Business Environment and Strategy

This assignment delves into the multifaceted realm of the business environment. Students are tasked with analyzing the interplay of legal, regulatory, and competitive factors influencing business operations. A key focus is placed on understanding the evolving concepts of sustainability and corporate social responsibility (CSR) within contemporary business strategies. The analysis draws upon scholarly literature and real-world examples to demonstrate how businesses navigate these complex forces.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1 (Covered in PPT)................................................................................................................3
P1 Types and Purpose of private, public and voluntary organisation and their legal structure...3
P2 Size and scope of different organisations...............................................................................3
TASK 2............................................................................................................................................3
P3 Interrelation between different organisational departments and their link to objectives.......3
TASK 3............................................................................................................................................5
P4 Impact of macro-environmental factors.................................................................................5
TASK 4............................................................................................................................................7
P5 Internal analysis of organisation in order to identify strength and weaknesses.....................7
TASK 5............................................................................................................................................8
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses.8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is considered as one the important tools that need to consider at the
time of running the business smoothly. Further, there are different factors like profitability,
performance and overall growth of business which need to be consider at the time of starting
business which include political, economical, technical, social, environmental and legal factors
which leads to both positive and negative impact on overall operations of business. Further
different changes coming in dynamic environment therefore it is essential for organisation to
scan all the innovation and digitalisation in respect of those product and services in which they
are dealing currently (Reed, O. L. and et. al., 2013). Under this assignment the company which is
preferred i.e. Nestle which is swiss transnational food and drinking company headquarter in
Switzerland engaged in different items and expand their market at global level and become top
most company in FMCG sector. Further this report discusses about the type and purpose of
public, private and voluntary organisation, size and scope and interrelation between different
department and SWOT analysis in order to know actual market position which allow them for
improvement and achieve targets on specified time period.
TASK1 (Covered in PPT)
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
P2 Size and scope of different organisations
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
In every organisation success and failure among management is fully depend upon the
working capacity of management and further Nestle is consider as multinational organisation
require to understand all the significance of interrelation between different departments and
divisions and this will also helpful in grabbing all the market opportunities on the basis of which
they make further changes in their products and services that help in satisfy all the needs and
requirement of customers. Apart from it in Nestle there are different department like human
resource, finance, marketing and operational will need to be coordinated and managed in order to
accomplish all the targets in specified time period (Karagiorgos , Drogalas and Giovanis ,2011).

Further, it helps in creating harmony and peace in atmosphere which leads to positivity and
higher productivity in future. Interrelation between different departments of Nestle are discussed
below: -
 Human resource department: - This department is considered as important division who
are responsible for recruiting and selecting the able and professional employees for
vacant job position. Further HR manager require to formulate various policies and
procedures related to rewards recognition, performance appraisal and also the factors
related to determination of remuneration. Further, it allows them to organise training
development programmes that improve overall performance and motivate them for higher
performance.
 Marketing department: - This department consider as one of the important division in
every organisation who formulate different policies and strategy regarding marketing
promotion in which different tools and techniques has ben used by marketing department
like roadshows, exhibition and social networking through which they aware the
customers regarding all the new changes and features in respect of goods and services
through which enhance the sales and profitability of business.
 Finance department: - This department of organisation has to take all the responsibility
related to preparation of budgets in which they analyse the amount of revenue earned
during the year. Further this will help in comparing the actual performance with standard
performance and if any deviation is their then it is solved by them so no problem arises
for the execution of projects in financial terms.
 Production department: - This department take concern regarding all the matters related
to manufacturing and producing of goods and services. Under this they also make deep
analysis regarding demand and supply of their products on the basis of which stock has
been maintain so they are able to deliver the goods to end user at specified time period.
Organisational Structure
Company divided their structure on different segment which are stated below: -
 Function based: - Under this task are divided among individuals on the basis of
functions which are performed by them. For example Nestle one of the famous
organisation in FMCG sector therefore they have to divide their work on the basis of
functions so that each activity can be accomplish within specified time period.

 Divisional structure- In this structure, there is use of various approaches which are
competent to company. There is use of policies which can be effective for
working. In this structure, one department works on their own and this makes
policies as per their goals and objectives. There are possibilities of repetition of
activities.
 Strategic business unit- In this type of business unit, there is division of activities
which are competent to company and they perform actions to run some particular
product and service. There is use of techniques which are competent to business
operations. Their main aim is to develop profits from such product and services.
 Matrix structure- This is the mixture of various structure, such as functional,
divisional, etc. their main aim is to work as per get work completed and this
affects business operations. Sometimes there is need of combination of various
actions through which changes are possible.

From the above discussion it is clear that as Nestle has good brand image, this is
because they use techniques which are effective for developing changes in operations. As
there are various departments in Nestle, so in case association is launching new product,
then there is strategic business unit, because main aim is to come with new techniques
which helps to increase sales and profits. But for existing product, matrix structure is
used. Its aim is to satisfy demand of customer.
TASK 3
P4 Impact of macro-environmental factors
In every organisation working atmosphere has been affected due to macro and micro factors of
environment therefore, it is essential for business to scan all the relevant changes coming in form
of innovative technologies and digitalisation in respect of goods and services done by rivalry
therefore it is essential for business to formulate their ow policies and strategies through which
they make innovative modification in respect of their goods and services which help in satisfy

the needs of customers. Further, nestle one of the leading organisation in FMCG engaged in food
and drinking sector but in order to sustain in external market for longer period they need to
analyse the tactics of their rivalry (Kolk ,2016). Different external factors which has both
positive and negative impact on business are describe below: -
Political factors: - This factor affect politically to the working conditions of business and further
Nestle expand their business in different countries but they have to adhere with all the legal rules
and regulations. Elements like dynamic government policy, taxation, export import policy and
other political condition affect business decision making.
Positive impact: - Political policies formulated by government are generally made for enhancing
the growth of corporate industry this will help in increasing the revenue of country.
Negative impact: - Complex import export policy and heavy tax charged on manufacturing and
production of goods and services lead to increase the cost of production.
Social factors: - There are different factors and element which need to be consider at the time
they developing their branch in different countries. They promote their goods and services after
considering the feeling, sentiments and emotions of society and ensure their social promotion is
not detrimental to the interest of individual because it affect their brand equity.
Positive impact: - Nestle will incur expenditure on CSR activity that will help in establishing
positive image and brand equity n the society where they establish their branches which lead to
higher sales and profitability.
Negative impact: - Management must ensure that whatever the marketing promotional tools used
by them like advertising, public relations and social networking must ensure that contents used in
marketing must be ethical and does not impact negatively to the feeling of target audiences.
Legal factors: - Under this macro environment factors management require to ensure that all the
legal regulations and rules are properly adhere enforced by particular country on the basis of
which other activities has been conducted. Compliances of laws help company in avoiding
penalty and punishment.
Positive impact: - Adherence of all legal rules regulations allow organisation to run their
business effectively. Market image and investor investment is wholly depending upon brand
image and goodwill of company so it is essential for business to manage all over operations of
organisation.

Negative impact: - If there are in-compliances in rules regulation of business then it is very
difficult for organisation to survive in market for longer period of time. Further once the image is
diluted then it is difficult to improve it in eye of target customers.
Economical factors: - Nestle is top most organisation in FMCG sector who expand their business
and branches then they need to analyse all the conditions related to inflation, deflation and level
of income in that particular country.
Positive impact: - Under this there is need for preparation of report related to analysing the
situation this will allow them to get the idea regarding inflation deflation conditions.
Negative impact: - If purchasing power of people is low in that particular country then it will
affect the sales and profitability of that particular country.
Technological factors: - In modern corporate world there are different changes are coming in the
form of technology and innovation in respect of goods and services so in order to beat the
challenges of competitors Nestle company required to update with latest technology they
included in their products which also helpful in increasing their growth.
Positive impact: - Helpful in meeting the current expectation of customers in the form of
improvised goods and services offered by them and charge premium prices also.
Negative impact: - Lack of able staff and high cost incurred in the implementation of technology
leads negative impact on the sustainability of company.
Environmental factors: It is an utmost responsibility of Nestle company is to clean the
environment. They have to follow such rules and regulation which helps in production of healthy
foods and environment friendly operations. Under this company required to focus on social
welfare by contributing through CSR activities.
Positive impact: - Conducting different events and take initiatives for the cleanness of
environment which also educate society for the protection of environment.
Negative impact: - Producing high carbon footprints become threats for the long-term
sustainability of business.
TASK 4
P5 Internal analysis of organisation in order to identify strength and weaknesses
Internal analysis related to all those practices that help in understanding all those factors
that help in analysing all the strength and weaknesses of company (Nishitani and et. al., 2012).
Further, this will help organisation to know the actual position in external market which give

them idea for the improvements any required. Here the nestle FMCG based company decided to
conduct SWOT analysis on the basis of which actual internal conditions are observed and by
considering outcomes policies strategies are framed for better profitability in future. Here the
SWOT analysis of Nestle which stated below: -
Strength
 Brand image: - Nestle is well renowned organisation in FMCG sector at global level. The
market position and profitability. This brand establishes such prestigious position in
market because of which customers are ready to pay premium price in respect of goods
and services.
 Logistics management: - Nestle maintain good distribution system in respect of goods
and services. Proper logistic team has been recruited by company that maintain list of
order and date of delivery this will help in transferring the products to customers at
specified date.
 Efficient workforce: - Nestle comprises of such employees which are efficient and
professional at the time of performing duty related to serving customer and sale of goods
and services.
Weaknesses
 Brand structure: - Nestle has strong brand portfolio that allow them to offer multi variety
of goods and services to end customers. But due to high competition company unable to
satisfy their current needs.
 Legal issues: - Different rules and legal legislation has been formulated by government of
different countries therefore it is difficult for company to adhere with each and every law
enforced by them.
Opportunities
Expanding market: - Due to strong financial position and brand image company can plan to
expand their market in different countries which allow them to provide their services to each
customer at every level which increases their sales.
Strategic alliances: - It is simple way through which company can plan to enter into new market
therefore it is an opportunity for Nestle to come with alliances with those company which have
brand value and image in that respective country.
Threats

Huge competition: - One of the major disadvantage that Nestle faced is the presence of rivalry in
FMCG sector like HUL and Cad-bury that affect the sales of company.
Pricing factors: - Prices charged by company is higher as compare to their rivalry because of
which target audience switch to other brands that affect their sales and profitability.
TASK 5
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
Business has many factors which affect in positive or negative way, so it is essential to
apply business policies in better and effective way. As per change in internal policies, there is
alteration in internal factors too. In Nestle there are many workers (Osterwalder and
Pigneur ,2010). There is difference in strategies of company, so it is essential to perform
activities in better way. Due to change in technology there is effect on morale and working style
of workers so it is essential to motivate then and then use appropriate technology. Technological
change is important due to change in competitors working style. This change is helps to improve
position in industry. Through this there is use of different and updated technology with which
there is less defects and this helps to work effectively.
There are many changes which has to be taken due to which there is possibilities of
alteration in policies. As per change in government policies there is mandatory alteration in
policies of company. There are many workers so manager has to take care of effective approach
which is helpful in managing them. There are many laws related to workers such as safety and
protection act, gratuity act, etc. which are amended by government so t is important to make
changes in them. This is essential to convey it to workers so they can achieve targets. There is
change in management then there is effect on operations of Nestle. It is essential to make policies
which can be effective in achieving business objectives in better way so they can compete with
other business associations.
There are many competitors of Nestle such as Mars, Cadbury, etc. so this has impact on
customers. There is use of policies through which it is effective in performing business
operations. In case of change in business objectives then it must be communicated to employees
so they can achieve targets better. Nestle operates in all over the world. There is change in
business policies everywhere so it is essential that company has to make alteration in their
strategies as per society. As there is more consumption of dark chocolate in Western countries as

compared to India. As per change in demand of society it is essential to alter policies, this helps
to enhance goodwill and then this helps to improve profits and sales of company. If company do
not take care of social factors then customers will approach to another competitor’s brand.
Government change after specific tenure so it is essential to apply changes with which
they can make policies according. Due to change in internal factors of company, there is effect
on business in negative way. As management of company cannot concentrate on main motto of
association. Financial need of every change, in case of technological changes there is
requirement of finance through which they can apply changes. So, it is essential to make
expenses low so there will increment in profits. There are various policies with which there is
change in internal policies also. This is responsibility of managers which is working in
association to use knowledge which helps to achieve targets. In case of technological changes
there is requirement of finance so it is responsibility of manage to select source, which is cheap
and provides knowledge effectively. Due to alteration in external factors, it affects internal
factors too. So, it is clear that there is linkage between internal and factor factors of business. To
make business growing and to achieve heights in industry, change is necessary but at the same it
is important to apply that change in effective way. By analyses of market management of Nestle
can find what can be done to achieve business objectives on time. As per requirement, there must
be use of factors which assist in growth and development of business.
CONCLUSION
It has been concluded from whole assignment that business is affected by both macro and
micro factors of environment therefore it is essential for whole management of Nestle to
formulate such policies and tactics that allow them to take competitive advantages over
competitors and allow them to satisfy the needs of customer in effective and efficient manner by
providing modernised products and services according to their expectations.

REFERENCES
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Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
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