SWOT Analysis and Organizational Structure

The provided document is an assignment that focuses on conducting a SWOT analysis for Sainsbury's and exploring various types of organizational structures. The SWOT analysis involves identifying the strengths, weaknesses, opportunities, and threats of the company. Additionally, the assignment delves into different types of organizational structures, including flat organizations, which are characterized by a more horizontal structure with fewer levels of management. The document also includes references to relevant studies and articles on the topics of SWOT analysis and organizational structure.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
Different Types, Size And Scope Of Organisation................................................................1
LO 2................................................................................................................................................6
An Analysis Of Two Types Of Organisational Structure And Ensure A Clear Understanding
Of The Relationship Between Different Functions At Sainsbury's........................................6
LO 3...............................................................................................................................................10
Report on impact of Brexit on Sainsbury's business organisation and also use PESTLE tool to
highlight the negative and positive impact on business. .....................................................10
LO 4...............................................................................................................................................14
Swot Analysis of Sainbury's and its impact of micro and macro factors on business decisions
..............................................................................................................................................14
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Business environment can be defined as sum of all internal and external factors that affect
overall working of organisation to great extent. Sainsbury company is the UK based retailer
company deals in food, clothing, property investment services and banking sector. Sainsbury was
established in 1869 and it also takeover Argos Parent home retail group in April 2016 at £1.4
billion. Sainsbury closes most of the Argos stores and converted them into the large Sainsbury
supermarkets. Present report is based on business and business environment of Sainsbury
company at the time of Brexit.
This report includes the types of organisation and their purpose. Further it defines the
organisational structure and their interrelationship with various function in the organisation.
Report explains with the positive and negative impact of PESTLE analysis on business operation
in Brexit time and lastly it ends with the description of SWOT Analysis and impact of micro and
macro factors on Sainsbury's business decision and objectives.
TASK 1
Different Types, Size And Scope Of Organisation
Different types of organisation
There are many organisations those which have different purpose and ownership
(Organization: Meaning, Definition, Concepts and Characteristics ,2019)
Organisation can be classified into different types based on their mode of incorporation, liability
of the members etc. The most common types of organisations on the bases of ownership are:
 Public Organisation
 Private Organisation
 Voluntary Organisation
Classification of organisation on the bases of size is as below:
 Micro Organisation
 Macro Organisation
Public Organisation: The public Organisation is usually comprised of organisation that
are owned and operated by the government and exist to provide services for its citizens.
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The major objective of such an organization is to render concerned service to people
while at the same time earning enough to keep functioning better, to get better infrastructure and
to pay its employees (Torry, 2017). For example: BBC (British Broadcasting corporation) is
working as public company in UK. It is the British public service broadcaster that circulate news
to people. The main purpose of organisation is to broadcast all detail on time. It provides radio,
web portals services as well to mass audience. It comes under tertiary sector, as it works in
service industry.
Private Organisation: These are such firms in which owner takes all the decision for the
firm and there is no intervention of government. Purpose of private organisation is to maximise
profit an expand business across the world. For example: Argos is working as private
organisation, it was take over by Sainsbury. Sainsbury offers range of grocery items, cloths,
home accessories to its consumers across the world. Enterprise continuously work to raise its
profitability and make efforts to open new branches in other locations as well (Carney and et.al.,
2015). It comes under secondary sector.
Voluntary Organisation: This is the type of organisation that provides health care
services to people and work for social welfare always. Its main agenda is to improve well-being
of people. Some UK based Voluntary Organisation is Welcome Trust. Its main agenda is to
help every one. It is global charitable foundation that comes under tertiary sector.
Micro Organisation: A Micro organisation is small business that employs a small number of
employees. A micro organisation is usually operated with fewer than 10 people and its turn over
is under £2 million and turnover is and is started with small amount of capital. Most micro
organisations specialize in providing goods or services for their local people. It includes Lawn
and landscaping, street vendors, carpenters, plumbers etc.
Micro organisation serves a vital purpose in improving the quality of life for people in
developing countries. Some UK based Micro Organisations are- Boss Brewing Company
(Faherty and Stephens, 2016)
Macro Organisation: Macro organisations are the part or subsidiary of the private
organisation. The share of these business are less liquid, and their valuations are more difficult to
determine. These are big size firms that have more than 250 employees in organisation. For
example: ALDI is working as macros firm. It can be sole trader, partnership firm etc. Sole trader
2

is the type of firm in which owner is responsible for whole liability of company. Whereas
partnership firm is the type of business in which both partners share profit and liability.
Difference among these organisations
Public
Organisation
(BBC)
Private
Organisation
(Sainbury's)
Voluntary
Organisation
(Wellcom,
Trust)
Micro
Enterprise
(Boss
Brewing
Company)
Macro
Enterprise
(Aldi)
Vision and
Mission
Vision of
BBC is to
enrich people
lives and
inform them
or educate
them.
Mission of this
organisation is
to be
customer's
first choice for
food,
delivering
products of
outstanding
quality and
great service
at a
competitive
cost through
working
faster, simpler
and together.
Adopting right
long term
strategy and
priorities.
Improve the
mobilization
of the
abundance of
natural
resource in
country.
Vision of
macro
companies are
to maintain
sustainable
relationship
with the
customer.
Objectives The major
objective of
such an
organization is
Objective of
this
organisation is
to achieve
Objective of
Voluntary
organisation is
to provide
Its objective is
to spread
industries and
trade in an
Objective of
this type of
organisation is
to earn profit
3

to render
concerned
service to
people, It
organises
various
programs so
that large
number of
people get to
know about
recent news
and daily
activities.
target,
increasing
sales and
profit
maximization(
Carney and
et.al., 2015).
social services
to poor, needy
neglected, old-
aged, the sick
and the down
trodden.
economically
backward
areas. This
helps in the
development
of overall
economy(Fah
erty, and
Stephens.,
2016).
expand their
business.
Legal
Structure
Board of
director run
the business
and
shareholders
have right to
vote in
company. It is
essential to
sell shares on
stock
exchange(Torr
y, 2017).
It runs by the
board of
directors on
behalf of the
stakeholder. It
must have its
memorandum,
and Article of
association
This
association is
governed by
the
constitution,
legal
documents
which govern
the association
Owner,
partner are
responsible for
all the
liabilities of
company. It is
not necessary
to sell shares
to stock
exchange.
It runs by the
board of
directors on
behalf of the
stakeholder. It
must have its
memorandum,
and Article of
association
Scope Scope of BBC
is wide. As
this
There is a high
Scope of
Private-sector
Wellcome
trust become
an irresistible
Boss Brewing
Company has
scope to grow
Aldi can enter
into new
locations and
4

organisation
are operated
with
government
and they for
serve best to
people of UK.
organisations
such as
Sainsbury. As
It has huge
scope to enter
into
international
market and
provide
services to
foreign
consumers as
well.
global force
today. It has a
definite place
on modern
state but also
perform vital
functions and
providing
social services
to poor, needy
neglected, old-
aged, the sick
and the down
trodden.
well but due to
financial
constrains its
scope to grow
in
international
market is
limited.
can establish
its branch in
global market
successfully.
Market Size
and Share, No.
of Employees
Enterprise has
generated
revenue of
£4.954 in the
year
2016/2017.
billion, . It has
20916
employees.
Net income of
the firm is
129.1 million.
It has
generated
revenue of
£10.2 billion
in 2018, It has
approx.
83000
employees
across the
world.
In the year
2017 company
has done
£125.9 billion
Investment.
Recently there
are around
2,057
employees
those who are
contributing
well in
accomplishing
goal of
business unit
£32 million
revenue was
generated by
the firm.
Company has
employed 650
workers.
In the year
2010 company
has generated
53 billion
revenue.
Recently it has
10000 stores
in more than
20 countries.
stakeholders There are Qatar Primary Consumers Investors
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many
stakeholders
of BBC such
as television
viewers,
investors,
government,
managers,
employees of
the firm They
all get affected
with the
overall
working of
BBC.
Holdings
LLC,
BlackRock
Inc.
Stakeholder-
Board
members,
communities,
employees,
volunteers.
Secondary
Stakeholder –
Government,
Interest
groups,
investors.
Employees
Investors
Suppliers
Communities
Suppliers
Consumers
TASK 2
An Analysis Of Two Types Of Organisational Structure And Ensure A Clear Understanding Of
The Relationship Between Different Functions At Sainsbury's
Organisation structure:-
It is a system that outlines how certain activities are directed in order to achieve the goals
of an organisation. These activities can include rules, roles and responsibilities. It also
determines how information flows from level to level within the company.
Flat organisation structure:-It refers to an organisation structure with few or no levels of
management between management and staff level employees. The flat organisation supervises
employees less while promoting their increased involvement in the decision-making process
(organising staff, 2019). Mostly this structure is followed by private organisation because the
levels of management and employees are less in number (De Vries and Van der Poll, 2016).
Sainsbury follows this organisation structure as it helps the firm in smooth functioning of
6

business and minimising chances of conflict in the firm. This helps in raising motivation level of
worker and retaining them in the organisation for longer duration.
Illustration 1: flat organisation
(source:-The 5 types of organizational structures: past 3, flat organisations,2015)
Organisation structure of Argos was flat and Sainsbury also applied the same structure
after acquiring Argos. they have fewer management levels, with each level controlling a board
area or group. Argos organisation focus on empowering employees rather than adhering to the
chain of command. This structure allows for increasing communication which believes to be the
source of the higher than normal profit.
Tall organisation structure: - The structure in which there are multiple layers of
management from top executives down to low-level managers and employees. As an
organisation grows, the number of management level increases and the structure grows taller.
Mostly this structure is followed by public organisation because the levels of management and
employees are high in numbers (Närman, Johnson and Gingnell, 2016). As Food retailer and
financial service provider it follows tall organisational structure. It is not possible to involve all
7

employees in decision making process while providing financial services to consumers thus, use
of tall structure is suitable and worthwhile.
Organisation chart
(source:-organisation charts and structures, 2019)
Organisation structure of Sainsbury's is flat as company involve employees in decision
making process. It takes suggestion of workers so that correct decision can be made in business.
Relationship between various function of organisation:-
Human resource and finance:-
Human resource department is responsible for hiring the best candidate those who have
skills and knowledge about relevant field. It looks upon the experience of people before
recruiting for particular post. HR department retain its workers so that recruitment cost can be
minimised. This helps financial department to manage funds in appropriate manner. On other
hand finance department provides funds to HR team for running HR practices such as training
and recruitment. This helps in the best utilisation of resources and generating more funds in
Sainsbury (Huang, Rundle-Thiele and Chen, 2019).
Human resource department recruits qualified people in the organisation that enhance the
profitability of the organisation by using minimum resources. This profit helps to finance
department for future investments of the organisation.
Marketing and production department:-
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Marketing department is responsible for promoting brand and generating demand as well.
Marketing team conduct market research in order to know about needs of consumers, by this way
production team can modify its existing products and can design asper the requirements of
consumers so that sales can be increased. On other hand production department produce high
quality products so that marketing team can convenience people and can offer satisfactory goods
to them (Jara-Rojas and et.al., 2018). The production or marketing function of the sainbury
maintains a good relation with each other such as marketing functions provides detail of the
needs and wants of the customer to the production department. So, the production department
produce goods according to customer's need and wants. Both department helps in rising
profitability of the organisation.
Sales and marketing function:-
Successful companies need efficient sales and marketing departments. A sales function
focuses primarily on expanding the organization’s customer base, and a marketing function
focuses on promotional activities. An organization depends on a healthy relationship between its
sales and marketing functions because if marketing department does good promotion and
advertising of the product that increase sales of the organisation.
The sainbury has a separate Marketing and Sales department. The company
advertises mainly through T.V and radio and through adverts in magazines and newspapers. The
major influences on the price of the product are costs by the producer, competitors prices,
regional pricing and select prices. The sainbury is establishing closer links with suppliers by
sharing vehicles. This helps the company to meet its objectives because it allows them to know
the target customers than sale department directly sales their products to their customers without
help of intermediator.
Marketing and logistic department:-
logistic and marketing might seem to be diametrically opposed. Logistics deals with the
nuts and bolts of handling and delivering products. On the other hand Marketing is a
combination of creative activities and the detailed analysis that backs them up. However, these
two departments within any company have a symbiotic relationship. That means what happens in
one department directly affects the other.
9

In sainbury the marketing function that works drives increased sales and when it does, both
production and logistics systems get stressed. Once products are made, they need to get from the
factory to the store or customer. Logistics has to not only take care of this but ensure that there is
enough excess capacity to handle the next hot product. When a company's marketing focus
shifts, reverse logistics take care of getting products out of stores or accepting returns from
customers.
TASK 3
Report on impact of Brexit on Sainsbury's business organisation and also use PESTLE tool to
highlight the negative and positive impact on business.
Sainsbury is the oldest and largest retailer supermarket chain in UK but due to some
reason there is a continuous downfall in the market relating to its lack of marketing strategy,
changing management techniques and unhealthy acquisition concept which results in destruction
of customers interest in their business. Due to Brexit, company lost its financial performance in
terms of profit, share price and other investment activities (J Sainsbury SWOT and PESTLE
Analysis, 2019).
PESTLE Analysis closely examines the impact on Sainsbury company:
Political Factors – Sainsbury company deal with a dozen countries and also have to conduct
operations in different political situations. Further it explained as ~
Positive Aspect Negative Aspect
Sainsbury company is the retailer company so
more benefits arises from Britain area but
after Brexit political situation of UK was very
bad and there were poor trade agreement, but
still authorities have developed relationship
with other countries. This has helped in
increasing trade activities and generating
more income as well.
At the time of Brexit, government not
change the norms to give any country
their benefit which result in heavy
losses. Poor trade relationship affected
import and export that has reduced profit
of company to great extent.
10

 Economic Factors – Economic condition of country has affected business to great
extent. Like Currency fluctuation, Import and export of goods are common issued faced
by company during Brexit(Little, J, 2018).
Positive aspect Negative Aspect
As if there is good employment rate and value
of currency is high then people will have
adequate income sources. That helps the firm
in attracting more people and consumers can
spend more money to buy products of
Sainsbury. This impact positive on the firm
and help in raising profit of business unit.
Due to Brexit there is an inflation in the
wage growth rate. Increase in fuel price
also had an effect because customers had
to travel a lot to shop from the store. In
2009 there is a loss of employment due
to global financial crisis. Company is
leaving the EU which means that
company is leaving the trade zone. As
EU is more strong that pounds sterling
which customers predict to have the
major changes in the supermarket
industry of the company and also the
prices of the products is increased
because most of the goods are imported
from the Britain and if they stop the
import and export procedure it will cost a
big loss to company because most of the
market is linked with that area.
 Social Factors – lifestyle, social culture etc. impact on business activities to great extent
(Jones and Comfort, 2018).
Positive Aspect Negative Aspect
 Sainsbury always ensure to design
products as per the needs of
consumers. It gives respect to all
culture thus, offer wide range of
 Many customers have to cut their
spending on buying same product
as of continuous increase in price
which is not affordable by all.
11

goods and services that help business
in satisfying its consumers and
retaining them in business to great
extent. Currently company deals in
innovation and also fulfil the demand
of the customers of organic food
products.
 As consumer behaviour is
changing frequently which result
in over utilization of resources.
 Technological Factors – Sainsbury follow the trend of online system as it give a greater
access of information to the clients, partners and customers for higher profit gaining ratio.
Positive Aspects Negative Aspects
Sainsbury company has now upgraded their
sites and also their approaching opportunities
by bring new technologies in the market and
many companies also supporting their new
technologies and people also feeling it
beneficial to have time saving concept and
cost effective.
After the Brexit happens, company can't
promote their products or bring
innovation in the market because the
sites from where they got business or
profits are from Britain and as compare
to recent technologies customers in
Britain are more upgrade and because of
that company can't bring products in the
market or launch the new product
through there new technology websites.
 Legal Factors – There are various regulations and laws implemented by the government
but Competition law is specially influenced in Sainsbury company.
Positive Aspect Negative Aspect
Sainsbury always follows legal regulation
carefully, before entering into new location it
looks upon the government policies and apply
these policies into its business practices. That
At the time of Brexit, government of UK
has made changes in trade laws, import
policies and employment legislation. All
these laws have affected profitability of
12

supports Sainsbury in running operations
smoothly. At the time of acquiring Argos it
follows legal regulations that has helped in
making this acquisition successful. This
improves brand image of company and
enhance its sustainability as well.
Sainsbury negatively. For example if
government reduces wages rate of
employees then it will enhance staff
turnover issue that would affect
productivity of company to great extent.
 Environmental Factors – Environmental is the important aspect as it reflects upon the
large stem from weather, Corporate Social Responsibilities and many more factors as
well.
Positive Aspect Negative Aspect
Sainsbury company is taking care of their
social responsibility by delivering proper
services and products to their stakeholders
and clients and also deals in pollution control
activities to save environment and also made
scheme to save seasonal products which is
affected by the changes in weather.
Company face huge losses due to change
in weather in terms of delivering services
to customers through online or by waste
of products due to pollution measures
and sometimes they fail to maintain
relationship from their stakeholders or
with any business partners and the reason
may be related to profits or the terms and
condition which the Sainsbury company
is offering.
TASK 4
Swot Analysis of Sainbury's and its impact of micro and macro factors on business decisions
Strength
 Sainsbury is the biggest supermarket group in the UK.
 It has 150000 employees working in the company.
 It consists of experienced team with expertise talent.
13

 It promotes attractive branding and advertising techniques in UK.
 Sainsbury every store consists of 30000 types of goods and some of which are own
labelled goods.
 Sainsbury has strong relationship with its suppliers.
 It is listed on the London Stock Exchange and also in Financial Times Stock Exchange.
 It is the first retail store in the UK which promote self-service.
 It has expanded its business from food and groceries to clothing, finance etc.
 Consistency in quality of products of Sainsbury came from the consistent use of
automation. (Devitt and et al., 2016)
 It successfully combined with the new technology which came in the market and increase
its operations through supply chain.
 Sainsbury build such a relationship with their dealers and suppliers where they are not
only advertise their product but also helps in trained the sales person to sell their product .
 It is also achieving a high customer satisfaction because of good relations with their
customers.
 Sainsbury has high skilled people to work in the company which helps them to grow fast.
 It spends resources on the workforce by providing them good training and development
sessions which not only skilled them but also motivated to achieve their goals .
 It has greater cash flow in the economy which helps in expanding the new products in the
market.
 Sainsbury also expand its brand portfolio.
 It has done different investment which helps in growing the company as the largest
retailer in UK.
 Through online marketing also Sainsbury expand its market share in the UK.
 It has also won the Quality Food Awards in retailing stores in the UK(Sainsburys SWOT
Analysis, Competitors & USP, 2008).
14

Weakness
 Price rise in the market affected the pricing strategy of Sainsbury.
 There is a high competition between other retail stores in the UK.
 In a research it was analysed that the price of the Sainsbury product is much higher than
its competitors.
 As in UK other competitors invested their money in research and development which
helps them to expand their business at fastest pace of growth. So Sainsbury is not able to
compete with other companies.
 The demand of product of Sainsbury is not good as compared to other competitors in the
market.
 Employees of Sainsbury are leaving the company because of less training and
development opportunities for employees as compared to its competitors(JO David.
2017).
 As challenges are more in the market because of new entrants so Sainsbury is not able to
cope with it and lost its market share in niche categories.
 Sainsbury have to invest more in the technology as the present investment is not at par to
survive in the competitive market.
 Sainsbury is only limited to sell its product in UK so the less chances of business growth
in the market.
 As Sainsbury is investing less in the campaigns which will be a difficult situation for it to
beat with other competitors. (Thatcher and et al., 2016)
Opportunities
 Through Joint ventures and partnership it can expand its business operations in the
market.
 Expansion of business in many other countries like Africa , Malaysia etc.
 Expanding business in other countries will also offer a low cost labour.
15

 New taxation policy in the country will also lead to bring new opportunity for doing
business and increase profit.
 Changing in the preference of the customer will also lead company to manufacture a
categories' product which will generate more revenue for the company.
 Low inflation rate is the opportunity for the company to sell its products because it brings
stability in the market.
 New customers are involved with the company because of past investment in the online
marketing channel.
 By minimising its long term expenditure it can invest in opening of more outlets.
 If the cash flow in the economy is stable it will provide an opportunity to invest in similar
product segments.(Ortega-Altamirano and et al., 2018)
Threats
 Changes in the rules and regulations of the country.
 Demand of high profitability product which are seasonal in nature during peak season
would impact on profits of the business.
 Changes in Development of the technology by the competitor would lead to the biggest
threat for Sainsbury.
 Lack of skilled workforce will also lead to slow growth of the business.
 Growth of the local trader will lead to threat for the company.
 Maintaining the consistent quality of product is also a threat or Sainsbury.(Jenkins and
Williamson, 2015)
Impact of Micro and Macro factors upon Sainsbury business decisions and objectives
Suppliers: As company’s major strength is that it has strong relationship with suppliers.
Suppliers are the people who provide raw material to the company for manufacturing of
product. Sainsbury always get quality products on time that helps Sainsbury in offering quality
goods to consumers on time. This supports in satisfying consumers and meeting the
16

organisational goal. Furthermore, as firm has good relationship with suppliers thus, it is
beneficial in making correct production and manufacturing decisions.
Customers: Another strength of Sainsbury is that it has high customer satisfaction,
Business earns its profit by fulfilling the demands of the customer. Sainsbury’s business decision
is affected by the demand of the customer. As if company thinks of innovating some new
technology and the technology didn't work in the market or not liked by the customer then it will
impact on operating cost of the business. Similarity if the customer not get satisfied with the
product it will impact on objective of the business.(Hermansyah, Sainsbury and Krass, 2017)
Economic Factors: As weakness of company is that high prices of raw material has
affected pricing decision of company, If economic condition of country is not good then
defiantly Sainsbury will have to make changes in its pricing decision so that it can sustain in
market for longer duration. GDP rate will affect the financial condition of the Sainsbury
company as when company is in loss which has an impact of taking business decisions. Rise in
price of fuel which ultimately effect the transportation cost of the company (Lancaster and
Massingham, 2017)
CONCLUSION
From the above study it can be concluded that Business environment consist of different
types of organisation and their scope in the business to achieve its predetermined goals of the
company. Present report has concluded that the Business environment of Sainbury's company
helps in achieving success. Business environment includes organisation structure which consist
of tall or flat and also shows relationship between various functions of organisation. There are
many macros factors that impact on overall working of company to great extent. Due to changes
in economic and political condition firm has to make changes in its policies so that it can sustain
in market for longer duration.
17

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