Business and business environment assignment | Sainsbury plc

Business and business
Environment

Table of Contents
INTRODUCTION...............................................................................................................................3
TASK 1.................................................................................................................................................3
P 1 Different types and purpose of organisations...............................................................................3
P 2 Scope, size and legal structure of different type of organisation..................................................3
TASK 2.................................................................................................................................................5
P 3 Interrelation between different organisational functions..............................................................5
TASK 3.................................................................................................................................................6
P 4 Positive and negative impact of the Macro environment upon business operation......................6
TASK 4.................................................................................................................................................8
P 5 Analysis of strength and weakness of the organisation................................................................8
P 6 Interrelation of strength and weakness of the organisation with macro environment factors.......9
CONCLUSION..................................................................................................................................10
REFERENCES..................................................................................................................................11

INTRODUCTION
Organisation is the social group of people which is managed or structured to meet a
need or achieve the common goal.
This report is based on the Sainsbury company, which is the second largest
supermarket in UK. It is founded in the year of 1869, by John James Sainsbury. Sainsbury plc
split into three divisions: Sainsbury Supermarket Ltd, Sainsbury’s Bank and Sainsbury
Argos.
This report will include the different types of organisations, their size scope and legal
structure. This will also include the relationship between organisational functions and how
they help the organisation to achieve its goal. Further in this report will include impact of
macro environment upon the business operations. This report will also include the analysis of
the strength and weakness of the organisation through SWOT and internal and external
analysis through PESTEL. It will also include the interrelation of strength and weakness with
macro factors.
TASK 1
P 1 Different types and purpose of organisations.
Organisation is the social group of people which is managed or structured to meet a
need or achieve the common goal (Burrell and Morgan, 2017).
Types and purpose of Organisations
There are three types of organisation:
Private Organisation - Private organisation is run by individuals and companies and not
operated by the government. It can be referred to any partnership, corporation, association or
any agency which not a public organisation or it can be self-sustaining (Bouckaert, Peters and
Verhoest, 2016).
Sainsbury is also a private organisation. Its purpose is to achieve the target, earn profit
by deliver the value to customers and shareholders.
Public Organisation – Public organisations are part of the economy and operated by the
government. These organisations are existing to provide services for citizens. Also, it works
for earn enough to keep functioning, to get better infrastructure and to pay enough to its
employees (Syed and Hauer, 2017).
British Broadcasting Corporation (BBC) is British public service provider and it is the
world’s oldest national broadcasting organisation and also largest broadcasting I n the world.
Voluntary Organisation – These organisations are set up as charity and created by the group
members or community and there are unpaid workers work with it. These organisation’s
purpose is to provide the benefits and enrich the society with litter government intervene,
without any motive to make profit (Argenti, 2018).
Cancer Research UK is a voluntary organisati0on of UK and its purpose is to cured
call the cancers and research the strategy to cured the cancer.

P 2 Scope, size and legal structure of different type of organisation.
Private
Organisation
(Sainsbury plc)
Public
Organisation
(BBC)
Voluntary
Organisation
(Cancer Research
UK)
Vision and mission Its vision is to
become the most
trusted retailer
where people love to
shop and work and
deliver the best
products what they
need.
Vision of the BBC is
to informed and
empowered the
people to live
healthy and helps
them to understand
their rights and
responsibilities.
Its vision is to
support the research
to cured the all
cancers.
Objective Sainsbury’s
objective is to help
the customers to eat
healthy and
improving the
quality of life and
food of the people
(Michael and Popov,
2016).
Objective of BBC is
to serve the serve the
information and
educate and
entertain them which
helps the people to
understand and
engage with world
around them.
Its vision is to
reduce the number
of cancer patients in
next 20 years.
Scope As Sainsbury is
supermarket chain in
UK which have wide
scope to expand
their business
globally with new
and different
products and
services.
The British
broadcasting
corporation (BBC) is
radio and television
company and it has a
high scope in
international market.
Everyone wants to
aware and be a part
of the world.
Cancer research has
also a wide scope
across the world. As
there are many
patients who are
suffering with
cancer. It increases
the scope of the
cancer research
globally to research
all cancers to cured
it completely (King,
2017).
Legal structure It has a board of
director who
manages company
and elected by the
shareholders and it is
headed by the
chairman. Some
legal documents are
important to
completed these are:
Memorandum of
association and
Articles of
This is nationalised
industry which is
operated by the
government. It runs
by the board of
directors on behalf
of the shareholders
(Legal structure,
2018).
There are three types
of legal structure for
different type of
Voluntary
organisation:
Associations, Trust,
and Company
limited by guarantee.
Cancer research UK
follows the
association legal
structure where
group of people

Association (Franklin,
2017).
come together to
carry out an
objective
(Voluntary Sector,
2019).
Market size and no
of employees
It has 16.9% market
share of the
supermarket with
£28.246 billion
revenue and £309
million in the year of
2018. It has 186,900
employees working
with Sainsbury plc.
In the year of 2016-
17 its revenue was
£4.954 billion and
net income was
129.1 million and it
has 20,916
employees working
with it (Bartholdy and
Olson 2017).
Its revenue was
£634.81 million in
the year of 2015 and
3,964 employees and
40,000 volunteers
working with the
Cancer Research UK
TASK 2
P 3 Interrelation between different organisational functions
As Sainsbury is food retailer and financial service provider, it has many functions
which are interrelated to each other and helps the organisation to achieve its overall
organisational goal.
Finance and Production
Sainsbury finance functions is related in various ways to other functions in thye
organisation. Finance enables the production and products demand. Financial department of
the Sainsbury company provide the funds to production department for the producing of the
goods, for buying the raw materials and other tools for smooth producing in the organisation.
Finance department manage all the outcomes and income of the Sainsbury organisation and
allot capital to other department to perform their operations. If finance functions will not
operate in the organisation, all the functions in the organisation will stop working because of
lack of the capital to perform operations. Finance department maintain the balance and
provide funds to production department to produce goods and fulfil the customers de, and
that increase the demand of the Sainsbury’s product and also helps in achieving the target of
the organisation by delivering the value and quality products to the customers (Bustinza,
Vendrell-Herrero and Baines, 2017).
Production is also related to finance departments of the Sainsbury. By producing the
right quantity of the products according to the need and requirement of the customer. This
increase the demand and sell of the products and this will increase the profit of the
organisation and will help in increasing financial capital of the organisation and helps in
growth and expanding the organisation. Higher the production higher the demand and
satisfaction level will increase this helps in generating the profit and helps the financial
department to flow of capital with different department for smooth running of operations in
the organisation.
Production and Marketing
These are closely related to each other, as production function of the Sainsbury
produce the goods and marketing department promote and sell those produced goods in the

market and increase revenue of the organisation it helps the finance department of the
Sainsbury. After completion the productions as per the need and choice of the customer, then
its marketing department’s responsibility to promote their products and provide those
products in the market for consumer and make aware about the products. This increase the
sell of the products as production is done within time and make available them in the market
through marketing department for the customers. This increase the loyalty of the Sainsbury
company as they take care of the consumers and their choice and helps in completing goal of
the organisation as company’s department fulfil the demand of the customers (Bustinza,
Vendrell-Herrero and Baines, 2017).
Like production, Marketing is related with the production department as marketing
functions determine the sells and purchase of the products and services in the market. It
provides the data to production about demand and need of the consumers and new production
and quantity ratio. According to it production function is to be perform and fulfil the demand
of the customers within time and helps in generating revenue for the organisation.
Marketing and Human Resource Management
Marketing Department need to work closely with HRM for appropriate staffing in the
department and with the right skills. Human Resource Management overlooks the recruitment
and selection, training and development of the employees. Human Resource ensure to deliver
the right people with right skills to the different department. If marketing department of the
Sainsbury need a staff or marketing assistant, HRM helps them to scope of the job, prepare
job profile, job descriptions and advertise the job and helps in organising the interview and
get the best suitable employee for the marketing and other department to enhance the
performance of the Sainsbury marketing function and overall organisations performance by
deliver the right employee that helps the organisation to achieve the target (Thompson and
McLarney, 2017).
TASK 3
P 4 Positive and negative impact of the Macro environment upon business operation
Macro Environment are external and uncontrollable factors the organisation’s
decision-making process, its strategies and performance. For analysing the external factors
Sainsbury use PESTEL model that affects the Sainsbury business as a whole. These factors
are:
 Political Factors – Political factors include the government and its policies like fiscal
policy, tariffs, Tax policies etc that affects the business strategy at great extent.
Positive Impact Negative impact
Political stability of UK government
helps the Sainsbury to follow its long-
term strategy to run the business
smoothly. Fix taxation policies and
fiscal policies helps the organisation ton
flow of capital also helps in import and
import of the goods and raw material
that helps the Sainsbury in production
and helps to sustain in the market.
During the Brexit where UK and Europe
apart from each other it affects the
Sainsbury at great extent, as increase the
import and export cost affects the
Sainsbury as it provided the large
quantity of food across the Europe.
Changing government policies affects
the Sainsbury that it had to change its
Strategy accordingly Situation and

affects the production of the company
and. Lower production and Low revenue
were the impact of the Brexit.
 Economic Factors – Economic factors are foreign exchange rate, inflation rate,
interest rate, economic growth etc are the factors that affects the company’s
performance directly.
Positive Impact Negative impact
Good economic condition helps the
Sainsbury’s pricing of products and
service. Good import export rate,
inflation rate, foreign exchange rate
helps the organisation in its overall
sales, source of profit increases. Good
economic growth gives the high
employment to the organisation that
helps the organisation to perform well
and achieving the overall company
target.
In the time of Brexits currency rate had
fluctuated. Import rate increased, new
tariffs introduced, pound increased its
price and because of this food prices had
changed this create issue for the
Sainsbury to supply foods and
production and it created problem with
cross border access ((Devitt, C. and et.al.,
2016).).
 Social Factors – Social factors refers to customers, their culture, age group, education
level, attitude, demographic conditions which influence the organisation and its
decision making and production at great extent according to them.
Positive Impact Negative impact
Society’s culture and way of doing
things and way of thinking, customer’s
education level and gender influence the
organisation, they demand he goods and
service according to their culture and
need and according to cost. Like
Sainsbury has a no of stores across the
world, different location has different
culture and population, all stores have
their own different strategy of
production to fulfil the demand of the
customers. If organisation fulfil all their
needs it will increase the organisation
profit and will also helps in increasing
their new customers and sustain its
existing customer.
Because of the Brexit, splitting
condition of the country, their different
exchange rates increase the price of the
goods and services this influence the
customers and their choice. They were
looking for different substitute of the
good and services in low rate. This
resultant performance and demand of the
organisation’s decreased and profit
ration also had low.
 Technological Factors – Technological factors refer to the innovation in technology
that may affects the organisation and its operation of the industry.
Positive Impact Negative impact
Sainsbury is leading supermarket
company in the UK which uses the new
technology to produce goods and
Using the high technology in the
Sainsbury organisation for the
operations and producing goods need

delivering them to the customers within
time when they need. It increases the
demand of the organisation and its
products that provide the quality
products to the customers with minimum
cost and helps Sainsbury to generated
revenue that helps it bring more others
new technology for the operations
(Swot And Pestel Analysis Of
Sainsburys Marketing Essay,2018).
high amount of capital to bring it in the
organisation also need some extra care
and fund to maintain them. It causes
more expanse via company.
 Environmental Factors – It include the natural environmental factors like pollution,
natural damage that affects the organisation and its demand and production.
Positive Impact Negative impact
Sainsbury contribute a lot to the
reduction of carbon footprint. As
Sainsbury provide organic food It helps
to maintain environment this helps the
organisation to increase its brand image.
Due to environment damage like flood,
Earthquakes affects the organisation and
its production. Frequently changing
weather and attitude toward the
ecological products affects
organisation’s image and due to this
production will decrease and influence
the performance of the organisation
 Legal Factors – This legal factor include all the external and internal laws that
necessary for the organisation for its smooth-running organisation.
Positive Impact Negative impact
Sainsbury firm should follow the laws
before entering into the new market.
Some other legal laws antitrust laws,
discrimination law, employment law,
health and safety law this increase the
authentication of the organisation and
loyalty towards the consumers.
This include the all type of laws
consumer laws, competition laws,
employment laws and safety laws that
are necessary for the organisation to
follow them. If Sainsbury not follow
these laws, this create a bad image of
the organisation (Swot And Pestel
Analysis Of Sainsburys Marketing
Essay, 2018).
TASK 4
P 5 Analysis of strength and weakness of the organisation
To analyse the strength and weakness of the organisation Sainsbury follow SWOT
analysis. SWOT refers the Strengths, Weakness, Opportunities and Threats.
Strengths
 Sainsbury is one of the largest retailers in the UK. It has wide range of products over
30,000 which is convenient for its customers and give high level of satisfaction to
them.

 Sainsbury is also great financial strength with £28.456 billion revenue and £518
million operating income and net income is £309 million in the year of 2018.
 It splits into three divisions with 186,900 employees and also have large no of
employment.
 It has high experienced leadership team to lead the employees.
 Sainsbury is listed in London stock exchange and FTSE Index and also sponsored
several events like Paralympics (Devitt, C. and et.al., 2016).
Weakness
 Its rising food price effects on the Sainsbury.
 Sainsbury company is not able to handle the new entrance in the segment market and
has lost small market share.
 Uses of new technology in the industry need more investment. This stops the new
expansion in different geographic of the company.
 With growing competition, Sainsbury cut down costs as well as lowering the price
than the competition which is no longer sustainable (Muskett, 2017.).
Opportunities
 Sainsbury can enter into new markets through joint ventures or partnership to explore
new market.
 It has the opportunity to expand its business into growing countries.
 Opportunity to attract more customers through online channels.
 New trends in the customer’s behaviour b ring new opportunity to open up new
market for the Sainsbury to increase revenue.
 There is opportunity of the Sainsbury bank’s diversificati0on and growth in
international market.
Threats
 Shortage of high skilled workforce in certain market seems a threat for Sainsbury.
 New technology developed by the competitors can be a threat to the industry.
 Increasing globalisation, and present challenge become a threat of the Sainsbury.
 There are many competitors of Sainsbury like ALDI, Tesco, ASDA, Morrison’s
which provide the quality products to the customer at lower price this become a great
threat for the Sainsbury (Sainsbury's SWOT Analysis / Matrix, 2018).
P 6 Interrelation of strength and weakness of the organisation with macro environment
factors
The external factors that affects the Sainsbury organisation and its operation also
interconnected with the strength and weakness of the Sainsbury company.
Sainsbury is also great financial strength with £28.456 billion revenue and £518
million operating income and net income is £309 million in the year of 2018. This financial
condition of the company interrelates with the Economic factor of the Macro environment
which affects the company decision making process. Good economic condition of the country
provides the good policies and provide the good interest rates and other import and export
rates give the opportunity to smooth running of the business and its production and provide
ease in import and export of the products. Good economic condition of the country helps the

organisation by providing the good place and fund for the organisation and also helps in
building the relationship with other country as well (Marketing and Functions, 2019).
Using the new technology in the production of the quality product is also a great
strength of the Sainsbury which is also interconnected with technological factor of the Macro
environment which affects the organisation and its decision-making process. Changing in
technologies force the organisation to adopt new technology to provide the quality product to
the customers when there are competitors also provide the good products in minimum cost
via innovative technology. That affects the Sainsbury to adopt it and deliver the product to
customers and gaining the revenue.
Growing competition and changing attitude of the customers is the weakness of the
Sainsbury that sometime it is not able to handle high competitors in the market. This relates
to Social Macro environmental factors. Changing attitude of the customers affects the
demand that affects the production of the of the Sainsbury organisation and increasing
competition is also affects the organisation and its operation as Sainsbury has to change their
strategy and its decision process to fulfil the changing demand of the customers and also
compete with the competitors. Changing attitude, culture behaviour affects the organisation
as whole they have to produce goods according to the demand of the customer. If Sainsbury
complete the demand of the customer as according to their culture and value, this enhance
the brand loyalty and performance of the organisation and helps it to achieve its overall
objective (Marketing and Functions, 2019).
CONCLUSION
This report is concluded that business environment is very essential for every
organisation. It concluded that different organisation has different vision, size and legal
structure which Sainsbury work for to achieve its different purpose. In Sainsbury organisation
perform different operations in which its different functions are interconnected with each
other and helps the organisation to deliver the value product to the customers and achieve
overall organisational goal. Analysing the strength and weakness of the Sainsbury
organisation with SWOT model, organisation can overcome its weakness and analysis of the
external factors through PESTEL model and concluded that external environments and
strengths and weakness of the organisation are interconnected with each other and affects the
organisation and its performance to accomplish the goal.

REFERENCES
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