Challenges and Development of Nspresso in China

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The Nespresso story began with a simple idea: enable anyone to create the perfect cup of espresso coffee – just like a skilled barista. From its beginning in 1986, Nespresso has redefined and revolutionized the way millions of people enjoy their espresso coffee. (Nespresso, 2014). The company dedicated to offering the special coffee experience for customers through the ‘Nespresso Club’, which combines the smart coffee capsule with advanced technology machine. (Source: Nespresso, 2014) • Question 1: Discuss the key environment factors that may continue to affect Nespresso’s process in China, and comment on their business implications. 1. Environmental Factors: (1) PESTEL Analysis According Learn Marketing. Net (2014), an organization’s success is influenced by factors operating in its internal and external environment. Before Nespresso makes a decision of what strategy to use in the market, it is important to analysis the external environment (Chinese market) so that the company can choose a proper strategy to adopt to the market situation. And the external environment, which also refers to PESTEL, include these factors below: (Source: Consultants Online, 2014) • Political According to the JLJ Group (2013), with the implementation of a new income tax law from January 1st 2008, companies who previously enjoyed reduced tax rates saw their income tax rate gradually rise to the standard 25% by 2012.That is to say, companies would not enjoy the precious preference tax treatment any more. In other words, the tax rates change depends on the unpredictable market. • Economical With the development of China, the economy of China has become the World’s second largest after the US. On the other hand, the ... ... middle of paper ... ...ndeed, you need to use one capsule per coffee, which involves more waste compared to the traditional coffee machine. Reference CNNIC (2014) Number of internet users in China crosses 600 million mark [online] available from: [March 4, 2014] Consultants Online (2014) External Environment – PESTLE [online] available from: [March 4, 2014] JLJ Group (2013) Taxation of Foreign Enterprises in China [online] available from: [March 4, 2014] Nespressso (2014) from pioneer to reference in premium portioned coffee [online] available from: < http://www.nestle-nespresso.com/about-us/our-company> [March 4, 2014]

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