Nestle SWOT Analysis and Business Environment

The assignment is a detailed report on conducting PESTLE analysis for getting familiar with effects in advance, as well as discovering similar prospects through SWOT analysis. The report aims to minimize weaknesses by adopting proper plan of action. References are provided from various sources, including books and journals.

Business And Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2............................................................................................................................................1
P 3. Relationship between different organisational functions that link with objectives........1
TASK 3............................................................................................................................................3
P 4. Positive and negative impacts the macro environment upon business operations..........3
TASK 4............................................................................................................................................4
P 5. Conducting internal and external analysis for identifying strengths and weaknesses....4
P 6. Explanation of strengths and weaknesses having its interrelation with external macro
factors.....................................................................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
Every company used to operate itself within a surrounding that is known as business
environment. This has been recognised that such environs consist of macro as well as micro
environmental factors. Macro factors commonly include government, economy, technological
alteration, political & social situations of nation, natural forces, etc. On the other hand, micro
elements is nothing but the internal things comprised by specific organisation. For instance
workers, consumers, investors, potential competitors, suppliers & so on falls under the category
of micro factors. It is to be noted that these components are giving several form of impacts which
might influence overall performance of corporation (Burns and Winter, 2011). This may be
positive or negative depending on the nature of those environmental prospects. Thus, it is vital
for each and every enterprise to look after such aspects before starting any business in new
market place so that they could run their commercial activities in proper manner. The present
report is designed by considering one of the famous company titled as Nestle. It is a Swiss
international food and drink organisation whose headquartered is located at Vevey, Vaud,
Switzerland. On the basis of its revenue and another metrics, it is known as largest food
association in all over globe, since 2014. In this report, various types of organisations has been
described along with their legal structure. Apart from this, Pestle and Swot analysis is done in
order to perform interior and exterior analysis.
TASK 1
Covered in PPT
TASK 2
P 3. Relationship between different organisational functions that link with objectives
Nestle comprises of different organisational functionalities which is found to be liked
with objectives as well as whole structure. There are number of organisational functions that are
present in single business organisation that is linked with its set objectives and aims in effective
and efficient manner (Gebauer, Paiola and Edvardsson, 2010) . There is relationship of different
departments that exist in this company is described below:
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Research and development department: This department of Nestle perform important
function of analysing the current market condition so that they could able to take decision in
effective and efficient manner. They continuously have to examine external environment so that
they can study the positive and negative impact on the organisation system. Their prime duty is
to evaluate all the working process that is taking place so that overall function of the company
will be performed in effective and efficient way.
Marketing Department: This division play an essential role by performing number of
marketing activities that is directly linked with the accomplishment of final goals and objectives
of Nestle (Halbert and Ingulli, 2011) . It is the responsibility of marketing manager to perform
actions so that they could able to influence the behaviour of the customers so that sales could
take place. Its basic aim is to sell the company's product in order to achieve high profits and
outcomes and establish sustainable market image and goodwill.
Production department – It is manufacturing department of company that produce
different types of products and services for their desired customers. For an organisation, it is
necessary for understanding their production approaches and concepts which assist in reducing
the additional wastage and cost that can aid in making effective goods in better manner. Before
manufacturing some product, it is required for company is to analyse the customers needs and
demand after that they can identify target customers.
Human resource management – It is the important part of an organisation which help in
managing and maintaining all functions of the department in proper manner. Human resource
management is doing work for developing and increasing skills or knowledge of employees by
providing training and development program. With the help of this, they are capable for gaining
and attaining desired goals and objectives in effective manner. The main objective of this
department is to provide training and learning sessions, hire candidates, manage business
activities and developing career direction for employees. This division work for reducing
disputes and conflicts from organisational functions and activities (Hamilton and Webster,
2015).
Accounting and Finance – It is the major department of company which are developing
for managing all accounting and financial activities in better manner. With the help of this,
company manager can manage cash flow, fund flow, capital management, budgetary control and
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trading accounts which required for managing as per accurate manner. It is confidential
department of company that manage financial statement for gaining future growth and success.
From the following hierarchy based on organisational structure. There are different jobs
which are available for organisation from top to bottom management to employees. This is
divided into some parts such as chief financial officer, human resource manager, etc.
TASK 3
P 4. Positive and negative impacts the macro environment upon business operations
Macro environment is that which include the external business factors that affect the
operational activities and decision (Agarwal, Grassl and Pahl, 2012) . It is such which involve
the political, legal, technological, social and environmental factors. Various factors are there
which are normally based on the various changes for policy and procedure too. External analysis
is also determined through PETLE analysis such as:
Political and legal factors: Many factors are there which is based on the government
policy and procedure too with activities in organizational procedure. Legal and political factors
are those which directly affect decision procedure of firm. It is required to identify the legal
factor and government regulation as well with business procedure too. Government of the
country has made various rules and regulation which need to implement the business procedure
as well. Some of positive and negative impact as:
 Positive impact: Government rules and laws are also regulated with positiveness and
effectiveness in the country. These are such which help to reduce the negative approach.
 Negative aspect: Government regulate the various strict rules and having different rules
in organization and they need to implement the procedure too.
Economic factors: These are based on economical condition of the country which are
affected with business procedures. It is having an vast structure which directly affect the legal
and trade terms of firm in great manner. This is such which include the economy growth, interest
rate and the inflation as well (Aterido, Hallward-Driemeier and Pagés, 2011) .
 Positive aspect: Having better strategy and planning is such which can contain the
appropriate income which directly help in contributing the proper amount.
 Negative aspect: Higher tax rate of economical factors are somewhere leads to affect the
business procedure with its growth too.
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Social factors: These factors are used to determine the customers demand and their need for the
particular firm too. Social factors are those which do affect the manufacturing and delivery as
well with its process too and it is being done according to the want of market.
 Positive aspect: If the Nestle is not be able to make an research of market which will
easily analyse the marketing demand to fulfil them easily in better manner as well.
 Negative aspect: These element is such which is based on the services and product too
with quality which do reduce the marketing image of the firm. It is being considered as
negative aspect of firm too (Auzair, 2011) .
Technological aspect: It is being considered as the important factor which build
opportunity and may be having some risk for the firm. Advance technology is such which needs
to implement in business procedure and they are getting desired outcome in ease manner. For
nestle it is required to bring innovation and creativity in ideas which attract more customers.
 Positive aspect: Technology is considered which always and helps to reach in exact path
and they have firm which can attain the appropriate growth and desired profit too.
 Negative aspect: Knowledge and various staff is such which attain the advantage and it is
such which has negative affect on the business procedure to with employees with
productivity too (Teece, 2010) .
TASK 4
P 5. Conducting internal and external analysis for identifying strengths and weaknesses
Internal and external analysis both are important part for the company to analysis their
strength, weakness, threats and opportunities. With the help of this factor Nestle easily survive in
marketplace as well as increase their growth and development within an organisation. All these
are highly essential for the organisation to identify opportunities to expand their business
operation in different level (Ullah and Lai, 2011) . SWOT analysis of Nestle is determined as
below:
Internal factor: It is main part of the organisation to deals with difficult situation in an easy
manner. This factor includes Strengths and weakness of Nestle which are identified as below:
Strengths:
World Renowned brand: Nestle is world's largest company which deals in food products.
It is one of the main strengths of the company which help to increase their reputation in
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marketplace (Chow and et. al., 2011) . This also assist them because is a product like Maggi is
highly influenced, it does not impact the coffee sales.
Broad product Portfolio: Company has maximum 8000 product or brand under its
effective name which extent from beverages such as mineral water and coffee, Soups & sauces,
Breakfast cereals and so on. It is role of manager is to satisfy customers basic needs and wants
by providing quality products.
Weaknesses:
Brand Structure: Nestle has large number of products under the similar Umbrella
groups. So it can develop conflict of interest among different people.
Consumer and legal problems: Nestle is one of the biggest brand in all over world bout
it obtained into dispensation over the different years like Baby Formula boycott of nestle, fixing
of chocolate price, child labour by suppliers and many other (Wetherly and Otter, 2014) .
External factor: It is another factor that includes threats and opportunities of the organisation
which are determined as below:
Opportunities:
Maximising income levels: Due to enhanced literacy rate, stable political scenario and
controlled country, available income of nation people is maximising there by outputting into
flow in demand and modifying in their lifestyles.
Emphasising more on Research and development to manage ethical problems: It is
another opportunity for the company to improve their research and development department
because with the help of this division they easily identify needs and wants of customers in a
systematic manner. It is also essential for the organisation to maximise their sales and revenues
in limited time period (Commander and Svejnar, 2011) .
Threats:
Price of commodities: Maximising commodities price will output in further maximise in
the price. Along with them, maximisation in product price will output in reduction in brand
switching, margins and sales.
Competition in marketplace: It is another threats which is highly effects on business
operations and its performance in a negative manner. In the marketplace, there are large number
of competitors whose are produce similar products and services. Thus, it highly influence on the
productivity and effectiveness of firm in an effective and efficient manner (Wild and Han, 2014).
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P 6. Explanation of strengths and weaknesses having its interrelation with external macro factors
Macro factor is one of the main and foremost part of the company that identify the
business position in marketplace. This factor cover PEST analysis which is highly essential for
the success and development of Nestle. PEST Analysis includes political, economic, social and
technological factor that influence company and its effectiveness. This factor is interrelated with
Strengths and weakness of enterprise. These are determined as below:
PEST Analysis Description Strengths Weakness
Political It is important factor
that needed by
management in order
to make business
functions and activities
in an appropriate
manner. In this
government play
important role in
establishing of some
rules and regulations.
In case of Nestle: In
order to opening their
business is another
nation they needs to
proper strategies and
policies (Cronan and
et. al., 2011) . This
will assist an
enterprise to increase
profit and sales of
company.
Nestle is well-known
organisation which
make modifications in
their business system
and process in
accordance
government rules and
regulations.
As Nestle is
establishing in
different locations, so
needs of management
is to make policies and
strategies accordingly.
They need to have data
regarding laws,
regulations of
governments which is
not good for the
business success and
development.
Economic There are some Management level of Various countries have
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components which are
includes In this factors
such as exchange,
inflation, interest rate
which effects on
business performance.
Nestle operating their
business operations in
different nations that
needs to conduct
activities and functions
as per the economic
condition of country.
Nestle needs to expand
their business
operation in different
nations according to
economic condition.
For example: market
situation of Asia is
better which is
beneficial for
organisation. So
manager are capable to
generate proper
amount of revenues.
exchange rate and
divers interest; so
management need to
develop better function
in their system
accordingly. So it can
effects on business and
its performance level.
Social Nestle needs to render
services and products
according to the
people wants and
needs. Manager of the
company is mainly
emphasis on to deliver
quality products to the
customers at
reasonable cost. In this
main aim of the
business is to satisfy
basic needs and wants
of the clients.
This factor is mainly
related with company
strengths in different
ways to maximise
sales and revenues by
satisfying basic
requirements of the
customers. Thus, they
can increase their
reputation and
goodwill in
marketplace
(Fernando, 2011).
Management needs to
take care that better
quality goods are
delivered and provided
to customers,
otherwise this will
influence on company
position in negative
way.
Technological It is another important
part which is essential
for the company to
If business entity
apply innovative
technology, so
Technology effects on
company and its
profitability and
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reduce their cost and
maximise profit. In
Nestle, digitalisation
are applied for
production process; so
proper and quality
products are offered
by organisation.
management is
capable to utilise
optimum uses of
resources in an
effective manner. It is
beneficial for them to
maximise their sales
and profit.
productivity level. In
case of Nestle, there
are large number of
workers are
employing, some
employees has lack of
knowledge about
advanced technology
which influence on its
effectiveness.
CONCLUSION
From the above based report, it can be concluded that business environment comprise of
different types of external and internal factors which is also known as macro or micro factors.
These elements can be customers, workers, suppliers, rivals, government, technological changes,
social beliefs, natural environ, political situations and many more. Such all things has been
impacting on complete working of every types of company either they are private, public or
voluntary. Implications might be optimistic or antagonistic in nature . Thus, Nestle should also
consider types of influences prior to design their strategies of running commercial actions.
PESTLE analysis is conducted in this assignment for getting familiar about such effects in
advance. In addition to this, it is important for Nestle to know about their own abilities, weak
factors, opportunities for upcoming days along with current or future threats. For discovering
similar prospects, SWOT analysis has also been carried out hereby in clear way. The refereed
firm should try to minimise their weaknesses by adopting proper plan of action.
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REFERENCES
Books and Journals
Online
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Cronan, T. P. and et. al., 2011. Decision making in an integrated business process context:
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Fernando, A. C., 2011. Business environment. Pearson Education India.
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Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
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