Report on Business Environment of Nestle Company

BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
ASSIGNMENT 1.............................................................................................................................1
2.1 How economic system attempt to allocate resources effectively.....................................1
ASSIGNMENT 2.............................................................................................................................3
1.1 & 1.2 Purpose of different type of organization and extent to which Nestle meets the
objectives of its stakeholders..................................................................................................3
1.3 Responsibilities of Nestle and its strategies employed to meet them...............................4
2.2 & 2.3 Impact of varied policies and other regulatory mechanism on Nestle...................4
3.1 & 3.2 Market structure determining the pricing and output decisions of Nestle and its
response to market forces.......................................................................................................5
3.3 How business and cultural environment shape behavior of Nestle..................................6
4.1, 4.2 & 4.3 evaluating the significance of international trade, economic integration and
global market as well as its implication.................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The business environment is affected by the internal as well as external factors. These
factors put an impact on the strategies of the company. In order to make the employees of
organization productive it is important for the company to develop a good business environment.
This report focuses on varied organizational purposes of a business and further analyzes
the national environment in which the business is operating. Moreover, the behavior of
organization in its market environment is evaluated briefly.
ASSIGNMENT 1
2.1 How economic system attempt to allocate resources effectively
Decisions regarding resource allocation are significant because there is scarcity of
resources across the world. Difficulty in allocating of resource can be solved with the help of
economic system at work (Burke, 2013). Economic system is comprised of labor, distribution,
products, services etc. Problem of resource allocation is universal and persists in every nation.
Allocating resource is an important aspect for every country as it has to tackle the issues like
what, how and for whom the goods and services are to be produced. There are varied economies
where the resources are allocated in different manner.
The command economies do central planning for effectively distributing resources. . The
problem of scarcity is resolved by government or any agency which are appointed by
government through the method central planning. The government here command or direct the
resources which are to be consumed in a specific manner. For instance, government can use its
power to force citizens for paying taxes.. The command economy has an advantage over the free
market economies as it can bring in a more coordinated system of distributing resources at the
time of crises such as natural disaster or wars. Free rein market also fails in allocating resources
efficiently so in the final resources are allocating by government to counter balance such failures
(Fernando, 2011).
The free enterprise economy is the one in which there is limited government
interventions and is linked with private ownership for the means of production. The system
follows the decentralized form, where individuals look forward in pursuing their own goals
without government restrictions. There is a mutual relationship between the producers and
consumers and it relies on the market to solve the economic problem. Resources distribution is
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done on the basis of interaction of self-directed and free market forces. This system interprets
that, what to produce is determined by consumers, how to produce is determined by producers
and who receives the produce depends on the buying power of consumers. The resource
allocation is determined through self-interests in the free market economies. In case of command
economy, there is a restriction on allocation of resources by the government. In free market
economy it is influenced by the various interactions of market forces (Haigh and Brubaker,
2010).
Mixed economy is a combination of command economy and free market economy. The
market economies have a distinct privatized sector in which the resources are allocated on the
bases of market forces. It also consists of a distinct public sector, where the resources are
allocated mainly by the government in sectors such defense, fire services and police. Health care
is a sector which is a combination of both the elements that are market and planning.
The Transition economy was developed after collapsing of command economies in
1980's. These economies are those which move from command economy to free market
economy. This economy has been isolated from the global economic community during era of
centrally planned economy. Here, the distribution of resources pattern has been shifted from
command economy to free market economy.
The public and private sector initiative is a new concept where the economy is held by
both public and private enterprise. The resources are shared on the basis of joint agreement. This
is a modern method in which private sectors are given the opportunity to share the risk with the
private sector (Diefenbach and Sillince, 2011).
Private Finance Initiative- PFI is a method of giving funds in major capital investments
where the private organization have been contracted to manage or complete the public projects.
The resources are thus allocated by private sector in fulfilling public projects.
The efficiency of allocating resource in an economic system can be seen in the manner in
which they can achieve their economic objectives.
ASSIGNMENT 2
1.1 & 1.2 Purpose of different type of organization and extent to which Nestle meets the
objectives of its stakeholders
A business organization has to make effective decision regarding its coming establishments for
overall prosperity or its sustainability.. The organization is comprised of group of people who
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