Business Environment Analysis and Impact on ALDI and Nestle Operations

This report presents a comprehensive business environment analysis focusing on the supermarket chain ALDI and the food giant Nestle. The analysis begins with an introduction to the business environment, outlining internal and external factors that influence business decisions. The report then delves into the organizational structure of Nestle, examining the interrelationship between different organizational functions like marketing, human resources, finance, and production, and how these functions relate to the company's objectives. It explores the positive and negative impacts of macro-environmental factors, including political, economic, social, technological, environmental, and legal factors, on business operations. Furthermore, the report includes a SWOT analysis of Nestle, evaluating its strengths, weaknesses, opportunities, and threats, and discusses how these elements interact with external macro factors. Overall, the report provides a detailed examination of the business environment, offering valuable insights into the strategic considerations for both ALDI and Nestle.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship among different organisational functions and link with organisational
objectives and structure...............................................................................................................1
TASK 3............................................................................................................................................3
P4 Positive and negative impacts of macro environment has on business operations................3
TASK 4............................................................................................................................................5
P5 Internal and external analysis.................................................................................................5
P6 Strengths and weaknesses interrelate with external macro factors........................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................8
.........................................................................................................................................................9

INTRODUCTION
Business environment is a combination of different internal and external elements which
impact on actions as well as decisions which are taken through an entity. Change in clients,
technology, market trends, suppliers, government and some of the legal systems are come in this.
In addition to this, it is a responsibility of manager to determine all factors and include them in
prepare the effective business related strategies or policies. External as well as internal both
factors impact on business related operations. In internal factor includes rules, culture, structure
and policies and firm can control on these all given factors. On the other hand on external factors
there is no control of an organisation (Kang, Lee and Kim, 2010). This present business report is
based on the ALDI organisation which is a supermarket chains with more than 10,000 stores in
almost 20 countries. Under this mention report discuss about various kinds as well as purpose of
different organisations and also their legal structures. Relationship among various organisational
function and they all are related with structure of firm will be mention in given report. In
addition to this, negative and positive affect on macro environment on business operations will
also be discussing under this assignment.
TASK 1
Covered in PPT
TASK 2
P3 Relationship among different organisational functions and link with organisational objectives
and structure
Nestle is one of the biggest food organisations in all over the world. It produces as well as
provide different types of food goods to consumers in order to satisfy their demands and
requirements (Kian Chong, Shafaghi and Leing Tan, 2011). The main motive of this organisation
is to capture large share of market and generate more profit as comparison to its strong
competitors. In products of Nestle organisation involve medical food, breakfast cereals,
confectionery, ice- cream, snacks, baby food, frozen foods and many others. This firm conduct
its business at global level and it has different functions like for an instance finance, operations,
human resource and marketing. The functions of every department are varied from the each
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other. All functions are related with the organisational structure and objectives. An interrelation
of different functions of every department given below as above:
Marketing department- Under this, it is a responsibility of marketing manager is to
carried out an investigation in context to get accurate information regarding current market
trends (Klapper, Lewin and Delgado, 2011). For interact with consumers, Nestle firm uses
different communication modes to aware consumers about existing or new services or products
of company in better manner. In addition to this, efforts which are done through marketing
department enhances sale of products of firm and also maximise profit level.
Human resource department- The main work of this department is to choose as well as
recruit qualified and capable employees to fill vacant job position. The main functions which are
carried through this department are performance appraisal, prepare compensation package,
documentation etc. There are various efforts which are done through management of human
resource for recruit capable candidate for specific job.
Finance department- The work of this department is to prepare different budgets as well
as allocation of finance in proper manner of various departments so that they can implement their
operations at workplace in better manner.
Production department- Production of services and goods for fulfil demands of
customers. Activities and operations of production department are connect with objectives of an
entity (Buckley and Casson, 2010). It is the responsibility of this department is to produce goods
on the basis of needs of consumers and make improvement in process of production.
Organisational structure- It refers to a way in which company implement its activities and
produce goods for the final customers. There are various kinds of organisational structure given
below as above:
Geography based- Under this, segmentation of firm take place according to the different
regions (Klapper and Love, 2010). In context to this, Nestle organisation ascertain needs as well
as demand of customers which are live in various regions.
Function based- Under this organisational structure, firm is segmented according to
different functions which are performed through firm. The main functions of Nestle company are
marketing, human resource. Production, finance and many others.
Product based- In this, segmentation of Nestle company is to be taken place according to
different products which are produced through firm on the basis of different needs of consumers.
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Nestle organisation produce as well as provide different kinds of goods to buyers like for an
instance baby goods, breakfast cereals, ice- cream, snacks, confectionery etc. So, this
organisation structure is segmented according to various goods.
Consumer based- Under this, behaviour of different buyers remain major basis behind
any segmentation of company. It encourage an innovation to satisfy different demands or needs
of consumers.
TASK 3
P4 Positive and negative impacts of macro environment has on business operations
As Nestle organisation deals at large scale and all necessary activities or operations of
this firm can impacted through many factors which are available in this business environment. In
addition to this, differentiation in any kind of component affect on business operations either in a
negative or positive manner (Machuki and Aosa, 2011). Under this, main factors which come in
macro environment are political, economical, social, technological and environmental. Each firm
develop its effective business policies as well as plan at the time of this. If company will consider
all given factors in better manner then profit level will be increased. Alterations in the external
components affect on business related activities in positive and negative ways mention below as
above:
Political factors: Under this, rules, policies and various regulations are developed through
government of United Kingdom in order to control all business related activities of firm to
control an economy, main factors which affect on commercial activities like for an instance
export and import of goods, excise duty etc.
Positive impact- At the time of prepare effective business policies, Nestle organisation
include all these kind of factors and develop positive brand image at market place by enhance
profit level.
Negative impact- When government make regular changes in policies then it develop
some obstacles in expand of business operations.
Economic factor: This component shows interest rate, inflation, deflation rate under which
Nestle organisation operate its business activities as well as operations (Mahmood and Hanafi,
2013). Under this, positive economic situation enhanced profit level of firm and assure its
expansion in effective manner.
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Positive impact- Under this, those countries which are developed have better economic
situation and it is necessary for Nestle to analyse before begin its all business operations and
through this company can achieve its aims and goals in an effective manner.
Negative impact- In this, high inflation rate can reduce buying power of people which
reduce sale of goods and services of Nestle.
Social factors: It is an effective or necessary macro element which include age, beliefs, culture,
lifestyle, behaviour, religion and attitude of consumers. All these given factors impact on buying
power of customers and these affect on sales of goods and services of Nestle firm.
Positive affect- Include requirements and demands of customers at the time of producing
process which enhance sales of services of firm and generate more profit (Bryman and Bell,
2015).
Negative affect- Variations in behaviour, attitude of consumers which directly impact on
sales of Nestle firm's products.
Technological elements: Firm uses advanced technology to make process of production more
effective and attractive.
Positive affect- When Nestle organisation update its technology then the process of
manufacturing will be make better and helpful in attract the large number of consumers.
Negative affect- Use of obsolete technology can enhance aeration cost.
Environmental factor: Different kinds of organisations develop various services and goods at
the time of company make liable in order to adopt the minimum wastage.
Positive affect- When Nestle company use various methods as well as raw materials
which make an environment safe and develop positive brand image. It enhances sales of goods
along with services of Nestle (Ullah and Lai, 2011).
Negative affect- When Nestle firm neglect all these given aspects concerned with safe5ty
of an environment then firm face several disuses for society as well as people.
Legal factors: It covers all necessary legislations which are necessary to follow through Nestle
firm in order to operate business in particular area.
Positive impact- If Nestle organisation follow all necessary legislations or regulations
then it will be helpful in support of firm.
Negative impact- Neglect of all legislations increase chance of any penalty as well as
legal action which can affect on reputation of company.
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TASK 4
P5 Internal and external analysis
Both internal and external analysis aid a firm in identifying those factors which create
negative impact on operational activities. In addition to this, it will also help in determining
opportunities through which an enterprise can gain its profitability. Thus, in context with Nestle,
these types of analysis help in gaining strong position at marketplace (Bovee, 2010). For this
context, SWOT analysis of this organisation is used to evaluate its strengths, weaknesses,
opportunities and threats in the following manner:-
SWOT Analysis of Nestle:.
Strengths Weaknesses
 Products of Nestle are available in
most part of the world i.e. near
about 200 countries which shows
its strong geographic presence. It
helps in giving tough competition
to rivals and increasing high
profitability of the business
(Welford, 2013).
 In addition best quality of food
items and beverages with
tremendous taste also aid in
keeping interest of customers for
long period of time.
 Many rumours has been spread in
context with nutritional value of
Nestle’s products like Maggie as
some rodents and contaminated
ingredients have been found. This
thing has created a negative impact
on brand image as well as sales
performance of this firm.
 Due to increase in competition, this
firm has invested a lot on
advertisement of new products in
market. This would leads a less
return on investment.
Opportunities Threats
 Due to intense situation of working
life and preference of people,
demand of pre-packed food having
nutritional value has increased like
energy food drinks. It leads to
enhance sales performance of
company.
 Companies like Mars, Hershey,
Mondelez are giving much
competition to Nestle and giving
best quality of their nutritional
products in order to snatch position
of this firm at marketplace.
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 Due to increase in online retailing,
gives opportunity to Nestle to open
its outlet easily in new market era
and sales its items easily.
 Awareness of health among people
leads them to avoid chocolates and
products which increase level of
sugar and obesity. It would impact
P6 Strengths and weaknesses interrelate with external macro factors
Management of Nestle firm conduct the PESTLE analysis in order to acknowledge all
market situations as well as environment under which business is to be conducted. In addition to
this, Nestle company needs to use effective devices in addition to know about weaknesses and
also strengths of firm. There is a requirement that top management of Nestle company should use
the effective strengths for use and deliver goods and services in better manner and overcome
from all weaknesses (Werther Jr and Chandler, 2010). Under this, Nestle firm can use all
resources in better manner by using its strengths and enhance profit level. High sales, increase
profitability and competitive advantage are some of the different advantages those are
incorporated through company. In addition to this, external macro factors of Nestle are examined
through an administration to determine all strengths as well as weaknesses in context to market
situations are given below as above:
Political factors- Under this, it is essential that management of Nestle company make functions
of firm on the basis of regulatory bodies of United Kingdom under which company operate its
business. Government of United Kingdom develop effective legislations related to political
stability as well as taxation. Nestle firm provide its services in various nations so needs to
prepare effective strategies as well as policies under which firm implement its all activities. It is
helpful in increased sales along with profitability.
Strengths: This firm developed its own team to make changes in existing systems on the
basis of effective regulation and rules of government. It provides benefit to firm to increase
image of firm at market place.
Weakness: Nestle firm operate its business in many different countries so for this there is
a need for management to prepare effective policies. They should have better knowledge
regarding all legations.
Economic factors- Inflation, exchange and interest rate are the different components which
affect on activities and operations of business. It is essential that firm should have proper funds
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which are available for conduct all functions of business in proper manner. Nestle company
operate its business in different countries in order to organise and manage all activities and
conduct business on the basis of economic condition of country.
Strengths: An Administration of the Nestle company need to reduce activities of
business in different countries on the basis of situations. Market condition of Asian market
Weakness: Due to different interest and exchange rate of currency as well as economic
condition of nations of those countries in which Nestle has operated its business create much
impact on its profitability.
Social factors- Since people are becoming much aware for their health, therefore, sales
performance of Nestle has impacted a lot (Wild, Wild and Han, 2014). In addition to this, present
firm also requires to deliver high quality of its services and serve them on time.
Strengths: By delivering good qualitative products as per need of consumers help in
enhancing brand image of this firm.
Weakness: Concentrating more on ingredients and manufacturing process of each
product requires much time and cost.
Technological factors- This firm needs to adopt high techniques and latest technologies in
production and operational activities so that better outcomes can be obtained.
Strengths: Modify existing technologies aid this firm to produce adequate quality of
products.
Weakness: Adoption of new technologies and techniques requires management to give
training program to employees.
CONCLUSION
It has been concluded from the above given report that manager is responsible behind
determine of internal and external factors which negatively affect on all business related
operations as well as buying decisions of consumers in an effective manner. Scope of operations
of each firm are varied from each other because of change in purpose as well as size. Under this
given report studied about various purposes and types of firms like for an instance private, public
and voluntary. Negative and positive affect of macro environment on operations and activities of
firm has been discussed in this mention business report.
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REFERENCES
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Enterprise Revisited (pp. 147-176).
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based ontologies.Expert Systems with Applications. 37(4). pp.3274-3283.
Kian Chong, W., Shafaghi, M. and Leing Tan, B., 2011. Development of a business-to-business
critical success factors (B2B CSFs) framework for Chinese SMEs.Marketing
Intelligence & Planning.29(5). pp.517-533.
Klapper, L., Lewin, A. and Delgado, J.M.Q., 2011. The impact of the business environment on
the business creation process. InEntrepreneurship and Economic Development(pp. 108-
123). Palgrave Macmillan UK..
Klapper, L.F. and Love, I., 2010. The impact of business environment reforms on new firm
registration.
Machuki, V.N. and Aosa, E., 2011. The influence of the external environment on the
performance of publicly quoted companies in Kenya.Prime Journals, Business
Administration and Management (BAM).1(7). pp.205-218.
Mahmood, R. and Hanafi, N., 2013. Entrepreneurial orientation and business performance of
women-owned small and medium enterprises in malaysia: competitive advantage as a
mediator.International Journal of Business and Social Science. 4(1).
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requirements engineering.Journal of Computer Information Systems. 51(3). pp.21-28.
Welford, R., 2013.Hijacking environmentalism: Corporate responses to sustainable
development. Routledge.
Werther Jr, W.B. and Chandler, D., 2010.Strategic corporate social responsibility: Stakeholders
in a global environment. Sage publications.
Wild, J., Wild, K.L. and Han, J.C., 2014.International business. Pearson Education Limited.
Online
SWOT Analysis of Nestle, the popular food brand,2018. [Online]. Available through:
<http://pestleanalysis.com/swot-analysis-nestle/>./
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