Political decisions can affect Nestle for the good and the bad, because if taxes increase, therefore consumers decrease and sales of stock decrease. However if taxes decrease the likelihood is that consumers will buy more.
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POLITICAL - business decisions which are influenced by political and legal decisions. Political decisions can affect Nestle for the good and the bad, because if taxes increase, therefore consumers decrease and sales of stock decrease. However if taxes decrease the likelihood is that consumers will buy more. The confectionery has been criticised for unhealthy products with high levels of sugar in chocolate and an advertising campaign for health eating has been launched. The confectionery market operates within the wider food industry and, as such, is subject to stringent regulation. There are a number of regulations affecting cocoa and cocoa products, including the following: The Cocoa and Chocolate Products Regulations 1976, The Cocoa and Chocolate Products (Amendment) Regulations 1982, The Food Safety Act 1990 and The Food Labelling Regulations 1996.
The interest rates can affect Nestle (and KitKat) because if the interest rates were high then Nestle would not want to borrow as much money for expansion. In addition, if consumers had loans they would again have less disposable income to buy luxury items. If the minimum wage were brought down, this would mean more money for Nestle but would also result in low sales from the consumers and vicar versa. The government can also raise taxes, which would bring a decrease in the sales of chocolate. There could also be a tax put on sweets to encourage consumers to eat healthier food. Advertisement costs could rise on television due to increase costs from taxes, interest rates on unrelated business like the media. A high unemployment rate would mean employees could be obtained more easily and could be paid cheaper wages.
TECHNOLOGICAL - developments in manufacturing and business processes. If the cost of machinery risen due to an increase in cost of producing that machinery means production cocts of the new KitKat will be high than before the increase. There could be new machinery enter the market that allows production to be carried out more effective and efficient than before, which saves on labour costs. Maintenance cost of machinery may increase because better-trained skilled personnel are needed to maintain the machinery through advanced in technology. Employees may need training for advancing IT within the business which make the job more reliant on skilled computer operators rather than packers ect. It may be necessary to upgrade old machines to improve the company efficiency in producing the new KitKat egg because of the shape of the product moulds will be needed and better protective packaging. Advances of transport of goods/cost/lorries because the shape of the KitKat will require greater care when transporting it to the customers like Tesco.
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