Global Business Environment: SWOT Analysis and Impacts on Functions of Sainsbury

This report explores the global business environment and its impact on Sainsbury, a supermarket chain in the UK. It includes a SWOT analysis of Sainsbury and discusses the operational impacts of the SWOT drivers on the company's functions.

Global Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
SWOT analysis of Sainsbury..................................................................................................3
Impacts of SWOT drivers on functions of Sainsbury............................................................4
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global business environment can be referred to as the environment in various countries
which have factors exogenous to home environment of the company. It influences the decision
making of the company relating to the use and capability of the resource. Businesses in today's
era are greatly affected by the global environment which is also the uncontrollable international
or local interactions which influences the working of the company (Kasemsap, 2016). The
organisation chosen for this report is Sainsbury, a supermarket chain situated in the country of
United Kingdom. The company was founded in 1869. this report shall cover the SWOT analysis
and operational impact analysis.
MAIN BODY
SWOT analysis of Sainsbury.
It is a tool which helps in identifying the strength, weakness, threat and opportunity so
that company can plan its strategy accordingly. The strength and weakness are internal factors
whereas threat and opportunities are external factors. In context to Sainsbury, the SWOT
analysis is discussed below-
Strength Weakness
 The company Sainsbury has a
diversified business which deals in
retail industry and is one of the largest
super market chains in the country UK.
 The organisation Sainsbury has a
diversified employees team with over
150000 workforce and has a
experienced leadership team which
helps in achieving the organisational
goals efficiently.
 The company has been working
efficiently which shows the strong
balance sheet of it which have
 The company deals in retail industry
where there is low margin in the food
business which works as weakness for
the organisation (Kotabe and Helsen,
2020).
 The competition in the retail industry is
very stiff which lowers the market
share and profit of the company.
 The increase in the price of food all
over the world have affected the
company as it deals in high prices.

consistent profitability.
Opportunity Threat
 The company Sainsbury can enter new
markets through partnerships and joint
venture which may work as opportunity
for the organisation as it will be able to
explore new markets.
 Sainsbury can utilise the self checkout
machines in its new stores which are
going to operate 24 hours so that it can
help in boosting the sales for the
company and attracting potential
customers.
 Another opportunity for company is to
expand its global operations via online
collaborations so that it can attract
potential customers.
 The intense competition in the retail
and grocery sector may affect the
working and position of the company.
 The company has a pressure to always
sourcing the best quality and financially
viable product so that it can battle the
competition and attract new customers.
 The company has high attrition rate and
has to spend more on the training and
development of the employees as
compared to its competitors which
lower their profitability and work as
weakness for the company.
 The threat introduced is of Brexit which
will be bringing huge uncertainties and
fluctuations in market as well in the
whole retail industry.
 Another threatening factor introduced
in 2019, is Covid-19 a deadly disease
which have caused the world economy
to stop and brought a pause in lives of
people. Due to Covid-19 the world
suffered and is still suffering so as the
economies which is why it will be a
huge impacting factor causing
problems.

Impacts of SWOT drivers on functions of Sainsbury.
The factors or drivers discussed in the section above do have several influence and
impacts on the organisation that is Sainsbury. These impacts are either directly placed on the
organisation or through its operations. The changes and influence of these factors on the
operational areas of Sainsbury are discussed in the section below in regards with the focus kept
on the key drivers identified in the report (Hampden-Turner and Trompenaars, 2020).
 A key strength of Sainsbury is its strong balance sheet and the end result is consistent
profitability and profit units which the brand earns every period. In regards to the same
the finance department is highly and positively impacted. The finance team is
responsible for managing the liquidity of company and all the money it has. Strong and
consistent balance sheet and profit figures helps the department in making comparisons
effectively and most importantly in keeping the money flow within the organisation
smooth. As well the use of finances in making investments on behalf of Sainsbury also
becomes more consistent.
 A threat which is faced by Sainsbury is of increasing need for training and developing
staff with changing market. This is imposing influence on strategies and plans of
Human resource department of Sainsbury as the company and the team needs to stay
focused in case of finding the best training and development sessions for the people in
case of the updating and upgrading retail sector and skill set required.
 The opportunity identified is of market development and expansion which is not a strong
suit for Sainsbury as the company only deals in domestic market and have not moved out
yet (Adekola and Sergi, 2016). But if the organisation plans to opt the suggested
opportunity then at first the operations department and around every department of the
organisation will be affected. For instance, marketing team of the organisation will be
offered new responsibilities to search out new information of new market and according
make plans for promotions and developments.
 The weakness which is identified is of low profit margins in food products sales. Through
this the operational unit affected is the sales department of Sainsbury. The reason being is
sales department and members have to make plans in a way to encourage sales of those
food products in which higher profit margin is earned. For doing so sales team will be
needing to make proper projection and accordingly communicate to marketing for

promotional agendas and then adopt suitable sales approaches and techniques to attract
customers and make them the regular customers for the brand (Peng, 2016).
 The next consecutive factor which will be affecting multiple and varied operational units
or departments of Sainsbury is Brexit. This is a threat which has affected the whole
economy of United Kingdom which includes number of industries as well. The Brexit
impact are placed on retail sector too and so on Sainsbury. The company will be suffering
for instance, Marketing department performs promotional actions and develop
promotional plans in favour of the firm to keep informed and make them well aware
about the offerings of Sainsbury. With the changing environment and increasing
uncertainties in the market and in retail industry the marketing team will be suffered and
face challenges in making the appropriate plans and campaigns for the firm which are
matched with the political environment and policies made in accordance to it. The
Finance Department will be facing difficulties in managing the finances as with change
rules and laws due to Brexit the taxes have changes, import and export rates have
changes. This change will bring variations and make the past plans of finance team to
manage funds and offering the most suitable financial stability to company. Along with
the finance team needs to build new plan for which they have to make research and invest
in it too which all require money and resulting reducing the treasure of the Sainsbury.
 The next affecting component is Covid-19 which is deadly disease that has cause the
world to go under lock down and economies have been stopped and severely being
shattered with its effects. The retail sector is impacted in mixed form due to Covid-19,
where some necessary products sales have gone down extremely and the other are
shooting up. The graph of demand and supply is changing rapidly going extreme down or
moving up in a fast pace. In regards to the same the Marketing Team is affecting in a
unique manner where the member have to work remotely and make plans to promote
goods through intangible means that is through digital tools and digital marketing. The
marketing team of Sainsbury had to make changes in their marketing plans and most
specifically in their promotional campaigns. Covid-19 have impacted the Finance Team
too, where they hold the responsibilities of managing the assets of company, allot
finances to different department according to budgets etc. the team is sufferings as
uncertainties budgets have developed some departments like inventory and marketing

needs more money to conduct and complete their work on the other hand some do not
require any money. This has caused imbalance in financial management and developing
the books and maintaining records of Sainsbury's capital and monetary assets.
CONCLUSION
The above report concludes about the impact internal and external drivers like strengths
of the company, its opportunities its threats and weaknesses imposes on the functions like
marketing, finance and others have. The report conducts a thorough analysis by using the SWOT
model or framework for gaining effective results.

REFERENCES
Books and Journals
Adekola, A. and Sergi, B. S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Hampden-Turner, C. and Trompenaars, F., 2020. Riding the waves of culture: Understanding
diversity in global business. Hachette UK.
Kasemsap, K., 2016. Creating product innovation strategies through knowledge management in
global business. In Civil and Environmental Engineering: Concepts, Methodologies,
Tools, and Applications (pp. 1-26). IGI Global.
Kotabe, M. M. and Helsen, K., 2020. Global marketing management. John Wiley & Sons.
Peng, M. W., 2016. Global business. Cengage learning.