Assignment 1 MKT420 - PDF

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Warning: TT: undefined function: 32BACHELOR’S DEGREE OF OPERATIONMANAGEMENT (BA244)MKTTOPIC : HOW MICRO & MACRO ENVIROMENTWILL AFFECT A COMPANY?CHOOSEN COMPANY : NESTLE SDN BHDPREPARED BY : NURSHAZWANI ALIAH BINTI HISHAMUDDINSTUDENT NO : 2019466326CLASS : NBO2APREPARED FOR : SIR NOR SHAHRUL ...

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BACHELOR’S DEGREE OF OPERATION MANAGEMENT (BA244) MKT420 TOPIC : HOW MICRO & MACRO ENVIROMENT WILL AFFECT A COMPANY? CHOOSEN COMPANY : NESTLE SDN BHD PREPARED BY : NURSHAZWANI ALIAH BINTI HISHAMUDDIN STUDENT NO : 2019466326 CLASS : NBO2A PREPARED FOR : SIR NOR SHAHRUL NIZAM BIN MUHAMAD NOR DATED OF SUBMISSION : 17th MAY 2020

ACKNOWLEDGEMENT

With the name of Allah, the most gracious and the most merciful, all praises to Him for giving us strengths, mind, and healthy body. I am surely will not be able to complete the assignment without Him as our Creator. Firstly, I would like to thank my lecturer for this subject, Mr. Nor Shahrul Nizam bin Muhammad Nor. Because of his special skills and good performance in the class, I understand more clearly about the assignment that we need to complete. He guides us with a full of excitement and he inspired us to the do the assignment more cleans and neat by following the criteria. Finally, a very special thanks to my family and friends as they have helped me a lot to complete the assignment. My family keep supporting me by giving morale support. My friends also always help each other whenever I am doing the discussion for the assignment. Their helps and support make me to boost up my spirit to complete the assignment. Without all helps from the persons that mentioned above, I agree that I will face many obstacles and difficulties in completing this assignment

Table of Contents 1.0 INTRODUCTION....................................................................................................................1 2.0 MICRO ENVIRONMENT .....................................................................................................2 2.1 Suppliers .................................................................................................................................2 2.2 Marketing Intermediaries .......................................................................................................2 2.3 Customers ...............................................................................................................................3 2.3 Competitors ............................................................................................................................3 2.2 Marketing ...............................................................................................................................3 3.0 MACRO ENVIRONMENT ....................................................................................................4 3.1 Political Environment .............................................................................................................4 3.2 Cultural Environment.............................................................................................................4 3.3 Economical Environment .......................................................................................................4 3.4 Technological Environment ...................................................................................................4 4.0 CONCLUSION ........................................................................................................................5 5.0 REFERENCES .........................................................................................................................6

1.0 INTRODUCTION

NESTLE LOGO Nestle was established in Malaysia at 1912. The first Nestle office in Malaysia was set up in Bishop Street, Penang, which was known as Anglo-Swiss Condensed Milk Company. Then, in year 1939, due to growth and expansion, Nestle Company expanded to Kuala Lumpur The first Nestle factory in Malaysia was developed at 1962 in Petaling Jaya. Now, it manufactures its products in its seven factories from Petaling Jaya and Shah Alam at Selangor, Chembong at Negeri Sembilan, and Kuching at Sarawak. Moreover, Nestle Malaysia’s head office is located at Mutiara Damansara. Since 13 December 1989, Nestle Company was publicly listed in the KLSE, which is known as Bursa Malaysia Berhad now, at an issue price of RM5.20 for each share but it increased sharply to RM21.00 each in year 2000. (Nestle. 2015.) Today, Nestle Malaysia Sdn Bhd employs more than 5000 people and manufactures as well as markets more than 300 Halal products in Malaysia. Many of our key brands have now become a part of Malaysian households for generations including Malaysian favourites such as MILO, MAGGI, NESCAFÉ and KITKAT. Having been present in the nation and in the hearts of Malaysians for over a century, we are firmly committed to offering the very best in quality, nutrition and taste. Nestle becomes the leader in nutrition, health and wellness industry. Nestle employed local autonomous regional employees to manage the company. This is because they understand the culture and taste of the local market compared to foreigners. Besides, Nestle produces different products that are suitable for each religion in a country.

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2.0 MICRO ENVIRONMENT The micro environment of Nestle includes three divisions: i.

Suppliers

Suppliers provide the raw material resources, unfinished goods and labors to the company in order to produce goods and services. The effectiveness of suppliers determines the efficiency of the company in terms of producing the goods. In addition to that the quality of the finished product has a strong with the suppliers of the firm especially in case of food products. As the presence of the company is in more than hundred companies, it is a challenge for the company to maintain its standard all over the world and provide the consistency to its customers in the taste and quality of the product. Further we can divide the supplier of Nestle into two parts: Labor suppliers and material suppliers. Labor suppliers deal with the quantity of labor is required at the optimum level in order to prevent the loss of labor force and prevent the company from the shortage of labor which again can lead building of inventory as a cost for the company. The skills of labor is again maintained by the labor suppliers, wherein the labors of different skills are managed in such a way that the operation of the firm can run smoothly. Labor strikes and labor relations are other factors which we cannot ignore in the current scenario as the efficiency of the business depends largely on the factors like attrition and employee satisfaction. Material supplies handle all the material required by the firm in order to manufacture the finished product for sale. Nestle is in the food and quality markets and the quality of such item plays an major role in its success in the market. Nestle has maintained a high quality efficiency in handling the quality and quantity of the two different supplies i.e. labor supplies and material supplies and hence the company has been able to run its business smoothly for more than 100 years in spite of the different business trends in the world market. ii.

Marketing Intermediaries

The market intermediaries of the company help to advertise, sell and distribute its product to the end customers. The physical distribution network of the company decides the medium by which the finished product is delivered to the end customer on time and with safety. This department also ensures the proper storage of the firm that prevents the product from getting any king of damage. The marketing service department of the firm helps in the promotion of the product and acts as a communication channel between the company and customers. It not only communicates the features of the product to its customers but also get the feedback with the help of survey, which helps the research and development department to develop a product according to the need of the customers. The other intermediaries of the company like banks help to provide the funds to the companies and play an important role in the continuity of the business. Insurance companies insure the Page | 2

property and the goods of the company against the risk involved in various operations, buying and selling of the product. Nestle has the differential advantage of working in a smooth coordination with all its marketing intermediaries which helps in providing the best and pure food products to its valuable customers in the different parts of the world. iii.

Customers

The immediate customers of Nestle are retail and grocery stores which provide the products of the company to the end customers at a reasonable price and a reasonable profit. The end customers of Nestle are the consumers who consume its wide range of product. The company has a bright brand image in its big pool of end customers. iv.

Competitors

Although Nestle is leader in packaged food industry of Malaysia but the other competitors who are giving tough competition to Nestle are Petra Foods Limited, Chocoladefabriken Lindt & Spruengli AG, Yeo Hiap Seng Limited and Maeil Dairy Industry Co., Ltd Nestle has a clear advantage over the above mentioned companies is its presence in Malaysia for over a century now. Nestle has been able to setup a good and trusted distribution channel and a huge retail network. The trust worthiness gained by Nestle among the Malaysian people is build in decades on hard work and quality products and varied range of prices, thus even after facing stiff competition with the above mentioned companies in chocolates, dairy products and other packaged food products the company is able to maintain the bottom lines of its profit and loss statements attractive for its investors and good image in public. v.

Marketing

The basic marketing strategy of the Nestle was to develop brands for each their product instead of focusing on making brand value for the entire company, thus never allowing cannibalization of products and gaining multiple brand value for the entire company. The vision of the company could be summarized in following statements • Be the leading multinational company in food, nutrition and wellness. • Produce and sell world-class products of the highest consistent quality, reliability and convenience based on business excellence principles throughout our operations. • Maximise the use of good quality local raw materials • Be an exemplary employer with a progressive human resource and social policy; with a management style that is based on "Management Commitment and People Involvement" • Be a responsible corporate citizen, fulfilling all obligations to Government, shareholders, customers, communities and consumers. • Protect the environment by being committed to environmentally sound business practices, and taking into account the need to preserve natural resources and save energy. • Guarantee that all products manufactured, imported and distributed by Nestlé Malaysia are certified HALAL by authorized Islamic certification bodies. • Deliver shareholder value through the achievement of sustainable and profitable longterm growth. Page | 3

Adhering to the above vision statements the company has been able to maintain the marketing and branding unique and ahead of the competitors.

3.0 MACRO ENVIRONMENT Macro environment include following environment of the country i.

Political Environment

Government of Malaysia has never imposed any political pressure in fact they have always supported foreign investment and foreign businesses to grow in Malaysia. As the company is into food and nutrition business they have to just adhere to the laws of food and nutrition policies of government and constantly provide good quality which is the vision and mission of the company thus Nestle never faces any problems on political front. ii.

Cultural Environment

Malaysian culture is no doubt of having light food at constant intervals and young crowd of Malaysia likes to have good nutritional food thus Nestle has great scope there. iii.

Economical Environment

The disposable income of country and the high living standard of Malaysia always give better bigger business opportunities for Nestle. iv.

Technological Environment

Malaysia is technologically rich country both in terms of availability of technology and also the technological work force the highly skilled and educated manpower is abundant in Malaysia. In case of Nestle and the product offered by the company these factors do not create much impact in general scenario. However as we have seen the major events like World War had created a positive impact on the sale of confectionary products of the company. The culture has some impact in this company as whether the country has most people as vegetarian or non vegetarian the consumption of milk products is always there. However the countries where the people are more dependent on milk products are profitable market for Nestle.

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4.0 CONCLUSION Nestle exerts great attempts to achieve its visions to be the leader in Nourishment, Health, and Wellness Company by producing better quality of products to the consumers. Nestle also research about the consumer's needs from time to time and gratify the consumers as much as possible. Nestle's advantages such as high financial capabilities, effective strategic marketing capability, strong research and development, as well as great leaderships have helped them through the obstructions. Most importantly, Nestle targets its missions and ensures regularity by making the right decisions to manage and build its business to deliver the assurance of Good Food, Good Life all around the globe . Several factors affect Nestlé in its international operations among them political, economic, social, technological, as well as environmental and legal factors, which are significant influences determining the success of operations in modern business environment. Three particular challenges are identified as having substantial impact on Nestlé’s operations and business potential which quality of products and supplies which portends loss of confidence in product; the company’s weak implementation of eco-friendly initiatives which are essential not only to check the environmental impact, but also serve as proof for goodwill to society; and, the increasing trend towards healthy eating which is a concern for future competitiveness of the company’s products. These challenges should be addressed to guarantee success of products in markets, as well as overall competitiveness.

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References Interbrand. (2014, September 1). Best Global Brand 2012. Retrieved from http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx Nestle. (2014). Nestle Annual Report 2013. Retrieved from http://www.nestle.com/assetlibrary/Documents/Library/Documents/Annual_Reports/2013-Annual-Report-EN.pd waheedahmedarain. (2013, March 17). Scribd. Retrieved from Micro and Macro Environment of Nestle: https://www.scribd.com/document/130902396/Micro-and-Macro-Environment-of-Nestle Weiler, M. (2012). NESTLE MARKETING ANALYSIS. Kindle Edition.

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