Scanning the Environment: EFAS and IFAS for Nestle

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Research Nestle Corporation.

Nestle is one of the world's largest global food companies. It has over 500 factories in 76 countries, and sells its products in 193 nations, and only 1% of sales and 3% of employees are located in its home country, Switzerland. Nestle is the leading food company in terms of sales, Nestle is the world leader in coffee (Nescafe). It is also one of the world's largest bottled water (Perrier) and baby-food makers. Its 2001 purchase of Ralston Purina made it a top player in the pet food business. In addition to food products, Nestle owns about 75% of Alcon Inc. (ophthalmic drugs, contact-lens solutions, and equipment for ocular surgery) and almost 27% of cosmetic giant L'Oreal.

Nestle's philosophy has been of a multinational strategy where it customizes its products according to the needs of the nation. It believes in innovation and adapting local culture without compromising the core principals of Nestle. Nestle, with headquarters in Vevey, Switzerland, was founded in 1866 by Henri Nestle and is today the world's biggest food and beverage company.

External Factor Analysis Summary:

The remote environment of a firm comprises of economic, social, political, technological and ecological factors (Pearce & Robinson, 2005).Outside conditions can affect a firm's performance, so a close review of various external environmental factors can help an organization identify opportunities and protect themselves from looming threats. Identifying and analyzing the external environment allows an entity to identify factors in which they have control over and those in which are beyond their direct control but can still impact their operations. Technological, economic, social, political and ecological factors make up this remote environment. Analyzing the above mentioned areas of the remote environment will help identify the opportunities and threats.

Economic Forces

Monitoring economic trends like GDP trends, inflation rates, interest rates, unemployment level, money supply and disposable income. Currently the USA economy is creeping up towards recession (Choi, 2008). Current housing prices crisis in USA have affected most of the low income group customers (BBC News, 2008). In other parts of world, economies are doing reasonably well like. There is growth in Asian countries like India and China. Indian economy is expected to grow at 8% (Kumar, N. & Chatterjee, S., 2008) and Chinese economy is expected to grow at 8.7%.

Societal Trends

Demographics are another way of defining population characteristics. Demographics include race, age, educational attainment, income, employment status, home ownership, and even location. Nestle is using its wealth of sales and inventory data to segment based on demographics, allowing it to market to specific age, ethnicity and income brackets.

Health is also a big issue and consumer expectations are on the rise. Obesity ...