Impact of Business Models on Environment

This assignment examines the crucial connection between business models and their impact on the environment. Students are tasked with exploring various business models and analyzing how they contribute to or mitigate environmental challenges. The analysis should encompass relevant concepts like sustainable development, corporate social responsibility, and the circular economy. Frameworks such as Porter's Five Forces and PESTLE analysis can be utilized to understand the broader business context and its influence on environmental performance. Real-world case studies will further illustrate the diverse ways in which businesses are shaping a more sustainable future.

Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Covered in PPT.......................................................................................................................3
TASK 2............................................................................................................................................4
P3 Relationship between different organisational functions and their link to organisational
objectives................................................................................................................................4
TASK 3............................................................................................................................................6
P4 Positive and negative impact of the macro environmental factors upon business operations
................................................................................................................................................6
TASK 4............................................................................................................................................8
P5 Internal and external analysis of organisation for identification of their strengths and
weaknesses.............................................................................................................................8
P6 Interrelation of strength and weaknesses with external macro factors............................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
.......................................................................................................................................................14

INTRODUCTION
Business environment consists of both internal and external factors which influence the
operations of organisation. It is the responsibility of management of organisation to change their
strategies and policies according to such factors to attain a large number of benefits. Both
internal and external factors have their positive and negative impact upon the business
transactions. The internal factors are such which are present with the organisation and manager
has some control over them. Internal factors include technological capacity, employee’s morale,
organisational culture, etc. On the other hand, manager of organisation has no control over
external factors. It includes the factors such as, political, economic, social, technological, legal
and environmental. Consideration of all these factors helps in preparation of effective policies
which provide direction to the employees in performance of their different functions. Large
number of benefits are gathered by the organisation like competitive advantage, improved
market share, sustainability in their business operations, improved profitability, etc. Nestle is a
food and drink company which provides their products and services in all over the world
(Shigang, 2010).
In the present report, different types and purposes of public, private and voluntary
organisations, size and scope of different types of firms, relationship between different
organisational functions and their link to organisational objectives and structures will be
explained. Also, positive and negative impact of the macro-environmental factors upon business

operations, internal and external analysis for identification of strengths and weaknesses as well
as interrelation of strengths and weaknesses with external factors will be discussed.
TASK 1
Covered in PPT
TASK 2
P.2 Size and scope of various organization
P3 Relationship between different organisational functions and their link to organisational
objectives

Nestle is an multinational organisation which provides their products and services in all
over the world. The main of organisation to earn large number of profits by satisfaction of the
different demands of customers. Large number of departments are working in Nestle like
operational, human resource, finance, marketing etc. All the departments of organisation have
their different functions which helps in accomplishment of the common objectives. Somehow,
such different operations of various departments are interlinked to each other and helps in
performance of their tasks. There is huge importance of such functions in accomplishment their
organisational objectives. Interrelation of different departmental functions and their link to
organisational objectives is defined below:
 Human resource department: The main function of this department is about workforce
planning. The other important function which are provided by this department in Nestle is
appraisal of employee’s performance, appointment of employees, determination of the
remuneration etc. Planning of workforce helps in appointment of employees in different
departments like marketing, finance etc. of organisation according to requirements. It
helps in achievement of organisational objectives effectively (Pikka, Iskanius and Page,
2011).

 Finance department: It is another important department of organisation which distribute
the finance among the different departments. The major function of this department is
preparation of budgets which provides direction to different departments like marketing
regarding performance of their functions as per such standards. It provides opportunity
regarding use of modern marketing tools to accomplish their targets.
 Marketing department: Such department of Nestle provides the functions of advertising
and research about the market. Advertising activities helps in promotion of the products
and attraction of the large number of customers to improve their sales. Market research
helps in determination of the demand of their different products and such information is
further distributed to production department. It helps In satisfaction of the different
demand of customer and optimum utilisation of their given resources.
 Production department: It is considered as most important department of Nestle which
provides their function regarding manufacturing of different products. This department of
organisation has direct link with marketing and distribution departments. It helps such
departments regarding providence of their function in optimum manner.
Organisational structure
Structure of organisation is segmented into four different types which are mentioned
below:
 Function based: This includes about the segmentation of the organisation on the basis of
functions. It means organisation is divided on the basis of human resource, marketing,
production and finance. Through various functions organization can easily run their
various functions and this leads to growth of firm.
 Geography based: This provides about the segmentation of the organisation as per
different regions of countries. It is most important method which helps in determination
of the demand of customers of different regions. Through this firm can easily identify
needs and wants of all people living in various regions.
 Product based: It includes the process of segmentation of organisational structure on the
basis of different products. For ex. Nestle provides large number of products like food
items, drinking water etc. So, the organisation structure is divided on the basis of such
different streams of product (Pulver, 2012).Due to this categorization Firm can deliver
different products to the customers and thus it can increase the user's satisfaction.

 Consumer based: Segmentation of the organisational structure on the basis of the
different behaviour of customers. It provides the opportunity regarding make innovation
in their products for fulfilment of their different requirements and preferences. It helps
Nestle in improving service and in increasing the customer satisfaction.
TASK 3
P4 Positive and negative impact of the macro environmental factors upon business operations
Nestle operates their business transactions in 195 countries. All countries have different
business environment which have both positive and negative impact upon the business
operations. External environment includes large number of factors such political, economical,
social, technological, legal and environmental. Consideration of all such factors by the
management of Nestle helps in preparation of the effective strategies and policies which provides
opportunity regarding accomplishment of their organisational objectives. Positive and negative
impact of macro-environmental factors are defined below:
Political factors: Due to having their operations in several countries, political factors
have large impact upon the business operations. The major factors which are included in this are
stability of government, legislations, tax policies, import export excise duties, government
permission etc. Due to having such factors large number of risk are raise which are need to
manage by organisation.
 Positive impact: Consideration of all such changing regulations helps in preparation of
the effective policies which provides direction and contributes in improvement of their
sales.
 Negative impact: If regulation provided by the government are strict then it has adverse
impact upon the business operations. Due to having high tax rates in some also impacts
their profitability.
Economical factors: Different countries where Nestle provides their services have
different level of development. It represents the situation that every country has different
economy. The different factors which are included in this are flow of cash, rate of inflation and
deflation, income of individual etc.

 Positive impact: It is observed that in developed countries the economic condition is
good which helps in development of their business functions and improve their sales
figure (Reed and et.al., 2013).
 Negative impact: There are many countries where high inflation rate and the level of
income of individuals is low which has direct impact upon the demand of the different
products of Nestle.
Social factors: This includes the factors regarding age, belief, value and behaviour of
customers. It has direct impact upon the business functions. Other factors which are included are
education of individual also have both positive and negative impact upon business.
 Positive impact: If the large number of youth resides in country then it has positive
impact upon business. It helps in improvement of the sales of their food items and
expand their business operations with the helps of online technology.
 Negative impact: lack of education has adverse impact upon business transactions.
Technological factors: This includes the factors regarding technological changes, new
methods, techniques etc. Adaption of new technologies helps in improvement of their
productivity and quality.
 Positive impact: It helps in improvement of productivity and quality of their products.
 Negative impact: Use of obsolete technology increase the production cost and reduces
the efficiency of employees.
Legal factors: This includes about the legal environment which present in country.
Different country posses different legislation regarding operation of organisational activities.
 Positive impact: Fulfilling of regulations helps in ascertainment of the support of society
and government.
 Negative impact: If such different legislations are not fulfilled by the organisation then it
has adverse impact upon business operations. If health and safety legislations are not
fulfilled then support of employees is not ascertained which reduces the capacity of
organisation.
Environmental factors: It is the duty of organisation to keep their environment clean.
They are required to adopt effective waste disposal system and follow al such regulation which
are provided in this regard (Reinhardt and Stavins, 2010).

 Positive impact: Fulfilment of environmental regulations helps in improving their brand
image.
 Negative impact: If organisation not take care about environment then they have to face
criticism of society which results as negative publicity organisation transactions.
TASK 4
P5 Internal and external analysis of organisation for identification of their strengths and
weaknesses
Internal analysis helps in identification of the factors which have adverse impact upon the
business operations. It provides the opportunity to the management of organisation to identify
their strengths and weaknesses and build their strong position in market. Nestle is multinational
organisation which deals in large number of diversified products and conducts their business
activities in more than 195 countries. To attain sustainability in their business operations, need to
conduct SWOT analysis which helps to grab the opportunities which are available to them in
future. SWOT analysis of Nestle is mentioned below:
Internal
factors
Strengths
 Research and development
capability
 Strong geographic presence
Weakness
 High Criticism
 Contaminated food recalls
External
factors
Opportunities
 Clear labelling of harmful
products
 Transparency in material sourcing
 Growing ready to drink tea and
coffee
Threats
 Poor quality water and its
scarcity
 Increased competition
 High price of coffee bean
Strengths
 Research and development capability: It is one of the strength of Nestle that the
management is good in research and development activities. Large number of budget is

assigned by Nestle for their R&D department. Such department helps to research about
the market and satisfaction of different demands of customers.
 Strong geographic presence: Nestle provides their products and service in more than
194 countries. It means it covers almost all over the world. It operated their business
activities into three geographic segments such as America, Europe and Asia. It helps in
earning of the large number of profits.
Weaknesses
 High Criticism: There is high criticism is faced by company due to over use of large
amount of water, selling of contaminated food, anti-unionism, child labour and other
unethical practices etc. This will have huge adverse impact upon the image of
organisation and reduces their sales and profitability (Hair, 2015).
 Contaminated food recalls: Nestle provides large number of food products. Due to the
low quality of their products they recall their products in large number of quantity. This
will have large adverse impact upon the profitability and image of organisation. For ex.
They recall Maggie from the India after rejected in quality check. This will affects the
sales of Maggie in al over the world and company has to bear large amount of loss.
Opportunities
 Clear labelling of harmful products: Nestle has the opportunity to use the accurate
labelling regarding their different products. It helps in attraction of the large number of
customers because they prefer to buy such product which properly labelled. It helps in
attaining the trust and confidence of customers over their products and contributes in
building of good brand image.
 Transparency in material sourcing: It is the duty of the organisation is to provide the
accurate information regarding the source of food items. It helps in gaining the loyalty of
customers. It provides the opportunity regarding ascertainment of sustainability in their
business operations.
 Growing ready to drink tea and coffee: There are large number of opportunities are
available in front of Nestle regarding expansion of their business operations. It provides
the opportunity regarding expansion of their market and profitability.
Threats

 Poor quality water and its scarcity: Through their segment of beverages 25% of
income is earned by Nestle. In production of such products large number water is used.
Due to the low quality of their water they have to suffer in their sales. 8% of the revenue
is generated from bottled water. Due to the scarcity of water there is huge adverse effect
on the business operations.
 Increased competition: There is huge increase in the competition in beverage and food
industries. Due to increased competition there are large number of difficulties are faced
by the management regarding improvement of their sales and profitability.
 High price of coffee beans: It is observed that 10 % prices of coffee beans is increased
which lowers down the profit margin of organisation. The major reason behind increment
of such prices is drought and disaster in Brazil ( Hamilton and Webster, 2015).
P6 Interrelation of strength and weaknesses with external macro factors
It is important for an organisation to consider all external factors. This provides the
opportunity regarding assessment of their strengths and weaknesses. Through application of the
different approaches, management of organisation have responsibility to overcome from the
weaknesses and improves their existing performance. There are large number of advantages are
gathered by organisation like competitive advantage, improved profitability, high sales etc.
Evaluation of external factors by the management of Nestle regarding identification of their
strengths and weaknesses are mentioned below:
 Political: Due to have their operations worldwide, political factor have huge impact upon
business. Due to having effective legal team in organisation they are able to comply with
all regulations. The strength and weaknesses of Nestle regarding such political factors are
define below:
- Strength: Due to having legal team they are able to follow rules and regulations and properly
pay their tax in different countries. It helps in improvement of their image.
- Weakness: The weakness of Nestle is provide services in 194 countries, so it is difficult to
understand different laws.
 Economical: Different economic situation are present in various countries. In some
countries such factors has positive impact and on other hand, due to having harsh
situation in other countries, demand of their products is low.

Strength: In Asia situation is good and it becomes their strength regarding expansion of their
business operations and earn large number of profits.
 Weakness: Suppose there is inflation but company cannot sell products at low prices
thus it results in decreasing of sales and profits.
 Social: Nestle main aim is to provide good quality food products for the development of
society. There are large number of donation are also provided for improving their living
standard.
- Strength: Such CSR activities is the strength of Nestle which helps in improvement of their
image
- Weakness: Low quality of food product becomes their weakness. Due to this it cannot attract
many users.
 Technological: It is important factor which helps in improvement of productivity and
quality. Nestle uses advanced technology in production process.
Strength: Use of advanced method helps in ascertainment of employee support and bring
innovation in their products regarding satisfaction of the different demand of customers
(Karagiorgos, Drogalas and Giovanis, 2011).
 Weakness: Due to increasing competition company have to adopt recent tools. If they do
not adopt latest technologies then it results in reduction in sales an revenues.
All strengths and weakness of firms are connected with the macro factor of business
environment. For example: if Nestle wants to expand its activities in a country having political
stability and which use the technology use by NESTLE then this will help firm in achieve growth
and at the same time company can generate more profits. It is very essential for manager of firm
to carry out an external analysis.
Nestle can use this strength by creating more effective and efficient plans and policies.
They can use the strength so that they can easily adopt the external macro factors. Through this
they can easily enhance their revenues and thus they can enhance the market share. If they
convert their weakness into strength, then they can easily maintain good and unique position in
the market. Hence they can easily expand their operations by creating effective policies.
CONCLUSION
It has been concluded from the above report that, John lewis is retail organisation which
provides their products and services in all over the world. Large number of macro-environmental

factors like political, economical, social, technological, legal and environmental have adverse
impact upon the business operations. Consideration of all such factors helps in preparation of the
strategies and identification of their strengths and weaknesses. Large number of departments are
working in organisation and their activities are interrelated to each other. Effective deployment
of the functions by all the departments helps in accomplishment of their desired targets. SWOT
analysis is the effective tool which provides the opportunity regarding use of their strengths to
attain sustainability in their operations.

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