Analysis of Business Environment Factors

The assignment analyzes the business environment of Sainsbury PLC and National Health Services (NHS) in the UK. It explores various factors such as market structure, key responsibilities of Sainsbury PLC, and legal considerations affecting NHS. The report highlights the importance of considering these factors to ensure successful operations and compliance with regulations.

The Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Describe the type of business............................................................................................1
P2 Describe the different stakeholders...................................................................................2
TASK 2............................................................................................................................................4
P3 Describe how two businesses are organised in terms of their structures and functioning
areas........................................................................................................................................4
P4 Explain the styles of organisation which helps them to fulfil their purposes...................5
TASK 3............................................................................................................................................6
P5 Describe the influence of two contrasting economic environments on business activities6
TASK 4............................................................................................................................................6
P6 Describe how political, legal and social factors impact business activities......................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business Environment is an integral part of effective and efficient management of
Business. Business Environment determines the types of Business that will be Successful within
the environment. Business Environment has many forces that shape the business segment as well
as product line. In this report, the Business environment of Sainsbury PLC and National Health
Services is analysed with respect to some factors such as Market structure, key responsibilities of
etc. Moreover, the importance of International Trade as well as the impact of Global factors on
Sainsbury PLC and NHS is described with the essence of globalization. Lastly, the policy of
European Union and its relation to profit and not for profit organisation is presented with
reference to the particular policies.
TASK 1
P1 Describe the type of business.
There are different types of organizations available. Some organizations are profit
seeking and some others are beneficiary or non-profit organizations. Organizations vary due to
their structures, cultures, and environment along with the line of Business (Chavis, and et. al.,
2011).
National Health Services (NHS) England: National Health Services England is treated
as the world‟s the largest health service that is publicly funded. With its evolution in 1948, it has
been able to create the image of most efficient and most comprehensive Health service in the
World. The NHS has come with the idea that good healthcare should be available to all,
irrespective of wealth, class, age and other issues.
The purpose of NHS is to serve the nation for the betterment of the people. No profit
motive is there; rather the right of getting equal treatment and medical benefits are the main
purpose for its existence. Patients are treated as the most expensive resource for NHS. Patients
are highly satisfied with the services of the NHS (Galaskiewicz, J., and et. al., 2016)
Sainsbury PLC: The company started as small retail store, now it becomes the third
largest U.K. retail chains. Sainsbury is now a listed company in U.K. that is serving a wide range
of customers every day. Sainsbury focuses on the customer‟s satisfaction and tries to give the
best possible shopping experience to its customers.
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The main purpose of Sainsbury is growth, in terms of market share as well as number of
customers. The company focuses at serving the best food for health, and is also maintains
responsibility and respect the environment (Davies, and et. al., 2014)
P2 Describe the different stakeholders
Individuals or groups who have staked in the activities of Sainsbury‟s are regarded as the
Stakeholders. Stakeholders have several rights in the Sainsbury, where both the sustainability
and performance related information is available for the stakeholders (Mouraviev, and et. al.,
2016). Stakeholders make the decisions of investment or employment or mere buying products
of Sainsbury PLC through the information related to its performance and financial position.
1. Typical stakeholders of Sainsbury Plc are here under:
 Suppliers: They want to feel valued by the company and want frequent orders with
prompt payments.
 Customers: Customers want value for money which involves providing the highest
quality products at competitive prices.
 Owners: In a company it would be the shareholders. Owners are often thought to be the
most important stakeholders because they have set up the business and give a lot of time
into the company to make it successful. Owners like to see their share of profit
increasing, and the value of their business rising.
 Employees: Their stake is that the company provides them with am livelihood. They want
security of employments, good rates of reward and also promotional opportunities.
 Employer associations: This is the same as trade unions but for the employers,
representing the interests of employers in specific industries.
 Governments: The government wants businesses to become successful, to create jobs and
to pay taxes. They want to see good businesses that take a full responsibility on looking
after the welfare of society.
2. Stakeholders of NHS are as follows:
Patients
 Interests: To be able to have a service provided to them free of charge, to have clinics
available for when they need to speak to a GP, to be able to speak to someone when they
are in medical need.
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 Influence: Staff hiring because if a lot of people are using the NHS service then they will
have to recruit more doctor nurses GP’s and specialists to make sure that the client has
someone who is able to see them. They can also influence redundancy because if the
client isn’t satisfied with the service being provided then they might go to private clinics
which could lead to staff getting fired.
Tax-payers
 Interests: To make sure that the money they are paying in taxes to fund the NHS is being
well spent on good service.
 Influence: They fund the NHS through their taxes; they can also fund new hospitals and
clinics through tax.
Government
 Interests: To make sure that the NHS is being run safely and properly, to keep patients
satisfied with the service, provide free health care to the people of England.
 Influence: they can close hospitals, invest more into the NHS, decrease funding
Pressure groups
 Interests: Make sure the NHS is in good health and safety condition, to make sure the
client has good service provided to them.
 Influence: Can cause hospitals and clinics to close, redundancy, pay rise, better working
conditions, shorter shifts
Employees
 Interests: to get as many clients as possible, to provide a good and clean service, to help
the community and to get rewarded for good service
 Influence: They attract customers, provide service, demand pay rise, demand better
working conditions, and go on strike (Dunn, and et. al., 2015)
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TASK 2
P3 Describe how two businesses are organised in terms of their structures and functioning areas
Functional Structure of Sainsbury is as follows:
Human Resource Department: This department of Sainsbury manages recruiting,
hiring, training, relational assistance, compensation and keeps a check over employee's
performance.
Finance Department: In profit maximizing organisation, company needs finance
manager to analyse financial conditions, profits, planning and budgeting, internal audit, tax
administration and economic appraisal.
Marketing Department: Functions of marketing includes, promoting brand, organising
campaigns, advertising, and monitoring and managing companies' affair.
Production Department: In Sainsbury, production manager keeps a check over daily
production report, regulates the allocation of resource, and is responsible for turning of raw
material into finished goods.
Customer Services: Since the customers demand keeps on rising and fluctuating,
competition is becoming tough for Sainsbury that is why company has trained its employees in
order to satisfy customers and maximize profit.
Sales: For increasing sales, retailers offer products at discounted price so that customers
get attracted and shop more which in turn will increase sales of specific company.
National Health Services Organisational structures given in picture below:
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Figure 1 Organizational structure of NHS
(Source: )
P4 Explain the styles of organisation which helps them to fulfil their purposes.
The structure of the Sainsbury helps in simplify the units of the company to smaller units
which makes it easier to get task done and do their jobs accurately as staff will have better
understanding of their roles. The Sainsbury strategy plan is, the focusing around there five areas
at its centre. (Prajogo, and et. al., 2016)
1. Great food at fair prices: To lead the customer in a long stretch of food products. It
sharing customers' passion for healthy, fresh, safe, and tasty food. Sainsbury acts to continue the
innovation and provide the leadership of delivering the quality of products at fair prices, sourced
with integrity to become the World's largest retailer of Fair-trade goods by value.
2. Accelerating the growth of complementary non-food and service: To continue the
acceleration development of non food and services following the principle of quality and the
value and to provide a longer shopping experience for the customers.
3. Reaching more customers through additional channels: To the reach of Sainsbury
brand extension by opening new convenience stores and developing the online operations. Now
non food online business launched over 8000 products now it's available in nationally.
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4. Growing supermarket space: Opening of new super market with including all
products of foods and non foods items and the extensions of super market to tracking their
targets.
5. Active property management: Market value of our free hold property port folio
increased in large no. the ownership of the property assets will provide the operational flexibility
and the exploitation of potential development opportunities will maximize the value (Xue, and
et. al., 2010).
TASK 3
P5 Describe the influence of two contrasting economic environments on business activities
Impact of Fiscal and Monetary policy on Sainsbury Plc
Sainsbury is affected through the Fiscal policy severely. If the VAT is increased on the
products, then Sainsbury PLC has to make new pricing strategy in order to make the predestined
profit. On the other hand, if the income tax increases, then people will try to spend less money,
as they have to pay higher amount of taxes with comparison to previous times.
Monetary Policy is the policy where supply and demand determines the proportional
distribution of Money. Through lowering the interest rates, the supply of Money in the Market is
raised, in order to ensure the sufficiency of Money in the Market. (Murray, and et. al., 2017)
1. The Free Market Economy: The free Market Economy is regarded as the most acceptable
economy, where the market values of goods and services are determined through the
crossroads of Supply and demand curve. Government intervention is avoided here, where
it is assured that without government legislations, the economy can be fair to all.
2. The Mixed Economy: It is the economy where both the Government and the Market are
the decision makers for the proper allocation of resources. Mixed Economy is the
combination of free market economy and Command Economy. From these five types of
economy, Sainsbury is going through the Free Market economy in order to allocate its
products to the Customers. Pricing is crucial here in order to determine the items to
produce and the quantity to produce.
TASK 4
P6 Describe how political, legal and social factors impact business activities
Pestle Analysis of Sainsbury is as follows:
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 Political factors: The political factors in the United Kingdom have a great influence on
the performance of Sainsbury. Currently in UK, the government debts and the consumer
debts are very high. This impacts the customer attitudes and therefore business conditions
experience great pressure. Sainsbury has to not only operate in these market conditions
but also has to develop their business continually (Kuznetsova, S. and et. al., 2017).
 Economic factors: This play a vital role in any industry. These factors affect demand,
costs, prices and profitability. In the light of the economic slowdown, growing
unemployment and inflation in food prices are the 2 important elements of economic
factor that will affect Sainsbury significantly (Light, S.E. and et. al., 2016).
 Social factors: In today's market, the customers tend to prefer one-stop shopping. This
means that they prefer to have all the products available under one roof. Sainsbury by
introducing non-food products have largely benefited from this strategy. In addition,
other social factors such as increasing female workforce, longevity in the population, etc.
has resulted in a decline domestic meal making.
 Technological factors: The technological advancements have a positive impact on the
business operations. There is a significant growth potential in the online or web based
operations of the business. Sainsbury online food delivery service is increasingly
expanding. As per their annual report for 2009, continuous improvement in the services
offered online has resulted in increase of sales by 25% year after year.
 Legislative factors: The government legislation and policies have a direct impact on the
performance of the organisation. For example the legislation that introduced a new tax on
advertising highly processed and fatty foods. Sainsbury adapted to this new tax by
modifying its products and also complied to the legislative requirements.
Pestle Analysis of NHS is as follows:
 Political factors: The government of the country influences NHS to a large extent. The
politicians aren’t aware about management and hence, the managers are really stressed
with the continuous change. The funding for certain treatments is done by the
government and their rates are not in sync with the actual rates of the hospital.
 Economic factors: The movement of money from or to the organization causes a change
in the environment. Economic environment can increase the profits or losses of the NHS
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so that needs to be analysed and required changes should be implemented (Tietenberg,
and et. al., 2016).
 Social Factors: The NHS should take into consideration, the number of ageing people
who are present in the country. Ageing people require more health care services and
hence, it should increase the capacity of the hospital.
 Technological Environment: Technology may not touch other areas in the NHS but
surgical equipments have to be changed as per the improving technology. If the surgical
equipments are outdated then it is very risky.
 Legal factor: The NHS will have to follow quality issues which have been set forth by the
government. The quality issues are adhered so that the patients in the hospital are safe.
The NHS has to produce the accounts every year so that the government can keep a track
of the taxes that they pay and the income that they earn.
CONCLUSION
Business Environment has many forces that shape the business segment as well as
product line. In this report, the Business environment of Sainsbury PLC and National Health
services is analysed with respect to some factors such as Market structure, key responsibilities of
the Sainsbury PLC etc.
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REFERENCES
Books and journals
Chavis, L. W. and et.al., 2011. The impact of the business environment on young firm financing.
The world bank economic review. 25(3). pp.486-507.
Davies, J. C., and et.al., 2014. Comparing environmental risks: tools for setting government
priorities. Routledge.
Dunn, W. N. and et.al., 2015. Public policy analysis. Routledge.
Galaskiewicz, J., and et.al., 2016. Social organization of an urban grants economy: A study of
business philanthropy and non profit organizations. Elsevier.
Kuznetsova, S. and et.al., 2017. New Challenges in External Environment and Business
Strategy: The Case of Siberian Companies. In Financial Environment and Business
Development. Springer International Publishing. 14(3). pp. 449-461.
Light, S. E. and et.al., 2016. Parallels in Public and Private Environmental Governance.
Mouraviev, N., and et.al., 2016. Conceptualising public-private partnerships: a critical appraisal
of approaches to meanings and forms. Society and Business Review. 11(2). pp.155-173.
Murray, A., and et.al., 2017. The circular economy: An interdisciplinary exploration of the
concept and application in a global context. Journal of Business Ethics. 140(3). pp.369-
380.
Prajogo, D. I., and et.al., 2016. The strategic fit between innovation strategies and business
environment in delivering business performance. International Journal of Production
Economics. 171. pp.241-249.
Tietenberg, T. H. and et.al., 2016. Environmental and natural resource economics. Routledge.
Xue, X., and et.al., 2010. Critical review of collaborative working in construction projects:
business environment and human behaviours. Journal of Management in Engineering.
26(4). pp.196-208.
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