Business and Business Environment Report

This report analyzes the business environment of Nestle, a global food and beverage giant. It examines the internal and external factors influencing Nestle's operations, including political, economic, social, technological, legal, and environmental factors. The report also conducts a SWOT analysis to identify Nestle's strengths, weaknesses, opportunities, and threats, and explores the relationship between these factors and the company's macro environment. Desklib provides past papers and solved assignments for students.

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
(Covered in PPT).........................................................................................................................2
TASK 2............................................................................................................................................2
P3 Explain the relationship between different organisational functions and how they link with
objectives and structure...............................................................................................................2
TASK 3............................................................................................................................................4
P4 Identify the positive and negative impacts of macro environment on the business
operations....................................................................................................................................4
TASK 4............................................................................................................................................6
P5 Conduct internal and external analysis of organisation to identify strength and weaknesses
.....................................................................................................................................................6
P6 Explain how strengths and weaknesses are interrelated with external macro factors...........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Business environment can be defined as all of the internal and external factors which
affects on the company and its functions. In this included employees, management, competitors,
government, cultural, political, legal, customers, technological, supply and demand as well as
business regulations that have direct impact son the company's goals or objectives (Agarwal,
and Grassl, 2012). These factors are beyond the control of the business which affects on
functions and operations so it is necessary to formulate better plans for dealing with such forces
in an effective manner. This report is based on Nestle that is a Swiss transnational company and
deals in food and beverages. It is situated in Vevey, Vaud, Switzerland. This assignment will
explain the different types and purpose of organization with their size and scope. It explain the
relationship between organizational functions and identify positive or negative impacts the
macro environment on business. There will conduct internal and external analysis for identifying
strengths and weaknesses of company and determine that how these are interrelated with macro
factors.
TASK 1
(Covered in PPT)
TASK 2
P3 Explain the relationship between different organisational functions and how they link with
objectives and structure
Organizational Structures: A valuable definitive structural scenario can be considered
as the structure which includes works out, for instance, coordination, supervision and task parcel.
The legitimate structure chooses how the organizations perform the functions. In united
structural scenario the ideal organizations have the majority of the essential initiative controls.
They also have a tight controlling grip on the workplace and division and in decentralized
structural scenario, the fundamental authority controlling is appropriated and the workplace and
division have particular degrees of opportunities. Therefore, it can be analysed that every
company use different organisational structure and functions for operating business with an
efficient way, it is necessary to have better organisational structure that facilities in performing
entire tasks or objectives as well as attains set targets. Nestle firm used Hierarchical structure
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which support in communicating with every and each individuals regarding any business
informations in well manner.
Organisational Functions : Production function : This is the most important function of organisation in which
company decides to make effective goods and services for manufacturing so that
customers needs and wants are to be fulfilled. Nestle is dealing with varieties of foods
and beverages items including baby food, coffee, tea, ice cream and many more in the
international market so that more customers are to be attracted and satisfied. Production
department support in achieving particular goals or objectives in an effective way. Marketing function : It play a vital role in increasing sales volume and market shares
with an efficient manner. It is essential in providing necessary information among
targeted audience and help to attract them towards firm so that more sales can be made.
Marketing department support to the Nestle firm in promoting their goods and services at
international market. Nestle use several promotional activities such as banners,
hoardings, celebrity endorsement, TV, commercial advertisements and many others for
the purpose of creating customers awareness with efficient way. Marketing department
also support in attaining predetermined goals or objectives with the help of meeting
targets. They provide information about customers demands, competitors, fashions etc. so
that company can make favourable decision for production of goods and services. Human resource functions : Human resource are most important component for
performing various tasks or activities with an accurate manner. Human resource manager
play a crucial role in building good workforce within organisation. They are responsible
for recruitment, selections, training and development and performance appraisal of
employees so that predefined goals or objectives can be achieved. It is necessary to have
effective workforce and better skilled persons who can perform entire role as well as
tasks in an effective way. Information Technology : In the modern era, Information Technology has wide scope as
it is only a responsible function who can perform several activities with system and
manage entire business operations in an effective manner. Information Technology
department take responsibility to manage all tasks with utilising available resources and
also support to record data so that better outcomes can be attained. Nestle is selling
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number of products and dealing in international market so they always consider the IT
functions to connect with global market. IT manager ensure about the data recording,
keeping it safe and secure, manage websites or internet sources for providing effective
informations to the target audiences in an appropriate way.
 Finance functions : Finance is backbone of company or business. Without financial
services, business cannot be operate and run effectively. Therefore, it is necessary to
arrange and manage funds and utilise them in an adequate manner. Finance department
play an important role in running entire business functions and operations with an
effective manner. Nestle provide number of products or services at international level so
it is necessary to manage funds and arrange them in well manner so that effective
outcomes can be get. Finance manager consider the proper budgets and prepare plans for
allocating available funds among different activities so that goals or objectives can be
achieved. They perform different activities including tax payments, salary pay scale for
employees and record or maintain financial data while running business in an appropriate
manner.
Therefore, it can be analysed that every business function perform various activities and
responsibilities as well as have significant impacts on the organisation success in an appropriate
way. Nestle also depends on the organisational functions that perform different tasks so that
better objectives can be achieved.
TASK 3
P4 Identify the positive and negative impacts of macro environment on the business operations
Pestle analysis of nestle
Political factors : It includes the government policy impact on the organisation or its related
industry. These factors are trade, fiscal, foreign exchange currency and taxation policy.
Positive Impact : When government imposed corporate social responsibility to the
organisation than it will also benefit the nestle.
Negative Impact : If the government is not stable than business have to make changes
according to the new rules and regulation (Pahl, 2012). It will affect the profitability of the
nestle.
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Economical factors : these factors impact on economy performance, which directly affect the
organisation profitability and working. It includes interest rates, inflation rates,employment rates
, foreign exchange rates, raw material rates and so on.
Positive Impact : As per the economic fluctuation company can set its pricing strategies
that facilitate in earning more profit.
Negative Impact : Due to different economic policy the company has to face many
problem regarding supply of this product (Aterido, 2011). If the price of raw material increase
than there is a increase in the cost of product.
Social factors : Organisation should produce the goods on the basis of customer needs and
wants. These factors include education level, fashion, cultural level, attitudes change, change in
lifestyle ,demographics and so on.
Positive Impact : In today's time people are attracted to the product which is less salty
and sugar free. For them this kind of product is very beneficial as it keep them fit.
Negative Impact : Due to increase in healthy habits there is huge down fall in the sale of
nestle. Customers get attracted to the healthy food and beverages which provide less sugar. If the
nestle want to grow than they should after the ingredients of their product.
Technological factors : In today' time technological innovation and development create a large
affect on market or industry (Hallward-Driemeier, and Pagés, 2011). These factors include
change in digital or mobile technology, automation and research and development. Nestle should
focus on new technology of production with the new methods of distribution and logistics.
Positive Impact : Technology advancement increase sales of the nestle because through
digital marketing individual able to get the product information and quality by sitting at their
home
Negative Impact : When nestle use digital marketing to promote their product then their
information can be used by the rival firm to make a strong presence in the market and to earn
competitive advantage.
Legal factors : An organisation before preceding their work in some nation firstly understand
their rules and regulation. It includes employee legislation,consumer law ,health and safety,
international laws, data protection act and so on.
Positive Impact : In the effort of reducing excess sugar UK government levy a sugar tax
in the budget of 2016. The aim of this tax is to provide healthy product to the customer of the
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society. The tax target is Pepsi,Coca-Cola and nestle who was engage in the production and
distribution of soft drink which have excess sugar.
Negative Impact : New rule was passed in UK which ban the advertisement of the
product as high fat,salty product to the children under 16. The company mainly customers are
children which decrease their sale.
Environmental factors : In present scenario customers get attracted to the organisation which
fulfil their environmental responsibility and does not harm them (Auzair, 2011). These factors
include climate, recycling,carbon footprint, waste disposal and so on.
Positive Impact : Nestle is very active in the handling and taking care of environment .
They are praised by the NGO such as Greenpeace for its effort in tackling climate change and for
zero deforestation in the nation in which they work.
Negative Impact : Society get affected from the waste of plastic and aluminium
packaging material. Competitive firm of nestle like Pepsi, coca cola are indulging in recycling of
plastic bottles it create pressure on the company to recycle.
TASK 4
P5 Conduct internal and external analysis of organisation to identify strength and weaknesses
Nestle is Swiss company that deals in various foods and beverages products in the
international market. They are offering number of products including baby foods, candy, coffee,
dairy drinks and many more so number of customers are attracted towards company
(Avramenko, 2012). Nestle company has various strengths and weaknesses that can be identified
through conducting internal and external analysis. It will be supportive in formulating better
plans and strategies as well. Here is SWOT analysis of Nestle firm such as:
Strengths:
 Nestle is world's largest manufacturing firm and it is highly diversified company that
operate functions in different market areas or sector.
 It is serving varieties of brands and give strong ability to the economics due to dealing ins
different segmentation of market as well.
 There are good relationship of Nestle with various established powerful brands including
Coca-Cola, Colgate and General Mills.
 Company has strong ability in research and development which is essential in growing
business in better manner.
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Weaknesses:
 There are high demands of customers regarding Nestle products that can create critical
situation for company in sudden changes in consumer behaviour and tastes.
 Nestle products are depends on highly advertisements that support in attracting number of
customers so company have pay for promotions (Adeoye and Elegunde, 2012).
 There are founded some less fashionable foods as well as old fashioned food items which
customers do not prefer so it is responsible in declining sales.
Opportunities:
 There are various opportunities for the Nestle firm as they can expand their business at
various countries so that market shares can be increased.
 Company can consider the online transaction with the help of different websites so that
more customers can be attracted with an effective way.
 There is opportunity for Nestle in developing and growing industry by providing different
new products as well as launch new items in the market so that gaols or objectives can be
achieved.
 Growing middle class people in various countries can be beneficial for the Nestle in
increasing demands and sales volume that facilitates in earning higher profits (Bar-Isaac,
and Shapiro, 2013).
Threats:
 There are various competitors available in the international market such as Sunsburry,
Cadbury and many more who captured the market.
 There are some pressure on Nestle because Large retailers such as Walmart is focusing
on providing several products or services at reasonable prices to the customers.
Therefore, the pressure is about cutting costs or prices on particular items (Burns, and
Winter, 2011).
 Changes in consumer behaviours, tastes, preferences and choices also become a biggest
threats for the Nestle that directly impacted on the sales volume.
P6 Explain how strengths and weaknesses are interrelated with external macro factors
Political factors – Nestle is running its business in approximately 194 countries. It is abide the
several government rules and regulations of different countries that's why it has to pay distinct
taxation, import and excise duties to enter in the market.
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Strength –
 The core strength of Nestle is to be a renowned brand in several countries.
 Before entering in the new market it put efforts to fulfil the government rules and
regulations. Therefore, Albeit Nestle is known for its promotion activities according to
the government health and quality standards.
Weaknesses
 In the past years, it has been in controversies regarding taxation.
Economical factors – As countries has diverse economy that's why they need to develop
the policies according to the different target market (Boons, and Lüdeke-Freund, 2013). Nestle
should analyse the inflation rate and buying power of the customers in the targetted segment.
Strength
 Nestle plans according to the income level of the citizens as it helps them to take a
fruitful decision.
Weaknesses
 Suppliers affects to fulfil the demand of customers due to variation in the income level of
different countries.
Social factors – Nestle promotes the societal value through its advertisements of Maggi and Ice
Tea products (Chow, 2011). It adopted the family time sharing concept to influence the
customers which changes their purchasing behaviour.
Strength
 Nestles has products a high reputation among the consumers through it advertisements
and affordable prices.
Weaknesses
 Recently, it faced controversies for chemical use with Maggi in India.
Technological factors – It refers to the technological advancement to enhance the productivity.
Strength
 Nestle products are available on several e-commerce website for the users.
Weaknesses
 The new technologies should be adopted to raise the productivity and profitability of
Nestle.
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CONCLUSION
From the above report, it has been concluded that business environment is surrounded
from various environmental factors that have major impacts on the organisational functions and
operations. In this included internal and external which are beyond the control. Therefore,
company formulate better plans and strategies for the purpose of dealing with such situations
with adequate manner. This report has covered various types of organisation and different
purposes such as public, private and voluntary etc. It also described the size and scope of those
particular organisations which perform number of functions as per the business nature in
accurate way.
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REFERENCES
Books and Journals
Agarwal, R., Grassl, W. and Pahl, J., 2012. Meta-SWOT: introducing a new strategic planning
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growth? Business environment and employment growth across firms. Economic
Development and Cultural Change. 59(3). pp.609-647.
Auzair, S., 2011. The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels. International Journal of Business and
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Mahmood, R. and Hanafi, N., 2013. Entrepreneurial orientation and business performance of
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