Business and the Business Environment of Nestle
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Added on 2020-10-05
Business and the Business Environment of Nestle
Added on 2020-10-05
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BUSINESS AND THEBUSINESSENVIRONMENT
Table of ContentsINTRODUCTION...........................................................................................................................3TASK1 ............................................................................................................................................3P4: Positive and negative impact of macro environment on business operations..................3P5: SWOT analysis of Nestle for identification of strength and weakness............................6P6: Interrelation of strengths and weakness with macro environmental factors....................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONBusiness environment refers to the environment of business where different activities andoperations are carried out by various department for achieving goals and objectives of companyin a better and efficient manner. It involves various external and internal factors which effects theoperations of an organisation as well as of partners, staff members, consumers, investors etc. Thecompany taken for this assignment is Nestle which is a leading firm in food and beveragesindustry. This report will identify the positive and negative impacts on the business operations ofNestle. Also, SWOT and PESTLE analysis has also been done for identifying the negative andpositive impact of these factors on the company and the reason behind their influence on thedecision making process.TASK1 P4: Positive and negative impact of macro environment on business operations Nestle is one of the largest food and beverages companies with an employees number of323,000 which is serving customers worldwide (Aithal, 2016). They are mainly manufacturingfood and bakery products. Nestle are running their operations from the year 1866 and are alsoselling snacks, coffee, frozen food, medical food, snacks etc. The environment of any company should have to be effective and of high quality offacilities which is necessary for performing different functions and operations of an organisationin an efficient manner. Such quality provides effectiveness to the company. There are two mainfactors which effects the environment of a company. These factors are called macro factor andmicro factor which influences the different operations and activities of company in an effectivemanner. The structure of the these external factor is very complex and is not regulated byorganisation. So management needs to implement changes for providing solutions of the variousissues arises by the macro factors. These factors effects the performance of various operations ofthe organisation. Therefore it is the prime duty of the management to determine these internalfactors which effects the performance of organisation. These factor i.e. Political, economic,social, technological, environmental and legal which are described below along with theirpositive and negative impact:Political factor: This factors are concerned with the different decision taken by thegovernment for maintaining stable economy. These are policies concerned with the rules and
regulations of UK government. Nestle should understand the various rules and regulation madeby government of UK in order to make effective decision as per the norms (Boons and Lüdeke-Freund, 2013).Positive impact:Positive impact of political factors is that if the newly formedgovernment will bring import-export policies for the businesses than it will positivelyimpact the Nestle through which the firm can sustain in the market for a longer period oftime.Negative impact:Negative impact of these factors is that when the taxation rate of UKwill increase, then the prices of products and services provided by the firm will alsoincrease and the purchasing power of customers will decreases. This can negativelyimpact the profitability and productivity of the company.Economical factor: It is related with components such as growth rate, deflation, inflationetc. which affects the performance of a company. These factors varies from country to country.Nestle provide its services in all over the world. Changes in the economy of country will impactsthe growth as well as sales of the company. So, it is necessary for Nestle to determine thesechanges which happens in the business environment.Positive impact: Analysis of the market in terms of inflation and interest rates will helpthe Nestle to gather knowledge regarding the current situation of economy. Through thisanalysis, company can gain knowledge regarding the market which will positively impactthe company due to this understanding and knowledge.Negative impact:Low level of income of individuals has direct impact upon the demandof their products and services. Even the UK government has recently increased the rate ofinterest which negatively impacted the business of the Nestle. The recent inflationsituation also caused the rise in prices of products which will negatively impact the firmas the loyal customers are seeking low prices products which are available to thecompetitors.Social factors:It involves various factors such as culture, population, income groups etc.It is very necessary for an organisation to study such factors and develops their product andservices according to the needs and demands of customers (Bovee, Thill and Raina, 2016).
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