Business Strategy: Analysis of Macro and Internal Environment Factors of Sainsbury

Business strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
Analysis on impacts of macro environmental that influence Sainsbury's businesses..................4
Analysis on internal environment factors of Sainsbury...............................................................6
Porters five forces model.............................................................................................................8
Strategic management plan........................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy refers to the practices and policies which is used by the company to
gain the attention of customer, increases the level of performance and attain the goals and
objectives of the business. It determine that how the business will achieve the future goals
maintain the image of the company. Business strategy gives the way from which the company
fulfils their goals and objectives. It is the effective contribution of the actions and decision which
is taken by the business to gain the benefits of the competition the market.
This report determine the business strategy of the Sainsbury which is the largest comp-
any in retail market. Its headquarter is at the London, UK and they sales large variety of products
and services in the international market.
This file includes various external factors which affects the business strategies of
Sainsbury. The focus of this report is to promote the sustainability and growth of business in the
different external and internal environment. There is the determination of internal environment
factors of the organisation by considering the skills ability and capabilities of the business. To
achieve the advantages of competition company evaluates the market by using the porters five
forces. This analysis will helps to improve the level of competition in the business of Sainsbury.
This report also covers the strategic management plan which helps the business to achieve their
success and growth. Micro environment are the environment in which the company will operates
their business activities internally. Micro environment have lots of factors which affects the
success and growth of business such as suppliers, customer, competitors, employees etc. The
company also influenced by macro environment which is external environment of business and
affects the working of business. Element of macro environment are political, economical, social,
technological, environmental and legal.
TASK 1
Analysis on impacts of macro environmental that influence Sainsbury's businesses.
Macro environment refers to the external environment in which company operates their
business activities. External environment is controlled by the organisation because it is very huge
and unpredictable to control. Sainsbury is recognized as one of the biggest supermarket of UK.
Sainsbury also faces tough competition from major competitors. For a long-lasting future it is
vital for Sainsbury to analyse macro environmental factors that affects Sainsbury's policies and
strategies. For the same PESTEL analysis is performed. PESTEL stands for political, economic,

social, technological, economical and legal. PESTEL analysis is a kind of tool used by
corporates in order to acquire information regarding macro environmental factors that affects
businesses.
Political Factors: When UK decided to break out from European Union in 2016, this
move affected heavily on Sainsbury as well as other supermarkets. This made Sainsbury's
importing goods from foreign economies very difficult. Also, rise in costs of importing goods
from abroad will also result in rising costs of their products for consumers (Baraibar‐Diez,
Odriozola and Fernández Sánchez, 2017). To counter this, Sainsbury should develop policies
that encourages their consumers to keep purchasing goods in order to gain as much as profit as
possible. Market uncertainties after Brexit can also cause poor relationship of UK with Qatar,
and this would have disastrous impact on Sainsbury, since Qatar's wealth fund is one of the
biggest shareholder in Sainsbury.
Economic Factors: Coming to the economic factors, which includes increasing gasoline
prices, increasing wages, tough competition also impacts majorly on Sainsbury. Since Sainsbury
is heavily dependent on road transport for their products shipment and with the increase of cost
of fuel prices, to counter that Sainsbury may increase their product prices. This will definitely
result in losing of lower income class customers. Also, scarcity of fossil fuels in future will force
Sainsbury to develop alternative option for shipping their products. Rapid decline of GBP after
Brexit will impact on profitability of Sainsbury. Then comes another concern for Sainsbury, that
is, increasing salary trend across UK. Since Sainsbury have large number of employees, for
carrying out simple activities in their supermarkets. Following the market trend, if they need to
increase wages of their employees, this would be a serious expenditure for Sainsbury (Dahlberg,
Hokkanen and Newman, 2016). And to counter that, they will increase prices of products which
will result in falling of sales, which will ultimately account in reduction of their profitability.
Another major factor is rising competition from local competitors such as Tesco, Waitrose or
Asda etc. This competition will force Sainsbury to develop and make such strategies to retain
customers, in order to maximize profits.
Social Factors: People of UK are becoming more aware of their food choices and dietary
inclusions. The social trend is changing and thriving toward healthy eating. For success of
Sainsbury, the organization need to track down customer's demands and needs in dietary
supplements (Leischnig, Woelfl and Ivens, 2016). They need to include more healthy items such