Business and Business Environment

This presentation discusses the concept of business environment and its impact on businesses. It focuses on the positive and negative impacts of the macro environment, as well as internal and external analysis. The case of Sainsbury, the second largest supermarket chain in the UK, is used as an example. The presentation concludes with a summary and references.

Business and Business Environment

Table of Content
•Introduction
•Positive and negative impacts the macro environment
•Internal and external analysis
•Conclusion
•References

INTRODUCTION
Business environment refers to an atmosphere in which business enterprises operate
their business activities and operations. It can be sum or collection of all
extrinsic and intrinsic components like workers, consumers, suppliers,
management, owner, government, customer’s needs and expectations, supply and
demand, social needs, market trends and economic changes etc. This assignment
is based on Sainsbury which is the second largest chain of supermarkets in the
UK.

Positive and negative impacts the macro environment
Macro environment refers to the external business
environment in which a company operate its
business to fulfil the needs and demands of the
target audiences.
PESTEL Analysis
It is a tool and method that is used by
organisations to determine the factors and
components of external environment

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Political- This factor consist different aspects like political stability or instability,
taxation policy, corruption, foreign trade policy, tax policy, labour law and trade
restrictions etc.
Positive- In UK, political stability is a factor that can favourably influence the
business of firm like Sainsbury.
Negative- In UK, Brexit is the major component that highly influence the business
if retail sector and affect the company like Sainsbury that operate its business in
business industry.

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Economical- It consider diverse elements like interest rate, currency rate, inflation
and deflation, disposal income of consumers, employment and unemployment
rate, foreign exchange rate and tax rate etc.
Positive- In UK, unemployment rate is constantly rising and this could be pose to be
favourable thing for Sainsbury’s.
Negative- For the transportation of goods and material, Sainsbury is highly
dependent on rod transport.

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Social- This factor consist several aspects like culture, values, beliefs, needs and
demands, tastes and preferences of customers and demographic factors like
age, gender, income, lifestyle, occupation etc.
Positive- In current era, people aspire to shop from a supermarket in which all
needed commodities they can get under one roof.
Negative- In current era, people prefer to online shopping company that deliver
items to their ordered place and offer commodities through discounting
pricing.

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Technology- This factor includes different includes different components like
technological innovation, advancement in technology, artificial intelligence,
research and development and many others.
Positive- This factor positively impact retail sector organisation like Sainsbury
because due to technological innovation, the firm is able to fulfilling the needs
of its target audiences.
Negative- But lack use of technology, in promotion and publishing of goods and
services of the company, can unfavourably affect the firm.

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Environmental- It considers diverse aspects such as climate, weather,
environmental law, like air pollution, water pollution, carbon footprints and
emissions etc.
Positive- Now these days, people of a nation expects an enterprise to be eco-
friendly.
Negative- this factor negatively affect Sainsbury as the firm produce high level of
carbons footprints that is highly affect the current environmental situations.

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Legal- This factor of political analysis consist different laws and legislations that
are framed and developed by the national authority so that business of
organisations can run and operate in effective and efficient manner.
Positive- The administration of Sainsbury appropriately follows employment,
health & safety law and consumer protection act.
Negative-With the familiarisation of new Sugar Tax in UK, the rules and
regulations laid down stopping Sainsbury to stop promoting its high fat, salt
and sugar foods to the children below 16 years of age.

Internal and external analysis
SWOT analysis
It is a strategic analysis that is utilised
by the firms to analyse the strengths,
weaknesses, opportunities and risk of
the company. The brief explanation of
this analysis is mentioned as below:

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Strengths Weaknesses
•The organisation has providing for all
types of customer and there are number
of brand and extensive products
accessible for all higher income
segments.
•The firm utilise innovation promotion
strategy like Brand Match promotion.
•Due to Brexit, inflation is arisen and
the cost of transportation and food
prices arises that unfavourably affect
the company.
•There is rigid rivalry in each section
of the retail sector.

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Opportunities Threats
•To make technical innovation in its
business like by offering self check out
and self billing services service assist in
opening outlets of 24 hours that help
increasing sales of it.
•By offering option of online shopping to
Asian and African market, the enterprise
can make growth in its business.
•There are number of retail firm like,
ASDA, ALDI, LIDL, Tesco, Marks &
Spencer and many others that create
high level of rivalry.
•Changes in national authority’s rules
and legislation also generate disputes to
operate or run business in diverse
countries.

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TWOS Analysis
It is an analysis and method which is
also used by the management of
company to determine the threats
weaknesses, development opportunities
and risk.

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Strengths/opportunities- There is different option of business expansion accessible to the company
like high use of artificial intelligence and the demand of advance technology also develop in
emerging market in retail industry of UK.
Strengths/threats-The main risk is to survive in the marketplace for Sainsbury is that it is ignorant
regarding the rising atmospheric concerns that could be lead to reduce in its market share.

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Weaknesses/opportunities- One of the major weaknesses of Sainsbury is that it is highly
dependent on UK markets and road transportation for the distribution of the goods and
commodities.
Weaknesses/Threats- The political era of the UK is highly uncertain and there the main
risk of modifications in laws and legislation of the nation.

CONCLUSION
This has been summarised from the above define content that business
environment is an area and atmosphere where business organisations can
operate their business activity and operation with the purpose of providing
satisfaction of consumer’s needs and demands and gaining profits from
market.

REFERENCE
• Hamilton, L. and Webster, P., 2018. The international business environment. Oxford
University Press.
• PESTLE Analysis of Sainsbury’s. 2020. Available Through: <
https://pestleanalysis.com/pestle-analysis-of-sainsburys/>.
• SWOT analysis of Sainsbury. 2020. [Online]. Available Through: <
https://www.marketing91.com/swot-analysis-of-sainsbury/>.

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