Notesale: Turn your study into money

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               BTEC  Higher  National  Diploma  in  Business  
   
 

 

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Table  of  Contents  
ASSIGNMENT  NO:  1  ESSAY  
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 7  
BIBLIOGRAPHY  
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2
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It   is   important   to   know   what   to   produce,   how   much   production   is   needed,   how   to  
produce,  where  to  produce  and  for  whom;  therefore,  material,  natural  resources,  and  
machinery   are   necessary   components   in   the   production   process
...
   
There  are  limited  disposable  resources  in  comparison  to  the  never-­‐ending  wants  (eg;  
cars,  gadgets,  luxurious  holidays)  and  needs  (eg;  food,  water,  shelter  and  warmth)  of  
the  society  and  that  can  be  an  economic  problem,  therefore  choices  have  to  made
...
 
The   Government   allocates   the   resources   and   decides   what   goods   to   be   produce,   in  
what   quantity   and   the   selling   price
...
   
Limited   choices   for   customers,   shortages   and   surpluses,   less   flexibility   slower  
consumer   reaction   to   changes   and   fluctuations   in   demand   and   supply   are   some   of   the  
effect  of  command  economies
...
   
(Investorwords,  2013)  
 
-­‐As   there   are   very   low   or   non-­‐existent   taxes,   workers   can   keep   most   or   all   of   their  
incomes,  therefore  they  are  motivated  to  work  longer  hours
...
 They  can  decide  
on  what  to  buy,  where  to  buy  therefore,  prices  can  be  kept  low  trough  the  competition  
A   high   demand   of   a   good   or   service   can   also   lead   to   a   price   rising   and   increase  
production   of   that   good   or   service,   therefore   the   business   will   experience   a  
maximized  profits  which  is  in  their  interest
...
   
Free  enterprise  Economy  is  generally  free  from  government  control  while  in  a  
command  economy  the  government  plans  every  stage
...
  The   decisions   regarding   the   production   and  
distribution  of  product  and  services  are  shared  between  the  government  and  private  
owners,   the   Government   having   control   over   Laws,   taxes,   military   spending,   and  
public  education
...
   
 
A  balanced  level  of  private  economic  freedom  is  permitted;  also  the  Government  can  
interfere  in  economic  activities  in  order  to  attain  social  objectives
...
   
 
Transitional   economies   have   faced   few   difficulties   along   the   way,   such   as:   raising  
unemployment,   inflation,   corruption,   and   lack   of   entrepreneurial   skills   or   moral  
hazard
...
 
According   to   O’Connor   and   Netting,   liberalization,   legal   reforms   restructuring   are  
some  of  the  factors  that  contributed  in  influencing  this  kind  of  economic  system
...
 
A   good   example   is   Cuba   where   the   majority   of   resources   are   allocated   by   the  
government   while   the   economies   in   Europe   has   an   even   mix   between   markets   and  
planning
...
   
 
The   Private   Finance   Initiative  (PFI),  in  order  to  raise  money  to  pay  for  new  buildings  
and   services   the   Government   established   PFI,   where   private   firms   manage   public  
projects  and  take  care  of  the  starting  up  costs
...
   
 
PFI  projects  can  last  for  many  years  and  are  usually  contracted  to  associations  such  as  
banks,  facilities  management  company  and  constructions  firms  that  are  to  dedicated  
to  bring  value  for  money,  efficiency,  equity  and  responsibility  
Financing,   designing,   building   and   operation   are   four   important   elements   in   a   PFI  
project
...
 (Investopedia,  2013)  
Public  sector  is  normally  composed  of  organizations  owned  by  the  government,  such  
as;  health  care  bodies,  educational  bodies,  prison  and  police  services
...
   
PPP  supports  competition,  skills  transfer,  innovation  and  choice
...
    The   involvement   and   activities   between   public   and   private   sectors   must   be  
focused   and   very   well   and   structured   in   order   to   provide   quality   services   for   the  
public  in  an  efficient  and  cost-­‐effectively  manner
...
   
It  can  be  said  that  the  Mixed  economy  is  the  most  popular,  functional  and  efficient,  
supported  by  socialism  and  capitalism
...
1  &  1
...
  It   is   the   responsibility   of   the  
government,   private   sector   and   the   public   sector   to   sustain   and   protect   the  
environment
...
   
 
In  1996  Nestle  introduced  the  Nestlé  Environmental  Management  System  (NEMS)  and  
they  are  still  doing  their  best  to  mature  and  sustain  the  environmental  fortification
...
     
 
Nestle  is  the  Swiss  based  global  food  and  beverages  processing  organization  offering  a  
variety   of   products   such   as:   dairy   products,   baby   food,   coffee,   tea,   bottled   water,  
cereals,  ice  cream  and  chocolate
...
 However  there  are  other  factors  that  need  
to   be   considered   in   order   to   create   an   exceptional   equilibrium   for   a   successful  
business
...
 (Businesscasestudies,  2013)  
 
An   organization   is   formed   by   a   group   of   people   with   a   specific   purpose,   and   mutual  
goals,   trying   to   meet   different   needs,   achieve   the   best   results   and   perform   to   a   high  
standard
...
 In  the  private  sector  in  the  UK  the  main  
types  of  business  organization  the  seek  profits  are:    
1) Sole  traders  are  very  common  in  the  UK  and  have  many  advantages  such  as:    
Is  very  easy  to  set  up  in  a  business  as  a  sole  trader,   coordinated  by  one  person,  fast  
decisions  can  be  made,  can  be  set  up  with  very  small  capital,  the  owner  keeps  all  the  
profit,  close  connection  can  be  maintained  with  the  customers  or  employees,  however  
there   are   some   disadvantages   too:   the   owner   has   a   unlimited   liability,   can   work  
longer   hours   and   might   not   be   able   to   take   a   holiday   or   time   off   if   the   trader   does   not  
have  employees,  is  the  only  person  the  responsible  for  the  business
...
   
The   purpose   of   the   sole   trader   is   to   serve   their   clients   in   the   best   possible   way   in  
order  to  build  a  profitable  business  and  make  a  profit
...
 The  business  can  
still  operate  in  case  one  of  the  partners  is  off  sick,  or  on  holiday
...
 The  responsibilities  can  be  shared  between  the  partners,  
meaning  less  pressure,  however  as  the  sole  trader  there  is  unlimited  liability
...
   
Examples  of  partnerships  are:  doctors,  accountants,  solicitors,  etc
...
   
 
3)   Companies   must   be   registered   with   the   Companies   House,   must   have   an   official  
address   and   is   a   legal   body
...
   
 
There  are  two  types  of  companies  
A  private  limited  company  (ltd),   usually   smaller   than   a   public   company   business,   it  
does  not  trade  shares  on  the  stock  exchange
...
  Can   attract   many   investors   and   capital   can   be  
easily  raised
...
 The  biggest  advantage  of  a  PLC  
is  that  the  shareholders  have  limited  liability
...
 A  perfect  example  of  public  limited  company  Nestle
...
   
5)  Voluntary  organizations  defined  as  non  profit  organizations  Eg
...
 A  stakeholder  can  be  a  
person,  a  group  of  people  or  an  organization  that  has  interest  in  an  organization
...
 
(BusinessDictionary,  2014)  
Objectives  are  explicit  results  that  are  to  be  accomplished  by  a  business
...
”  
(Nestle,  2013)  

 

“Good   Food,   Good   Life”,   is   Nestle’s   slogan   and   they   aim   to   meet   its   stakeholder’s  
needs,   expectations   and   objectives
...
 Nestle  is  complying  with  the  laws  and  regulations  of  the  countries  
where  they  function,  making  sure  that  they  offer  their  staff   the  needed  support,  health  
and  safety  protection  and  the  staff  is  well  trained  in  order  to  deliver  the  best  results
...
 (Nestle,  2013)  
Taking  in  consideration  the  complexity  and  the  size  of  Nestle  it  is  fair  to  say  that  
meeting  the  objectives  of  the  stakeholders  at  the  same  time  is  a  very  challenging  
mission
...
3  The  responsibilities  of  the  NESTLE  and  its  strategies  employed  to  meet  
them  
Like   any   other   organization,   Nestle   also   has   meaningful   and   various   responsibilities  
towards   the   market   and   has   adapted   different   strategies   in   order   to   meet   them   all
...
 The  organization  thrives  to  implement  the  
best  techniques  of  farming  without  diseases
...
 
 
-­‐  Management  Responsibilities  
Different   management   policies   with   regards   to   human   and   operations,   such   as  
suitable   training   to   employees   for   a   good   performance   and   their   best   result   and   an  
efficient  use  of  the  available  resources  of  organization    
Furthermore,  Nestle  is  responsible  to  produce  a  healthy  and  high  quality  product  for  
it’s  consumers
...
 
-­‐Preserving  natural  resources  
-­‐Observation  of  the  energy  used  (cost  effective,  efficient  use,  pollution  reduction)  
 
-­‐   Effective   Ethical   practice   it’s   a   long-­‐term   objective   for   Nestle   and   plays   a   very  
important  role
...
 
(Riley,  2012)
...
   

2
...
 It  is  important  to  understand  which  one  is  more  
effective  as  they  can  both  encourage  or  slow  down  the  economy
...
   
The  interest  charge  at  which  commercial  banks  loan  balances  are  commanded  by  the  
Federal  Reserve  to  other  reservoir  organization  overnight
...
 By  reducing  the  supply  of  money  a  balanced  level  will  be  created
...
  People   and   business   can   take   this   opportunity   to   make   new  
investments  and  develop  new  projects
...
   
The  products  export  expenditure  of  the  Nestle  can  also  be  pronounced  impacted  by  
the  monetary  policy    (Hall,  2013)
...
 
2
...
 (EuropeanCommission,  2012)  
Competition  policy  affects  Nestle  in  various  sectors
...
 It  
helps  to  reduce  the  price  and  increase  the  quality  of  product  and  crates  wider  choices  
for  consumers
...
 
(Davies  and  Ormosi,  2013
...
 
 
Main   Roles   of   the   Regulators   are   Office   of   fair   Trade,   Competition   Commission,  
Directorate   General   for   Competition,   Competition   Act   1998,   Enterprise   Act   2002,  
European   Union   Competition   commission   plays   an   important   part   for   the   UK  
economy
...
 The  policy  maintains  and  
promotes   vigorous   competition   in   the   market   trough   anticompetitive   conduct   by  
organization
...
   
The   Competition   Act   1980   cultivates   many   laws   and   regulations   that   deal   with   the  
anti  competitive  practices  of  different  organizations
...
 
The   Restricted   Trade   Practice   Act   1976   deals   with   the   circumstances   where   the  
organizations  are  restricted  to  compete  freely
...
  This   act  
implements   minimum   prices   on   goods   and   services   that   can   be   re-­‐sold
...
 
3
...
 The  buyer  and  seller  behavior  
are  influenced  by  the  market  structures
...
 1    
In  fig
...
   
 
Perfectly  competition  has  a  large  number  of  producers  of  the  same  product
...
 It’s  easy  to  enter  or  exit  the  market
...
 
The  firm  has  a  significant  market  power  and  control  over  price,  however  laws  such  as  
the  Fair  Trading  Act  of  1973  and  the  Enterprise  Act  2002  are  trying  to  control  them
...
 In  order  
to  increase  prices  and  profits  the  companies  often  reduce  supply  of  product
...
 The  companies  are  the  
price  makers
...
2  Illustrate  how  market  forces  shape  responses  of  NESTLE  
 
NESTLE  has  to  set  its  prices  according  to  their  competitors  in  the  market
...
   
 
Price  Elasticity  of  Demand  indicates  the  change  in  the  demand  of  quantity  if  the  price  
changes
...
 This  will  increase  revenue  at  lower  costs
...
 
 
 

 
Equilibrium   takes   place   when   the   demanded   quantity   is   equal   to   the   supplied  
quantity
...
   
 
If  the  demand  of  products  is  less  than  the  quantity  supplied,  Nestle  can  consider  
promotional  tricks
...
   
 
The  macro-­‐environmental  factors  that  have  an  impact  on  an  organization  are  
examined  using  the  PESTEL  analysis
...
   
The  micro  forces  affecting  the  business  are  illustrated  in  the  below  figure
...
3  Judge  how  business  and  cultural  environment  shape  the  behavior  of  
NESTLE  
 
The  behavior  of  Nestle  is  without  doubt  is  shaped  by  the  business  and  cultural  
environment,  therefor  they  are  important  factors
...

This  may  include  both  the  external  environment  (competitors,  customers,  rules  and  
regulation  of  government)  and  the  internal  environment  (employees,  supplier,  etc
...

 

 

 

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4
...
 The  domestic  market  can  suffer  saturation  therefore  international  
trade  is  significant  for  Nestel  UK  as  it  opens  doors  to  new  market  segments
...
 
International   trade   eliminates   limitation   and   as   a   result   there   is   communication  
improvement,  larger  consumption  that  has  a  good  impact  on  Nestle  organization
...
   
Global  events  can  affect  the  supply  and  demand  or  the  prices  and  at  the  same  time  the  
world  economy  can  be  stimulated
...
     
Through   International   trade,   NESTLE   has   become   a   global   organization   with   a   large  
market  share
...
   
Quota  is  used  and  an  instrument  of  negotiation  between  the  countries
...
 
 

4
...
 
All   Member   States   are   required   to   obey   by   the   regulations   implied   by   the   European  
Union
...
  Examples   of   free   trade   areas   are:   North   American   Free   Trade   Area  
(NAFTA)   between   the   USA,   Canada   and   Mexico;   Asia   Pacific   Economic   Cooperation  
(APEC)  and  the  Common  Market  for  Eastern  and  Southern  Africa  (COMESA)
...
 
The  global  forces  influence  UK  businesses  and  this  can  be  well  analyzed  using  PESTEL  
analysis
...
3  Impact  of  policies  of  the  European  Union  on  NESTLE  
 
The   policies   of   European   Union   (EU)   has   a   big   influence   on   nestle   business   activity
...
 Nestle  has  free  trade  across  the  European  Union  and  it  has  to  follow  
the  policies,  rules  and  regulations  in  the  international  and  national  trades
...
   
-­‐  The  Inflation  policy  is  developed  by  the  EU  in  order  to  control  the  inflation  and  to  
increase   the   economy
...
   (Lihitkar,  2013)  
-­‐   The   Agriculture   policy   is   related   with   the   domestic   and   agriculture   products  
aiming   to   increase   the   domestic   production   therefore,   helping   farmers   to   earn   a  
satisfactory  income
...
    The   aim   of   the   single   European  
market  is  to  increase  the  economic  growth  and  employment  within  the  EU
...
 Competition  also  helps  to  avoid  the  production  of  inefficient  goods  associated  
with  domestic  monopolies
...
  It   also  
illustrates   the   strategies   applied   by   Nestlé’s   with   regards   to   its   responsibilities   and  
how   Business   and   cultural   environment   shapes   Nestlé’s   behavior,   market   structure,  
pricing,  and  the  response  of  Nestle  to  Market  forces
...
  It   can   be  
concluded  that  Nestle  attained  an  increased  profit  and  market  share  through  effective  
applied   strategies   successful   allocation   of   the   resources
...
   
 

 
 
 
 
 
 
 

 

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