Reflective Analysis Of The Internal Business Environment

This reflective analysis explores the internal business environment and its impact on business activities. It discusses the value chain model and its usefulness, with a focus on Unilever. The analysis covers the internal environment, including processes, resources, and systems. It also reflects on the benefits of the value chain model and its role in improving the flow of information, material, and finances. References are provided for further reading.

Reflective Analysis Of
The Internal Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Value chain model.......................................................................................................................1
TASK 2 ...........................................................................................................................................3
About Unilever............................................................................................................................3
TASK 3 ...........................................................................................................................................3
Internal environment...................................................................................................................3
TASK 4............................................................................................................................................5
Reflection on the usefulness of value chain model.....................................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment refers to the sum of all internal as well as external factors which
impacts on the business activities (Chen, 2018). Whereas, internal business environment defined
to the several components that are present inside the organisation which can effect the choices,
decisions as well as activities of a firm. The aim of internal analysis is to examine the strengths,
weaknesses, competencies, competitive viability, cost position etc. and it considers the resources,
objectives, policies, plans etc. Unilever is chosen as a study of internal business environment
analysis which is a British-Dutch transnational consumer good company. Under this essay study
about the company, value chain model, internal environment as well as provide reflection.
TASK 1
Value chain model.
The value chain model is propounded by the Michael porter in 1985 which is highly
popular in the business world. This model visually represents all activities with equal weight and
focus on the real requirements of a company. As this focused on the systems of an organisation,
how inputs are converted into outputs and buy by the customers. It includes primary as well as
supporting activities (Hamilton, 2018). Primary activities includes inbound logistics,
operational, outbound logistics, marketing and sales as well as services as all these are directly
related to the physical creation, maintenance, sale and support of goods and services. Whereas,
secondary or supporting activities involves procurement, human resource development,
technological development as well as infrastructure of a business organisation that helps in
supporting primary activities. For instance, procurement supports the operations along with the
many activities as well as supports marketing and sales activities with another one.
In primary activities, inbound logistic refers to the whole processes of receiving, storing
as well as distributing the raw materials or inputs within the organisation. Here, the key factor for
creating a value is suppliers relationships (Ibarra, 2018). Operations refers to the transnational
activities which converts their raw material into finished goods which are sold to their potential
customers. Here, the operational system is a key factor for creating value. Outbound logistics is
defined as an activity which is used for distributing products to the end users such as receiving,
warehousing and distributing activities which may be internal as well as external for a business.
In marketing and sales activity the sources of creating value is communication and benefits

which a company offer to their customers and persuade customers to buy from them rather then
their competitors. Services refers to the after sale activity which is based on maintaining the
product value to their customers once it has been purchased (Jia, 2018).
In secondary or supporting activities, procurement is what a business does to get
resources which requires to operates such as getting vendors, negotiating best prices etc. Human
resource management is related to the how a company hire, trained, motivate and retained
employees because people are the important source of value creation within an organisation
(Lozano, 2018). Technological development is associated with the processing as well as
managing the information and protecting the knowledge base of organisation. The source of
value creation are reducing technological cost, technical excellence and advancement. Whereas,
infrastructure allows to maintain daily operations legal, administrative etc. are essential
infrastructure for the company.
(Sources : Porter’s Value Chain, 2019)

TASK 2
About Unilever.
Unilever is termed as a British-Dutch company which deals in the transnational consumer
goods industry and headquartered in London, UK. The company was founded in 1929 by the
merger of Dutch producer Margarine Unie and British soap-maker Lever Brothers and they
operates their operations across worldwide. The company mainly deals into four divisions such
as foods, home care, refreshment and beauty & personal care and it is a Europe's seventh most
valuable company. It is also known as a oldest multinational company which serves their
products in approx 190 countries. As of the 2019, the total number of employees are 155000 who
employed in the company Unilever (Unilever, 2020). The core values of company is based on
the responsibility, integrity, pioneering and respect etc. As the company is one of the leading
consumer goods company in entire world that making as well as selling around 400 brands in
approx 190 countries. The mission statement of Unilever is to add vitality to life and it works
towards the health and well being of the society in order to increase the livelihoods of people.
The company operates globally so the value chain model is required to analyse the company's
requirements in order to provide value to their customers and gain high level of satisfaction with
loyalty. This will help in analysing the internal environment of an organisation especially the
process of conversion their inputs into final outputs which are sold to their users within the
market.
TASK 3
Internal environment.
Internal business environment consists with the processes, activities, resources, systems,
human resources, structure, planning as well as practices which impacts on the company's
performance. For analysing the internal environment businesses use Porter's value chain model
which was developed in 1985 by the Michael porter. It is a set of several activities which a
company carried out in order to create some vale for their customers (Murni, 2018). This tool
helps in identifying the sources of value creation for their organisation and these activities are
performed in order to determine the cost which affects the profit margin of company. The
implementation of value chain model framework is to analyse the significance of functions and
activities as per the role of goods and services delivery procedure. It is essential to Unilever to

realise the performance of activities and porter's divided this model into two category which is
primary and support. The primary activities of Unilever's are includes in manufacturing and
selling goods to their target market. Analysis of primary activities can assist in increasing the
performance of Unilever's as there are mainly 5 elements in primary activities such as inbound
logistics, operations, outbound logistics, marketing and sales as well as services.
In this, inbound logistic helps in maintaining strong relations with their suppliers and
necessary to receive, store and distribute goods. As without this Unilever can suffer from issues
in their product development phase. Operations is essential for examining the operational
functions at a time of getting raw material and the company Unilever is ready to proceed material
into finished goods in order to launch in a marketplace (Porter, 2019). It helps in increasing the
productivity of company, ensures the competitive success of Unilever as well as improve the
efficiency level. Outbound logistics refers to that function through which goods are delivered to
the customers as it includes material handling, warehousing, order processing etc. Unilever can
optimise this activity in order to explore the sources of competitive advantages as well as achieve
growth objectives of business. In marketing and sales activity, Unilever will display benefits
and differentiation factors of their offered products to their customers in order to differentiate
themselves with their competitors which includes pricing, advertising, sales force, promotional
tool and so on. Services includes pre sales and post sales which is provided by the Unilever
which leads in increasing the loyalty of users towards their brand value. The company must
require to avoid damaged reputation of firm by analysing its support activities and use
appropriate tool in order to spread positive word of mouth due to the efficient and quickly
support services.
In addition, secondary or support activities plays a crucial role in coordinating as well
as facilitating the activities of primary value chain. Firm infrastructure refers to a wide range
of activities like quality management, financing, strategic planning and management and so on
that can allow Unilever to optimise the value of entire value chain and facilitate strengthen their
competitive position (Schmidtke, 2018). Human resource management, the company Unilever
can identified them by examining the several aspects such as recruitment, selection, training and
so on. Effective HRM can allow company to minimise competitive pressure from their
workforce. Technology development means most of the activities are based on the support of
advanced technologies in production, marketing, sales etc. as the company Unilever requires to

know about the significance of technological development. For example, automation software,
product design research, technology-supported customer service as well as data analyst. But in
this category the research & development department of Unilever's is considered. Procurement
is the process of buying raw materials or inputs that may consists from supplies, machinery,
equipments, raw materials etc. that are essential for producing a final output as a finished goods.
As Unilever's should consider this carefully in order to optimise the inbound, operational and
outbound value chain.
TASK 4
Reflection on the usefulness of value chain model.
Value chain analysis helps in knowing that how a company adds value to something and
how it can sell their products and services by adding some value to them and generate huge
margin of profitability. This is very flexible tool which is used for strategic management of an
organisation and it can be used by Unilever in order to diagnose and create competitive
advantages on the basis of cost and differentiation to gain a competitive advantages (Wang,
2018). Value chain model helps in knowing about the challenges of businesses which includes
the promise of making commitments as well as promises of customer value as it provides more
attention on those activities which are required to deliver the value propositions to their
customers.
Within the context of Unilever, there are several uses and benefits of value chain analysis
such as: It helps in analysing the sources of competitive advantages as business is a combined
sets of various activities which share some kind of relatedness between them at a great extent.
Whereas, Unilever can not trade entire activities in external marketplace so the approach of value
chain suggests that company can consider all activities as a source of economic rent. These
activities can results in creates barriers for the new entrants as well as create disadvantages of
cost for their rivals in the market. It also assists in examining the complex sets of inter-
relationships as well as interdependencies as Unilever can analyse many links among activities
internally and externally through the lens of value chain model. Internal alignment refers to the
insiders relations among activities and external linkages means relatedness with other
organisation. So the analysis of these inter-relationships can helps Unilever in order to take
advantages from the joint optimisation as well as better coordination.

In addition, value chain model helps in increasing the flow of information as it can help
Unilever to define and exploit many new opportunities as well as minimise external threats. If
company do continuous evaluation of value chain then they can results in filling the gap in order
to manage the flow of information within the time frame which may impact on the company's
productivity and profitability. It also aids in improving the flow of material as the company
Unilever can raise flow of raw materials and final products due to the appropriate sales
prediction as well as increased demand (Sari, 2018). The management of inventory increase as
the company can reduces their delays by tracking all activities throughout the effective supply
chain. In addition, the value chain model helps in raising the flow of finances also as the
customers of modern era placed huge significance on quick responses as well as convenient
access towards the products or services related to the information. Whereas the unpredicted
disruption within the flow of information can impacts directly on the relationship of customer-
supplier. The value chain model analysis of Unilever and its implementation can shows as well
as minimise the bottlenecks of their informational flow which results in effective financial
planning and expenditures.
CONCLUSION
It has been summarised from the above assignment that to create some value for their
customers every company requires to analyse their internal business environment effectively
which helps in identifying the sources and benefits of value creation. In order to know about the
impacts of internal environmental factors a company must need to evaluate and implement
porter's value chain model that helps in analysing the entire elements which creates some value
and helps in providing value propositions. In addition, the company needs to know about the
uses and benefits of value chain model within the organisational flows of material, information
as well as finance.

REFERENCES
Books & Journals
Chen, H. L., 2018. Supply chain risk’s impact on corporate financial performance. International
Journal of Operations & Production Management. 38(3). pp.713-731.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Ibarra, D., Ganzarain, J. and Igartua, J. I., 2018. Business model innovation through Industry 4.0:
A review. Procedia Manufacturing. 22. pp.4-10.
Jia, F. and et. al., 2018. Sustainable supply chain management in developing countries: An
analysis of the literature. Journal of Cleaner Production. 189. pp.263-278.
Lozano, R., 2018. Sustainable business models: Providing a more holistic perspective. Business
Strategy and the Environment. 27(8). pp.1159-1166.
Murni, Y., 2018. Corporate Governance, Value Chain and Financial Performance: An Empirical
Analysis in Indonesia’ s SOEs. International Journal of Contemporary Research
and Review. 9(02). pp.20485-20492.
Porter, M. E. and Kramer, M. R., 2019. Creating shared value. In Managing sustainable business
(pp. 323-346). Springer, Dordrecht.
Sari, M. and et. al., 2018. The Influence of Organization's Culture and Internal Control to
Corporate Governance and Its Impact on State-Owned Enterprises Corporate. Journal of
Applied Economic Sciences. 13(3).
Schmidtke, N. and et. al., 2018, April. Technical potentials and challenges within internal
logistics 4.0. In 2018 4th International Conference on Logistics Operations
Management (GOL) (pp. 1-10). IEEE.
Wang, J., Zhang, Y. and Goh, M., 2018. Moderating the role of firm size in sustainable
performance improvement through sustainable supply chain management.
Sustainability. 10(5). p.1654.
Online
Unilever. 2020. [Online] Available through :<https://www.unilever.com/>.