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.
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Business And Business Environment
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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 havingits 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: 1
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 2
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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. ï‚·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. ï‚·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. ï‚·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. ï‚·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 4
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). 5
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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 AnalysisDescriptionStrengthsWeakness PoliticalIt is important factor thatneededby managementinorder tomakebusiness functions and activities inanappropriate manner.Inthis governmentplay importantrolein establishingofsome rulesandregulations. In case of Nestle: In order to opening their businessisanother nationtheyneedsto properstrategiesand policies(Cronanand et.al.,2011).This willassistan enterprisetoincrease profitandsalesof company. Nestleiswell-known organisationwhich make modifications in theirbusinesssystem andprocessin accordance government rules and regulations. AsNestleis establishingin different locations, so needs of management is to make policies and strategies accordingly. They need to have data regardinglaws, regulationsof governments which is notgoodforthe businesssuccessand development. EconomicTherearesomeManagementlevelofVarious countries have 6
components which are includes In this factors suchasexchange, inflation,interestrate whicheffectson business performance. Nestle operating their business operations in differentnationsthat needstoconduct activities and functions aspertheeconomic condition of country. Nestle needs to expand theirbusiness operationindifferent nationsaccordingto economiccondition. Forexample:market situationofAsiais betterwhichis beneficialfor organisation.So manager are capable to generateproper amount of revenues. exchangerateand diversinterest;so managementneedto develop better function intheirsystem accordingly. So it can effects on business and its performance level. SocialNestle needs to render services and products accordingtothe peoplewantsand needs. Manager of the companyismainly emphasis on to deliver quality products to the customersat reasonable cost. In this mainaimofthe businessistosatisfy basic needs and wants of the clients. This factor is mainly related with company strengthsindifferent waystomaximise sales and revenues by satisfyingbasic requirementsofthe customers. Thus, they canincreasetheir reputationand goodwillin marketplace (Fernando, 2011). Management needs to takecarethatbetter qualitygoodsare delivered and provided tocustomers, otherwisethiswill influence on company positioninnegative way. TechnologicalIt is another important part which is essential forthecompanyto Ifbusinessentity applyinnovative technology,so Technology effects on companyandits profitabilityand 7
reduce their cost and maximiseprofit.In Nestle,digitalisation areappliedfor production process; so properandquality productsareoffered by organisation. managementis capabletoutilise optimumusesof resourcesinan effective manner. It is beneficial for them to maximisetheirsales and profit. productivitylevel.In caseofNestle,there arelargenumberof workersare employing,some employees has lack of knowledgeabout advancedtechnology 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. 8
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