Business Environment and Operations Analysis

This assignment requires analysis of the business environment and its operations, with a focus on macro factors that have an impact on business performance. The student is expected to identify strengths and weaknesses related to these macro factors and provide examples from various sources, including books and journals, to support their analysis.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
LO 1.................................................................................................................................................1
P1 Different types of business organisation and their Purposes.................................................1
P 2 Size and scope of different organization ..............................................................................3
LO 2.................................................................................................................................................4
P3 Relationship between different organisational functions and its interrelationship................4
LO 3.................................................................................................................................................7
P4 Positive and Negative impacts of macro environmental factors ...........................................7
LO 4.................................................................................................................................................8
P5 Internal and External analysis of Sainsbury's........................................................................8
P6 Strengths and Weaknesses interrelates with external macro factors....................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business gets influenced due to many factors that are available in the business
environment. The influencing and affecting factors can be classified as internal environmental
factors and external environmental factors (Kolk, 2016). Sainsbury's is a chain supermarket
business which was founded in the year 1869 by John James Sainsbury. It also deals as a food
retailer and financial service provider. The Brexit Referendum brings great impact on the largest
UK retailer and financial service provider company Sainsbury. The present report explains
different types of business organisations with whom company can develop close partnership.
Demonstration of interrelationship of various functions of an organisation are done in the report
and also its link with organisational structure is explained. The impact of macro environmental
factors on business organisation are described using both positive and negative impacts. The
report further determines the internal strengths and weakness of an organisation following
Brexit. Evaluation and impact of both micro and macro factors on business organisation's
decision making and business objectives.
MAIN BODY
LO 1
P1 Different types of business organisation and their Purposes.
Type of Organization:
Following is given the explanations of different types of business organisation with
whom Sainsbury's can seek for developing close partnership within the supply chain and value
distribution networks. The different types of business organisations are sole traders, small and
medium size enterprises, partnership, private, public and voluntary organisation. The
explanations also includes whether organisation operate in primary, secondary or tertiary sectors.
Private Organization:
It is the also called as private held company and close organization which is owned either
by non governmental companies (Erasmus and et.al., 2016). These are relatively small number of
shareholder and members of firm that they do not offer and trade their stock of company stock to
public on the exchange stock market.
Sole Trader: This refers to a business which is owned by one person only. Sole-proprietor
business is easy to set-up as it is least costly. Small business entities adapt to sole trading
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business and it generally operates in primary sector or tertiary sectors. Example: Sole trader can
provide services like hairdressing, news agents.
Legal structure: The sole trading businesses are considered as the easiest organisational
structure as it requires limited legal formalities which governs its formation. Organisation needs
to register under Self-assessment tax.
Size and Scope: The size and scope of a sole trader business is limited as it is set up with small
amount of capital.
Key Objectives: The objective of sole trader is to make money for ultimate goals and some short
terms steps. The purpose of private organization is to making profits run with intention (Hair Jr
and et.al., 2015).
Public Organization:
Public sector organizations are companies set up with purpose of providing the public
services instead of making the profits. It is the part of economy combined of both public services
and public enterprise.
Public limited company: It is type of joint stock firm and incorporated business which is run by
the Board of Director on the behalf of the shareholder and annual general meeting for certain key
issues relating to firm. For example: Sainsbury's.
Purpose: The purpose of public organization is to provide the goods and services to public for
making profits of business.
Legal Structure: Public limited company is kind of joint stock firm and incorporated business.
Company is run by the Board of Director on the behalf of the shareholder within the firm.
Voluntary Organization:
It is also called as common interest association and society which is unit of individual
who enter into an agreement normally as volunteer to kind of body to achieve the purposes
(Quinlan and et.al., 2019).
Purpose: The purpose of voluntary organization is provided the free services of health and social
and creating the social impact instead of profits. It is the group of individual who enter into
agreement normally volunteers, form body to achieve the purposes.
Legal Structure: There are different legal structure of Voluntary organization such as
unincorporated non-profits and not-for organization and so on. Unincorporated association does
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not have individual legal personality that is few members of association normally enjoy limited
liability. It is taken in kind of no-profit and not-for-profit organization.
P 2 Size and scope of different organization
Public Organization: Sainsbury's
Size and Scope:
Sainsbury's is a Public Limited company that deals in chain supermarket business in
United Kingdom. There are 1415 retailer stores of Sainsbury's providing employment to approx
186900 employers. It is the largest retailer of groceries and adopter of self services retailing.
Product and Services:
Company has sold own brand food goods which are not part of any other ranges have
been re-branded as by Sainsbury's. This was introduced on frozen foods in 2010 and re-branding
was completed in 2013. Company utilised fascias using the title J Sainsbury. It was founding
member of retail loyalty scheme is called as Nectar in the UK (Chang, 2016).
Mission and Vision:
The mission statement is to be first choice for food to consumer, delivering products of
outstanding quality and great services at the competitive cost via working faster, simpler and
together. The vision is to be most trusted retailer where people love to work and shop.
Private Organization: River Island
Size and Scope:
It is the high street fashion which offers in number of marketplaces within the worldwide.
Company has over 3500 stores alongside 6 online websites which operates in 4 currencies over
100 nations worldwide.
Product and Services:
Company has provided the clothing and footwear for men, women and children across
the worldwide. River Island has in-house designed team at their headquarter in West London.
Mission and Vision:
The brand of River Island is to new, exciting and forward looking. It is an award-winning
online fashion retail site with 300 stores across the world (Pearson, 2017). River Island is the
largest in-house design teams of the high streets in the UK. Company's deep commitment to
nurturing new talent and one the most successful fashion retailer across the world.
Voluntary Organization: Cancer Research UK
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Size and Scope:
Cancer research UK is the world's largest independent cancer research charity. It is the
charitable organization. There are 3964 employees and 40000 volunteers within the across the
worldwide. The revenue of cancer research UK is to £634.81 Million.
Product and Services:
Company is provided information about cancer runs campaigns aimed at increasing
awareness and influencing the public policy. They are conducted research into prevention,
diagnosis and treatment of diseases.
Mission and Vision:
The mission statement of Cancer Research UK is to reduce number of death from cancer
across the world (Wheelen and et.al., 2017). The vision of company is to increase awareness of
people about the cancer and its treatment.
LO 2
P3 Relationship between different organisational functions and its interrelationship
All organizations have different functions that are interrelated with other such as human
resource, marketing, finance, research and development, production, and other functions. All
these are interrelated with the each other which help to accomplish the objectives and goals of
organization. These functions are interrelated with structure of Sainsbury's.
Human Resource Functions:
It is the major function of organization in which various functions have been done such
as recruiting and selecting, training and development, managing the performance and developing
skills and competencies and so on. These human resources function are interrelated with
marketing, finance and production activities (Teece, 2018). For example: human resource
manager is responsible for hiring and selecting the skilled and qualified candidate who have
ability to marketing of product and services, controlling of the finance activities and researching
of new goods and services as compared to their competitors within the Sainsbury's. With the help
of interrelationship, manager and employees make efforts to achieve the objectives and
competitive advantages.
Marketing Functions:
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It is the another important function of company in which various activities have been
such as marketing research, creating marketing plan, new product development, branding
labelling and so on. Therefore, marketing manager needs to skilled employees who are
contributed and worked as marketers, researching about marketplace new or existing etc. Also,
they need to fund and finance for promoting and advertising of products and services, conducting
the marketing research and marketing campaign for achieving the marketing objectives. This
interrelationship help to achieve the objectives and goals of Sainsbury's effectively by promoting
the goods and services as well as increasing the consumer awareness towards them (Bocken and
et.al., 2015).
Finance Functions:
It is the essential function of firm in which various functions have been done such as
sales analysis, recording of cost and expenses, analysing the profits and budget of Sainsbury's.
Therefore, finance manager needs to qualified employees for controlling of the financial
resources for rising the funds for marketing and human resource department in relation to
promote goods, giving job advertisement of vacancy within the organization. This
interrelationship help to achieve the goals and objectives of Sainsbury's. Also, they need to raise
the funds for production of new products and services of firm. In this context, finance function is
interrelated with marketing, production and human resource help to increase competitive
advantages of Sainsbury's.
Production Functions:
It is the major function of organization in which functions have been done such as
producing, designing, labelling of products and services within the organization. Therefore,
production manager needs to skilled workers for effective working in the product designing and
development, acquire finds for production process with the Sainsbury's. This interrelationship
help to achieve the objectives and goals of organization (vom Brocke and et.al., 2016). Thus,
production manager needs to producing and designing the goods, so that marketing manager
easily promote the goods and services within the marketplace. With the help of it, they are easily
achieving the objectives of marketing as well as Sainsbury's.
Impact of interrelationship on Organization Structure and its impact on the decision
making and it objectives
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Sainsbury's is the largest retailer supermarket in the UK, so that they are followed
hierarchy organizational structure within the business. In this organization structure, workers are
ranked at different levels within the firm in which each level is above the other. The chain of
command is the typical pyramid shape. This organizational structure is highly impact in both
positive and negative ways on the objectives of company (Beatty and et.al., 2018).
Organisational structure is always affected to business and its decision making process by
introducing their new roles and responsibilities. It refers the relationship between the employees
and different organisational functions. That influences to each other by making and creating
goals and growth of business.
In organisation having various parts of functions. That all have various work and function
ans improve growth of organisation. It will influence the decision making and objectives of the
Sainbury. For example: human resource department is responsible for hiring new candidates for
the work and their vacant post in organisation. By this they influence the decision making
process of organisation. Functions are impact to the needs and wants of the customers by
satisfying them. Sainbury's have the various function departments at their workplace and they are
impact to each one b y making the effectiveness.
Various departments are like finance, marketing, human resources, technology,
operations and research department. That all are work together for achieving the goals of
company and satisfying the peoples and customers (Meyer and Peng, 2016). The main objectives
of this is to provide the best services to attract the customers towards the company to improve
their productivity and profit of company. For that they can make the effectively maintain the
quality and quantity of products. Marketing department is responsible for setting the goals and
objectives for marketing and attract customers to target market.
Other hand finance department is responsible for allocating the funds to other functional
department. Organisational structure is influence the objectives and decision-making process of
Sainbury's. This structure has some advantages like clear chain of command and clear path of
advancement. By this can face the problem like poor flexibility and also creates the
communication barriers.
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LO 3
P4 Positive and Negative impacts of macro environmental factors
Positive and negative impact of macro environmental factors are affect to business and
Sainbury. For that knowing about that are important to analysis by using PESTLE analysis
(Prajogo, 2016). This impact to business operations. Analysis of this are as follows:
Political factor
These factors include governmental factors which affect to business environment. This
includes the political stability, foreign trade policy, government policy and tax policies. All these
are political factor that can affect the business and its working. It is clear that political and
government factor often have the impact on Sainbury's working environment. As during the time
of Brixit the political condition are not favour. It as UK's political relation with Qatar impact to
Sainsbury negatively. Like the government has increased the national minimum wages, in this
company have to pay extra to their employees. This negative impact on the business and its
operations. Other hand government is reduced this tax rate in this case they pay fewer wages.
This give positive impact on Sainsbury.
Economic factor
These factor have impact on the organisation and its objectives. Operations of Sainbury is
affected by the economic factor (PESTEL analysis, 2017). These factor is included interest rate,
exchanges rates, inflation and economic growth. These factor are allows to Sainbury to see it has
performed its work. At the time of Brixit consumers and business are remaining cautions and
conservative in their spending habits. The inflation rate is increased then purchasing power of
customers have decreased. This impacted the company negatively because of now the consumers
will purchase less. Also, exchanges rate has been devalued which has positive impact because of
Brixit on the company. The customers be paying the more for the same product in the different
country.
Social factor
It is also known as socio culture factor. These includes consumer buying behaviour,
corporate social responsibilities, social attitudes and so on. For this, the company has managed
any ethical and environmental factors which has either direct or indirect impact on business. It
also supports company employees by improving the working conditions of the employees. Brixit
affect the sales and profits of Sainbury because this company is uses the waste materials to create
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new product which is help to improve social side of the business. The impact of Brixit is rise to
many socio cultural changes in the past and also changes in consumers purchasing behaviour.
Technological factor
A technological factor can change have impact to business environment. Changes of
technologies impact to Sainsbury either negativity and positively (Hillary, 2017). At the present
all this thinks are doing online and because of this Sainsbury has start boosting online purchase
on mobile applications. Due to Brixit, Sainsbury positively started online retails and by this sales
have increased by and orders are also increased. The company customers services in stores and
online business has been improved the because of improvements in technology.
Legal factor
Legal factors are included the government practices and policies which are established
and introduced by the government policies. That affect to company and its operations of
Sainbusry. The business is globally is then it becomes complicated to be correct as each country
has its own set of rules and regulations. According to minimum wages act, the minimum wages
are being increasing gradually which affect to Sainsbury Brixit affected negatively because no it
has to pay more wages.
Environmental factor
These factor related to the ecological and environmental aspects that will impact to
business and operations of Sainsbury. This factor has gained popularly only because of
increasing security of raw material, pollution targets doing business in ethical way. It is
important to understand that external factors are going impact on business. Similar to Brixit,
presidential elections and other events can cause businesses to freeze up (Hamilton and Webster,
2018).
LO 4
P5 Internal and External analysis of Sainsbury's
SWOT analysis is a method through a company undertaken a study through which it
identifies its internal strength, weakness, threats and opportunities. By this analysis they are able
to overcome the weakness and threats by using their strength and opportunities.
Strength
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It means an organisation excels and in quality it has an edge over its competitors (SWOT
analysis, 2017). That only make by the company, by providing their effective and best services
to customers. The strength of Sainsbury are as follows:
 It is the one largest supermarket chains in the UK.
 Its employees are their strength.
 It has extremely experienced leadership team.
 Excellent branding and adversing across the UK by using the print media, online
campaigns.
 This is listed on London stock exchange and FTSE index.
Weakness
There are the weakness which stops an organisation from performing to its optimum
level. This give negative impact and it creates hardnesses for growth of business. Management of
company have to make strategies to overcome that and try to hide this from their competitors.
In this area the company has to work hard and need to improve their weaknesses. The weakness
of Sainsbury are as follows:
 Rising food price over the world have impacted on company selling at higher prices.
 Stiff competition within every segment of the retail sector (Laudon and Traver, 2016).
 There is haviHair Jr and et.al., 2015ng the low margin food business.
 Single operating market.
Opportunities
There are favourable external factors which is grabbed will give the company a
competitive advantage over its competitors. That are help to overcome the weakness and threats
of business. But that are also helped to make effective brand image at marketplace by using the
new technologies and it is also effective and best for improve profit and growth of company. By
using new technologies at workplace help to reduced the work efforts of humans. Opportunities
for Sainbury's are as follows:
 Expanding into growing economics.
 Self checkout machines are helpful for Sainbury to opening stores help to boost sales.
 The market emerging companies through joint ventures of partnership.
 Global market expansion via online collaborations.
 Technologies are analytics helps in customers insights (Philipov and et.al., 2015).
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Threats
It refers to a factor which have a potential to harm the organisation. It can also be defined
as the elements in the environment. They have from the competition market. In term of that they
can make effective and valuable strategies for improve this and also do time to time analysis of
their target market. Threats of Sainsbury are as follows:
 Increasing the globalization, presents challenges as well as an opportunity to Sainsbury.
 Source of the best quality and financially viable products for the world tom its
competitors.
 Impact of Brixit on prices.
 Intense competition in grocery and retail segments.
By this analysis company is able to make effective strategies by analysing the strength and
weakness of firm. It is most important for analysis. This help to overcome the weakness and
threats by using their strength and opportunities. Internal factor are affect to Sainbury and its
operations. Also, helped to give impact on the business through making new strategies for uses
the opportunities in their work policies (Billari, 2015).
P6 Strengths and Weaknesses interrelates with external macro factors
There is interrelation between the strength and weakness with the external macro factor
because both the things are interconnected to each other. These relations are shows the
effectiveness for the firm to gain their productive and profits by using it. Strength have direct
relations to with the macro factor. All the strength have a direct link with business and Sainsbury
environment. Other hand weakness are also linked with macro factors are help to overcome that
and help to make effective strategies for using this in their business. The relationship among
these factor can be shows in below.
Strength related to the micro environmental factors
Excellent branding and advertisement across the UK related to the technological factor of
the macro environmental factors because nowadays the technological factors interrelates with the
marketing of the organisation which improve and increase the profitability and revenue. From
branding and advertisement of the products and services it easily increases the sales of the
products (Kolk, 2016). It is strength of the organisation that it has strong ideas and process of
marketing through new technologies such as the organisation launch their products and aware
their customers through new technology. It easily attracts and increase the interest of customers
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for products. From new and advance technology it's a challenge and opportunity for the
Sainsbury to accept the challenges and done a great job through marketing which gives
satisfaction to the customers. It is an interrelation micro and macro factors of the environment.
The strength of the Sainsbury are their employees and it easily interrelates to the political
factor of the macro environment. It depends upon the stability in the working environment which
easily change day by day when the new changes and policies are made by government because it
is a positive impact for the employees that when the policies are changes and it increases the
minimum wages than Sainsbury has to pay more to the employees (Quinlan and et.al., 2019). If
employees are not working with the Sainsbury then its not easy to stand in the market and fulfil
the needs and demand of the consumers.
It has one of the largest supermarket supply of chain in the market which is related to the
economic factor of the macro environmental factors because if the financial condition of the
Sainsbury is good than its easy to make chains of the supermarkets at different places. If
Sainsbury makes good financial strategy to stand at different places than its easy to supply the
products and services of the Sainsbury.
Weaknesses related to the macro environmental factors
Rising the food price over the world impact on the selling price of the company and it
easily interrelated to the economic factor of the macro environment. It's a threat for the Sainsbury
to increase the selling price of the food because this situation is only creates when the raw
material and manufacturing products are purchased on high price. It affects the selling price of
the organisation which decrease the purchasing and decrease the rate of customers. The impact
of high price selling consider the economic conditions such as when the inflation rate are high
and purchasing of raw materials on high rate(Sarsby, 2016.).
Stiff competition with every segment of the retail sector is interrelated with the
technological factor of the macro environment there are so many technological changes comes
ion the market which tough competition from other retail stores because when the market gets
tough its difficult to stand in the market and run the organisation. From new technologies it's a
challenge for the organisation to accept the challenges and faced the issues and then satisfied the
need of the customers.
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CONCLUSION
From the above study it had been concluded that the business and business environment
has important for growth of business. It had been played an effective role in the business and its
objectives. The values and growth of business has important for every business. The report had
been covered by the types and purpose of organisation like public private and voluntary sector
and its legal structure has helped for making effective decisions for growth of company.
According to sized and scope of a range there having various company which has partnership,
sole-proprietor, small, medium and large companies. That all has their roles in marketplace to
achieve the goals of firm. In every organisation, all operational function had their interrelations
with other functional departments like finance department has responsible for allocating funds to
other in context human resources has roles to hire eligible candidates for organisation. It is also
covered by the positive and negative impact macro environment upon the business environment
and its operations. Strength and weakness has interrelated to the macro factor of environmental.
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