Impact of Larger Markets on Efficiency and Productivity

Nestle group has been influenced by EU policies in various ways. Larger markets have led to higher efficiency and productivity, allowing the company to scale up its production. The open trade policy of EU has helped Nestle carry out trade operations across 22 nations without barriers, enhancing its sales and demand within Europe. Labour cost is another crucial factor that impacts the company's profitability, which Nestle minimized by setting up manufacturing units in countries like India and Bangladesh. EU policies also regulate imports and domestic agriculture, increasing agricultural goods productivity and providing products at reasonable prices to consumers. Additionally, environmental factors such as pollutants and greenhouse gas emissions are addressed through initiatives like the Emission Trading Scheme (ETS). International policy integration has helped Nestle create high development measures by adhering to product quality, safety, and promotion measures. Overall, it is crucial for businesses to understand their purpose and analyze the national environment and international factors that shape their operational activities.

BUSINESS
ENVIRONMENT
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1................................................................................................................................................3
1.2The extend to which an organization meets the objectives of different stakeholders............4
1.3 responsibility of an organization and strategies employed to meet them ............................4
TASK 2............................................................................................................................................5
2.1 Explain how economic systems attempts to allocates resources efficiently.........................5
2.2 assess the impact of fiscal and monetary policy on business organizations and their
activities......................................................................................................................................6
2.3 ...............................................................................................................................................6
TASK 3............................................................................................................................................7
3.1................................................................................................................................................7
The market structure are perfect due to monopolistic, oligopoly, and monopol market ...........7
3.2................................................................................................................................................8
3.3 Judging how the business and clutural environment shape the ............................................8
TASK 4..........................................................................................................................................10
4.1..............................................................................................................................................10
4.2..............................................................................................................................................10
4.3..............................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business environment means all of the external and internal factors that effect how the company
functions including employees, customers, management, supply and demand of business
regulations. Internal factors relates to all components that can be controlled by the administration
whereas, external factors are those which are uncontrollable and are beyond organizational reach.
This concept of stakeholders involves consumers, suppliers, competitors and investors. These are
the significant part of business environment. This present study will examine a case analysis of
Nestle, which is a Swiss food products and beverages producing company. The main objectives
of Nestle to provide its consumers for best tasting, more nutritious choices of food and
beverages. This study shows that the objective of Nestle meets its stakeholders that impacts and
significance of international factors as well as domestic business environment. An analysis has
focused on linking the theoretical models with practical business aspects to attain well defined
results (Elearn, 2009).
TASK 1
1.1
In the present era organizations are categorized with Vision mission value and strategic
goal etc.
Mainly there are three types of corporation’s public, private and voluntary organizations
which are explained as below:
 Private organization: These companies are owned by the individuals or group of people
with the intention of making profit. In private sector worker are paid with part of the
company’s profit. In this sector worker tends to have more carrier choices and better
opportunities for promotions. Public Organizations: These business entities are
controlled by government organizations. In this sector employee workers through the
state or central government. In public sector more job securities and less comprehensive
plan. The main purpose of public sectors are to help and support the social
communities.NHA UK is a health care organization that provides to improve better
health of people. (Craig and Campbell, 2012). Nestle deal with these organizations to
fulfill the corporate needs and demands. The company use the services of these
organization directly and indirectly.
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 Voluntary organizations: The main purpose of voluntary sector is to improve and enrich
society. It focus on social wealth rather than material wealth.
Nestle is to attain market share and increase the sales and commits for quality of life in
all communities where they operate and their business has a large level of operational service
and doing all the necessary changes to attain customer satisfaction (Arai, Kitada and Oura,
2013).
1.2The extend to which an organization meets the objectives of different stakeholders
Stakeholders who influences the corporate entity and also influence various decisions of
Nestle directly and indirectly. The basic purpose of a company is to motivate stakeholders.
Nestle focus on “Creating shared value” model that provide a greater value to society and the
stakeholders. Stakeholders plays important role towards development and expansion of nestle
organization. Nestle should many practice to meet objective of stakeholders. nestle focus on
relations between the community and organization.it helps the people to become useful persons
in the community to provide universities and other education institution at the low cost .It has
undertaken major such as saving water and nutrition development. Suppliers, clients, creditors
and top management and BOD are the major stakeholders of an organization (Asakawa and
Westney, 2013).
To meet desired objectives of the consumers, Nestle is working to analyses needs and
demands of consumers and produce products accordingly. Nestle has improved its food
technology by introducing range of healthy products with better taste. Organization should
practices in order to increase social responsibility. Business organization are enforced by
principles, rules, regulation and statement policies in order to help the stakeholders to achieve
their objective(Fernando 2001).
1.3 responsibility of an organization and strategies employed to meet them
Nestle believes that Corporate responsibility is a way to create a positive image among
the stakeholders. This involvement of stakeholders is a significant part of all operational
activities of a business organization (Blahová and Zelen, 2013). The following are various
strategies which have been adopted by company to fulfil needs of stakeholders:-
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 Manage closely: This concept is compatible with those stakeholders who are at a high
authority level in the corporation. BOD, investors and top management authorities are
some of such examples. Measures taken by organization to prioritise the stakeholders
are, a well-built chain of communication, involvement in management and decision
making processes and also in strategic planning (Bourne and et. al., 2013). Keep satisfied: This concepts is adopted by the organization for public bodies which
have high level of powers and a low interest in company's internal operational activities.
Working as per the guidelines prescribed by government and a proper communication
will keep them satisfied. Keep informed: This concept is used by Nestle group for the stakeholders who have
high interest and low powers in operations such as competitors, employees etc. (Cocca
and Alberti, 2010). Company can inform the stakeholders by providing annual reports,
company accounts and audit etc.
 Monitor: It plays a vital role for the organization as through which the company can
have a regular check over the guidelines which are implemented for taking care of the
interest of the stakeholders. Through monitoring the company will be able to avoid the
violation if any done against the stakeholders.
TASK 2
2.1 Explain how economic systems attempts to allocates resources efficiently
Their are various type of resources, that contribute towards economic growth of organization as
well as country. Private,public,and finance economies.workers, finance, row materials, suppliers
and customers all are included these resources. Effective allocation resources create through
economic system.
The economic systems are explained as follows:-
Market economy: A market economy is an economy system in which economic decisions
and the pricing of goods and services are guided solely by the aggregate interactions of a
country’s individual citizens and businesses. Their is a little government intervention or central
planning. Command economy: A command economy is an economy in which the
government has the power the financial management of the country.thi economy has state-
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onward entities as well as privately-owned entities that are controlled by the state. The main
advantage of this economy is low unemployment rates because of the regulation of jobs by the
government and decisions are made quickly by state or government officials.
Mixed economy: Private and public sector are both combined for operating the business
activities. It is also refers as dual economy. Under this economy their is freedom of economics
activities and government interferences for the social responsibilities. Developing countries have
adopted mixed economy to accelerate the pace of economic development. Government always
tries to promote ecomnomic development of the country because of mixed economy. Under
mixed economy , government takes huge initiatives to contral monopoly practices among the
private entrepreneurs through effective legislative measures.
2.2 assess the impact of fiscal and monetary policy on business organizations and their activities
Business organizations are affected both positively and negatively by the monetory and fiscal
policies. fiscal polocy refers as the government policies, that include taxation and revenue,
sources of income, and government expenditures. On the other hand monetary policy is
stabilization mechanism aimed to contral supply of money in the state by central banks.
Economic policies refers as actions taken by government in an economy. Rate of
inflation, budget etc. are controlled by flow of money in the economy which are regulated by
economic policies Nestle choose the forign trade partners based on the questions i.e. “what to
produce” and ‘”for whom to produce”, the answer “how to produce” depends up on price
elasticity and cross elasticity.
.
2.3
One of the most important indicators to measure the business success under a wide range
economic growing region. Competition policies refers as the strategies to meet consumer
increasing wants and needs. It help an organization to measure its strength in terms of profit
maximization. Nestle business as a chocolate product producer, has analyses competition as its
daily measures for uts economic stability ( Baatsma, 2004) . Competition has reduced the power
of monopoly that has very low risk of other companies producing the same products.
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Nestle has highly helped business unit in shaping its business operational activities (Furuya and
et. al., 2009).Thus nestle business organization affected because of competition policies and
regulatory mechanisms.
TASK 3
3.1
The market structure are perfect due to monopolistic, oligopoly, and monopoly market .
The prime market structures existing within an economy are perfect, monopolistic,
oligopoly, and monopoly. Monopolistic competitive marketing structure has been adopted by
Nestle :
 The overall marketing operations have been carried out by the numerous and large firms
which are present in these markets. (Guay, 2014).
 The organizations in this marketing structure offer the products and services which are
more or less similar and identical but they are not perfectly substitute for other firm.
 The business organizations in this type have an authority to enter or exit freely from the
sector at the time they wish and also ensured that there are no abnormal profits nor any
abnormal losses to a corporation in the long run.
 Developing a competitive position in the market is helped by the service range and
product quality which differs from one another.
Pricing decisions: A set of homogeneous services are offered by Nestle to its consumers
and has likelihood in the services offered (Elearn, 2009). The external and competitive factors
regulates the pricing strategies of the business corporation. Setting competitive prices for its
products and services has been focused by the business corporation.
Output decisions:-The In order to establish a distinct place and image in a market the
output decisions of organization are focused on developing innovative and differential services
within the market (Sinay, 2014). Products and services are differentiated by low cost travelling
measures or distinctive services helps in attaining the competitive advantage. Moreover market
forces such as demand and supply, competitive strategies etc regulates the output decisions of the
business.
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3.2
The below mentioned are some ways in which various types of market forces shape-up
their organizational operations:- Demand and supply: The company have a need to identify the needs, preferences and
requirements of consumers and this is to be considered as the most influencing and
crucial character which aids the business organization in planning and developing its
operational activities and production aspects as well. For the analysis and evaluation the
plans and strategies on the basis of the current market demands and accordingly measure
can be taken to survive the past records, reports and data of company are compared
(Arai, Kitada and Oura, 2013). Price elasticity: All other expenses incurred and profitability of an organization are
regulated by the cost of operations. Change in prices of raw materials used in
manufacturing process by the business organization has a direct influence on the costs
incurred to carry out the operations. In order to regulate the cost of company thus
adopting competitive pricing measures the organization needs to plan and analyse these
forces (Asakawa and Westney, 2013).
 Changing marketing trends and preferences: Detailed researches and surveys can be
carried out by the organization in order to know and analyse current trends and
preferences of consumers for estimation of demand. For example food products are
bought in more at the time of festivals and other occasions by the customers as compared
to other time, so company should plan accordingly (Bititci and et. al., 2012).
3.3 Judging how the business and clutural environment shape the
Here is all that factors which are impacting on the business operations of Nestle Group, this
factors are describe here under as PESTLE analysis: Political: This factors focus on the government and political power which make influence
in the work style of the Nestle. Company has manage a stability in the their political
relations and it is also helping them to manage a balance in the economy (Blahová and
Zelený, 2013). This is a responsibility of the government to make rules and regulation for
the food sector industries, these policies have to be in the favour of the company because
they are also believing in to produce quality of products and foods for their customers.
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Nestle is a brand which known for the higher sense of safety in the foods towards their
customers. This is a having a higher class policies and procedures to make their product
and this is the reason which make them loyal brand. Economic: This is a element which have a direct impact on the company for a long time.
Fluctuations in the inflation rates are a big reason to make changes in the price rates of
the products and also in their policies. They have to make changes according to the
inflation rates in their various operations which have direct affect. Social: This factor is related to the social environment of the market and this is having a
various internal factors like; population analytics, cultural trends, demographics etc. Nestle is
making best in qualities products and their demands got higher in the celebrations and festive
season but company never compromise with their quality and also fulfil the demands of the
customers. Technological: The concept is related to the advancements, innovations and up-
gradations brought in the business environment and which also effects the functionality
and the operational activity of the business corporation (Cocca and Alberti, 2010).
Making the use of the upgraded technology has brought developments in the quality of
products and services of Nestle and also there has been and reduction in the operational
costs to a favourable extent. Legal: The concept is concerning with the external and internal factors. The government
prescribes some rules and regulations within the economy and these self-imposed rules
and norms over the organization are determinants of this factor. The governing authority
of UK which have favourable effects on Nestle has imposed some rules for example
labour laws, safety standards (Franceschini, Galetto and Turina, 2013).
 Environmental: This is a factor which have a direct influence by the environment of the
earth. Company is using the Ozone-friendly techniques and believes in to nature. So they
are using latest technology to make their products which haves less affect on the nature.
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TASK 4
4.1
Around the world there is direct significant affect on business activities when there is any
change in the international policy (Franco-Santos and et. al., 2007). Nestle group of business has
affected by the global change in trade administration which is caused by major organisational
unit for example WTO, CAA ETC in many ways such as:
Provide flexible options: Due to global policies for options of trade has made possible for
Nestle which has developed and enhanced wide market opportunities for growth and
development in the international market. For capturing effective market development and
expansion opportunities the well- established set of businesses operational activities has helped
Nestle to develop(Franco-Santos, Lucianetti and Bourne, 2012)
Competitiveness has increased: FEMA, FERA, WTO are some governing and public
bodies which provided help in international market to the organisation for operating their
marketing activities by setting up some standard measures. For the company this develops sense
of competition in the international market thus for growth in global economy effective measures
are taken. For the higher sense of safety towards consumer and providing good quality products
UK government has imposed some policies and guidelines for food sector industries (Furuya and
et. al., 2009).
4.2
International factors which affected Nestle group are explained as follows: Trading blocs: Because of a belief of free trade an economy establishes trading blocs
which will be providing many benefits to the consumers as they will be getting good
quality product at the very low price. these block are said to be territorial because it is
easy to do contracts with few countries which are neighbours than doing contracts with
many partners.Regional trading blocs allows Nestle to place facilities where the costs are
lowest without incurring tariffs or duties (Horn and Cross, 2009). Larger markets results
in higher efficiency and productivity through the large organizations and lower
overheads. These factors benefits Nestle group which will scale up their production. The
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open trade policy of EU has helped nestle in carrying out trade operations in 22 nation
without any barriers. This has helped the company in enhancing its sales and demand
widely within Europe.
 Labour cost: This concept has a definite impact on cost of goods for business (Iida and
Morris, 2008). Nestle ensured to minimise the labour cost by establishing manufacturing
units in countries like India, Bangladesh etc. this helped company in managing overall
profitability of the business. Labour cost can be variable depending on a number of
factors within the company and outside of it. Supply and demand also plays a crucial role
in determining labour cost. As organization will have to pay a higher cost if they will
have a shortage of the employees.
4.3
In Europe European is primarily located as a supranational political and economical
organisation (Lehmberg, Dhanaraj and Funai, 2013). Nestle group of business is influenced by
the EU policies of food sectors which are explained below :
Agriculture policy
Imports of foreign agricultural products and domestic agriculture are regulated by the
rules and norms made in this policy. For nestle this policy bought an advantage, agricultural
goods productivity got increased, for the consumers products were provided at reasonable price
in stabilized markets. EU has taken one initiative regarding implementation of norms which is
Common Agricultural Policy (CAP) specified by the agricultural policy.
Environmental factors
Pollutants which is released by plants and manufacturing units are also focused by EU.
For reduction in emission of pollutants there were many changes made in the strategies which
are bought by policies. By reducing greenhouse gas emission cost EU emission trading scheme
(ETS) was established to sort climate changes. So, environmental friendly way should be used
compulsorily by the Nestle group(Sinay, 2014).
International Policy.
Focus is on integrating the global market as one big market. Policies regarding
agriculture, competition, production, employment etc, are closely adhered and evaluated by the
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company in order to attain effective and well defined growth measures in the market. Nestle has
efficiently integrated with international policies regarding product quality, safety and promotion
measure. This has helped the company in creating high development measures.
CONCLUSION
To meet various objectives of different types of stakeholders it is very important for the
business organisations this is concluded from the above carried out analysis. It is crucial for the
organisation to know the purpose. Analysis of nature of national environment in which Nestle
group is operating its business activities is done. Further examination of international factors
and it significance has help Nestle group for shaping up the operational activities. child labour,
unethical promotion, price fixing and mislabelling etc. are also reported which was asssociated
with Nestle group. Government and market forces of demand and supply determines the
strategies related to price and in mixes economy the entity operates it's business. In perfect
competitive market Nestle group operates it's business so as per the trend in market the price are
adopted and it comes with discount offers to attract the consumer when the demand of the
product get decreased.
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REFERENCES
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