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Nestle Environmental Analysis

560 words - 3 pages

Environment Analysis

Business Overview

The company’s business centre is located in Switzerland. It operates worldwide in the countries of France, Germany and other European countries, Brazil, and Australia. It has five major business partitions which are presented in the table below. Yogurt products, including LC1, are part of the dairy business, a subset of the milk and nutrition businesses.

External Environment Analysis (1994 - 2000)

The General Environment

* Technological – The last part of the twentieth century was the influx of IT capital investment in Europe. This rise in IT spending which concerns the sale of hardwares, software, and related internal and external services, plus telecommunication has improved the efficiency of distribution channels between the seller and the final customer. It also contributed to the enhancement of computer information systems of companies, especially those that ...view middle of the document...

Western people tend to value products that incorporate with them healthy benefits. Obviously, these types of goods are preferred more than that of junk foods and its relative products. Moreover, generation Y cohorts (those born from 1980s – 2000s) possess characteristics such as acceptance to change and being technologically savvy. These kind of characteristics should coincide to the firms aggressiveness of using technology especially that this is also the time of the influx of technology in the Europe.

* Global - Globalization was the buzzword of the 1990s, and in the twenty first century, there is no evidence that globalization will diminish. Some premises of globalization are the ease and speed of communication and travel, and a growth in the international investment. However, besides its positive effect, there had been also unfortunate events in the global environment. There was the fall of the Triad economies: Japan, United States, and Europe. These three giant experienced an economic downturns that consequently created a negative impact to the word’s economic environment. The global environment condition did not promised benefits to the multinational enterprises operating on different countries.

Industry Environment

* Porter’s Five Forces Model

Dairy Products Industry: Growth Stage until 1998, peak until present
Time Frame: 1994 - 2000

Bargaining Power of Suppliers:
* Higher bargaining power as the industry relies heavily on a complex agri-business supply chain.

Intensity of Rivalry among Competition:

* Intense Rivalry as there are equally -powered competitors.

Imitation Threats
* Average imitation threats.

Threat of New Entrants:

* Vertical strategies of firms provide a barrier to potential entrants.

Bargaining Power of Buyers:
* Higher bargaining power results from its immense influence on the supply side of the industry.
* Buyers are considerably many in number and possess lower switching cost.

Product Life-Cycle LC1 Yogurt

1994
present

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