Global Business Environment

This document discusses the global business environment and its impact on functional areas of business. It includes a SWOT analysis of Sainsbury's organization and explores the key drivers affecting HRM and marketing.

Global Business
Environment
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1.SWOT analysis.........................................................................................................................3
2.Impact of key drivers on functional areas of business.............................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
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INTRODUCTION
Global business environment can be define as environment where various countries with
factors that are external to home environment of the organisation, effecting its decision making
on resource utilization and abilities of the organisation. It can be categorised into external and
internal environment (Bedianashvili, 2016). External environment consist of political, social,
regulatory, tax and technological environments. For this study, Sainsbury's has been selected. It
is a supermarket chain in United kingdom. It was established in 1869. It is a large retailer of
packed groceries and fresh foods. In this study, SWOT analysis of the respective organisation
will be conducted. Furthermore, impact of key drivers which has been identified in PESTEL
analysis on functional areas like HRM, marketing, finance and R&D will be cover.
MAIN BODY
1.SWOT analysis
SWOT analysis is an effective tool which is use to identify strengths, weakness,
opportunities and threats (Barac and et.al., 2016). It helps an organisation to analyse its
competitive position and to create a strategic planning. It is majorly responsible for identifying
external and internal factors along with recent and future potential. Hence, SWOT analysis of
Sainsbury's organisation is discussed here.
Strength: It can be define as positive and internal factors of an organisation. Basically a
strength of a firm is usually its resources and abilities which can be utilize as a base for creating
a competitive advantage. Strength of Sainsbury's is that it is one of the strongest grocery retailer
in UK. It dominates the supermarket sector by 16.0%. It uses technology in its best way to
increase shopping experience of their service users. It has almost over 1415 shops.
Weakness: it can be define as lack of strengths in an organisation such as a weak brand
name, lack of resources, high cost structure and many more. Weakness of respective organisation
is that it often get failed to bear customers. Brand switching is also a major weakness of this
organisation (SWOT analysis of Sainsbury, 2019). Its low price strategy due to growing
competition in markets and to attract large number of customers is also consider as a weakness.
Opportunities: It can be define as a set of circumstances which could be beneficial for
an organisation. They are the external factors of a business that may be beneficial for overall
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success. Growth in villages is the major opportunity for Sainsbury's to expand its business in
some rural areas.
Threats: Various diversifications in an external market can be proved to be threat to an
organisation. New regulations, change in customers choices and increased trade barriers are
some of the threats to organisation. Competition is also a major threat of the organisation.
Sainsbury's threat is tehri competition such as Resco, Lidl, Asda and Aldi.
2.Impact of key drivers on functional areas of business
Functional areas of business consist of marketing, sales, finance, accounting and
customer service which has are majorly influenced by external and internal business
environment. It is the responsibility of management to analyse these factors to deal with
consequences of internal and external business environment (Hamilton and Webster, 2018).
Impact of key drivers on marketing and HRM of functional area of Sainsbury's is discussed
here.
Impact on HRM and Marketing
Brexit: When government of UK decided to remove from European union, human
resource department of the organisation was not prepared and was not aware about its effects on
organisational operations. HR department of Sainsbury's was majorly effected as organisation
was not able to provide enough amount of funds to HR manager to conduct number of business
activities. Respective organisation also face problems in recruiting talented candidates as they
would not be able to pay them enough according to their skills and knowledge.
Due to a great downfall of economy in United Kingdom because of Brexit, marketing
department of Sainsbury's was also effected (Adekola and Sergi, 2016). Customers was not able
to spend money for buying their products which eventually leads to decrease in sales. Customer
tends to negotiate regarding prices and thus it will have a major impact on profitability and
success of marketing department.
Laws and regulations: There are various laws an regulations that help Sainsbury's for
better functioning of business operations. Utilization of employment, workplace safety and
national minimum wages law help the organisation in proper growth and development. It creates
a positive environment and discipline in the organisation. All the laws and regulations applied to
the organisation has a positive effect on their productivity and profitability. Employment laws
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help HR department by protecting their workers from any kind of discrimination by the
employers.
Another functional area is marketing that it provides a better experience to their
customers (Chasdi, 2017). In context with respective organisation, marketing laws helps in to
protects rights of customers by avoiding development of any kind of deceptive advertisements. It
helps the organisation to avoid any kind of wrong graphics or some lines that may mislead its
customers.
Technology: It will help human resource department of Sainsbury's as it will change the
way through which HRM department recruit candidates and their way of storing files. It will ease
the process of performance evaluation (Tallman and et.al., 2018). It will help to enhance the
quality of HR practices and minimize the ratio of defects. Particular for HR department,
technology help in to attract skills and talented candidates from company websites, it will help
them to manage and retain talent for a longer duration. Technology brings optimization of
workforce management and tos support workforce administration.
In context to marketing, it help the organisation to collect data and develop channels in
order to connect with target customers. It help the marketing department to develop various
kinds of advertisements tools.
CONCLUSION
From the above study, it can be concluded that it is very important fro an organisation to
analyses its business environment. It will help them to build number of strategies and planning in
order to meet target goal and objectives. External business environment can be analyse from
PESTEL analysis where impact of different external factors on organisation can be identified.
Whereas for analysis of internal environment, SWOT analysis can be conducted which help an
organisation to find out strength, weakness, threats and opportunities.
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REFERENCES
Books and journals
Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Barac, K., and et.al., 2016. The capability and competency requirements of auditors in today's
complex global business environment.
Bedianashvili, G., 2016. The Global Business Environment, European Integration and the
Cultural Potential of Social-economic Development of Georgia. Globalization &
Business.
Chasdi, R.J., 2017. Corporate Security Crossroads: Responding to Terrorism, Cyberthreats, and
Other Hazards in the Global Business Environment. ABC-CLIO.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Tallman, S.,and et.al., 2018. Business models in global competition. Global Strategy Journal.
8(4). pp.517-535.
Online:
SWOT analysis of Sainsbury, 2019 [Online]. Available through:
<https://www.marketing91.com/swot-analysis-of-sainsbury/>
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