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    Environmental Factor: Nestle S.A.

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    Identify the environmental factors that affect global and domestic marketing decisions for Nestle S.A.. Address the following as they relate to the organization's marketing decisions:

    - Analyze the influence of global economic interdependence and the effect of trade practices and agreements.

    - Examine the importance of demographics and physical infrastructure.

    - Analyze the influence of cultural differences.

    - Examine the importance of social responsibility and ethics versus legal obligations.

    - Analyze the effect of political systems and the influence of international relations.

    - Analyze the influence of the Foreign Corrupt Practices Act of 1977, as well as the influence of local, national, and international legislation.

    - Explain the effect of technology.

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    Solution Preview

    I have taken Nestle as a company.

    As per Wikipedia, "Nestle S.A. is the largest food company in the world."1.

    Its headquarters are in Vevey, Switzerland and has Sales more than CHF 107.6 billion and net profit was CHF 10.43 billion in 2009. As per the corporate website, Nestle's " 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." 2

    Its key financials are as follows:

    2010 consolidated (In millions of CHF)
    Sales 109 722
    EBIT (a) Group 16 194
    as % of sales 14.8%
    Net profit (b) 34 233
    as % of sales 31.2%
    Capital expenditure 4 576
    as % of sales 4.2%
    Equity attributable to shareholders of the parent 61 867
    Market capitalisation, end December 178 316
    Operating cash flow 13 608
    Free cash flow (c) 7 761
    Net debt 3 854
    Ratio of the debt to equity (gearing) 6.2%


    The above table is showing that Nestle has robust financial with positive operating cash flows. Nestle is a multinational company and it operates in more than 80 countries. Let us evaluate the environmental factors affecting Nestle.

    Analyze the influence of global economic interdependence and the effect of trade practices and agreements.

    I have taken factors such as National Income and industry growth rate to understand the economic environment and its impact on Nestle. GDP is important because that this number tells about the national income of the country and also about the world at large. Right now US and Europe is facing recession and GDP growth is below average and developing countries like India is having ...