Business Environment Report: Types, Scope, and Interrelation-Nestle

This report provides a comprehensive analysis of the business environment, using Nestle as a case study. It begins with an introduction to the concept of the business environment and its various influencing factors, including political, economic, social, technological, environmental, and legal aspects. The report then delves into the types and purposes of private, public, and voluntary organizations, examining their legal structures and objectives. It explores the size and scope of different organizations, using Nestle as an example of a private company, the NHS as a public company, and Oxfam as a voluntary association. The report further analyzes the interrelation between different organizational departments, such as human resources, marketing, finance, and production, and their link to overall objectives. It examines the impact of macro-environmental factors on business operations and conducts an internal analysis of Nestle to identify its strengths and weaknesses. Finally, the report discusses the interrelation of macro-environmental factors with Nestle's organizational strengths and weaknesses, culminating in a conclusion and references.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
P1 Types and Purpose of private, public and voluntary organisation and their legal structure. .3
P2 Size and scope of different organisations...............................................................................5
TASK 2............................................................................................................................................7
P3 Interrelation between different organisational departments and their link to objectives.......7
TASK 3............................................................................................................................................8
P4 Impact of macro-environmental factors.................................................................................8
TASK 4..........................................................................................................................................10
P5 Internal analysis of organisation in order to identify strength and weaknesses...................10
TASK 5..........................................................................................................................................12
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
...................................................................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment is considered as one the important tools that need to consider at the
time of running the business smoothly. Further, there are different factors like profitability,
performance and overall growth of business which need to be consider at the time of starting
business which include political, economical, technical, social, environmental and legal factors
which leads to both positive and negative impact on overall operations of business. Further
different changes coming in dynamic environment therefore it is essential for organisation to
scan all the innovation and digitalisation in respect of those product and services in which they
are dealing currently (Reed, O. L. and et. al., 2013). Under this assignment the company which is
preferred i.e. Nestle which is swiss transnational food and drinking company headquarter in
Switzerland engaged in different items and expand their market at global level and become top
most company in FMCG sector. Further this report discusses about the type and purpose of
public, private and voluntary organisation, size and scope and interrelation between different
department and SWOT analysis in order to know actual market position which allow them for
improvement and achieve targets on specified time period.
TASK1
P1 Types and Purpose of private, public and voluntary organisation and their legal structure
These days there are various policies which have to be used in order to achieve specified goals
and objectives. It is important to plan to perform actions in better and effective way. Due to
change in policies, employees need motivation and leadership (Reinhardt and Stavins ,2010) . In
society there are various types of business so it is important to analyze aims and objectives,
which can be performed in better and effective way. There are many types of organization, so it
is important to achieve targets in better ad effective way. Due to change in objectives there are
uses of effective policies with which this can be analyzed in proper and effective way. UK is the
country where many business activities are used and this is effective due to alteration in plans
and policies.
Basis Profit NPO NGO
Meaning These are
organizations
These
organizations
In this type of
companies there

which are
effective to
perform active
with purpose to
earn profit.
They have many
changes which
has to be done
in better and
effective way as
per requirement
due to
alterations in
plans they have
to alter.
works for
welfare of
society, so it is
essential to
achieve targets
in better and
effective way. It
is important to
know how
activities can be
done to analyse
satisfy and
improve living
of standards.
are many
changes which
have to be done
to analyze
changes and
then take actions
in appropriate
manner.
Objectives Profit
organizations,
work to achieve
profits and this
are effective to
change policies
which can be
done in lieu of
competitors.
There are many
changes which
have to be done
in order to
make policies in
better and
effective way.
Their main aim
is to make
actions in
proper and
effective way. It
is essential to
know what can
be done to raise
living of
In this type of
company, it is
important to
achieve targets
which are
effective un
order to peror
activities in
better and
effective way.
These
organizations
serve society for
some specific
purpose such as
education,

standards. cancer
eradication, etc.
Competition There are many
competitors in
this type of
business. There
rev different
policies which
has to done to
achieve motive
of profits.
In these
organizations
there are no
competitors, so
it is essential to
perform
activities in
better way.
There are less
competitors as
compared to
profit
organizations. It
is essential to
that NGO has to
work as per
norms.
Purpose of different organizations
Private sector- This sector helps to improve economic condition of society. In this sector
there are many companies which analyse market and ten frame policies. It is essential to take
corrective measures through which they can achieve targets. It is important to change policies
with which they can perform activities. There are some goals and objectives for which they are
working, so it is essential to change policies in case of alterations.
Purpose of such sector is to earn profits and serve society best and appropriate changes
which can be done in better way. Due to change in management of company there in change in
operations also. If there are alterations in plans then it must be communicated to workers.
Public sector- These sectors is headed by government, so there are some benchmarks
with which they work/. There is requirement of policies through which they can change policies
which can be performed in proper way. There is consistency in activities of these sectors so
people take less interest in dealing with them.
Voluntary sector- There are many sectors which have to be done with change in plans
and policies. This sector work to serve society, there is no mandatory course which as to be done
in effective and efficient manner. As per change in policies of government, they have to achieve
targets in appropriate manner. As per requirement they provide serves. It is important to achieve
targets which has to perform in better and effective way.

Purpose of such organization is to serve society and it helps to improves position
of people and they serve people in sector they are working. There are many volunteers which
work to achieve targets.
P2 Size and scope of different organisations
There is difference in size, scope goals and objectives of company, so it is essential to
perform activities in better way. There are many changes taking place in business so it is
important to analyse market and then apply polices. Due to alteration in factors there is change in
policies of company also. It is essential make and then approach targets person, but to change in
market factors, there is change in company’s policy also (Shigang ,2010).
Private Company- In this report, company for private sector is Nestle, which is one of the
leading brands in industry. They serve many products which are effective for satisfying
consumer need. There is change in their policies due to which they have to motivate workers.
This company was established in 1874 and there are numerous workers associated with them. As
per change in requirement they have to alter policies as there are many competitors.
Public company- NHS is one of the leading brands in public company so it is essential to
know what has to be done and there is direct control of government over it. as per requirement, it
is essential to change factors through which they can make control over society. Public has more
than 50% share and they keep eyes on activities. There is more faith of public over such
companies as there are less possibilities of fraud. There is change in factors with which it is
important to change policies, there are many policies which ac ne used and effectively applied.
Voluntary association- Oxfam is one of the best voluntary organizations which cover 15
institutions under it. They have some specific purpose to work and hence this helps to improve
position of country. It is effective when more and more volunteers work to them. As per change
in factors it is effective and hence they can satisfy problems facing by society. There is less
competition in this industry as it is effective for changing business policies. As per change in
society need they have to alter their strategies. It is effective as per requirement of people.
Micro Small Medium Large
This is the
smallest form of
organizations. In
this business 1-2
This business
is small but
has more
scope as
In this business
there is use of
resources which
are outside the
This is the
biggest form of
business and it is
effective with

people are there
and they get
affected due to
change in plans
and policies.
There is less
resistance of
such business.
This business
runs by family
people and
hence they face
financial
problems too.
They cannot
work as per
society trends.
In this type of
business, it is
important to take
actions in better
way so they can
perform
business
operations in
better way.
These
businesses can
liquidate
promptly.
compared to
micro. This s
also operated
by family
people to earn
livelihood and
this is less
respondent
towards
change in
market. They
have
consistent
policies. They
earn and use
those funds to
expend
business. Due
to change in
factors they
can little
renovate their
policies. There
is rising of
funds from
internal
sources such
as friends,
family.
Financial
position
organization but
it must be used
in effective and
efficient
manner. There
is impact of
business
environment on
such business. it
is important top
frame policies
as per
requirement of
customer.
Hence, they
have to alter
their policies.
These
businesses have
good position
and 50-100
employees in
organization. It
is essential to
motivate
employees so
best results can
be get.
use of various
policies through
which they can
expand business.
These
organizations are
important for
achieving
business
objectives such
as profit
maximization,
expansion of
business. These
businesses have
important role in
improving
position of
business. Scope
of large
organization has
much more as
compared to
other business.

fluctuates
promptly due
to which they
make changes
in their
policies.
TASK 2
P3 Interrelation between different organisational departments and their link to objectives
In every organisation success and failure among management is fully depend upon the
working capacity of management and further Nestle is consider as multinational organisation
require to understand all the significance of interrelation between different departments and
divisions and this will also helpful in grabbing all the market opportunities on the basis of which
they make further changes in their products and services that help in satisfy all the needs and
requirement of customers. Apart from it in Nestle there are different department like human
resource, finance, marketing and operational will need to be coordinated and managed in order to
accomplish all the targets in specified time period (Karagiorgos , Drogalas and Giovanis ,2011).
. Further, it helps in creating harmony and peace in atmosphere which leads to positivity and
higher productivity in future. Interrelation between different departments of Nestle are discussed
below: -
 Human resource department: - This department is considered as important division who
are responsible for recruiting and selecting the able and professional employees for
vacant job position. Further HR manager require to formulate various policies and
procedures related to rewards recognition, performance appraisal and also the factors
related to determination of remuneration. Further, it allows them to organise training
development programmes that improve overall performance and motivate them for higher
performance.
 Marketing department: - This department consider as one of the important division in
every organisation who formulate different policies and strategy regarding marketing
promotion in which different tools and techniques has ben used by marketing department
like roadshows, exhibition and social networking through which they aware the

customers regarding all the new changes and features in respect of goods and services
through which enhance the sales and profitability of business.
 Finance department: - This department of organisation has to take all the responsibility
related to preparation of budgets in which they analyse the amount of revenue earned
during the year. Further this will help in comparing the actual performance with standard
performance and if any deviation is their then it is solved by them so no problem arises
for the execution of projects in financial terms.
 Production department: - This department take concern regarding all the matters related
to manufacturing and producing of goods and services. Under this they also make deep
analysis regarding demand and supply of their products on the basis of which stock has
been maintain so they are able to deliver the goods to end user at specified time period.
Organisational Structure
Company divided their structure on different segment which are stated below: -
 Function based: - Under this task are divided among individuals on the basis of
functions which are performed by them.
 Geography based: - Under this product and services are categorised ad divided in
different geographical region so that it is easily available to every customers.
 Product based: - Under this structure of business is divided on the basis of diversified
product segment provided by organisation. For example, nestle offers both food and
beverages to customers.
 Customer based: - In this category products and services are manufactured and
produce on the basis of demand arises by external customers.
TASK 3
P4 Impact of macro-environmental factors
In every organisation working atmosphere has been affected due to macro and micro
factors of environment therefore, it is essential for business to scan all the relevant changes
coming in form of innovative technologies and digitalisation in respect of goods and
services done by rivalry therefore it is essential for business to formulate their ow policies
and strategies through which they make innovative modification in respect of their goods
and services which help in satisfy the needs of customers. Further, nestle one of the leading

organisation in FMCG engaged in food and drinking sector but in order to sustain in
external market for longer period they need to analyse the tactics of their rivalry
(Kolk ,2016). Different external factors which has both positive and negative impact on
business are describe below: -
Political factors: - This factor affect politically to the working conditions of business and
further Nestle expand their business in different countries but they have to adhere with all
the legal rules and regulations. Elements like dynamic government policy, taxation, export
import policy and other political condition affect business decision making.
Positive impact: - Political policies formulated by government are generally made for
enhancing the growth of corporate industry this will help in increasing the revenue of
country.
Negative impact: - Complex import export policy and heavy tax charged on manufacturing
and production of goods and services lead to increase the cost of production.
Social factors: - There are different factors and element which need to be consider at the
time they developing their branch in different countries. They promote their goods and
services after considering the feeling, sentiments and emotions of society and ensure their
social promotion is not detrimental to the interest of individual because it affect their brand
equity.
Positive impact: - Nestle will incur expenditure on CSR activity that will help in
establishing positive image and brand equity n the society where they establish their
branches which lead to higher sales and profitability.
Negative impact: - Management must ensure that whatever the marketing promotional
tools used by them like advertising, public relations and social networking must ensure that
contents used in marketing must be ethical and does not impact negatively to the feeling of
target audiences.
Legal factors: - Under this macro environment factors management require to ensure that
all the legal regulations and rules are properly adhere enforced by particular country on the
basis of which other activities has been conducted. Compliances of laws help company in
avoiding penalty and punishment.
Positive impact: - Adherence of all legal rules regulations allow organisation to run their
business effectively. Market image and investor investment is wholly depending upon

brand image and goodwill of company so it is essential for business to manage all over
operations of organisation.
Negative impact: - If there are incompliances in rules regulation of business then it is very
difficult for organisation to survive in market for longer period of time. Further once the
image is diluted then it is difficult to improve it in eye of target customers.
Economical factors: - Nestle is top most organisation in FMCG sector who expand their
business and branches then they need to analyse all the conditions related to inflation,
deflation and level of income in that particular country.
Positive impact: - Under this there is need for preparation of report related to analysing the
situation this will allow them to get the idea regarding inflation deflation conditions.
Negative impact: - If purchasing power of people is low in that particular country then it
will affect the sales and profitability of that particular country.
Technological factors: - In modern corporate world there are different changes are coming
in the form of technology and innovation in respect of goods and services so in order to
beat the challenges of competitors Nestle company required to update with latest
technology they included in their products which also helpful in increasing their growth.
Positive impact: - Helpful in meeting the current expectation of customers in the form of
improvised goods and services offered by them and charge premium prices also.
Negative impact: - Lack of abled staff and high cost incurred in the implementation of
technology leads negative impact on the sustainability of company.
Environmental factors: It is an utmost responsibility of Nestle company is to clean the
environment. They have to follow such rules and regulation which helps in production of healthy
foods and environment friendly operations. Under this company required to focus on social
welfare by contributing through CSR activities.
Positive impact: - Conducting different events and take initiatives for the cleanness of
environment which also educate society for the protection of environment.
Negative impact: - Producing high carbon footprints become threats for the long-term
sustainability of business.

TASK 4
P5 Internal analysis of organisation in order to identify strength and weaknesses
Internal analysis related to all those practices that help in understanding all those factors
that help in analysing all the strength and weaknesses of company (Nishitani and et. al., 2012).
Further, this will help organisation to know the actual position in external market which give
them idea for the improvements any required. Here the nestle FMCG based company decided to
conduct SWOT analysis on the basis of which actual internal conditions are observed and by
considering outcomes policies strategies are framed for better profitability in future. Here the
SWOT analysis of Nestle which stated below: -
Strength
 Brand image: - Nestle is well renowned organisation in FMCG sector at global level. The
market position and profitability. This brand establishes such prestigious position in
market because of which customers are ready to pay premium price in respect of goods
and services.
 Logistics management: - Nestle maintain good distribution system in respect of goods
and services. Proper logistic team has been recruited by company that maintain list of
order and date of delivery this will help in transferring the products to customers at
specified date.
 Efficient workforce: - Nestle comprises of such employees which are efficient and
professional at the time of performing duty related to serving customer and sale of goods
and services.
Weaknesses
 Brand structure: - Nestle has strong brand portfolio that allow them to offer multi variety
of goods and services to end customers. But due to high competition company unable to
satisfy their current needs.
 Legal issues: - Different rules and legal legislation has been formulated by government of
different countries therefore it is difficult for company to adhere with each and every law
enforced by them.
Opportunities

Expanding market: - Due to strong financial position and brand image company can plan to
expand their market in different countries which allow them to provide their services to each
customer at every level which increases their sales.
Strategic alliances: - It is simple way through which company can plan to enter into new market
therefore it is an opportunity for Nestle to come with alliances with those company which have
brand value and image in that respective country.
Threats
Huge competition: - One of the major disadvantage that Nestle faced is the presence of rivalry in
FMCG sector like HUL and Cadbury that affect the sales of company.
Pricing factors: - Prices charged by company is higher as compare to their rivalry because of
which target audience switch to other brands that affect their sales and profitability.
TASK 5
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
Business has many factors which affect in positive or negative way, so it is essential to
apply business policies in better and effective way. As per change in internal policies, there is
alteration in internal factors too. In Nestle there are many workers (Osterwalder and
Pigneur ,2010). There is difference in strategies of company, so it is essential to perform
activities in better way. Due to change in technology there is effect on morale and working style
of workers so it is essential to motivate then and then use appropriate technology. Technological
change is important due to change in competitors working style. This change is helps to improve
position in industry. Through this there is use of different and updated technology with which
there is less defects and this helps to work effectively.
There are many changes which has to be taken due to which there is possibilities of
alteration in policies. As per change in government policies there is mandatory alteration in
policies of company. There are many workers so manager has to take care of effective approach
which is helpful in managing them. There are many laws related to workers such as safety and
protection act, gratuity act, etc. which are amended by government so t is important to make
changes in them. This is essential to convey it to workers so they can achieve targets. There is
change in management then there is effect on operations of Nestle. It is essential to make policies

which can be effective in achieving business objectives in better way so they can compete with
other business associations.
There are many competitors of Nestle such as Mars, Cadbury, etc. so this has impact on
customers. There is use of policies through which it is effective in performing business
operations. In case of change in business objectives then it must be communicated to employees
so they can achieve targets better. Nestle operates in all over the world. There is change in
business policies everywhere so it is essential that company has to make alteration in their
strategies as per society. As there is more consumption of dark chocolate in Western countries as
compared to India. As per change in demand of society it is essential to alter policies, this helps
to enhance goodwill and then this helps to improve profits and sales of company. If company do
not take care of social factors then customers will approach to another competitor’s brand.
Government change after specific tenure so it is essential to apply changes with which
they can make policies according. Due to change in internal factors of company, there is effect
on business in negative way. As management of company cannot concentrate on main motto of
association. Financial need of every change, in case of technological changes there is
requirement of finance through which they can apply changes. So, it is essential to make
expenses low so there will increment in profits. There are various policies with which there is
change in internal policies also. This is responsibility of managers which is working in
association to use knowledge which helps to achieve targets. In case of technological changes
there is requirement of finance so it is responsibility of manage to select source, which is cheap
and provides knowledge effectively. Due to alteration in external factors, it affects internal
factors too. So, it is clear that there is linkage between internal and factor factors of business. To
make business growing and to achieve heights in industry, change is necessary but at the same it
is important to apply that change in effective way. By analyses of market management of Nestle
can find what can be done to achieve business objectives on time. As per requirement, there must
be use of factors which assist in growth and development of business.
CONCLUSION
It has been concluded from whole assignment that business is affected by both macro and
micro factors of environment therefore it is essential for whole management of Nestle to
formulate such policies and tactics that allow them to take competitive advantages over

competitors and allow them to satisfy the needs of customer in effective and efficient manner by
providing modernised products and services according to their expectations.

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