Analyzing External Environmental Factors

The assignment requires analyzing the external environment of businesses to determine their strengths and weaknesses. It involves identifying different types of companies running in current market trends and making accurate plans for achieving desired targets. The external environment factors need to be observed and analyzed regularly to understand their positive and negative impacts on operational activities.

BUSINESS & BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure. .1
P2 Size and scope of different organisations..............................................................................3
TASK 2 ...........................................................................................................................................5
P3 Interrelation between different organisational departments and their link to objectives.......5
TASK 3 ...........................................................................................................................................6
P4 Impact of macro-environmental factors.................................................................................6
TASK 4............................................................................................................................................7
P5 Internal analysis of organisation for identification of strength and weaknesses...................7
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses 8
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
Business environment can be described as several internal and external factors that
impacts on operational activities or task of an organisation. These components are required to be
observed, analysed and evaluate so that an appropriate action can be taken by company for their
several positive and negative effects. It basically involves a combination of all these elements
which includes clients, suppliers, competitors, owners, improvements in technology, laws &
government activities, mark et trends and economics conditions (Reed and et. al., 2013). This
report is based on Nestle which is a Swiss transnational food and drink company and
headquartered in Vevey, Vaud, Switzerland. It was founded by Henri Nestle, Charles page and
George page in the year 1866, almost 152 years ago. They provide several products such as baby
food, dairy goods, coffee, breakfast cereals, confectionery, bottled water, ice cream, pet foods
and many more. This assignment will discuss about different types of organisations with their
purposes, size and scope. It will also described about several factors which impacts on
operational activities.
TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
There are different types of organisations which are running in present scenario of market
having their various types of structures and cultures as well. It includes basically private, public
and voluntary sector that has their own purpose and legal structure involving several rules or
regulations to conduct their business properly. These different sector companies are described
below:
Private company
The private companies can be considered as those business concerns which are owned by
private individuals and there is no interference of government authority in decision making, these
firms are also required to follow some of legislations but in limited manner (Reinhardt and
Stavins, 2010). For example, Nestle is kind of private enterprise which provides several eatables
items to customers at global level. They have their own purpose and legal structure according to
that they run their business properly for generating desired outcomes son regular basis.
Purpose of Nestle
1

 They have purpose to provide better quality of food products to attain satisfaction of
customers in an appropriate manner.
 They have an essential reason to attain growth of business and become greatest
confectionery company at global level.
Legal structure of private company Partnership: - This can be described as to establish a business with partners in which
investment, profit and other aspects are all distributed between business partners
properly. In this case, two or more people can run single firm in sharing to earn more
profits through overall efforts. Sole proprietorship: - The Sole proprietorship includes an individual who take care of
whole business in terms of operating different kinds of activities trough building more
effective as well as efficient strategies to carrying out business properly to generate
required outcomes on regular basis (Shigang, 2010).
 Limited companies: - This refers to those businesses which has separate legal entities
along with structure as well which should be followed by them properly.
Public organisation
The public organisations are owned by government authorities and provide required
product or service to citizens of country to completing their regular needs and demands in an
appropriate manner. These companies provides an opportunity of employment to people and they
carrying out business to fulfil desires of people living in the nation. For example, NHS is public
health care organisation which put efforts to boost up standards of living or people by improving
their health status in proper way to get required outcomes.
Purpose of NHS
 They have purpose to render medical facilities at correct time to solve health issues of
people (Karagiorgos, Drogalas and Giovanis, 2011).
 To maintain health standard of citizens through providing more effective treatment.
 To become best medical company by establishing an efficient medical techniques to gain
satisfaction of people.
Legal structure of public company Central government: - Public organisations are under control of central government in
terms of making decisions.
2

 State government: - State government of that particular area can interfere in which they
company has established their operational workshop.
 Local government: - In involves the local government authority to monitor regular
activities in correct manner (Kolk, 2016).
Voluntary organisation
The voluntary organisations does have any specific structure and it is for social welfare in
which charity funds are collected to provide required products to poor people. It includes several
types of campaigns and events which should be conducted by volunteers in more effect6ive as
well efficient manner to gain desired outcomes. Money collected in charity is used to render
desired goods or services to poor people. This will help them to improve their standard of living
and fulfil needs which cannot be completed by their own. For example, Oxfam is kind of
voluntary company which put efforts to fulfil basic need of poor people.
Purpose of Oxfam
 They have major purpose to render facilities to poor people which facilitate to reduce
poverty on country.
 To save people from natural disaster such as tsunami, floods, earthquake etc.
P2 Size and scope of different organisations
Different types of companies are running in current situation of changing trends of
market. There is a huge competition between these various types of organisations. Each and
every firm has it's own structure, culture, size, scope and visions which are considered according
to their nature of business and setted target, an enterprise made an accurate strategy or policy to
carrying out several operational activities and tasks properly to create desired outcomes on daily
basis (Nishitani and et. al., 2012).
Nestle
Size: - It is a kind of company that provides food and beverages to customers at global
level. It render several products such as baby food, dairy goods, coffee, breakfast cereals,
confectionery, bottled water, ice cream, pet foods and so on. This company was founded in 1866
in Switzerland to manufacture required goods to fulfil needs of people. They put their efforts in
effective manner so that they can produce an efficient goods to attain satisfaction of clients and
make them loyal for brand.
3

Scope: - Nestle is dealing at international level and provide food products to people fir
completing their expectations as per needs, wants and demands properly. It has 447 branches of
this organisation to manufacture required products and has number of staff members around
339000 working in company (Osterwalder and Pigneur, 2010). Several goods are considered as
major products like frozen foods, tea, coffee, bottled water, Maggie, Kit-Kat, baby foods etc.
they have an important purpose of providing an appropriate service to customer so that they can
attain more market share through earning better profits.
Vision: - The vision statement of Nestle is to provide required food items in better way to
fulfil expectations of people and delivering improved shareholder value by being preferred brand
for customers, employees and suppliers.
Mission: - Nestle is leading nutrition, health and wellness company. It has a mission
statement of “Good Food, Good Life” which means to render best tasting, most nutritious food in
wide range of food and beverage categories. They have an aim to provide best eatable times to
clients in order to fulfil their desires in an appropriation manner.
NHS
Size: - The NHS id health care organisation which put an effective as well as efficient
efforts to sort out health problems of people living in particular area. It was established in the
year 1948 in England, UK. They have better techniques and practices to render an appropriate
treatment to patient so that their health issues can be solved properly.
Scope: - This health care company has well expanded business and it's branches are
spread in different areas so that health problems of people living in different areas can be easily
solved (Osterwalder and Pigneur, 2010). The scope of NHS is that it renders wide range of
services at large level to solve well being problems of citizens in accurate way.
Visions: - The vision statement of NHS is to become an outstanding trust that deliver an
excellent healthcare to people in appropriate way to solve problems of patients.
Mission: - The mission statement of this healthcare organisation is boost up well being of
population which facilitate to building a healthier future of citizens and country.
Oxfam
Size: - The voluntary sector has an aim to reduce any societal issue to improve standards
of living to poor people who are not able to fulfil their basic needs. Oxfam has an important aim
to decrease factor of poverty from the nation through putting an accurate efforts. It was
4

established in the year 1942 for helping people to solve their problems (Pikka, Iskanius and
Page, 2011). They also protect people from natural disasters like floods, tsunami, earthquake etc.
Scope: - The scope of Oxfam is that it has several policies to reduce factor of poverty
from the country and make it well developed nation in world. They conduct a research through
effective surveys to know about social issues and then put proper efforts to sort out them in
accurate way.
Vision: - The vision statement of Oxfam is to protect people from social issues and
reduce poverty through providing better quality of life to them.
Mission: - The mission of Oxfam is focus on needs of poor people and render service to
them for completing their basic requirements.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
There are different types of functions which are carrying out in an organisation for
completing required targets and objectives in order to generate better outcomes. Various types of
activities or tasks are designed as per desired goals and objectives of Nestle to complete them
properly. It is necessary to make an accurate plan of action for completing desired targets of
company in correct way (Pulver, 2012).
Marketing department: - This an be described as that section of company which deals
with different promotional activities and sales. They have a responsibility to observe and analyse
present trends of market along with needs, wants, demands, taste and preferences of customers to
convey this information to production department. This will facilitate to manufacture an
appropriate product properly. Nestle have to set sales target and build an accurate strategy to
complete the same with profits.
Production department: - This refers to the manufacturing department of the company
in which desired product or goods are produced in bulk as per desires of customers. It is
necessary to carrying out production of products according to needs and preferences of clients to
complete their expectations. Nestle have to manufacture required goods or service to fulfil their
requirements along to achieving their satisfaction for a long time.
Human resource department: - The term human resource refers to work force of an
organisation who is responsible for various achievements of the company. It is necessary to hire
an appropriate candidates for required designations so that they can fulfil roles or duties
5

properly. Allocation of tasks or processes should be done according to field of expertises of
people so that maximum outcomes can be generated (Avramenko, 2012). Nestle have recruit
well qualifies and experienced persons so that they can complete desired roles of particular
designation in correct manner to create outputs. Targets and objectives of this firm must be
made by nature of business and efficiencies of manpower.
Organisational structure
Function based: - Different types of functions are required to completed and for that it is
mandatory to establish an effective as well as efficient organisational structure to conduct these
tasks properly. Nestle have to maintain an appropriate culture of company so that required
targets can be completed in accurate manner.
Product based: - Every company has their major products which are manufactured on
regular basis in bulk to supply in market so that demand of clients can be fulfilled properly.
Nestle have to establish an effective strategies or policies which supports in production of
product or service.
Geography based: - People belongs to different geographical areas has different types of
requires so that it is necessary to make policies to fulfil their desires to grab more number of
target audience. Nestle have to determine different needs of people living in rural, hilly, urban
areas and make effective techniques to complete expectations of all of them.
TASK 3
P4 Impact of macro-environmental factors
The external environment factors are necessary to be observed and analysed to determine
their positive as well as negative impacts on operational activities on regular basis. Nestle have
to focus on these elements and study them, on regular basis to reduce several threats and enhance
certain opportunities properly. This will facilitate to improve productivity and profitability as
well. These factors are described below their impacts on an enterprise (Bovee, Thill and Raina,
2016).
Political factor: - This can be described to rules and regulations of political parties which
are mandatory to be followed by firms to run business properly. Positive impact is that it will
facilitate to choose correct pathway to conduct activities. Negative effects are faced b6y Nestle
due to high tax rates etc.
6

Economic factor: - It involves changes into economical factors that involves currencies
rates, GDP, inflations, growth rates etc. Positive impact is that it gain information about
economic condition which helps to take required actions properly. But fluctuations in several
elements affect the business (Cavalcante, Kesting and Ulhøi, 2011).
Social factor: - This refers to various types of cultures, religions and values which are
believed by various kinds of people. Positive impact is that it will help to gain trust of customers
but negative one is that it will create problems for company.
Technological factor: - The term technology refers to various kinds of techniques and
software which are helpful to conduct different procedures in an appropriate way to gain desired
outcomes. Technological factors provide benefits as it helps to carrying out different procedures
or activities easily in limited period of time. But it has a negative impact that a single minor
mistake can spoil the whole data to damage the overall project.
Legal factor: - This refers to legal rules and regulations which are necessary to be
followed by Nestle for running a business properly. These legislations are helpful in avoiding
negative aspects but it is time consuming many times.
Environmental factor: - There are various types of environmental issue which are raised
due to operational procedures of an organisation. Taking care of these problem helps to enhance
image of Nestle in front of customers but if it is not focussed then it will affect business.
TASK 4
P5 Internal analysis of organisation for identification of strength and weaknesses
There are different types of strengths and weakness of a company which are necessary to
be determine through carrying out an effective as well as efficient analysis. A SWOT analysis is
mandatory to be conducted by different kinds of organisations so that strong and weak points of
a company can be determined, this will facilitate to take an appropriate action towards risk and
uncertainties to reduce negative impacts. It involve several elements such as strengths,
weaknesses, opportunities and threats which are mandatory to be studied so that an accurate
action can be taken to gain required results properly. Nestle have carrying SWOT analysis which
is given below:
Strengths Weaknesses
 This can be described as strengths of  It can be described as certain weak
7

company which can be utilised to
conduct operational procedures to
attain desired results. For example,
Nestle put efforts to improve efficiency
in standard operating procedures and
manufacture at low cost.
 It involve that better techniques
available in company can be used to
enhance image of brand which facilitate
to improve number of customer and
sales of Nestle.
points which are necessary to be
overcome with them otherwise these
can create problem within an enterprise
(Hair, 2015). For example, Nestle is not
able to render consistent quality in food
items.
 They have weak implementation of
corporate social responsibility which is
important to improve brand image of
Nestle in front of government and
customers.
Opportunities Threats
 It is observed that market trends are
rapidly changing which facilitate
several opportunities that helps to gain
better growth of business.
 Nestle have better distribution
techniques which support to conduct
this task properly.
 High competitive scenario of market
impacts on profitability of company
which is require to be reduced by
appropriate efforts of nestle.
 Various types of competitive firms
facilitates more competition which
should be reduced.
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
There are various types of factor which are necessary to be studied so that their impacts
on operational procedures and activities can be determined properly. It is mandatory to observe,
analyse and evaluate effects extremal and internal factor so business environment because they
impacts on business procedures in regular basis. These factors involves political, economical,
social, technological, environmental and legal element which has certain positive as well as
negative impact on an organisation.
Nestle have to study these factors properly in regular basis before launching any new
product or implement any change or modification. This will facilitate to make an appropriate
strategy or policy to get required outcomes (Hamilton and Webster, 2015). It will provide
8

support to reduce threats or risk factors and help to enhance profitability of an organisation.
Impact of external factors and nature of business will facilitate to know about strengths and
weakness of an organisation. This will help to take an accurate steps by Nestle so that problem
can be avoided easily and profits will be boost up properly. It is necessary to determine strong
and weak points of company as strengths can be utilised to attain better growth of business and
weaknesses can be decreased by taking correct actions.
The politically stable environment of a particular place provides an opportunity to Nestle
for expanding their business and earn better profits. Economic factors like high taxation can be
considered as threats that increase overall cost implementing in business to run it properly.
Social values of people facilitate to innovative new styles of products to earn better profits.
Technological trends are helpful for company but single minor mistake can spoil everything and
is included in threat. Putting efforts to save natural environment helps to boost up image amongst
clients and excess legal regulations become barrier in increasing profitability of Nestle.
CONCLUSION
The above report had concluded that business environment can be described as several
internal and external factors that impacts on operational activities or task of an organisation.
There are different types of organisations which are running in present scenario of market having
their various types of structures and cultures as well. Different types of companies are running in
current situation of changing trends of market. It is necessary to make an accurate plan of action
for completing desired targets of company in correct way. The external environment factors are
necessary to be observed and analysed to determine their positive as well as negative impacts on
operational activities on regular basis. There are different types of strengths and weakness of a
company which are necessary to be determine through carrying out an effective as well as
efficient analysis.
9

10

REFRENCES
Books and Journals
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Reinhardt, F. L. and Stavins, R. N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
audit in Greek Hotel Business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Nishitani, K. and et. al., 2012. Are firms' voluntary environmental management activities
beneficial for the environment and business? An empirical study focusing on Japanese
manufacturing firms. Journal of environmental management. 105. pp.121-130.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Pulver, S., 2012. Business and the Environment.
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
11