Business and Business Environment - Sainsbury Assignment

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
LO 1.................................................................................................................................................3
P1 Explains Different types and purpose of the Organisation...............................................3
P2 Explain Size and scope of the Different organisation.......................................................5
LO 2.................................................................................................................................................7
P3 Explain relationship between different organisation function..........................................7
LO 3.................................................................................................................................................8
P4 Explain positive and negative impact of macro environment...........................................8
LO 4.................................................................................................................................................9
P5 Explain strength and weakness of the organisation..........................................................9
P6 Explain interrelation in Strength and weakness..............................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business Environment includes all the external and internal factor which influence the
working of the business. Sainsbury is the Supermarket chain originated from the UK. Sainsbury
is the third largest Supermarket chain in the UK market with the market share of 16.9% in the
market. Sainsbury was founded in the year 1869 by the founder John James Sainsbury (THE
HISTORY OF SAINSBURY’S, 2019).. This report highlights the definition and purpose of
the different organisation Furthermore, report explains the Size and scope of the different
organisation. It highlights the relationship between different organisation function. This report
also highlights the internal and external analysis of the organisation by the way of PESTLE and
SWOT analysis for uncertainty the macro and micro factor which influence the working of the
business. Study will explain relationship between strength weakness of business and its macro
environmental factors.
MAIN BODY
LO 1
P1 Explains Different types and purpose of the Organisation
There are three type of the Organisation known as Public Organisation, Private Organisation and
Voluntary organisation
PUBLIC ORGANISATION
Public organisation is the firm which are owned and control by the government of the country
and generally operated to provide their services to their citizen. Agencies, enterprises, entities
funded by the government fund are known as a public organisation. Government generally used
to operate the working of this organisation or centralised to any other to do the work. Shares of
the Public organisation is listed at stock exchange.
The National Health Service (NHS) is one of the best venture of the UK government
which focuses on providing the free or at very low cost medical services to all the individual of
the country. NHS is funded by the Public sector and all the activity and working of the business
is looked and controlled by the Department of Health and Social Care (Bouckaert, Peters and
Verhoest, 2016).
NHS is regulated by the Care Quality Commission. Commissioners, customers,
contributors, channels, commentators, champions, competitors are the stakeholder of the NHS.
The main purpose or objective of the NHS is to provide the best quality of the health care
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services to the individual of the country. Framework of the NHS is based on the health and social
care of the Social Care, l, Nursing and Midwifery Council, General Medical Council, General
Dental Council and Department of Health and Social care and The Health and Care Professions
Council (Coyle, 2018).
PRIVATE ORGANISATION
The private organization is an organisation which is done by an individual, agency, entity
or corporation. This organization are not in control in any government or public body.
Organisational objectives of such kind of organization is to earn profit. The main purpose of
these type of organisation is to make profit. Legal structure of this type of industry show that
their should be Board of director and law and legislation should be written in AOA and MOA.
The Sainsbury group plc is third largest supermarket chain in UK. The Company deals in
groceries, clothing, electrical and other products. The company is operating under sector of
banking, supermarket. The company is a parent group of Argos, habitat and Nectar.
The purpose of Sainsbury is to provide good quality of food at fair price. The company
believes that being fair with the suppliers and environment enables gains at long term. The
company's main objective is to increase profit by reinvestment in the company which allows
them to grow and help them in attaining the biggest chan of supermarket. Along with it they also
aim at increasing profit will bring new ideas which provides an aid to company in attaining
competitive advantage.
VOLUNTARY ORGANISATION
Organisation in which individual with common interest or goal comes together to achieve the
common goal of the business. Most common these type of organisation are trade union,
professional association etc.
OXFAM is a major non- profit organisation of the UK with the sole motive of reducing
the poverty at the global level. OXFAM main aim is to work together to make a good impact at
international level to reduce the poverty (Gorman, 2019). The main purpose is to provide the
way by which individual can be self depended and it is the trust which is formed by 20 charitable
trust.
Scope of the OXFAM is to introduce new and innovative idea to increase the quality of
the life of the people of UK. OXFAM stated the goals toward the below poverty line people in
the form of quality live, standard of life etc. Main purpose of the OXFAM is to reduce the
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poverty at the international level. Trust of Association & works on the principles of Gender
equality, Anti-discrimination policy, Safety policy &Corporate Governance policy are the same
party which regulates the OXFAM. It has huge scope to grow into international market, as it has
skilled volunteers those who are ready to serve people well. This makes the firm able to expand
its business across the world.
P2 Explain Size and scope of the Different organisation
PUBLIC ORGANISATION - National Health Services
Background: NHS is the public government funded organisation formed in the year 1948 and is
seen and controlled by the department of Health and social care
Service: NHS used to provide the health and care services to all the citizen of the UK at low cost
and also at a Free of cost, service include primary treatment, emergency treatment and the and
dentistry etc (Hamilton and Webster, 2018).
Size and scope: Size of NHS is to big that they used to treat more than 1 million citizen in 36
hours. More than a million employee are employed by the NHS. NHS is the biggest health care
hospital of UK.
Vision: To improve the quality of the health of all the citizen and provides the treatment to every
class citizen in the country.
Mission: To provide the health service to all the citizen irrespective of their wealth.
Business objectives: Main objective of the business is to provide the information and the merits
of the good quality of life to the citizen of the country and also to teach them how to defend
injuries and infection.
Legal structure: NHS is 51% owned by the public government and the other are distributed
through the shares.
PRIVATE ORGANISATION – TESCO PLC
 Background: Sainsbury was founded by John James Sainsbury in 1869 by Jack Cohen,
they started their business by opening first small dairy shop at 173 Drury Lane which was
at that time known as the poorest part of the London region.
 Products and services: Sainsbury used to provide the product of other brands from all
across the globe into their stores. Product include books, cloths, electronics, furniture,
toys, petrol, software, financial services, telecoms, and internet services.
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 Size and Scope: Sainsbury provides employment to 1,86,00 employees. There is 1423
total stores in all over UK(Size of Sainsbury, 2018)
 Vision: Main vision of the organisation is used to grow the business with the help of the
innovative ideas and also by serving the society.
 Business objectives: the main objective of the business is to grow the business and to
become the leading organisation in the Local UK market and to also grow the business in
the global market by opening the store in other country as well.
 Organisational structure: Sainsbury used to use the functional and divisional structure in
the organisation as there are many stores in the UK of the organisation so this structure
benefit them
 Legal structure: All the Decision is taken by the Board of Director and all the laws and
legislation are presented in MOA and AOA which need to be followed by the employee
and interested party.
VOLUNTARY ORGANISATION - OXFAM
 Background: More than 20 charitable trust confederation is the reason of the formation of
the OXFAM. OXFAM at first provide food to the needy and then after food and medicine
after that Oxfam also helps individual in becoming self supported.
 Products and services: The main services which is provided by the OXFAM is that they
used to conduct the event which is done with the aim of reducing poverty in the public at
the global level.
 Size and Scope: Oxfam has their offices in across the globe including UK, Asia, Africa
and Australia.
 Vision: Is to make world without poverty and hunger.
 Mission: To decrease the poverty at the global level.
 Business objective: To help the needy and poor people with providing them the way to be
self depended.
 Organisational structure: OXFAM organisational structure is formed of the hierarchical
structure consisting of many levels, of which each level is controlled by one person.
 Legal structure: It is the trust which has been formed by confederation of 20 trust (Gürel,
E. and Tat, M., 2017).
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Micro enterprise- Micro enterprise is the enterprise which employee less than 9 employees and
the balance sheet of the enterprise shows the turnover less than €2 million or PhP 3 million.
Small enterprise- Enterprises which are having less than 250 employees in the organisation are
categorised in the Small enterprise.
Large enterprise- Enterprises which are having more than 250 employees in the organisation
are categorised in the Large enterprise.
LO 2
P3 Explain relationship between different organisation function
Functions of Sainsbury are:
 Finance – This department focusses on seeing the financial position of the business by
seeing that is there is loss or profit. It also helps the organisation in taking the financial
decision by seeing the current performance with benchmark.
 Marketing, Sales & Production- This department generally focuses on conducting
survey and research by the way of questioner to known the feedback of the customer with
the aim of knowing taste and preference.
 Sales department of the Sainsbury takes care that there is a proper launching of the new
product in the market by making people aware about the product.
 Production function of Sainsbury makes sure that there is a proper availability of the
product and there is a timely delivery of the product (Miller and Jentz, 2017).
 Research and development: This is the function in which Sainsbury invest a very good
amount of the finance resources as by the help of this company used to research about the
opportunity and then develop the product according to that to get a competitive
advantage.
Organisational functions Interrelationships:
 HR department is the one who used to help Production department as this is the
department which recruit the top class employee for the production department to
produce the good at the same time production department used to give feedback on the
performance of employee and on the basis of which HR department organize training
program (Phadermrod, Crowder and Wills, 2019). These help the organisation in getting
best human manpower but also help in increasing the efficiency of the business.
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 Financial department of the Sainsbury is interlinked with the marketing department as
these is the department which used to allot the budget and the relevant financial
document to the marketing department and on the basis of that department used to work
in the organisation and in return marketing used to give them a proper idea of the
situation which helps finance department to take a financial decision. This help the
business in maintaining the fund for the growth of the business.
 Marketing, sales and Production are the three department which are interlinked with each
other as they are the one which work together to achieve the organisational goal as
Production department used to produce the good and the marketing department is the one
who used to promote the awareness of the product in the customer eye and the sales
department is the one who use different strategy to sell the product (Cepel and
et.al.,2018). The main objective of all the organisation is to increase the sells of the
business.
LO 3
P4 Explain positive and negative impact of macro environment
Political Factor
As Sainsbury covers a very good market in the local market so its business is influenced by the
political parties decision.
Positive- Sainsbury always operate in the political laws as Sainsbury always try to save the
environment by using environment friendly packaging raw material which helps the business in
getting good name.
Negative- At the time of import of raw material it affects the business as due to change in tax
rate of other country it affects the operating cost of the business.
Economical Factor
These are the factor which are not controlled by the organisation as inflation rate, interest rate
and unemployment rate are not in company hand to control.
Positive- As there is a decrease in the unemployment rate it has increased the spending power of
the individual which has helped the business in attending need of the consumer.
Negative- At the same time increasing wage rate as increased the operation cost of the business
as they have to invest more on employee (Clarke and Xu, 2016).
Social Factor
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This factor looks at the change of the taste, preference and culture of the people.
Positive- As Sainsbury invest heavily on research and development program it has helped the
business in knowing the change in the environment which has helped them to change their
product.
Negative- At the same time the clothing which is developed by Sainsbury not able to satisfy need
of the consumer which has affected the business in negative way
Technical Factor
Factor which affects the business due to change in the technology.
Positive- This is the factor which has played a crucial role in success of the organisation as
organisation always adapt the best possible technology.
Negative- At the same time it has proved difficult for the organisation to train their employee
according to the new technology (Phadermrod, Crowder and Wills, 2019).
Legal Factor
This is the factor which affects the business as these are the law and legislation of the business.
Negative- This is the factor which has affected the business as due to the legal policy of the
country there is a rise in the price of some commodities of the Sainsbury
Positive-At the same time following this policy has created a good name of the organisation.
Environment Factor
Positive- This is the factor which has been successfully defended by the company by reducing
the wastage of the resources and by optimum utilisation of the resources
Negative- At the same time due to heavy rainfall or any calamities company has faced the
problem of late shipment or delivery.
LO 4
P5 Explain strength and weakness of the organisation
STRENGTHSGood market share and Position – Sainsbury is the third largest supermarket chain the UK
due to the quality of the product which has helped the business in gaining the good attention of
the people.Customer Satisfaction – Sainsbury main purpose is to satisfy the need of the customer as a
reason Sainsbury has invested very heavily in the research and development program so by the
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help of that they are able to known the opportunity and the need of the customer which has
helped them to develop the product accordingly.Variety of products – As Sainsbury has variety of the stores across UK and the variety of the
product which are offered by the company has helped the business in gaining good attention.
Product offered by company is clothing, technology, grocery, retail etc.
WEAKNESS Low margin Product – Due to increase in the price of the product it has hampered the growth
of the businesses as due to that company has to reduce the profit margin of the product to be
competitive in the market (Perera, R., 2017).Dependent retailer – Sainsbury has diversified their business by entering into new industry
such as Sainsbury bank and Sainsbury Argos but there is over depended on the Supermarket
stores to earn a profit for the company.Competitive disadvantage – This is the one of the biggest weakness of the organisation as
there is a good competition in the market and as the reason company has to sacrifice their profit
margin to have a competitive advantage in the market and also it forces the Sainsbury to be
flexible in their approach which sometimes affect the business as due to flexibility there is
uncertainty sometimes.
OpportunitySainsbury has the great opportunity to grow in the global market also as there are many
countries which are developing and developing country will offer a good opportunity to
establish.
ThreatsOver dependency on supermarket business can be threat for the business as other diversified
business of Sainsbury is not making that much of profit which is expected.
P6 Explain interrelation in Strength and weakness Sainsbury follows the employment law in the organisation which says that government of UK
encourage the company to provide employment to the local UK citizen only and that's the reason
they get a good support from the UK government which helps them to gain the good goodwill
and the biggest strength of the Sainsbury is Customer support although there is a huge
competition which is offered by the other organisation but because of the quality of the product
of Sainsbury it helps the company to retain the customer (Perera, R., 2017).
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 Sainsbury has faced the issue of over dependency on one department, Sainsbury has variety of
the product to offer to the customer as they have diversified their business which helps them to
compensate their one department loss with the other for eg. Cloth department of the Sainsbury is
not seen a good growth but the food department has seen a good growth which has helped the
business in gaining the good name. Sainsbury is investing very heavily in diversifying their business in new industry and which has
not proved that successful for the business as a result they have to lose their second position to
the Asda and also that have a made shareholder also unhappy but the investment done by
Sainsbury is in growing sector so it can benefit them in the future (Miller and Jentz, 2017).
CONCLUSION
After going through above report it has been summarised that there are huge difference in the
types of the organisation on the basis of purpose, legal structure and motive. It has been also
summarised that there is a good interrelationship between department of the Sainsbury
organisation. It has been also summarised that the organisation is doing good in the local market
but diversification of the business is affecting them but can be beneficial in the Long run of the
business.
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REFERENCES
Books and Journals
Bouckaert, G., Peters, B.G. and Verhoest, K., 2016. Coordination of public sector organizations.
Basingstoke, UK: Palgrave Macmillan.
Cepel, M., Stasiukynas, A., Kotásková, A. and Dvorsky, J., 2018. Business environment quality
index in the SME segment. Journal of Competitiveness. 10(2). p.21.
Clarke, G., Li, Y. and Xu, L.C., 2016. Business environment, economic agglomeration and job
creation around the world. Applied Economics. 48(33). pp.3088-3103.
Coyle, D.J., 2018. A cultural theory of organizations. In Culture matters (pp. 59-78). Routledge.
Gorman, R.F., 2019. Private voluntary organizations as agents of development. Routledge.
Gürel, E. and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research. 10(51).
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Miller, R.L. and Jentz, G.A., 2017. Business law today: The essentials. Cengage learning.
Perera, R., 2017. The PESTLE analysis.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Online
THE HISTORY OF SAINSBURY’S. 2019. [ONLINE]. AVAILABLE THROUGH <
https://blog.s4rb.com/the-history-of-sainsburys-trying-something-new-for-147-years>
Size of Sainsbury, 2018. [ONLINE]. AVAILABLE THROUGH
<HTTPS://WWW.STATISTA.COM/STATISTICS/386475/SAINSBURYS-STORE-
NUMBERS-BY-CONVENIENCE-AND-SUPERMARKET-UNITED-KINGDOM-UK/>
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