ARTICLE NO: 02

CHAPTER NO: 02 THE EXTERNAL ENVIRONMENT:

“PEST ANALYSIS OF NESTLE: HOW POLITICS AND SOCIAL CULTURE
AFFECT ITS GROWTH”
WEBSITE: PESTEL ANALYSIS
SOURCE: https://pestleanalysis.com/pest-analysis-of-nestle/
DATE: August 24, 2019
A. POLITICAL FACTOR: Since Nestlé operates in more than 190 countries, any shift
in regulatory environments can massively impact operations. There are different
regulations and food standards which are being imposed on these multinational
companies. There was a situation names as “BREXIT SITUATION”, when UK was
withdraw from the European Union. Europe is an important market for Nestlé
production and profits. And the instability of Brexit has disrupted the entirety of the
UK food supply chain.
- Because of the Brexit nestle face a great damage and decided to replace its
production in Newcastle and York to Poland. Nestle does not trust on the current
government, for the reason it’s smarter to move operations out of this volatile
landscape. It also creates unemployment
B. ECONOMICAL FCATORS: Within the last couple of years, Nestlé has been in an
upswing for profit. In fact, in 2018, the company’s profits increased by more than
40 percent. According to the company, profits changed from $7.6 billion to $10
billion. Much of this success is thanks to three things: The United States market, the
Chinese market, and selling off its confectionery business.
C. SOCIAL CULTURE: Attitude, culture, buying behavior all these affects and
demographics as well. Now a days people are become more health conscious, more
focusing on purchasing healthy products. Nestle is also trying to produce healthy
product Nestlé knows this. If it didn’t, the company would be in a world of trouble.
Nestlé is focusing on reducing sugar, salt, and saturated fat in some of its products.
D. TECNOLOGICAL: Nestlé needs to spend more money on research and
development. It has more technology at its disposal to achieve greater feats in the
R&D department. With the passage of time they have to find out different ways and
new technology to increase productivity and reduce the time of producing a product.