Comprehensive Business Environment Analysis Report: Nestle Company

This report provides a comprehensive analysis of the business environment surrounding Nestle, a global food and beverage company. It begins with an introduction to the business environment, emphasizing its impact on organizations and the importance of sustainable development. The report then delves into the purpose of different types of organizations, including public, private, and voluntary companies, followed by an assessment of how well Nestle meets the objectives of its various stakeholders, such as customers, finance providers, government, suppliers, and employees. It further explores the responsibilities of organizations and their strategies, including maintaining a healthy and safe environment, ethical considerations, environmental concerns, and business responsibilities. The report also examines economic systems, including free market, centrally planned, and mixed economies, and analyzes the impact of monetary and fiscal policies, as well as competition policies, on business organizations. The report concludes by discussing pricing and output decisions in different market sectors, such as perfect competition, monopoly, and oligopoly, and explains how demand and supply shape Nestle's operations. Overall, the report offers a detailed overview of the external factors influencing Nestle's performance and provides insights into its strategic considerations.

BUSINESS
ENVIRONMENT

INTRODUCTION
The Environment is the key element which affect all the businesses and people as
well. Every company needs to maintain environment in the interest of people. Its a
responsibility of Government, public and private company in order to grow sustainable
development. Nestle company Ltd is the world's largest food producer which deliver various
types products for people in a worldwide. Its headquartered in Switzerland. Around billions
of people receive its goods and services and enjoy from so many many years. Nestle has
around 451 factories which are operated in approx 192 countries. The company needs to
manage its operation in order to grow sustainable development in the interest of people.
Monetary, fiscal and competition policy having a impact on existence of organization.
Entities needs to make strategies and planning which assist them in smooth running of
performance. International trading can boost up their performance in international market and
provide employment to lots of people. Various types of competition market are based on
market demand and supply (Iskanius and et.al, 2010).
TASK 1
1.1 Purpose of different types of organizations.
Various types of companies which are able to work according to fulfil the needs of
customer in order to maintain environment and grow sustainable development. These various
organization are as defined below:
 Public companies- These types of organisations are incorporated by
government and main aim is providing its services to people. The main aim of
these entities is social service and provide goods and services in a reasonable
rate. Public companies have a responsibility to maintain their business
environment in order to protect the interest of people (Xue and Ren, 2010).
 Private companies- Private sector is incorporated by the private person there
is no influence of government. The main purpose of these entities is providing
goods and services to people and earning more profits as well. These are the
profit making organizations. Some examples of private sector are partnership
and sole proprietorship. An individual person has a ability to incorporate new

company and run it as well. Nestle is provides so many goods and services in
various countries with out any kind of help of Government.
 Voluntary companies- These entities refers to different types of persons come
together with a common objective and run a business. The main purpose is
making more profits and distribute them equally between them. Members of
this sector are come voluntary without any force and make a company with a
set of common goals (Klapper and et.al, 2011).
1.2 Extent to which an organization meets the objective of stakeholder.
Nestle company having a various types of stakeholders who are able to influence
existence of the company. Stakeholder can individually or jointly may affect the performance
of entity in international market. Various types of stakeholders of Nestle are as following:
 Customers- They play a important role in any company. Nestle provide
various types of goods and services in to satisfy the needs of their customer
and earn more profit. Consumer's demand and requirement are affect more
through which sale of company is affected (Bughin and et.al, 2010).
 Finance provider- Persons who help Nestle financial are play a vital role in
company. Its a main source, through which any organization purchase raw
material from suppliers and converted them into finished product after that
deliver them in international market for their customers.
 Government- Various types of policies, rules and procedures are framed by
government which having a impact on performance of Nestle company. Like;
they set policies and rules for production limit and export and import related
which affect Nestle. Because it is a international food producer company
which deliver products in various countries (Chavis and et.al, 2011).
 Suppliers- Whenever, Nestle going to start production process they purchase
raw material from their suppliers and converted then into finished product.
Suppliers are able to affect performance of company in international market.
 Employees- Staff members or workers assist Nestle company Ltd to meet its
desired goals and objective. Organization needs to pay them bonus and
incentive for their collective efforts towards entity.

1.3 Responsibilities of organization and their strategies.
Every company having their set of responsibilities and strategies which support them
to meet business goals and objective. These can be helpful for Nestle company Ltd to
complete task on time or fulfil in a timely and efficient manner (Hamilton and Webster,
2015). Strategies are the forecasting element which support company to reduce contingencies
or conflicts. Some responsibilities are as aligned below:
 Maintain health and safety environment for employees- It is the biggest
responsibility of every organization. Because workers are able to fulfil task
on time in order to achieve pre planed goals and objectives. Government
framed some rules related to health and safety of worker Nestle company
have to follow them. At the time of production process entity have to provide
safety equipment to them for their good health (Al-Debei and Avison, 2010).
 Ethical consideration- Nestle needs to maintain work environment according
to workers culture, nature and tradition in which they feel comfortable and
perform work effectively and efficiently.
 Environment concern- Every organization needs to perform work in order to
manage good environment. They need to follow various laws and regulations
which define some guidelines for safekeeping it.
 Business responsibilities- Managers and leaders have to perform their task in
order to increase their revenues and earn more profits (Babatunde and
Adebisi, 2012). They needs to complete task in timely and efficient manner.
 Interest of stakeholder- Nestle company Ltd have to perform according to
the interest of their stakeholders. These persons having a impact on existence
of company and able to affect the overall performance of an entity.
TASK 2
2.1 Economic system attempt to allocate resources effectively.
Every country has their own economic system which are implemented on the basis of
customer demand. It is a tool which Nestle attempts to meet consumers' needs and demand
through providing products ans services. Economic activities are assist companies in
production of goods and services and identify the costumer demands (Tan, 2011).

 Free market economies- In this system, purchaser and suppliers are perform
mutually. In this market consumer are free consume goods whatever they want
and producers are free to produce whatever they think on which earn more
profits (Halbert and Ingulli, 2011). It means what to produce is evaluate by
the consumer, how to produce is evaluate by the producers themselves in
which they seeks more profits and for whom to purchase is based on the
purchasing power of consumers. This is rely in a market to solve the problems.
 Centrally planned economies- In this economy government take some
decision for allocation of resources in the interest of people. Further,
producers and customer are not able to make decisions. But they have to
follow rules and regulations which government should framed them related to
production and distribution of goods and services.
 Mixed economies- This type of economies are followed by various countries
on order to remove basic problem related with allocation of resources. It is a
combination of two economies like centrally planned and free market. In this
market partly decision are take by government and rest of them by the
companies itself (Foerstl and et.al 2010).
2.2 Impact of monetary and fiscal policy on business organization.
 Fiscal policy- Through fiscal policies government able to control money from
the country. It having a impact on existence or performance of the Nestle
company Ltd. Further, when legal authorities increase level of tax rate then
products and services are become costly and customers' earning power will be
affected. And when decrease the tax rates goods are become cheap and
customers easily purchase them as well. Through this policy government can
able to control economic system and maintain economic condition as well
(Blanchard and Mencken, 2011).
 Monetary policy- Through this policy government control money from the
country. At the time of inflation in the country, government increase the rate
of taxes which reduce the purchasing powder of customer through suppliers
earn less profits. But when tax rates are decrease customers are able to
purchase more goods at cheap price and producer earn more profits. It can

directly impact on performance of Nestle company in international market
(Aula, 2010).
2.3 Impact of competition policy.
Most of the organizations are follow the competition policy to sustain their
competitive advantage. Through this policy Nestle company Ltd can able to improve their
performance. Customers gets variety of products and services at a cheap rate which increase
their level of consumption and producers can improve their earning efficiency. Competition
policy having a impact on Nestle Ltd through which company can increase its market share
and provide product in market at low price. With the help of this policy organizations can
increase their number of customer and level of earning as well. Some various mechanism
which are affect the existence of organization. Here, these mechanism are as define below:
 Office of fair trading- This mechanism is work in the interest of consumers. It
protect the interest of people and help to reduce competition as well. The main
purpose of this law is reduce the unfair practices from countries. It ensures that
transactions between companies are must be fair through which people get
goods at reasonable price.
 Standard customer service- Every company must ensures that their product are
able to fulfil needs of customer. Nestle have to provide goods and services
with better quality which attract more customer and increase their earning as
well.
 Environment policies- Nestle company Ltd have to follow related laws which
are framed to protect business environment (Czinkota and et.al, 2010).
TASK 3
3.1 Pricing and output decision in different market sector.
Market is the place in which companies provide goods and services to their customers
in order to increase their profits according to their taste and demand. Various types of market
which fulfil the need of their consumers are as follows:
 Perfect competition market- In this market large of buyers and seller are
present. No single buyer or seller able to change the market condition. In
perfect competition buyer have more option to purchase similar products. If

sellers can increase the price of their goods and seller so that they can loose
customer because they can shift to another shop for purchasing the same
product. Further, managers and leaders have to manage price of their goods in
order to attract more customer and maintain market demand and supply. They
can take decision for maintain demand and supply (Harrison, 2011).
 Monopoly competition market- In this market large number of buyer are there
but only few seller. Sellers are able to increase rate of their products through
which customers demand may not be reduce because there is only few seller
for that product. Nestle Ltd may not work in this market it has large number of
competitors who produce same types of products.
 Oligopoly competition market- In this market only seller are present and
provide homogeneous product to them. This market is suitable for Nestle Ltd
because there is less competition and sell differentiate products and services.
Through this Nestle attract large customers and increase its earning efficiency
as well (Gebauer and et.al, 2010).
3.2 Explain hoe demand and supply shape Nestle Ltd.
Different types of elements can affect existence of business organizations. Market
demand and supply are play a vital role in market which are able influence its overall
performance. The prices of existing goods and services are affected by the change in quantity
of demand and supply. Every organization needs to achieve market equilibrium point in
which market demand and supply intersect each other. Nestle is able to work according to
market equilibrium in which demand and supply of consumer are intersect each other.
Consumer demand or requirements are important factor for every business organization.
Managers and leaders have to continuously identify the customer demand for a products and
supply goods and services which has greater in market. Further, market forces and
organizational response able to maintain success of business and Nestle have to improve
relation between these two elements. Managers needs to control the market forces for
balancing market conditions.
3.3 Evaluate how business and cultural environment assist in shaping the behaviour of Nestle.
Business and cultural environment having a impact on organizational goals and
objectives. Further, every entity having two types of environment like; internal and external

environment. Nestle company Ltd opted PEST analysis for main its environment which are as
aligned below:
 Political factor- These factor influence the every business environment.
Government decision can influence the management of Nestle (Cantwell and
et.al, 2010). An organization have to follow rules and regulation which are
framed by government and having impact on it.
 Economical factor- If changes in inflation rate, wage rate etc. which affect the
existence of company. Further, if changes in number of customer it can able to
influence market demand and supply. If wage rates are increase, through
which companies reduce their profits and earning efficiency as well.
 Social factor- This factor is related with the costume, cultural, tradition and
nature of customer. Nestle Ltd have understand consumer's cultural, tradition
etc. of their customer and provide goods and services accordingly. Nestle is
the world's largest food producer which provide various types of food stuff
according to demand and needs of their customer.
 Technological factor- In the process of promotion programme, Nestle have to
use advance technology for promote their products in various countries.
Managers and leaders needs to use latest and upgraded technology for
providing training programme to their customers. Further, which help
companies to meet their desired goals and objective (Ullah and Lai, 2011).
TASK 4
4.1 Significance of international trade to UK business.
Nestle company Ltd can able to transport its goods and services through international
trade. It offering a greater advantage to every business organization through exporting goods
of Nestle in various countries. Entities are able to build image in international market. It
provides benefits like; proper utilisation of resources, increase number of customer, improve
performance in international market and increase work efficiency as well. Various
significance of international trade are as aligned below:
 Production cost- If company start trading in other counties then surely they
will reduce their production cost. For example; if Nestle start trading in other

countries which means they are able to reduce production cost in comparison
to domestic country (Hadjiconstantinou, 2012).
 Materials- Lots of countries which needs raw material from other countries in
order to convert them into finished products. Materials can be easily transfer
goods and services in various places only with the help of international trade.
 Opportunities to grow business- Through this trading platform Nestle receives
an opportunity to grow its business in other countries and improve earning
efficiency as well (Solomon, 2014).
 Increase sale- Organization can be increase their sale and earn more profits in
comparison to domestic country. Increase denotes more profits and revenue
through which company can rapidly grow in UK market.
4.2 Impact of global factor on UK.
Many countries which are grow their businesses from other countries by importing
goods for production process. Global factors provide opportunities to Nestle Company Ltd to
meet their desired goals and objective and grow business globally. Various factors which
impact on organizations are as aligned below:
 Global growth- It gives a advantage to all companies to improve their
business growth and expand it in other countries. Nestle can able to improve
their revenues and benefits with the help of international trade. Through
international trading Nestle also receive a knowledge related to new
technologies and also it boost up their growth rate.
 Impact of government- Government has a set rules and regulations for fair
trading which are Nestle have to follow them for smooth working of their
business (Trkman, 2010). Leaders and managers have to framed policies
according the rules and regulation of government which cannot be affect
them. Further, in this legal authorities are support fair trading but not the
unfair trading. Every organization need to follow them for smooth working
and build image in international market.
4.3 Impact of policies of EU on UK organization.
Most of the businesses are affected with the policies European Union. This union
framed some rules and regulation which every organization needs to follow them for the

smooth working of their performance in international market. Here, some different policies
which affect UK businesses are as follows:
 Affect on taxation policy- Nestle providing its goods and services in various
countries but also they have to pay huge amount of taxes. Government offer
some benefits to organizations which pay huge amount of taxes like;
concessions in taxes etc (Colfax and et.al, 2010).
 Huge amount of opportunities for employment- European policies are
motivates and encourage organizations through which they grow their
business and give employment opportunities to people. It help companies to
meet their desired goals and objective (Carroll and Shabana, 2010).
 International policies- European Unions framed policies and regulations for
entities to increase export of goods and services and reduce level of imports
through which companies can easily able to meet desired goals and grow in
international market as well.
CONCLUSION
On the basis of above report, it has been concluded that there is various types of
organization which having their own objectives and goals. Different types of economies
market which are related with the customers demand in a market. European policies having
impact on UK organization which support them to easily meet pre planned goals and
objective. Also some global factors are affect performance of entities. Through international
trading Nestle company Ltd able to transport their goods and services across the boundaries
and reduce their production cost as well. Nestle get opportunities to grow their business in
international market. Entities are able to import raw material from other countries and
converted them into finished product. Nestle needs to opt PEST analysis in order to balance
their business and cultural environment. Firms have identify their business environment in
which they are easily perform operation. Also they needs to make effective pricing policy and
strategies which support them to meet desired goals and reduce contingencies. Every firm
have to provide better customer services for attract more people and increase their earning
efficiency.