M/508/0498 Business EnviromentLevel 4 Regent College
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Business environment includes of two main and foremost elements; internal and external environment (Reed and et. al., 2013). Both are important part of the economic, in this business meaning is human activities including production, extraction or sales or purchase of products and services that are accomplished to earn maximum amount of money. On the other hand, Environment depict as an element of surroundings. Thus, business environment is define as a set of conditions institutional, legal, political, social or economic that is not controllable and impacts the functions and activities of the company.
Further, internal environment consists of 5M's like man, material, machinery, money and management. Apart from this, external environment includes of political, socio-cultural, demo-graphical, legal, government and geo-physical factors. In this report, three organisations play a vital role namely, private, public and voluntary sector. Nestle, Crown Prosecution services (CPS) and Wellcome trust. This assignment divided into different parts which included purpose & type and scope & size of three types of organisation. Relationship between organisational function and business structure and objectives is also explained in this study. PESTLE and SWOT analysis and their interconnection with each other is also determined in this project.
P3 Relation among different organisational functions and their link with objectives & structure
Nestle is a food and beverage organisation which serve different variety of food products to the customers at reasonable price. In the organisation different departments are work with each other and have common motive to achieve long term goals and profit in limited time period. Beside this company need to Cognize the significance of interconnection between the activity of various departments (Reinhardt and Stavins, 2010). It renders the chances about betterment of their strength and satisfy basic needs and wants of clients. In the organisation, different departments are functioning such as finance, human resource, operational and marketing. Interrelation between various functions and activities of those departments are explained as below:
Production department: In the organisation, different departments are work with each other. Beside this, production department play vital role to produce different variety in their food and beverages (Shigang, 2010). All these are based on customers’ needs and wants as well as market trend. Apart from this, business organisation innovate in their ice-cream, chocolates and baby food products. Thus, it is benefited for the enterprise to maximise customer loyalty in the organisation. Objective of production department is to produce quality and healthy products in their food and beverages items.
Human resource department: There are different role which are play by the human resource of the Nestle such as workforce planning, selection and recruitment, performance appraisal, training and development and many other (Karagiorgos, Drogalas and Giovanis, 2011). All these are important and essential for the individual and organisation to improve their performance and profitability in allotted time period. Main objective of this department is to recruit knowledgeable and talented workforce either external or internal source. The functions of this department is interrelated with entire other departments like, operational, finance, marketing and so on. It support them via appointment of knowledgeable workforce at these division which allows them is to apply modern technologies in order to carry out all functions in market with effectiveness.
Finance and accounting department: In Nestle, main role and responsibility of accounting manager is to arrange sufficient amount of the money. In this business use different sources such as Bank loan, Hire purchase, equity share and many other. Thus it support the business to improve their performance at marketplace. Main aim of finance department is to arrange sufficient amount of the capital. The main function of such department is regarding the planning about capitals needed to transfer the activities with best quality and acceptance of new technologies. This will consider the preparation of budgets for various departments to render way is to make their plans as per assigned budgets differently it outcome in gain of costs which take down their profitability.
Marketing and sales department: It is another and main department in the Nestle. In the company main role of this department is to introduce their new products and services at marketplace as well as to the customers also (Kolk, 2016). The main and useful function of marketing department which is to carry on the task related to promotion of of the actual and possible offerings of Nestle clients to spread consciousness. Also, execute essential function regarding research and investigation of market to find out the existent demand, current trends, strategies and challengers adopt by them. All such information or data has direct relation with operational department of Nestle which has motive regarding conducting regular operations.
Organisational structure: It is important part of the business which is classified into different parts which are explained as below:
Consumer based: This structure is mainly based on customer's needs and wants. In this role of manager is to innovate their products and services which benefited to the company to maximise their sales and profitability.
Product based: It is another structure of Nestle which play important role in classifying and providing Nestle food and beverages to the customer's as per its needs.
Geography based: In this business is segmented on the basis of different regions of nations where they provide their quality products and services to customers (Nishitani and et. al., 2012). This structure support the company to determine customer demand according to various regions.
Functional based: This structure is divided into different functions of organisation such as operational, finance and accounting, sales and marketing and human resource. This structure assure operational effectiveness and efficiency as the activity is going to be executed by collective try of all worker. As an outputs, entire functions of organizational are determined in an effective and efficient manner. In addition to that entire productivity and performance of each and every functional manager enhances as whole are having appropriate and capable staff who carries out entire specified task in an accurate manner.
Above all these departments are interrelated with the objectives and structure of company. It is important and essential for the enterprise to maximise their sales and revenues in an effective manner. In case of human resource department, they have various roles in recruiting best candidates and thus it highly effects on business structure in positive, it is also beneficial for the company to accomplish their long term goals and objectives in limited time period. Under financial department, entire growth and success of business is mainly depends on accurate amount of the money. Therefore, it is needed for the organisation to set an effective structure in an appropriate manner. In production department that has various roles and responsibility to provide effective goods and services to the end consumer. Thus it support to accomplish or attain their desired objective within predetermined period of time.
P4 Positive and negative influence of macro environment on business operations
Macro Environment is the part of the organisation which effects on business operations and activities (Osterwalder and Pigneur, 2010). This factor includes PESTLE Analysis which has negative and positive impact on profitability and effectiveness of Nestle. PESTLE Analysis of the Nestle and its negative and positive effects are explained as below:
Nestle serves in various nations. The regulations and legislation set by the legal authority in various regions. Company should emphasis on these political changes like excise duties of import and export, taxation and government permission in order to come in to the target market and introduce hygiene food and beverages allowed by the government.
If rules and regulations of the government effects on business operations and activities. Main positive effect of political factor on company is to apply health policies which help to keep product quality.
High rate of taxation, export and import policy negatively effects on company in adverse manner.
Economy of nations differs everywhere. So business entity has to fix various economic and effective policies for targeted segments (Osterwalder and Pigneur, 2010). In this product price is main decision to interpret while strategizing the policy as per the buying power and inflation rate of the segments.
Effective preparation of report assist the business to collect knowledge about income level and inflation rates. Thus, it positively effects on business functions.
Individual low income level has direct effect on the demands of the food and beverage products.
The shared beliefs and thoughts of the clients impacts the business functions and operations. The life style, culture, norms and conditions force company to provide the specific food and beverages to the accurate segments. Nestle has well know the aspects that customers changing behaviour has immense essential.
This factor help Nestle to analysis basic needs and wants of customers towards Nestle products and services (Pikka, Iskanius and Page, 2011).
This factor also have negative impact in terms of lack of education. This adversely effects on profitability and productivity of company.
This factor provides different opportunities or chances for the implementation of innovative techniques and tools of marketing like e-commerce and internet (Pulver, 2012). Therefore, company uses these technology in their business operations and activities like software.
Nestle apply new technology in their business operations such as E-Commerce and Internet. Both are beneficial for the company to maximise their sales and revenues in limited time period.
New technology effects on employees are doesn't know about advanced technology. Thus, it reduce profitability and effectiveness of Nestle.
This factor consists the legal situation of Nestle which highly impacts on their operations in order to meet reduce the cost. For example: Nestle has to apply health and safety act for their workforce and also render hygiene food and beverages for the clients.
Health and safety act is identify as a positive impact on employees and business organisation to maintain better relation with them (Avramenko, 2012).
Legal penalties is another legislation that adversely and negatively impacts on company profitability.
Today's environment is dynamic and clean. Nestle require to emphasis on these regulation and rules also to provide healthy and hygienic products with environmental friendly operations.
This factor support company to provide friendly environment to their workforce. Thus, they work happily which is beneficial for them to maximise their sales.
Environment rules and regulations highly effects on the image and goodwill of company.
P5 Internal and external analysis for identifying strengths & weaknesses
Internal and external analysis is a main part of the SWOT Analysis. It is important factor for the all organisation which includes strength and weakness as an internal part and threats and opportunities as an external part (Bovee, Thill and Raina, 2016). Thus, it is important for the company to identify their internal as well as external factor also. SWOT Analysis of the Nestle which are explained as below:
Large workforce: In the organisation approx. 340000 employees are currently working which is main strength of the company. All these employees are well-educated and knowledgeable which help them to deal with difficult situation in easy manner.
Broad product portfolio: Nestle is a world's largest brand across the world and they recently having more than 8000 products or brands under its name such as mineral water and coffee, soups and sauces, breakfast cereals and many other. All these are available in marketplace as per the needs and wants of customers (Cavalcante, Kesting and Ulhøi, 2011).
Brand Structure: Nestle has different brands and products under the umbrella unit so handling such different number of personal brands can develop conflict and misunderstanding of interest.
Consumer and legal problems: Although Nestle recently come up controversies over the different years for example Nestle baby food formula boycott. Another issues is fixing of chocolate price and child labour by suppliers which effect in adverse worth of mouth.
Healthy breakfast: Main opportunity for the Nestle is Maggi oats and many other healthy breakfast food which have a more time future (Hair, 2015). Thus it is important and essential for the company to maximise their sales. In this business require to do maximum market penetration with respects to its cereals.
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Maximising income levels: Due to enhanced literacy rate, stable political scenario, handled inflation rate and disposable income level of population is maximising there by effecting into changing lifestyle and upsurge in demand.
Prices of commodities or products: Maximising price of products will effects in further gain in the price. Further maximise in price that will output in reduce in sales, brand switching and margins.
Competition in the market: With maximising number of national and local participant it's becoming more difficult for the business to distinguish themselves for other organisation. There is another threat from imitative goods destroying its image in marketplace.
P6 How weaknesses and strengths interrelated with external factor
It is more essential for the company to associate external factor and its weakness and strength. This factor give better chances to the business entity to gain competitive advantage easily. It is the role of management to overcome their weakness and provides their efforts in achievement if predetermined goals (Hamilton and Webster, 2015). Through this, various advantages are archived by company such as higher profitability, maximum sales better, image in market and many other. PESTLE Analysis of the Nestle and their relation with Strength and weakness are determine as below:
Political factor is main factor that have direct impact on the business growth and success. In this factor company follow different rules and regulation that impact on business strength and weakness. Presence of political situation in UK is quite unstable due to the impact of Brexit but their strong legislature structure provide the strong base to politics of a nation.
Strong legislature structure turns into the strength of an organisation as this will allows Nestle to adopt stable corporate strategies.
Instability due to the impact of Brexit turns into the weakness of an organisation as this will negatively impact their short term objectives and strategies about improvement in sales figure.
Economic factor also main part of the business growth and success. Each and every nation has various economic situation and various level of cash inflow or outflow. In UK, economy is strong due to high flow of cash but there is situation of inflation in UK due to impact of Brexit.
High flow of cash becomes the strength of Nestle as this will allows to improve their functioning specifically in UK to generate more amount of profits.
Inflation has direct negative impact over the per capita income of individual which results in lower down the demand of the products and impacts the sales.
Social factor is mainly related to the attitudes, cultural aspects, beliefs and behaviour of clients. This will have more effects on business operation and demands. Individuals in UK are more attracted towards the consumption of different items but on the other hand they become the health conscious too.
Preference of the new items becomes the strength of the organisation as the have diversified product lines.
Health consciousness of the people turns out into the weakness as they some target group goes beyond from their products which have impact over their sales.
Technology factor is more essential part for the Nestle because with the help of this factor they easily introduced their new products and services at marketplace. The technological environment present in UK stable in nature due to presence of highly build infrastructure. The main aspect which is associated with the same is high cost.
Presence of high technological environment becomes the strength of the organisation as this will allows Nestle to optimise the quality of their products and justify the standards.
High cost of new technologies turns into the weakness due to decrement in profit margin as involving usage of high cost behind the implementation of new technology.
Swot is influenced and connected with the macro factor of company. If changes in rules and regulation of government are high, it affects the business operations and functions in different countries. If economic condition of country where Nestle is operating is sound then it can prove to be an opportunity for it as it can expand and diversify easily. Social factor is also connected with the strength of company like they identify needs of customers and market which will help them to easily expand their business operations at large scale. Technology factor is also main and big opportunity for Nestle to introduce their products and services to the customers easily. It will help an enterprise to retain long run sustainability at marketplace. In case of legal factor, it is not easy for company to know rules and regulations of all country which is show weakness of the organisation. Under, environmental factor, it is an opportunity for Nestle to provide quality and healthy products to the customers at reasonable price.
From the above mentioned report, it can be concluded that environment is the combination of both factors such as internal and external. These factors highly effects on business profitability and effectiveness. Apart from this, there are three types of enterprise are functioning including, private, public and voluntary. Structure of organisation is mainly related with the business functions and objectives which is important for the firm to maximise customer loyalty in the company. All these has different size, scope and purpose. Different factors are used by the company to analysis their internal as well as external factor. In this SWOT and PESTLE analysis play vital role. Both factor are interrelated and impact on business growth and success at marketplace.
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