Business Environmental Analysis

This document provides an analysis of the business environment, including the purpose and legal structures of public, private, and voluntary sectors, the size and scope of different types of organizations, the relationship between different organizational functions, and the impact of macro environment on business operations. It also discusses the SWOT analysis and interrelationship between strength and weakness.

Business Environmental
Analysis

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1.Purpose and legal structures of Public, Private and Voluntary sectors ....................................3
2. Size and scope of different types of organization ...................................................................4
3. Relationship between different organizational functions .......................................................6
4.Macro Environment impact on business ..................................................................................7
5.SWOT Analysis......................................................................................................................10
6. Interrelationship between strength and weakness .................................................................11
CONCLUSION ............................................................................................................................12
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is defined as the process in which all the aspects of business which
are working in the organization consisting of all the external and internal forces and other factors
which defines the growth and development of the company or organization (Pereira, 2018). The
report will explain the purpose of public (NHS company), private (Sainsbury company) and
voluntary organization (Red cross company) along with its legal structures, size and scope of
different types of structures in an organizations, the interrelation between different organization
function and how they link to different organization structure, positive and negative impact of
macro environment has upon business operations, internal and external analysis to identify
strengths and weaknesses of Sainsbury organization and how it interrelates with the external
macro factors. Thus, the report will help in analysing all such factors which are the basic parts of
the organization so that the organization works effectively and efficiently to achieve goals and
targets that are set by the company or entity.
MAIN BODY
1.Purpose and legal structures of Public, Private and Voluntary sectors
Public Sector – Public sector is defined as the portion of the economy composed of all
levels of government and government controlled enterprises (Fugini, Bracci and Sicilia, 2016).
The purpose of public sector is that it helps the government to enforce social control on
trade and policies for ensuring equitable goods and services to the general public. All the public
services that are rendered by the government to the general public ensures that there is smooth
functioning in the rules and regulations and that they are followed by the public.
The legal structure of public sector is an incorporated business which is run by the Board
of Directors and has an Annual General Meeting at which shareholders vote on certain key issues
relating to the company. As NHS being a public sector organization, it focuses on the
legalization of all the functions which takes place within the organization as the government
rules and regulations are to be followed by the company which are under direction of
Government.
Private Sector – Private sector is defined as the part of economy that is run by
individuals and companies for profit (Van Zyl, Mathafena and Ras, 2017).

The purpose of private sector is concerned with making more money and provide
employment to workers in companies. Private sector companies work for the products and
services to be efficient enough so that the company is engaged in producing more profit along
with generating sales.
The legal structure of private company is a type of joint stock company where the
business has a separate legal entity. Sometimes, the company is run by family, small businesses
which are owned by shareholders. Sainsbury being a private company cannot invest shares in the
other company but sells its shares to the public companies. Each shareholder has limited liability
for the company's debts. The company is run by the Board of Directors and this is headed by the
chairman. The legal documents of the company are formed to take in important details which are
mentioned.
Voluntary Sector – Voluntary sector is defined as the organizations whose primary
purpose is to create social impact rather than profit.
The purpose of voluntary sector is to shape and enhance the society by providing services
through NGO's which helps in the growth and development of such organizations and the
operations of these organizations works smoothly and effectively. Thus, voluntary organizations
work at grass root levels to provide services to the poor sections of the society.
The legal structure of voluntary organizations consist of Trust, Unincorporated
association, company limited by guarantee, Charitable incorporated organization and other
additional sectors within this legal structure include Community benefit society, Co – operative
society, Community interest company, Royal charter bodies. Redcross through these different
legal structures that constitute the organization work accordingly by proving the efficiency and
effectiveness on the society. This charitable trust that is categorized in the voluntary sector
define the working of society for the purpose of not creating profit and implementing proper
functioning.
2. Size and scope of different types of organization
MICRO ENTERPRISES SMALL AND MEDIUM
ENTERPRISES
LARGE ENTERPRISES

Size The size of micro
enterprises consist of
employment of 10
employees in the
organization (Needham
and Allen, 2016). This
size is measured in the
micro organizations which
are built on very small
scale and they employee
less number of employees
in the organization. The
efficiency and
effectiveness is also at
pace level when there are
less number of employees
as the working and
operations work
accordingly in the
company. Thus, the
enterprises comprising of
10 employees grow on the
scale of improvement for
the growth.
The size of small
enterprises consist of fewer
than 50 employees in an
organization. And the size
of medium enterprises
consists of employees that
are less than 250 in
number. Both the
enterprises play an
important role in the
formation of an
organization in
consideration with the
employees and their
employment. Small and
medium enterprises consist
of the basic necessities that
are prior in the company or
an enterprise. Thus, the
functioning is measured by
the development in
economy of sector.
The size of large
enterprises consist of over
1000 employees in an
organization. Number of
employees in large
enterprises defines its
employment criteria and
the profit the organization
is achieving from years.
Being able top employee
employees on large scale
defines the capacity and
the size of employees the
company holds. Thus, by
building large enterprises
it increases the
employment for the under
- employed and the scale
of enhancement upgrades
with the performance of
the employees with
increase in revenue.
Scope The scope of micro
enterprises lies in the fact
that they not only help
improve the quality of life
but they also add value to
the local economy. Micro
finance seeks to help
The scope of small and
medium enterprises play an
important role in the
economy. They are a major
source of entrepreneurial
skills, innovation and
employment. As it provides
The scope of large
enterprises is that they
share large part on
different economies of
scale and so they
contribute towards
growing more on the

micro enterprises by
providing them loans for
the business to grow more
and the financing will help
in developing the quality
of the products and
services that the company
produces. This scope of
growing micro enterprise
helps in the development
of local enterprises and
makes them value their
efficiency.
employment to people of
an organization it becomes
best in terms of ensuring to
increase the efficiency and
effectiveness of the
company in this sector and
the performance base is
also increased as these
enterprises are the biggest
contributor to the economy.
Thus, scope of these
enterprises increases the
employability skills and
attributes.
internal basis by giving job
opportunities or
employment to people who
are already on the verge of
unemployment. Large
enterprises concerns the
important areas of
functioning and
operations in an
organization or the
company. Thus, large
enterprises increases the
scope of expanding its
business on large scales
and generate profits for
helping the economy on
different levels.
3. Relationship between different organizational functions
Different organizational functions consist of the relationship between HR, Marketing and
Finance of Sainsbury company described as below -
HR and Finance - Human Resource and Finance are two major areas of Sainsbury.
Finance department helps to allocate the resources to support the organization's goals by
maintaining a balance between cost and revenue of the projects or the tasks that are taken under
by Human Resource department (Kotler, Keller, Brady and et.al., 2019). HR hires and recruits
the people with the help of financing. In recruiting and hiring employees for the organization
financing is an important segment for which the HR seeks collaboration with it. Without
financing HR department would not be able to contribute in the employment generation process
and the other work procedures which takes place under the HR department. Thus, collaborative
effort of HR and Finance department will lead to the successful operation in the business and the

organization to run effectively and efficiently so that synchronization of the company is not
hampered.
Finance and Marketing – Finance and Marketing departments are significant key
holders of Sainsbury. Finance department helps in providing the finance to the marketing
strategies which are to be generated based on the plan. All the promotional strategies of the
organization holds the fact that the finance factor is sufficient enough so that there are no
difficulties in the near future when those strategies are implemented,. The finance factor is
helpful in promotion and marketing of the products and services rendered by the organization on
large platform which increases the profits, growth and development of the company also which
upgrades in the due process (Sidani, 2018). Thus, marketing and finance functions are
interrelated to each other as without any one of them the process will come to the verge of
extinction of the company. To work in an collaborative manner the company ensures that the
procedures of marketing and finance sync well with each other which leads to increase in the
performance.
HR and Marketing – HR and Marketing are the vital forms of Sainsbury and without
their collaborative or collective effort the company will face major downfall both within and
outside the organization (Eyring and Consuegra, 2017). The HR function plays an important role
in marketing of the strategies and promoting its product and services outside the organization
which helps in increasing the sales and profit of the organization affecting the growth in a
positive aspect. HR department helps the marketing function to develop in the promotional
strategies of the services which the company offers along with marketing of its brand and the
product it produces. Thus, the marketing and HR functions work hand in hand with each other as
if any one of the function reduces its efficiency the whole organization will have to face the
losses occurred in the process. To improve the performance of organization it is necessary that
both functions work along and promote their strategies for development and growth.
4.Macro Environment impact on business
It will help in analysing external factor that are affecting business of organization and
impacting its growth. There are number of drivers which can become barrier in business expand
of Sainsbury such as political, economical, environmental etc. It becomes important that timely
action will be taken for it so that firm can grow as well as expand.

Political factor - Britain is political stable country and hence same policy as well as
guidelines support growth of different country. BREXIT has effected on number of companies in
the country such as cost of raw material that was imported from Europe increase which affected
Sainsburry business and become barrier in its growth (Jones and Comfort, 2020).
Positive impact -
Vaccination decrease fear among customers and market of organization again growing.
Government is focusing on helping firm by improving infrastructure which can again help in
growth of company.
Negative impact -
European tourist also decreases because of increase in Visa as well as other formalities.
Lock-down by British government has decreases number of customers and hence profit share of
organization reduces.
Economic factor - Britain in economically strong nation but COVID and BREXIT has
effected on GDP of country and it becomes negative because Lock down. Inflation rate in
country continuously increase because of trade barrier after United Kingdom's exist from
Europe. Number of unemployed in country increases which again effecting on firm's business
and it effects on firm to attract middle as well as lower class people in country.
Positive impact -
Government of Britain committed to change in corporate taxes which might help in
providing product at lower cost and increase profit share of Sainsburry in time of globalization.
Negative impact -
Sainsbury customer decline because purchasing power as well as interest and hence
effecting on growth of firm.
Social factor - In Britain taste and trend of customers continuously changes and
Sainsburry highly invest in Research and development programs which attract them and impact
on growth of firm's business. Firm has a separate department which focuses on analysing need
of customer and according to it provide product as well as services and help it in expanding
business.
Positive impact -
Organization offer range of product which again attract British citizens and support one
stop sloping habit. After pandemic, British citizens interest shifted towards organic product

which again helping in gaining customers and improve market position of organization in United
Kingdom's retail sector.
Negative impact -
Sainsbury continuous invest in research and development increasing expenditure and on
the contrary old stock has to sell in lower prices because of changing taste and trend of British
consumers.
Technology factor - In United Kingdom technology contentiously changes which make
it advance country. Training and development programs are not according to changing
technology as well as continuous up-gradation of system increase pressure of work and hence
reduce their productivity. Firm also invest in modern technology for promotion which helping in
influencing large number of customer for its product as well as services.
Positive impact -
Sainsbury contentiously invest in improving system which can increase efficiency,
quality and productivity of work and hence it will able to gain competitive advantage in time of
globalization.
Negative impact -
Advance technology decreasing financial stability of firm and it hampered expansion of
business in different part of world.
Environment factor - United kingdom Industries highly focusing on sustainable
development of business as well as conserving environment (Souza-Monteiro and Hooker,
2017). Human Resource management of company again encourage worker to use cycle and
support various campaigning related to environment.
Positive impact -
Sainsburry ban plastic bag and provide funds to various NGO for plantation trees in
different part of country which improve good-will of firm in time of globalization
Negative impact -
Investment in corporate social responsibility increase financial expenditure of firm and
effect on expansion of its market.
Legal factor - There are number of rules, regulations, acts etc. introduce by firm in order
to protect right of employees. However, employees sometimes misuse of their right which create
challenged for firm.

Positive impact -
Sainsbury implemented various laws for stakeholder so that they feel part of organization
and their rights cannot be violated in any way (Power and et.al., 2020).
Negative impact -
Key legislation increases expenditure of Sainsburry as well as consume lot of time to
maintain diversified work-culture in firm.
5.SWOT Analysis
It helps in analysing strength, weakness, opportunities, etc. so that proper market strategy
can be set-up for it.
Strength - Sainsburry focuses on providing range of product which help organization in
gaining customer and also support one stop shopping habit of British. Organization highly
emphasizes on innovation as well as creativity skills improvement of workforce which help in
increase customer satisfaction level as well as increase market share of firm. Firm invest large
profit share in promotion strategy so that it can reach to customer on time.
Weakness - Training and development programs of organization are not aligned with
advance technology which decrease efficiency, quality and productivity of work and impact on
firm's growth in time of globalization. Most of the suppliers of firm are from Europe but
increasing raw material cost from BREXIT has effected on its competitive price strategy
(Filimonau and Gherbin, 2017). Supply chain management of firm is not effective which again
creating number of challenges for firm and effecting on its business.
Opportunities - Sainsburry can invest in promotion strategy to influence large number of
customer for organic product customer. Innovation as creativity skills can be used in providing
high quality product and help in increasing customer satisfaction level. There are large number
of places in United Kingdom such as rural are of UK where organization can open stores and
increase profit share.
Threats - Ineffectiveness in training and development programs can create issue rising
organization in time of globalization and can impact on growth company. Poor supply chain
management can create opportunities for expanding business and improve market position in
changing business.

6. Interrelationship between strength and weakness
There are various interrelationship between strength and weakness of the company which
accounts to relationship with the external factors of the company where by strength of the
company lies with having qualified and skilled employees who will account to meet various
challenging tasks of the company and support various business dynamics as a result accounts
with designing of policies of the companies which accounts with meeting to various political
factors which can affect the business functioning as a result in meeting with various political
norms being prevailing in the country and which can affect the business operation such as Brexit
and various other.
The companies strength also accounts with having technology which makes the business
operation more efficient which accounts and helps in supporting external factors such as
technology which helps in supporting in getting valuable insights on the end of the company and
serving the same which helps in deriving high level of satisfaction and whereby the strength and
technology factors are related where the company is continuously accounting to make efforts to
upgrade on the technology as a result will helps the smooth flow of working operation, whereby
its is being also related that company accounts with the weaknesses that the company accounts
with this external factors is large and huge amount of investment inn upgrading of technology as
result may affect the operations of the company in unfavourable manner (Sisakhtnezhad,
Alimoradi, Akrami, 2017)
The strength also accounts with company that it is being taking sufficient steps to protect
the environment where it takes sufficient steps for effective disposal of waste materials and
accounting to measures for removing carbon footprints as a result serves with the means of
matching up with the macro factors such as environment which the business considers to
effective and smooth functioning of the businesses. It strength accounts with the sustainable
development which helps the company to build positive brand image and spread of positive word
of mouth .
The companies strength lies with making innovation at the workplace and deriving a
culture which is being fun loving and gives positive vibe to the individual which serves as the
means of meeting with various social factors that are external in nature and accounts with
building relationship with various business parties which serves as meeting with social factor of
the company.

The weaknesses of the company accounts with management of the company which is
being not satisfactory and accounts to huge conflicts at the same time whereby it is being
affected that legal factors needs in focus and are interrelated with each other as it regards with
management serving with various rules and regulation and not accounting to the same will result
in imposing of various penalties, restriction which can affect the business functioning in
unfavourable manner and build the negative image of the brand (Toppinen, 2019)
It accounts with weakness where the company is lacking in terms of providing after
sales services whereby the social factors comes into the role as it accounts with hindering the
customer loyalty and trust.
CONCLUSION
Thus, it is concluded from the above report that all the business environment factors with
their explanations proves that the essentials that are required by the organization plays an
important role in the company's development and growth which was verified through the legal
structures that were framed in the private, public and voluntary sector within an organization.
The interrelationship between HR , Marketing, and Finance functions played an important role
within the organization defining the operations that were considered and interlinked within these
segments or structures. The positive and negative factors that impacts the macro environment
upon the business organization proves that along with the positive aspects there are loopholes
which are also to be considered for improving the facets of the company where they are affecting
and rectifying the measures therein which is measured through PESTLE analysis. The SWOT
(Strength, Weakness, Opportunity, Threat) analysis helped to measure the internal and external
factors of the organization to analyse the functioning of Sainsbury.
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