PESTLE and SWOT Analysis for Business Environment

This assignment requires students to conduct a PESTLE (Political, Economic, Social, Technological, Legal, Environmental) and SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for a business environment. The goal is to analyze internal and external factors that affect an organization's success. Students are expected to use real-life examples or case studies to demonstrate their understanding of PESTLE and SWOT analysis in a business context.

Business and Business
Environment

Contents
INTRODUCTION.....................................................................................................................................3
TASK 1....................................................................................................................................................3
P1: Different types and purpose of organisations..............................................................................3
P2: Size and scope of a range of different type of organisations.......................................................6
TASK 2....................................................................................................................................................8
P3 Relationship between different organisational functions and their link to organisational
objectives and structure ...................................................................................................................8
TASK 3....................................................................................................................................................9
P4: Positive and negative impacts the macro environment has on business operations ..................9
TASK 4..................................................................................................................................................11
P5 Internal and external analysis of organisations in order to identify strength and weakness .....11
P6 Strengths and weakness interrelated with external macro factors for the company ................12
CONCLUSION.......................................................................................................................................13
REFERENCES.........................................................................................................................................15

INTRODUCTION
Business Environment comprises of internal as well as external factors which can
influences organisational functions either in negative or positive way. Business environment
consisting of several influencing factors such as suppliers, investors, owner and competitions,
up gradation of existing technology, government laws and regulations etc. For this,
management play an important role in making suitable plans and profitable decisions for an
organisation (Business Environment, 2017). The main purpose of present assignment report
is to identify the influence of business environment on business functions of an organisation.
The present report is based on three organisation including private, public and voluntary
which are Sainsbury Plc, National Audit office and Cancer Research UK respectively. The
whole assignment report is based on Sainsbury Plc which is private company and become
second largest chain of supermarkets in UK. The project includes size, scope and purpose of
different kinds of organisation along with the linkage of various departments to achievement
of organisational goals. In addition with this, the project also covers PESTLE, SWOT
analysis and their interconnection that can affect the decision making process.
TASK 1
P1: Different types and purpose of organisations
Business environment implies the majority of the outer and inward factors that affect
on organizational activities, for example, clients, workers, rules and regulations, import-
export policy etc. There are significant three kinds of organisations, for example, public,
private and voluntary. All has their own purposes and intention to accomplish better results
inside pre-decided time frame. Every type of organisations along with their purposes is
briefly explained as under:
Private company: It is valuable part of an economy of nation due to contributing
maximum output in form of generating large employment opportunities, paying huge taxes
etc. It is owned by two or more person with the purpose of making huge profits. Sainsbury is
a private company which is engaged in retailing sector in UK.
Purpose: The main purpose behind Sainsbury Plc is to give standard quality of
products at a reasonable cost. Organization believes in being reasonable for their environment
and providers (Bovee, Thill and Raina, 2016).
Legal structure:

• Partnership: When at least two individual arrived in consent to share a common goal
for accomplishing objectives. Such structure enables them to share both the benefit and
misfortune and even took decision together.
• Sole proprietorship: It is the least difficult type of business. These are possessed and
controlled by a single person who is considered in charge of the considerable number of
benefits and losses of the firm.
• Limited organization: This hybrid structure directs partners and proprietors to restrain
their liabilities. It implies that the individuals are not in charge of any losses or obligations
until the point that their illegal act can't be demonstrated (Dahan and et. al., 2010).
• Multinational organization: MNC organizations are worked everywhere scale in
excess of one nation in which their central office is situated in a particular nation and its
branches works in different nations.
• Global organization: In this, an organization advertises their products in different
nations under a solitary brand name. Head office is in charge of making policies and strategy
for entire organisation.
• Transnational organization: This sort of organization additionally works in excess of
one nation yet without a settled headquarters.
Legal structure of Sainsbury is limited company.
Public organisation: These associations give products and services to the general
public without stressing much on benefits. These kinds of associations are directed and
controlled by the government. Shares of such associations can be allotted directly to the
general public. In this, National Audit Office is perfect example of public sector organisation
which is responsible to conduct audit of central government departments.
Purpose of Public organisation
The main purpose of public sector is providing public services which including
government services and public products such as police, military, public education, health
care etc. The purpose of National Audit Office is to give advices to government authorities
through producing reports (Erasmus, Strydom and Rudansky-Kloppers, 2016).
Legal structure:

• Local government: Local government directs and controls a little part of zone, for
example, a city or town.
• State government: This controls and forces laws and directions to state. It is in charge
of giving answer for the issues and prerequisites of a state.
• Central government: This government controls and directs the entire economy or
nation. It is in charge of keeping up peace in a nation.
National Audit office is a part of central government due to performing duties allotted by the
government.
Voluntary organisation: It is kind of organisation which is established for
performing social activities due to which it is also known as non-governmental organisation.
In this, Cancer Research UK is an example of such type of association which is engaged in
conducting research into diagnosis, prevention and treatment of diseases.
Purpose:
The main purpose of voluntary sector is to maintain healthy lifestyle of people
through offering health related services at free of cost.
Legal structure:
 Trust: It doesn’t require a membership due to having charitable in nature. It is
established by group of people with the common objective i.e. social welfare.
 Association: It is also another type of association which is formed with the group of
persons having common objectives other than profit.
Cancer research UK is comes under charitable organisation.
The organisational can expand its business functions at global market through proper
evaluating the global business environment along with the motive and legal structure of
different nations. Here, the management play an important role in performing all such roles
and responsibilities related with growth of an organisation.
P2: Size and scope of a range of different type of organisations
As mentioned above, there are different kinds of organisations which are explained as
under along with their size and scope:

Private organisation (Sainsbury)
 Overview of the company: Sainsbury is a sort of private association which was
established by John James Sainsbury in 1869 at London, UK. It is a second biggest
general store chain in the United Kingdom.
 Products and services: Sainsbury products are classified into hypermarket, super
store, grocery store, comfort shop, forecourt shop and so forth.
 Size: In the Sainsbury, there are roughly 181,900 workers are working. Organization
has 1415 shops in everywhere throughout the globe (Kew and Stredwick, 2017).
 Scope: Different number of Sainsbury comfort and grocery stores in the UK. Scope of
the company’s offerings is not restricted to United Kingdom itself but also throughout
the globe.
 Mission and Vision: Vision of the organization is to be the most reliable retailer
where huge number of individual love to work and shop. Mission of the association is
to make every one of our customers' lives easier each day by giving incredible quality
and services at sensible costs.
 Objective: Main goal of organization is to give high and better quality services to
customers and furthermore increment or give good return to stakeholders.
 Organisational and legal structure: Organizational legal structure of the Sainsbury
Plc is flat and lawful structure is a limited company.
 Stakeholders: The main stakeholders of the Sainsbury Plc are shareholders,
proprietors, investor’s workers clients and so forth (López-Gamero, Molina-Azorín
and Claver-Cortés, 2011).
Public organisation (National Audit Office)
 Overview of the company: National Audit Office is a kind of public association
which was established by the governmental authorities on UK in 1983. Fundamental
jobs and duty of organization is evaluating the focal government divisions,
government offices and so on.

 Products and services: Company is mainly engaged in examinations of record and
provide services of reviewing financial accounts.
 Size: In division of National Audit Office, Approximately 798 staff members are
working.
 Scope: Company provides its products and services in various places, for example,
UK and numerous other preeminent Audits.
 Mission and Vision: Vision and mission of the organization is to encourage good
governance by bringing transparency and accountability towards society.
 Objective: Objective of organization is applying and makes their insight and gives
better performance.
 Organisational and legal structure: Legal structure of National Audit Office is
charitable association and Organizational structure of company is non-profit.
 Stakeholders: In the association, there are some principle partner, for example,
volunteers, employees and government.
Voluntary Organization (Cancer Research UK)
 Background of company: Cancer Research UK is a part of voluntary organisation
which came into existence in 4 February 2002. It is a type of charitable association in
London, United Kingdom. Fundamental focal point of the organization is to bring out
new ways of eradicating cancer diseases through conducting research (Nishitani and
et. al., 2012)
 Products and services: Company offers better treatment to cancer patients at free of
cost and make their life much better.
 Size: Organization has around 40,000 volunteers and 3,960 specialists.
 Scope: Company give diverse services in different nations, for example, England, UK
and so forth.
 Mission and Vision: Mission of the organization is to convey forward the day when
whole cancers are cured. Vision of the association is to give greatest level of
treatment for cancer patients.

 Objective: One of the fundamental goals of the organization is to diminishing the
cases of deaths due to cancer.
 Organisational and legal structure: Legal structure of the organization is central
government.
 Stakeholders: Main partner’s stakeholders are Clients and political parties.
TASK 2
P3 Relationship between different organisational functions and their link to organisational
objectives and structure
Illustration 1: Organisational chart
Source: Organisational chart, 2018
In the Sainsbury, there are distinctive divisions are exist in which some departments
and their interrelationship is resolved as under:
Human resource with marketing department: HR department performs crucial
functions such as performance appraisal, training and learning programs, recruitment and
selection, rewards and compensation etc. On the other hand, Marketing department is
responsible to promote the brand of company by reaching information about company's
products and services in different market. In Sainsbury, HR and marketing department are
interrelated with each other to perform their functions. For example, HR department is
responsible to hire skilled and qualified employees with the support of marketing department

in form of advertising job vacancies in company to influence skilled applicants. This will
help organisation in achieving its objectives due to gaining maximum efforts by skilled
workforce (Pikka, Iskanius and Page, 2011)
Marketing with production department: Marketing department has performed several
functions such as analysing the needs and requirements of market so as to fulfil them within
shorter period of time. On the other hand production division is performing crucial functions
which includes conversion of raw material intop finshed goods. Sainsbury focuses on
enhancing brand image in market. For this, it requires support from production team to
produce adequate amount of demanded products at minimum cost so that products and
services can be offered at reasonable prices. Marketing department also promoted the features
and benefits of produced products which can easily attracts large number of customers which
in results increasing organisational profits.
Organisational structure consists of an activity related with supervision, timing and
share allotment in order to execute business purpose, Sainsbury should bring more
transparency and flexibility in their business process so as to achieve competitive advantage.
It follows flat organisational structure which is explained as under:
Flat hierarchical structure: Sainsbury pursues flat organisational structure in their
business which is otherwise called horizontal structure. Such sort of structure shows that
there is no level among representatives and directors because of which the workers and best
specialists can specifically speak with one another without confronting any aggravations. It
conveys inspiration among workers to share their new and inventive thoughts directly to the
best level administration which in results brings maximum advantages to company (Shigang,
2010).
TASK 3
P4: Positive and negative impacts the macro environment has on business operations
PESTLE is conducted by organisations to analyse external factors which can influence
their business functions both in negative and positive manner. It includes several influencing
factors which are given as under along with their positive and negative impact:
Political factor: Sainsbury works in different nations. In this way, the Company can
confront different political issues because of various guidelines and directions of these

nations. Sainsbury management should centre on various political elements like tax
assessment approach, import-export policies, amendments in government etc.
• Positive effect: Present duty and import-export policies of UK and different nations
are agreeable to organization which will give chances to grow its business in these countries.
This will reinforce the situation of Sainsbury in worldwide markets (Werther Jr and Chandler,
2010)
• Negative effect: Changes in these duty and import-export policy will negatively
influence the organization as it will influence the sales because of lessening in purchasing
power of focused market.
Economical factors: Sainsbury works in different nations and these nations has
diverse level of economic growth. Thus, management at Sainsbury needs to frame effective
policies according to the inflation and deflation rates, cash generation, level of pay and so
forth.
• Positive effect: Sainsbury need to focus on capturing different income buyers through
selling products using online platform. It helps in identifying the country where the demand
of products are high.
• Negative effect: To attract low and middle income group, Sainsbury offers discounted
policy, cash back etc. which reduces their profitability and sales.
Social factors: It includes distinctive culture and standards of community that affect
business of Sainsbury. In this business are more relying on preferences and buying behaviour
of targeted customers.
 Positive-Sainsbury ought to create quality products or services in their shops which is
gainful and fundamental for their business activities.
 Negative-Sainsbury furnish quality product to their customers with sensible cost. But
all over reliance on individual brand give negative impact on business. Since their
rivals are giving distinctive range in products offering for expanding client base
(Yoon, 2012).
Technological: It is another factor that is primarily associate with innovation headway in
an undertaking. It supports to increase in profitability of Sainsbury and improve a

communication channel in a venture. It is more essential for association to introduce
innovation in their manufacturing process so as to produce distinctive products than their
rivals.
• Positive-Sainsbury need to pursue web based marketing with an objective of pulling
in clients and taking competitve advantages.
• Negative-There are diverse numbers of rivals who are applying new innovation which
is affecting the brand picture of Sainsbury in the market.
Environmental factors: It includes the social obligation and ethical responsibility of
an organisation in order to utilise limited resources in an optimum manner. Sainsbury needs
to consistence with the environmental laws and additionally pursue eco-friendly equipments
in the production process that cannot affect the environment (Hamilton and Webster, 2015).
• Positive-Sainsbury ought to adopt eco-friendly raw material through this they can
without much of a stretch get consumer loyalty and dependability.
• Negative-Under substantial rain, delay is occurring in transportation. Through this,
customers won't gain ordered products on time to time and turn into a negative and direct
impact on Sainsbury.
Legal factors: There are various laws and regulation framed by government of
different nations which should be followed by Sainsbury for smooth working in such nations.
Management is held liable to pursue such lawful prerequisites to take care of the demand and
necessities of clients.
• Positive effect: Sainsbury pursues the rules given by government in quality standard
and pricing of products.
• Negative effect: Failure in implementation of laws which are requested by
government will result in lawful punishments and fine. These can adversely impact on the
brand image of Tesco regarding quality and standard of items.

TASK 4
P5 Internal and external analysis of organisations in order to identify strength and weakness
SWOT analysis is conducted to analyse internal influencing factors which can affect
the business functions internally (SWOT analysis of Sainsbury’s Plc, 2017) It assists
management of Sainsbury to make effective decisions for the betterment of an organisation
after identifying strengths, weaknesses, opportunities and threats. It is further discussed as
under:
Strengths Weaknesses
 Sainsbury has a huge brand esteem
which is offering diverse products
and services with different
prerequisites of customers.
 Company works roughly 600
supermarket and more than 800 ease
stores crosswise over United
Kingdom.
 Business has attained wide range of
products which assist them in
capturing large market share
 Bringing innovation in their business
process increases the value of
company in competitive market.
 Over reliance on cutting edge brands
subterranean insect out quality stock
give a positive effect on their
customers.
 Sainsbury have unskilled and
unknowledgeable staff members so
that, business can-not satisfy
necessities to their clients.
 Sainsbury has poor incapable store
network due to which the company
can't convey quality item or services
at whole areas.
 Company isn't having any significant
bearing progressed and remarkable
technologies which could safeguard
their time and also cash.
Opportunities Threats
 Company has network in various
countries, which increases their
expansion everywhere throughout the
globe.
 Sainsbury requires to build consumer
loyalty's level so that, genuine
customers could easily attract towards
business.
 With the help of better brand
acknowledgment organization could
enter in inventive market portions
which will bring them one step ahead
in the expansion.
 Business has opportunity for
extending business in Africa, Asia
nation and so forth due to having their
products more in demand.
 Rules and enactment of various
countries in everywhere throughout
the globe may affect on business
functions of Sainsbury. As this would
diminish the operational procedure.
 Business has an immense brand
picture and generosity so there might
be threat in view of their over reliance
on out of quality products.
 Maximising globalization, exhibits a
major challenge as well as chances to
Sainsbury's.

Influence of internal factors on the decision making process of Sainsbury
It is more helpful for the management of Sainsbury to conduct SWOT Analysis in
order to make an effective decision after determining the strengths, opportunities, threats and
weaknesses. Form the above internal analyses, it is clearly identified that Sainsbury has
suffering from lack of skilled employees which makes adverse impact on the profitability of
company. Therefore, it enables company to consider such weakness and make decision
related with recruitment of skilled and knowledgable employees. It also came to known that
expansion of business in India will be more profitable for company thus managers should
take decisions regarding such expansion in order to capture large market share.
P6 Strengths and weakness interrelated with external macro factors for the company
In this part of project, PEST analysis has been conducted and interrelated with the
strength as well as weaknesses of an organization. It is further understood as under:
Political factor: It includes fluctuations in political system which can either support
organisation in expansion or can restrict them to reach their business to another countries.
 Strength: Sainsbury follows all rules and regulations framed by the government as
well as also paying tax amount on time which brings positive impact on their brand
image.
 Weakness: Sometimes payment in taxes is delayed due to which governmental
authorities imposes pressure which causes weaknesses for Sainsbury.
Economical factor: It includes economical fluctuations or economic stability which
decided the growth of an organisation.
 Strength: Sainsbury is mainly operated in UK whose economy is developed due to
which buying power of people also goes high. It increases their spending income for
buying retail products.
 Weakness: Sometimes inflation situation arises in some nation where Sainsbury is
operated due to which the price of products are increased. It negatively impact on the
buying behaviour of customers which in results decreasing its sales and revenue.
Social factors: It includes lifestyle and behaviour of customers which can either increase
sales of company or vice versa.

 Strength: Sainsbury offers quality products which increases health and satisfaction
level of customers.
 Weakness: Not investing money in recruiting skilled people brings disadvantages to
company.
Technological factors: It includes decisions of organisation made regarding adoption of
advanced technology which can affect their profitability as well as working behaviour.
 Strength: Providing cash back offers on online selling increases the customer base of
company.
 Weakness: Offering cashback or discount on products makes wrong perception
towards people about their quality of products (Relationships between PEST and
SWOT, 2017).
CONCLUSION
It has been concluded from the above project report that it is essential for all types of
organisation to understand the impact of influencing factors of business environment so as to
protect the existence of their business in market. For this, it is required to conduct PEESTLE
and SWOT analysis to analyse internal as well as external factors which assist management
to make an effective decisions for the betterment of an organisation. It also required to
understand the interrelation of various departments towards achievement of organisational
goals.

REFERENCES
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Online
Business Environment. 2017. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
SWOT analysis of Sainsbury’s Plc. 2017. [Online]. Available through:
<https://writepass.com/journal/2012/06/swot-analysis-of-sainsburys-plc/>.
Relationships between PEST and SWOT. 2017. [Online]. Available through:
<http://smallbusiness.chron.com/relationships-between-pest-swot-10083.html>.