Nestle's Strategic Management and Stakeholders

This assignment delves into Nestle's strategic management practices, focusing on how the company considers both its internal operations and external factors when formulating plans. It analyzes various stakeholders involved with Nestle and their influence on the organization's objectives. The assignment emphasizes understanding Nestle's overarching purpose and its strategic approach to achieving it.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Brief description of Nestle and British Airways...................................................................3
TASK 2............................................................................................................................................4
2.1 Different stakeholders that influence the businesses............................................................4
2.2 Different stakeholders that influence Nestle and British Airways........................................5
2.3 Influence of different stakeholders on organisation..............................................................5
TASK 3............................................................................................................................................6
TASK 4............................................................................................................................................7
ASSIGNMENT 2.............................................................................................................................7
TASK 1............................................................................................................................................8
1.1 Influence contrasting economic environments of Nestle company......................................8
1.2 Challenges faced by Nestle in two economic environments.................................................8
TASK 2............................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment are the internal and external factors that affect the company's
function, This term focusses on the external forces that are not in control of business and affect
the functioning of enterprise to a high extent (Worthington and Britton., 2015). Present report
discusses about the purpose and stakeholders of two contrasting businesses, that is, Nestle and
British Airways. With the help of this report, business environment of both the enterprises will
be studied. Along with that, political, economic, social and technological factors that have
impact on the strategy of business will be described as well.
TASK 1
1.1 Brief description of Nestle and British Airways
This report has chosen Nestle which is a Swiss Transnational fFod and Drink Company
and other business which dealing in service sector named as British Airways. Brief description of
these businesses is as follows:
Basis Nestle British Airways
Business Activity Nestle is working at the global
level with providing its
products all over the world
(Persson., 2013).
It is working at the
international level with
providing air flights all over
the world.
Business Sector It is dealing in food and drink
products such as baby diet,
medical food, breakfast
cereals, etc.
It is the second largest airline
in UK.
Business Purpose It wants to provide consumers
with products of standards that
are acceptable across the world
and commit to long-term
sustainable growth and
satisfaction of shareholders.
It wants to become the world's
leading airline along with the
satisfaction of consumers.

Ownership Company has taken 19% loan
against equity as derived from
the debt equity ratio
Key Stakeholders Its key stakeholders are
employees, customers,
investors, government and
competitors. Local
communities are the one who
directly or indirectly
influenced by the operations of
Nestle (Brooksbank, 2006).
Its key stakeholders are crew
members, employees, pilot,
shareholders, passengers and
government which are affected
by the functions of British
Airways.
TASK 2
2.1 Different stakeholders that influence the businesses
Stakeholders include any person, organization or society at large that has interest in the
business (Srdjevic, Bajcetic, and Srdjevic., 2012). They are the one who can affect the business
and can be affected by its operations. Different stakeholders that influence the businesses are: Customers: Consumers are the backbone of every company. Nestle and British Airways
frame strategies to satisfy their customer base. Nestle plans out its manufacturing and
production procedure by considering the tastes and preference of customers. They are the
one for the satisfaction of whom, entire organisation is working. It affects the sale and
profitability of every business. Employees: They are the support system that implement plans into actions. Without them,
an organisation cannot function. In return, company acts as a source of income for the
workforce (Bulpit., 2012). Investors: Shareholders play an integral role in the functioning of company. Every firm
needs finance to operate its business which is provided by these investors. In return, they
expect higher profits from the firm. Thus, it is very important to convince the investors
for strategies framed by top level management.

 Government: Nestle and British Airways should comply with the rules and regulations
framed by government so as to protect themselves from any kind of legal action against
them.
2.2 Different stakeholders that influence Nestle and British Airways
Stakeholders Nestle British Airways
Consumers They expect quality
standardised product at
economical price. Customers
prefer nutritional food rather
than fast food. Nestle should
focus on manufacturing of
nutritional quality product
which in turn will increase
their productivity and
profitability (Vracheva, Judge,
and Madden., 2016.).
They expect that British
Airways should provide them
high quality services Standing
out their expectation has made
British airways among the top
leading airlines.
Employees They are the helping hands
through which Nestle can
attain its goal and objective.
They should try to analyse the
needs of employees and satisfy
them accordingly.
It includes pilot and
employees. They all contribute
to provide services for
fulfilling the needs and
requirement of customers.
They expect that airline should
install safety measures in the
time of emergency.
Investors Investors are the one who
invest in the projects of
company. They expect that in
return, they would get higher
Same as Nestle.

returns.
2.3 Influence of different stakeholders on organisation
There are different stakeholders that influence the functions of Nestle which are like:11 Employees: They are the one who put plan into action. They greatly influence the
working of organisation. For instance, if Nestle is planning to expand its operations,
employees play a vital role in the implementation of this plan. However, if workforce
would resist to this, executing the plan will not be possible (Granger and Schroeder.,
2013).11 Government: They frame rules and regulations to monitor the functioning of company.
Nestle needs to comply with the laws that are designed by government. For example, if
Nestle wants to set up its branch in another country, it has to comply with legislation
drafted by lawmaker and take the required permission from government. Regulatory
authorities also depend on Nestle as a source of revenue to collect taxes (Botha, Kourie
and Snyman., 2014) .11 Investors: They inculcate financial help to Nestle and in return, expect good returns from
company. Firm needs to design its strategies by keeping in mind the expectations of
investors of the firm.
TASK 3
There are different ways through which business organizes their businesses. Thus,
comparison of business organisation of two different organisation are: Purpose: Nestle's objective is to become world's largest food provider that manufactures
best branded products. Recently, Nestle have undergone many corporate restructuring
like expansion and divestment to attain more balanced structure to the business
(Worthington and Britton., 2015). The main purpose of British airways is to meet out the
rising expectation of customers and to become world’s leading global premium airline.
Both the organisation is collectively working to attain its goal and objectives. Ownership organisational structure: Nestle is a private company that offers benefits of
equity financing, and the freedom to sell the enterprise (Mellahi and Frynas., 2015) In
accordance to Nestle's Chief Executive Officer, Paul Bulcke depicts that the private

company plays vital role in addressing the global food crisis. British airways is a public
company that can offers shares to the public and can raise funds from them.
 Strategic Planning: British airways design its strategic plan keeping the base to become
global premium airline strategy. Top level management drafts its strategic plan
considering Colleagues, Customer, Performance, Excellence and Partnerships into
account. Whereas, Nestle's management design its strategic plan after analysing the
internal and external environment analysis with the help of PESTLE and SWOT analysis.
TASK 4
Organisation structure and strategic plan plays important role to achieve goals and
objective of organisation which are discussed below: Nestle: It is a decentralized organisation that allows its subordinates and employees to
enjoy high level of independence and design its strategic plan after considering internal
and external factors helps the organisation to attain its goal and objective (Weiss., 2014).
 British Airways: The organisation structure adopted by British airways is tall structure, it
helps the organisation to assign roles and responsibilities without any ambiguity. It would
develop healthy working environment that motivates the employees to work harder for
the organisation. It attains goals and objective of the organisation, it designs strategic
planning that gives direction to the employee to accomplish their task.
ASSIGNMENT 2
TASK 1
1.1 Influence contrasting economic environments of Nestle company
Economic growth and recession are the two most important economic environment that
effect the company's operations. At times of economic growth, the company will earn huge
profits by producing goods in bulk. Thus the company will invest more and earn profits.
Similarly if there's a period of recession in the country company might cut down its operations
and due to the less purchasing power of the people. Customers will not purchase branded
products and will try to save money as much as possible (Cosh, Fu, and Hughes., 2012.).
Similarly the GDP has an impact on every business. If GDP increases so does the
economy has gone up. If the current rate of interest is high the company will not borrow loans

from bank and vice a versa. Thus Nestle might borrow loan when the interest rate is low so that
they may not have to pay back much amount.
1.2 Challenges faced by Nestle in two economic environments
In order to start business in different country, the company has to keep in mind all the
factors that will effect its operations (Persson., 2013). For example, If Nestle wants to expand its
business in India it has to consider all the factors that might effect its profit. India is rich in its
resources, its easy for the company to purchase coffee and cocoa at cheap prices then importing
it from other country say Uk. Additional to it there are cheap transport and labour are available in
India. Whereas if the company wants to expand its operations in UK it might get better
infrastructural and transport facilities. Moreover, people are willing to spend more as there is less
income inequalities as compared to India. In conclusion, Nestle might faces lots of challenges in
carrying out its activities in India as compared to Uk.
TASK 2
2.1 Analyses of political legal and social factor of Nestle
There are many factors that affect the environment of a business concern. Some of which
are: Legal factors: An increase in taxes leads to rise in prices which further indicates decrease
of customers. Similarly, change in export and import patterns may cause decline in
operations of business internationally (Šommet., 2013.). These constitute legal factors. Political factors: Every country has a different set of rules and regulations, the business
concern has to operate under. Similarly, government imposed certain restrictions on
nestle company for sale of cocoa products. It has been criticized for selling unhealthy
products. Also, if there is change in government, certain laws may change which may
affect the company.
 Social factor: The company is the main supplier of some of its product in different
countries. Nestle therefore emphasises on the traditional and cultural values of the
country where its conducting its business activities. Change in customs and traditions of
people may cause the company to bring changes in products (Weiss., 2014).
2.2 Future changes affecting the strategies of Business concern

 Economical factor: With change in economic growth there are certain other changes like
inflation exchange rate that affects the customer purchasing power.. so in future demand
for some of Nestle's product like Kitkat, Milo may fall down due to the recession in the
country. Political factors: Pakistan government may object the way in which the Nestle conducts
its business. This may lead to increase in the amount of tax that the company pays
initially resulting in increase of prices of the products (Persson., 2013).
 Social factors: People are becoming more conscious these days regarding the products
and services. New and innovative products should be brought in market to meet the
customers future expectations. Nestle shall introduce new products like Milo to serve the
customers needs and preferences.
CONCLUSION
It can be concluded that organisation has its own purpose that has to be attained
effectively and efficiently (Vracheva, Judge, and Madden., 2016). To attain this objective,
management make strategic planning considering the internal and external environment. There
are various stakeholders that are affected and can affect the functioning of the company.

REFERENCES
Books and Journal
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environment: knowledge management and knowledge management technology.
Elsevier.
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Mellahi, K. and Frynas, G., 2015. Global strategic management. Oxford University Press.
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Šommet, J. U. L. I. J. A., 2013. Sustainability assessment of Estonian oil shale mining. Oil
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Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: A case study of reconstructing a
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Vracheva, V., Judge, W. Q. and Madden, T., 2016. Enterprise strategy concept, measurement,
and validation: Integrating stakeholder engagement into the firm's strategic
architecture. European Management Journal.
Weiss, J. W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-
Koehler Publishers.
Worthington, I. and Britton, C., 2015. The business environment. Pearson Education Limited.
Online
Daniel Brooksbank. 2006. Nestle's CEO: pension funds are main stakeholder.
[Online].Available through: <http://www.ipe.com/nestl-ceo-pension-funds-are-main-
stakeholders/19195.fullarticle>.[Accessed on 11th july].