Sainsbury's SWOT and PESTLE Analysis

This assignment requires a detailed analysis of Sainsbury's firm using a SWOT and PESTLE framework. The student needs to examine both the internal strengths and weaknesses of the company as well as external opportunities and threats within its operating environment. Additionally, they must consider macro-environmental factors such as political, economic, social, technological, environmental, and legal aspects that impact Sainsbury's business.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in PPT...........................................................................................................................1
TASK 2............................................................................................................................................1
P3 Relationship among organisational functions and its objectives...........................................1
TASK 3............................................................................................................................................3
P4 Positive and negative affect of macro environment...............................................................3
TASK 4............................................................................................................................................5
P5 External analysis and Internal analysis of Sainsbury............................................................5
P6 Strengths and weaknesses interrelate with external macro factors........................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.........................................................................................................................................................9

INTRODUCTION
Business environment means combination to the internal and external elements which
impact sales as well as functions of an organisation. It develops various impact on the different
elements of business firm like for an instance management, demands, customers, staff members
and supply of services and goods. It is necessary for the manager of business organisation on
concentrate on creating harmonious environment in an organisation and also maintaining
performance or effectiveness of staff members for an increment. In context to this, there are
various components which are directly impact on an organisations and employees in a proper and
effective manner. It is the responsibility of manager to analyse and also examine whole cases
with the help of using different techniques and methods (Bagtasos, 2011). This present business
report is based on the Sainsbury business firm. It is a second largest supermarket chain in United
Kingdom. In this mention report discuss about the various kinds and purposes of different
organisations. Relationship among the various functions of business firm and they are
interlinking with the organisational structure and objectives. Negative and positive affect of
macro environment which has on the business operations will be discussed under this mention
report. There will be discussion about the weaknesses and strengths which are interrelate with
the external macro factors.
TASK 1
Covered in PPT
1

2

3

It is necessary for the manager of business organisation on concentrate on creating harmonious
environment in an organisation and also maintaining performance or effectiveness of staff
members for an increment. In context to this, there are various components which are directly
impact on an organisations and employees in a proper and effective manner. It is the
responsibility of manager to analyse and also examine whole cases with the help of using
different techniques and methods. This present business report is based on the Sainsbury
business firm. It is a second largest supermarket chain in United Kingdom. In this mention
report discuss about the various kinds and purposes of different organisations. Relationship
among the various functions of business firm and they are interlinking with the organisational
structure and objectives. Negative and positive affect of macro environment which has on the
business operations will be discussed under this mention report. There will be discussion about
the weaknesses and strengths which are interrelate with the external macro factors.
4

5

The advantages of business firm are based on its culture as well as structure which helps in
enhance productivity of firm by providing better quality of services and products. In addition to
this, companies are emerging as the most necessary part of country, provide employment
opportunities to people and contribute towards economy of country. It is necessary for manager
of firm to examine and analyse business surroundings because of this, it is more easy to identify
the current position and status at market place.
6

The public sector is controlled as well as regulated through the government bodies. There is
power in the hand of authority as well as right to regulate and operate public sector
organisations on the basis of rules and policies. Sainsbury is second biggest supermarkets chain
in United Kingdom with 16.9% of share. It has many supermarkets in all over the world. The
main focus of this business firm is to provide better quality of services or products to
consumers in order to fulfil their needs and preferences. Sainsbury is public limited
organisation and it is a leading grocery firm which gives various kinds of goods to consumers
to attract them.
Legal structure – Legal aspect of the Sainsbury business firm, is to controlled through
Secretary State which has more rights as well as power in order to taking corrective or effective
decisions. Regional offices of this business firm are depend around 25 local areas of nation.
Local government- Under this, kinds of public administration included with an
7

objective to cover United Kingdom local part.
State government- It is separate institutional units which aids in government functions.
It included those departments which are related to central and state agencies.
Central government- In this, administrative functions are concerned with central as
well as state government.
Purpose- The main motive of Sainsbury business firm is to give the better or high quality of
services of products to its consumers at the market place. This firm provide its goods according
to demands and requirements of consumers.
Advantages and disadvantages of public sector
Advantages Disadvantages
Availability of large amount of funds Large number of regulatory requirements are
required to be fulfilled
Helps in overall development of nation More amount of government interruption
8

Marks & Spencer is a British multinational retailer in London. This firm is specialised in
selling of home products, food items and clothing in all over the world. In United Kingdom, it
has 979 stores and in which 615 stores sell only food products. This firm helps in giving
different opportunities to society in order to enhancing their capabilities and abilities for gaining
the employment. This firm provides better quality of goods to consumers and earn profit.
Legal structure- There is no more control of government on private firms. The directors of
private organisations are control as well as manage employees for allocating the task on the
basis of working capital.
Sole proprietorship- In this, business firm controlled as well as managed through
an individual. Generally, size of business is small so risk of chances is also minimum.
On business, there is a full control of owner.
Partnership- There is an agreement between two or more firms in addition to
9

achieve common objective. Profit which earn from business are divided among partners.
Private limited firms- These firms are considered as small companies such as
independent retailer and owner's liability is limited.
Purposes- Its objective to generate more profit for providing various kinds of services or goods
to consumers at reasonable cost.
Advantages and disadvantages of private sector
Advantages disadvantages
Works to earn large number of profits for their
different stakeholders
Restrictions are imposed by the government
regarding invitation of public to subscribe
their shares
Provide good quality products to the
individuals of society
Less availability of funds
10

It regulated and operated through governance of nation on the basis of norms and regulation.
World vision is a foundation institution in United Kingdom and this firm has around 50000
passionate volunteers and staff.
Legal structure-
From the given legal structure of World Vision, it is segmented in to the three parts. It consists
executive and congress commission which has some rights as well as authority for taking the
better decision for running charity organisation.
Purpose- Its main motive to give better services as well as facilities to children which are in
danger zone.
11

Under business environment, firm is segmented between three various parts according to the
size and these are small, medium and last large. The size and scope of all firms are different
from, the each other.
Public organisations- On public companies, government has more control and run through
the permission of government. The main motive of public firms to earn profit by offering
quality services as well as products. Public firms work for better living of people or enhancing
their living standard. In order to run public firms, government gives finance to them.
Size- As Sainsbury is second largest retail supermarket in United Kingdom so its size is large.
In retail sector, market share of this organisation is 16.9%. In Year 1995, Tesco company
overtook this organisation to became market leader. Sainsbury firm is segment in to the three
divisions and these are Sainsbury's Argos, Bank and Sainsbury' s supermarkets Ltd in which
convenience shops are included. In world, Sainsbury has 1415 stores and 181,900 staff
12

members are recently working for this organisation.
Scope
In addition to begin new business, there will be need of license
More need to funds at the time of starting new firm.
Stakeholders- Its main stakeholders are government, shareholders, customers, suppliers
and they all are the important part of firm and take interest in activities as well as operations of
firm.
13

Size- Marks & Spencer is British multinational retailer in London and the size of this
organisation is large. This company is listed on London Stock Exchange and under this around
84,939 staff members are presently working. The revenue of this organisation is £10,622.0
million.
Scope- In Marks & Spencer firm, there is large number of employees working in order
to accomplish set targets in specific period of time. Scope of private organisation given below
as above:
An individual can run business in easiest manner.
No need of more fund in start new business.
Stakeholders- Stakeholders of Marks & Spencer are consumers, investors, service
providers etc. They all give their more contribution or efforts in making the business successful.
14

15

16

17

18

TASK 2
P3 Relationship among organisational functions and its objectives
Sainsbury is one of the most famous store of grocery in United Kingdom. The main motive
of this business firm is to earn more profit by satisfying needs and demands of consumers in an
effective manner. In 18 countries, this firm has 10000 stores and focus on providing goods in the
basis of demands and needs of consumers (Bhaduri and Ha-Brookshire, 2011). The size of
Sainsbury organisation is large and it performs different functions in order to generate more
profit and also achieve the decided targets in specific period of time. The roles as well as
responsibilities of every functions are different from each other. Most of the activities as well as
functions both are interconnected with the each other and success of business firm is according
to capabilities of firm. Sainsbury company plays a necessary role in giving contribution in an
economy of country. the main focus of this organisation on capture the large market shares and
generate more profit as comparison to its competitors in competitive market. Sainsbury firm
provide its goods and services at international level and ear and it has different functions like for
an instance human resource, finance, marketing, Information technology and many others.
Relationship among the different functions of Sainsbury given below as above:
Marketing- It plays necessary role in order to promoting and selling of best quality
services and products to consumers at market place (Bovee and et. al., 2016). Manager of
Sainsbury marketing function conduct research before producing products and doing nay
activities in context to get some information regarding current trends in market. For
communicating with consumers, this department uses the different mode of interact. The main
motive of this firm is to enhance sales as well as profit level. This firm selects the better
promotional activities to aware people regarding the features or specifications of products or
goods. The collected data or information which is collected through research are helpful in
taking corrective decisions regarding firm.
Human Resource- It is a main part of Marks & Spencer and mainly work on recruit the
capable and well knowledge staff members so that they can focus on achieving aims and
objective of an organisation. The main functions of human resource department are recruitment,
provide training, payroll, performance appraisal, compensation and rewards etc. It is a
19

responsibility of human resource manager to communicate aim and goals of firm to all staff
members so that they can work on achieving them with in specific time period (Budhwar and
Debrah, 2013). If aims will properly communicate to employees, then they will work for benefits
of an organisation. Different efforts are done through manager of human resource function to
recruit right person for correct job. It will be helpful in enhancing development and productivity
level.
Finance function- The main role of this department is to allocate the funds for doing
business activities in an effective manner otherwise other departments cannot perform their
activities in a better manner and cannot achieve organisational objectives. The function which is
performed by this department is provides aids to all other departments of organisation in
effective achievement of their targets within stipulated period of time. They perform the
activities regarding allocation of funds to departments as per their needs which strength their
internal position which enables the organisation is to accomplish their desired targets in most
appropriate manner.
Research and Development function- Sainsbury business firm conduct an effective or
better research in order to perform all the business activities in a systematic or proper manner. it
is helpful in making proper or beneficial decisions regarding firm. the department of research
and development is helpful for Sainsbury company at the time of manufacturing procedure to
know about preferences and taste of different groups of consumers.
Production function- The main work of this function is to producing quality goods as
well as services on the basis of demands and preferences of consumers (Charter, 2017). In this
modern era, people are conscious about the brand. They like to purchase the branded products
because of quality. So, in context to this, it is necessary for company to manufacture quality
goods by making improvement in production process in a proper or systematic manner. From
this, productivity and profitability of Sainsbury firm will be enhanced.
Hence, it is evaluating that firm should perform all activities and functions in an effective
way. All these functions work on achieving decided objectives with in specified time period.
There are different types of organisational structure given below:
Geographical – Under this, work is segmented on the geographic basis and organised in
various fields in order to gain attention of more consumers at market place.
20

Merchandise organisational structure- Under this, construction will unioisied through
an assistance of specific goods and also their specifications.
Based on different functions- It is regarded as a common structure and on the basis of
this manager of Sainsbury organisation can also assure employees position according to the
position. Some of the basic functions of various divisions like for an instance finance,
operational, marketing and human resource.
Based on customers- The success of firm is based on consumers. in order to enhance
sales, it is necessary for consumers to provide goods on the basis of demands of consumers in an
effective manner.
TASK 3
P4 Positive and negative affect of macro environment
Macro environment are the external factors firm can not manage as well as control. These
factors affect development and productivity of an organisation (Cheng and et. al., 2012). Impact
of macro factors can be negative or it can be positive. These all are based on conditions or
circumstances. It is essential for Sainsbury organisation to determine the negative or positive
affects of macro factors on business. The PESTLE Analysis of Sainsbury company mention
below as above:
Political factors- Under this, authorities of particular country is coming up with various kinds of
norms, regulations and rules which are applied in while organisation. These factors impact on
performance level of Sainsbury firm. The main motive of this factor is make the nation free from
exploitation or discrimination (Meiners and et. al., 2014). This directly affect on various
functions of Sainsbury in different ways which are mention below:
Positive- Introduction of rules, regulations and norms which helps consumers as well as
sellers have various sources like for an instance cost of goods which are fixed and identified
through authorities.
Negative impact- Rules and regulations of the advisory bodies acts restriction during
exchanging of services or goods. There are many strategies as well as policies which are required
to follow while dealing with global consumers.
21

Economical factors- Under this, development of an organisation is impacted in various ways.
There are some components of environment factors are taxation and currency rates etc. which are
declining under an economy of United Kingdom country.
Positive affect- An emergence of various firms at market place are helpful in formulating
and enhancing United Kingdom economy through removing an employment. It will be helpful in
enhancing standard of living of local people though providing employment opportunities to
them.
Negative impacts- Fluctuation rates and taxation cost is directly impact contract of the
Sainsbury business firm and from this sales also negatively affected.
Social factors- It consist changes in taste, lifestyle and preferences of consumers. It is necessary
that firm should provide goods on the basis of demands of consumers in an effective manner.
Sainsbury business firm introducing the no- non items for providing more benefits (David,
2011).
Positive impact- If firm will understand needs of consumers then it will be beneficial for
business and enhancing productivity. Quality of goods should be good.
Negative impact- Continuous changes in preferences or taste of consumers develop
problems for Sainsbury organisation.
Technological factors- These factors are helpful in enhancing quality of goods and make up to
date website of firm. Technology develops positive affects on operations of business. Online
operations are helpful in expand capacity of business.
Positive impact- Reducing value and cost through using modern technology in order to
finishing transaction process in a proper manner.
Negative impact- Chance of hacking enhanced and cost will be enhanced in purchasing
advanced technology (Pikka and et. al., 2011).
Legal factors- Under this, government formulates rules and regulations, laws which are
necessary to follow by business firm. The legal system of every country is different from each
other. It consist employment rights, taxation, tights of different customers and many others
which are necessary to follow for smooth running of business operations.
Positive affect- Unethical practices, exploitation of staff members and any of the
wrongful activities can be removed through legal authorities.
22

Negative impact- If firm will not apply or follow the legislations then it will develop
negative impact on business. Change in government regulations.
Economic factors- Resources which are acquired through external environment which are
required for Sainbury company to perform business activities as well as operations in a proper
manner.
Positive impact- Required for examining environmental conditions in order to delivering
goods in specific time period.
Negative impact- Wrong use of natural resources (Rose and et. al., 2013).
TASK 4
P5 External analysis and Internal analysis of Sainsbury
Internal factors which are considered in micro environment which firm can easily
controlled as well as managed through organisation. On the other hand, there is no control of an
organisation on manage external factors. It is necessary that manager of Sainsbury firm should
determine all those internal factors which can create negative impact on business activities. In
addition to this, an assessment of the SWOT analysis is conducted through Sainsbury firm which
is helpful in determine some issues and try to improve performance level. The managerial
division of Sainsbury firm will use this kind of strategy for examining nature and also try to
execute modifications on the basis of current market demands or needs of consumers. SWOT
analysis of Sainsbury firm below as above:
Strengths
 It is a second supermarket chain in United Kingdom.
 Excellent advertising and branding (Scheer, 2012).
 In United Kingdom, it has 350 stores over the 550 supermarkets.
 The leadership team of Sainsbury firm is more experienced.
 This organisation has strong consumer base
 Capital investment of this firm is large.
 It has more outlets in all over the world.
Weaknesses
 In Sainsbury organisation, there is limited communication skills.
23

 Higher competition in retail sector.
 Complexities concerning to searching capable and skilled staff members.
 It has limited presence in an international market.
 Increasing cost of food items which impact on selling of Sainsbury at increased cost.
Opportunities
 There is an opportunity to Sainsbury company to enter emerging organisations markets
with the help of partnerships and joint ventures in order to explore new markets (Sass
and Fifekova, 2011).
 Can expand business in to developing economies such as Asia, Africa and many others.
 It has an opportunity to increase its online marketing.
Threats
 Competition is high in retail sector.
 Enhancing globalization, presents challenge and opportunities to Sainsbury.
PESTLE Analysis of Sainsbury firm
Factors Analysis
Political  Political relations of United Kingdom with Qatar to affect business
of Sainsbury
 Brexit to have important implications for the businesses.
Economical  Reduction in Great Britain Pound after Brixit to affect earnings.
 Enhancing fuels cost
Social  Sustainable practices of business through Sainsbury organisation
aids to the support of consumers.
 Enhancing demand of organic food items.
Technological  Advanced technology enhance productivity level of firm.
 Use of data or information driven analytics to insights of retail
consumers (Turban, Sharda and Delen, 2011).
Legal  Approvals from regulatory delay growth of an organisation as well
24

as decision making.
Environmental  Minimization of the carbon emissions.
 Minimization of recycling as well as operational waste.
P6 Strengths and weaknesses interrelate with external macro factors
Sainsbury firm is a chain of supermarkets which provides large number of services as
well as products to consumers in all over the world. Under this firm there are large number of
consumers are working for achieving decided aims and objectives with in particular period of
time. All functions of firm are based on business environment. External environment is nor
beneficial for an organisation and it impacts on business operations as well as activities in
negative manner. In external factors involves political, economical, social, technological, legal
and environmental (Wheelen and Hunger, 2011). In addition to this, it is a responsibility of
management of Sainsbury organisation to consider affect of all these factors and then develop
effective policies. Interrelation of macro factors with weaknesses and strengths of Sainsbury
given below as above:
Political factors- In United Kingdom country,these factors have more influence on
Sainsbury performance. Under this customers as well as government debt are more high and
these affects on attitudes of consumers. This organisation can not operate in these kinds of
market situations but also create business continually.
Economical factors- In addition to economic slowdown, rate of unemployment and high
inflation has became main components of economic factor which impact on business of
Sainsbury. Under this, demand of Sainsbury goods reduce due to high amount of food items and
enhance unemployment rate which lead to reduction in manufacture of food items (Bagtasos,
2011). In regards, to this, Sainsbury firm should expand its business in emerging markets.
Social factors- In present market, consumers lean to choose one- stop shopping. They
prefer those products which are available in single roof. Sainsbury firm gain more profit through
introducing the non- foo items.
Technological factors- Advancement in technology develop positive affect on
operations of business. It helps in web based and online operations of business. These both
25

business are helpful in enable firm to expand capacity in developing demand areas. Sainsbury
organisation provides online service of food delivery which enhanced sales of business.
Legal factors- Government policies and also legislations have affect in organisation
performance level. Sainsbury firm is more bounded through several legal problems like for an
instance favouritism, minimal pay policy, intervention of statue legislation and many others.
Environment factors- There is a big pressure on management as well as firms to act
socially in order to maintain and keep an environment safe (Bhaduri and Ha-Brookshire, 2011).
Companies affect environment in direct or indirect manner. Economic affect of Sainsbury is to
Agros takeover.
CONCLUSION
It has been concluded from the above given report internal and external both factors
impact on business negatively as well as positively. Manager of Sainsbury business firm work on
determining negative affects and try to manage. In this mention report studied about the scope
and size of different organisation. PESTLE analysis of Sainsbury firm also discussed in given
report. External environment affect on development and productivity of an organisation, so firm
work on manage and control them. In order to fulfil needs and preferences of buyers, this firm
produces good quality of products. In this mention assignment studied about interrelation of
weaknesses and strengths of Sainsbury firm with macro environment.
26