Trade unions- Trade unions are put in place to look out for the best interests of the worker. They discuss what is wrong with the work place or what needs changing and they then come forward and speak for the working bodies. If Nestle had to lower wages for some reason, this would mean that the trade union would file a complaint because of the wage reduction and if the wages were not raised to an acceptable amount there is a danger of a staff strike. This would affect the production lines of Nestle and any other section of the business that was experiencing the same treatment. This would cause Nestle to be late on deliveries and maybe even stop some production lines; obviously this would mean a decrease in profit because there would not be as many products available for sale.
Changes in the availability of raw material- The availability of raw materials used in the ingredients is obviously at threat if there are any problems in the chain of production. Because if there is not the ingredients needed to make the product production would stop and it is not possible to just go get some out of a warehouse that may have been put away in case of increased demand because this product can go out of date.
Duties and levies- Are additional to the cost of shipping when importing and when exporting products. This is what duty free is because there is no added cost for the import/export of the goods. So if the price of duties and levies was to increase the company would have to pay extra for transport.
Regulatory constraints, such as labelling, quality, safety- When a company like Nestle releases a new product. They must comply with certain rules and regulations like safety hazards of the new product all risk assessments must be done. Failure to comply with these regulations may result in the product being taken off the shelf.
Economic factors
Inflation- Inflation effects Nestle in much the same way as changes in tax would. So if the changes in interest rates went down so may the prices.
Unemployment- may affect sales because if the unemployment rate was to rise this would mean that people would not be earning as much money and they might have to cut back on luxuries such as chocolate and other things that are not needs.
Energy prices- Energy prices rise as do interest rates and taxes, so if electricity costs were to be rise this would mean that it would cost Nestle more to run their machinery and this would lead to price increases. As a result again this could mean that Nestle lose out on customers as a result of over pricing.
Social factors
Consumer lifestyles- This is the feeling of the current trend what is considered to be in style and popular. These trends run in cycles and this is a good way of predicting what will become trendy and when this gives businesses a chance to prepare. Nestle can use this to their advantage by anticipating the next trend and releasing a product meeting that need.
Technological factors
New technological progresses- This would more than likely have a positive knock on affect to Nestle as new technologies means faster computers and things that make every day jobs easier. Or it may be possible to get a new machine that could increase production rate as it is more advanced that the older model.
Energy saving techniques- If any new energy saving techniques are invented this would mean that the price of the energy would go down which would mean there would be extra money to invest in to the business or into a new product.
New materials and substitutes for existing materials- New material could be useful to Nestle as they could be used to make new types of packaging and it may make chocolate wrappers more environmentally friendly.
Better equipment- This is just like new technological progresses. Better equipment means that the production rate would increase as they would be more advanced and faster. This would enable Kit Kat to meet popular demand.
