Impact of EU Policies on Nestle's Business Environment

This study examines the factors that impact the business environment and company strategies of Nestle, a multinational food and beverage corporation. It highlights the importance of EU policies in shaping the company's production and pricing decisions, with a focus on domestic and agricultural product production. The study also explores how these policies positively impact farmer income and achieve market share for Nestle.

In the business environment involves both internal and external factors which affect the working
of the company such as its employees, customers, suppliers etc. It also helps to understand
economic policies and market conditions. With the business environment nestle also get affected.
Nestle is one of the world’s leading food company which is a Swiss based multinational food and
beverages firm and it offers a variety of products such as baby food, medical food , coffee, tea and
many more (Feenstra, 2015). The primary objective of nestle is to maintain its position across the
globe by satisfying its customer. In this study the purpose and objective of different organisation and
stakeholder is identified with this also explaining the responsibility of organisation and strategies
which is adopted for nestle. It focuses on the significance of international trade and study impact of
global factor. Moreover current study is also TASK 1 1.1 At present companies consist of size, type,
purpose and their objective showcase of orgnaisation behaviourss in . There are three types of
organization which are private, public and voluntary. These are as follows: ? Private organisation: -
Private sector consist of all for profit businesses that are not owned and controlled by the
government. The basic objective of this is to earn maximum profits. The benefit of working at private
sector is to get good salary package, competitive environment and incentives etc (Nestle. 2016). ?
Public organisation:20 public sector is run by government servants in which pubic pay various
charges as a tax to the government officer. By which all collection of money is used in a financial
resorce in economy growth of the country. Main reason behind this is to serve the citizens and also
tries to use maximization of resources.. With public body so many benifits take by the citizen such as
job security, retirement benefits, allowance etc. ? Voluntary organisation: These are type of non-
profit business which works with the aim to benefit the society. It is said to be as charitable trusts as
they support various group (Richardson and Mazey, 2015). Hence Nestle is a public limited and its
operate2 and provided thier service in a world wide. For that company always focuses on customer
satisfaction and try to fulfill their needs. Company also focuses on delivery sysytem as well as
qualitative services. 1.2 Every company has their own stakeholders for which they are liable to fulfill
their requirements through satisfy them with their services. Likewise Nestle also possess different
stakeholders that has a various objectives and needs which is to be considered. These are major
stakeholders at nestle such as shareholder, employees, suppliers, customers, and government,
etc. ? Shareholders are the people who are affected with the functioning of the company. Company's
stakeholder always wants share dividend and profit percentage from growth of profit. 31 For every
business customer play a crucial role because production is based on a customer demand. They are
the one who are responsible survival of the business. However in return customer wants quality
goods and services from nestle with the value of money (Lister, 2016). It is observed that nestle fulfil
the demands of its customer in a efficient way. ? Suppliers are the one who supply raw materials to
nestle and get order from them on regular basis. At the same time, they also have timely payment

demand of their services. It is very necessary to meet with customers exception and nestle always
focuses on customer demand with the help of creating strong relationship with their consumer.?
Employees are the people who work for the benefit of the nestle. For maintaining their motivation at
nestle they provide them adequate opportunity of career growth with the attaining organisation and
their personal goal. ? Government are authorities who have interested in tax revenue and also
expect nestle to follow their legality (Feenstra, 2015). Nestle also meet the norms of legal authority
by adopting of corporate social responsibility to work for the betterment of society. Nestle has
believe in creating and sharing their values with other with this they use value system in order to
develop the trust relationship with their stakeholders. Nestle strive to meet the expectation of their
stakeholders by showing care to suppliers, providing deeply quality and food safety products to their
customers and healthy, sustainable environment for government. 5 | P a g e 1.3 Nestle has their
responsibility towards the individual for whom they produce the products and services. Nestle
believes in doing a business in such a way that help in addressing global and local issues such as
nutrition, water and rural development. As a recognised with the nutrition, health and wellness
company, they ensure to be successful over the longer period by creating an strong relations with
their society (What Is Business Environment? - Definition & Factors. 2016). Nestle is committed
towards various responsibilities which are: 1. For the continual improvement in the environment
performances nestle has made “Nestle Environmental managements system”. 2. Nestle is
responsible for the sources of packaging materials and other goods and services. Because it is
necessary to use packaging ingredient according to government norms for which they use nestle
supplier code and work for continual improvements in environmental performance. 3. Nestle adopt
the Equal opportunity & Non Discrimination strategy against any colour, national, status, expression
etc. Because they follow core value which allow them to treat every employee equally even if they
have a high position at company. 4. Nestle has adopted an specific code of conduct that is strictly
followed at all employees in order to act ethically. Its code of conduct is based on values and
principles that apply in their operations (Brambila and Massa, 2010). 5. They also use
environmental- friendly technology in production. With this they increase safety at workplace and
helps in protecting the environment. 6. Other than that they also initiated various kinds of
environmental campaigns which encourages the customer to follow an e-co friendly products.
Besides this nestle also announced various discount coupon for their customer and it will assist for
enhancing customers attraction towards the nestle products. Continuously purchase goods from the
company so that they repeat their visiting and become an loyal customer. TASK 2 2.1 Economic
system is the best way through which any country can allocate their scare resources in an efficient
manner. Here scare resources restrict company to function in an appropriate way. Economic system,
government interventions, policies, fiscal & monetary policies influence Nestle. Economic system

includes production, distribution and consumption of good and services in an economy
(Branstetter ,2014). It includes capitalists, socialist and mixed system. The economic problems in a
society which has a greater impact on nestle are in allocating resources optimally. Hence nestle has
adopt that economy which help them to allocate resources properly. So there are three economies
which are: Market economy: In this economy there are less interventions follow for any decision
making. It also allows producer to produce goods and services and sell or purchase in a free market.
This economy helps the Nestle to work freely. Command economy: It is a planned economy where
the government has control all the production, pricing of products and services. In this economy
government interventions is more than a market and it is based on the power of supply and demand.
Mixed economy: it includes both the features of command and market economy. Thus if
nestle isusing an market free environment in performing their operations then they easily allocate
their resources effectively (Revilla-Romero and et.al., 2014). In economy policy is influenced by so
many activities. All this policies are normally formulated by governmnet body or government
servents. By spending and also related to supply of money. The decisions at nestle regarding
operational activities is influenced by the policies and regulations in economy. Fiscal policy can be
defined as inflow of revenues and outflow of cash by government. Similarly, it has an impact on
nestle as it 7 | P a g e determine their operational cost and also take decision regarding investment,
sending according to the economic changes (Lister, 2016). Monetary policy impacts money supply,
funds for banks and so on. It directly impact on the decreasing in interest rates and mortgages rates.
Nestle also undergone through great effect by interest and exchange rates changes as if rates are
high so its directly impact on the currency that is decreasing the value of dollar. Inflection in rates is
also impact on the import and export of the nestle product.. Or if it is lower rate then it occur negative
impact on nestle. All these policies influence the companies functioning and also increase in tax
rates. In this situation nestle has to pay more to the government. In addition to that when cash
reserve ratio is decrease it means banks are capable to borrow more financial resources (Managing
Business resources. 2016). company always promote best dealing process in which they provide
best quality products to serve their customer requirement. In this UK also promote fair trading act in
which healthy practises in merger and acquisition are included. One more act is about free trade in
which no cross country transaction are included. For standing in the market company follows
comparatives act in which entity must follow rules and regulation. Legal authority always impact in
the business practises in every situation also provide suitable solutions and suggestions (Chaney,
2014). The other regulatory mechanism initiated by the UK government that also has a great impact
on various companies of UK in which one is Nestle who also has not untouched with them. Nestle is
the company who follows all the laws and regulations which are develop by the government and

offer their their with highly quality products at reasonable cost that helps to satisfy them and allow to
build up long term relationship. TASK 3 3.1 In Market structure so many buyer and supplier are their
for fair competition and it include perfect competition, monopolistic and oligopoly in which Nestle who
deals in multiple products has also influence in their decision related to price and output. Perfect
competition: It is a market which create products in a most effective manner. There are many
businesses which produce a homogeneous product with having no control over the supply and price
of goods in market. In this firm are the price taker similarly nestle produces an specialised products
so it will assists for increasing customers interest towards the products (Feenstra, 2015). In
monopoly market no competition is their because there is a single supplier with single
product and no other company having same products. Mostly company focuses on less out
out with high price commodity. It is the market which is dominated by one supplier. Hence, Nestle
has not used this structure in their business functions.1 In oligopoly market various companies work
in which their output is comparatively less so it will assits for the profit gaining. They are the price
maker which helps them to making cash inflow with the help of high price. But nestle set their price
in a competitive strategies. They are price maker as Nestle also create an image with this it become
an price maker of their products For Example: Maggie which has occupied largest market share in
all over the counties by becoming the price maker. 3.2 The decisions regarding marketing is based
numbers of forces. There are various market forces that shape Nestle and help them to achieve high
market share the following responses of these forces are mention below: Demand and supply:
(Finger and Princen, 2013.). For perfect demand and supply needs, preferences are identified by
the companies so that they design their product according to their requirements. Nestle by offering
variety of products in the market have created demand well which helps them maintain their growth
in market. Price elasticity: The expenses which are occur at the time of productions that has a direct
effect on the price of raw materials. Nestle has a direct impact of change in price over with the help
of systematic planning and also focuses on regulation of price that is adopted by the company
(Revilla-Romero and et.al., 2014). Changing marketing trends and preferences: Organisation need
to make deep research about the taste, preferences so that they find the trends in current market.
Similarly, Nestle also analyse present market situation so that they create their products accordingly
and make customer satisfy for example: specially in festival season customer buy more products as
compare to other days accordingly the companies have to plan their business functions. 3.3 Cultural
and business environment shapes the behaviour of people at organisation. There are four factors
which are always present in environment that also affect organisation in doing their business. These
environment plays an vital role in the growth of the business as Nestle also get influence with these
issues but with by using the opportunities in a good manner they are able to manage these factors
(Golub, J., 2013). Political: these factors have a vast impact on nestle. As different countries have

their own governing bodies so nestle group with the focus on quality and safety of products they
have implemented government policies in every economy. Nestle supports the efforts of government
and equally follow their strategies which is framed by them that helps in creating an goodwill.
Economic: In this nestle always focuses on proce and quality but economic effects is directly impact
on the inflation of rate and its reflect the product price. Social: This environment includes beliefs,
values and objectives of the company that shows the structure of business. Nestle always focuses
on end less relation with their customer for that it involves them in decision making process. By
which customer loyalty is increase towards the nestle products. Technological: Nestle use advanced
technology in their business operations in order to make innovation with that new customer get
attracted. They also follow formulated regulations by government example nestle always follow
updated technology for their products which helps them to sustain long term in the market. Thus
marketing manger focuses on input and output of environment. TASK 4 4.1 international trade is
trade in which company transact among the countries. It provides the opportunity to counties for
expansion their business across the globe. Foreign trade allows Nestle to take an competitive
advantages against its rivals in exposing their business in other countries. The major significances of
international trades which are as follows by Nestle: ? International trade creates an goodwill of nestle
in different countries among customers and also help in achieving the market growth (Richardson
and Mazey, 2015). ? With foreign trade Nestle got an opportunity to explore their products and
services across the globe. ? Nestle get the new segments to target and position their products
among the new consumers. It also helps in enlarge the potential of organisation in different
markets. ? It also protect from market fluctuations as the dependency of Nestle on domestic market
is reduced. ? Nestle use diversification in order to reduce the risk and able to maintain their growth in
future also which makes profitability in business. ? By following regulation of different economy
Nestle have manage their quality system in a reliable manner which help them to implement their
strategy in an effectively. 4.2 Global factors have an adequate impact on UK business whether factor
is related to exchange, employment, labour movement, environment and science technology. These
all have a direct or indirect effect on nestle which need to be consider. Labour cost is the concept
which an impact on cost of goods for company. Nestle tries to reduce their labour cost by installing
manufacturing units in different areas and also upgraded their equipment so that less manpower can
be used this helped the business in managing the earning 11 | P a g e and growth ( Xu and et.al .,
2013). Labour cost is dependent upon numbers of reasons which can be happen inside or outside of
the company supply and demand plays an vital role in determining labour cost. Exchange rate
fluctuation is one of the factor which effect every business. If rates are daily changes so its directly
impact on the investment of companies. All this hurdles impact the Nestle as it also performs its
operation in various countries internationally, so in order to overcome Nestle can not change their

price for long time with the help of setting their contact. Beside that they can also purchase currency
in advance. Environmental and technological factors also have an effects the company products.
With the help of technology price will be decrease and their product will be highly selling. Company
focuses on healthy production and nutritious product by using research and development
specialise. While change in climate, natural resources, air pollution has become an issues for the
society for which Nestle can take initiated to reduced wastage and recycling them in order to protect
the environment. Other factors such as shortage of raw material which affect the production
efficiency, due to international exposure with the domestic competitor it makes the market diversify
(Chaney, 2014). Therefore, international trade is assists for growth in business and also equally
disruption. European union is one of the company who always promote their members for fair trade .
They can also transit in cross boundaries. It will assists for reduction of sales tax and also members
are free from other restriction without any government involvement. EU always significantly work for
food products with the help of policy monitoring. With the help of completion policy it enhance market
competitions so that company has to provide their products in cheapest range because of high
competition. They are not working for profit they work for standing in market in a lpng time as well
surveying in a good way. scale or emerging companies is increased. Similarly, Nestle has also
follow this policy of EU and provide Quality products at best price to the customers in order to satisfy
them. In agriculture policy EU focuses on domestic and agriculture product so it implements the
production and postively impact of economic growth. All these policy highly impact on the production
of nestle for deciding price, enhancing reasonable production. This policy is enhancing farmer
source of income because they have opportunity for growing (McGovern, 2016).It is formulating to
reduce and EU create policy where farmers welfare work and security is concentrated. It helps
to achieve market share. Thus EU policy related to trade are binding all the members with other
parts of the world which helps to create long term relationship.1
CONCLUSION
In this study also observe the several factors impact the political, social and economical are
included. By which they impact on the production department as well its economic growth. Different
market structure such as perfect competition, monopoly, oligopoly are used to determine the price
and output of nestle and also evaluate the market forces which shape organisation responses. Lastly
studied about the policies develop by the EU and their effects on the company strategies. Thus from
the above report it is concluded that various factor strongly impact on the business environment and
its organizations functions and their operations.

REFERENCES
Books and journals
Feenstra, R. C., 2015. Advanced international trade: theory and evidence. Princeton university
press.
McGovern, E., 2016. International trade regulation (Vol. 2). Globefield Press.
Chaney, T., 2014. The network structure of international trade. The American Economic Review.
104(11). pp.3600-3634.
Xu, X. and et.al ., 2013. Local and global factors controlling water‐energy balances within the
Budyko framework.Geophysical Research Letters. 40(23). pp.6123-6129.
Revilla-Romero, B. and et.al., 2014. Evaluation of the satellite-based Global Flood Detection
System for measuring river discharge: influence of local factors.Hydrology and Earth System
Sciences. 18(11). pp.4467-4484.
Finger, M. and Princen, T., 2013. Environmental NGOs in world politics: Linking the local and
the global. Routledge.
Richardson, J. and Mazey, S., 2015. European Union: power and policy-making. Routledge.
Lister, M. ed., 2016. European Union development policy. Springer.
Golub, J., 2013. New instruments for environmental policy in the EU. Routledge.
Online
What Is Business Environment? - Definition & Factors. 2016. [Online]. Availabile through:
<http://study.com/academy/lesson/what-is-business-environment-definition-factors-quiz.html>
[Accessed on 2nd November 2016].
Nestle. 2016. [Online]. Available through: <https://www.nestle.in/>. [Accessed on 2th
Novemberr, 2016].
Managing Business resources. 2016. [Online]. Available through:
<https://www.gov.uk/government/policies/business-and-the-environment>. [Accessed on
2th November, 2016].

1

2