Business and the Business Environment

This assignment focuses on the analysis of the business environment of J. Sainsbury's PLC, the second largest supermarket chain in the UK. It covers topics such as different types of organizations and their purposes, the scope and size of organizations, the relationship between organizational functions and structure, the positive and negative impact of macro environment on business operations, and the internal and external analysis of J. Sainsbury's PLC. The assignment provides insights into the strengths, weaknesses, opportunities, and threats of the organization and their inter-relationship with external macro factors.

BUSINESS AND THE BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P 1 Different types of organizations and their purposes..............................................................1
P 2 Scope and size of different types of organizations................................................................2
LO 2.................................................................................................................................................4
P 3 Relationship between different organizational functions of Sainsbury and ways in which
they link to organizational structure and objectives....................................................................4
LO 3.................................................................................................................................................4
P 4 Positive and negative impact of macro environment upon business operations from
example of J. Sainsbury’s PLC....................................................................................................4
LO 4.................................................................................................................................................5
P 5 Internal and external analysis of J. Sainsbury’s PLC............................................................5
P 6 Strengths and weakness of J. Sainsbury’s PLC and their inter-relationship with external
macro factors...............................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business environment consist of various kinds of internal and external factors that can affect
an organization’s ability to grow and maintain customer relationship (Phadermrod, Crowder and
Wills, 2019). It is important for all the organizations to analyse their business environment and
bring changes within their organizational strategies accordingly. This assignment will lay
emphasis on business environment analysis of J. Sainsbury’s PLC so that they can enhance their
decision making and business development. J. Sainsbury’s PLC is the second largest
supermarket chain of UK that was founded in 1869 whose headquarter is in London, UK.
LO 1
P 1 Different types of organizations and their purposes
There are three main types of organizations, each of the sector organizations has their own
legal structure and purpose.
 Public Sector: Public sector organizations are one of the most important part of a countries
economy. These types of organizations are mostly organized and run by government or it can
also be said that a major part of an organization is owned and operated by the government i.e.
51 percent or more than that percent of shares are owned by the government. Main purpose
of these kind of organizations is to serve customers with best quality of products and services
(Ali, Miah and Khan, 2017). These kinds of organizations do not think of profit as their main
factor but providing best service to the customers is their main factor to be focused on. Most
of the decisions of these type of organizations is taken by their board of directors, none of the
decision can be passed without their approval. These types of organizations are also listed
understock exchange. For example, General Motors is a public sector organization whose
few shares are owned by the government.
 Private sector: private sector organizations are those type of organizations that are mostly
run by an individual. The main purpose of these kind of organizations is to make profit.
These types of organizations have less number of restrictions as compared to public sector
organization. All the profit and financial risk faced by the organization are faced by
individual owner themselves. For example, J. Sainsbury’s PLC is a private sector
organization that focuses on making profit by enhancing their market share and customer
base.
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 Voluntary sector: These are type of organizations whose main purpose is to serve society
without focusing on profit. These types of organizations can be run either by government or
by individuals as well (Kozubikova, Homolka and Kristalas, 2017). Legal structure of these
type of organizations is not fixed i.e.it can be trustee based, charitable incorporate
organizations, unincorporated organizations and many more. One of the most common
example of voluntary sector organization is NHS it is a non profit organization which is run
by partnership of local government.
P 2 Scope and size of different types of organizations
Public Sector Private sector Voluntary sector
Goal and objective Main objective of
these type of
organizations is to
enhance nation’s
economy and their
main goal is to serve
and provide
customers with good
quality products and
services
(Komljenovic,
Loiselle and Kumral,
2017(.
Main objective of
these type of
organizations is to
increase their profit
and market share.
Their goal is to
increase owner’s
capital, reduce
liability etc.
Main objective of
these type of
organizations is to
serve society. In this
different type of
organizations have
different purposes.
For instance NHS’s
main goal is to
provide medical
facility to people at
lower possible price.
Market share According to recent
reports market share
of General motors in
UK in past five years
is decreasing
continuously and
current it is below 5
percent.
According to recent
reports market share
of Sainsbury is
approximately 15.3
percent.
Non-profitable
organizations do not
have any kind of
market share
(Hörisch, Kollat and
Brieger, 2017).
Size General Motor Sainsbury currently NHS serves in
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operates Globally
except few counties
and they have more
than 170,000
employees
approximately.
operates in UK and
serves people of UK
and they have
approximately more
than 180,000
employees.
England, Wales,
Scotland and in
Northern Ireland and
they have
approximately 1.4
million employees.
Growth In last few years
growth of General
Motor especially in
Europe has decreased
Sainsbury have to
face tough
competition in retail
sector. According to
recent survey it was
observed that their
growth rate has
increased by
approximately 1.08
percent (Almalki, Al-
fleit and Zafar,
2017).
NHS is a growing
organization who is
continuously
focusing on
increasing their
funding’s in order to
serve their people. In
Fact, in past 1 year
their funding’s have
increased by
approximately 3.7
percent.
Products and
services
They provides
products and services
related to
automobiles,
automobile parts,
commercial vehicles.
Sainsbury provides
retail sector products
and services through
their supermarkets,
they also provide
financial services
through their banks
etc.
NHS provide all
kinds of healthcare
services.
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LO 2
P 3 Relationship between different organizational functions of Sainsbury and ways in which they
link to organizational structure and objectives
Organizational functions are one of the main part of an organization and for retail sector
organizations these functions are quite important. Some of the moat common functions of
Sainsbury are: Sales and marketing, finance, human resource logistics etc.
 Sales and marketing is one of the main and primary function of Sainsbury which plays a vital
role in achieving mains and objectives of the organizations. Sales helps an achieving main
objective of an organization which to provide quality products and services to their
customers. Marketing helps in enhancing brand name of the organization.
 Human resource of an organization helps in dealing with current employees, recruiting and
selecting employees. This function of Sainsbury helps in achieving their objective of
providing employment (Kim, Jang and Yang, 2017). HR also helps in designing or bringing
changes with organizational structure and it is designed in such a manner that al the main
functions of an organizations are fulfilled properly.
 Financial functions of an organization also help in managing all kinds of financial activities
of an organization. If financial functions of Sainsbury are not managed in a proper manner
then they might face issues in achieving their organizational objectives.
All kinds of organizational functions of a business are completely dependent upon their
size, scope and type of organization. Sainsbury has a hierarchical organizational structure i.e. all
employees at same level are controlled and managed by above level. Functions of Sainsbury
directly affects their organizational structure because all the departments and functions of the
organizations are distributed according to their overall hierarchical structure and chances with
the functions will directly affect their overall structure.
LO 3
P 4 Positive and negative impact of macro environment upon business operations from example
of J. Sainsbury’s PLC
Macro environment positive and negative impacts upon business operations can be
explained with the help of PESTLE analysis. This analysis will also help in understanding
impact of macro factors on J. Sainsbury’s business operations.
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Political Factor: Brexit uncertainties can impact business operations of Sainsbury in many
ways. It can impact marketing and sales operations of their business as import/export rates might
get fluctuate which will further affect product pricing (Virglerova, Dobes and Vojtovic, 2016).
But political stability of UK can help them to gain sustainability as well.
Economical Factor: Growth rate is one of the main factors that can help Sainsbury to expand
their business operations bur growing competition in retail sector can increase pressure on their
sales and marketing operations of Sainsbury.
Social Factor: Rising demand for organic products can be an opportunity for Sainsbury which
will impact business operations of the organizations as they would be requiring to bring changes
within the products and services that they offer to their customers. But change in shopping
pattern of people can have a negative influence on business operations of Sainsbury and can
further affect their profit.
Technological Factor: Advancement in technology is helping Sainsbury to enhance their
business operations. In fact, recently has introduced their own digital services of online shopping
which is helping them to enhance their business. But there is one negative impact of these
technological advancement i.e. they continuously need to bring changes within their business
operations in order to gain profit and if these changes are not brought then it can affect their
overall sales and profitability as well.
Environmental factors: high carbon footprint of Sainsbury can affect their business operations
as UK government has passed various kinds of regulations for organization to reduce their
carbon footprint (Ahmadi, Rahimi and Rezaei, 2018). However, Zero waste supermarkets of
Sainsbury are helping them to attract more customers.
Legal Factors: Regulatory approvals can have a negative impact on business operations it can
delay their decision making and can further result in market share loss. But ensuring systematic
legal changes within the organization can help them in enhancing their overall business growth.
LO 4
P 5 Internal and external analysis of J. Sainsbury’s PLC
Analysis of Sainsbury’s internal and external factors can be done with the help of SWOT
analysis.
Strengths: Sainsbury’s digital services of online shopping has become their one of the main
strengths in fact, 18 percent of their overall sales is because of their online sales. Sainsbury’s
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channel distribution is another one of their main strength as it provides flexibility to their
customers. This has also helped them to gain competitive advantage against their top
competitors. One of their core strengths is that they provide variety of high-quality products for
their customers.
Weaknesses: One of their major weakness is that they operate only in UK because of which their
customer range and growth of business decreases (Bohari, Hin and Fuad, 2017). Changes in
inflation rate of UK is also affecting their business drastically as they only operate in UK. Due to
this reason their overall sales are getting affected. Sainsbury has high carbon footprint which is
another main weakness and changing government regulations towards environment can impact
their business
Opportunities: Global market expansion is one of the main growth opportunities for Sainsbury.
They can focus on expanding their business in developing countries. They can further focus on
expansion of online sales and enhancing customers shopping experience.
Threats: Brexit uncertainty is one of the main threats as it can result in price hike and decrease
in consumer’s spending’s. Increasing competition in retail sector is another one of the main
threats of Sainsbury which can affect their overall sales, profit, revenue and market share.
P 6 Strengths and weakness of J. Sainsbury’s PLC and their inter-relationship with external
macro factors
Strengths and weakness of Sainsbury and macro factors are interrelated to each in many
different ways such as:
 One of the main strengths of Sainsbury is there online presence where customers can do
online shopping as per their convenience. Advancement in digital technology will only
benefit the organization and will help them to increase their overall sales (Ahmadi, Rahimi
and Rezaei, 2018). It can also help them to enhance their overall customer base.
 One of the main weakness of Sainsbury is that they only operate in UK and political
instability due to Brexit can affect their overall business profit as Brexit can impact in rising
inflation rate which can affect their overall sales.
 Another one of their main strength is that they provide high quality and organific products to
their customers and social change of customers i.e. shifty of customers towards environment
friendly products can help them to enhance their overall sales, profit and market share.
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 Another one of their weakness is their high carbon footprint. today most of the countries are
bringing changes within their legislation and introducing various acts for organizations in
order to reduce their Carbon footprint and this can affect their overall business in many ways.
CONCLUSION
From the above assignment it has been analysed that there are three different kinds of
organizations and each of these organizations have their own purpose, goals and legal structures.
It has also been analysed that there are various kinds of macro factors that can impact an
organization both positively and negatively which can affect their decision making and business
objectives.
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REFERENCES
Books and Journals
Ahmadi, F., Rahimi, M. and Rezaei, A., 2018. Study of relation between business model and
sensemaking decisions. Journal of Humanities Insights. 2(02). pp.99-108.
Ali, S., Miah, S.J. and Khan, S., 2017. Analysis of interaction between business intelligence and
SMEs: Learn from each other. JISTEM-Journal of Information Systems and Technology
Management. 14(2). pp.151-168.
Almalki, M., Al-fleit, S. and Zafar, A., 2017. Challenges in Implementation of Information
System Strategies in Saudi Business Environment: A Case Study of a Bank. International
Journal of Computer Trends and Technology. 43(1). p.60.
Bohari, A.M., Hin, C.W. and Fuad, N., 2017. The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space.
9(1).
Hörisch, J., Kollat, J. and Brieger, S.A., 2017. What influences environmental entrepreneurship?
A multilevel analysis of the determinants of entrepreneurs’ environmental orientation.
Small Business Economics. 48(1). pp.47-69.
Kim, S.H., Jang, S.Y. and Yang, K.H., 2017. Analysis of the determinants of software‐as‐a‐
service adoption in small businesses: Risks, benefits, and organizational and
environmental factors. Journal of Small Business Management. 55(2). pp.303-325.
Komljenovic, D., Loiselle, G. and Kumral, M., 2017. Organization: A new focus on mine safety
improvement in a complex operational and business environment. International Journal
of Mining Science and Technology. 27(4). pp.617-625.
Kozubikova, L., Homolka, L. and Kristalas, D., 2017. The effect of business environment and
entrepreneurs’ gender on perception of financial risk in the smes sector. Journal of
Competitiveness. 9(1).
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.
Virglerova, Z., Dobes, K. and Vojtovic, S., 2016. The perception of the state's influence on its
business environment in the SMEs from Czech Republic. Administratie si Management
Public. (26). p.78.
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