Internal and External Environment of Nestle

Internal and External Environment of Nestle

The paper will address the key issues challenges affecting Nestle Co by conducting an environmental analysis. Organizations face various challenges in their operations both internal and external and to develop the right business strategy, these issues need to be addressed. The report will make use of different environmental models such as SWOT, PEST and Porter’s five forces. After carrying out an analysis, the report will identify a key business challenge and develop a plan for leadership and management as a means of addressing the issue. Conclusions and recommendations and limitations to implementation will be discussed. Nestle Co is the world leading nutrition, health and Wellness Company established in 1867 with its headquarters at Vevey Switzerland. It is a multinational corporation employing over 328,000 people worldwide in over 160 countries. Its sales volume as at the year ended 31 December 2011 amounted to CHF 83,652 and it has 2 billion customers in over 180 countries. It deals with various brands such as chocolates and confectionaries, baby foods, cereals, coffee, dairy products, healthcare nutrition, bottled water, and cereals among others. Overall, the company has over 120 brands. Its mission is to provide customers with products that provide nutrition, health, and wellness. It is committed to increasing the quality of life for all people by ensuring healthy nutrition through a slogan named ‘Good Food, Good Life.’ Its performance is driven by its capacity for innovation and renovation. It has a flat and flexible organizational structure with few management levels and a broad span of control. (Nestle, 2012).It is headed by the CEO, Paul Bulcke who has been in the organization and driven it to where it is since 1998 who according to Raisch Ferlie (2008) thinks globally and acts locally to penetrate the mature market.The organization markets its products in almost every country and operates in six geographical locations. Europe, the Americas, Asia/Oceania/Africa. It operates in the food and beverage industry with main competitors being PepsiCo, Unilever, Kraft, Procter Gamble, among others. Nestle is a world leader of nutrition, health and wellness products. Its success is made possible by frequent innovation and renovation and the use of environmentally sustainable practices. The CEO is committed to ensuring the customers get quality of life through brand and product diversification and additional nutrition. The company operates in a very competitive environment with major competitors being PG, Unilever, and PepsiCo. It has products in almost all countries and has over 500 brands in six continents. Europe, the Americas, and AOA. All its operations are guided by the corporate business principles and the suppliers have to adhere to this code of conduct. Nestle environment is very complex as the organization operates globally. The possible strengths include. strong brands, corporate brand, its structure, and cost advantage while weaknesses include. barriers to entry, competition, complex structure, and minimal rewards. It has an opportunity to venture into new markets due to its reputation and can also engage in a joint venture to diversify its products. The company is also affected by changing consumer demands hence buyer power. The major challenge that may impact on the effectiveness of the organization is to retain workers in a globally competitive environment using its cost-cutting strategies and still add value for shareholders. The threat of worker turnover due to poor performance management is crucial and should be addressed.

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