+ 44 20 8144 3706Executive Summary:
There are a number of components of the business environment and all of them have an impact on HUL. It is identified that ruling Government of India is preparing a business friendly policy. Socially, people of India no longer remain money saver and due to this reason, in future demand for FMCG products will increase. HUL has a good R&D team and it develops innovative products. The economic environment is the factor that severely affects business performance. Firm distribution resource is rare and valuable. Financial resources are valuable to the firm. It is hard to imitate HUL product portfolio. HUL must expand its business in international market considering strength.
Introduction:
The business environment has huge importance for the firms because it to large extent affect business performance. In the present research study, business environment analysis is done and comments are made on the HUL and external and internal environment factors on it. In the middle part of the report, VRIO analysis of HUL is done and comments are made by the company. At the end of the report, reasons due to which firm must expand its business in the international market are discussed in detail. Finally, conclusion section is prepared in the report.
External and internal analysis:
Business environment time to time required to be analyzed by the business firms because it greatly affects firm operations and its profitability. The extent to which company will be successful depend on business environment factors conditions. If business environment is favorable to business, then in that case there will be an opportunity for the firm and on the other hand, if business environment particular component is not favorable for the firm, then in that case it can be said that there is a serious threat to the firm. External environment analysis is given below.
• Political environment: Ruling Government greatly affects any nation growth in varied areas. This is because every ruling Government has its own thinking, belief and value system. Every ruling Government has its targets and objectives and desire to work in particular direction to work for the benefit of society. It is the ideology and value system that influence ruling Government actions and thoughts. If the ruling Government prefers to prepare business friendly policy then in that case business firm get proper support from the Central Government. Consequently, business firms flourish at a rapid pace in the nation. Such kind of business friendly policy is mostly prepared by the capitalist economy (Rastogi, & Trivedi, 2016).
There are many nations where Central Government gives more priority to the social welfare more and focus on more on social security, etc. In such kind of nations business firms receive less support from the Government and due to this reason in such kind of nations only few firms operate. The Indian Central Government has fully focused on promoting business firms in the nation. In the last 3 years Indian Government takes many steps to ease doing business in India. Such kind of things motivates firms to make investment in India and also develop confidence among investors. HUL acquire Horlicks from GSK for Rs 3045 crore (HUL-GSK merger complete, FMCG giant buys Horlicks brand for Rs. 3,045 crore, 2020).
Modi Government is promoting more and more Indian firms to do business cross border and in this regard provide a varied sort of facilities to the firms and enter into the trade agreement with foreign nations. Ease of rules in India promotes merger and acquisition deals from side of Indian companies. Hence, it can be said that the political environment is creating opportunity for the firms.
Conclusion:
On the basis of the above discussion, it is concluded that business firms must constantly monitor the business environment because by doing so they can immediately take action and respond early to any threat or opportunity. HUL is the one of the leading FMCG Company in India and it have product portfolio. The company also has a good R&D team. All business environment components other than economic factor have a positive impact on the business firm. HUL has ample valuable and rare resources in its business. Some of its resources are possible to imitate and some not. HUL must expand its business in the international market as it has a large product portfolio.
Reference:
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