BM461 CW2 Portfolio: Analysis of Key Drivers Impact on Nestle

This BM461 portfolio report provides a comprehensive analysis of Nestle's internal and external environments, focusing on identifying key drivers that significantly impact the company's operations. The report utilizes SWOT analysis to assess Nestle's strengths, weaknesses, opportunities, and threats, considering factors such as brand reputation, market competition, and changing consumer preferences. The main body delves into the operational impact of these drivers on various functional areas, including human resource management and marketing. For instance, the report examines how external factors like competitor salary offerings and evolving consumer behaviors influence these departments. The report also discusses the importance of adapting to changes in customer tastes and preferences, and the need for strong marketing strategies. In conclusion, the report emphasizes the importance of strategic analysis and proactive measures for Nestle to capitalize on opportunities and overcome challenges presented by its environment.

BM461 CW2
PORTOFOLIO

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK...............................................................................................................................................3
Identifying key drivers from external and internal environment.................................................3
Operational impact analysis.........................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
Books & Journals:........................................................................................................................7

INTRODUCTION
Business environment get more complex and that’s why it becomes very necessary for
the organisation that issued identify key drivers from internal and external environment (Cao and
Chen, 2019). This report gives a detailed analysis of key drivers which impact on organisation
functions. In this context, Nestle is undertaken to show the impact of these drivers on their
functions. It also covers the operational impact analysis on function areas of company.
MAIN BODY
TASK
Identifying key drivers from external and internal environment
Every organisation effects by internal and external environment and that’s why it
becomes very necessary for a company to identify key drivers. A company is formed by many
outside and a side factors that’s why it affects from both environment (Nodehi and et. al., 2021).
In that case, companies need to analyse factors which helps to overcome the challenges and
reduces risk. It can be done with the help of SWOT analysis which gives a detailed analysis on
internal and external factors. Nestle is the large organisation which is the Anglo Swiss milk
company. Nestle provides many products and services such as confectionery, ambient dairy,
coffee, juices, breakfast cereal, etc. That shows it provides varieties of product in over the entire
world. It becomes necessary for company to perform a SWOT analysis as they are functioning in
global market.
Strength Weakness
 Nestle has a reputed brand name in food
and beverages sectors as they offer high
quality of products across all over the
 Nestle is a retail store and that’s why
they have a weakness of price
fluctuations (Li, Liu and Li, 2020).

world.
 They have large number of varieties of
production services for offering to
consumers.
 It is identified that Nestle sell their
products in approximate 189 countries
which shows that it is a very highly
diversified company (Sriharan,
Pechmon and Kampetch, 2020). It will
help in reduces risk and uncertainty.
 According to the Forbes it becomes one
of the most valuable brands which have
highest profits, market value, assets and
revenues.
They did that because of their
competitors suggest Tesco, Walmart,
etc.
 It is identified that it has many social
criticism in respect of misleading
labelling, privatise water, lawsuit for
chocolate making, using child
labour, etc.
 Nestle has a matrix structure that
means they belong to a same
umbrella which becomes very
challenging administration to deal
with individual brands.
 They are found in a illegal activity of
water controversy in which they
pumping millions of litre in six
Nations.
Opportunity Threats
 Day by day online business is rising and
that's why Nestle open their E-
Commerce site which becomes an
opportunity to increase their sales.
 Strategic alliances with large giants is
also become a great opportunity for
company in order to increase their
profits and revenues.
 Nestle is criticize under misleading
labelling so that they have an
 Nestlé’s production is mainly
depending on the usage of water and
it is found that country face water
scarcity.
 Competition becomes some major
threat for company because day by
day their giant also provides same
type of quality with reasonable
prices.
 Competition increases at threat of

opportunity to improve their practices
by providing trustworthy information.
substitute as more goods gives a
choices to customers.
Operational impact analysis
External and internal environment gives a great impact on organisation functions and
operations. It can be understand with the help of Nestlé’s example. Nestle also faces many
threats and opportunities from internal and external environment (Appiah and et. al., 2018). All
drivers that come from external and internal environment gives a great impact on the functional
areas of organisation which includes human resource management, marketing, etc. It can be
understand with the help of separate explanation which are as follows:
Human resource management
Human resource management is important functional area of organisation as it recruits
and selects talented employees in the organisation so that they can achieve their goals and
objectives. But it is found that external and internal drivers effects on their performance which is
not good for a company. For example, Nestle found that the competitors give high amount of
salary to employees which effects on their employees (Dubnitsky and et. al., 2020). Employees
get distracted from the effect of other organisation because they found employees get higher
salary in in other companies. It directly impact on the performance and sometimes it create
conflicts between employees and organisation. That's why external environment gives a great
influence on functional area such as human resource management. It becomes very tough for HR
to find those candidates which are passionate about their work. Day by day competition is rising
and that’s why companies need high skilled employees but it becomes very tough.
Marketing
External and internal drivers is also gives a great impact on marketing because daily
changes in customers tastes and preference becomes very tough for Nestle that how they can
satisfy them. Satisfaction is the ultimate goal of organisation and companies need to identify
customer’s behaviour about their products and services. It is not easy for organisation due to high
complexity in consumer behaviour. For that purpose, companies need those marketers which
have a capability to understand consumer behaviour and formulate strategies in order to promote

their goods and services which successfully attract customer’s attention. Nestle need to make a
strong marketing team so that they can deal with the regular changes in market trends.
The above analysis shows companies need to take a corrective action in order to deal
with key drivers of external and internal environment. There are many functional areas of
organisation which get affected due to external and internal environment factors. For that reason,
they should be aware about all changes.
CONCLUSION
It can be concluded from the above discussion, that there are many key drivers of external
in internal environment which affects company’s operations and functions. It can be creating
opportunities as well as challenges but companies need to take and immediate action so that they
can grasp opportunities and overcome with the challenges. The success and growth of
organisation depends on the analysis of key drivers which are emerging due to external and
internal environment of organisation. This should not avoid all factors because it gives a great
impact on company. For that reason, they need to use SWOT analysis tool.

REFERENCES
Books & Journals:
Appiah, K. M., and et. al., 2018. External environment and SMEs investment in the Ghanaian oil
and gas sector. Economics and Sociology, 11(1), pp.124-138.
Cao, H. and Chen, Z., 2019. The driving effect of internal and external environment on green
innovation strategy-The moderating role of top management’s environmental
awareness. Nankai Business Review International.
Dubnitsky, V. I., and et. al., 2020. JUSTIFICATION OF THE CHOICE OF INDICATORS IN
MODELS FOR ASSESSING THE LEVEL OF ECONOMIC SECURITY OF
INNOVATIVE AND ACTIVE ENTERPRISES IN CONDITIONS OF UNCERTAINTY
OF THE INTERNAL AND EXTERNAL ENVIRONMENT.
Li, M., Liu, Q. and Li, X., 2020, October. Research on the Combination of Architectural Design
and Internal and External Environment Planning Based on Small Building Space. In IOP
Conference Series: Earth and Environmental Science (Vol. 585, No. 1, p. 012098). IOP
Publishing.
Nodehi, H. K., and et. al., 2021. Strategic Analysis of Community Participation in Primary
Health Care in Iran and Presentation of Promotion Strategies Using Internal and External
Environment Assessment Techniques. Asia Pacific Journal of Health
Management, 16(1), pp.77-85.
Sriharan, P., Pechmon, T. and Kampetch, P., 2020. Analysis of Internal and External
Environment of Community-based Tourist in the North of Thailand. Dusit Thani College
Journal, 14(3), pp.95-109.