Sainsbury's Business Environment and Organizational Structure Analysis

The assignment provided is an in-depth analysis of Sainsbury's business environment, organizational structure, and strengths, weaknesses, opportunities, and threats (SWOT) analysis. The report highlights the impact of macro factors on Sainsbury's operations, including economic, social, technological, legal, and environmental factors. It also discusses the importance of a cohesive departmental work in achieving organizational goals and objectives. Furthermore, the assignment emphasizes the significance of quality workforce, IT structure, and other strengths that contribute to Sainsbury's competitive edge.

Business and Business Environment

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................1
PART 1.......................................................................................................................................1
P1 Describing purpose and legal status of different types of organization............................1
P2 Presenting the size and scope of different types of business unit.....................................3
P3 and M2 Stating how different functions of organization are related with each other.......3
D1...........................................................................................................................................4
PART 2.......................................................................................................................................5
P4 and M3 Identifying some positive and negative effects of macro environment on
business operations.................................................................................................................5
P5 and M4 Conducting an internal and external analysis of Sainsbury’s Plc........................7
P6 and D2 Assessing the extent to which strengths and weaknesses of Sainsbury’s are
related to macro factors..........................................................................................................9
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................11

INTRODUCTION
Business environment includes both internal and external factors that closely
influence business operations as well as functions. All such factors imply for employees,
customers, management, supply, demand and business regulations. Thus, manager of the
business unit is required to develop strategies and policies by making assessment of all such
aspects. Moreover, in the competitive time frame, firm requires highly strategic framework
that helps in dealing with macro factors more effectually. The present report is based on
Sainsbury Plc which is leading multinational retailer of UK. It provides customers with wide
range of products or services and thereby fulfils their expectations. In this, report will shed
light on the purposes of public and private units behind carry out operations. Further, report
will describe relationship which takes place between different departments of firm and size,
scope etc. Along with this, through macro analysis, report will shed light on the level to
which external conditions are good. Report will also present internal analysis and its
associated with macro aspects.
PART 1
P1 Describing purpose and legal status of different types of organization
Each business unit develops aim and objectives with the motive to perform activities
in the best possible way. Moreover, objectives gives indication to firm and helps in
developing suitable strategic as well as policy framework. However, goals which are
undertaken by different types of firm such as public, private and voluntary are highly differ
from each other.
Private firm: Sainsbury Plc comes under the category of private firm because in this
ownership is attained by authority other than government. It is listed on the recognized stock
exchange of London such as FTSE 100. Sainsbury was established 148 years ago because it
founded on 1869. Such business unit is involved in offering retail products or services to the
customers. In the retail sector, such private firm has built its distinct and competitive position
over the rivals such as Tesco, Morrison, ASDA etc.

Vision Sainsbury’s vision is to become a more trusted retailer where large number of people
prefers to do shopping. Along with this, Sainsbury also wants to create distinct identify
of its firm so several individuals are encouraged to work here.
Mission To become a first choice of customers in food is considered as the main mission of
Sainsbury. In addition to this, providing customers with outstanding quality products
and great services at competitive cost through the means of fast working is recognized
as firm’s main mission (Company Profile Sainsbury Plc, 2017).
Objective The main objective of Sainsbury is to deliver quality products and offer amazing
shopping experience to customers. Business unit is trying to exceed customer’s
expectation pertaining to safe, fresh, healthy and tasty food. Hence, company is making
main focus on making the lives of customers easier.
Legal
status
Public firm: It includes firm that is government owned so in this category Essex
County Council of England has been selected. Such public firm governs non-metropolitan
county of Essex in England. Hence, vision, mission and objectives of such council are
enumerated below:
Vision Ambition and vision of ESSEX council is to improve lives and deliver best quality of
life to Britain’s resident.
Mission Mission of council is to elect competent employees as well as professionals who have
ability to work together and preparing them for future.
Objective The main objective of such council is to provide targeted audience with quality
services and deliver real value for money.
Legal status It has assessed from evaluation that Essex county council comes under the category of
National company.
Voluntary firm: It includes business unit which work for the welfare of others
voluntarily without an intention to make profit. British Red Cross is recognized as voluntary
organization formed in 1870. Such firm is mainly involved in offering help to people suffered
from the situation of crisis in both UK and overseas. Such society provides help to the people
of society without making any discrimination on the basis of ethnic group, nationality,
political benefits etc.

Vision Such society’s vision is to make sure that voice of people in crisis come through loud
and clear (British Red Cross, 2017).
Mission and
objective
Company’s mission and objective is to offer helps to all people who are facing issues
due to conflicts, natural disaster and individual emergencies. Thus, main objective of
such society is to help vulnerable people in UK as well as abroad and assists them in
recovering from emergencies.
Legal status British Red Cross society operates at global level as it saves all people who reside in
and outside UK.
P2 Presenting the size and scope of different types of business unit
Size and scope of Sainsbury and Essex County Council
Sainsbury Ltd has attained fourth position in the category of large chain of
supermarket. Firm has attained 16.3% market share and it is main constituent of FTSE 100
index. In the year of 2016, ales revenue and operating profit margin of Sainsbury’s accounts
for £23.51 billion & 707 million respectively. Besides this, at the end of 2016, net profit
margin of Sainsbury’s Plc account for £1471 million. Further, in 2016, number of employees
which are employed by Sainsbury accounts for 1627000. Along with this, business unit has
opened several stores in UK for offering convenience to customers. Further, geographic
presence of Sainsbury in terms of operations is limited to UK. Thus, by taking into account
all such aspects it can be presented that scope of Sainsbury is moderate.
Moreover, firm has opportunity to enhance customer base and profit margin when it
operates at large level. Thus, firm is required to make focus on exploring business operations
at global level which in turn helps in attaining success. As Sainsbury have 550 supermarkets
and 350 convenience stores in UK. Referring the same, it can be depicted that sixe of
Sainsbury’s operations are wide (Chattopadhyay and Bhawsar, 2017). On the other side, size
and scope of Essex County council is limited in comparison to Sainsbury. The rationale
behind this, Sainsbury has operations across UK and now it is planning is expand at global
level. In contrast to this, operations of Essex County Council is limited to UK so its scope
and size too narrow.
P3 and M2 Stating how different functions of organization are related with each other
In the business unit, several departments are developed such as HR, marketing,
finance, sakes and production with the motive to carry out activities more efficiently. From

research, it has assessed that hierarchical structure is followed by Sainsbury for co-ordinating
functions and attaining goals as well as objectives. The main objective of Sainsbury is to
offer quality products or services to the customers. By offering amazing shopping experience
to the customers (Eling and Schaper, 2017) Sainsbury wants to generate high profit margin.
In the service sector, personnel are the one who interacts with the customers and evolve
satisfaction among them through offering quality services. For example, HR manager takes
input from sales and operation department about the number of personnel required to deliver
effective services to the customers (Roth and et.al., 2016). On the identification of need, HR
manager consults with the authority of finance department for deciding monetary
requirements. Thereafter, finance personnel prepare suitable budget and circulates the same
to HR. In this way, as per budget, HR manager develops plan and thereby recruits as well as
selects suitable personnel for job.
Thus, by appointing skilled and competent personnel Sainsbury can meet customer’s
expectation and thereby build as well as sustain competitive position. In addition to this,
quality products become the major focus of both business unit and customers. Along with
this, innovation is another major concern on which both business unit and customers tends to
make focus (Jaakkola and et.al., 2016). In this regard, R&D department of Sainsbury takes
input from sales department and thereby focuses on identifying gap. Along with this, R&D
also contact finance department for financial resources. On the basis of availability of funds
finance manager allocates resources to R&D. Hence, by taking into account all such aspects,
it can be presented that different functions of an organization positively contribute in the
attainment of organizational goals and objectives.
D1
Hierarchical structure
Advantages Disadvantages
 Clear chain of command
 Specialization
 Poor Flexibility
 Communication barriers (Key
Advantages and Disadvantages of
hierarchical Organizational
Structure, 2017)
Flat structure

Advantages Disadvantages
 Clear and precise communication
 Faster decision making
 Less employee motivation that
hinders growth
 Less employee retention (Key
Advantages and Disadvantages of a
Flat Organizational Structure, 2017)
PART 2
P4 and M3 Identifying some positive and negative effects of macro environment on business
operations
In order to get deeper insight about macro factors or external environmental Sainsbury
is required to conduct PESTLE analysis. This in turn clearly indicates the extent to which
political, economic, social, technological, legal and environment aspects are good or not.
Hence, by making evaluation of both macro factors in terms of both positive and negative
Sainsbury can develop competent framework.
Pestle analysis
Political factors: In the year of 2016, Britain voted to leave UK which in turn place
direct and negative impact on both political and economic condition. Along with this, tax
rates which are setting down by political authorities highly supportive (Prajogo, 2016). As
compared to before, now tax rates are declined from 30% to 28%.
Positive Negative
Tax rate closely influences earnings after tax
of firm. Thus, decreasing tax rates will
improve profitability aspect of Sainsbury.
Brexit will adversely affects productivity and
profitability of firm to a great extent.
Economic factors: By doing assessment, it has found that rising cost of fuels is the
main economic factors that highly affects supply chain and thereby increases the price of
products or services offered. In addition to this, situation of credit crunch or global crisis
closely influenced the sales of Sainsbury. As after global recession, purchasing power of

individuals decreased significantly. Hence, due to this, customers are looking for the retailer
which is offering quality products at lower prices.
Positive Negative
As per the economic condition, prevailed in
UK, by offering products or services to the
customers at affordable prices Sainsbury can
increase customer base and profit margin.
Rising prices will increase indirect expenses
of firm and thereby decreases margin. Along
with this, Brexit will affect the situation of
employment as well as purchasing power of
customers and thereby economic condition of
UK.
Social factors: Now, customer’s preferences are shifted from tastier to healthier food
to a great extent. Thus, as per the social factors, now people are seeking for the retailer which
is offering healthy and hygienic food to the customers (Jaakkola and et.al, 2016). In addition
to this, customers want to purchase from the retailer that lays emphasis on quality and makes
prices of the product lower.
Positive Negative
By offering healthier food products or
services to customers business unit can
improve its customer base and brand image.
Due to customer’s preferences and
expectation Sainsbury is compelled to offer
products at lower prices which in turn
negatively affects profitability and
shareholder’s return.
Technological factors: In the recent times, high level of technological advancements
takes place in retail sector. Now, with the motive to enhance the efficiency of operations
companies are making focus on undertaking automated inventory management and self
checkout system. This is turn facilitates quick functioning and thereby helps in offering
quality services to the customers (Prajogo, 2016). Along with this, now trend in relation to
shopping products from online increased significantly. Thus, by making focus on all such
aspect business unit can gain competitive edge over others.
Positive Negative
Through indulging self check control system Now, customers are still hesitating to

firm can increase both productivity and
profitability.
purchase products from online store due to
the lack of security. This in turn affects sales
and growth of online stores to a great extent.
Legal factors: With the aim to offer protection to employees and customers UK
government introduces several laws & legislation. Hence, in UK, business units are obliged
to comply with food policies, minimum wage, discrimination Act etc.
Positive Negative
Sainsbury’s can build distinct image in the
mind of customers by complying with the
laws. Besides this, by following employment
Act and health & safety laws firm can get
desired level of outcome or success.
Changing rules and governmental laws
pertaining to food compels firm to make
modification in the existing operations.
Environmental factors: Business units are laying high level of emphasis on doing
activities in such as manner that contributes in sustainable environment. Now, customers also
give priority to retailer which performs activity in an eco-friendly manner.
Positive Negative
By doing activities in an eco-friendly manner
firm can attract more customers and thereby
would become able to maximize customer
base.
For ensuring sustainable operations, firm, has
to assess and invest money in the latest
technologies. Thus, investment affects
liquidity position of firm to a great extent.
P5 and M4 Conducting an internal and external analysis of Sainsbury’s Plc
Business unit can develop competent framework only when it has idea about own
strengths, weaknesses, opportunities and threats. By taking into account such aspect, internal
analysis of Sainsbury’s has been conducted. This in turn helps Sainsbury in taking suitable
action or measure that helps in converting weakness into strengths (Bhowmick and Prasad,
2017). Along with this, internal evaluation also helps in identifying and grabbing
opportunities to a great extent. Further, on the basis of strengths firm also would become
able to develop strategy for dealing with threats more effectually.

SWOT analysis of Sainsbury
Internal analysis
Strengths
 Diversified investments
 IT infrastructure
 Large capital investment and wide
outlet network
 Quality human resource
 Offering products at affordable prices
Weaknesses
 Faces issue in offering food at lower
price
 Lack of training & development
activity
 Lack of R&D activity
External analysis
Opportunities
 Entry in emerging economies through
joint venture, acquisition and strategic
alliances
 Use of self check-out machines
 Expansion in growing countries
Threats
 Increasing globalization
 Competition
 Prone online platform
(Source: SWOT Analysis of Sainsbury, 2017)
 Strengths: From internal evaluation, it has identified that Sainsbury is the fourth
largest supermarket chain of UK. Further, excellent branding and advertising
strategies is considered as main strengths of firm. Business unit has established 550
supermarkets and 350 convenience stores across UK. With the motive to develop high
level of satisfaction among the customers Sainsbury has built and maintained skilled
workforce (SWOT Analysis of Sainsbury, 2017). In accordance with this, by offering
quality services firm can develop and enhance customer base.
 Weaknesses: In the recent times, there are several retailers such as Tesco, ASDA,
ALDI etc which are offering products to the customers at cheaper prices. Thus,
business unit is facing issue in relation to offering quality products at lower prices
(Sainsburys SWOT Analysis, USP & Competitors, 2017). Along with this, lower level
of emphasis is placed by such retail firms on the activities like R&D and training and
development.

 Opportunities: Sainsbury also has opportunity to maximize productivity and
profitability by expanding business operations in developing countries such as India,
China etc. Moreover, now customers of developing countries are seeking for quality
and lower priced products. On the basis of such aspect, it can be stated that firm has
opportunity to enhance customer base and margin by taking entry in developing
nations.
 Threats: Due to globalization, competition in the retail sector is increased
significantly. This in turn imposes threat in front of Sainsbury and affects margin
negatively. Besides this, cyber threats or issues are also creating issues in front of
Sainsbury in the context of online platform.
P6 and D2 Assessing the extent to which strengths and weaknesses of Sainsbury’s are related
to macro factors
From evaluation, it has asserted that macro factors have significant impact on the
strengths and weaknesses of firm. Moreover, productivity and profitability of firm is highly
affected from the performance of macro factors. External environment analysis of Sainsbury
shows that for inventory management firm started to use automated technologies. Thus, by
considering the current technological trends firm has developed effective IT infrastructure
which in turn recognized as major strength of firm (Wu, Chandramohan and Bali, 2016). In
addition to this, for carry out business activities and functions in a sustainable manner firm
requires highly skilled personnel. Besides this, as per social factors customers prefer to visit
store which offers satisfactory and friendly services to the customers.
In this context, Sainsbury has skilled workforce which in turn increases customer
satisfaction by offering quality services. Macro assessment presents that, customers are now
interested in purchasing products from retailer that maintain high quality and lower prices. By
considering this, firm has maintained lower prices which are considered as main strength of
firm (Calabrese and et.al., 2017). Further, now major focus of customers is on accessing
retailer that provides services at lower prices. Sometimes, business unit faces high level of
issue in offering products or services to the customers at lower prices in comparison to Tesco,
ASDA, LIDL, ALDI etc. Thus, by keeping such aspects in mind it can be stated that macro
factors and strengths as well as weaknesses of Sainsbury’s are highly interrelated.

CONCLUSION
From the above report, it has been concluded that objectives and legal status of public
& private varies to some extent. It can be seen in the report that Sainsbury is national,
whereas legal status of concerned pubic company implies for local in terms of legal status.
Considering the same, it can be stated that legal status of different firms varies significantly.
Besides this, it can be inferred that size and scope of Sainsbury’s is wide over others. In
addition to this, all the department of business units work cohesively for making contribution
in the organizational goals and objectives. It can be summarized in the report that macro
factors have both positive and negative influence on Sainsbury’s operations. Further, it has
been articulated that Sainsbury’s has several strengths in terms of quality workforce, IT
structure etc which in turn helps firm in gaining competitive edge over other. In conclusion, it
can be depicted that both micro and macro factors are high associated with each other.

REFERENCES
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Online