Nestle PESTLE Analysis: External Factors Drive

This assignment details Nestle's revenue generation and market share maintenance strategies, with a focus on their PESTLE analysis to understand and leverage external factors. The organization operates in approximately 197 countries, facing varying economic situations, cultural aspects, technological advancements, and legal frameworks. With strengths like diverse legal teams for effective outcomes and strong R&D for trend analysis, Nestle also faces weaknesses such as interpreting different nations' rules and managing high employee conflict.

BUSINESS ENVIRONMENT

INTRODUCTION
Business environment is process of determining different stages such as person, entities
and many other factors which are control and manage by the firm. These elements frisks an
important role in order to maintain enhance the performance of the business concern,
performance of company and expand the business organisation (Charter, 2017). There are
different external element which impact the performance of the organisation these factor are
political, economical, social, technological, legal and environmental factor which give
advantages and disadvantages on the environment of business company. Taking into account
these factors helps to enhance the performance of the company. There are different types of
intrinsic factors which is present in side the business. These internal factors are such as morale of
employee, technological capability and time taking delivery process which effect the durability
of the different operation in effective manner. It is responsibility of the director to implement
different types of strategies in order to drive the different types of challenges in the future. Nestle
is organisation which provide numerous types of drink and food which provide different types of
services in different world (Zsambok and Klein, 2014).
In this report it concerned with different types of private, public, and wilful company of
their size and scope of various organisation and there interrelation between the various
department of the organisation in effectual manner. It also link with goals and aims of the
organisation it also explains the positive and negative impact of these external factors SWOT
analysis which related determining different aspects of strength and weakness of company.
TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
There are different sorts of companies which perform their number of work in specified
time period. The manager have to inculcate with the specific legal factor which helps to glossy
running of the business venture in effective manner. There are many types of organisation which
are bifurcated as private, public, and voluntary. So these company needs to follow different
regulations which is impose by the organisation which aids to achieve support from the
government and the different individuals.
Various kind and the aim of business concern and their legal structure are describe below:
Private company
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There are different companies present in the marketplace which have their private
ownership such types of company is known as private company. There is no control of
government official related to various types of operation of firm. There are number of functions
which are performed in the organisation which are controlled by the private officials. There are
several types of implications which are imposed on these firm that they are not allowed to sell
their shares in public and also subscribe their shares.
Nestle is one of the leading organisation which provide various types of food materials
and also ascertain large number of the revenue. The organisation was set up in 1886. There are
huge number of products which are produced by the company like food, coffee and tea, dairy
products, frozen food snacks and many others.
Purpose of Nestle
 The purpose of the company is to provide qualitative life to different individuals who are
living in the society.
 Put their effort in order to develop different functions of the organisation.
Legal structure of private company
 Partnership: This is the full-dress mutual mind among the two parties in order to
operate and control the different functions of the business. There are different share and
profits and losses which are equally distributed between partners. Those partner which do
not take part in the different operations of the functions of organisation is termed as the
silent partner. The main objectives of these organisation in order to attain level of the
profit.
 Sole proprietorship : There are various types of the company which is owned and
manage by the single individual. It is known as sole trader. These individuals took control
over the different functions and unlimited liability.
 Limited companies : it is the individuals legal organisation which have distinct from the
owner. There are two kinds of limited shares and guarantees. It reveals about the liability
of the owner and different share holder which have the limited liability for the
organisation about the unpaid amount of capital and shares.
Advantage Disadvantage
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The owner have the total control over business
functions.
Need to settle up different legal formalities.
The liability of the owner and share holder
have the limited liability
Ascent of finance is challenging.
Public organisation
It is related with the different business firms which provide many types of functions like
as military, police, infrastructure, transit of public, health issues and many others. Among
performing different functions various public company have control upon the different functions
so that effectiveness is maintained in various function of organisation. Main aims of companies
is to perform different functions which benefits the society.
NHS perform different types of facilities which related to health issues of UK. This
company provide different types of medical facilities to the different people. It also provide
different service such as dental and eye related issues.
Purpose of NHS
 Behave with the different patient with effective manner.
 Perform different types of facilities in effective manner.
Legal structure of public company
 Central government: maintain the effectiveness in different department of state and
central government.
 State government : Maintain collaboration in order to ,perform various functions which
are related to state government and agencies.
 Local government: provide different function which are concerned with the controlling of
public company.
Advantage and Disadvantage of Public organisation
Advantages Disadvantage
Perform work to the benefit of public There are scarcity of funds
Allocation of different resource Restriction in freedom to arrange capital
Voluntary organisation
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It is concerned with functions of various company in in order to support volunteers they
perform their work to develop people living in the society not to maximise the profit.
Oxfam is the charitable company has main aim to remove the level of poverty. This company
was founded in 1942.
Purpose of Oxfam
 Provide effective solution related to poverty.
 Aids in creation to create good future of different person.
Advantages and disadvantages of voluntary companies
Advantages Disadvantages
Government give financial support to such
companies.
Do not control over the different functions it is
difficult to take up the chance.
Various functions and participation available. No chance of continuity.
P2 Size and scope of different organisations
These three companies ascertain different shape, size and scope and also have distinct
structure of organisation. Size of the companies related to the different location in order to
operate various operation of organisation. The scope of organisation concerned about the various
products and services which given by these organisation.
Nestle
 Size: Nestle is the company which provide different types of drink beverages and food
to the different people. The main objectives of the organisation to maintain the standard
of life of the person by providing better quality of food and drink products in proper
manner. This company comes in existence in 1866. After it is diversify in 447 different
factory which are performing their functions in different part of the world. It is estimated
that more than 339000 employee's working in the different organisation in order to
provide qualitative products. These strength of employee possesses helps to attain goals
and targets of organisation.
 Scope: It aims at the various functions which are performed in the organisation. The
major products which are related to foods of baby, medical food, bottled water, coffee
and many more products. All these products deliver in different countries.
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 Vision: The main vision of the company is to manufacture consumer products which are
riskless, qualitative products to their customer. It manufacture many types of products in
order to fulfil the desire and demand given by the consumer.
 Mission: The mission of the Nestle is to provide best amenity of service to the
different customer. The customer want good food, good life by providing different range
of products and beverages.
NHS
 Size: The objectives of NHS is to provide different types of facilities which are
related to healthcare sector as per the wealth of the organisation. This organisation
was come into existences in 1948. in present era more than 1.5 million employee
working in the different sector of NHS.
 Scope: it is related to various description of different sector of the organisation
which provide different types of services
 Vision: The vision of the organisation is to provide effective services provided to
the different people.
 Mission: The mission of company is to give qualitative services to the people.
Oxfam
 Size: there are 20 company which are performing different types of the operation
in order to remove poverty globally. This company come into existence in 1942.
 Scope: There are various sector where the organisation perform different types of
activities like poverty, advocacy, policy research and many others
 Vision: The vision of the watch out the whole world without poverty in order to
provide better life.
 Mission: To aim at effective guidelines which helps in reducing poverty from
whole whole world.
Stakeholder analysis
It is the procedure to determine the value of stakeholder of Nestle. These collaborators
are named as employees, customers, investors, and many others. There are list of stakeholder
according to their involvement in organisation which are describe below:
 High power – fascinated people
 High power – less fascinating people
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 Low power – less fascinating people
 Less power – fascinated people
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
Every companies get prosperity with helps of performance of various functions in
effective manner. A multinational organisation like Nestle should evaluate the performance of
various departments (NTeece, 2012). It helps to create opportunity which are related to operate
different function inn effective manner. Organisation needs to maintain supportive nature of
management of organisation in order to win the aim and objectives defined of organisation in
effective manner. These department helps to attain maximum number of customer in order to
buy different products and generate huge amount of revenue. Interrelation of different function
of Nestle is given below:
 Human resource department: There are various types of functions which are ascertain
by the various department of organisation like workforce planning, performance appraisal
employee remuneration. These functions help to perform various activities in effective
manner.
 Marketing department: This department concerned with the department which produce
different products of Nestle (Wack, 2017). Implementation of various strategies which
are related to marketing department. This department provides different current and
innovative technology to fulfil the demand of the consumer in the market. These
information aids to perform different functions in order to attract maximum customer in
the marketplace.
 Finance department: This is the most crucial department of any industry because it
deals in distribution of funds in the different department of Nestle. This department aims
to distribute different resources in order to collect funds. The main responsibility of this
department is to prepare a budget plan for the proper running of venture. It also helps the
marketing department in order to implement various types of promotional tools and
advertising medium to generate a great number of revenue (Zeng, L and Duan, 2012).
 Production department: This department deals to produce various types of food items
according demand made by the customer. The department gather different information
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which are related to the different views of customer. The marketing department
determine the buying behaviour of the customer and provide different types of the
products in proper manner. These information gather by this department and produce
different types of products in order to attract maximum customer. This department also
implement various strategies in order to enhance rate of sales of different products
(Gilboy, 2016).
Organisational Structure
Structure of company is bifurcated on the different basis which are describe below:
 Function based: Determine the define skeleton of company according to the various
operation performed in the company. Like HR department, marketing department,
finance and operations department and many other department in order to perform
various function in proper manner (Jarillo, 2013).
 Geography based: This is based on the manufacturing of different products according
to various region of the country in accordance to the demand of the consumer of different
region in order to provide different types of products and services in effective manner. It
aids to recognise the demand made by the customer according to the various region.
 Product based: Define structure of the companies leads to diversify the different
products. Organisation manufacture long range of advanced and innovative products in
order to sustain the effectiveness to supply of different products in the marketplace. It
helps to maintain availability of various types of products in the marketplace. like Nestle
provides various types of food and drinking beverages. It also provide various products
which are ascertain by different products (Scheer, 2012).
 Consumer based: The buying behaviour of the customer is being identified by the
organisation and produce various products in proper manner. The management of
company leads to determine the demand of customer in proper manner. Company put
their force in producing different type of product as per the views given by the customer.
It leads attain sustainable position in the marketplace. This leads to compete different
rivals present in the marketplace.
P4 Impact of macro-environmental factors
Different company put their research in order to give various products and services in
various countries. There are various external factors which impact on the various operation of the
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company. Nestle is the multinational company which suffers from the different types of macro-
environmental factors. These environmental factors are like political, economical, social,
technological, legal and environmental factor. These factor give positive as well as negative
impact on the various activities of organisation (Gharajedaghi, 2011). The positive impact is
ascertain by the company to implement different strategies and plans to maintain the
effectiveness in different function of organisation. Organisation needs to add different strategies
in order to remove the various impact of the organisation in order to maintain the effectiveness of
various function in proper manner. It aims to accomplish different types of function of
organisation in proper manner. Positive and negative impact of various types of external and
internal factor which are describe below:
Political factors: As this organisation in order to provide different services to various nations.
There are various rules and regulation obtain which has been follow by the management of the
company. So organisation needs to follow various political dynamics such as taxation import,
excise duties permission taken by the government to start business venture (Crane and Matten,
2016).
 Positive impact: if the rules and regulation is being supported by the government it
benefited the organisation.
 Negative impact: high tax and tight export policies give negative impact upon the
Nestle (Li, and et. al., 2011).
 Economical factors: Nestle provide different types of service at different level in order
to generate large number of revenue.
 Positive impact: prepare determination of different report to analyses to collect
knowledge at various level.
 Negative impact: reduce the level of income in proper manner which impact on the
demand made by the customer (Hillson and Murray-Webster, 2017).
 Social factors: This is concerns about many types of belief and thoughts of the various
factor which influence different operations of business
 Positive impact: It requires to focus on the behaviour of various customer in order to
increase the rate of sales of the organisation.
 Negative impact: Because of lack of education among the different function which
impact on the level of profit.
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 Technological factor: This is related with the execution of advanced and innovative
products in order to develop the organisation.
 Positive impact: There are various techniques which are implemented like internet and
e-commerce in order to amend the sales of various products.
 Negative impact: Implementation of advanced technology reduce the performance of
various activities improper manner.
 Legal factor: There are various lawful regulations which are provided by the
government which should follow by the Nestle. It is responsibility of the managers to
follow these legal requirement. In order to minimise the different cost in proper manner.
 Positive impact: Follow the health and safety laws by the organisation to gain trust of
the customer (Wallace, 2017).
 Negative impact: if organisation do not follow these regulation then it will suffers from
the penalties which is impose by the government.
 Environmental factor: It is responsibility of the organisation to manufacture effective.
They have to follow rules and regulation which aids to produce of healthy products
 Positive impact: Helps to take on the society. Adaptation of environmental friendly
equipment.
 Negative impact: Prohibition of environmental regulation impacts the image of the
organisation (Beaumont, WHITAKER and PEDERSEN,2013).
P5 Internal analysis of organisation for identification of strength and weaknesses
Internal analysis is the methods which is use to determine the strength and weakness of
the organization. In order to remove various factor which hinders the performance of the
organisation. The management decided to conduct SWOT analyses which give internal analyses
about the company. This aids to determine the various strength weaknesses, opportunities, and
threats. It provide opportunity to implement different strategies in order to remove those factor
which reduce the presentation of the organisation in bad way. It helps to attain sustainable
position in the marketplace. SWOT analysis of Nestle is describe below:
Strength:
 World renowned brand: It is renowned as the largest brand company in the food sector
(Cross, and Miller, 2011). It is also helps to generate large number of revenues. It
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implement a single name of brand to provide various products in effective manner. It
helps to aware among various customers about the various types of offerings.
 Good distribution system: Nestle is the company which ascertain perfect distribution
channel which aids to perform different activities in order to penetrate the marketplace.
This methods is included supply chain, street market, door to door market medical outlets
and many others.
 Large workforce: There are high number of employees who are working in the
organisation. It is approximately 340000 for continuously providing the various quality
products in various parts of the world (Kian Chong, Shafaghi and Leing Tan, 2011).
 R&D centre: Nestle has the world biggest food and nutrition research centre in which
500 employees works. It has 21 research centre globally.
Weaknesses
 Brand structure: There are various products which are provided by the Nestle
under the same brand name. This will aim to perform various types of work in the
organisation. It leads to perform different issues in effective manner.
 Legal and consumer issues: There are many issues and problems which are
concerned to the name of Nestle which reduce the performance of the company.
The image of brand is the diminished in the marketplace. Due to which huge
number of customer in order to ascertain large number penalties which was
imposed by the government on Nestle.
 Maggie Controversy: It is declare that due ban impose on the product Maggie
in the Indian market. It reduce the profitability of the organisation at large extent.
This will done due to appearance of the different harmful element in the Maggie.
This will give bad impact on the organisation.
Opportunities
 Expanding market: Nestle has ample number of chance in order to grow the
business in the various agrarian area it helps to robust supply chain and
transformation of unstructured business function.
 Increasing income levels: it has been determined that because of stability at large
extent of external factor and improve the level of income of the person. There are
various chance to earn profit in the stipulated time period.
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 Quality products: Organisation leads to provide the quality products to
customer to ascertain the trust of the customer to ascertain the trust and loyalty
points toward the brand.
 Strategic Alliance: This will leads to ascertain the help of the other company to
achieve their targets for ex. Nestle has the partnerships with many company such
as Coca cola which opens the new way for the growth of company.
Threats
Competition in market: The main threats of the organisation are local and national players
which effects the sales and profits of the firm. This will destroy the image of the brand in the
marketplace.
 Price of commodities: There are other threats which impact on the number of
sales of Nestle is continuous increasing the price of the different commodities. So
there are large number of customer switch to other brand and purchase the
different products of other brand. This leads in reduction of sales of different
products of Nestle and also decrease the margin of profit of the organisation. It
leads in deduction of the performance in the organisation in marketplace (Morrell,
2017).
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
This is the most essential factor of the company to interrelate the various external factor
with their weakness. It provide various opportunities in order to implement different their
strength to ascertain the positive result from these factors. It is responsibility of the management
within an organisation to remove different weaknesses and put their attempt in order to
accomplish different types of issues in order to achieve goals and objectives of the company also,
in order to remove the weaknesses of the company. Though this has large number of the benefit
and gather by the organisation. It helps to ascertain competitive advantages, and generate large
number revenue and maintain large number of shares in the marketplace. PESTLE analyses is
being done by the organisation in order to drive of the external factor.
 Strength: Different legal teams are put their work in the various countries. It aids to
attain effective outcome. It aids to build sustainable brand image
 Weaknesses: it provide various types of operations and services in approximately 197
countries. So it is very hard to interpret the different rules of different nations.
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 Social : This is concerned with to cultural aspects, attitude belief of the consumers.
 Economical: All nations has the different economical situation and various level of flow
of cash in the different nations. There are different factors which are determine the under
the inflation and deflation rate.
 Strength: organisation have the better operation in the Asia where the economical
condition is good.
 Weaknesses: higher international exchange rates in various nations.
 Social: this aids to relates to different cultural aspects attitude and belief of the
customer .
 Strength: R&D team of the organisation enhance their strength it aids to analyses the
different trends.
 Weaknesses: large number of employee working in the organisation which creates lots of
conflict.
 Technological: it is concerned with the technological aspects in order to implement
different new and innovative technology inside the organisation (Yuand Ramanathan,
2013).
 Strength: company used new and innovative technology in order to generate large
number of revenue.
 Weakness: this will enhance the cost of manufacturing of different products in the
organisation.
CONCLUSION
It has been assumed that from the mentioned report internal analyses of the company to
provide various opportunity to the manager of the Nestle to estimate the capability and weakness
of the company that leads to maximise the profitability of the organisation and it also put its
efforts in order to remove the different weakness which is present in the firm. There are different
types of factors which pay a significant role in order to be effective in the organisation. This
factors helps to attain goals and objectives of organisation in a correct manner. The manager of
organization monitor different function which is performed by the worker working in the
organisation. Taking consideration of the of several kinds of micro environment al factor aids to
prepare different types of modern and advanced strategies in order to maintain the effectiveness
of the organisation. In order to execute various types of function organisation needs to maintain
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flexible duty hour and an effective hour in order to achieve high number of revenues in effectual
manner. Organizations put their attempt in order to maintain the performance of different service
which is being provided in accordance to the company to attract large number of customer.
REFRENCES
Books and journals
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