PESTLE & SWOT Analysis for Businesses

This assignment explores the significance of PESTLE and SWOT analyses in the context of business operations. It delves into how PESTLE helps identify macro-environmental factors that can positively or negatively impact an organization, enabling informed decision-making regarding product modifications, service adjustments, and overall productivity. Furthermore, the assignment explains how SWOT analysis empowers firms to pinpoint their strengths and weaknesses, allowing them to strategize for overcoming vulnerabilities and leveraging advantages. It also highlights how SWOT analysis can aid in identifying opportunities for business expansion into new geographical markets.

Business environment

Table of Contents
Introduction......................................................................................................................................3
P1 and P2 enclosed in PPT..........................................................................................................3
P3.....................................................................................................................................................3
P4 ....................................................................................................................................................6
P5.................................................................................................................................................8
P6...............................................................................................................................................12
Conclusion.....................................................................................................................................13
REFERENCES..............................................................................................................................14

Introduction
Business environment include all the internal and external factor which can inpact the
business such as government, employees, customer etcs. There are different way through which
company can easily analysis the macro and micro factor which impact the business activities.
The present report is based on two different retail company Sainsburys and Iceland Supermarket.
Sainsbury is public retail company and Iceland supermarket its private limited company. In this
report discussion is done on different organizational function and its structure. Along with this
the positive and negative impact of macro environment on business operation is identified. Apart
from this, the strength and weakness of business is interrelated with external macro factor is
explained.
P1 and P2 enclosed in PPT
P3
The function of and interrelation between function and how they link with organization
structure
Sainsbury is one of the leading organization which perform all its function in effective
manner. The organizational function refer to the various operation which take place within the
organization. There are different department as Sainsbury who perform different function for
accomplishing the goal and objective (Stenmark, Bergström and Petersen, 2016). Further,
organizational function performed by different department such as marketing department, HR
department, financial department etc. this all department function are interlinked with each other
which are discussed below:
Marketing function: The marketing is one of the major function of organization because
it role is to advertise product and increase the sale of company by performing different marketing
activities. There are various marketing strategy which are implemented by marketing department
so that people came to know its company product and buy them (Kaul, 2016.). There are
different way through which advertisement is done so that firm can grab attention of its customer
and eager encourage them to buy product. According to the organizational structure, in

marketing department marketing manager guide its team and delegate responsibility to its each
team member.
Human resources function: Human resources department is also important part which
help organization in achieving success. HR recruit highly skilled candidate for organization so
that firm can achieves success on time. It focuses on hiring right number of workforce and make
them aware of organizational rules and regulation and policy (Kimura 2014.). HR also make
different kind of policy for welfare of employees. In addition to this, HR department also commit
for complying with all legal formalities and make sure that employee works in healthy and safe
environment. For the organizational structure it HR department is important part and it is
interrelated with different department. It provides resources to various department such as
marketing department. So that they can carry out their function in effective manner. Along with
this,
Finance function: Finance function is one of the role which is played by finance
manager. It is responsible for managing all fund in organization and make budget, so that
unnecessary expenses can be avoided. Along with this, manager make plan for different type of
financial activities and also make close supervision on the expenses and income which is
generated by firm. Different department in organization required fund for carrying out all its
activities due to this role of finance department increase (Kimura 2014.). In addition to this at
sainsbury manager of finance department also forecast the different type of expenses and make
financial plan. Apart from this it also monitors the balance sheet statement and income statement
so that financial position of company can be identified and it can be tracked. It also manages
avoid fund in business so that all business activities can be carried out easily.
IT function: function of IT department is to make sure that all the activities in business
carrying on systematic manner. At Saisnbury, IT department used different types of technology
and tool for keeping the record of various data. Along with this it used software for tracking and
saving important information of company. Inventory management is also done in software which
help in keeping track of stock which is available for the business. Sainsbury used advance
technology for selling its product and services for this it purpose IT department help in keeping
records of its online buyer and help them in fulfilling order of customer. With the help of IT
department firm can easily make relation with its customer (Meyer, 2016.). Apart from this, it
also make sure that all the data and information is kept secure in the system of company. It also

help in managing communication with different department with the help of mailing system. If
HR not recruit highly skilled employee for its company then it may suffer from loss. It company
not have highly skilled employee then it may be suffer from loss and unable to make innovative
product. This show that all department are interrelated. For Example if proper fund is not
available for business then marketing department cannot carry out all its activities because for
advertising product marketing manager needs fund which it only get from the finance
department. So proper coordination is required between all department.
Hence, above discussed all organizational function are interrelated with each other which
help Sainsbury in achieving organizational goal and objective on time.
The structure of organization and function have a close link in which it department play
significance role for common goal of company (Croon, 2013). All the function which are
performed by different department at different level of structure are depended on the different
business and market activities The organizational structure of any company is based on different
type such as matrix, functional and divisional. Sainsbury organizational structure is Matrix in
which all the roles of employee are divided where they need to report as per determined matrix.
In this organizational structure all staff member are responsible toward the functional and
product manager. Along with this communication is better in this type of structure and close
supervision can be done by high level department.

P4
Sainsbury is the second largest supermarket chain in UK having more than 1300 stores
and has over 1,60,000 employees and from the past few years company has again got into growth
trajectory. There is increased competition in market with the entry of new entrants (Croon,
2013). To maintain its growth the company has to keep proper knowledge of the environment in
which it is operating. To determine the different environmental factors affecting the business
organisation PESTLE analysis can be used . PESTLE analysis only considers external factors.
PESTLE analysis is the acronym of the combination of given words P – Political factors;
E - Economic factors; S - Social factors; T - Technological factors; L - Legal factors; E -
Environmental factors. To understand the relationship of strength, weakness, opportunity and
threat of business with the environment each of these factors should be considered. These factors
are described below:
Political: The political factors plays an very important role in the growth of the
organisation as political factors influence the mind of the people in the particular economy.
There is huge debt on the people and government of the UK. The GDP growth rate of UK is also
very less as compared to other emerging countries (Flores, Monroy and Fabela, 2015.). The
focus of Sainsbury is not only to survive in this market but also to develop the business
continuously.
Positive influence- Sainsbury has to follow the all the policies and regulation formed by
the government and have to maintain clean image
Negative influence- Any regulation related to any trade barrier will create limitations for
the company.
Economic: Economic factor plays a vital role as they involve the factors relating to
demand, supply, cost and profitability. Economics factors are affected by the per-capita income,
unemployment data etc. As the economy of UK is going through tough phase (Oppenheim,
2016). To overcome such issue Sainsbury can expand itself into new emerging markets and can
take the benefits of globalisation,
Positive influence- Any situation which give boost to the economy of the country will
therefore help the country to earn huge profits

Negative influence- The situation such as inflation, recession effect the company in
negetive way.
Social: Social factors are related to culture of the given country. The customer of the UK
prefer to shop from under one roof. Sainsbury is also provide all the items such food products
and non-food products under one roof. Sainsbury can also follow additional social techniques
such as giving employment to more female and engaging in CSR activities (Cunningham,
2015.).
Positive influence- By understanding the social factor company can focus on customer
satisfaction and company can form policy and strategies considering the social factors.
Negative influence- The company can face severe loss by the competition as they can
also replicate the strategies followed by the company.
Technological: Due to the rapid growth in the technological advancement this factor
plays an important role in the growth of the organisation. Sainsbury can increase its penetration
in the online or web-based mode of commerce. The youth of UK is preferring to buy online
products so Sainsbury should see growth from this segment
Positive influence- Sainsbury can gather information related to prospective clients and it
can also collect information for the prospective employees
Negative influence-To upgrade the whole system of the company requires lot of time and
it will difficult for the employees to accept such technological changes.
Legal: The law drafted by the government has a direct impact on the organisation. Any
amendment in various acts such as tax law, labour law, company law, consumer protection act
has the effect on the performance of the company (Oppenheim, 2016.). Sainsbury should follow
all the law and policy drafted by the government.
Positive influence- Government can draft any act which will create some compliance in
relation to customer and employees which in-turn enhance the performance of the company.
Negative influence- New law can sometime be damaging for the company.
Environmental: Those factors which affect the market situation in which company is
carrying its operation. Sainsbury should carry detailed competitive analysis report to be ahead of
its competitors such as TESCO, Asda etc.
Positive influence- Environmental factors can provide relevant data to draft suitable
strategy in correlation with company and industry

Negative influence- Sometimes environmental changes can make the operation of
company difficult.
P5
Sainsbury is the second largest supermarket chain in the whole UK. It deals in retail of
various range of product covering foods and non-food items. Sainsbury operates through various
subsidiaries. It has more than 1300 stores in UK and over 1,60,000 employees. SWOT analysis is
used to determine the position of the organisation in the business environment. The company
should develop various marketing strategies to enhance its sales in the market and acquire new
customers. It helps the company to understand how to allocate the resources of the company to
increase the performance (Flores, Monroy and Fabela, 2015.). The following table shows the
strength, weakness, opportunities, threats of Sainsbury in relation to its strategy and operation in
UK as it faces tough competition from TESCO, ASDA, Morrison.
Strength  Sainsbury is the 2nd largest supermarket
chain in UK. It has more 1,60,000
employees with a very experienced
management team. Sainsbury uses
various marketing technique to sale its
product and making customer relation.
Sainsbury sale products of various
brands including its own brands which
help them clock great margins. Sainsbury
makes investment in many verticals
which are not co-related and helps the
company to minimise its risk.
 The company has adequate exposure in
online commerce and has a reach to over
88% of households through E-commerce.
Sainsbury has opened new stores in
recent past and entered into new
geographic as well. Sainsbury has staff

training college which provide quality
training to its staff (Flores, Monroy and
Fabela, 2015.).
 The company has a very good supply
chain and distribution network as
company is increasing its number of
stores. Sainsbury has a very good brand
name in the market so it is very easy for
the company raise more capital in case of
capital crunch.
 More than 20% of the sale of sainsbury
comes from its own brand products
which helps the company in making
higher margins on that product and it can
provide unique product against its
competitors.
Weakness  Sainsbury has started its operations 1869,
which makes sainsbury the oldest
company in the retail industry. But the
company that has started operation after
Sainsbury like TESCO and ASDA has
taken over the growth of Sainsbury and
there is huge competition pressure in the
retail industry.
 The company has been suffering losses
from last couple of years. Sainsbury uses
old school method of business so it has
not taken full benefit of globalisation.
 In the recent history there has some issue
related to sainsbury relating tax
avoidance, price fixing, food safety etc.

which has hamper the image of the
organization (Cunningham, 2015).
Sainsbury has not developed any
competitive advantages against its
competitors.
 Sainsbury is suffering from huge
operating loss as there is price war
among its competitor which has impact
the financial statement of the company
Opportunity  Sainsbury can increase its operation in
new emerging geographies such as china,
middle-east, Africa etc. through Joint
ventures or partnership.
 Self checkout machines could be used in
certain stores. New customer-base prefer
personalised products so Sainsbury could
provide custom and personalised
product.
 Sainsbury has its operations in various
vertical so it can expand its market reach
in those verticals. Sainsbury can focus on
high selling items which also generates
higher margin for the company.
 There are lot of small retailers in the
market. Sainsbury can focus on inorganic
form of growth by acquiring these small
retailers and expand its reach. This will
also help the company to increase its
store count.
 Sainsbury can start operation of selling
its grocery products in Australia. Where

there is less competition in this segment
and the customer are not price sensitive.
 The company focus on developing new
market such as Africa where the culture
of supermarket has not risen.
Threat  Retail industry is a very crowded place
with many companies are fighting for
same customer-base and many new
established players are entering the
market.
 With the rise of globalisation many
threats are being imposed on the existing
players (Stenmark, Bergström and
Petersen, 2016). There is race to acquire
best quality of raw material so that
sainsbury can stay ahead of competition.
 There can various factors such as
decrease in the customer-demand,
recession, war of price among
competitors or there can be increase in
competition. People may find new source
of buying product such as electronic
market.
 Being a global retailer there are various
political factors to which the company is
exposed
 There are various issues which are faced
by the sainsbury like price fixing and
food safety etc.

P6
The strength and weakness of company is interrelated with macro factors. There it can be
stated that Sainsbury company focus on the making a quality product which help in maintaining
its customer base. It also minimises the risk of losing customer base. Sainsbury is one of the
leading organization and it used advance technology for making innovative product and services
for its customer it helps in grabbing the attention of large number of customer. Firm have idea
for reaching to its target customer. Such as it use different social media sites for promoting its
product and services. On contrary to this, S is operating its business from longer time and now it
have many competitor who make same type of product and services. This impact the sale of
organization. So company is facing issues because of its competitor. Firm also using old methods
for selling its product which make company to suffer from loss (Meyer, 2016.). Along with this
there are some macro factor which are impacting the organizations and linked with strength and
weakness. Political factor play impact organization negatively because changes made by
government in the tax rate directly impacting the profit of organization. If government set high
tax rate then firm can face loss because it need to pay high tax. Along with this changes take
place in social factor also impac the sale of organization. Taste and performance of customer
changes with the changes of time. If customer needs and wants changes then company need to
modifies their product and services for satisfying its customers. Inflation and recession
negatively impact the organization because at the time of recession people avoid spending
money on product and services which may impact the profit of company. So at the time of
recession firm need to keep price of its product and services low so that it can easily increase the
sale and manage losses. Apart from this Sainsbury have opportunity to expand its business in
different country such as China, India etc. through joint venture and partnership.
Along with this new technology have great positive impact on firms. If Sainsbury
introduce new technology then it can easily make innovative product for its customer. In addition
to this there are some legal rules and regulation which company need to follow for its employee
safety such as it need to provide its employee safe environment for working so that employee
may not get harm at the time of carrying out all business activities . It can be stated that people
are now become conscious for their surrounding environment so company should focus on
making environmental friendly product and services. It help in keeping surrounding environment

neat and clean and support in increasing a sale. From the above discussion it is clear that there is
negative and positive both impact on macro factor on organization performance.
Conclusion
From the above report it can be concluded that, organization function and structures are
interrelated with each other. In organization there are different department who perform different
type of function and each department is interrelated with each other. Organization structure help
firm carrying out all business operation in systematic manner. Through proper structure firm can
easily achieve goal and objective on time. Further, different type of organization have different
aims and objectives it depends on the nature of business. PESTLE help in analysing the factor
which impact the organization negatively or positively. It helps in making changes in company
productivity and for modifying its product and services. Further it can be concluded that there
with the help of SWOT analysis firm can easily identify its strength and weakness. Firm can also
take necessary action to overcome from its weakness. Further it also help in identifying the factor
help organization in expanding its business at new geographical area. Macro Factor impact the
organizational function and operations.

REFERENCES
Books and Journals
Balasko, Y., 2016. Foundations of the theory of general equilibrium. World Scientific.
Croon, J., 2013. Comparative Institutional Analysis, the European Court of Justice and the
General Principle of Non‐Discrimination—or—Alternative Tales on Equality
Reasoning. European law journal, 19(2), pp.153-173.
Cunningham, T., 2015. Monitoring Equality–Reflexive Regulation, Planning Systems, and the
Role of Discrimination Law: Lessons from Northern Ireland. The Equal Rights Review,
14, p.119.
Ferrari, S., 2016. Religion between Liberty and Equality. Journal of Law, Religion and State,
4(2), pp.179-193.
Flores, R.P., Monroy, G.V. and Fabela, A.M.R., 2015. Compensatory Policies Attending Equality
and Inequality in Mexico Educational Practice among Vulnerable Groups in Higher
Education. Journal of Education and Learning, 4(4), p.53.
Kaul, V., 2016. Foreword: Gender Equality and Multiculturalism. In Toward New Democratic
Imaginaries-İstanbul Seminars on Islam, Culture and Politics (pp. 265-270). Springer
International Publishing.
Kimura, M., 2014. Non-performativity of university and subjectification of students: the question
of equality and diversity in UK universities. British Journal of Sociology of Education,
35(4), pp.523-540.
Meyer, K., 2016. Why should we demand equality of educational opportunity?. Theory and
Research in Education, 14(3), pp.333-347.
Oppenheim, J., 2016. The second law of quantum thermodynamics as an equality. In APS
Meeting Abstracts.
Sadurski, W., 2014. Equality and Minority Rights. In Rights Before Courts (pp. 289-328).
Springer Netherlands.
Sarrasin, O., 2016. Attitudes Toward Gender Equality and Opposition to Muslim Full-Face Veils.
Swiss Journal of Psychology.
Stenmark, H., Bergström, E., Hägglöf, B., Öhman, A. and Petersen, S., 2016. Mental problems
and their socio-demographic determinants in young schoolchildren in Sweden, a country

with high gender and income equality. Scandinavian Journal of Social Medicine, 44(1),
pp.18-26.