The Global Market Environment for Nestle Boost - Case Study Example

Respected Sir, We are submiting herewith our complete report on analyzing the marketing environment for Nestle Boostas partial fulfillment towards the course. The main purpose of the report is to evaluate the external environment and its effect on the business by looking into political, economical, social, technological, environmental, legal, and internal analysis so that the market conditions and its effect on business can be better understood We hope that the report meets the requirements and gets your approval Respectfully yours Your name Report on Analyzing the Global Market Environment for Nestle Boost Executive Summary The manner in which health issue is gaining prominence and consumers are looking towards healthy products has increased the demand for health drink. Nestle Boost has looked towards providing a health drink which looks to provide customers with the valuable nutrient that the body requires. This will help them to fight against various disease and obesity and will thereby help the increasing health conscious people. This report presents the manner in the demand for health conscious drink in rising in Australia. The environmental factors through the analysis of the present situation demonstrate a growing demand for health conscious drink. Even the government is looking towards supporting the same as the external conditions is making the government look into the issue seriously. Even the change in the social outlook and the increasing demand for health care drink provides an opportunity where Nestle Boost can look towards tapping the present base of customer and ensure that they are supplied with a drink they are looking for. Further, the internal analysis highlights the core strength and opportunity the Nestle has and being able to identify and use those will ensure that Nestle is able to create a niche market and looking towards aggressive advertising will ensure that they are able to capture a large chunk of the population and ensure growth for their business. This thereby transforms into a great opportunity for Nestle Boost and by building on the external environment and developing their strengths the company will be able to ensure long term association and business from the market. Table of Contents Introduction 5 Background Information 5 Environmental Analysis 6 Conclusion 16 References 18 Introduction The manner in which health issue is gaining prominence and consumers are looking towards healthy products has increased the demand for health drink. This has made companies develop healthy drink which apart from being healthy in vitamin helps to fight various diseases and provides the required vitamins and nutrients which the human body requires (Green Fit, 2011). This will thereby increase the chances of success as the product will be able to provide nutrition to the people. This is an area which Nestle Boost has looked to work on and develops a product which provides the basic nutrient the humans are looking for. This helps to find the following reasons for which the study has been conducted as to conduct a strategy development for Nestle Boost. This helps to identify the manner external environment is influencing the working of Nestle Boost and the manner in which internal environment helps Nestle Boost to develop their working. This also looks to identify the market size, the growth and the manner the environmental factors are having a role in shaping the performance of Nestle Boost. Background Information Nestle Boost is a nutritional drink which is to be launched in Australia and has chances of succeeding due to increase in health conscious customers and obesity which has increased the demand for such health drink. Also, the fact that the nutritional drink is rich in vitamin and will help in fighting against disease the chances of succeeding is very high. This report thereby looks into the manner nutritional drink will be accepted by the people by working on different directions. The market size of health conscious drink is on a rise as the demand for health drink is on a rise. The Australian health care industry is growing rapidly and is expected to have a market based on value is around 1739.9 million which is bound to reach 3,687.5 in 2012 (Laishram, 2006). This will thereby provide an opportunity for Nestle Boost to capture the market as the people suffering from obesity and other health concern disease is on a rise. Working on this area will ensure that Nestle Boost gets accepted by the people and will provide an opportunity to earn profits for the business. Nestle Boost needs to look towards developing a strategy where they are able to highlight the benefit that the nutritional drink provides. Further, working on the core strength and highlighting the customers that the drink is fit for consumption for people suffering from obesity at the same time provides vitamins which helps to fight against various disease will help to make the customer aware about their core strengths (Laishram, 2006). This will help to clearly depict a picture on the mind of the consumer regarding the benefit that the customers will derive from the health drink. Environmental Analysis Understanding the external environment will help to understand the manner in which the working of Nestle Boost gets shaped due to external conditions and will help to develop a strategy to deal with those (Doole & Lowe, 2001). Pestel analysis looks at the manner in which external environment affects all industry performing in the economy (Fletcher & Crawford, 2011). This is as follows Political: Political situation helps in determining the manner an organization will be able to perform. Nestle Boost while looking to operate in Australia needs to understand the fact that the economy has a democratic form of government. Australia has been shaped by the political situation as the political instability and foreign trade policy has a role in determining the performance of the organization. This makes it important that Nestle Boost conducts proper market surveys that will determine the manner the company will be able to perform. Nestle Boost thus needs to meet the political standards set by the targeted market and follow a flexible route to adapt itself with the changing needs and ensure a success in its endeavor to go global, special care has to be taken to meet the quality standards of the products as per the requirements of the different countries (Coughlan, Stern, & Ansary, 2006). The September 11 terrorist attacks have raised concerns and made the government more circumspect on different activities which are operating around the country but strong policies to counter check those has ensured that the government is able to take vital decisions. The government has also looked towards making rules and opening the economies which has ensured more foreign investment flows into the country and has ensured better construction facilities. Strong government and the ability to take tough decisions have helped the economy to flourish and special consideration being given to the construction business has helped to ensure rules drawn in favor of them (Chew, Cheng & Petrovic-Lazarevic, 2006). Economic: The world economy have been drastically been affected by the global recession which has resulted in decrease in the purchasing power. People are postponing their expenses for the future which has resulted in decrease in the sell of products which are luxurious. Nestle Boost while looking to go global and expanding its reach should look to ensure that all aspect of the business is looked minutely. The problem has been further increased due to rising inflation which has resulted in reduced bargaining power of money and made people postpone or alters their purchasing habits in relation to infrastructure (Cateora, Mary & Graham, 2009). This has made families take decisions where they live in small houses. The present economic conditions have made it difficult for families and have thereby affected the manner in which business was conducted and has affected the way in which work was carried out. Nestle Boost will also have to face the economic situation so need to look into the manner the economy is performing and the chances of recovery in the near future needs to be analyzed before Nestle Boost is able to develop its strategy of entering Australia (Coughlan, Stern, & Ansary, 2006) Social: The change in social outlook and people looking towards health conscious food has increased the demand for nutritional drink. Also, the improvement in the educational level has ensured better opportunities and changes in the social conditions. Social perspective shapes the manner in which an organization performs and its especially correct for Nestle Boost which looks to supply healthy products especially for the upper segment of the customers. The changing life style of people in Australia and improving living standard has increased the demand for healthy products. The change in social outlook is further witnessed by the growth of Y generation which looks to follow the modern lifestyle and look towards trendier products and different lifestyle. This has thereby resulted people looking towards a different set of principles which has increased the growth of old age homes. This has been compounded by the change in the mind set of the people. This has resulted in widespread changes in the taste and preference of customers which has thereby increased the market share of Nestle Boost and has thereby looked to develop the market based on it (Coughlan, Stern, & Ansary, 2006) Technological: Technological advancement has ensured that the logistic network is developed which has facilitated the opportunity of developing the supply chain and ensuring maximum efficiency and reducing cost so that businesses are able to benefit. The rapidly evolving world has gained momentum due to widespread changes seen on the technology front. This has aided towards the better and developed products for customers who are facing health issue which will ensure best facilities for the people. The country has been able to absorb and accept the changes readily which has thereby helped and ensured that better facilities are provided to the construction busines. Better technology has ensured better supply and demand of products which has helped different industries to flourish and gain the required momentum in the market. Technology has helped to develop different products and ensure better hygiene has helped to shape the manner in which Nestle Boost has performed and will further help Nestle Boost in the future (Coughlan, Stern, & Ansary, 2006). Environment: Increasing concern towards the environment and the pressure from NGO’s and government bodies along with environmentalist has ensured that businesses look forward towards creating an environment which is friendly and ensures a care for the society. This is an area where Australia has looked towards developing their business environment and ensuring that all businesses houses look after the environment has ensured better home care facilities and improving environment. Also, the health industry looks towards performing their basic functions and after that looks towards planting different sapling so that the environment is protected. This is an area where Australia has laid emphasis on and by delivering on the required standard set by the government will help to improve the basic care facilities for people. This will ensure that all the different parts of the society contribute towards the society and help in the improvement of the society and preserves the environment. Nestle Boost has looked into this factor and have ensured that the products provided by them are developed after considering the environment and steps have been taken to ensure that the quality doesn’t compromise with environment. Nestle Boost has looked towards saving lives of people and provides products which will help to ensure better life thereby ensuring a look after the environment (Coughlan, Stern, & Ansary, 2006) Legal: The development of legal laws with regard to the licenses, quotas and other government requirements has resulted in businesses obtaining the required license so that they are able to look towards the society as well and meet the legal requirements in the different fields. The Australian government has framed rules and regulations which all players performing in the industry have to adhere to. The government has different rules and license agreements for different business but it is mandatory to ensure that the business follows the prescribed rules and regulations (Korey, 2006). The importance of this magnifies when human life is involved as having a proper legal environment ensures that the organization performs according to the set standards. The government has framed rules for the health industry. In addition to it the government has ensured that some of the basic amenities which are required for living are provided. Food and shelter has been laid stress upon and measures have been taken to ensure that it matches international standards. Along with it the government has looked to ensure proper license and are involve in a proper paper work which ensures that utmost care has been taken with regard to health, food and sanitation. This has ensured that the legal formalities are followed to and has helped the different businesses to be able to maintain the required standards. Nestle Boost has ensured that they obtain the required permission and meet the legal requirements that have been stated by law. Nestle Boost in their endeavor to Australia has to look into the legal requirements and being able to meet the required laws will help in the growth of their business. Nestle Boost through this mechanism will thus be able to ensure that they look after the different rules laid down by the government and other organization (Phillip & Gary, 2001). Competitive Environment Porter Five Force Analysis will help to understand the effect of external environment on a relative industry and the manner it is affecting the business (Phillip & Gary, 2001). This is Porter Five Force Model Rivalry among Sellers Increasing competition as businesses are looking towards developing products which are healthy and look towards health conscious customers so that a niche market can be tapped at (SCRIBD, 2010). Potential of New Entrant The entry cost is high due to high establishment cost and ensuring that the business is able to provide and meet the requirements of the health industry (SCRIBD, 2010) Threat of Substitute Limited threat as there are few products and drinks which are healthy and at the same time helps to fight disease thereby providing an opportunity to tap a big market (SCRIBD, 2010) Bargaining Power of Suppliers The suppliers are able to get a good bargain as there are few suppliers which has resulted in over reliance and looking for their services so that the demand for health conscious food and drink can be met (SCRIBD, 2010) Bargaining Power of Customer Limited bargaining power due to limited availability of health conscious food and drink making them rely on the few suppliers in the market (SCRIBD, 2010) Strategic group analysis shows that the culmination of the external factors is affecting the manner in which businesses perform and require developing a strategy so that they are able to combat the external environment and ensure maximum growth and satisfaction for the customers. Also, understanding the strategy and looking towards short term objectives of ensuring a better product for customer satisfaction by looking into the external environment will fetch a strategy to deal with the external environment and ensure maximum growth. Internal Environment The internal environment analysis will help to understand the core strengths and areas which Nestle Boost can work on so that their product becomes successful and by ensuring that the strategies are developed on their strength will help the business over a long period of time. The SWOT analysis will help to understand the core strength and weakness based upon which Nestle Boost can develop strategies so that chances of failure reduces (Czinkota & Ronkainen, 2004). Further, this will also provide the opportunities that the company has and will enable in the long term strategy preparation Strength Nestle Boost is a specially designed and prepared nutritional drink which apart from satisfying the basic quench of thirst provides nutrition and helps the human body to fight from different disease like sugar Increase in population concerned about obesity and health issues provides an excellent opportunity that Nestle Boost can look to tap as their product is designed accordingly Nestle Boost has ensured that the drink is fit for all age groups thereby providing a wide market to cater to and at the same time ensures that the consumers are able to get a special health drink designed for them Strong finances of the company will ensure aggressive marketing which will help to create awareness and ensure that customers are satisfied and look towards the product Weakness The product to be launched by Nestle Boost is not tested so there are chances of failure as the customers might not accept the product and reject is totally Lack of a distribution network which will make it difficult to supply the product to every nook and corner of the country No brand name as the company looks towards a new venture which has an additional risk associated with finances and return over investment Increased cost of marketing as development of technology has enabled new tools of marketing which are costly which will thereby push the cost of the product and make it difficult to supply the product at lower rates Opportunities Australia provides an excellent opportunity for nutritional health drink as the country has a vast population comprised of obese and health conscious people Opportunity to provide the product in other markets as there is an increasing trend towards health drink The climate of Australia also provides an opportunity to sell drinks and the drink being healthy and having nutritional value will multiply the effects for the consumers Increasing population provides a wider market as the product by Nestle Boost is fit for consumption across all age groups. Threats Chances of failure of the product is there as the product is untested so the consumers might reject the product based on taste, price or other characteristics Increasing competition from other players as the competitors might look towards copying the product and look towards catering towards the same product Nestle Boost also faces threats as certain section of the society might object to the health drink by stating that it has chemical and intoxicants which are not suitable for consumption Thus the SWOT analysis highlights various factors for Nestle Boost which will ensure an opportunity to grow by working on their strengths. It also highlights the opportunities available and working on different directions and areas will ensure that the product is readily accepted by the people. This has further been tabulated in a matrix form as shown below Strengths Weakness Nutritional Drink Lack of brand name Increase in health conscious people Untested product Fit for consumption across all ages Increasing cost of marketing Opportunities Threats Rising population Untested product Increase in health conscious people Chances of competitors copying the product Opportunity to move overseas Objection from section of the society Nestle Boost also needs to develop a strategy based on their internal assessment where they are able to target the correct section of consumers and look towards specially designed marketing activities so that the correct section of the society can be targeted. Also, being able to present before the customer the manner in which the nutritional health drink will help to attract different section of the society and ensure proper development of the business. The strategy developed by Nestle Boost should also be such that it looks towards aggressive marketing so that the customer is able to generate a strategy where they are able to place the customers correctly in the mind of the consumers. Another, important aspect of there strategy is to ensure that they remain ethical and present before the customers the true situation and content about the product (Chew, Cheng & Petrovic-Lazarevic, 2006). This will help to ensure that the company remains ethical and provides the customer complete and true details related to the product which will help Nestle Boost to ensure better business. Another important aspect of the strategy here is to formulate a mechanism through which Nestle Boost looks towards penetrating and improving the logistic network. This will help to spread the required network and ensure maximum penetration so that the goods and services are available at every nook and corner of the country. This will help to ensure that Nestle Boost will be able to sell their dink to even far flung areas and will be in a position to capture a large chunk of the population from different quarters. This will thereby help in the transformation of business and will help to ensure a proper marketing strategy that helps the business to face maximum growth opportunity. Conclusion This will thereby ensure that Nestle Boost is able to understand the market conditions better and develop a strategy which will facilitate the development of business and ensure that the company is able to ensure sound returns over a long period of time. This will thereby help to ensure that Nestle Boost is able to develop a strategy which ensures growth and provides an opportunity of growth. The report thereby helps to analyze both the internal and external environment for Nestle Boost based on which the company can look towards developing their marketing strategy. The market conditions also states that the time has come for a healthy nutritional drink and being able to launch one will ensure success. The study also that Australia present an opportunity for a healthy drink and being able to understand the external environment and launching the product based on it will ensure easy market acceptability and help the company earn a good return over their investments It also looks towards presenting the manner Nestle Boost needs to understand the external conditions which is revolving fast. They need to take step where they look towards providing customers with quality products so that they are looked after and look towards making a strategy through which they ensure proper understanding of the environment and developing a stratgey which ensures growth for the business over a longer period of time. References Czinkota, M.R. & Ronkainen, I. A. 2004. International Marketing, 7th edn. South-WesternPublishing:Australia. Chew, M.M.M., Cheng, J.S.L. & S. Petrovic-Lazarevic, 2006. Managers’ Role in Implementing Organizational Change, Journal of Global Business and Technology, Vol. 2, No. 1 Coughlan, A., Stern, W. & Adl Ansary, E. 2006. Marketing Channels, 7e, ISBN 9780131913462 ISBN 10:0131913468 , Pearson Education Doole, I., and Lowe, R. 2001. International Marketing Strategy. 3rd Edition, Bedford Row, London, Thomson Fletcher, R. and Crawford, H. 2011, International Marketing: An Asia-Pacific Perspective,PearsonAustralia. Green Fit. 2011. Green Fit: New All Nutritional Health Drink Hits US Market. Retrieved on Mach 23, 2012 from http://www.prlog.org/11686408-green-fit-new-all-natural-health-drink-hits-us-market.html Laishram, J. 2006. Australian Health Care Drink Segment moving Fast Forward. Retrieved on March 23, 2011 from http://www.creature-companions.com/HealthCareDrinksegment.htm Phillip, K. & Gary. A. 2001. Principles of Marketing, 9th ed. Upper Saddle River, NJ: Prentice Hall SCRIBD. 2010. Executive Summary since 1994, Nutritional Drink has grown. The Times New York Company Read More