Business and Business Environment Report

This report examines the business environment and its impact on Nestle, a leading food and confectionery company. It analyzes different types of organizations, their legal structures, and the interrelation between organizational departments. The report also examines the positive and negative impacts of the macro environment on Nestle's operations, conducting a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Finally, it discusses how these internal factors interrelate with macro factors.

BUSINESS AND BUISNESS
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 various types of organisations.............................................................4
M1...........................................................................................................................................5
D1...........................................................................................................................................6
TASK 2............................................................................................................................................6
P3 Interrelation between different organisational departments and their link to objectives. .6
M2...........................................................................................................................................7
TASK 3............................................................................................................................................8
P4. Positive and negative impact of macro environment upon business organisation...........8
M3...........................................................................................................................................9
TASK 4..........................................................................................................................................10
P5 Internal analysis of organisation for identification of strength and weaknesses.............10
M4.........................................................................................................................................12
P6 Ways in which Strengths and Weaknesses interrelate with macro factors.....................12
D2.........................................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment can bee defined as a place in which several kinds of activities are
being conducted in an effective and efficient manner. Through this they are also able to achieve
the goals and objectives in a proper manner. There are two kinds of factors which are included in
business environment and they are named as internal and external factors. All these kinds of
factors are having an impact on the functioning of company which includes employees, partners,
customers etc. this is very difficult fir every company to understand that which environment will
suit them the best so after deciding this they will decide their business operations. It is required
to be effective because then only company will be able to earn profits. The company which will
be referred in this report is Nestle which is a food and confectionery company operating in UK
since many years (Osterwalder and Pigneur, 2010) . This report will basically discuss about the
nature, size and scope of the organisations who are working in different parts of the environment.
After this, the interrelationship between the organisational functions and its link with the
objectives of the company will also be discussed. The discussion will also be done on positive
and negative impacts of micro environment on the activities of the company.
TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
It has been analysed that there are ample number of organisations are present in today's
world that works with different objectives. Most of firm's main motive is to make profit at
maximum level through delivering products and services to consumers that are in need. On the
other hand, government of United Kingdom has legalised all the registered organisations and
differentiated them according to their operations, employee numbers, working and so on. Along
with this, it has been located that company usually consist with distinctive approaches and have
totally different legal structure then others. Here, government have given instructions and made
some rules in order to distribute companies in different sector.
Different types and purpose of organisation and their legal structure are given beneath:
Private company
If a common citizen owns a company of at United Kingdom can be considered as private
firm and does work under all the legislations, rules that has been set by UK's government. On the
other hand, government bodies do not have control over these firms and if they wants to expand
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their business they can easily do it because there is no law has been made by government to stop
an organisation in a specific area. Majorly, these are the firms who directly gives employment to
citizens of United Kingdom and aid in enhancing economy of UK.
Under this, reporThey deal in food industry and manufactures products that comes under
food category. Firm was found in the year of 1866 and are dealing in baby and medical food,
coffee, dairy products, frozen food, snacks and so on.
Purpose of Nestle
 Deliver quality products so that to maintain the living standards of its consumers.
 Awaring customers to stay fit and fine through consuming healthy products.
 Give pollution free life to its customers through offering them environmental friendly
products.
Legal structure of private company
 Partnership: When a company have two owners comes under this sort of legal structure.
This sort of company usually earns high profit as two minds of people work where they
both try to enhance their profitability and productivity both at the same time.
 Sole proprietorship: This is sort of company where an organisation is owned by an
individual. Usually this person do not need to share profit and have to bear all the losses
which are being faced by firm.
 Limited companies: Two kinds of legal structure comes under this and these are shares
and guarantee. Under this, owner have full control and do have less liabilities,
Advantages and Disadvantages of private organisation
Advantages Disadvantages
Mostly government bodies do not interfere
under this sort of sector.
Legally getting registered is a time taking
process.
Both owners and investors do consist with less
liabilities.
Business needs funds which is hard to be made
under this secor.
Public organisation
Governmental bodies like military, police, infrastructure, public education, public transit,
healthcare comes under this sort of organisation which is being run by government of United
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Kingdom. On the other hand, mostly high profiled or high ranked person like of military ususally
takes decisions and runs whole organisation.
Under this assignment, NHS has been taken as this firm delivers services to citizens of
United Kingdom. They deal in public healthcare sector.
Purpose of NHS
 Delivering healthcare services,
 Provide quality services in order to enhance standards of living of every single individual
or citizen of UK.
Legal structure of public company
 Central government: Looks all the department that comes under state or city.
 State government: Delivers work and supports central government.
 Local government: Maintains all the necessities and does work in a specific area.
Advantages and Disadvantages of Public organisation
Advantages Disadvantages
Developing standards. Tax are not being paid by citizens of United
Kingdom which may reduce money through
which operations can be done.
Voluntary organisation
Mostly this sort of firm does work and deliver its services in free of cost. On the other
hand, it is much required for these companies to take approvals from government of UK so that
to deliver their services.
Oxfam which is one of most famous charitable trust through which many celebrity and
others are connected and are delivering products and services in order to develop the living
standards of citizens of United Kingdom. Company was found in the year of 1942.
Purpose of Oxfam
 Deliver services to people who are in need.
 Upgrading living standardisation of people of UK.
 Development programmes are being organised on a regular basis.
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P2 Size and Scope of various types of organisations
There is difference between objectives, vision, and mission of companies so before
making policies it is essential to analyse them and take actions in better and effective. It is
important rto make policies which are competent to achieve targets. It is essential to make
policies in better and effective way. This size, scope are effective are as under-
Nestle
 Size- This is one of the best brand in sector of confectionery. These days there are much
competition, so it s essential to make policies which are competent to market. This
company is ion big sector, so it is 8mporatnt t maintain brand of company. There are
various policies which has to be consider. This company was established in 1866 and it
earns large amount of profit. This organisation has 447 factories and this is effective due
to its good operating system. This company operates in about 194 countries to serve its
customer. There are 339000 employees which make aims and objectives in better way.
This is shareholder of L'oreal which is big brand in cosmetic industry. This company has
large amount of profits which is 8.88 billion in 2017 and has large market share.
 Scope- Nestle has numerous products which satisfy demand of different age groups. It is
essential to apply changes which are competent to achieve business objectives. Kitkat,
Maggie, Baby food, medicines, etc. are product which is served by Nestle. Frozen fruits,
milk products, pet food, snakes, etc. are also served by them.
 Vision- Vision is long term objective of organisation. Vision of Nestle is to satisfy
physiological demand of society and this is effective with proper analysis of market.
There is must be nutrition which provides health related assistance to society.
 Mission- Mission of Nestle is to become Asia's best leading chocolate brand. They take
care of quality so there is proper satisfaction to society.
NHS
 Size: NHS is big brand in health and social care and it is important at to make polici4s
which is effective for society. This company was established in 1948. This organisation
provides free services to people residing in society. It is essential to make policies which
are effective to support company. There is 1.5 million people are working under this
brand and this company is under top 10 organisations. They serves good quality of
professionals to serve people indeed.
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 Scope: This organisation has large number of employees hence they provide services
which are effective to perform activities which improves living of standards. They
provide free medical services to improve condition of society.
 Vision: Their aim is to provide services through which they have knowledge of people
suffering from problems. There is change in alteration in companies and it is effective for
achieving targets in better and effective way.
 Mission: Mission of NHS is top swerve society which services which helps to improve
living of standards and this can be effective with change in policies.
Oxfam
 Size: This is the organisation which is big as it covers 20 charitable trust it. It was
established in 1942. Oxfam have numerous workers which work to improve economic
condition of country . There are various volunteers which work to achieve targets on
time.
 Scope: Scope of Oxfam is large as there is requirement of factors which are impressive to
achieve goals in proper and effective way.
 Vision: Poverty shows poorness of country, so being social company, they perform
activities which are helpful in removing poorness and they want to see country without
poverty.
 Mission: Their mission is to come with new and relevant solutions to imp[rove living
standards of organisations.
M1
On the basis of size and scope, there are three types of business associations, i.e. public,
private and voluntary. In a private company, individuals have all rights to take business decisions
and align works to employees; there is no involvement of government. Nestle is a private
business organisation. Apart from this, main aim of public business associations is to stays that
to enhance standardisation, deliver security, develop mind sets and many more of citizens of
United Kingdom. Voluntary organisations are developed the society and in return of it
organisation do not ask for any money or anything.
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D1
Due to change in policies it is effective as per change in effective as requirement. Size
and scope of company is effective as per requirement of company. For an example: Private,
Public and Voluntary, these are some sections in which it has been located that usually most of
enterprises comes under. Away with this, it is very much required for manager to understand all
the legislations and rules which have been formulated by government of United Kingdom so that
to run business without facing any sort of risk factors. Through this only organisation can keep
on hitting their targets in much effective and in efficient manner.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
In this competitive era, firms are tend to acquire new and innovative tools and techniques
so as to achieve high market growth and success (Osterwalder and Pigneur, 2010). This aspects
requires proper collaboration of business units in order to perform all functions in the best
possible manner. It supports in accomplishment of organisational goals and objectives of Nestle
in a short time of span. Below is defined different functions of a corporate entity: - Finance
department – Capital is lifeblood for every business association, as the finance department of the
firm has the responsibility to formulate financial budget for the firm so as to recognise the actual
capital which will be spend on all working activities and procedures. In addition, finance
manager also look out proper allocation of funds on business activities and forecast future profits
of the firm.
Human resource department – It is essential for managers to identify well qualified and
skilled workforce who has capability to complete all tasks and activities in an innovative manner.
Human resource manager of Nestle organise training and development programmes so as to
boost up performance level of employees. Apart from this, the person also look out how to
manage healthy and positive relationships between employees; it improves cultural of an
organisation (Pikka, Iskanius and Page, 2011). Marketing department – Promoting and
advertising products and services of the firm is a vital activity which helps customers to get
aware about products and services. Marketing department formulates marketing campaigns and
works with R & D department so as to gain more and more information about target market. The
department also uses effective communication tools so as to understand needs and wants of
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customers and implement marketing strategies accordingly so as to gain high competitive edge.
Production and operation department – The department of the company is liable for assuring
quality of products and services as well as it also ensure about availability of raw materials so as
to production process can be done in proper manner.
Organisational structure of Nestle - As a multinational business association, several
departments are linked in organisational structure of Nestle. The firm is following matrix
organisational structure, in this all departments of the firm are connected with each other. Due to
the global presence of Nestle, here employees work with colleagues of different departments
who have their expertise in different functions in order to attain vision and mission statement of
the company in a certain time period (Nishitani and et. al., 2012).
M2
Organisational
structure
Advantage Disadvantages
Functional
organisational
structure
Functional organization is that it
leads to more efficiency and speed
of work because a specialist who is
the expert in his or her field is likely
to do the task much efficiently and
effectively than normal people.
there is increased chances of
conflicts among department’s
heads due to various reasons like
ego, same position, budget and
much more which in turn can
hamper the progress of the
company.
Matrix
organisational
structure
Clear articulation of project
objectives
Workable way of integrating project
objectives with functional
objectives
Project members playing bosses
against one another
Increases organizational
complexity
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TASK 3
P4. Positive and negative impact of macro environment upon business organisation
In exhibit innovative world, there are different components show at inward and outer
condition of business association which influences operational exercises in a vast way. Any
progressions in such factors, request ventures to change systems and arrangements keeping in
mind the end goal to remain aggressive and run business in smooth way (Pulver, 2012). For
inspecting negative and positive effect of such factors, administration of Nestle are required to
make examinations by utilizing PESTLE method. It can be expounded as:-
Political Factors: These components are specifically effect on exchange of an organization.
Authoritative principles and controls shaped by administrative bodies are utilized to watch out
for exercises and business tasks so as to dispense with debasements. Alongside this, political
laws are influenced much on those organizations which are worked business in different nations
too.
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Economic Factors: Economical state of a nation impacts on business of an association in
both positive and negative way (Avramenko, 2012). For an example, in expansion period,
obtaining energy of individuals turns out to be high because of abnormal state of pay, thusly, it
helps endeavors in expanding their business execution and increase exceptional yield on venture.
While in flattening period, all procedure goes in negative way.
Social Factors: It incorporates discernments and perspectives of society and individuals
living at there. Because of modernisation, taste and inclination of clients gets changes on
customary interim of time (Kolk, 2016). This would impact on deals execution of as
organization as it request to fabricate imaginative items or include an incentive in existing wares.
Technology Factors: Today without mechanical headway, any association can't make its
encouraging in a required way. Along these lines, so as to increase aggressive progression, it is
vital for all organizations including Nestle to receive most recent innovation in business.
Legal Factors: It is important for chiefs of Nestle to keep refresh its exercises with lawful
conventions. This will help in running business in a smooth way (Bovee, Thill and Raina, 2016).
Legitimate components incorporate business enactments keeping in mind the end goal to keep
representatives from abnormal exercises and segregations held at working environmen. In this
manner, Government of UK has set up different laws like Anti-Discrimination Act, Health and
Safety Law, The National Minimum Wage Act and the sky is the limit from there. Subsequently,
Nestle had consistence its association with all enactments and give sound condition to its
workers also.
Environmental Factors: This area requests a firm to diminish its wastages and also keep a
security measure to pulverize the same in an appropriate way (Karagiorgos, Drogalas, and
Giovanis, 2011). Since, refreshments of Nestle contain high measure of carbonate, thusly, this
firm has confronted a few issues in running business effective. This would impact its image
picture and additionally deals execution contrarily.
M3
PESTLE analysis of NESTLE
 Political factors - Subsequently, business of Nestle is additionally influenced by
government laws. It requests this firm to fabricate high caliber of carbonated drink.
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 Economical factors - Likewise, vacillations in loan costs and practical phrasing, request
undertakings to change techniques and strategies appropriately.
 Social factors - Subsequently, it is fundamental for Nestle to keep alteration in creations
and convey results of extraordinary taste in commercial center according to taste of
individuals.
 Technological factors - This would help in assembling great nature of items too. Be that
as it may, it requires substantial measure of assets which makes negative effect on money
related circumstances of associations.
TASK 4
P5 Internal analysis of organisation for identification of strength and weaknesses
Internal business analysis is an important tool as it helps in identifying the major strong
and weak points of a business organisation. In order to analyse these strong and weak areas
management have planned to conduct SWOT analysis which are useful in generating
informations about the company (Cavalcante, Kesting and Ulhøi, 2011) . This is the most
beneficial factor as it results in weakness, strengths, opportunities and threats. This is also useful
tool as it helps in development of effective strategies that helps in establishing effectiveness in
all their business activities. The SWOT analysis of NESTLE is evaluated below as:
Strengths
 World Notable brand: Nestle is known by its biggest business which is mainly dealing
in food sector. They have generated high revenues by selling their goods all around the
globe. It uses their official brand name in order to sell their goods and enhance their
overall sales and profitability ratios. This is the most important factor as it helps in
developing awareness among customers so they will buy their products as they have
established good brand image at market place.
 Good distribution system: The distribution system of selling goods to customers of
Nestle is very effective and they have opened their retail outlets in many parts so that
customers can easily purchase their goods without facing any difficulty. This is the most
useful method as it consist of street markets, supply chain, medical outlets, personal
selling method etc.
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 Large workforce: There are huge number of workers who are working in order to
manufacture products of Nestle so that customers can easily consume them and there will
not be any shortage in demand. There are approximately 350000 employees currently
working in order to provide quality products to their clients all around the globe.
 Research & Development centres: According to the survey reports Nestle is classified as
one of the largest brand in terms of nutrition and food sector where large number of workers
are working in order to provide quality products to all potential customers (Hair, 2015) .
There are almost more than 22 research centres all around the globe.
Weaknesses
 Brand structure: Nestle is dealing in variety of products under one umbrella and they all
consist of similar brand name. This is the most difficult factor for management in order to
manage their brand name due to variety of conflicts.
 Legal and consumer issues: There are many controversy linked with Nestle products
and this results in affecting the brand image of firms and customers will not buy the
products from market place thus affecting their overall sales and profitability index.
There can be legal penalties imposed upon the company in context to customer’s issues.
 Maggie controversy: It was analysed that quality of Maggie was rejected and this had huge
negative impact on sales and profitability of Nestle. The main reason of rejection in quality
was that it contains lead in excess quantity (Hamilton and Webster, 2015). This is the most
vital factor which results in destruction among customers and they were not preferring to buy
Maggie.
Opportunities
 Expanding market: The firm is having opportunity in order to expand their business
operations in rural market so that their business can be expanded at larger scales. They
have effective supply chain system which result in comfort for customers as they can but
the products from any retail stores.
 Increasing income levels: As firms have established strong brand image so they can
easily earn high profitability also they are having large number of loyal who are only
preferring to buy Nestle products thus opportunity to earn higher profitability index.
 Quality products: The most important opportunity in order to establish strong brand imag
in mind of customers is by selling quality products to them as it helps in retaining loyal
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clients who will enhance their overall sales volume. In this ear people are more
concerned about their health thus they have to majorly focus on quality in order to
achieve loyal customers.
 Strategic Alliances: This is the most fundamental tool as it helps in generating help from
organisation so they will attain their set goals and targets. Nestle is having partnership
with various organisation such as Nestle in order to expand their operations all across the
globe.
Threats
 Competition in market: The major threat is from national and local players as they are
affecting sales and profitability ratios of firms. This results in destroying their current
brand image at market place.
 Price of commodities: Another difficult factor for Nestle is linked with increase in the price
of commodities as they are constantly increasing (Shigang, 2010). This is the main reason as
customers are switching to other brand as compared to Nestle.
M4
SWOT analysis of NESTLE: -
Strength
World Notable brand
Good distribution system
Weaknesses
Poor Brand structure
Legal and consumer issues
Opportunities
Expanding emerging market
Increasing income levels
Threats
Competition in market
Higher Prices of commodities
P6 Ways in which Strengths and Weaknesses interrelate with macro factors
Through inspecting appropriately on elements of full scale condition, administrators of a
firm can quantify effect of these effortlessly on operational exercises. What's more, by leading
appropriate investigation, they can reinforce the framework all the more effortlessly and
additionally diminish shortcomings moreover. Thusly, bosses of Nestle have utilized PEST
investigation to assess the shortcomings and qualities in a legitimate way:
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Political Factors: These variables regularly affect in negative method for business tasks
of an organization, accordingly, bosses are required to make adjustments in arrangements and
techniques according to changes in political tenets. It will demonstrate advantageous in running
business association in a more influenced way.
Conservative Factors: This factor for the most part impacts gainfulness and deals
execution of an organization (Reinhardt and Stavins, 2010). It incorporates factors like
conversion scale, flattening, expansion, tax assessment approach and the sky is the limit from
there. According to current circumstance, efficient state of UK is so great, this, business
execution of Nestle is likewise improved in a huge way.
Social Factors: Through assembling items in a high subjective manner by concerning
more on well-being element of individuals help Nestle in giving high fulfilment to clients.
Alongside usage of assets, likewise demonstrates helpful for generation of this organization.
Mechanical Factors: Nestle needs to make change in innovations, which help in assembling
great appropriately.
Strengths:
Every single element is filled with various strengths and consist of unique features.
Therefore, it is mandatory for NESTLE to consider all the factors in an effective manner so that
high benefits can be seen in both profitability and productivity.
Weaknesses:
On the other hand, it has been located that along with strengths these factors does have
weak points as well which can put impact on decision making process of Nestle (Reed and et. al.,
2013). Therefore, it is very much required for firm to analyse both external and internal market
on a regular basis and take actions through which profitability can be enhanced.
D2
Macro and micro environmental factors are interrelated with each other. If a firm has
good political relations then it seems as its biggest strength in terms of expanding markets. Apart
from this, due to economic recessions disposable income of people get lower; its seems major
weakness of business organisations.
CONCLUSION
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From the given task report, it can be expressed that for achieve set business objectives and
target it is extremely basic for a business element to first examination the earth and analyze the
different elements exist in that. One of the primary advantage of this examination is that it enable
business to firm in define a compelling business methodology which give aggressive advantage
to element. Apparatus called SWOT examination can be use by element to distinguish its main
qualities and shortcoming. Advance there is an instrument called PESTLE which can be use by
firm to distinguish and look at the main considerations exist in business condition.
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REFERENCES
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Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
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Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
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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).
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pp.324-344.
Pulver, S., 2012. Business and the Environment.
Avramenko, A., 2012. Enhancing students' employability through business simulation.
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Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
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Online:
Business Environment. 2018. [Online]. Available
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