Nestle's Business Environment: Functions, Objectives, Macro Analysis

This report provides a comprehensive analysis of Nestle's business environment, encompassing both internal organisational functions and the external macro environment. It details the relationships between different organisational functions, such as marketing, production, human resources, and finance, and how they link to organisational objectives and structure. The report also examines the positive and negative impacts of macro environment factors, including political, economic, social, technological, legal, and environmental factors, on Nestle's business operations, utilising the PESTLE framework. Furthermore, an internal and external analysis of Nestle is conducted using SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats, highlighting how these internal factors interrelate with external macro factors. The analysis aims to provide insights into how Nestle can leverage its strengths, address its weaknesses, capitalize on opportunities, and mitigate threats within its dynamic business environment.

Business and
Business
Environment

Table of Contents
TASK 1............................................................................................................................................3
P3) Explain the relationship between different organisational functions and how they link to. 3
organisational objectives and structure..................................................................................3
TASK 2............................................................................................................................................5
P4) Positive as well as negative impacts that macro environment has on business operations. .5
P5) Internal and external analysis of particular firm to identify strengths and weakness......6
P6) Strength and weaknesses interrelate with external macro factors...................................8
CONCLUSION................................................................................................................................9
REFERENCES ...............................................................................................................................1

Introduction
Business environment can be refer as all those factors which affect business operations
(Apăvăloaie, 2014). These factors include internal and external factors. Both of these factors
have great impact on business decision making as well as organisational functioning. Internal
and external factors of company consist of employees, competitors, suppliers, government, social
trends, technology etc. All these factors affect company in it effective and efficient operations.
Business environment can be consider as a total sum of all external and internal factors which
influence functioning of a company. These factors of business environment helps in identifying
opportunities for company in market as well as it assists in planning and improve overall
performance of company. For this report chosen company is Nestle. This is a multinational
which deals in food and drinks. This organisation is formed in 1905 by Henri Nestle. This
company provide its services worldwide and headquarter are located in Vevey, Switzerland. This
assignment helps in understand various types of organisation as well as their size and scope in
market. impact of macro environment with its strength and weakness on business operations.
Interrelation of different departments of company for effective flow of organisation.
TASK 1
(Covered in PPT)
P3) Explain the relationship between different organisational functions and how they link to
organisational objectives and structure.
Nestle organisation consist of various functions and department. All department of this
organisation carry different roles and responsibilities to carry its functions. Each and every
department have major role in creating and maintain business. In order to carry out successful
business practise its is essentials for all department to function properly. Success of Nestle
company depends upon its department and their function. No organisation can become
successful with only one or two department. So it is very important that each and every
department perform its activities effectively and effectively by coordinating with other
department (Glova Saboland Vajda, 2014). Coordination between departments helps all
department to contribute their best on overall success and growth of company. Major department
of Nestle company and their interrelationship with other department is mention below.

Interrelationship between marketing and production department is that marketing
department focus on increasing sells of Nestle products. This department is responsible for
identifying needs and demands of customers and analyses situation of market (Gupta, 2013).
Production department more focus on manufacturing of products. Marketing team will conduct
an effective research in order to understand requirement of customers. Marketing department
will provide information to production department according to their research. Nestle production
department will carefully understand requirement and manufacture products which is in demand.
Marketing department will set deadline for production department and share quantity and quality
to manufacture Nestle products. Marketing department is responsible for selling all products
developed and manufactured by production with motive of generating large volume sales.
Human resource and marketing department needs to work closely for effective
functioning of Nestle organisation. It is responsibility of human resource department to find and
attract capable employees within organisation. Marketing team needs to coordinate with human
resource and share requirement in candidates to full vacant position in their department. Human
resource team needs to carefully evaluate all sources for attracting candidates and select best
employee from pool of candidates. This team will recruit employees who fits with requirement
of marketing department and has high qualification, ability to handle difficult task and proper
knowledge to perform job. This will helps in developing and maintaining strong marketing team
of Nestle organisation.
Link between human resource and finance department is that finance department of
Nestle control and maintain all financial resources of company. This department provide budget
to all department to carry out their activities and functions (Hair and et.al., 2015). Human
resource department will hire right skill set employees for finance team and also look for
requirement of teaming them. Training employees will help in improving their capabilities and
performance of employees and employees will be able contribute in success of Nestle
organisation. Finance team will decide budget of human resource department activities. Human
resource will help in solving all issue of employees and solve comfits within finance department.
This will help finance team to work effectively and complete their task on time. By training
employees will have better understanding of their job and learn new trick to perform job.

TASK 2
P4) Positive as well as negative impacts that macro environment has on business operations
Macro environment includes all those factors which influence business decision making
as well as affect operations of organisation (Hamilton and Webster, 2018). Nestle macro
environment consist of all external factors of company. These external factors are uncontrollable
factor which effect overall functioning of business. External factors includes economic,
technology, legal, demographics, social conditions, technological changes in market, natural
factors etc. All these factors has direct on indirect impact on Nestle business functions. Impact of
these factor can be positive or negative on overall activities of organisation. In order to
understand each and every macro factors of Nestle company carefully, company needs to
analyses external factor through PESTLE business model. PESTLE stands for political,
economic,social,technological, legal and environmental factors impact on business.
Political factor are all activities related to government policies and regulations. It includes
taxes, trade policies, import and export rules and regulations, political stability, government
agencies etc. (Harrison, 2013). Nestle organisation have to deal with various political factors of
all those companies in which they are providing their products. Nestle is in foods and beverages
industry where government has set various rules and policies for companies. This organisation
have to develop and manufacture products according to guidelines of government to provide
healthy and good quality food to consumers. By following all rules of political party, government
support Nestle in operating its business function effectively and effectively. Economic factors of
macro environment is related to labour cost, interest rates, economic condition of country, GDP
etc. These factors are not directly related to Nestle company but it affect decisions and operations
of company. When economic conditions of company is not good then customers purchasing
actively will be effected as customers are more focusing on saving money to fulfil basic needs.
This economic factor can have impact on demand and supply of Nestle products in market.
Nestle maintaining positive relationship with its employees and labour by satisfying their needs
than labour will perform effectively and leads to high production of products.
Social factor of Nestle consist of beliefs, customs, social trends, attitudes and lifestyle of
customers of company. This organisation have to consider perspective of people and society as
well before taking business decisions. Needs and wants of customer changes with time and social
trends also have impact on operations of organisation. Providing Nestle foods products which is

healthy and nutritious for consumer will have positive impact on company. High changes in
behaviour of customers and social trends can have huge negative affects on Nestle business
operations. Technological factors includes new, innovative and updates technology of various
functions of Nestle business. Technology can be opportunities for threat for this organisation.
Technology used in right manner can bring positive change in business of Nestle whereas more
innovative and updated technology used by rival companies can leads to decrease in Nestle
market share and profits. Technology will help company in accelerating production, promotion
and other business operations. But usage of high technology require huge amount of cost to
business.
Legal factors of external environment helps in identifying how law affects the way in
which business operates and customers behave towards products of company (Hillary, 2017). It
includes consumer law, discrimination law, health and safety law, fraud law, employment law
etc. these laws has been introduce to prevent customers from unhealthy products and ingredients
in food products. Nestle providing false information to customer about their products will have
to face negative impact of legal factor. Nestle should provide fair and minimal wages to
employees and labours working in company and factors. By providing healthy and safety work
environment to works company can fulfil its legal laws related to employee protection.
Environmental factors for macro environment came for protection natural environment in which
Nestle is operating its business activities. It includes climate, green agenda, pollution,
environment policies, natural resources. Company have to follow all environmental policies
made by government to protect environment of business. Manufacturing of Nestle products
creates lots of pollution and waste. If organisation is not managing or minimizing waste and
pollution, government can ban Nestle products or company have to pay huge amount of charges
for destroying environment. Company can conducts several social act ivies such as tree
plantation or recycling of waste products. This will help company in developing positive image.
P5) Internal and external analysis of particular firm to identify strengths and weakness
Nestle is a world wide company which deals in nutrition, health and wellness of
consumers. This organisation is providing wide range of products so it is very important to
analyse company internal as well as external factors. In order to understand these factor company
needs to use SWOT analysis tool. SWOT analyses helps in identifying various factors which
affect business decisions and improve change of earning profits and growth (Kolk, 2016). SWOT

stands for strength, weakness, opportunities, threat. Internal analyses of consist of strength and
weakness of Nestle whereas external analysis includes opportunities and threats to organisation.
Nestle is a world renowned brand and worlds largest food company. This organisation is
highly diversified company which is operating in many different counties. Nestle is providing
more healthy and nutritious products with hight quality. With diversified product range Nestle
has been successful is supplying to large market area by using various different methods of
marketing. This organisation have very large workforce and it maintain employees relations by
satisfying needs of their employees. Nestle use high technology to produce and promote its
products and this organisation have world's largest research organisation in food and nutritions.
This will leads to maintaining and building brand image of company. As this organisation is
offering its products in many countries so it have to deal various rules and regulation of
government of different countries (Laudon and Traver, 2013). Strict rules and regulation in
import and export of Nestle products can be consider as weakness of company. In order to serve
different areas, organisation needs to consider wants and desire of all types of consumers. Some
times it is very difficult for company to satisfy needs and wants of all customers. Nestle business
operations with the use of high technology is very costly to company as training employees
regarding technology incurs huge cost to company.
Opportunities for Nestle includes expansion of its market area and entering in new
market. Company can focus on developing strategies which help in targeting as well as
promotion of products in rural area. Nestle can also engage in partnership with other major
companies will open doors of other opportunities for company. Nestle can more focus on
corporate social responsibilities. This will help company to gain positive image in market and
deal with past controversies. By proper research and development Nestle can handle its health
issues and improve quality of its food products with more hygienic products. High competition
in market can be consider as major threat to company. Rival companies using better and more
updated technology can be harmful for Nestle company. Different companies in market is
providing different products with wide range at cheaper price. For producing high quality
products Nestle needs to use commodities of good quality. With the increase in price of
commodities, costing and price of Nestle will also increase. Increase in price of product may
leads to decrease in sales and margins of company. Customer can switch is brands or can

purchase products from local suppliers at cheap price. Continuous change in market trends and
government rules and regulation in food industry and its prices is a threat for Nestle company.
P6) Strength and weaknesses interrelate with external macro factors.
Nestle strength can helps it business to deal with various external factors environment. It
can influence business decision making as well as provide opportunities to business. Weakness
of Nestle company can have negative impact on business operation and it will create threats for
company. All factors of macro environment are somewhere related to business and its strength
and weakness (Popescu, 2013). These factors may sharp opportunities for business or can create
problems for organisation. These factors affect overall functioning of business and developing
strategies for Nestle organisation. This can help in improving market share of company as well
as minimize its weaknesses.
Political factor cover all tax rates, trade polices, restriction on import and export of
products and all rules and regulation set by political and government body. Nestle is produce
products which is good for health of customers by adding nutritious ingredients in products.
Government of UK is more focusing health of people and encouraging them to purchase those
products which leads to improvement in health and keeping people healthy. Strict rules and
regulation of government in import and export of products will not let company serve it products
to some countries and this will leads to down in market share of company as compare to its rival
companies. Economic environment factors includes economy of country which influence
purchasing power of customers, interest rate, labour conditions etc. Nestle have to deal with
different economic factors of different countries. Different economic condition of different
countries have impact on overall profitability of Nestle company. When country does not have
good economic condition it affect purchasing habits of customer and there are more looking for
cheaper products to stratify their basic needs (Reed and et.al, 2013). Company can take
advantage countries which have high population and less job opportunities. Nestle help them by
providing employment to people of many countries and it is benefits for organisation also by
getting huge effective labour capital.
Nestle is largest manufacture and producer of finished consumer goods worldwide. It is
responsibility of this company to full fill social responsibilities as well as consider social factors
before taking any business decisions. It is a strength of organisation that it is developing products

which contains health benefits. Manufacturing products by considering safety and health of
consumers helps in developing positive image in market and building customers relationship
(Wilden and et.al., 2013). Social trends and wants of customers keep changes time to time. Wide
range of market with different customers required to identify different needs and wants of all
customers which is quite long process and sometimes difficult to handle as well. Technology
helps Nestle company in improving its capabilities and potential to perform its operations.
Technology factors includes all those various that helps in evaluating different available
alternative in order to improve technological capabilities. This macro factor consist of new
technology in market, innovative technology as well as more updated technology. Nestle
company is using innovative and modified technology in manufacturing of products which leads
to produce more products in less time duration. It will also helps in promotion of products by
various ways to inform and attract customers towards Nestle products. But the usage of high
technology is very costly as it require huge amount to purchase machines and in training
employees to teach them how to use high technology.
CONCLUSION
Form the above report it can be concluded that business environment is surrounded by
various factors. Business environment includes micro as well as macro factors. These factors
have major impact on business as it affect organisation business decision making and it
operations. By having proper understanding of different factors of business environment,
organisation can carry its function properly and conduct effective as well as efficient flow of
business activities. All organisation department are directly or in direly linked with each other in
order to achieve common goal of business. It is very important to analyses external and internal
business environment as it will helps company in identifying their positive and negative impact
on business operations.

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