When analyzing the macro environment of a product category, PEEST analysis is used to identify the five main forces that influence marketing decisions. The five forces of analysis are political-legal factors, ecological-physical factors, economic factors, socio-cultural factors, and technical factors..
Political: Nestle is a global company and in the food and beverage one of the most important factors to consider is globalization. According to Jose Lopez, Nestleg’s vice president of operations explained that the impact of globalization on Nestlé is very different from what was originally expected. Initially we thought this meant that developing countries opened up the market but later proved that we must globalize to understand how to deal with the global market (Bell 2009, 10). Another factor in insider information is the impact of regulations on Nestlé. The global food and beverage industry is one of the most regulated industries in the world. For example, when Nestlé inevitably affects its products, it must face multi-layer regulations (Nestlé 2008).
Economics: Food is a basic human need and therefore a necessity for survival. From an economic point of view, this means that the basic demand for food is always high. Although food eating patterns may change, they vary from place to place. Nestlé has adjusted these changes based on the preferences and price sensitivity of the different laces it operates. An example of Nestlé is to open factories in different places, from packaging, pricing to taste, to cater to the local market. Most of these new plants are located in developing countries, as it is estimated that by 2010, approximately 90% of the world’s population will live in these countries.