Business and Business Environment

This document provides an overview of the business environment, including types, purpose, and legal structure of organizations. It explores the interrelationship between different marketing functions and analyzes the positive and negative impact of macro environment on business operations. The document also identifies the strengths and weaknesses of Sainsbury and NHS through internal and external analysis.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
1 – Types, purpose and legal structure of organisation...............................................................3
2 Scope and size of different organisation ..................................................................................4
1- Size and scope related to business objective ..........................................................................5
3. The interrelationship between different marketing function of organization..........................5
4. Positive and negative impact of macro environment within business operation.....................7
5 Internal and external analysis of Sainsbury and NHS to identify strengths and weaknesses...8
6 Strengths and weaknesses interrelate with external macro factors...........................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment is the sum of collection of all internal and external factors such s
employees, customer needs and expectations, demand and supply, clients , suppliers and various
other. Business if the group of people who are being gathered together to achieve common goals.
Business environment consists of all the factors that affect the business operation. Sainsbury is
the second largest chain of supermarket in United Kingdom that provides wide variety of
products and services in the range of clothing, food, electricals, home- wares, beauty and various
others. Present report will assess to explanation of different types,size and scope of organisation,
will demonstrate interrelationship with various functions within the company such as marketing,
human resource, finance and various others and will account to use various contemporary
examples to demonstrate negative and positive influence or can be in effects of macro
environmental factors and lastly will brief into strength and weakness of a specific business and
there interrelationship with external factors
1 – Types, purpose and legal structure of organisation
There are variety of types of organisation which have there own purpose and legal
structure industry in which they operate. The three different type are public, private and
voluntary organisations
Public organisation – this are defined as the organisations which are being operated and owned
by the government of that country that exists to provide products and services to the citizens of
the company, it is publicly and government owned enterprises that deliver goods and services to
the public.
The purpose of public organisation is to helps the government of the country to exercise
social control on industry and trade for equitable distribution of services and products. The main
purpose of this organisation is to provide services to public rather than accounting to make
profits out of them(Sani, 2018)
As public sector refers to the companies which are being accountable with central and
local government, this enterprises are being funded by the government directly . This are being
run by certain board of directors and accounts to annual general meeting and are being listed on
stock exchange of the country where it sells its shares. Example of public sector undertaking is
National health services that provide health care services to people of UK.

Private sector – This are the companies whose shares are not offered top public and which are
being subject to various legal requirements. This are the companies held under private ownership
where business accounts to separate legal entity from that of its owners
purpose of this companies is to maximise profits for its shareholder and to be the leading
player in there line of business by capturing huge customer base. This are being focused around
setting right kind of structure that helps in meeting with there interest of business.
Legal structure of private company that its shares can be sold to public, each share
entitles owner for one vote in time of company annual general meeting and share in profits at
time of end of financial year which is being know as dividend. Company is being run by various
director, and a chairman is being appointed to run the business where members liability are
limited to number of shares they account/ held to (Ihm, 2019). Example of private sector In UK
is Sainsbury which is giant player in retail sector.
Voluntary sector- this are the companies which are collection of individual who work together
to account to various activities for the benefits of the company.
Purpose of this companies to identify with the needs of groups, individuals and accounts
to initiating programmes in collaboration of government of that country. The purpose is to give
concrete expression to fundamental rights to group of members and individuals.
This companies exist as people of community perceive a need and account to work
together top bring a change (Ingram, 2016) This are being managed by various executive
committee, management committee and various board of directors that exercise control in the
same. Example of voluntary organisation in UK is Red cross society which encourages to
humanitarian activities and reduce human sufferings.
2 Scope and size of different organisation
There are different types of organisation which have different size and scope such as
Micro enterprises- Micro enterprise are enterprises which could be everywhere in the country.
This are the company which operates with the small amount of capital investment . This
companies represents large majority of small business that are being run all across. This
companies add to the value of the economy by having business that enhance income level of
various individual. The scope of this companies is vast as it covers wide range of activities which
produces goods and services for local areas of operation and the size of this organisation are

minimal in terms of employees and capital requirements where it operates with less than ten
people and investment is around 115000€ with turnover Up to 575000€ (White, 2017).
Small and medium enterprise- Small and medium enterprise play a major role in the economy
as they are the major source of generating entrepreneurial skills, employment and innovation in
economy (Quinn, Thakor, 2018). The scope of this is wide which can be in terms of real estate,
media and various other which helps in extracting the best opportunity. This are the enterprises
who employs around 250 employee and their investment range is between1 115000€-5750000€
and account to huge turnover.
1- Size and scope related to business objective
Large enterprises- This are the organisation which focuses on providing wide range of products
and services accounts to have complex management than any other type of organisation and have
its global presence all across where its scope is vast with the amount of investment and
generation of revenues which is being accounted with diversified business operations and
account to communication at all levels (Berghoff, Kelley,2019). This are the companies which
accounts to having more than 1000 employees and are equipped in all terms. It accounts to
annual turnover which is being greater than 1.5 billion euro and where the balance sheet accounts
to more than 2 billion euro. The example of this could be Sainsbury which is the second largest
chain in retail industry in UK and a multinational company which provides wide variety of
products and services to its customers
3. The interrelationship between different marketing function of organization
Here are some interrelationship between functions of Sainsbury-
Marketing and finance department:- Every organization their aim for business for making
some profits like Sainsbury company work for earning profitable, gain growth and maintain their
cash flow. It seems that marketing often to get more budget for advertising and many more
promotions while finance try to always cut the budget (Hanssens and Pauwels, 2016). Both
department have better communication as they both can make more growth for company among
their competitors in market. Finance and marketing are two pillars of company without doing
promotion of products Sainsbury could not increase their sales while for developing profits
finance department should require working. Organization have to maintain their relationship for
promoting themselves in market with best finance terms.

If their will be conflicts among them hen company would not able top work, and they have will
have to earn more losses in product and balance sheet will not be proper maintain as per year.
Marketing and human resources department:- Marketing department helps Sainsbury for
developing them in many countries across the world for higher profits. In competitive market for
hiring more employees is most important in success. HR have to use many tools for attracting
more employees towards their company. The relationship of HR and marketing communication
is brand of company. HR gives proper allocation of resources for promoting their products and
making more technology with help of this they can hire more employee and have people
management satisfaction.
Due to some issue if they do not work together company can face more challenges or situation
for their work (Matovic, 2020). Both should maintain balance at workplace and easily make
profit.
Human resources and finance department:- Sainsbury should maintain their relationship
between both departments. As human resource function is hiring and firing of employee and look
over resource utilization is proper in company and finance department function is to prepare
budget for their company along with budget of different department so that they can keep in
mind while before using their resources. As finance departments thinks that hiring candidates is
just investing expanses but HR thinks that hiring must be essential part of organization.
Interrelationship between should be proper and useful for company as well to their employee.
But finance department I sometime break down with their budget that could be directly affected
their working place.
IT and finance department:- Finance team prepared balance sheet and financial year plan for
company. IT helps finance in achieving their cooperate objective, they can work in collaboration
for keeping their work in proper line (Moorman and Day, 2016). Technology can find out more
new tools and techniques that can be more benefits for finance department in summarizing their
data and secure their information of Sainsbury store.
For having lack of knowledge their can be also conflict among them if suppose they have
adopted new technology and if some employee could not be applicable for understanding and
misuse that, it would be more losses for company.

4. Positive and negative impact of macro environment within business operation
Sainsbury is multinational retail company which has many stores across country and
there are positive and negative impact on their business for identifying them external analysis
being described-
Political factor:- While increasing globalization Sainsbury has to face challenges in growth of
foreign country products price it being more difficult to afford their supermarket imports
products. Due to increasing product pricing in brand and large number of customer may losses
their competitors who provide them goods and services at cheaper prices. Many rules and
regulation have been given by government to retail which can be positive impact for organization
but sometime many of them are barriers for their company and put negative impact over their
income expectations.
Economic factor:- Sainsbury is mainly based on road transport for exporting and importing their
goods and services across country (Shtal and et. al., 2018). This means that raising in fuel can be
major reason for increasing their product pricing. The rise of new supermarket chains is always
being strong economic factor. Brands like ASDA and Tesco have major source to competitors in
market. Due to having increase in inflation rate it may cause positive impact for them and less
market share and shareholder can be more affected they can easily being loss for their company
with highly negative impact.
Social factor:- Social factor can be sometime have positive for company as many people prefer
organic food for their health and Sainsbury have opened many new stores with healthy food
along with more services. As they offer soft drinks, heavy snacks, vegetables with reasonable
price. The rise of products prices can be negative impact for their business operation if farmers
have increased their grain, vegetables price than it could be more difficult for organization to
purchase them and make their customer satisfaction.
Technology factor:- Sainsbury have also started their online business operation for food delivery
to their people and provide them better experience of their food quality (Yusop, 2018). They can
better understand their customer demographic needs and cater them for making satisfaction. This
could be help company in increasing their sales and run their business. If company do not
upgrade them according to time it could cause their negative impact on customer and have bad
experience of food and other products which are essential to them.

Legal factor:- Sainsbury has to adopt quickly changes which made by government for their
business structure and while keep changing according to their customer (needs) than company
can meet out their objective. Brexit economy is also important factor for legal factor in
developing external environment and require to make many changes in their policies (Perera,
2017). Negative impact can cause if legal environment could not be followed by company then
changing in their policies may affected their customer satisfaction.
Environment factor;- Supermarket of Sainsbury have produces carbon foot print in improving
their environmental conditions. They have also started recycling plastic and fossil fuel
transportation methods which can be more positive impact for their surroundings. Their
environmental would be more affected and unhygienic in resources can also cause negative
impact over their income and target audience in developing them.
5 Internal and external analysis of Sainsbury and NHS to identify strengths and weaknesses
Internal and external factors both affects the business. Management should consider
internal environment factor and external environment factor while doing the decision-making
process. By analysing these factors company can know their strengths and weaknesses and can
plan their goals according to it. Internal analysis help the company to know about the resources
available or their capabilities of the employee to do any task. Resources include plant and
machinery, fixes assets etc. external analysis incudes market trends, government etc. SWOT
analysis is used to identify the strengths and weaknesses.
SWOT:
Strength:
Strength of Sainsbury is their business philosophy. Company had adopted low cost strategy
which help them to attract large customer base and help to retain customers. They create their
brand loyalty by manufacturing products for all class segments. They do innovation because
company know that customer got attracted more towards the innovative products whereas NHS
strength is they deliver good quality of services and their employees performance are also very
good. They have loyal employee with high morale. Their governance is well-developed. they
have good research and development team who do timely research so that company can reach
towards its goals. They have motivated interns who deliver their best (Phadermrod, Crowder and
Wills, 2019).
Weaknesses:

Sainsbury's weakness is the low margins they had adopted such pricing strategy from which they
get low profit, they are able to attract good number of customer but lowering their margins
(Vlados,2019). With the increase in the competition company have to take advance technology
or have to hire educated and skilled employee which incur high costs. They are facing employee
turnover because of the excess night shifts and have to do hiring again which incur cost. They are
also facing financial deficit issues which should be solved because financial balance must be
their in every company to reach towards goal. Their employees are not motivated always which
affect the productivity of the workforce.
Opportunities:
Sainsbury has the opportunity for international expansion. They can explore other countries
markets and can take advantage of their low labour costs. From private patients they can earn
good money. Their brand image is made because they work for public which will create trust
among the public. They provide good services to the cancer patients and elders as well.
Threats:
Sainsbury threat is the competition which is faced by the rivalry company. They loss the market
share because of the competitors. They have to take property on rent for which they have to give
high rent.
6 Strengths and weaknesses interrelate with external macro factors
Strength and weaknesses influence by external macro factors. These factors are analysed
by doing PESTLE analysis.
PESTLE
Political factors:
Political factors influence the business of Sainsbury. Brexit have the consequences for the
company. The slow economy of UK affects the company. High in the inflation rate is the
problem for the company. Brexit has also affected NHS. Company should have such workforce
who can assess the political factors and help the company to tackle these factors. sainsbury also
have to face trade tariffs which lower their revenue (Sarsby, 2016).
Economic factors:
Rise in the cost of fuel affected Sainsbury operations. Fuel is so expensive that company have to
increase the cost of their product and increased price is not able to attract more customer which
lowers the profitability of company (Teoli and An, 2019). NHS have to face problems in the

downfall of the economy. They had faced a lot financial troubles by which they were not able to
provide good quality of services to the patients.
Social factors:
Customers are now shifted towards healthy eating. They now do not attract towards fast foods
because they are health conscious and want to intake what is healthy. So Sainsbury have to
launch healthy snack options if they want to survive for the long period in the market. Cancer
patients are increasing day by day. NHS also have to deal with the increased diabetic patients.
Technological factors:
Sainsbury have to face challenges from the advance technology. If they have to survive in the
market then they have to adopt new technology. Online shopping are also provided by the
company so that they can capture large market and can increase the revenue. With the improve
technology NHS provide better quality services (Zahari and Romli, 2019). Technology have
direct connection with healthcare.
Environmental factors:
Sainsbury take care of the environment. They do waste reduction by adopting single packaging
method and ignoring the more outer layer. Plastic are also less used by the company. Company
also organize environment awareness program in which they educate people about protecting the
environment. NHS have to deal with toxic waste because it is the healthcare organization. So it is
expected from the company to treat their wastage properly so that they do not pollute the
environment.
Legal factors:
with the growing taxes company should done modification in their products so that they can
ignore some taxes and can save money on that. NHS patients now come to know about the legal
platforms where they can go and complain about the company, if they face any grievances.
Unhappy patients create problems for NHS (Widodo, 2016).
CONCLUSION
From the above case it can be concluded that types and purposes of private, public and
voluntary sectors has explained with their legal structures. Private organization are those whose
main aim is to earn profit. Public organization are those who is funded by the government and

voluntary companies are those who work for the society and not aiming for profits. Along with
the size and scope of those organizations. Further, described the relationship between different
organizational functions and what is their link with organizational objectives and structure.
Identification of the positive and negative impacts macro environment have upon business
operations and is explained through PESTLE. This study has also conducted internal and
external analysis of the organization to identify the strengths and weaknesses using SWOT
analysis. In the end it is analysed that how strengths and weaknesses interrelate with external
macro factors.

REFERENCES
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