Business Environment in Sainsbury

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1: Different types and purpose of organisation..........................................................................3
P2: Size and scope of different types of organisation..................................................................4
TASK 2............................................................................................................................................5
P3: Explain the relationship between different organisation function.........................................5
TASK 3............................................................................................................................................6
P4: Positive and negative impact of macro environment upon business operations..................6
TASK 4............................................................................................................................................8
P5: Internal and external analysis to identify strength and weakness of an organisation............8
P6: Strength and weakness in interrelation to external macro factors.......................................10
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................12

INTRODUCTION
Business Environment refer to the sum total of internal as well as external factor that
affect the operations of business (Rossano and et.al., 2016). It simply include individual and
institute which business can not control but still they make policies based on these factor as it
affect the overall performance of business and lead to sustainable development of business. To
better understand the topic Sainsbury company has been selected which has third largest
supermarket chain and provide wide range of products and services from its convenience shop or
retail store. It basically offer utility items, shopping items, grocery item, electronics etc. This
report cover following topic such as various, type, size and scope of an organisation.
Interrelation between various function of organisation as well as positive and negative impact of
macro environment on business operation. Further, internal strength and weakness of business
and their interrelations with macro factor are covered in this report.
TASK 1
P1: Different types and purpose of organisation
Public organisation: It is a type of organisation which is operated and owned by the
government as well as exist to give better services for its citizens. Crown Prosecution Services is
best example of public organisation which are explained as under:
Crown Prosecution Services that is CPS is the international agency that provide the legal
advices to the legal authority such as investigation agencies, police and criminal investigation. It
was formed in 1986 that run its services specifically in England and Wales. The company has
approximately five thousand employee which conduct the criminal prosecution
Purpose: The primary purpose of CPS is to promote the legal practices by conducted
deep investigation and conduct prosecution.
Legal structure: CPS follows the various type of legal structure like central, state and
local government to run the business successfully.
Private organisation: This is another type of organisation which introduces to any
person, corporation, association, partnership and agency which is not a public body that is run
and operated for making profit.
Sainsbury is one of the leading supermarket chains that offer wide range of goods and
services under one roof within the national market. It was founded in 1869 and has market share

of around 16.8% within UK. It provide employment to approximately one lac employee due to
which company gain huge market revenue that is around £28.456 billion. Furthermore, selected
company has approximately fourteen private label products which is sold through its own
convenience store (Buno, Nadanyiova and Hraskova, 2015).
Purpose: The purpose of Sainsbury is to provide high quality of food to the customer and
at reasonable prices. Along with that company company form fair relationship with their
supplier, customer and environment.
Legal structure: Private company include partnership, sole proprietor, cooperative and
limited as a legal structure. Sainsbury company follows the public limited legal structure that
earn the profitability as well as productivity by dealing in wide range of products.
Voluntary organisation: The Voluntary Sector is normally comprised of enterprise
whose main motive is to benefit as well as enrich society, frequently without profit as a purpose
and with small or no government intervention.
Oxfam is the independent global organisation that work and prove the charity to the poor
people who are unprivileged part of the society and lack in fulfilling their basic requirement. It
was founded in 1942 that serve the global poverty. It is a non profit organisation that is
connected to around 20 independent organisation that work together for the social welfare.
Purpose: The sole purpose of Oxfam organisation is to eradicate the poverty and fulfil
the basic requirement of people.
Legal structure: Oxfam adopts the Trust as a part of their legal structure which offers
social services and work for the welfare of people.
P2: Size and scope of different types of organisation
The size and scope of an organisation differ from one to another based on the external
factor, capital, internal culture, size, number of employees and so on.
Crown Prosecution Services:
CPS is an independent organisation that makes its own decision which are independent of
government and police. The company deals in international market and make sure respective
person is prosecuted for their offense (Chorafas, 2016). The lawyers follows all the code while
conducting criminal's case.
Size and scope: The size of CPS is expanding and it focuses to provide the information,
prepare whole case and witness it in the court. The scope of company is wider as currently bit

has over five thousand employee which is expanding based on the size of company. It provide
the jurisdiction services in countries like England and Wales as well as the area is continuously
expanding.
Vision and mission: The vision of company is to make better difference and
understanding in the community via justice system. Whereas, the mission of company is to offer
justice and support effective prosecution.
Objective: The objective of CPS is to deliver best services by achieving the outcomes
effectively, efficiently and economically.
Sainsbury:
It is a retail brand that provide products such as grocery retailing as well as service which
is retail banking (Chi, 2015). Company has its own supermarket store that offer food and non
food item under one roof.
Size and scope: In term of market share the size of Sainsbury is continuously lifting up as
it offer diverse portfolio of goods and services that satisfy the utility of people and capture wide
market effectively.
Vision and mission: The vision of company is to be reliable and trust brand and its
mission is to largest retailer company.
Objective: The objective of company is to provide supreme quality services and at fair
prices to effective satisfy the need of customer.
Oxfam:
Oxfam is the global company that take measure to control the poverty and work for the
social welfare of people.
Size and scope: As the company operate globally due to which it's size is rising and has
twenty charitable organisation. The scope of company is to cover global market and ehlp the
poor people to cover their basic need effectively.
Vision and mission: The vision of Oxfam is to make the world without poverty and
where everyone enjoy their right. Moreover, mission of company is to work against injustice.
Objective: The objective of company is to work on realistic life changing programmes
and make campaign to tackle poverty.

TASK 2
P3: Explain the relationship between different organisation function
There are various function which business needs to perform that helps in landing up
effective decision by enhancing the profitability of company (Falkner, 2017). Thus, various
organisation function performed by Sainsbury are stated below:
Marketing function: Marketing helps to identify the needs and preferences of customer
which the company uses to build effective strategy and promote it's brand significantly. Thus,
this function is incomplete without other function such as HR which recruit as well as train the
employee like sales executive that helps in increasing the sales of overall company (Divanbeigi
and Ramalho, 2015). Along with that finance functions helps in the preparation of budget due to
which company knows how much they need to invest in marketing function like promotional
technique in order to achieve long term success.
Finance function: With finance function all decision related to monetary transaction are
made like amount to be invested and sources of fund. Sainsbury gets advantage due to this
function as it helps in the preparation of budget as well as financial statement to attract the
interest of stakeholder. It is interrelated to marketing function as it makes the efficient strategy
like cost effective strategy that helps in increasing the revenue for company. Moreover, the HR
profession depends upon finance function to conduct whole recruitment cycle.
Human resource function: HR function helps the company to get most suitable
candidate for the right job. This function is interrelated to marketing function as it train the
personnel, motivate them to achieve the sales target and achieve business objective.
Therefore, all the function are interrelated to each other in order to achieve the objective
of Sainsbury which is to enhance the profitability and productivity. To make it possible HR
department will help to place the right person at right place. Whereas, finance department keep
the record of all transaction and business activity which is utilised to prepare fair and transparent
financial statement (Dyllick and Muff, 2016). Moreover, among the various structure Sainsbury
has adopted divisional structure that is used to place the people similar type of people based on
their specialisation to achieve business objective.

TASK 3
P4: Positive and negative impact of macro environment upon business operations
Macro environment refer to the external factor which are uncontrollable for which
Sainsbury company uses PESTLE analysis framework in order to make the business decision
effective and perform the operation efficiently.
Political factor: Political factor significantly influences the business performance as it
includes factors like trade policy, government intervention, political stability and so on. It
directly influences the performances and function of business as it includes the immense pressure
of customer attitude and business performance.
Positive: Sainsbury within UK comes under big organisations but still they have to pay
low corporate tax that is approximately 30% sue to which company is left with huge revenue.
Negative: With the emergence of globalisation and digitalisation it is an opportunity for
the business to expand the product range even in developing country where the market is still
untapped (Korshikova, and et.al., 2016). But these region are political unstable due to which
company finds difficulty to exploit the opportunity.
Economical factor: It is one of the essential components of PESTEL that affect the cost,
demand, profitability as well as prices of the product.
Positive: Due to expansion of retail business and good purchasing power of people within
developed country Sainsbury is able to give tough competition. Along with that company is
successfully managing its market share by fulfilling the require of local residence. Mnoreover,
the unemployment are within UK is lifting so that's a positive aspect for company as they get
large pool of candidate who can be the part of business.
Negative : With the huge competitive pressure some stores like Aldi and Lidi supply
goods at steeply discounted range which has adversely affected the food retailing market of
selected company. Hence, company is finding difficulty to earn suitable margin from the food
items.
Social factor: It include various factors associate with the people such as their lifestyle,
culture, attitude, belief, distribution channel etc. which company needs to analyse before starting
their operations as it can positively or negative determine the buying behaviour of ultimate
consumer (Lee, Lee and Seo, 2015).

Positive: Customer usually prefer they get the wide range of goods and services under
one roof instead of one stop shopping. Further, due to increase in percentage of male and fem,ale
working outside they are more inclined to purchase ready to cook food items. Thus, selected
company has covered the changing need or requirement of customer wisely.
Negative: The trend keeps on changing and the company needs to match the pace which
although consumes time and cost but the company cannot avoid them.
Technology factor: Technology factor include research and development technique,
innovation and advancement of existing technology. For the smooth buimjerss process company
adopt the latest technology which is easier way to communicate with ultimate consumer and
spread brand awareness.
Positive: Sainsbury provide the digital services where they encourage the customer top
purchase the product through online platform by single click and collect method. This process
provide huge convenience to customer.
Negative: To adopt the latest innovation company has to bear huge cost that decreases
their profit margin (Fleisher and Bensoussan, 2015).
Environmental factor: Due to rise in environment conscious society the demand of
company for using recycling method as well as paper packaging has increased. Thus, it is ethical
for the business to make optimum utilisation of resources in order to achieve sustainable
development.
Positive: Company encourage to engage the traffic through the website of company this
is economical practice where customer can save the fuel of their vehicles.
Negative: Company faces immense pressure due to the government legislation which are
made for the safety of an environment (Jo and Henry, 2015).
Legal factor: The legal factor include the laws or legislation that needs to be adhere by
company to perform its smooth business operations. It is vital for company maintain the steady
growth by following all rules and regulation.
Positive: Company has become successful in following the regulation due to which it
gained the huge trust of customer.
Negative: Sainsbury is bounded by various policy which at times become difficult for the
company to deal with it. Like, continuous rise in remuneration decreases the profitability of

company. Also UK government has levied new tax that is Sugar tax leads to decrease in sugar
content and impact the company's own brand.
PESTLE Analysis of Crown Prosecution Services:
Political: This factor normally involve things that effect on Crown Prosecution Services
from a government or legal standpoint. Political factor has positive impact on business services
while implementation of accurate policies. This factor also has negative impact on Crown
Prosecution Services, as company has their operations in various nation so in this company is not
able to follow rules and regulation of each country which negatively impact on business.
Environment: This factor introduces to anything that can influence business from an
ecological as well as environmental standpoint. This factor help an organisation to implement of
CSR activities which will positively impact on business. If business not follow policies
according to environment which will negatively influence on sales of company.
Social: It is another factor that introduces to the cultural norms as well as attitudes of
targeted demographic and that of their employees, competitors, partners, etc. Proper
identification of customers needs and wants positively impact on Crown Prosecution Services
sales and market ratio. If business not provide accurate services which will negatively impact on
sales and performance of company.
Technological: This factors have a direct affect on the cost of doing business activities
and the efficiency of their business functions. Adoption of technology help an organisation to
complete each activities or tasks within given time duration. Apart from this, technology factor
also has negative impact on business operations and functions of company. Inaccurate
knowledge about technology among employees, it has negative impact on business operations.
Legal: This factor will directly impact on company’s operations of their service business.
Proper formulation of policies has positive impact on business whereas improper utilisation of
business policies has negative effect on business sales and market share.
Economical: These are financial fluctuations that are atypically out of control. Crown
Prosecution Services help country to increase their inflation rate by providing security to
multinational companies who are operating their business in same country. Interest rate of
imports and export duty negatively impact on company because this reduce customer base.

TASK 4
P5: Internal and external analysis to identify strength and weakness of an organisation
SWOT/TWOS analyses helps the business to identify the internal (strength and
weakness) as well as external factor (threat and opportunity) to formulate the effective business
strategy and perform the business successfully. The company must utilise its strength and
opportunity in such a manner it compensate the weakness and build effective strategy against the
threat of company.
Strength
Wide range of products: Sainsbury has more
than one thousand store which deals in wide
range of items such as financial services,
stationery, clothing etc. Thus, because of the
wide range the company has captured
approximately 16.9% market share (SWOT
analysis of Sainsbury, 2018)).
Employee diversity: The company has
provide employment to wide range of people
on the basis of YOUCAN scheme respective
company also promote disable friendly
workplace.
Weakness
Brand switch: The retail sector bear cut throat
competition due to which company
experiences the risk of brand switching.
Although company try to compel the customer
through loyalty programme but still there is a
fear to retain the customer.
Low margin: Sainsbury has adopted cost
effective price strategy where the prices of
product are set at lower rates that hamper the
profit margin of company.
Opportunity
Investment in emerging economies: In order
to earn additional profit Sainsbury can expand
its business in developing market as well
before the existence of its competitor. This can
helps the company to diversify its market share
successfully.
Strategic alliance: In order to deal with the
competition selected company can form the
strategic alliance with other company that
Threat
Threat of existing competitor: The major
competition of Sainsbury is Alsi, Resco and
Asda due to which company need to adopt the
strategy based on their competitor.

deals in same sector. As it helps to minimise
competition rate like Sainsbury formed alliance
with home retail group to be one of the largest
retailers of UK.
SWOT Analysis of Crown Prosecution Services
Strength Weakness
Good relationship with customers is biggest
strength which will help an organisation to
gain competitive advantages within given time
duration.
Crown Prosecution Services has goof internal
communication which will assist them to retain
employees for long time.
Poor record keeping is one of the main
weakness of Crown Prosecution Services
which will impacted over its performance.
Company also faced cash flow problem which
will impact on its performance and
profitability.
Opportunity Threat
Implementation of technology is identify
biggest opportunity for success and growth of
company within given time duration.
Competitors have launched a new advertising
campaign which will impact on sales and
market ration of Crown Prosecution Services.
P6: Strength and weakness in interrelation to external macro factors
The strength and weakness of company in relation to external factor or PESTLE analysis
are defined below:
Political factor: Sainsbury is UK based company which is expanding its market reach
signification because of which it is essential for the company to analyse the political factor which
extremely influences its operations.
Strength: As Sainsbury has over one thousand retail store and this number is
continuously increasing. This depict that it provide huge employment opportunity to the people
as well as cover huge customer base.

Weakness: It is complex for the company to anticipate the legislation or law which
existing government or new government can make that hampers the whole business process and
strategy set by organisation (Linder and Williander, 2017).
Economical factor: Economic factor is emphasize on both macro and micro factors that
together include disposable income, interest rate, purchasing power of consumer, demand and
supply of goods and services.
Strength: Sainsbury perform its business in developed country like UK and Ireland
where people has high disposable income and experience low risk of economic fluctuation like
inflation rate.
Weakness: Increase in cost of fuel negatively affect the sales or footfall in the store of
Sainsbury as well as it affect the supply chain that finally lead to increase in prices of product.
Social factor: The economic factor such as high inflation rate or low wages are the prime
reason that lead to social changes like dramatic change in the shopping habits of consumer which
affect the retail store of Sainsbury. Thus, company need to build the strategy based on the
lifestyle of people to maintain their sales and profitability.
Strength: Nowadays people are become more heath and fitness freak so instead of
looking for junk food they prefer more organic food. Hence, Sainbury offer wide range of
organic food items in order to fulfil the demand of people.
Weakness: The retail outlets usually receives low footfall during working days because
most of the people work outside.
Technology factor: It refer to the innovation ways of running the business that keeps the
company ahead of their competitor.
Strength: Advance technology makes the selling process speedy which is time effective
for both company and consumer e.g. the mode of electronic payment and scanner leads to
efficiency while serving customer.
Weakness: Company at times faces the resistance of their staff to adopt new technology
or changing the existing regime or patter of working (Trad, 2015).
Environmental factor: It includes factors like corporate social responsibility, tourism
and climatic condition. Thus, the business needs to function ethically and adopt eco friendly
techniques. Like, big companies like Sainsbury are expected to reduce the emission of carbon
and promote ethical process.

Strength: Based on the recent trend Sainsbury has adopted zero waste management
practice also they have abolished the use of plastic bags.
Weakness: Company faces huge ethical issue regarding sales of organic food as well as
treatment of animal that leads to the pressure of ethical acceptance.
Legal factor: There are various legal issue from which the Sainsbury is bounded such as
fair treatment, discrimination policy, minimum wages and so on. The company needs to maintain
the legal law.
Strength: Due to the various policy and tough competition rate the new entrant find
difficulty to enter and sustain in competition.
Weakness: Due to huge price war and intense competition the profit margin of company
decreases. Further, new rule related to ban of high fat advertisement restrict the promotional
effort of company.
CONCLUSION
From the above report it can be determined that internal as well as external business
environment needs to be analysed effectively in order to run the business operation effectively.
Further, PESTLE as well as SWOT analyse help the company to identify the capability of
business and how it can deal with the external threat or challenges sustain in macro environment.
Therefore, there care various business function that are interconnected and needs to be function
effectively by achieving long term goals of the organisation.

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Online Source
SWOT analysis of Sainsbury. 2018. [Online]. Available
through:<https://www.marketing91.com/swot-analysis-of-sainsbury/>