Fauget University

PESTLE
Analysis
Group 3
Alegre Magboo
Cetro Soliven
Lincuna Rico
 Introduction

Nestlé Philippines, Inc. (NPI) is a leading

manufacturer of food and beverage in the
Philippines. It was established in the country in the
early 1930s, initially as a trading company.

It produced and sold products like Magnolia ice

creams and tetra pack juices, Bear Brand and
Carnation condensed milk, Bertolli pastas and
tomato sauce, Maggi seasonings, pasta and
mayonnaise, and Smarties candies.
Example
 Political
Changing Policies - Nestle Philippines, Inc. is one of the leading manufacturers in the Philippines. Because of the
company's scale, they face a variety of obstacles on a regular basis. They must examine environmental rules, taxation, and
the import and export laws of numerous countries with great care.

Taxation - Nestle Philippines, like other companies, is required to pay taxes in order to maintain a positive public image.
It's because the amount of tax a company pays has an impact on its ability to spend and develop. Businesses are more
likely to opt-out of the formal sector when taxes are high.
 Political
Limited - The disadvantage of political issues is that Nestle may be subjected to legislation prohibiting fast food from
being served in restaurants and cafes, but on the other hand, it will provide Nestle with a fantastic opportunity to develop
a healthy cuisine free of chemicals.

Rising Supply Cost - When it comes to rising supply costs, Nestle Philippines is struggling. Due to a scarcity of resources
in the Philippines, they are experiencing an increase in the cost of essential supplies and ingredients required for their
products. In economic terms, a shortage occurs when the amount demanded exceeds the quantity available at the market
price. Even in large corporations, shortages are likely, especially in the face of this pandemic.
 Economic
Employment - High unemployment signals the availability of surplus labor at comparatively lower wages. Operating in
such a market can lower the production cost of Nestle Philippines.

Interest Rate - The organization should also carefully consider the interest rate and its influence on borrowing ability and
attitude towards investment. The high-interest rate will encourage the attitude towards investment and increase growth
opportunities for Nestle Philippines.

Gross Domestic Product (GDP) - The GDP growth rate will determine Nestle Philippines.’s ability to pursue its long-term
growth strategies. High GDP also signals the consumers’ ability to spend more on offered products

Inflation - The inflation rate can impact the demand for Nestle Philippines products. Higher inflation may require Nestle
Philippines to continuously increase prices in line with inflation which could lead to lower levels of brand loyalty and
constant endeavors to manage costs. Cost-Based Pricing could be a bad strategy under such conditions.
 Economic
Financial markets efficiency - The global expansion strategies of the Nestle Philippines. are influenced by the financial
market efficiency as operating in highly efficient financial markets leads towards improved liquidity position and
strengthened ability to enter new markets. The health and efficiency of financial markets will determine Nestle
Philippines's ability to raise capital at fair prices.

Economic structure - The business practices of Nestle Philippines. are influenced by the prevailing economic structure.
The economic and regulatory environment in a monopolistic or oligopolistic structure will be different from monopolistic
competition and perfect competition.
 Economic
Labor market conditions - The demand and supply of labor determine the wage rates and supply of skilled workforce.
Nestle Philippines. must study and predict the labor market conditions to understand how it can attract talented workers
and leverage their skills to improve business performance. When labor markets are flexible, Nestle Philippines. can take
advantage of higher labor productivity.
 Social
Changes in Demographic Patterns - Changes in demographic patterns like the aging population, migration trends, and
social variables have principal importance for Nestle Philippines. Knowing these factors can help the company in choosing
the appropriate market segments with high growth potential.

Power Distance - Nowadays, most of society leans closer to a healthier lifestyle, and over the years, Nestle works towards
trends that are related to improved health, developing their products with low sugar, sodium, and saturated fats. The
company also has a regular monitoring system that ensured that its products are of high quality and can prevent health
risks arising from the handling, preparing, and storing throughout their value chain.
 Social
Consumer Behaviour - Another, each society has its own set of norms and values that play an important role in shaping a
consumer’s behavior, that’s why it is important for Nestle to observe and understand the social class stratification. Thus,
market segmentation based on social class may very much be ineffective where social stratification is low.

Sets of Norms and Values - There are societies that consume a product because of its status symbol, while there are
those that use the same product for its functionality. Nestle should acknowledge the degree of consumer ethnocentrism
and consider its effects on consumers’ evaluation of foreign products. Lastly, due to the unwanted outbreak of the
coronavirus pandemic, online shopping has become prominent among people.
 Social
Degree of consumer ethnocentricism - Easily being influenced by small societal changes to trends is the plain truth of
running a large company. This is why the further success of Nestle depends on their ability to anticipate the needs of their
customers, and for them to be able to offer innovative, relevant, and high-quality products. With continuous efforts of the
company to keep everything and everyone covered, Nestle is working towards a brighter, more profitable, and innovative
future.
 Technological
Advancement in Technology - In the process of making strategic decisions for a business, the rapid advancement in
technology must be considered to understand technological factors that may benefit or threaten the company.

Cyber attacks, etc - In the field of information technology, Nestle promises that they value their information systems as
they do on their supply chain network. In this digital age, Nestle has developed sites, programs, and applications that
disclose information on their best practices and processes across global operations and provide reliable yet accessible
data about diet and health.
 Technological
However, despite Nestle being a well-established business, it is subject to cyber-attacks, the privacy of data, security
issues, and reliability. To achieve a solid system that will protect the company’s computer data, Nestle heavily invested in
technology segments such as real-time data. Nestle has partnered with several authorities to complete this plan.

Utulizing Technology - Meanwhile, Nestle Philippines has been utilizing technology to make products that are supported
by research and scientists. It has always been a vital part of their company’s research and development. They have
engineers working in different fields - from the products’ packaging, food processing, and manufacturing systems. They
also hire food scientists who carefully analyze the development of the products to produce safe, nutritious foods and
beverages while keeping us on the cusp of new developments in food science and technology.
 Legal
Tax Management and their Strategy - Over the last years, NESTE has developed 10 Principles of Responsible &
Sustainable Tax Management and five Foundations of their long-term Group Tax Strategy. These principles and
foundations are based on the recognition that tax is an integral element of their overall corporate social responsibility, as
well as on the fundamental objective of tax compliance and of responsible and sustainable planning.

Employment Regulations and Policy - Nestlé is committed to promoting greater knowledge and understanding as well
as an integral implementation of its Corporate Business Principles as the basis for being trusted by employees and
stakeholders.
Environmental
Sustainability - Environmental factors are now a central concern in the context of business especially as it affects the
public image of international businesses. In the case of Nestle Philippines, Its international presence necessitates that the
organization carefully consider these differences in order to avoid unfavorable circumstances.

Eco-friendly Environment - Every industry across the globe has been swept through by a wave of the eco-friendly
environment. Companies like Nestle are perceiving newer ways to gain sustainability and the welcoming for eco-
conscious people. The group’s efforts to lessen its environmental impact by reducing the usage of plastic in its goods and
focusing on generating 100 percent recyclable packaging is a major feat towards environmental sustainability since it is
one of the four major groups that are responsible for the production of 6 million metric tons every year.
Environmental
Zero waste production - Environmental factors are now a central concern in the context of business especially as it
affects the public image of international businesses. Every industry across the globe has been swept through by a wave
of the eco-friendly environment. Companies like Nestle are perceiving newer ways to gain sustainability and the
welcoming for eco-conscious people. The group’s efforts to lessen its environmental impact by reducing the usage of
plastic in its goods and focusing on generating 100 percent recyclable packaging is a major feat towards environmental
sustainability since it is one of the four major groups that are responsible for the production of 6 million metric tons every
year.
References

https://pestleanalysis.com/pest-analysis-of-nestle/
https://embapro.com/frontpage/pestelcase/3480-philippines-beans
https://www.mbaskool.com/pestle-analysis/companies/17962-nestle.html
https://wiselancer.net/pestle-analysis-of-nestle/
https://www.case48.com/pestel-case/3480-Nestle-Philippines
https://swotandpestleanalysis.com/pestle-analysis-of-nestle/