Business Environment Report: Unilever's Internal and External Analysis

This report provides a comprehensive analysis of Unilever's business environment. It begins with an introduction to the concept of the business environment and its impact on organizations, followed by a discussion of organizational structures and the interrelationships between various departments like HR, finance, and marketing within Unilever. The report then delves into the macro-environmental factors, using PESTLE analysis to examine the political, economic, social, technological, environmental, and legal factors affecting Unilever's operations. It analyzes the positive and negative impacts of these factors, along with an internal and external analysis to identify strengths, weaknesses, opportunities, and threats (SWOT) for Unilever, offering insights into how these factors interlink and influence the company's performance.

Business
Environment

Table of Contents
INTRODCTION..............................................................................................................................1
TASK1.............................................................................................................................................1
Covered in PPT.......................................................................................................................1
TASK2.............................................................................................................................................1
P3 Relationship between organisational functions.................................................................1
TASK3.............................................................................................................................................3
P 4 Positive and negative impacts of macro environment upon business operations............3
TASK4.............................................................................................................................................5
P5 Analysis of internal and external for identifying weakness and strength of Unilever......5
P6 Interlinked advantages and disadvantages with external factors......................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODCTION
The business environment consists of various factors which affect business. The business
environment is actually a combination of complex, dynamic and uncontrollable external factors
from which business operating factors are affected. There is no direct relation to any business
with its environment. They affect the business indirectly. The present report is on Unilever
Company which offers products such as personal care, food and refreshment to people. It is an
executive duty to conduct PESTEL and SWOT analysis to so that the output of their firm can
become maximum (Al-Swidi and Al-Hosam, 2012). One important thing in a business
environment is that business environment changes continuously so the manager should be real
quick to adapt to this ever-changing environment otherwise company may suffer a huge loss.
TASK1
Covered in PPT
TASK2
P3 Relationship between organisational functions
The organization structure defines the hierarchy in which the certain orders of the
business organization are followed. These activities include rules and responsibilities. It also
decides how information is processed in the organization. IT also defines the way in which duties
and responsibilities are assigned to individuals. It is applied in all the organization irrespective of
the size and shape. If we take the example of Unilever, then Unilever is a company which has
clear set of goals and objectives. The function of every employee is very well known to
everybody and the decision hierarchy is very well defined. Due to their global presence, the
Unilever tends to fall in MNC category (Bryman and Bell, 2015). Without the presence of a well
defined organization structure, the employee will not know whom to report. This can lead to
uncertainty and thus can very well affect the decision of the organization.
Different types of departments in an organization are Human resource department, research and
development, finance, sales and marketing and design and production. We will study all of them
in brief and will explain their relationships and advantages.
1. Design and production: - It is the preliminary department of an organization and in this
department the employee uses the resource available in the most efficient way. The
1

production needs to be monitored correctly so that it can be sure that all the resource is
used in most efficient way. Sometimes the production team is also divided into quality
assurance team and analyst team but it is better as it will ultimately increase the output of
the company.
2. Finance department: - Balancing budget in a company is very important as without the
right budget the quality of the product can be compromised. The finance department
includes accounting, controlling, and producing company’s financial statements. Finance
department affects all other departments as HR cannot recruit new people and production
cannot innovate in their product without the right budget (Christopher and Holweg,
2011).
3. Sales and marketing: - Sales and marketing are very important as it includes identifying
the needs of the customer and generates product at the right price satisfy the customer.
Marketing mainly involves research of the market. It also includes placing the right
advertisement in right medium so that they can have many customers attracted to their
product. In order to be successful, a business organization must either have a product
which is of subpar quality or its price must be low.
4. Research and development: - The Research and Development department mainly deals
in developing new products improving existing products/processes thus optimising the
whole production process. The relation of research and development with the marketing
team is close coordination with the organisation’s marketing activities so that the team
can ensure that the organisation is creating a product which will satisfy the needs of the
customer in the most efficient and economical way.
5. Human resource: - The work of this department is to hire new talent and promote the
existing employee. This is very important as it boosts the morale of the employee and
determines the hiring and firing round. Performance appraisals are also determined by
this department and sometimes HR employee gives advisory o higher management team
(Cross, and Miller, 2011). Every department must coordinate with the HR department
because HR will supply the manpower accordingly which is very important for the
overall growth of the company.
Relationship of these departments and their functions with each other:
2

Every department id interlinked with every other department because, without the help of
one, another department cannot survive. For example, if there is no innovation in the existing
product, then the existing product may become obsolete in the market and thus sales and
marketing team may run out of ideas as the product itself is outdated. Even the role of sales and
marketing team cannot be neglected because it is this team which conduct appropriate research
on what is the need of the customer and how the existing trend in the market is changing.
Marketing team market the product in such a way that it can appeal to the mass. And we all
know for the fact that without skilled labour, the company will not reach the heights it meant to
reach so it is the duty of HR to employ people who are of great calibre. And everything depends
on financing (Dibrell, Craig and Hansen, 2011). Without the right finance, a company may not
get the desired outcome as everything depends on financing.
TASK3
P 4 Positive and negative impacts of macro environment upon business operations
Macro environment includes the factors which have no link with the organization like
Political, economic, social, technological, environmental and legal and these factors are not
constant and change with time continuously. The company must check on these ever changing
environmental factors otherwise it will become a big threat to the company. Unilever, a
company, which work on food, refreshment and personal care, should keep in mind all the
external factors. For this, we will do pestle analysis and its impact on the economy.
1. Political factors: - Political factors are the government rules and regulation which affect
the company. These factors may be a change in government, current legislation or
discriminating laws that are ongoing in the country. It actually adds a risk factor in the
company which will ultimately lead to loss to the company. It also affects the rate of
development of the company (Gharajedaghi, 2011). Taxes regulation also affects the
finance of the company as fluctuating tax affects the production line. Unilever who deals
in food and refreshment should constantly check on political factors as sometimes
government the regulation in food is way more complicated hen other items.
2. Economical factors: - All the business national or international are affected by the
economic factors. Change in interest rates, recession, demand and supply etc are all in the
economic factors. Demand and supply are one of the major areas where Unilever should
3

focus on. If the economic condition of the country is poor then it is important for the
company to understand it and keep the cost of the product as low as possible. With poor
economic condition, the trade cycle also gets affected. Recession in the global market is
also very bad for the company and the managers should keep an eye on these factors.
Unilever business depends on the presence of money in the world as it is consumer-
centric company so the change in economic conditions greatly affects the Unilever.
3. Social factors: - The social environment is all about the believes and customs of the
society. The way people behave when they see a certain product is also in the social
factors. We all know that the decision of on individual to buy a certain product is greatly
affected by its family, family, colleagues and sometimes media (Kolk, 2016). All these
factors affect our attitudes, opinions and our interests, therefore directly affecting product
sales and services. But the fact is every society constructs its own social environment
factor which should be known to the person selling the product. Unilever has that
advantage because it employs people from all over the world based on their geographic
and environmental conditions. There are some beliefs and behaviours common to some
culture but mostly they vary. In Environment where society is multicultural, the social
environment becomes more complicated which further affect business. So the products
and services should be made to meet the consumer demand and lifestyle and only then he
will become a loyal customer to the company.
4. Technological factors: - In this ever changing technological environment, the manager
should keep in mind the newest technology so that they can cover the changing business
environment. Leaders should constantly look for development and updates within the
technological world so that they can update their product with the latest technology.
Proper investment should be done in the research and development department so that
they can bring in the latest innovative product in the house (Li and et. al., 2011). Even
with the latest technology companies can monitor and evaluate customer needs and their
demands for a particular product. Ata can also be collected and analyzed more efficiently.
5. Environment factors: - Company should release the product keeping in mind the
environmental factors of the location. Unilever releases the product in the market keeping
in mind the different segment of people and different environmental conditions.
Company has followed the theory where it appoints distributors at the regional level so
4

that their product can have widespread reach. Other elements such as pollution, recycling,
waste and ethical issues also affect the environmental factors.
6. Legal factors: - The government taxes in every nation that are being imposed o the
affects the economic growth of the company and it also protects consumers from
exploitation and another illegal factor. Laws such as business laws where the business is
governed and its operation and conduct are also foreseen. If a business is seeking to
obtain financing then we have securities law. And these laws are also important as they
prevent any kind of fraud in the company (López-Gamero, Molina-Azorín and Claver-
Cortés, 2011). Unilever executives are able to enhance the image in the marketplace as
they are using international patent laws and are providing adequate working environment
to the workforce.
TASK4
P5 Analysis of internal and external for identifying weakness and strength of Unilever
Managers need to organise analysis of external as well as internal factors to examine their
impact on the operations of enterprise. This assist them in system designing as per market
conditions. So, they can able to provide accurate services as well as products to peoples.
Unilever id offering different personal care brands, refreshment and food products to buyers.
Organisation need to provide offering quality by which they able to attract persons as well as
retaining them for a long period of time. So, management need to organise the process of
decision making by which proper choices are made, which are advantage for company. For this
analysis of SWOT is best techniques and tools which management need to organise to access
companies functionality (Meiners, Ringleb and Edwards, 2014).
Management organise analysis the factors of internal to acknowledge system
potentialities as per market opportunities. By analysing advantages as well as taking care that
proper techniques and tools are being utilized as well as workers are functioning properly.
Hence, taking care about disadvantages as well. Strength: In Unilever, management have to set up development as well as research team
which have people demand information as well as chech quality goods are provided to
consumers. By making a competent which are having a accurate information of goods,
5

benefits and features which are interact with persons to attract and make them for
buying their products.
 Weakness: Unilever, managers need to anticipate obst6acles as well as issues which
may influence the operations of business. Hence, they make modifications wit6hin
systems and applying a updated techniques as well as tools by which organisation can
make workers effectively (Onetti, Zucchella, Jones, and McDougall-Covin, 2012).
Management needs to organise survey of market to acknowledge consumers
demand as well as get information offerings. This assist in taking care of their given goods and
services as per their market place opportunities are used within organisation is able to position by
them managers others companies. Opportunities:Along with this time, peoples preferences as well as taste are
dynamically changing. So, manager of Unilever need to make modifications and
innovation in their goods by which giving a offerings. Organisation is running their
business globally so that it able to increase the base of consumers by giving healthy
products to peoples. Threats: Unilever need to provide products to consumers by which managers can retain
their employees for a long time, as their competitors are providing various goods so it is
important for managers to execute activities accordingly as well as set their competitive
cost for their products.
6

P6 Interlinked advantages and disadvantages with external factors
In company, manager need that system activities properly by which they provide goods
and services according to their needs of customers. By organising the survey within market
to acknowledge the demands of buyers as well as get competitors information. In Unilever
organisation, management need to understand components which are presented external of
company. Hence, some of advantages and disadvantages of system by which they can deal
with external environment factors. So, management acknowledge disadvantages and
advantages of system along with that organise a PEST analysis (Palo and Tähtinen, 2011).
Therefore, correlating for computing operations of organisation take place according to
situations of market. There are some of external factors which are explained in detail
below:
 Political factors: It is necessary for each company functions should follow the
policies of government of trade as well as taxation. Managers should make
different techniques along with tactics as per regulatory bodies of nation in which
enterprise are operated. These advantages of Unilever for competing with their
competitors of company as they have to increase share of market by carrying out
functions according to government laws. If organisation will not operate functions
according to their laws which will damage the reputation of organisation.
 Economic factors: These components are important because organisation activities
are depend upon exchange rate, inflation and interest of country in which activities
of enterprise are organised. As Unilever managers will able to increase profits as
well as sales, if buyers have proper income by which they buy according to wants
and needs. These factors aid managers in enhancing operations by contacting
financial institutes or loans (Pham, Segers and Gijselaers, 2013). Because of
exchange rate fluctuation it has influence on company’s techniques. Hence,
Functions affect the systems.
 Social factors: Companies need to provide services and goods according to their
needs of customers. As Unilever organisation give home care, personal care,
refreshment and food to their buyers. As Unilever organisation, it is important for
managers to use techniques of promotional activities for proving information to
consumers. This will aid in attracting customers as well as retaining customers for a
1

long period of time. Administration need to make improvements within offerings
so it aid in competing with others brands within a market. As if companies will not
add advantages as well as more innovative in their products. Then it will influence
revenue as well as sales of enterprise.
 Technological factors: Management need to utilize proper techniques and tools
within systems. By which they provide effective products to their customers. They
even require taking care of workers skills by which they can effectively work. If
companies use latest technologies, then this advantages managers to use resources
effectively as well as give quality of products. In Unilever, administration having
system by which they keep distribution records (Pikka, Iskanius and Page, 2011).
This assist organisation to give products within global market. But if companies are
improving strategies then it will influence on sales as well as will affect image
within market too.
Therefore, it can be conclude that external environment factors like as political,
economic, environmental etc. are involved by managing designs of the system. In this survey of
market is organising to enquire about competitors and demands of consumers. This need
organisation work as per market situations and laws of government. Therefore, applying latest
techniques as well as make strategies so workers can perform properly. It will aid in attracting
customers as well as retain them for a long time so that effective profits can be made by
managers.
CONCLUSION
From the above report it is concluded that there can be two types of business influencing factors
i. e. internal and external. Internal include items such as company’s product, employee and assets
whereas external factors include stockholders, economic conditions, government policies etc. It
is very important to maintain good business environment so that your worker know what to
expect. The manager plays an important role in managing the company in the harsh business
environment because the manager is the only person who has a clear understanding of all steps
which can be taken in order prevent the company from getting tapped in the after-effects of the
unsuitable business environment.
2

3

REFERENCES
Books and Journals
Al-Swidi, A. K. and Al-Hosam, A., 2012. The effect of entrepreneurial orientation on the
organizational performance: A study on the Islamic banks in Yemen using the partial
least squares approach. Arabian Journal of Business and Management Review (Oman
Chapter). 2(1). p.73.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
Christopher, M. and Holweg, M., 2011. “Supply Chain 2.0”: managing supply chains in the era
of turbulence. International Journal of Physical Distribution & Logistics Management.
41(1). pp.63-82.
Cross, F. B. and Miller, R. L., 2011. The Legal Environment of Business: Text and Cases:
Ethical, Regulatory, Global, and Corporate Issues. Cengage Learning.
Dibrell, C., Craig, J. and Hansen, E., 2011. Natural environment, market orientation, and firm
innovativeness: An organizational life cycle perspective. Journal of Small Business
Management. 49(3). pp.467-489.
Gharajedaghi, J., 2011. Systems thinking: Managing chaos and complexity: A platform for
designing business architecture. Elsevier.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Li and et. al., 2011. Towards the business–information technology alignment in cloud computing
environment: anapproach based on collaboration points and agents. International
Journal of Computer Integrated Manufacturing. 24(11). pp.1038-1057.
López-Gamero, M. D., Molina-Azorín, J. F. and Claver-Cortés, E., 2011. Environmental
uncertainty and environmental management perception: A multiple case study. Journal
of Business Research. 64(4). pp.427-435.
Meiners, R. E., Ringleb, A. H. and Edwards, F. L., 2014. The legal environment of business.
Cengage Learning.
Nishitani, K., Kaneko, S., Fujii, H. and Komatsu, S., 2012. Are firms' voluntary environmental
management activities beneficial for the environment and business? An empirical study
4

focusing on Japanese manufacturing firms. Journal of environmental management, 105,
pp.121-130.
Onetti, A., Zucchella, A., Jones, M.V. and McDougall-Covin, P.P., 2012. Internationalization,
innovation and entrepreneurship: business models for new technology-based firms.
Journal of Management & Governance. 16(3). pp.337-368.
Palo, T. and Tähtinen, J., 2011. A network perspective on business models for emerging
technology-based services. Journal of Business & Industrial Marketing. 26(5). pp.377-
388.
Pham, N. T., Segers, M. S. and Gijselaers, W. H., 2013. Effects of work environment on transfer
of training: empirical evidence from Master of Business Administration programs in
Vietnam. International Journal of Training and Development. 17(1). pp.1-19.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development. International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Scheer, A. W., 2012. Business process engineering: reference models for industrial enterprises.
Springer Science & Business Media.
Teece, D. J., 2012. Dynamic capabilities: Routines versus entrepreneurial action. Journal of
management studies. 49(8). pp.1395-1401.
Welter, F. and Smallbone, D., 2011. Institutional perspectives on entrepreneurial behavior in
challenging environments. Journal of Small Business Management. 49(1). pp.107-125.
Wheelen, T. L. and Hunger, J. D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
Zsambok, C. E. and Klein, G. eds., 2014. Naturalistic decision making. Psychology Press.
Online
business environment. 2018. [Online]. Available through:
<http://www.yourdictionary.com/business-environment>.
5

6