Business Environment Analysis for Nestle: Policies and Stakeholders

This report provides a comprehensive analysis of Nestle's business environment, examining its interaction with various stakeholders, including customers, employees, and suppliers, and classifying organizations into public, private, and voluntary sectors. It delves into the impact of different economic structures like mixed and free enterprise economies, as well as the influence of monetary and fiscal policies on Nestle's operations. The report also explores the company's adherence to various legal and ethical frameworks, such as the Health and Safety Act, Equality Act, and Consumer Protection Act, and analyzes the impact of competition policies and related legislation like the Competition Act and Enterprise Act on Nestle's activities. The analysis highlights how Nestle navigates these complex environments to achieve its business objectives and maintain a positive relationship with its stakeholders. The report is available on Desklib, a platform providing AI-based study tools for students.

Business Environment
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Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1.................................................................................................................................................3
1.1....................................................................................................................................................3
1.2....................................................................................................................................................4
1.3....................................................................................................................................................4
TASK 2.................................................................................................................................................5
2.1....................................................................................................................................................5
2.2....................................................................................................................................................6
2.3....................................................................................................................................................6
TASK 3.................................................................................................................................................7
3.1....................................................................................................................................................7
3.2....................................................................................................................................................8
3.3....................................................................................................................................................8
TASK 4 ..............................................................................................................................................9
4.1....................................................................................................................................................9
4.2....................................................................................................................................................9
4.3..................................................................................................................................................10
CONCLUSION .................................................................................................................................11
REFERENCES...................................................................................................................................12
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INTRODUCTION
Business environment can be stated as the analyses the internal and external factor under
which if the changes in these factors that affects on the company function, stakeholders and
customers etc. In this report, there are different types of the sector which is classified into three
categories like private , public and voluntary organization. Different organization have various
purpose accordingly employees fulfils the goals and objectives of the firm. Under this report, there
are various aspects of the business environment will be studied in the context Nestle. The present
report covers, various stakeholders like government, customers, suppliers, employees are influenced
for accomplishing the demand of the firm. Organization takes the responsibility for following the
rules and regulatory framework related to the consumer protection and reducing the unfair practises
at the work place. In addition to this, company includes the mixed economy and free enterprise etc
accordingly they effectively allocate the resource. There are different market structure under which
company takes the decision related to the price of the products.
TASK 1
1.1
In order to relationship of the Nestle with the different organization under which company
have various purpose accordingly employees fulfils the goals and objectives of the firm (Yu and
Ramanathan, 2012). There are different types of organization which is classified into three sectors
such as public, private and voluntary firm that are stated as below:
Public organization- The main objectives of the public listed company is to provides the various
types of the products and services to their customers. In this way, theses types of firm contributing
the some percentage to the government which helps to develops the economy. Public listed
company also profit making firm which involves the government in the decision making firm. For
example, British Broadcasting Corporation is the public listed company under which they provides
the various news to their consumer.
Private organization- These types of business unit the main objectives to drive the highly profit
and provides the various products and services to their customers. In this way. It includes sole
proprietor , partnership firm that is profit making firm. For example, Nestle is the profit making
organization which provides FMCG products to the customers.
Voluntary organization- It is another type of firm under which they collects the amount for
donation and gives the charitable institutes (Alshamaila, Papagiannidis and Li, 2013). In this way,
organization is formulated by the government and group of people under which they provides
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various services to their community. For example, Action Aid Care is the charitable firm which
provides various services to their children. They focuses on children health care and education .
1.2
There are various stakeholders such as customers, suppliers, employees etc who influence
the company by fulfilling the objectives and needs that are described as below:
Customer- Consumer plays important role in the organization under which they generates the
income in the company. In this way, they wants to the Nestle uses best quality of goods and sale at
the reasonable price. Consumers are interested in getting the relevant information related to the
products and services as soon as possible (Goworek and et.al, 2012). For this purpose, employees of
the organization strives to satisfy of the buyers under which they provides the variety of products
and services to their buyers on time.
Employees- Workers and trade unions plays active role in the firm under which they are interested
in getting the relevant information about the organization's development and productivity. In this
way, employees wants to the company to fulling their needs and wants on time and provides the job
security, remuneration. Furthermore, organization uses the rewards system under which manager
render the reward to their employees as per their performance. It includes some incentives,
promotional opportunity and bonus which generates the interest to the workers towards the work.
Accordingly, they gives the best services to the customer and perform in well manner. It help Nestle
to maintains the brand image in the market and increases the overall productivity of the firm.
Suppliers- Suppliers is the best source of the organization because they deliver the raw material
and semi finished goods to the company. In this way, they are interested in getting the information
regarding the order and material amount of the firm (Hill and et.al, 2014). Furthermore, Nestle pay
the amount of the material on time to time and maintains the relation with the suppliers. They want
to the company under which should not break the contact related to the firm and suppliers.
1.3
Nestle takes the responsibility for maintaining the business environment as well external.
Company follows rules and regulation which helps to matins the relation with customers. The
legislation provides the positive environment at the work place which helps employees meet the
target of the business. There are various ethical issues occurred in the firm and manager adopts
then legal norms for reducing the unfair practices at the work place that are described as below:
Health and safety act 1974- This act is formulated by the UK government under which company
follows this act. According to this act, organization provides the medical check-up facility to their
employees and uses the safety equipment while they working at the work place (Bartolomei and
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et.al, 2012). It helps manager to maintains the positive work environment which helps to workers
to feel safe in the firm. It affects performance of the workforce and they gives the best services to
their customers.
Equality act 2010- Nestle follows this act under which do not discriminate the employees on the
bases of the age, religion, caste ect. As per this act, organization treat the employees are equally and
gives the equal opportunity which creates the satisfaction of the workers towards the job. It helps
employees to deliver the good amount of work and perform in well manner.
Consumer protection act 1986- Organization focuses on the welfare of the society and gives the
best quality of the products. In this way, company provides the information to the consumer about
the packaging , products integrates etc which helps to maintains the relation with their users
(Turner and Zolin, 2012). Apart from this, Nestle focuses on friendly environment under which
they uses the paper bag and provides to the customers.
TASK 2
2.1
There are different types of economy which includes the mixed economy, command
economy and free enterprises. In this way, with the help of all these economy, Nestle effectively
allocate the resource and import and export of the goods and services that are explained below:
Command economy- In this economy is controlled by the government under which they involves
in decision making of the organization. In this context, company deal with the another country with
the help of government and taking the suggestion which creates the less risk towards the import and
export of the products (García, Gómez and Molina, 2012). Organization easily allocate the
resources because government has power of financial management of the firm. Accordingly,
manager of the company effectively allocate the resources and uses for producing the products and
services.
Free enterprise economy- Government has no role in the supply of the products of the company
and no involvement in decision making process of the firm. In this way, organization freely import
and export of the goods and transfer one country to the another country. Organization is not required
to follows rules and legislation which helps to increases the overall productivity and maximizing the
profit. Free enterprise economy situation, firm effectively allocate the resource without involving
the other but still, government has right to control and monitor the business activities.
Mixed economy- It is the mixture of the command and free enterprises economy under which
private sector firm operate the function with the help of government. In this way, they has power to
control the business activities and involving the decision making process (Butler and et.al, 2013).
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Government focuses on their warfare of the society under which creates the public interest towards
the products and services which is provides by the organisation. In mixed economy situation, Nestle
allocate the resource as per their own needs and fulfils the requirements at the work place.
2.2
The monetary policy is formulated by the government which includes the short term and
long term rates, loans and supply of money. In this way, this policy controls the supply of money,
the interest rate, purchase and sales of the security and cash reserve ratio (CRR), statutory liquidity
ration (SLR). Furthermore, if changes in all theses factor is directly impacts on the business
activities and purchasing power of the consumer. For example, decreases in the CRR and
purchasing of the security is the increased under which Nestle will be able to take the loan from the
bank. It helps company to fulfilling the requirements at the work place and easily produces the
products and services. As per this, it also helps consumer to purchases the products which helps to
increases the revenue of the firm (Beringer, Jonas and Georg Gemünden, 2012). Apart from this,
SLR, CRR and interest rates is increased which directly affects the Nestle operation under which
manager not able to fulfils the requirement at the work place as well consumers.
The fiscal policy is created by the government which includes the tax policy ect. In this way,
company pay the amount of tax to the government under which the success upon the economy
depends upon the highly collection of the tax which is given by the firm as well individual. For
example, increasing in the value added tax accordingly Nestle change the pricing strategy under
which they decides the prices of products is increased. It affects sales of the organization and
decreases the sales turnover as well decline in overall productivity.
2.3
In order to evaluate the impact of competition policy on the activities of the business. There
are different types of rules and regulation which follows by the organization or reducing the unfair
practices at the work place that are explained below:
 Competition Act 1998- This act is formulated by the UK government under which the main
objectives is to reducing the unfair practices at the work place and assure the fair level of the
competition among the competitors . As per this, Nestle requires to follows this rules and
regulation and do not involve in illegal practices which encourages the wrongfulness
competition in the market.
 Enterprise Act 2002- This act is created by the UK government under which a range of
measures designed to enhance enterprises. According to this act, it includes changes in law
governing the insolvency of the firm (What is Business Environment? Explain its
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types .2016). In this way, Nestle strictly abide by the principles and policies of this act.
 Company Act 2006- The organization adopts the rules and regulation for reducing the
unethical practises at the work place which helps manager to maintains the work
environment. It also helps workers to focuses on their work and gives the better result to the
firm. According to this, organization requires to maintains the all financial accounts, proper
records and auditing in financial terms.
 Office free trading- Company requires to follows the legal norms is related to the
consumer protection. With the help of office free trading, organization protect their
customers and their right which helps to reducing unethical practises at the work place. It
helps manager to maintains the relation with the customer and attain the satisfaction of the
buyers. It affects performance of the organization and increases the sales turnover ratio.
Henceforth, all theses legislation which impact on the firm activities like equality, health and safety,
and flexible working hours etc (Yu and Ramanathan, 2012). There are various regulatory
mechanisms which Nestle has to address while carrying out their day to day operation.
TASK 3
3.1
Market structure is the place wherein customers exchange the products and services. There
are different types of market structure which is classified into three market like perfect, monopoly
and monopolist competition, oligopoly that are described as below:
Perfect competition- There are different types of seller in the same industry under which they sale
the homogeneous products. In this way, organization do not able to control the price of the products
as they many firm sale the products in same industry. Company decides the price as per the demand
of the products in the market and they determines the low price because many business units trade
in same sector.
Monopolist competition- In order to large number of firm in the market under which they
produces the same products however the brand is different. In this way, Nestle decides the prices of
the products on the bases of differentiation.
Oligopoly competition- There are small numbers of the firm in the industry under which they sole
producers and this types of seller has no close substitute (Alshamaila, Papagiannidis and Li, 2013).
In this way, it is formed own market structure under which organization produces the products and
services as per the demand of the goods. Furthermore, company set the price of goods as per the
demand in the market as result few competitors. As per this, it helps corporation to increases the
overall productivity and revenue.
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3.2
In order to many factors which are affected by the Nestle activities , it includes the supply
and demand , elasticity of demand and customer perception. Here now discuss about the supply and
demand and consumer perception towards the products that are explained below:
Supply and demand- It is the relation between demand and supply under which increases the
demand of the products in the market as well company increases the price of the goods. In this way,
it represents the direct relationship between prices of the goods and demand of the products
(Goworek and et.al, 2012). On the other hand, The demand of the products is decreased in the
market that will affect the sales of the company. As per this, organization reduces the price of goods
in the market which compels the customer to buy more products. Moreover, it represents inverse
relation between supply and demand.
Customer perception- Organization focuses on their consumer and perception related to the
products and services. As per this, it directly affects the image of the corporation and its product
because consumers communicate regarding products feature and integrates otherwise they are
shifted other brand of product. In this way, Nestle adopts strong advertising for promoting the
products and services in the market because consumer see the this and attracts towards the products.
3.3
Global factors that impact on business organisation are political, legal , social , technological
and economical factors how they impact are discussed below :-
Social factors – As we know that UK firms now expand their business in many nations with global
market. But UK businessmen cannot design their businesses strategies according to each and every
country because every nation has its own social and cultural differentiation such as different
language pattern, taste, habit, and lifestyle. So social factor is making great impacts on the UK
Business.
Political factors – Government rules and regulations are changing with time and from this UK
businesses impact much with political laws and rules such as impose tax on goods and services,
restriction on quotas, changes in monetary and fiscal policy (Hill and et.al, 2014). It will more
impact with EU government rules and regulation because UK businesses opened its businesses with
European Union.
Legal factors – legal factors such as environmental legislation, health and safety laws, educations
these are change with the time so being a profitable businessmen UK must be up to date with the
changing laws of government to survive in a competitive global market so they can easily change
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their business strategy with the changing laws and rules.
Technological factor- In modern world technology continuous grow and develop so it help a every
businesses men to expand their businesses globally in a competitive market UK business firms must
adopt a latest technology to stay in a global market by develop their product more innovative.
TASK 4
4.1
With the increasing global competitive in modern and commercial world government
support to increase international trade by unrestricted trade and international trade organisation such
as world trade organisation and EU, UK business organisation export their goods and services to 90
(Turner and Zolin, 2012). foreign countries now 44% UK export its goods ad services to another
countries of EU and 53% of import by UK firms from EU countries , earlier domestic consumer not
consume UK'S products and services now it helps to expand their business globally capture another
market outside borders so international trade is a very important factor to UK business organisation
leads to growth in UK economy, Balance of payment is becomes positive now , reaches their
products and services in foreign countries leads to increase in foreign currency transactions,
expanded global market , it becomes a attractive investment area for foreign investors to invest in
UK, growth opportunities with BRICS to expand high growth markets globally, international trade
also increase by bilateral trade between UK firms and BRICS , UK firms are with high technology
and BRICS export mineral oil and fuels , ores , irons and steels and related articles on the other
hand UK firms export vehicles , machinery , consumer goods and services to BRICS so it is very
important for the UK firms to trade internationally there are many advantages for UK country to
improve its GDP growth rate and UK economy now it becomes a fifth largest national economy in
the world .
4.2
Global factors are :-
Competition- Nestle has its brand image on one or more areas in overall market position it is a
economies of scale in manufacturing , marketing and administration and it becomes a successful in
food and beverage sector and it research and develop a safety and better quality products , taste ,
health and nutrition create customer's benefits
Economic factors – It includes interest rate, inflation rate , employment and income which impact
consumers buying behaviour (García, Gómez and Molina, 2012). Nestle's company has a
substantial development , social and economic development because of its food quality is good ,
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brand image , customer loyalty economic factors cannot affect much to Nestle's business .
Government rules and regulations- It has great impact on Nestle's company by political decision
such as taxes will be increase their is a bad impact on sales of its products it will be decline in future
and consumers decrease and vice -versa but if government impose high tax sugar than it is
beneficial for consumers Nestle's provide them a healthier chocolate which leads to increase in
sales.
Education and training – Nestle trained its 4000 employees once in a year they trained on
nutrition quotient training they also provide environmental awareness training in all countries
Brazil, Mexico, panama, Australia, china, Switzerland, Dubai, Malaysia , Spain, Philippines,
Venezuela . It conduct awareness in 74% countries where nestle operates , percentage of workforce
trained on NQ foundation module increase from 70 % in year 2013 to 94.4% in year 2016 it has a
great progress towards training to all employees, e-learning also made available to all employees.
4.3
European union is a kind of union that is situated in Europe. It is necessary for all the
organizations to adopt the policies framed by this union (Butler and et.al, 2013). However, this
union has certain policies and regulations that are required to be adopted by the management of
nestle. These policies are stated below.
Employment policy: The motive of this policy is to enhance the job opportunities in the economy.
In addition to this, the objective of this policy is to bring innovation and new strategy of working
among the employees. As per this policy, the EU provides training and development programmes
for the employees in order to order to offer them better job opportunities. With the help of this
policy, the employees of UK get a chance to learn innovative ideas and gain knowledge which can
be further implemented to the practical aspects.
Education and training policies: As per this policy, the candidates and freshers are offered
training so that they can apply in the better companies in order to develop their career. The
employees of Nestle can take the advantage of these polices and enhance their knowledge level.
Regional policies: It is seen that regional policies of different regions are varied from each other. If
the management of Nestle wants to deal in different regions of Europe like U, Ireland, Poland etc.
then the firm has to integrate the EU policies and regional policies (Beringer, Jonas and Georg
Gemünden, 2012). This will assist the company to save form double taxation issues that is generally
faced by the organizations. As a result, the organization will be able to save funds can be invested in
different investment opportunities.
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CONCLUSION
Summing up the whole report, it can be concluded that, there are different types of the
organization and they have many purpose as per this fulfils the goals and objectives of the firm.
There are different stakeholders are influenced the goals and targets of the company. Various
economy like mixed, command and free enterprises which is followed by the organization and
effectively allocate the resources. With the helps of legislation, company reduces the unfair
practices at the work place and maintains the customer relationship. There are different market
structure under which organization decides the price of the products. Business and culture
environment has great impact on performance of the organization. Economical and technological
changes are affected business activities which helps employees to maintain overall productivity of
the business and its work quality.
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