SWOT Analysis and Business Structures

This assignment explores the relationship between business structure and strategic analysis. It delves into Nestlé's organizational structure using an illustration for visual representation. Furthermore, it applies a SWOT analysis framework to evaluate Nestlé's competitive position, identifying its strengths, weaknesses, opportunities, and threats. The provided resources include references to academic journals and online sources to support the analysis.

BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK 2 ...........................................................................................................................................1
P3 Relation among different organisational functions and their link with objectives &
structure..................................................................................................................................1
TASK 3 ...........................................................................................................................................3
P4 Positive and negative influence of macro environment on business operations...............3
TASK 4 ...........................................................................................................................................6
P5 Internal and external analysis for identifying strengths & weaknesses............................6
P6 Interrelationship of strengths and weaknesses with external macro factors....................7
CONCLUSION................................................................................................................................8
REFERENCES ...............................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Business environment is an essential term that refers all external and internal factors.
These factors are highly effects on business functions and operations including management,
customers, employees, demand and supply and certain regulations of company. In simple word,
in nature business environment is dynamic that means it retains of changing. These are
unpredictable and not easy to predict the perfect nature of future changes and the happenings in
social and economical environment (Asif, Garvare and Ahmad, 2011). It differs from country to
country, region to region and place to place. Business environment is very important in order to
determine threats and opportunities, providing direction for growth, continuous learning, meeting
competitions, image building and identifying business;s weakness and strength. In the present
report, chosen enterprise is Nestle, it is a private organisation that deals in drink and food
products. This assignment also includes voluntary and public sector i.e. Oxfam and NHS. Scope,
Size, purpose and types of different business are also defined in this study. Relationship among
different functions of company and their relation with its objectives and structure are described
in this project. Beside this, negative and positive effects of macro environment on operations and
activities of business are determined as well as SWOT and PESTLE analysis is organised for
evaluating weak and strong point of firm.
TASK 1
Covered in PPT
TASK 2
P3 Relation among different organisational functions and their link with objectives & structure
One of the main aim of the Nestle is to earn maximum amount of profit in limited time
period. Nestle is a food and drink organisation that has strong preferences in all over the world.
They deals in different variety of beverages and confectionery goods which is good for them to
improve their image in marketplace (Bhaduri and Ha-Brookshire, 2011). In Nestle, there are
different department which are work with aim of maximising sales and revenues of enterprise in
allotted time period. Some departments are operation, human resource, marketing and other
responsible division. Each and every section have their own duties to accomplish business
functions and activities in a proper manner. All these department are interrelated with together to
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attain long term goals and objectives effectively. The coordination and relation of these division
assist business employer and employees to attain various tasks in given time frame. There are
some department that play vital role in the success and development of enterprise are as follows:
Illustration 1: Organisational structure
(Source: Organisational structure of Nestle, 2017)
Finance department: Main role and duty of these department is to arrange different
resources of fund with purpose of completing all task in an appropriate manner. One of the
foremost function of this division is to manage all initiatives that are related with financial
activities (Cavusgil and et. al., 2014). In Nestle, this department have some responsibility to
accomplish project or tasks in limited time period.
Human resource department: HRD is also main and foremost department in
organisation that play vital role in the success and development of company. In Nestle this
department has some responsibility to recruit best candidates from pool of applicants. In order to
increase knowledge and skill of employees, human resource manger provide some training and
development session which move in the long term growth of firm.
Marketing department: It is another department in the organisation that play an essential
role in order introduced their new products and creative services in marketplace. For
achievement of this, marketing manager use different tools and techniques such as promotional
mix, this tactics includes some channels such as advertisement, personal selling, publicity,
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sponsorship, direct sale and many other. All these are highly essential for the growth and success
of enterprise.
Production department: It is another department which deals with producing various
variety in its quality goods as per customer demand (Chetwood and et. al, 2014). It also create
coordination or ordination with various distribution or marketing decision. Main role of this
sector is to produce goods to the end user in a systematic manner.
Organisation structure: Organisation structure is classified into mainly four parts which are
determined as below:
Function based: It is one of the main part of the organisational structure which is highly
based on business functions like marketing, HRD, finance and production department.
Geography based: It is another and essential part of the business structure which is based
on regions of countries. It assist to complete customer demand as well as recognise wants and
needs of clients of various regions of countries.
Product based: It is another structure of organisation which is related to product
classification as per the choice of clients. One of the best example is drinking water, it is drink by
large number of client. So the Nestle develop an individual division to render water to their
target audience.
Consumer based: This structure is suited on behavioural approach which is
manufactured by various goods (Gharajedaghi, 2011). In order to complete their needs and wants
of audience, Nestle produce new and flavour items.
TASK 3
P4 Positive and negative influence of macro environment on business operations
Transaction and operation of Nestle are directed in approx 195 nations. Further, business
environment is divided into two parts internal and external which highly influenced on business
activities and performance in a direct way. In this PESTLE Analysis is more important part that
includes different six factors such as political, environmental, economical, social, technological
and legal. All those factors has positive and negative effects which are determined as below:
PESTLE Analysis Description Positive effects Negative impact
Political These factor identify
the stage to which
Consideration of such
forces help in
Strict regulation of
government put
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legal authority and its
policy may effect on
an enterprise or a
particular industry
(Gilboy , 2016). This
force would consider
political stability and
policy as well as
taxation, fiscal and
trade policies too.
preparing strategies
and policies in an
effective manner that
give direction or
guidelines to
administrator for
accomplishment of
long term goals and
also imparts in
increasing sales.
unfavourable effect on
business operations
and functions. One of
the major effects of
political factor is high
tax rate which mostly
impacts on company
and its profitability
ratio.
Economical This factors effect on
the economy condition
and its execution,
which directly effects
on the enterprise and
its profitability ratio.
There are some
elements which are
includes in this such as
employment and
unemployment rates,
interest rates, foreign
exchange rates and
raw material cost.
Economic conditions
or situation of
developed nation is
very good which
support in success of
organisation and also
raise sales figure (Kian
Chong, Shafaghi and
Leing Tan, 2011).
In different nations,
income level of person
is not high and
inflation rate is not
minimum which
effects on company
and its product
demand in a direct
way.
Social These is another factor
that mainly emphasis
on the social situation
and determine
emerging trends. It
assist a marketer to
This factor mainly
focuses on customers
needs and wants which
is good for the
company to easily
fulfil its requirement
Negative effects of this
factors is lack of
education. It put
adverse and direct
effect on business
transactions and
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further know their
audience wants and
needs. This factor
covers education
levels, attitude
changes, culture
trends, changing
family demographics
and variation in
lifestyles.
and increase their
sales. So it is a
positive effects on
business operations
because with the use
of this factors an
enterprise easily their
relation with
customers (Li, and et.
al., 2011).
profitability ration.
Technological It is important factor
that considers charge
of technological
development and
innovation that could
impact an industry or
marketplace. These
factor covers
modification in mobile
and digital technology,
development, research
and automation
(Meiners, Ringleb and
Edwards, 2014).
This factor assist the
business manager in
order to improve their
product quality which
frequently maximise
productivity and
profitability level of
firm in limited time
period.
Use of outdated
technology and system
in business functions
or operations may
maximising cost of
production at the same
period it decrease
performance of
manpower.
Legal It is another important
factor which is mainly
based on government
rules and regulations.
This aspects includes
customer law,
Fulfilment of entire
rules and legislation
regulated by legal
authority which help
in running business
operation smoothly.
If such legislation are
not completed by an
enterprise then it put
adverse and negative
effects on operations
of business. For
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employment
legislation, health &
safety, trade
regulation,
international and
restriction law.
instance, if
employment
legislation are not
attained by the firm,
then they are doest not
support and satisfied
the enterprise.
Environmental These factor mainly
related to the effects of
the environment and
influence of ecological
parts (Sekaran and
Bougie, 2016). This
factor covers climate,
waste disposal, carbon
footprint, recycling
procedures and
sustainability.
Fulfilment of entire
regulations and laws
concentrated to
atmospheres which
support in improving
brand image or
goodwill of enterprise.
If an enterprise not
retaining in view the
business atmospheres
then they will face
some criticism related
to society which
outputs in adverse and
negative goodwill of
company in customer's
mind.
TASK 4
P5 Internal and external analysis for identifying strengths & weaknesses
There are mainly two types of factors such as internal and external that help in
identifying those initiatives which has negative and direct effects on business operations. It
support the administration in analysing threats, weakness, opportunities and strengths of
company. This will assist in retaining strong and long term position of Nestle in marketplace
(Tayur, Ganeshan and Magazine, 2012). Company is a multinational organisation that deals in
different variety of beverages and confectionery goods. In order to achieve sustainability and
growth in marketplace, Nestle require to organise SWOT analysis, it is essential tool which
support in development of opportunities or chances that are present for the firm in future. These
analysis are determined as below:
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Illustration 2: SWOT Analysis
(Source: SWOT Analysis, 2018)
Strength: Nestle is a world famous and well-established organisation with its quality products
and effective services. There are some strong point of company which are determined under this:
Strong presence in geographic area: Nestle has strong presence in geographic location it
means business gives their beverages and confectionery goods in various nations approx 194
countries. Business activities of Nestle are operated in different three geographic locations such
as America, Europe and Asia. This support company in earning maximum amount of benefit or
profits.
Capability about research and development: Research and development capability of
Nestle is very good as compare to other business. The financial division of an organisation
allotted accurate figure of budget or fund for research and development department (Türetken
and et. al., 2011, June). It will help researcher in order to organising accurate market
investigation and understanding the customers demands.
Weakness: In marketplace, there are some weak point which is highly effects on business
performance and profitability ratio. Some are determined as below:
High criticism: It is one of the main weakness which is faced by organisation because of
producing contaminated food, unethical practices and over utilisation of water.
Contaminated product recalls: Various kind of goods are offered by business entity. Due to low
quality, all items are recalled or named in greater quantity. It highly effects on business
profitability ratio and its image. Nestle recall their Maggie products from India.
Opportunities: There are some opportunities for the Nestle which are determined as below:
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Clear labelling of Harmful products: It is one of the best opportunity for the company in
order to apply accurate labelling and packaging of their goods (Vaiman, Sigurjonsson and
Davidsson, 2011). It help in acquiring more attention of clients as they choose to buy items with
proper labelling.
Clearness in physical sourcing: It is identified as a responsibility of an organisation in
order to provide accurate data regarding sources of product resources. This will also render a
better chance to enterprise to keep their position in marketplace.
Threats: Some threats which are determined as below:
Maximised competition in marketplace: Nestle face different difficulties and issues
regarding competition which was increase day by day. So it directly effects on business
profitability and sales. In beverage and food sector, competition is very high which is big threats
of Nestle.
Lack of water quality: In beverages sector, income of Nestle is 25%. In drinks
production, company use more amount of water (Zeng, Li and Duan, 2012). Thus, sales amount
of firm is declines related to poor quality.
P6 Interrelationship of strengths and weaknesses with external macro factors
PEST is a external factor that effects on business strengths and weakness. There are some
benefits which are gathered by an organisation such as profitability, productivity, maximise their
sales rate and many other. Determination of weakness and strengths with external factor which
are determined as below:
PEST Analysis Description Strength Weakness
Political This factor has some
responsibility in
establishment of
enterprise. In this
administration have
some legal team to
infuse with various
legislation of firm.
In this business able to
satin various
legislation in properly.
Nestle render their
services or products in
194 countries so it is
not easy to know the
different law.
Economical In various country, In Asian, business This factor highly
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there are some
economic situation.
There are several
countries which
achieve positive
influence on business.
condition is better so
the strength of
business entity is to
enlarge their operation
in another new place
(Zsambok and Klein,
2014).
effects on business
profitability and
productivity ratio in an
adverse manner.
Social The main aim of
business is to to render
effective and good
quality of goods in
order to retain society
standard.
In this CSR activities
assist in order to
improve their product
quality and also
launched better
goodwill at
marketplace.
Main weakness is low
production quality
which reduce business
image in customer's
mind.
Technological It is another factor that
maximise business
productivity and
improve the product
quality in a systematic
manner.
Implementation of
effective approach
assist to fulfil
customers demand, it
assist to manufacture
various goods in
allotted time period.
Weaknesses of this
factor is, some
employees are not
aware regarding
advanced techniques
which effects on its
performance and
productivity.
CONCLUSION
From the above mentioned report, it can be concluded that business environment is
essential and main part of the organisation, it consists two types such as internal and external
which play important role in identifying of PESTLE and SWOT analysis. Types. Size and scope
of the enterprise is effects the entire performance of company. Different business department and
its relation with organisational structure and objectives also effects on company. Internal and
external factor are interrelated with macro factor which influence on business and its sales ratio.
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REFERENCES
Books and Journals
Asif, M., Searcy, C., Garvare, R. and Ahmad, N., 2011. Including sustainability in business
excellence models. Total Quality Management & Business Excellence. 22(7). pp.773-
786.
Bhaduri, G. and Ha-Brookshire, J. E., 2011. Do transparent business practices pay? Exploration
of transparency and consumer purchase intention. Clothing and Textiles Research
Journal. 29(2). pp.135-149.
Cavusgil, S. T., and et. al., 2014. International business. Pearson Australia.
Chetwood, M. K.,and et. Al, 2014. Transforming a legacy IT infrastructure into an on-demand
operating environment. U.S. Patent 8,775,232.
Gharajedaghi, J., 2011. Systems thinking: Managing chaos and complexity: A platform for
designing business architecture. Elsevier.
Gilboy, G. J., 2016. The myth behind China's miracle. In SEEKING CHANGES: The Economic
Development in Contemporary China (pp. 1-16).
Kian Chong, W., Shafaghi, M. and Leing Tan, B., 2011. Development of a business-to-business
critical success factors (B2B CSFs) framework for Chinese SMEs. Marketing
Intelligence & Planning. 29(5). pp.517-533.
Li, Q., and et. al., 2011. Towards the business–information technology alignment in cloud
computing environment: anapproach based on collaboration points and agents.
International Journal of Computer Integrated Manufacturing, 24(11) pp.1038-1057.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain
management (Vol. 17). Springer Science & Business Media.
Türetken, O., and et. al., 2011, June. Enforcing compliance on business processes through the
use of patterns. In ECIS (p. 5).
Vaiman, V., Sigurjonsson, T. O. and Davidsson, P. A., 2011. Weak business culture as an
antecedent of economic crisis: The case of Iceland. Journal of Business Ethics. 98(2).
pp.259-272.
Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing environment.
Information Technology and Management. 13(4). pp.297-310.
Zsambok, C.E. and Klein, G. eds., 2014. Naturalistic decision making. Psychology Press.
Online
What SWOT Analysis is in simple words. 2018. [Online]. Available through:
<http://pestleanalysis.com/swot-analysis-examples/>.
Organisational structure of Nestle. 2017. [Online]. Available through:
<https://catalog.flatworldknowledge.com/bookhub/reader/15747?e=collins-ch06_s03>.
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