Nestle Case Study:

“Nestlé is the world’s largest food and Beverage Company and employs over a quarter of a
million workers. Nestlé feels that it has a real role to show a lead in acting responsibly with its
suppliers and customers around the world. The company has therefore developed policies and
principles to help it meet its general aims of fairness, honesty and concern for people.

By the end of 2013, Nestlé faced a great challenge in the Egyptian market when the biggest
bottled water manufacturers like Aquafina (Pepsi) and Dasani (Coca-Cola) had to shrink their
market share because of technical and legal reasons. Thus, Nestlé had to fill the gap in water
demand by acquiring BARAKA water Corp. However, Nestlé failed to fill the whole market gap
while it had to produce big-sized bottles to the big customers like hotels, business units and
schools on the expense of producing medium and small sized bottles for individual end
consumers. This in turn led to duplicating the price of medium and small sized bottles of water in
the Egyptian market.

The following data had been recorded about changes occurred in the external business
environment surrounded Nestlé Corporation:

• Local Competitors introduced new water brands in the market in competitive price. This in
turn led to drop in the Nestlé share estimated by 19%.
• Water technology Suppliers provided high technological programs for enhancing capacity by
10% through producing treatment and spring water.
• Governmental associations concerning consumers’ protection set course of regulations that
increase water-manufacturing cost by 12%.
• Small sized bottle Consumer prospected demand in the market decrease by 7%.

Performance of Nestlé's during the year was as in the following table:

Operations depts. 55%

Supply chain and warehousing depts. 56%
Financial depts. 40%
Human resources depts. 67%
Marketing and sales depts. 53%

Based on information provided about an organization's internal & external business environment:
environment:

A) Analyze the external business environment using PEST model B) Analyze the internal
business environment. C) Reveal a company situation according to the results of your
analysis. D) Set a report for CEO about the desired modifications.
Good Luck,,,,,,,,Tarek M. Ali