Internal and External Stakeholder Analysis

This document provides an analysis of internal and external stakeholders in the context of Sainsbury, a British retail house. It explores the functional areas of business, the roles of stakeholders, and the nature of their interests. The document also discusses the implications of conflicting interests and compares stakeholder differences in the retail and manufacturing industries.

Internal and External
Stakeholder Analysis

EXECUTIVE SUMMARY
Stakeholders are those individual parties who has significant interest in company and can affects
or be affected by business operations and functions. Stakeholder are bifurcated into two
categories that are Primary and Secondary holding positive and negative both kind off influences
over the specific project of the entity or on the whole organisational functions as well as decision
makings. The report is developed on Sainsbury a British retail house who has conducted its
stakeholder analysis by using Stakeholders matrix identifying their power and interest levels
within the firm.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Functional areas of business...................................................................................................4
Internal and External stakeholders of Sainsbury and their roles............................................5
The nature and degree of main stakeholders’ interests, and implications of conflicting interests
................................................................................................................................................7
Stakeholder dissimilarities and analyse the differences in stakeholder interests and influences
of two separate industries (Retail and Manufacturing)........................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Stakeholder analysis is a tool that helps a company in identifying potential stakeholders
and divides or groups them according to their levels of interests, power, influence and
participation in the firm Alexander, I. K., & Hjortsø, C. N. (2019). The stakeholder analysis
enables management of an entity to seek insight about the best interest of their firm by keeping
them informed throughout the whole project and also in future. The current assessment is
constructed over Sainsbury a British retailer which was founded in 1869 by John James
Sainsbury and headquartered in London, UK. It is a public firm which is being trading on
London Stock Exchange (LSE) and Financial Times Stock Exchange (FTSE). The report is
inclusive of identifying functional areas of business and related stakeholder of Sainsbury.
Moving along, stakeholder’s matrix is applied for gaining understanding about power and
interest for each stakeholder and for implications of conflicting interests.
MAIN BODY
Functional areas of business
A business is a combine’s action which is fulfilled with by integration of several
functions towards one specific goals and objectives on a similar path. Every business has
multiple departments or functions working in their indifferent ways for attaining a definitive goal
with a specific path. These functions of an entity determine its structure which varies according
to size, scope and objectives of the firm. Functional units of an organisation are the major
contributors of ultimate performances of company, playing major role in its success and future
growth. Sainsbury is the second largest supermarket chain operating in United Kingdom and
accordingly have certain functional units. Some if its functional units are as follows: Marketing or Promotion- Promotions and advertisements are the tools or phenomena's
through which company communicate with external parties and most prominently to
potential buyers for keeping them informed and aware about the offering of the entity.
Sainsbury do engage in effective marketing and promotions for attaining longer term
success, growth and profitability with the help of their marketing team. The marketing
unit is responsible for several tasks which involve market research, developing
promotional plans and planning campaign on behalf of the firm. Sainsbury make use of
tools such as Social media, Digital Advertisements and Print media for conducting

promotional actions and attracting people and for keeping them informed about new
discounting offers and policies. Sales- In every organisation, sales are one basic functional unit which is being
functioning and plays major role or be said the biggest role in company's success. This is
because if company is not making sales and earning revenue then its other operations are
useless and its aim will never be achieved. A firm’s constant aim of sustaining in market
is to earn revenue and make provisions accordingly. In same manner, Sainsbury has sales
department which is tasked to make sales of the company's offerings and ensure ultimate
results in profitable terms. Sales teams also stay in close contact with marketing
department in terms of spreading brand awareness, launching a new product or any
new discounting scheme and more Derakhshan, R., Turner, R., & Mancini, M. (2019). Customer Service Support- The name of the unit itself suggest its meaning and operative
value. The customer service department is aimed at staying in close touch with customers
by addressing all their queries, complaints, problems, inquiries and orders. The aim of
developing a customer service support for consumers is to build and maintain healthy
long-term relations with buyer that results in development of loyal consumer base. The
customer service unit of Sainsbury is responsible for providing support to buyers while
they are shopping with the brand as well as after sales service. Moreover, in case of
online retail the customer service department of Sainsbury is responsible for providing
before, during and after sales support to buyers for all of their queries and resolutions.
 Administration and Management- Running a business is a tedious job to perform with
hectic and critical actions. Thus, the administration and management staff or department
of the company act as a backbone by functioning in such a manner by handling all
important aspect of entity like Planning, Organising, Financial Review and Decision-
making. The administration and management department of Sainsbury is basically a link
between the firm and all the other departmental units involved in the operations
Weerakkody, V. & et. al. (2019).
Internal and External stakeholders of Sainsbury and their roles
A business organisation is a large body which has number of surrounding factors that
affects it and respective operations in direct or indirect manner. Stakeholders are a key integral

part of an entity irrespective of a company's sizes, scope, nature and purposes. The stakeholders
are divided in to categories that are internal and External.
The Internal Stakeholders are defining as those parties, individual and groups who are
participative member of company and its management. These internal stakeholders can influence
company's success and growth as well as can be influenced by it too which is because of their
vested interests in the firm. On the contrary, External Stakeholders are those integral parties,
individuals and groups that are not part of entities management and administration but gets
indirectly affected by work and operations of the firm. These are also referred as Secondary
Stakeholder and the internal stakeholders are addressed as Primary Stakeholders Giacomarra,
M. & et. al. (2019).
Both the primary and secondary stakeholders of the organisations are affected by its
functions and dealing where one group are highly affected and indulged in day to day actions of
the firm as they are providing services. Whereas, the other that are secondary stakeholders are
indirectly and partly affected, they are not involved in day to day chores but do have particular
interest levels and power too. For instance, the shareholders of Sainsbury get affected by less
dividend payments on their shares and the growth of company.
Thus, some of Internal and External stakeholders of Sainsbury are mentioned beneath
with their respective roles.
INTERNAL STAKEHOLDERS OF SAINSBURY Employees- The workforce or the firm are known to be its internal stakeholders as they
are directly impacted through its success and failure. The employees are the group of
individuals who works on behalf of Sainsbury for which they get paid salaries and wages
as well as some extra perks or benefits.
◦ Role- Personnel’s, play a major and very critical role within the firm by conducting
actions on behalf of firm and executing all plans made by management. That is the
workforce executes all plans made by the management in real and actual situation by
facing all practical factors that are flourishing in the marketplace and accordingly
perform in a manner which supports their expected performance standards
Sinthupundaja, J., Chiadamrong, N., & Kohda, Y. (2019).

 Board Of Directors- They are the group of person who governs the organisation on
behalf of members who elects them. Sainsbury is a public firm whose board is comprises
of a Chairman, CEO, Chief Financial Officer and Five NED's (Non-Executive Directors).
◦ Role- The major role which Chairman and other Board Members of Sainsbury has is
for setting the long-term strategy for the group and acting for the best interest of
shareholder, colleagues and all the other stakeholders. The Chairman and the Board
of Directors take all the decisions by taking up thorough and long discussions.
EXTERNAL STAKEHOLDERS OF SAINSBURY Customers- They are the life blood of a business and known to be the king of
stakeholders as they give revenue to company by consuming goods and services offered.
The customer base of Sainsbury is diverse and divided into whole United Kingdom. It
has its operations only in the UK.
◦ Role- The role of customers for Sainsbury is they offer the company its revenues and
profitability. As well as they offer them a unique data base through their buying
behaviours and purchasing decisions about their future needs and market trends that
are flourishing in market and are going to be placed in future. Suppliers- A retail organisation or a retailer is basically a bridge which decreases the gap
between wholesalers and end consumers. Thus, they are dependent on suppliers
(Wholesalers) for filling up stocks and managing their inventories. Thus, supplier are
major external stakeholders of Sainsbury Herold, D. M., & Lee, K. H. (2019).
◦ Role- The role of suppliers is clear and very common; they fulfil the needs of
Sainsbury related to inventories and other supplies.
The nature and degree of main stakeholders’ interests, and implications of conflicting interests
Stakeholders Matrix is a tool that is used for analysing stakeholders which enable the
firm in knowing and seeking information about the major and least authoritative and interested
parties. There are number of different stakeholder matrix and for conducting Sainsbury's analysis
Power and Interest Grid is utilised in which places parties in different quadrants according to
interest they hold in organisation and power to impact upon Strategic Future.
Once the internal and external stakeholders of Sainsbury are identified now company
needs to classify them for gaining higher level of understanding and then tailoring interactions
accordingly. Thus, the matrix has four quadrants which showcases the interest and level of

influence main stakeholders has over the firm and decision-makings Serravalle, F. & et. al.
(2019). Low Power, Low Interest- Those who have low power and low interest in Sainsbury and
its operations are the suppliers. They cannot be ignored; communication needs to be there
with suppliers but company do not need to spend huge amount of resources in doing so.
Sometimes, the interest of supplier’s conflict with other such as the Boards point of views
which implicate in changing them as Sainsbury do not depend on one party for
inventories and supplies.
 Low Power, High Interest- The stakeholder who has low power but major interest in
company are the employees. The workforce, perform for attaining the end goal and
offering respective level of services. The employees influence in Sainsbury is moderate
as they are engaged in decision-making but ultimate decisions are made by the
management. On the contrary, conflicting situations may arise amongst employees and
BOD's which can result in lower employee engagement and morals Hur, W. M., Moon,
T. W., & Choi, W. H. (2019).

Illustration 1: Analysing and Classifying Project Stakeholders, 2019
(Source: Analysing and Classifying Project Stakeholders, 2019) High Power, Low Interest- The high power and low interest grid is filled by customer
base of Sainsbury. The consumers have huge power as company's revenues and
profitability is dependent upon them Marques, P. & et. al. (2019). It is the responsibility
of Sainsbury to keep consumers satisfied and happy as well as maintain long term
relationships for better results. Their interest is low and fulfils once their needs are
satisfied but in any conflicting situations the customers influence level is high and
ultimately their opinions are made as priority for rendering them appropriate solutions.

 High Power, High Interest- The Board of Directors are the internal stakeholder with
huge interest and influence on company's operations and functioning. The BOD's
responsibilities initiate with developing long term strategies and goals for Sainsbury.
While doing so all the power lies in their hands and their interest is for thinking about all
and making the best decisions Noto, G., & Noto, L. (2019). Thus, their influence in any
conflicting scenarios is high too, for instance, employees and BOD are having
contradicting opinions. The implication can be worst but it is the responsibility of BOD
to think and be concerned about employees’ perspectives as well. In such situations,
management that is BOD's make arrangements for bringing a common opinion on table
which suits for employees and entity both.
Stakeholder dissimilarities and analyse the differences in stakeholder interests and influences of
two separate industries (Retail and Manufacturing)
As discussed, stakeholders’ interest and power (Influence) fluctuates and change
according to industries and businesses. Although most stakeholders of industries are same but
they differ sometimes as their influence on company and the impact of entities plans, policies
and actions on them can vary according to the working field Mogaji, E. (2019). Thus,
stakeholders do dissimilar from industry to industry. Some of the key dissimilarities in Retail
and Manufacturing industries with differences in their interests and power (influence) are as
follows: Employees- It is well known fact that employees or workforce or personnel can make or
break an organisation. Every firm has some employees according to their needs and
requirements who perform different actions assigned to them according to their expertise
and knowledge as well as according to their team goals. For example, the sales executive
holds the responsibility to match the sales targets and make increments. These employees
in retail and manufacturing sector have different power and influence. In retail employees
are appointed on permanent basis that are responsible for certain functions of company.
On the contrary in manufacturing sector salaried employees are commonly hired but daily
wagers are appointed at the time of emergencies and needs like at the time of bulk order
or in peak season. In retail sector if workforce combines together for a certain issue, their
power automatically rises due to their number. In manufacturing sector, the workforce is
divided into permanent and temporary basis which divides their power and changes the

dynamics. Thus, the power and interest both differentiate in retail and manufacturing
industries. Customers- The customers role is simple but crucial for the businesses as they survive by
relying on buyers and earning revenues. In retail industries such as in Sainsbury, the
customers are general public who visit stores or make online purchases for stocking up
their groceries and satisfying their daily needs by purchasing the regular needing goods
and prevailing services accordingly. On the other hand, customers of a manufacturer are
small or large retailers like Sainsbury. Asda etc. who make purchases in bulk for reaching
to the end customer and bridging the gap between the manufacturer and the end user of
the goods. The purposes of both type of customers have changed one is buying good for
satisfying their personal needs and requirements and the other one is making purchase for
business purposes and for earning revenue out of it by serving to others. Thus, power and
interests of both the parties differentiate from one another. Customer of a retailer will be
having more power but in a manufacturing field customer lacks power and their interests’
level is more.
 Government- It is considered to a less important stakeholder in businesses and different
industries but it does play specific roles and that are still significant and influential. The
major dissimilarity occurs when industries differ. This is because for every field and
industry of business government passes respective and specific laws and regulations. This
results in dissimilar nature of power and interest of government in retail and
manufacturing industry Ninan, J., Mahalingam, A., & Clegg, S. (2019).
CONCLUSION
From the discussion conducted above in the report over an entities stakeholder and their
analysis determines and concludes that they are the integral part of an organisation with relevant
power and interest in its success. The report conducts the primary and secondary stakeholders’
analysis by identifying and determining the internal and external stakeholders of the firm. Also,
in the report the Stakeholder analysis mechanism is used for determining the major stakeholders
of firm along with the role they play and the power they possess or enjoy being part of the
organisation. The tool used for the same is stakeholder’s matrix through which all the related
parties were divided and placed into relevant quadrants in accordance to their power and interests
in firm and its ultimate objectives. It is determined through the report that is every industry have

different stakeholders who are either internal or external imposing negative or positive influence
over the firm’s decision-making and has various dissimilarities in their approaches while be
authoritative and showcasing their interests.

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