormous scope of items and a considerable lot of these are
customized to the preferences and necessities of clients in explicit business sectors. These help drive deals
and benefits in the local business sectors. Nestle also considers sociocultural factors while marketing its
products in specific markets and designs ad campaigns accordingly.

Figure 4: https://www.vectorstock.com
The social climate, including the perspectives, purchasing practices, and evolving socioeconomics, all
influence a business. What's influenced food and drink organizations like Nestlé is the public's fixation on
smart dieting. Individuals need to devour less sugar and lower calorie nourishments.
 For example: Kit – Kat’s formular is almost different everytwhere. A Russian Kit – Kat is smaller than a
Bulgarian, but less sweet than Germany’s Kit – Kat. While in Japan, the strawberry Kit – Kat is all the rage.
 Figure 5: https://fortune.com/2018/03/22/japanese-kit-kats/
 Nestle has donated a lot of products, equipment, food and water to people in difficult circumstances,
disaster-hit countries and helped many children around the world:
1. Nestlé donates 88,000 medical face masks to Ministry of Health in the Covid – 19. (vietnamnews.vn).
2. Nestlé donates Personal Protective Equipment (PPE) worth ETB 346 thousand to the Ministry of Health to
aid health workers in the fight against COVID – 19 (nestle-esar.com).
3. Nestlé Supports 100,000 families & 50,000 Health Professionals, Donates 10 Million Food & Beverage
Servings, 620,000 Water Liters in Middle East & North Africa Mobilization. (nestle-mena.com).
4. Nestlé donates 650,000 bowls of cereal to FareShare. (fareshare.org.uk).
5. Nestle Water donates bottled water to Vernon schools for school year 2020. (chipleypaper.com).
 www.nestle.co.uk

 Application: Nestlé UK has raised a staggering £700,000 for its Charity of Choice, Action for
Children.

4. Technological factors: More ways to increase production and quantity:

Nestlé needs to spend more cash on innovative work. It has more innovation available to its to accomplish
more noteworthy accomplishments in the Research and development office; online media, computerized
studies, email promoting, limits, etc. the rundown goes on.

 Nestlé has more choices to expand creation, food quality, and food accessibility to buyers.
 hurriyetdailynews.com
nestle.com

Moreover, digital technology and AI have brought new opportunities and possibilities for international
brands. In the region of showcasing as well, web-based media has made it simpler for organizations to
associate with their clients everywhere on the globe and advance their items without any major expenses.

5. Environmental:
Nestle has been involved in a number of issues related to water and environment. The company has faced
severe criticism over its overuse of water and exploitation of natural resources in the past. 

Our objective is that Nestlé's items are not exclusively to be more delicious and more advantageous yet in
addition better for the climate along their worth chain. Natural maintainability additionally implies
enchanting shoppers – giving them another motivation to confide in Nestlé and make the most of our items,
and satisfying representatives' and outer partners' assumptions regarding our ecological obligation and
practices. (nestle.com.vn)

For the Planet:As a component of the Corporate Social Duty of guaranteeing that society lives inside
planetary limits, Nestlé is focused on ensuring biodiversity and characteristic assets while urging others to
act capably all together diminish natural effect in business activities. (thecsrarena.com)

33% of Nestle production lines (189) presently utilize 100% inexhaustible power; spared 3.5 million m 3 of
water through 371 water-sparing activities at her processing plants; accomplished 34% decrease in
generally speaking Degree 1 and 2 discharges; 87% of bundling was recyclable or reusable; 76% sans
deforestation in rural crude materials sourcing; 2030 aspiration is to make progress toward zero natural
effect in business tasks.

https://thecsrarena.com/

The globalization of Nestlé has

welcomed both negative and positive
effects on the climate.

* Positive:
- Nestlé is working at making items
which are less hurtful to the earth.
 Eg: Nestlé Waters utilizes eco-
accommodating plastic water bottles
that are "made with at any rate thirty
less plastic than the normal half-liter
jug".
- Nestlé has prevailing with regards to decreasing the bundling weight because of the cooperation between
the Nestlé waters Research and development focus and the bundling offices.
 Since 2008, ozone harming substance outflows and non-environmentally friendly power impacts for the
bundling cycle have been decreased by 19 percent in Nestlé Waters.
 Since 2008, ozone harming substance outflows and non-environmentally friendly power impacts for the
bundling cycle have been decreased by 19 percent in Nestlé Waters.

*Negative:
- Nestlé's globalization effect affects the climate, for example, contamination and the maltreatment of assets.
 Eg: as indicated by Greenpeace, Nestlé neglected to comply with the guidelines in China and released
enormous waste into streams and lakes there.
- The organization illicitly siphoned a large number of gallons of water from California's San Bernardino Public
Backwoods for a very long time, which is against government law.

www.timecamp.com

6. Legal:
In 2019, Nestlé brought about and gathered around CHF 13 billion of expenses to the legislatures in its
biggest business sectors. Those business sectors speak to almost the entirety of the Gathering net deals.
 nestle.com

In contrast to different parts of industry, in which the greatest syndications are, generally speaking,
American, the main food restraining infrastructure (regarding volume of turnover) is Unilever, a Somewhat
English Dutch firm, and the second biggest is the Swiss-possessed Nestlé Alimentana S.A. A few US
syndications are positioned after these.

https://encyclopedia2.thefreedictionary.com/

II. Internal environment:

In the internal environment, this report will discuss about 5 forces model (Porter model) including:
 Threat of New Entrants
 Bargaining Power of Suppliers
  Bargaining Power of Buyers
 Threat of Substitute Products or Services
 Rivalry Among Existing Firms

* 5 FORCES MODEL:

https://stratmatters.wordpress.com/

1. Threat of New Entrants:

- The economies of scale is fairly difficult to achieve in the industry in which Nestle operates.
 This makes it easier for those producing large capacitates to have a cost advantage. It also makes
production costlier for new entrants. This makes the threats of new entrants a weaker force.
- Clients likewise search for separated items. There is a solid accentuation on publicizing and client benefits
also. These elements make the danger of new contestants a feeble power inside this industry.
- The capital requirements within the industry are high, therefore, making it difficult for new entrants to set
up businesses as high expenditures need to be that.
- The admittance to dissemination networks is simple for new contestants, which can undoubtedly set up
their dispersion channels and come into the business.

 How Nestle can tackle the Threat of New Entrants?

- Nestlé can exploit the economies of scale it has inside the business, fending off new contestants
through its cost advantage.
- Nestlé can zero in on advancement to separate its items from that of new participants.
- It can spend on promoting to fabricate solid brand ID.
 This will assist it in withholding its clients instead of
losing them to new contestants.

ravepubs.com

sites.google.com
2. Bargaining Power of Suppliers:
- The quantity of providers in the business in which Nestle works is a ton contrasted with the purchasers. This
implies that the providers have less command over costs and this makes the haggling intensity of providers a
frail power.
- The item that these providers give is genuinely normalized, less separated, and have low exchanging costs.
 This makes it simpler for purchasers like Nestle to switch providers. This makes the bartering intensity of
providers a more fragile power.

- The providers don't give a tenable danger to advance reconciliation into the business in which Nestlé works.
The business wherein Nestlé works is a significant client for its providers.
 This implies that the business benefits are intently attached to that of the providers.

 How Nestle can tackle the Bargaining Power

of Suppliers?
- Nestlé can buy crude materials from its
providers requiring little to no effort.
 If the expenses or items are not
reasonable for Nestle, it would then be able
to switch its providers since exchanging costs
are low.

- It can include various providers inside its

graceful chain.
 Eg: Nestle can have various providers for
its distinctive geographic areas  can
guarantee proficiency inside its graceful
chain.
- As the business is a significant client for its
providers, Nestle can profit by growing cozy
associations with its providers where the two
of them advantage.
 https://learn.marsdd.com/
sites.google.com
3. Bargaining Power of Buyers:
- The quantity of providers in the business in which Nestle works is significantly more than the number of
firms delivering the items. This implies that the purchasers have a couple of firms to browse, and accordingly,
don't have a lot of authority over costs.

- The item separation inside the business is high, which implies that the purchasers can't discover elective
firms creating a specific item.
- The nature of the items is critical to the
purchasers, and these purchasers make
continuous buys.

 There is no huge danger to the purchasers to

coordinate in reverse.

 How Nestle can tackle the Bargaining Power

of Buyers?
- Nestlé can zero in on advancement and
separation to draw in more purchasers. Item
separation and nature of items are essential to
purchasers inside the business, and Nestle can
pull in countless clients by zeroing in on these.

- Nestlé needs to assemble a huge client base, as

the dealing intensity of purchasers is powerless.
 By showcasing endeavors pointed toward
building brand steadfastness.
- Nestlé can exploit its economies of scale to build up a cost preferred position and sell at low costs to the
low-pay purchasers of the business.
 Will have the option to pull in countless purchasers.

https://learn.marsdd.com/
sites.google.com

4. Threat of Substitute Products or Services:

- There are not many substitutes accessible for the items that are delivered in the business where Nestle
works.
- Not many accessible substitutes are additionally created by low benefit procuring enterprises.

- These variables make the danger of substitute items a more fragile power inside the business.

- Firms delivering inside the business where Nestle works sell at a lower cost than substitutes, with sufficient
quality.
- Currently, many corporations become competitors of Nestle such as: TH true milk, LaVie, Nuti Food,…
 brandsvietnam.com

https://cafebiz.vn/

As appeared in the diagram above, there is a high danger from substitutes in the espresso and tidbit shop
industry. Numerous espresso consumers think
about tea, hot cocoa, and caffeinated beverages
to be sensible substitutes for espresso.
Notwithstanding these espresso substitutes,
clients can decide to mix their espresso as
opposed to get it from a shop. Since these
substitutes do similar employment as locally
acquired espresso, clients won't cause costs in
exchanging items.

 How Nestle can tackle the Threat of

Substitute Products?
- Nestlé can zero in on giving greater quality in its items.
 Purchasers would pick their items, which give more prominent quality at a lower cost when contrasted
with substitute items that give greater quality yet at a more exorbitant cost.
- Nestlé can zero in on separating its items. This will guarantee that purchasers consider it to be as special
and don't move effectively to substitute items that don't give these interesting advantages.
learn.marsdd.com

5. Rivalry Among Existing Firms:

- The business wherein Nestle is developing each year and is required to keep on doing this for a couple of
years ahead. A positive Industry development implies that contenders are more averse to participate in
completive activities since they don't have to catch a piece of the pie from one another.
- The fixed costs are high within the industry in which Nestle operates
 Companies within the industry to push to full
capacity.
- The products produced within the industry in
which Nestle operates are highly differentiated.
- The strategies of the firms within the industry
are diverse, which means they are unique to each
other in terms of strategy.
 This results in them running head-on into each
other regarding strategy.

 How Nestle can tackle the Rivalry Among

Existing Firms:
- Nestle needs to zero in on separating its items so the activities of contenders will have less impact on its
clients that look for its one of a kind items.
- As the business is developing, Nestle can zero in on new clients instead of winning the ones from existing
organizations.
- Nestle can lead statistical surveying to comprehend the gracefully request circumstance inside the business
and forestall overproduction.
sites.google.com
III. Strengths and Weaknesses of Nestlé:
This part will evaluate the advantages and disadvantages of Nestlé through these following aspects:
 Brand name or brand equity;
 Core value or Mission or Vision;
 Organizational structure;
 Human resources;
 Financial strength/ factors;
 Fix/physical assets;
 Market resources;
 Technology base or Research and Development

1. Brand name:

Brand judgment, according to Ms. Heynike, “To customers, a product's brand represents an authentic, close
and familiar feature without having to advertise too much. But Nestlé is different in that on every product
package there is a guarantee of Nestlé through the Nutritional Compass.
With irons, information nutrition products were introduced according to a standard, allowing users to fully
understand the nutritional value of each product as well as choose the correct nutritional products for
themselves and their families. family. Nutritional Compass also represents Nestlé's holistic approach in every
product.

2. Mission:
Nestlé is the world's leading nutrition, health and wellness company. Our mission of "Good Food, Good Life"
is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage
categories and eating occasions, from morning to night. (www.nestle-esar.com)

Figure 11 (Annual Report 2019)

* Vision and core value:

To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value
by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred products.
(www.nestle-esar.com)

3. Organization structure:
Nestlé Company is a decentralized association that is sorted out as indicated by the matrix structure. Nestlé
as a decentralized association licenses to subordinate branches to appreciate a proportionately significant
level of autonomy. In spite of the fact that it actually settles on significant technique choices at the settle
level, everyday tasks are surrendered to subordinate branches to infer and perform. The duty regarding
working choices is push down to nearby units (Broeckx and Hooijberg 2008).

Source: (extraessay.top)

Top Level of Management:

It incorporates the top managerial staff, CEO. Top administration is the individual who has the ability to
choose and deal with the objectives and strategies for a feeling.
Middle management level:
The branch chiefs and division chiefs are the center level. They are responsible to top administration for the
exhibition of their specialty. They invest more energy on directional and authoritative capacities.
Lower management level:
The lower level is otherwise called the leader/administrative level. It incorporates bosses, chiefs, officials,…
4. Human Resources:
- Nestlé offers employees a dynamic salary and benefits system that competes with the market in all aspects,
including salaries, short-term and / or long-term bonuses, salary supplementary benefits or benefits. society.
- The quality of recruitment will contribute to determining the quality of Nestlé's personnel. Therefore,
Nestlé has been very serious and careful in its personnel policy.
- Nestlé's human resources policy clearly shows the company's interest in its employees, through items such
as working conditions, total bonuses, employee relations, ...
- Nestlé HR policies encourage creativity and flexibility.
- In general, multiplication policy:
Nestlé is very good. Under this policy, Nestlé employees in general and Nestlé Vietnam employees in
particular will enjoy many benefits and personal development after working in this environment.
5. Financial strength/ factors

www.gurufocus.com
The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations.
Companies with rank of 3 or less are likely in financial distress. (gurufocus.com)

www.gurufocus.com
The higher the ratio, the stronger the company's financial strength is. (gurufocus.com)
Nestle has a Z-score of 4.45, indicating it is in Safe Zones. This implies the Z-Score is strong.
 www.gurufocus.com
Nestle has the Financial Strength Rank of 6 due to the chart above, this means that Nestle Company will be
likely to fall into distressed situation.
6. Fixed assets:

* Competitive companies are chosen from companies within the same industry, with headquarter located in
same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term
value; the bigger the dot, the larger the market cap.
- From the capital sources of the assets, some of the assets are funded through shareholder's paid in capital
and retained earnings of the business. Others are funded through borrowed money.
Nestle's Total Assets for the fiscal year that ended in Dec. 2019 is calculated as:

https://www.gurufocus.com/
 https://www.gurufocus.com/

7. Market Resources:
- In the food and beverage market, Nestle is a leader in price, product, trust in the eyes of customers, and the
world's most famous brand in the food industry.
- In this market, Nestle has many companies, changing competitors, potential competitors waiting for the
opportunity to jump into the food and beverage race with Nestle such as Hershey's, Heinz, Pepsico,
Starbucks, etc.
 Source: Google Pics

8. Research and Development:

- Nestle has a declare that: “Innovation has been at the heart of our company since its beginning.”
There is an immense scope of activities for researchers, engineers, nutritionists, food technologists, planners,
administrative authorities, and buyer care agents to engage in.
- Nestle’s R&D network is the biggest in the food business with 23 R&D centers, 3,900 researchers, and
scientists working over the world. You can go along with us in various regions:
 Nestlé Product Technology Centre : The Product Technology Centers (PTCs) give specialized
improvement aptitude to our item, assembling, and bundling measures.
 Nestlé Application Groups: Joined to individual Nestlé plants, our Application Groups ensure our items
reflect neighborhood tastes.
 Fundamental research centers: Nestlé Research Center gives the logical information and examination
base for our item remodel and advancement.
 https://www.nestle.com/
Furthermore, this report will also have an evaluation about the SWOT of Nestle including:
 Strengths
 Weaknesses
 Opportunities
 Threats

IV. SWOT:
SWOT overview of Nestle:

https://atpsoftware.vn/
1. S - Strengths:
 Famous Brand
S - Nestle is the renowned brand language limit. It has built up a good rundown in the food and
drink area providing top-notch items to requesting everyday use.
T Globally Recognized Brand
- According to Fortune Global 500, Nestle is among the largest corporations in the world and
R ranked 69th on the list of 2018.
Highly diversified company

E - Nestle sells its products in 189 countries Instead of relying on a few markets, the company has
captured large markets in many developed and developing countries to earn the majority of its

N revenue.
World's Most Valuable Brand

G - According to Forbes Global 2018, Nestle is one of the most valuable companies in the world in
terms of revenue, profits, assets, and the highest market value.
Expanded Product Portfolios
T - Nestle owns more than 2,000 brands globally and innovates more than 8,000 products for
nutrition and health considerations, according to its 2017 annual review.
H Large distribution network
- Nestle owns a large and diversified distribution system, not only penetrating urban areas but
S also in rural areas.

birminghamfoodcouncil.org
2. W - Weaknesses:
 Retail giants price volatility
- Nestlé's grocery sales are mainly achieved through giants like Walmart, Tesco, and Kroger.
Any decrease or increase in prices by these retailers could affect Nestlé sales.
W Control Distance and Organizational Structure
- A large number of brands belong to the same group of cells, which makes it difficult to
E manage large governance, a large number of individual brands can often discord and conflict of
interest.

A Water controversy
- Recently, Nestle was accused of illegally pumping millions of liters of water in six countries

K where residents lacked drinking water.

Maggi noodle controversy

N - In 2017, Nestle failed to delete a lab test in India. This created a public hype when people
boycotted Nestle, resulting in a loss of 80% of the domestic market share. Nestle declares ‘No
MSG’ in Noodles packs. However, 1000 times the lead was found in the product after testing.
E
S
S
E
S
https://www.youtube.com/watch?v=zdbkMXmu_fk

3. Opportunities:
 Small food startup venture
O - Nestle has an excellent opportunity to grow small numbers of food startups under its popular
brand. Nestle can also partner with startups to promote their brands.
P Online Shopping
- Nestle has a remarkable opportunity to promote its e-commerce websites and online
P shopping platform.
- Although Nestle has online stores in several countries, expanding its online services into more

O areas will prove a rewarding decision for the company.

Breakfast Cereal Market Penetration

R - The Nestlé cereal and oat market has shown rapid growth in recent years. Therefore, more
penetration into this market will bring high profits for the company.

T Tea and Coffee Market Expansion

- The demand for tea and coffee is continuously increasing, creating profitable opportunities
for Nestle to market this market more.
U Partnerships
- Strategic alliances with other food and beverage giants are also a great opportunity for the
N company to increase sales and profits.
Authentic labeling
I - Nestle has been criticized for providing false nutritional information on its labels. So there is
an opportunity to improve its practices by providing reliable information and accurate labeling

T of its products.

I
E
S https://nestleblogcom.wordpress.com/2017/09/02/opportunity-analysis/

4. T – Threats:
 Illegal rainforest destruction controversy
- In 2017, Nestle was accused of being involved in the final destruction of Sumatra's rainforest.
It faces heavy criticism from non-governmental organizations and environmentalists on the
issue.
Water scarcity
- Nestlé production is highly dependent on water use. Access to clean water through less
expensive sources has become difficult for companies for many reasons. These include

T population growth, climate change, increased demand for food and water, increased pollution,
wasted water, and overexploited resources.

H Increased competition
- Many CPG companies such as Mondelez and Unilever offer similar food and beverage

R products. It is difficult for Nestle to compete in such a situation where alternative products are
easily accessible.
Government regulations and prices
E - Government regulations can affect Nestle's business. Besides, increasing commodity prices
force companies to increase product prices. It will lead to a decrease in sales as consumers can
A switch to other brands that are available at a low cost.

T
S

https://lakotalaw.org/news/2018-06-13/the-case-against-nestle/

C. CONCLUSION:
To be sum up, it can be seen that Nestlé is one of the quickest developing organizations with the longest
history in milk, food and drink in Vietnam and had the right to be the organization that has the right to be put
resources into growing activities in the period 2020-2025. Due to the PESTEL, 5 force model and SWOT,
Nestle can be the most famous corporation in food and beverages field. Despite the fact that there are
numerous Food and refreshment organizations are presently contending in the market, and Nestlé has
picked up the trust of numerous clients around the globe with the objective of "good food, good life". In this
way, in the coming time, Nestlé Organization will proceed become more grounded on the world market.

Nestle is quite successful in the CPG market. However, there are still some areas where it can be improved to
strengthen its market position.

Some suggestions are as follows:

 Bringing innovation in corporate services.
 Grow the number of startups in the food and beverage industry.
 Upgrade your online services to give you a unique competitive edge in CPG
 Improved production and operation processes.
 Use authentic raw materials to avoid opposition from social and environmental activists.
 Resolve media scandals and controversies to stand up for an active reputation.
 Participate in CSR activities and maintain its sustainability practices.

D. REFERENCE:
1. Political factors : https://pestleanalysis.com/pest-analysis-of-nestle/
https://www.heritage.org/index/pdf/2020/countries/switzerland.pdf

https://www.heritage.org/index/country/switzerland

2. Transparency: https://www.nestle.com/supply-chain-disclosure

3. Economic: https://pestleanalysis.com/pest-analysis-of-nestle/

*Positive and Negative: https://icuhighschool.wordpress.com/2016/06/12/nestle-and-globalization/

4. Inflation: https://www.nestle.com/media/pressreleases/allpressreleases/full-year-results-2019

5. GDP: https://www.google.com/publicdata/explore?

ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:CHE:SWE:NLD&hl=vi&dl=vi#!

ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=world&idim

=country:SWE:CHE&ifdim=world&tstart=1067014800000&tend=1540400400000&hl=vi&dl=vi&ind=false

6. GDP: https://tradingeconomics.com/switzerland/gdp

7. Population size: https://tradingeconomics.com/switzerland/gdp

8. Social: https://pestleanalysis.com/pest-analysis-of-nestle/

https://notesmatic.com/2019/04/nestle-pestle-analysis/

https://www.slideshare.net/karthikgudanvs/case-study-on-nestle-71451995

https://www.nestle.co.uk/en-gb/media/pressreleases/nestle-hands-over-700k-to-action-for-children

9. Technology: https://www.nestle.com/media/news/nestle-ranked-top-innovative-firm

https://www.hurriyetdailynews.com/nestl-expands-plant-in-turkey-to-boost-exports-58521

10. Environment: https://www.nestle.com/sites/default/files/2020-03/creating-shared-value-report-2019-

en.pdf

* Positive and Negative: https://icuhighschool.wordpress.com/2016/06/12/nestle-and-globalization/

11. Legal: https://notesmatic.com/2019/04/nestle-pestle-analysis/

*Taxation: https://www.nestle.com/csv/what-is-csv/taxation

* Monopoly: https://encyclopedia2.thefreedictionary.com/Food+Monopolies

12. Threat of new entrants: https://www.essay48.com/term-paper/13633-Nestle-Porter-Five-Forces

https://sites.google.com/site/starbucksanddunkindonuts/porter-s-five-forces

13. Bargaining Power of Suppliers: https://www.essay48.com/term-paper/13633-Nestle-Porter-Five-Forces

https://learn.marsdd.com/article/bargaining-power-of-suppliers-porters-five-forces/

https://sites.google.com/site/starbucksanddunkindonuts/porter-s-five-forces

14. Bargaining Power of Buyers: https://www.essay48.com/term-paper/13633-Nestle-Porter-Five-Forces

https://sites.google.com/site/starbucksanddunkindonuts/porter-s-five-forces

15. Threat of Substitute Products or Services: https://www.essay48.com/term-paper/13633-Nestle-Porter-

Five-Forces

https://learn.marsdd.com/article/industry-competition-threat-of-substitutes-and-porters-five-forces/

16. Rivalry Among Existing Firms: https://www.essay48.com/term-paper/13633-Nestle-Porter-Five-Forces

https://sites.google.com/site/starbucksanddunkindonuts/porter-s-five-forces

17. Vision and Mission:

https://www.nestle-esar.com/aboutus/missionvision

18. Organization structure:

https://www.ukessays.com/essays/management/nestle-system-and- organization-structure.php

https://www.academia.edu/43401891/Ph%C3%A2n_t%C3%ADch_t%C3%A1c_%C4%91%E1%BB%99ng_c

%E1%BB%A7a_TNCs_Nestl%C3%A9_%C4%91%E1%BA%BFn_t%E1%BA%A1o_vi%E1%BB%87c_l%C3%A0m_v
%C3%A0_ph%C3%A1t_tri%E1%BB%83n_ngu%E1%BB%93n_nh%C3%A2n_l%E1%BB%B1c_t%E1%BA%A1i_Vi

%E1%BB%87t_Nam

19. Financial Strength: https://www.gurufocus.com/term/rank_balancesheet/NSRGY/Financial-

Strength/Nestle-SA

20. Fixed Asset: https://www.gurufocus.com/term/Total+Assets/NSRGY/Total%252BAssets/Nestle%2BSA

21. Market Resources: https://www.marketing91.com/top-nestle-competitors-across-the-world/

22. Research and Development: https://www.nestle.com/jobs/career-area/research-development

23. Strengths: https://atpsoftware.vn/nestle-la-gi-phan-tich-swot-nestle-2019.html

https://www.forbes.com/sites/maggiemcgrath/2018/06/06/worlds-largest-food-and-beverage-companies-

2018-anheuser-busch-nestle-and-pepsi-top-the-list/?sh=56ee14b61b08

24. Weaknessness: https://atpsoftware.vn/nestle-la-gi-phan-tich-swot-nestle-2019.html

https://www.financialexpress.com/industry/maggi-ban-case-big-relief-for-nestle-as-sc-allows-favourable-

report-on-msg-lead-content-in-noodles/1432656/

25. Opportunities: https://atpsoftware.vn/nestle-la-gi-phan-tich-swot-nestle-2019.html

26. Threats: https://atpsoftware.vn/nestle-la-gi-phan-tich-swot-nestle-2019.html