Business Environment Analysis Report: Nestle Company in the UK Context

This report provides a comprehensive analysis of Nestle's business environment, focusing on its operations within the UK. It begins with an introduction to the business environment, distinguishing between internal and external factors that influence business operations. The report then delves into the types and purposes of private, public, and voluntary organizations, exploring their respective legal structures, with Nestle, NHS, and Oxfam serving as examples. It examines the size and scope of these organizations, highlighting their vision and mission. The report further analyzes the interrelation between organizational departments and objectives, the impact of macro-environmental factors, and the internal strengths and weaknesses of Nestle. Finally, it discusses the interplay between macro-environmental factors and organizational strengths and weaknesses, drawing conclusions based on the analysis and providing relevant references.

Business 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..................................................................5
TASK 2............................................................................................................................................7
P3 Interrelation between different organisational departments and their link to objectives.......7
TASK 3............................................................................................................................................9
P4 Impact of macro-environmental factors.................................................................................9
TASK 4..........................................................................................................................................11
P5 Internal analysis of organisation for identification of strength and weaknesses.................11
TASK 5..........................................................................................................................................12
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
...................................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment is described as the place in which activities are carried out
according to the set business plans in effective and planned manner. This is the most useful
factor in order to achieve all business goals and objectives in effectual and planned manner.
There are mainly two factors known as internal and external business factors which are useful for
the overall business operations (Reed and et. al., 2013). The factors are having direct
implications on functions of the organisations which consist of employees, customers, partners
etc. The most vital factor for business is related with analysing the most suitable environment in
which activities can operate so that firms can earn higher profitability and enhance their sales
and profitability ratios. The company chosen for the project is Nestle and they arr having their
operations in confectionery and bakery products in UK. The undermentioned report is based on
size, scope and the nature of organisation who are working in various environment, interrelations
among different business functions and the major objectives of business will be evaluated here.
Furthermore the discussion will be carried out about about the positive and negative implications
of the desired business activities.
TASK 1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
In the modern world there are various organisations working with their predetermined
business goals and objectives which are beneficial for them in order to achieve strong business
positions in the economy. The major aim of firms are linked with earning higher profitability
ratios by satisfying need and wants of customers. Presently the Government which is operating
in United Kingdom have developed plans in order to register the organisation and differentiate
them on the basis of the employees who are working, size of business operations, the working
environment etc. The firm is having differentiated legal structures in order to achieve
competitive gains at market place and earn higher profitability index. There are some rules and
regulations defined according to which the companies are classified according to their size and
business activities. Example: The firm are divided among private, public and voluntary
organisation according to their size and business operations. The business owner should be aware
about all the rules and regulations which are implemented by UK government so they will not
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face any type of risk in their business operations. This is the most vital factor as firms can
achieve their target in desired time frames.
Different purpose and type of organisation with their legal structure are given below as:
Private company
If the company is owned by the resident of UK and he is following all rules, regulations
and plans policies which are formulated by UK government. Another factors is that government
is not having any interference in the business operations and if they are earning higher
profitability thus wants to expand their business operations then they can easily do it because
there is no rules and regulations made which will stop them from running or expanding their
operations all around the globe. This is the most beneficial factor for the growth and
development of UK economy as they are providing employment to large group of people which
will in turn results in growth and development of UK economy and the literacy level will also be
increased.
The private firms chosen for the report is Nestle and they are running their operations all
around the globe and classified under one of the largest retailing companies. They are mainly
manufacturing food and bakery products. Nestle are running their operations from the year 1866
and are also selling snacks, coffee, frozen food, medical food, snacks etc.
Purpose of Nestle
They are mainly focused towards offering quality products to their customers in order to
maintain their living standards.
They are organising campaigns and making customers aware about the importance of health
foods for growth and development of body.
They are offering economical friendly products to all their customers.
Legal structure of private company
Legal structure of private company
Partnership: This is the most important factor in which two business owner come together to run
a single business then it is termed as partnership. The important factor is that they are earning
high profitability from their ventures and the shares are equally divided among both the business
owner who are running as partnership. This is an vital factor as it results in enhancing
profitability of business.
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Sole proprietorship: This is the structure where there is single business owner and they are
running their activities according to their set plans and all the profits and losses are beard by
them.
Limited companies: This consist of majorly two kind of legal structure one is known as
guarantee and the other is shares. The owner is having full control over all the business
operations and they faces less liabilities.
Advantages and Disadvantages of private organisation
Advantages Disadvantages
The government officials does not have any
interference in this type of business operations.
The registration of business is a very time
consuming process.
The investors and the business owners are
having very less liability.
The business is required to have sufficient
funds in order to run their business operations.
Public organisation
All the institutions which are classified as police, education, military, police , public
transit, healthcare and these are running by government authorities are known as Public
organisation. The persons who are having the highest position in the company takes all the
important decisions which are linked with business so that firms will their main objectives. There
main aim is not profit but to ensure security, develop mind set of customers and many more.
Under this Public Sector NHS have been taken as they are delivering health care services
to patients so they can be cured from those diseases which they are suffering.
Purpose of NHS
They are offering health care services to patient
They are delivering quality services to all their patients as this is the most vital factor which
results establishing strong image in mind of customers.
The Legal structure of public company is stated below as:
 Central government: It consist of all the department which are classified under city or
state
 State government: They are delivering work and providing support to state government.
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 Local government: They are maintaining all the work and requires necessities in all the
areas.
Advantages and Disadvantages of Public organisation
Advantages Disadvantages
They are developing standardisation in their
working
The tax rates in UK should be reduces so that
money can be used for the growth and
development of economy.
Voluntary organisation
These firms are mainly working in order to provide services at free of cost to all their
customers. The main aim of firms are linked with development of the overall society in order to
ensure growth and develop healthy working environment. On the other side these organisation
should take approval from the UK government so they can easily deliver their services.
Oxfam was established in 1942 and they are classified under charitable trust and they are
offering services to all the customers in order to ensure development of the whole society of UK.
Purpose of Oxfam
They are offering services to all those people who are in need of it.
 They are focusing on raising living standards of people.
 The development programmes are organised on a regular basis.
Advantages and disadvantages of voluntary organisation
Advantages Disadvantages
The government of UK is always providing
financial assistance to people of UK
If there are less amount of funds generated then
it may result in affecting business activities.
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P2 Size and Scope of various types of organisations
There are various difference between the vision, mission and objectives of business so the most
important factor for business is linked with analysing the working in order to achieve effective
results. There should be plans developed in order to achieve effectiveness in their business
operations. The policies should be altered according to changes in business operations. The size
and scope is decided according to the requirements of firms. The scope and size of business is
evaluated below as:
Nestle
Size- This is one of the most important brand in bakery product. As there is high
competition at market place so firms should make plans in order to achieve competitive gains at
market place. The firm have established strong brand image at market place thus they can easily
expand their business operations. The firm was established in the year 1866 and they have
retained loyal customers who are buying their products thus enhancing their sales and
profitability ratios. The firm is earning highest amount of profits which are beneficial for them in
order to enhance their overall sales index.
Scope: The firm is selling their products to people of all age group according to their
needs and requirements. There should be changes applied in the process in order to achieve
competitive gain at market areas. The offered products of Nestle are Baby food, medicines,
Kitkat, Maggie etc are the major products which are offered by Nestle. The firm is also dealing
in snacks, pet food, frozen food and milk products.
Vision: This is termed as the long term objectives of business organisation. There main
aims are linked with satisfying different needs and wants of customers. They should offer
healthy products to all their customers as this is the most vital factor in order to ensure healthy
life.
 Mission- The mission of Nestle is to become the highest leader in chocolate brand of
Asia's. They are also focusing on quality factor in order to satisfy needs of all the
members of society.
NHS
 Size: In Health care sector NHS is the most vital organisation and they are offering
products to all the members of the society. The company have started their business
operations in 1948. They are offering free services to all their customers and have
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formulated plans and policies in order to achieve success and growth in their business
operations. There are more then 2.5 million people who are working in order to provide
services to their customers. They are also serving quality products to there customers.
 Scope: The firm is running their business operations at large scale thus they have large
number of employees who are working under them in order to provide services to there
customers. They are also offering free medical services to all their patients.
 Vision: The main aim is to provide solutions to the problems from which people are
suffering in order to provide them comfort. If there are variations in companies then it
results in achieving targets in effective and planned manner.
 Mission: The main mission of NHS are linked with serving the people of the society in
most effective and planned manner. This helps in improving the living conditions of the
people of society.
Oxfam
 Size: This is the biggest organisation and it covers almost 25 charitable trust who are
working for the welfare of the people. They have recruited employees who are working
in order to improve economic conditions of society. There are many people working as
volunteer in order to achieve their assigned goals and objectives on time.
 Scope: The scope of firms are linked with achieving their goals and objectives in the
desired time time period that have been allotted to them.
 Vision: If there is no income in the economy then it results in poverty ratios and the
economic growth of the country will be hampered. Thus they want to provide
employment to people in order to remove poverty from the economy.
 Mission: There main mission is to make improvements in the living standards of people
of UK so they will easily fulfil the basic necessities of their life.
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TASK 2
P3 Interrelation between different organisational departments and their link to objectives
An organisation can run in effective manner when all its departments perform at their
level best. They have played different-different roles in accomplishment of goals and success of
business (Reinhardt and Stavins, 2010). But functions of all these are interrelated with each
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other. Therefore, it is essential of managers of these divisions to cooperating others and helps in
completing their functions. In context with Nestle, interrelationship of departments helps in
enhancing its strengths and decreasing weaknesses in a systematic way. Relationship of divisions
in Nestle can be shown as:-
Human resource department: HR managers in a firm perform various activities like staffing,
planning, organising and more. In addition to this, it helps other departments by recruiting
eligible candidates and managing work of them in a proper manner (Shigang, 2010). Through
various HR practices, divisions of Nestle can operate their functions easily. These practices
include employee engagement, training and development, performance appraisals, etc.
Therefore, by using these practices and policies, managers can design workforce of a company in
an effective manner.
 Marketing department: This department plays an important role in increasing sales
performance of a firm. In Nestle, marketing managers used to identify demands of
customers, situation of marketplace, position of business and more. Through these
functions, other departments operate their functions in a proper manner. In addition to
this, marketing division has a direct link with production and sales department. As
research carrying out by marketers aid them to do further activities.
Finance department: This department help all divisions in providing necessary funds for them.
Finance managers formulate proper budget plan as well as manage finance of company in a
systematic manner (Karagiorgos, Drogalas, and Giovanis, 2011). Therefore, through help of this
division, other departments of Nestle perform their function in a proper manner.
Organisational Structure
Structure of a company is mainly divided on its type of business in which it deals, it can
be shown as below:-
 Function based: In this section, structure is classified as per roles and responsibilities of
a company. It includes human resource management, production department, marketing
division and more.
 Geography based: Under this phase, organisation is classified according to different
territorial regions in which sell its services or products. Through this, managers can
evaluate taste of customers easily and satisfies them accordingly.
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 Product based: As per this head, structure of association is divided on the basis of
products like Nestle manufactures wide range of eatables such as Dairy milk, ice-creams
and more (Kolk, 2016)
TASK 3
P4 Impact of macro-environmental factors
Modern world is filled with various sort of complications that are related to external
elements that can put impact on both products and services of an organisation (Nishitani and et.
al., 2012). Pestle analysis can be considered as the best sort of hypothesis which is related to
external environment can put both negative and negative impact on nestle and these are given
beneath:
Political factors: Nestle serves in numerous nations. Distinctive nations have diverse
guidelines and directions. Under this, administration of Nestle need to center around various
political dynamic like tax collection, import trade extract obligations, government authorization
for entrance and so on. Additionally, need to see the soundness of government.
 Positive impact: In the event that every such control and directions are supportive of
association then it has positive effect. For ex., Nestle take after wellbeing approaches to
keep up nature of their items.
 Negative impact: High rate of tax assessment and tight import send out approaches have
antagonistic endless supply of Nestle (Osterwalder and Pigneur, 2010)
Economical factors: Every nation where Nestle gives administrations have distinctive
level of advancement. Along these lines, administration need to embrace diverse
arrangements as indicated by swelling and flattening rates. Different elements incorporates
stream of money, level of wage and so forth.
 Positive effect: Preparation of examination report assembles information with respect to
expansion rates and diverse salary levels. It gets positive effect.
 Negative effect: Low level of wage of people has coordinate effect upon the request of
their products.
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