Regent College HND Business: Nestle's Business Environment Report

This report provides a comprehensive analysis of Nestle's business environment. It begins with an introduction defining business and its functions, followed by an examination of the interrelationship between different organizational functions, including human resources, finance, marketing, operations, value chain, customer relations, and research and development. The report then delves into the influence of the macro environment on Nestle's operations, considering political, economic, social, technological, environmental, and legal factors. Furthermore, it analyzes Nestle's internal strengths, such as its strong brand and loyal customer base, and its weaknesses, including high costs and ethical concerns. The report concludes by summarizing the key findings and providing relevant references. The assignment is a report submitted to Regent College, as part of the HND Business program, covering Unit 1: Business and the Business Environment.

BUSINESS ENVRIONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in ppt........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship between different organisation functions.....................................................1
TASK 3............................................................................................................................................3
P4 Influence of macro environment on company functioning...............................................3
TASK 4............................................................................................................................................5
P5 Analysing strength and weaknesses of organisation.........................................................5
P6 Interrelation of strength and weaknesses of business with macro environmental factors.6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business is an entity or organisation which is engaged in delivering various types of
goods and services to the consumers in market. This is engaged in various type of activities that
helps in building country economy strong. The companies are involved various types of
functioning which develop an healthy competitive environment in market. Different businesses
are involved various type of activities that are linked to the other organisation functioning.
Actions of venture is influenced by many internal and external factors (Aterido, Hallward-
Driemeier and Pagés, 2011). Surrounding of any entity is constituted of various aspects that
affects internal functionality of organisation to larger extent. These aspects are divided into two
different parts i.e. macro and micro environment. The aspects involved in macro surrounding of
business which is controlled by the firm. While the internal surrounding of firm is in under
control of organisation which can be defined as 5M of venture i.e. man, machinery, money,
management and material. While micro surrounding of an venture constitute of customers,
supplier and competitors which can be controlled by firm to some extent. But the organisation is
not having full control over the micro environmental factors. Nestle is and public organisation
that is registered in share market of UK and an profit making organisation through delivering its
services to customers worldwide.
In this particular report, the various factors influencing the non-functioning of business
entity constitution internal and external environment of organisation are studied. Different
strength and weaknesses of Nestle is considered in delivering various type of strategies in order
top decrease the negative impact of external surrounding of business activity.
TASK 1
Covered in ppt.
TASK 2
P3 Relationship between different organisation functions.
The international companies dealing to large consumer base should be managed perfectly
in order to bring efficiency in processes resulting in delivery of products and services within
defined time period and quality constraints. So, the organisation should manage their functions
and work inn correlation in order to develop efficiency in operations. The Nestle should develop
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an well managed strategies in order to integrate the funding ions of firm to bring higher efficient
in performance and increasing profitability of firm in many folds. This interrelationship among
different functional department are as follows:
Human resource department: This is major functional department of any of the
company. As this is the ultimate sources of hiring and selecting an motivated and passionate
workforce fro the organisation which will deliver quality services to the customers (Fernando,
2011). Nestle is recruiting highly passionate employee towards work and helps in maintaining
good relationship with customers expectation.
Finance department: This department is the backbone of an organisation as this is the
main source of funding available for the investment and working of an firm effectively. This
division control over the revenue organisation, budgetary control of all other functional sector of
Nestler.
Marketing: This is the main department that contributes in higher sales of organisation.
This involved in development of various promotional schemes in order to attract at large
numbers of consumers towards the company products. Nestle is using various types of
advertisement in order to target different segment of market. The companies are making use of
information system in order to analyse the regular purchase of loyal customers and helps in
development of various plans in order to retain them with organisation sales resulting in repeated
purchase of products.
Operations: This is the functional department which converts raw material of company
into the final finished products that has to be delivered to the customers (Halbert and Ingulli,
2011). This operational division of firm works along with the marketing and research and
development sector of firm develop new changes in products and goods according to the
changing trends of market and business environment.
Value Chain: This system of organisation helps in efficient delivery of products of
Nestle to the right person at right time. This involves various approaches like six sigma and just
in time approaches in order to reduces wastage of available inventory and maintaining
distribution function of firm effectively.
Customers relation: Nestle is continuously engaged in maintaining an satisfactory
relationship with the consumers pre and psst sales. This helps in development of customers
loyalty with brand and helps in gaining competitive advantage in market, the firm is
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continuously engaged in resolving all the query faced by customers resulted to services and
products quality order to deliver them better services.
Research and development: Research helps implementing various changes in product
design, features, quality according to changing macro environmental factors in practice. This
department also bring some changes in flavours and taste of products in order to fulfil changing
demands of customers (Hill, Cronk and Wickramasekera, 2013). The research and development
department also works for the growth of an organisation through development of new product
design and variants in products in order to capture new market.
Companies are following various type of organisation structure and culture in order to
maintain continuous effectiveness in functioning Nestle. This can be achieved through
implementing various types of leadership and management styles in order to develop an
motivating working culture in internal environment of firm.
Functional: This organisation culture developed by an autocratic type of leadership style
helps dividing of task and functions according to the different operations of organisation. This
helps in integrating the various task relevant to the vision and mission statement of Nestle.
Centralized: Nestle basically following centralised organisational culture in their internal
environment in order to direct the workforce in right direction through allocating available
resource of organisation in an efficient manner. The power is distributed in the working structure
of nestle within hierarchy. Upper management is having highest power to make important and
profitable decisions fro the firm.
Matrix: This organisational functions is mots advanced structure which is foled by
various companies in order to manage task according to the task and functional department of
company. This is an integration of both functional and centralised function of venturer.
TASK 3
P4 Influence of macro environment on company functioning.
Nestle is a international and well known brand name it is almost in all small and as well
as in big countries and it serves the variety of food merchandise of chocolates, candy beverages,
baby food, bakery , dairy products and many more (Iskanius, Page and Anbuudayasankar, 2010).
This company founded in the Switzerland. The various factors affecting the internal process and
functionality of Nestle are as follows:
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Political factors :- Nestle heterogeneous the communities and its the face changing
revolutionary change in the world. It shows the emerging economies in various in various
countries like India and china . Internationalization process face many various task , due to the
change of globalization time to time it needs to create a standard like in the different countries
there are different politics and policies so they have to behave there like there environment.
Economical factors:- This brand nestle manufactured many products like
pharmaceuticals, beverages , confectioneries , baby food, dairy products and pet food .this
company nestle is working in more than the 86 countries and selling their product (Kew and
Stredwick, 2017).It also inform many other accessory like Maggie ,Nescafe , Kitkat so on. Due
to handling with many different countries it has to face and corporate with many problems and
resolve them to it deals with different localities,policies and changing of the inflation and
deflation.
Social factors:- now days people are getting more educated day by day and the level of
awareness in consumer is increasing too so they demand for the more healthy product and food
and special healthy ingredient product . So the companies like this nestle they mainly concern
about the factors and ingredient too. Most of the consumer have the great confidence in their
product which they us because of the quality product.
Technological factors:- IT sectors has created a many new ways to aware people and the
mostly used is the social media where the billions of people are thee and they can reach them
with in the few minutes. Due to all these now the consumer become more alert and they all want
to know about the ingredient the us and manufacturing process and want to deal directly with the
firms.
Environment factors:- the company has introduced some of the products which is kind
of healthcare products and which is used by he many countries of the world in the international
market. Healthcare product like powder cream are all essential for the kids of all countries to
protect from the harmful atmosphere (Klapper and Love, 2010). So, in change of weather as
according to the countries they send their product a the demand as per the climatic conditions. Its
necessary to follow the local rules of any country from which they are doing business.
Legal factors :- there are few laws so that according to that you have to set your
maximum as well as minimum wages for the labours and accordant to the labour laws . And they
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are privileged to work environment friendly as according to the environmental law. The
company nestle has to follow the foreign trade as according to the country's policies while
sending the product to another country. Brand has to maintain their own image in the
international market in terms of all the laws.
TASK 4
P5 Analysing strength and weaknesses of organisation.
Nestle is a world largest manufacturer of packages foods and beverages. It is a
multinational company (Moutinho, 2011). They are operated in approx 197 countries with more
than approx 2000 brands. Nestle operates in 12 different segments of consumer products such as
bottled water, baby foods, coffee, candy, cereals, prepared foods like dairy products, drinks,
nutrition and health care, ice cream.
Internal Analysis
Strengths: It has loyal relationship with retailers. Its effort of environment are
sustainable means it helps to reduce the wastage of material,goods and saved approx 500 million
kg of packaging goods by recycling its packages .The company is very good in branding so it
should be easily introduce their new products and sell existing products more easily. Nestle have
around approx 34000 worldwide employees who were worked continuously so its to make their
product easily available to every corner of world. This company established their marketing
strategies are innovative so more customers are attracted. Mostly people were trusted to this
brand because its market share is so high and cost are low. The most important strength of Nestle
is their quality which they were provided to their customers in more effective manner. They are
also promoted their products in colleges ,markets, etc. with the help of advertising and promotion
tool. Employees were encourage in organisation due to decentralized culture (Nishitani and et.
al., 2012).
Weakness: Many products of Nestle are not understandable in other countries so it
should be a huge problem. Its cost of logistics and supply chain are high. Retailers are not set
their own high prices because of stiff competition in market. Some of the brand are not changes
in new modern styles so consumers were seen in old fashion style. High water usage and
unethical practices these are the weakness of brand Nestle. For Example recently Maggie were
banned because it was found to contain some led so its also affected the Nestle brand. There are
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also huge problem of transport and storage facility. It also contain polluting substance for food
recalls. Nestle milk pack are not afforded to poor families because its premium price are so high.
So these are some weaknesses of Nestle which influences their brand.
External analysis
Opportunities: There are many opportunities like to increase their sale when they
adopted a credit policy. The coffee brand also offers a opportunity for company to get a high
sales and high profit. This brand provide opportunities for retailer to get incentives if they
increase their sales volume (Robbins, Judge and Campbell, 2010). Some of the product of Nestle
beneficial for human health like energy drinks. Today many pre packaged foods were more
demanding because of changing lifestyle of human such as long working hours,more women in
workforce etc. These are some opportunities which are provided.
Threats: Today competition are increased in every sector but especially in food and
beverages industries. Due to natural disaster,the beans of coffee are significantly high so more
people are not bought this brand. The major threat is that if there is increase in commodities will
result increase their prices then further increase their prices will result decrease in sales and
profit margins. The ingredient to be used to make a nestle product such as a poor quality of water
used so the communities suffer from a number of diseases.
P6 Interrelation of strength and weaknesses of business with macro environmental factors.
Business firms are systems where it get resources from the environment and provides
services and products to the environment. It can be related to national, regional or international
level. These are threats to the organisations for its sustainability and growth. Macro
environmental factors are greater to an organisation than the other factors (Roberts, Sykes and
Granger, 2016). It is not possible for an organisation to change the external factors but can react
to it. They change the strategies to tackle these factors. Company as big as Nestle have to look to
macro factors on the regular basis.
Strength of Nestle with macro environmental factors:
1) Company basically being from the diary industry and other food products the ecological
factor is a lesser threat.
2) With the advance emerging technologies Nestle competes with the technological factors
as being a bigger firm invest a lot on the technology advancement. Hence increasing the
quality of product it produces.
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3) With its wide range of products targeting each section of the society the social factors
like more requirement of fibre and proteins in different people are met by the company.
With the changing mind and eating habits of the society the company is producing its
product
4) Being a bigger corporate house the Nestle sign the treaties and following norms of
business in different part of the world reduces the threat of political factors (Rossi,
Vrontis and Thrassou, 2012). Like in India the ban of Maggie was a great loss so it took
back the product and passed all the quality checks to again do business in affecting
countries.
Weakness of Nestle with macro environment
1) Nestle has to pass all the standards that are different in different countries so as to
manage political pressure.
2) Being the MNC has to invest a lot in the technological advancements.
3) The food industry has the risk of getting replaced by the company that are of the same
country because the people sentiments are higher with the product that are country made.
4) Producing so large variety of product the packing which are Eco-friendly is more
difficult task.
CONCLUSION
It can be conclude from the above report the business environment largely influence the
functionality of any of the organisation. Some of the factors influencing the business activity can
be controlled while of them can be analysed in order to develop precautionary measures in
working environment. Nestle is optimally utilising their strength in order to grab various
opportunity that are available in external market environment which helps in reducing the
negative effect of changing macro environmental factors. Nestle develop various strategies of
growth through analysing its strength, weaknesses, threat and available opportunities. The
functions of organisation is interlinked with each other in order to bring unity in actions and
brand values which helps in effectively achievement of goals and objectives which are defined in
firm mission and vision statement by higher authorities.
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REFERENCES
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