Business Environment Analysis

This assignment requires a comprehensive analysis of the business environment, identifying both internal (organizational structure, culture, etc.) and external (economic, political, social, technological, environmental, and legal) factors. The student is expected to provide a detailed description of these factors and their impact on a company's operations and strategy, using relevant theories and models such as SWOT analysis, PESTLE, and Porter's Five Forces model.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Purposes of different types of organisations.....................................................................1
P2 Size and Scope of different types of organisations...........................................................3
P3 Relationship between organisational functions and objectives.........................................4
TASK 2............................................................................................................................................7
P4 Positive and negative impact of macro environment on TESCO operation.....................7
P6 SWOT analysis of Nestle..................................................................................................8
P6 SWOT analysis interrelate with external macro factors. ................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
.......................................................................................................................................................14

INTRODUCTION
In the current era, business environment plays very eminent role, because with the help of
this effectively manage and control all over business activities in appropriate manner. In the
other hand, different kind of factors and causes affects on organisation whether positive and
negative in nature (Aula, 2010). Due to it is very important to properly analysed and evaluated
them with the help of new and smart ideas. This research project will discussing about different
types of organisation as well as their major purposes. In the addition of this, will explaining size
and scope of different kind of business firm. As per the size and scope of business firm, easily
and effectively identify company's current position and status. It will be defining major
relationship between organisational functions and their objectives. Moreover, it will be fine
different kind of factors, which all are mainly divided into two context such as macro and micro.
Macro factors are directly impacts on business firm. In the other hand, for analysing and
evaluating strengths and weaknesses of organisation SWOT analysis method will be used. In this
project will be choose NESTLE as an organisation. It is one of the largest food company across
all over the world (Belás and et. al., 2015).
TASK 1
P1 Purposes of different types of organisations.
At this time, in the external environment includes different type of organisations, which
has their aims or purposes which wants to be achieve in future in effective and efficient manner.
Business firms are categorised on the basis of size and type of works. With the help of this, easy
to differentiate among several business firms. Moreover, organisations are mainly categorised
into three parts such as private, public and voluntary sector such as follows:
Private: In the context of private sector companies, major objective and purpose is to
earn high number of profit as well as build an brand image in external market place. These kind
of companies always on to adopt new and smart methods in entire business life. Due to, they try
to implement better and effective polices in their working environment with the help of this,
employers can effectively analyse market trends and customer's demand. So, as per customer's
requirements will provide company's services to them in effective and efficient manner.
Moreover, for managing and controlling all over business activities and operations, government
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of the country regulate and enacted some specific rules and regulations, which have to be
followed by all private company. Mainly this kind of company run and regulated by only one
person and it involves around thousand of person as employees of this sector. In this sector
includes sole proprietor, partnership, companies and franchises. The concept of sole
proprietorship refers, an individual person operates all over business activities as per own ideas
and knowledge. One of the major aim of this type of firm, is to give proper satisfaction to
customers towards their needs and wants. A sole proprietor able to take effective decision in
critical situation without any disturbance. As well as easily handle any kind of business risks and
problems. There are includes some examples of private companies such as , chemists, electrician,
grocer etc. all these are operates and run their own business as per their rules and business
polices.
In the context of partnership, it includes two or more persons they are working together
for achieving same goals and objectives. While starting any partnership firm in external
marketplace, all partners are mutually have to participate in business and liable to invest fund in
organisation development. Also partners of a firm are entitled to share profits in accordance with
their mutually decided shares or ratio of capital contribution.
The last concept of private organisation is company, this is one of the important sector of
this sector because it helps to provide high number of opportunities to society's person. These
companies are working at large geographical area which are registered in ROC. Due to all these
companies have some legal rights to effectively run their business process. Companies are
mainly categorised into three parts such as small, medium and large.
Public: These kind of companies are also knows as government companies, because
these are regulated and controlled by government of the UK as per their rules and regulations.
Major objectives and purpose of this sector is to provides better quality of services and products
with better quality to customers as per their requirements. These kind of organisations are does
not focuses on to earn high number of profit from external market place. They are concentrate on
developing society as well as providing several kind of opportunities to society. For example:
TESCO is one of the largest retail supermarket of UK, which is dealing with all kind of home
products and goods.
Voluntary: These kind of organisation plays important role in society development,
because its developed by large number of persons who wants to see positive and effective
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changes in their society. It includes NGOs, charity and non profit organisation, which is proving
several kind of services and required facilities to society without taking any charges. Because
these are regulated and managed by government of the country in effective manner. For
example: NHS( National Health Care Services)
Along with this, all these business organisations are played important role in
development of society. Because they are providing different opportunities to society's person, so
they can enhance their working skills and capabilities in effective and appropriate manner.
P2 Size and Scope of different types of organisations.
From the above defined several kind of business organisations with their major purposes.
Organisations are mainly categorised as per size and scope of business firm, with the help of this
easy to differentiate from each others in appropriate manner. From the above defined several
kind of business organisations with their major purposes. Organisations are mainly categorised
as per size and scope of business firm, with the help of this easy to differentiate from each others
in appropriate manner. These kind of business firm wants to set an effective image in external
market place as well as in customer's mind. These kind of private organisation are running or
working in limited area as well as provides their company's products and services in limited
area. Sole proprietors are not working for earn earn high number of profit and achieve their
long term goals and objectives. They are running for explain their business firm as well as build
an impressive image in external market place.
Partnership refers to, in which includes two or more persons who wants to start their own
business firm as per their rules and regulations. These kind of business firms are regulated and
managed by partners because all partners has equally rights to operate their organisation.
Because they mutually invest their fund in business development. These kind of business firm
has limited size and scope due to they are focuses on providing better quality of services and
products ton customers. It includes several kind of stakeholders such as suppliers, buyers,
competitors, etc. In the context of company, it made by group of persons who concentrate on
proving better quality of services and products to customers. So they can get proper satisfaction
towards their needs and want. Major purpose and objectives of companies is to attract high
number of customers towards business firm with the help of this, company can earn high
number of profit from external market place. Before starting any company have to be required
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registration and provides all over information and documents in which includes mission, vision,
objectives, investment, share price, equity fund and debt fund etc.
Public sector organisation refers to, these are regulated and controlled by government of
the country in effective manner. They are focusing on to provides better quality of services and
products to their customers at reasonable prices. As well as concentrate on society development.
These organisation has large size and scope, because they are formulated for society
development. These are providing several kind of opportunities to persons, with the help of
several chances, they can enhance their working skills and learn something new and innovative
things.
Voluntary sector refers to, these kind of organisations are easy to differentiate from
private and public organisations in appropriate manner. Because these enterprises are working
for society development. It also know as non profit organisation, which is providing all
necessary services and facilities to persons, with the help of them, people can effective full fill
their needs and wants.
P3 Relationship between organisational functions and objectives
As per above defined several kind of business organisation, which easy to differentiate
from each others as per their working style. In the context of NESTLE, this is one of the leading
food company, which is providing several products such as biscuits, chocolates, coffee,
beverages, maggi etc. this organisation focuses on earn high number of profits as well as attract
high number of customers towards business firm as well as their products. This organisation
wants to expand their business at national and international level. Due to they are using smart
techniques and methods for promoting and advertising their products. With the help of this,
increase awareness of company's products in rural and urban area as well. Employers of this
firm, already set their long and short goals and objectives, which wants to be achieve in future in
effective and appropriate way (Bill Pasmore PhD and CMC, 2010). In the addition of this,
organisations are totally depends upon objectives and structure of the company, as per their
decide major function which represented and operated by employees of the firm in effective
manner as well as in decided time period. Management of Nestle company includes planning,
organizing, staffing, leading and controlling activities. In the of this, every organisations are
categorised as per geographical area and their products. In the context of NESTLE, structure of
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this organisation will be define it includes several departments which regulated and controlled
by higher authority of firm.
Illustration 1: Organisational structure of Nestle, 2017
(Source- Organisational structure of Nestle, 2017)
Sales and marketing: In the context of sales and marketing, this department plays
important role in every organisation. With the help of this department company can effectively
maintain sales and marketing activities in effective manner. It assists to improve awareness of
company's products and goods in appropriate manner. It includes several activities or operations
such as advertising. Most of they company wants to attract high number of customers towards
their firm and their products, so they can increase their profitability and production as well. In
the context of NESTLE, this company focuses on to adopt better and attractive marketing and
promotion methods. Due to, they can effectively earn high number of profit as well as build an
brand image in rural area of all over world (Blanchard, Tolbert and Mencken, 2011).
Research and development: This department plays very eminent role, with the help of
this easily find out something new and innovative things for attracting high number of customers
towards firm. In which includes research activities, which conducted for find out something
different methods and informations. At this current time period, most of customer's wants
something new and attractive products and services with great features and effective quality. Due
to, it is very important for every company to conduct research in external market place. With the
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help of research process, systematically evaluate and analyse current market trends and
customer's demand as per that they employer of the company will prepare a plan for producing
new products and goods for customers at reasonable cost.
Production: This department of company is not that much complex because it is totally
depends on guidelines, which is provided by Research and Department manger. In this
department produce products and goods for customer. During the production regular evaluate
and check quality of products and goods. As per that, departmental head will take corrective
action (Cantwell, Dunning and Lundan, 2010).
Purchasing: This department of company, purchase raw material from the suppliers for
producing products and goods. Mangers of organisation look at good quality of raw material,
while using goods raw material, in entire business process they systematically produce better
quality of products for customers.
Finance: This is another one important department of firm, in this department manage
and maintain the all financial records, how many fund already invested in which sector as well as
how many fund will be invest. With the help of this, effectively manage and control all over
business activities in appropriate manner. Every business firm for evaluating and analysing their
financial position and status (Chow and et. al., 2012). Finance department made profit and loss
account, balance sheet etc. in which mention profit, loss, current liabilities, current assets of
company. With the help of these financial statement easily identify actual position of company.
Human Resource: Human resource department assist to mange and control all over
business activities in effective manner. This department working as backbone of company
because it helps to manage and control all human resource of firm. As well as focusing on their
working performance. Because working performance and involvement directly impacts on
organisation's profitability and production level. HR manger of organisation analyse performance
of employee, employment relationship, internal environment etc. also they are conducting
training and development programmes for employees. With the help of these programmes, they
can enhance their skills and capabilities so they can perform their task in significant manner. In
the addition of this, all these departments are plays important role in every organisation. For
managing and controlling all over business activities, it is very important to divide all works a in
different segments. Due to, employees of the firm will effectively complete their task with better
outcomes.
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TASK 2
P4 Positive and negative impact of macro environment on TESCO operation
NESTLE is a transnational food and drink organisation, which is considered to be world's
best and finest company in its own industry. It is impacted by micro and macro that are
prevailing in the business environment. The company is known to manage them by using
strategic approach and put special focus on its clients for ensuring higher profitability. The
macro environment of institution has different factors that are not under its own control and have
to be managed (Commander and Svejnar, 2011). It uses PESTLE analysis as a tool to evaluate all
these factors in a proper manner:
 Political: NESTLE is world famous company and with operations in most of the
countries, it has to keep on evaluating the political scenario on regular basis. Currently
the United Kingdom is have political instabil8ity which is hindering company plans to
recruit people from EU and other nations. On the other hand in Germany, the company is
thriving as the government has a friendly approach towards business houses. The positive
impact of political scenario is that company is able to gain market share and consumer
base in a limited time period. While the negative issue are caused due to constant changes
in global regulations. In developing countries, the governments tend to limit
organisations capabilities as to safeguard local producer (Cordes, Richerson and
Schwesinger, 2010).
 Economic: The recession of 2008 has impacted Nestle capabilities in negative manner. It
caused company to shut down some of its facilities as to cut down cost. But after
regaining the level of economic feasibility, they are able to turn inefficiency into higher
level of effectiveness. Also the economic condition (inflation is high, consumption is
low) in developing countries is low which is impacting company. In the addition of this,
sometimes economical condition of country it directly impacts on company because its
unstable in nature. It includes, inflation rate, interest rate, currency fluctuation, taxation
policy of country.
 Social factors: After globalisation, world witnessed one of the biggest manpower
movement. This migration has made social structure and diversity level more complex.
Nestle is an organisation that has to analyse people in a proper manner as to understand
their lifestyle, choice of products and other variables. It has become important for
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company to understand the behaviour of consumers so that they can be served as per their
needs (Cronan and et. al., 2011).
 Technological: It is one of the fastest changing factor that has revolutionised the
industries across globe, Nestle too has to adopt new methods and techniques for getting
better efficiency and effectiveness level. It is adopting new supply chain management
plans and equipments as to achieve a efficiency level.
 Legal: There are many changes that are taking place within business environment. Today
UK is separating itself from EU which is leading to changes in laws and other procedures
which have both negative and positive impact. The issues which will be caused are
changes in company structure and procedures which will increase cost of every activity.
While the positive side is that it will ensure that all operations are run as per laws of
countries reducing level of dependency and confusion (De Jonge, 2011).
 Environmental: There are treaties which are being signed by various countries to protect
environment from pollution and deterioration. The Paris treaty has asked developed
countries to stop selling vehicles that run on petrol and diesel. It has also asked
companies to cut down emission of carbon or greenhouse gases which will increase
expenditure of Nestle as it will need to make physical changes in its factories. In the
addition of this, all these factors are directly impacts on business, due to it is important to
properly analyse and evaluate them in the effective and efficient manner.
P6 SWOT analysis of Nestle
Nestle is one of the leading food company, which is current operates several products and
services at national and international market place (Erving and et. al., 2011). It has mainly 12
different segments of products and services such as baby food, candy, coffee, chocolates,
beverages, bottled water, drinks, pre-packaged food, healthcare and nutrition. Moreover, for
effectively analysing and evaluating strengths, weaknesses, opportunities and threats of the
company, SWOT analysis method can be used.
Strengths Weaknesses
 Nestle is highly diversified company
because it is dealing and operating in
different markets and sectors.
 Most of the sales of this company
depends on a few large brands.
 There is high cost for launching new
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 It has already build strong relationship
with other power full companies such
as Coca Cola, Colgate, Palmolive and
General Mills.
 This company has strong research and
development capabilities, with the help
of this, employer of this department
find out something new and innovative
things.
 This company includes well established
brand with large number of market
share.
 It has smart and extensive distribution
system, with the help of these
systematically distribute company's
products and goods.
companies products and goods.
 One of the major weakness of this
company is maggi controversy. In the
recent time period, maggi was banned
due to was found some contains of
additives, which were harmful of
consumer's health.
 It includes several brands of company
same as umbrella group. Moreover, it
has large number of brands sometimes
which creates conflicts.
Opportunities Threats
 This company as an opportunity is that,
it can be start online retail service in
entire business life. With the help of
this, consumers can easy to choose
company's products as per their
requirements.
 At this time period, change lifestyle of
persons. Due to increased demand of
pre-packaged food products.
 This company can expand their market
in rural area. Due to they can increase
their profitability in appropriate
manner.
 In the external market place has high
number of competitors related to food
company, which all wants to compete
with each others. This is one of the
major threat for Nestle.
 At this time period, regularly increase
price of products. Further increase cost
of products will automatically decrease
sales, margin of organisation.
 Economic condition of country directly
impacts on company because economy
is unstable in nature.
 After the maggi controversy, might be
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 This can focuses on research and
development department with the help
of this, they can find out something
new and innovative things.
possible increased rules and regulations
in some countries by government
against Nestle.
P6 SWOT analysis interrelate with external macro factors.
As per above defined several macro factors, which directly impacts business firm
whether positive and negative in nature (Fernando, 2011). Along with this, it is important for all
organisation to properly analysed and evaluated all major factors with the help of smart
techniques and methods. It has been used PESTEL method, it includes political, economical,
social, technological, environmental and legal. All these are interrelate with strengths and
weaknesses of firm. Because these factors positively impacts on business firm and sometimes
negatively Its all depends upon market condition and customer's demand.
1 In the context of political factors, it includes rules, regulations, polices and so more,
which regulated and enchanted by government of country for managing and
controlling all over business firms in appropriate manner. Sometimes political issues
interrelate with Nestle company's strengths and weaknesses. In the context of positive
manner, all these are assist to manage and control business activities in appropriate
ways. In the other hand, sometimes it creates some restrictions for employees and
employers, sop they cannot able to effectively perform their task.
2 Economical factors refers to, it includes economical condition of country such as
inflation rate, interest rate, currency etc. Sometimes, all these castors are helps to
increase profitability and sales of company's products. Apart from this, all these
causes negatively impacts on business firm. That's why it is very important for every
company to properly identify and analyse economic condition in appropriate.
3 Technological refers to, at this time period most of the companies are using smart and
innovative techniques in entire business life for completing works with better result.
In the context of strength of company, it assist to increase production level of
company's products and goods. Along with this, it sometimes become weakness of
company because new features and operating system of technologies and machineries
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does not easy to understand for employees. Due to they will not able to complete their
task in appropriate manner.
4 Environmental factors are uncertain in nature because it includes, natural climate,
weather etc., all these issues are directly impacts on working performance of business
firm. Impacts of this factors might be positive and negative in nature. That's why
before conducting any business activities in action should properly identify external
environment of firm.
5 Social causes includes life style of persons, culture, living style, religion etc., it is
important for all organisations to properly analyse and identify social factors of
country. As per that, should produce products for consumers without breaching ethics
and norms of society. Because when company breached and not followed society's
rules then society will not accept firm's products. This situation can be negatively
impacts on organisation.
6 Legal factors refers to, legislations and rules of country. For controlling and
managing all business activities in effective manner. Government of country
enchanted some acts and laws, which has to be followed by all business firm.
CONCLUSION
From the above mentioned this research project it is concluded that, different types of
organisations, which could be differentiate from each others as per size and scope of firm. It has
been define major factors, which directly impacted upon business firm and working environment
of NESTLE. It has been defined organisational structure of Nestle company, in which included
all their major departments with the help of them effectively managed and controlled all business
predations and activities.
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