Business Environment Analysis of Nestle: Macro & Micro Factors

This report provides a detailed analysis of Nestle's business environment, encompassing both macro and micro factors. It begins with an introduction to the business environment and its impact on organizations, followed by a focus on Nestle, a leading UK-based multinational food company. The report examines the interrelationship between various departments within Nestle, such as human resources, finance, production, and marketing, and how these departments contribute to achieving the company's objectives. Furthermore, it explores the positive and negative impacts of macro-environmental factors, including political, economic, social, technological, legal, and environmental elements, on Nestle's business activities across different countries. The analysis highlights how these factors influence the company's operations, profitability, and strategic decision-making. Overall, the report offers a comprehensive overview of Nestle's business environment and its dynamics.

BUSINESS
ENVIRONMENT

INTRODUCTION
Business environment implies mix of all external and internal elements that influence the
profits and productivity of an organisation at the whole. Fundamentally, it is a combination of
macro and micro variables that hav1_1539319121 (1)e immediate or aberrant effect on business
and its task (Asif, Garvare and Ahmad, 2011). It incorporate competitiors, suppliers, customers,
client, social and economic pattern, change in technology, laws and regulations of government
and so forth. It is imperative for all directors to view such variables that straightforwardly
influence working of an organization. The given report is based on Nestle which is a leading
UK-based multinational food company. It offers various products such as chocolates, baby food,
coffee, tea, pet food, medicinal suppliments etc. It covers distinctive purpose, size and scope of
organisation including voluntary, private and public. It additionally incorporates interrelation
between different functions of organization and how they related with its objectives,
distinguishing positive and negative effect of external variables and its connection with internal
components.
TASK 1
Covered In PPT
TASK 2
P3 Interrelation of several departments of company & their link with its objectives
Nestle is an eminent organization which offers their excellent products to different
clients. Prime target of firm is to fulfil needs and demands of clients by offering them fantastic
items and yield high incomes from them. Their are a few divisions inside firm which works all in
all for achievement of set targets and destinations of organization (Bhaduri and Ha-Brookshire,
2011). It helps with playing out their activities easily and successfully. Different useful divisions
of alluded firm and their connection with its destinations are characterized underneath:
Human resource management: Crucial part is played by this function in achieving
objectives and targets of organization. Its principle duty is to enroll competitors and select
person who have high aptitudes and capacity to meet targets of organization. Human resource
supervisors performs different exercises that are worried about this division, for example,
compensation, performance appraisal, recruitment, training and development, maintaining
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healthy workplace, administer health and security to workforce and so forth. Each one of these
exercises helps administrator of Nestle in enhancing motivation of workers and in encouraging
them to perform towards accomplishing objectives and goals of organization (Cavusgil and et.
al., 2014). Human resource department of the Nestle is interrelated with the financial
department. For example: In order to hire knowledgable and skilled candidates from internal and
external resource, company need to sufficient amount of money which is only provided by the
finance manager.
Financial Department: Main role of finance department in the organisation is to manage
cash-flow of company and ensure there are sufficient funds available in order to meet day-to-day
payments. This department is mainly interrelated with many other departments such as sales,
human resource, marketing, production etc. All this departments need sufficient amount of
capital to do their activities in an appropriate and proper manner. For example: marketing
manager require sufficient amount of capital for advertising their products and services in
marketplace. It is a role of finance manager to identify appropriate source of fund where they
collect money such as Bank loan, Friends, relatives etc.
Production and operations division: This is the department in which inputs are changed
into final products. Controlling manufacturing cost and make ideal usage of assets are the two
noteworthy obligations of administrator of tasks office. Tasks office profoundly contributes in
assembling superb garments for addressing needs and inclinations of potential clients (Chetwood
and et. al, 2014). This will helps with accomplishing targets of firm and in the meantime builds
its profitability and benefits. Production department is interrelated with the finance department.
In order to manufacture products and services, company required appropriate amount of capital.
In this fund is more necessary for doing business operations and functions in an accurate and
systematic manner.
Marketing: It is additionally one of an imperative department which assumes significant
part in development and accomplishment of organization. Marketing directors lead explore for
getting data about market patterns and client needs. They figure powerful plans and
arrangements and also actualize them to advertise their item. Different limited time devices are
utilized by directors to successfully advance their item in advertise and impart their esteem and
advantages to clients. This will helps Nestle in drawing in more clients and pick up their
steadfastness towards mark. Successful marketing additionally builds offers of association's
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items which will eventually expand incomes of organization. Marketing department is
interconnected with the different departments such as operations, financial and human resource
for introducing each and every activities in marketplace and to the customers.
TASK 3
P4 Positive and negative impact of macro environment factors on business activities
There are around 195 countries where Nestle perform its operations. Business condition
of all countries are distinctive which impacts on activities of organization in positive and
negative manner. Elements that incorporates into external business condition are social, political,
environmental, legal, technological and economical. Administration of Nestle needs to think
about every single such factor (Gharajedaghi, 2011). By considering those forces, it encourages
manager in framing successful plans and techniques that aids achievement of association's
targets. Positive and negative effect of macro environment variables are characterized
underneath:
Political components:
Nestle operates in more than 194 nations each with its regulatory situation that can have a
direct effect on business operations. Political environment can particularly be problematic for
company because it can finished up political bottlenecks in ways of new authority. As firm is
having its activities in numerous nations, effect of political factors on working of business is
high. It incorporates government solidness, impose approaches, enactments, practice obligation
and so forth. In view of every single such factor, numerous challenges are emerge which firm
needs to oversee. Nestle serves in different countries. The regulations and rules set by the legal
authority are in various regions. Nestle should emphasis on these political dynamics including
taxation, government permission, import export excise duties to enter in to the target section and
also to innovate hygiene goods allowed by the government.
Positive effect: Consideration of these powers encourages chief in planning successful
methodologies and approaches that renders heading to them in achievement of targets. This
factor help them to identify norms and regulations of various country which support them to
maintain long run sustainability at large scale.
Negative effect: Strict directions by government put negative impact on tasks of business.
Increment in impose rates is additionally a factor that influences company's gainfulness (Gilboy ,
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2016). It is not easy for the Nestle to understand rules and regulations of various nations, thus it
negatively impact on business operations and activities.
Economic components:
Nestlé operating in lots of bations is foreign exchange swings. It is in 2016 for example
resulted in a foreign exchange effect of –1.6% on team revenues even via comparative revenue
from the past year maximised by 0.8%. In every nation where firm renders its services, growth
level is unique. It obviously delineates that economy of each country is particular. Deflation rate,
inflation rate, income, cash flow and so forth are the variables incorporated into it. Different
nations have various level of development. Economy of nations differs everywhere. So company
has to set various economic policies and strategies for various targeted section. The price of the
goods is an essential decision to yield while strategizing the policies if economic as per the
inflation rate and buying quality of the section.
Positive effect: In developed nations, economic condition is great which encourages in
business advancement of firm and enhance their business figures. In order to take decision about
developing new product and services in marketplace is positively impact on company and its
operations in a positive way.
Negative effect: In some country, pay of an individual is less and inflation rate is high. It
straight forwardly impacts on requirements of Nestle items. Sometime decision about
implementing new product in marketplace is highly impacted on profitability and productivity
ration of organisation.
Social variables:
Culture, religion, values, convictions, age, salary, behavior of consumers and so on are
some social factors that impact activities of Nestle. 62% of United Kingdom adults are
concerned regarding sugar in non-alcoholic drink and food products with a further five three
percent stating they are passively taking phase to limit or decrese sugar in their diet. Education is
the variable which affects growth of firm in both negative as well as positive way. The business
has well know the concept about consumers changing attitude has large essential. Large number
of person are now very much aware to the healthy life style. An organisation has made a better
reputation of knowing and analysis the consumers behaviour as well as the related dynamics.
Positive effect: If young people in nation are more, its impact is positive and strong on
business. This encourages in improving sales and growing operations by utilizing technology.
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Lifestyle of the customers are important part of this factor thus, it is the role of manager to
customer lifestyle and provide product as per them which positively impact on business
reputation at large scale.
Negative effect: Business exchanges of firm are exceptionally impacted by absence of
education (Kian Chong, Shafaghi and Leing Tan, 2011).
Technology variables:
Technological change, rise of new strategies and systems, new apparatus, emergence of
new technology and so on are a few variables that firm requires to keep aware and updated with.
This gives competitive advantage to company in market place. But the biggest one is digital
disruption and the innovative technologies it is lead such as Internet of Things technology that
can be applied in order to track food and food quality and how digital marketing is modifying the
way brand owners pass along and market to customers as well as the use of large important in
developing a competitive benefits. By adapting with the latest technologies, productivity,
profitability and operations of firm can be enhanced. Nestle follows technology in few business
operations like to retain the databases with the support of software. The vertical application of
social media has constricted the gap between the nonstop interaction of clients and the company.
Positive effect: It helps in enhancing item quality that eventually drives the firm towards
high profitability. Proper and better knowledge of technology is highly essential for the success
and development of company at large scale.
Negative effect: Application of old technology may impact business activities
antagonistically. It increase manufacturing cost and decay labor effectiveness. Improper and
inaccurate knowledge about technology highly and negatively impact on employees behaviour
and performance.
Legal elements:
Different laws and legislations made by government are incorporated into lawful powers.
Legal condition of every nation is distinct where business perform its operations or work. ,
Nestle has to apply the health and safety regulation for their workers and also to offers hygiene
goods for the clients. Nestle required to emphasis on these too while running in various regions
of the globe.
Positive effect: Fulfillment of government controls encourages firm in running business
activities easily.
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Negative effect: Ignorance of government directions put unfavorable effect on business
tasks.
Environmental elements:
The transition to a resource-efficient and low carbon future is underway, impacting
almost all sector of the global economy. All the same, for the biggest soft drinks brands in all
over the globe, the biggest environmental problem they continue to grapple with are general
environmental thinking particularly the effect of their waste from all the aluminium and plastic
packaging followed for their products. Keep environment clean is the fundamental obligation of
company. The system of waste disposable requires to embrace by firm and take after related
directions with this (Li, and et. al., 2011). Nestle require to focus on these also to produce
healthy product with situation friendly operations. some nations set various rules and regulations,
so to maximise the attitude of the commodity by the targeted section the regulation are important
to follow.
Positive effect: Fulfilment of condition related to environment encourages organization in
enhancing their image picture.
Adverse effect: Ignorance of condition related laws drives the firm towards society
feedback that outcomes in making of pessimistic picture of organization among individuals.
TASK 4
P5 Internal and external analysis for identifying strengths & weaknesses
Internal and external factor of the company is define its strength and weakness and
threats and opportunities. All these are important part for the organisation to maximise their
position at globally and internationally (López-Gamero, Molina-Azorín and Claver-Cortés,
2011). SWOT analysis of the Nestle are determined as below:
Strength Weaknesses
 Nestle is a well-established and famous
brand in all over the globe with its
quality in its food and beverages.
 In the company approximately 330,000
employees are work, it shown its
strength in arccos the globe.
 Strong rivalry by other brand name
means limited share growth and
development of Nestle in marketplace.
 State a big and strong global brand or
trade name, numerous controversies in
various nations of operations cause
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 Strong advertising and marketing
through print media, TVCs, online ads,
sponsorship and OOH.
problems.
Threats Opportunities
 Maximise in raw material cost can
impacts on profit margin.
 Events including Eurozone crisis, as
large of its profit and income comes
from Europe.
 To enlarge their business operation and
activities at international and global
level.
 Tie-ups with starring hotel chains,
schools, government institutes,
restaurants, etc that can assist Nestle
keep its market control
In this strength and weakness are identifying as internal factor of company. Along with
this, threats and opportunities are known as external factor that effect on business operations and
decision making power about expanding business operations and activities at international
marketplace.
Strength, weakness, threats and opportunities of the company is highly effects on
business operation and activities in an effective manner (Meiners, Ringleb and Edwards, 2014).
It is also influenced on the company to expand their business operations and functions at
different and global level.
P6 Interrelationship of weaknesses and strengths with external macro factors
Organization need to determine the weaknesses and strengths of external macro
environmental factors. Management need to discover distinctive techniques and methodologies
with the aim that it can identify strengths & weaknesses within the company. It is imperative to
determine an opportunity so firm can get advantage of it and can exploit it. Firm need to decide
the weaknesses with the goal that it can find a way to evacuate those (Sekaran and Bougie,
2016). External variables determined by Nestle manager are:
Political:
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Organization need to actualize all regulations and laws that are formulated by
government. By following all lawful guidelines organization can make compelling and effective
group. This factor is related with strength and weakness which are as follows:
Strength: Firm follow all standards and laws made by the administration so that it can
build up a good and effective team. By it, the exercises and errands can run easily and
effectively. Consequently, firm can procure more benefits. Nestle has number of outlets in
develop nations which increasing their revenue and market presence. When Nestle apples all
rules and regulations and pay tax accurate time period then it create a positive image of company
as compare to other enterprise.
Weaknesses: Company offer its services to around 194 countries so consequently firm
can't legitimately comprehend and actualize all regulations and rules. Subsequently, strategies
and procedures can't keep running in an appropriately way. It puts negative effect on the firm. In
UK, the stability of government is low which causes loss to the company. When Nestle is not
pay tax on given time period then they knowingness governments pressure and create a weak
point for company.
Economic:
There are economic situations, for example, GDP of the country, interest rate, inflation,
deflation etc. There can be negative and in addition the positive effect of these elements on the
organization. Weaknesses and strengths are-
Strengths: In Asian nations, economic condition is good (Tayur, Ganeshan and
Magazine, 2012). Firm considers all the variables related to economic condition of country
which assists them in running their operations smoothly. Therefore, it puts positive effect on the
organization. Henceforth, it can acquire more benefits and can build the piece of the overall
industry. Nestle has attain strong presence in developed nations such as India, US whose
economic growth rate continuously increasing. When a country go through a deflation situation
then product price are decrease and customer's buy more goods then consumption of Nestle is
maximise automatically, it is show business strength.
Weaknesses: In a few countries, the condition of economy is not good, for example, there
is a condition of inflation in country. So henceforth clients don't have savings and they don't buy
products from the firm. It brings about declining in profits (Bhaduri and Ha-Brookshire, 2011).
Nestle has provided their products at high prices as compare to their rivals which adversely
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affects purchasing power targeted customers. When inflation rate of particular nation is arise
then product price become more. It is identify weakness of an organisation because more price
define low demand of product which directly impact on business operations.
Social:
Organization need to satisfy the requirements of individuals with the goal that it can
enhance living standard of society. This likewise helps in keeping up great gauges among all
individuals. It can have positive and also negative effect on the organization.
Strengths: Company do numerous commitment to social exercises and conveys items as
per needs and demands of clients. Henceforth by CSR exercises it can create positive and
particular picture before all clients. Henceforth firm can procure more benefits and can grow the
business. Company is operating in UK where the employees turnover is low which due to which
it makes easy for top management to recruit maximum number of people and enhance their
stander of living. When Nestle follow society culture then it highly assist to maximise product
demand and become a strength of Nestle which increase sustainability and profitability.
Weaknesses: Company don't create products of good quality thus it prompts diminish
production and declining of benefits. Subsequently it can't extend and differentiate the business.
So there is terrible picture before all clients. Maggie controversy restrict people of UK to buy
their products which in results decreasing there sales as well as customer strength. If Nestle does
not follow climate changes and community culture and not promote on customer's demand then
reduce profitability, thus it is identify weakness of an enterprise.
Technological variables:
There are numerous technological changes that are taking place in the market. It can has
positive and in addition negative impact on the organization.
Strengths: Company embraces the recent and high technology so it can create great
quality of items. Subsequently it maximizes satisfaction level of clients and company can gain
more benefits. In this way it can expand the market share of overall industry (Asif, Garvare and
Ahmad, 2011). The company has generate a high revenue every year which makes them more
capable to adopt advanced and latest technologies in there different business functions. It identify
as a strength of Nestle in order to marketing their products on digital media platform which assist
to get maximum support of customers.
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Weaknesses: The technological alterations are not effortlessly embraced by the firm. So
henceforth they oppose such changes. In this way firm can’t easily execute these progressions.
Lack of skills and knowledge about using advanced technology may bring disadvantages to
company. If Nestle following outdated technology then it increase production cost, thus it is a
weakness of an enterprise that highly impact on business sales and operations directly.
CONCLUSION
From the above mentioned report, it can be described as environment is more essential
factor that highly effects on business operations and its activities either favourable and
unfavourable manner. In the organisation, different number of departments are work having long
term motive for achieving predetermine objectives and goals in limited time period. In this three
type of business including private, public and voluntary sector has their own size, scope and
purpose which help them to maximise their position at internationally. Internal and external
factor such as SWOT and PESTLE Analysis influenced on business operations and functions.
Thus, it is important for the company to gain competitive advantages within predetermine period
of time. Internal and external factor of the company are interrelated with each other and have
common purpose to accomplish desired targets and objectives.
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