Analysis of Macro and Internal Environment of Sainsbury

This report provides an analysis of macro and internal environment of Sainsbury, including PEST and STEEPLE analysis, SWOT and VRIO analysis, and SOSTAC model. It evaluates the factors affecting the growth of Sainsbury and provides a strategic management plan. The report includes a detailed evaluation of the political, economic, social, technological, environmental, and legal factors affecting Sainsbury. It also provides an analysis of the company's strengths, weaknesses, opportunities, and threats. The report concludes with a strategic management plan that has tangible and tactical strategic priorities and objectives with respect to Sainsbury.

UNIT-32
ASSESSMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Factors that affect the Macro environment of Sainsbury.............................................................3
PEST analysis..............................................................................................................................3
STEEPL analysis.........................................................................................................................4
Evaluation of internal environment.............................................................................................5
SWOT analysis............................................................................................................................5
VRIO analysis..............................................................................................................................5
Porters five forces analysis..........................................................................................................6
SOSTAC MODEL.......................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES\...............................................................................................................................1

INTRODUCTION
A strategic process is inclusive of decision-making process within an organization. It
includes data from internal sources as well as external sources for the same. The present report is
based on Sainsbury which is a UK based company. The present report involves an analysis of
macro environment with the help of PEST and STEEPLE. On the other hand, in order to
determine the internal environment of the company, it will make use of SWOT and VRIO
analysis. The report also includes a strategic management plan that has tangible and tactical
strategic priorities and objectives with respect to Sainsbury.
MAIN BODY
Factors that affect the Macro environment of Sainsbury
For the purpose of determining the macro environment of Sainsbury, PEST and STEEPLE
analysis have been conducted.
PEST analysis
Political factors
A few years back, United Kingdom made a decision to leave European Union. This has
affected various brands negatively operating within the country including Sainsbury. Sainsbury
imports various products from different countries across the world, the exit of Britain from the
European Union has created troubles for the company.
Economic factors
There are a number of economic factors that are affecting the operations of Sainsbury.
These factors include rise in the prices of fuels, rise in salaries and increasing competition within
the industry (Fengyi, 2021). The rising fuel prices have led to an increase in transportation cost
of the company, the increasing competition within the industry has made it hard for the company
to survive.
Social factors

In today’s times, consumers are constantly working towards improving their health by
making changes in their diets and including healthy salads, shakes, etc. Sainsbury should
conduct a market research and work towards the satisfying the needs of the consumers by
providing them with products which healthy and nutritious instead of providing them with junk
food.
Technological factors
The use of technology within the business operations is growing effectively. Sainsbury
provides its customers with the flexibility of buying groceries in both ways, online as well as
offline (Phan, 2021). By using the website of Sainsbury, the consumers can buy and order what
ever they want at any time with the comfort of their homes and get it delivered at their doorstep.
STEEPL analysis
Social factors
The income level of consumer is the major source of earning for a business as well as
essential part in order to run the economy. However, due to COVID 19, many people lost their
jobs which affected their earnings. This in turn affected the growth of Sainsbury.
Technological factors
With the help of implementing technology within the various aspects of a business, the
companies are growing effectively. The introduction of bar codes, payment data base, storage
capacity has provided the facility and smoothen the business processes of Sainsbury.
Economic factors
With a constant rise in the rate of inflation within the economy of united Kingdom and a
comparatively low existence of the income, the profitability of the company gets affected
negatively.
Environmental factors
Sainsbury is efficiently working towards reducing the waste that is generated by the
business operations. It is also working towards minimising the use of water in order to save it as
much as it can. For the same, it is using rain water harvesting.
Political factors
Currently, the political relations of United Kingdom and Qatar are not going good
because of the presence of a political crisis in Qatar. It has lead to a blockade between 3

countries including Saudi Arabia and UAE (Yasobant, Patel, and Saxena, 2019). Since, Qatar
holds about 26% stake in Sainsbury, any kind of crisis in Qatar affects the company.
Legal factors
There is an existence of sugar tax in UK. The company needs to modify its product
categories in order to save itself from the same.
Evaluation of internal environment
SWOT analysis
Strengths
 Sainsbury’s is an A listed company and listed under the London stock exchange which
means people can buy and sell its shares.
 It has strong online presence and maintain its relations with consumers using interactive
posts on social media.
Weaknesses
 The major weakness of the Sainsbury’s is that it works for low profit margins because of
the existence of its competitors within the industry (Schleimer, S., 2018).
 Sainsbury’s find it hard to retain the customers. The consumers of the Sainsbury’s keeps
on changing.
Opportunities
 The major opportunities for Sainsbury include providing 24*7 services, providing the
consumers with latest trends, expanding the business in rural areas, and expanding the
business globally.
Threats
 There are a number of companies due to which Sainsbury’s is facing cut-throat
competition in the market. The presence of sugar tax in the country has increased the tax
applicable for the company.
VRIO analysis
Resources Valuable Rare Imitation Non
substitutable/
organization
Brand image ✓ ✓

Global presence ✓ ✓ ✓
Problem solving
skills
✓ ✓
Quality ✓ ✓
Location ✓ ✓
Marketing ✓
Competitive
pricing
✓ ✓
Financial
strength
✓ ✓
Technological
advancement
✓ ✓
Employee
training
✓ ✓
On the basis of the above analysis, it can be stated that all the resources of
the company such as employee training, technological advancement, financial strength, brand
image, location, marketing and many more are valuable in nature and holds importance for the
company. It helps the company in gaining competitive advantage in the market of the United
Kingdom. However, not all the resources are rare, imitable and non-substitutable. The resource
which are rare includes the international presence of the company and the problem solving of the
company, the resources which are imitable for the company includes quality, location and
competitive pricing. And lastly, the resources which are non substitutable includes the brand
image as its takes lot of investment in order to build such firm, global presence, financial
strength, technological advancement and employee training.
Porters five forces analysis.
The portals five forces model consist of the four elements which are mentioned as follow:
Threats of new entrants: in the domestic as well as international marketplace the company face
difficulty in entering new marketplace as the competitive company like Tesco acquire the
business with the adequate knowledge(Julian and Nyoman, 2019).

Bargaining power of the supplier: due to lack of effective supply chain management the
bargaining power is highly supported by the supplier. As per the covid 19 situation the company
need to follow all the guidelines that also leads to some restriction. For instance the business
enterprise is not able to build relationship with the supplier due to lack of connection. In context
to increase the profitability by reducing the bargaining power of the supplier the company should
maintain the business deal more efficiently.
Bargaining power of the buyers: tithe taste and preferences of the consumer is changing
rapidly as per the current scenario. Due to that the company is leading the limited potentials
customers. In context to that the scale of bargain power is continuously increasing.
Threats of the substitute goods: in the current period of time the substitute product is increasing
in the domestic as well as international marketplace that bring shifting of the customer toward
different brands. In order to reduce the risk of shifting toward other brands the company should
innovate the product and services as well as increasing the marketing of the company.
Rivalry among the existing competitors: the company is already facing high competition by
unalive and Tesco in the marketplace. In context to that the company expend its presences in the
market by various digital platform and deliver the competitive advantages in the marketplace
( Isabelle and et.al 2020).
SOSTAC MODEL
The SOSTAC model is renowned as the one of the effective tools of marketing that deliver
assistance in developing plans of action for the welfare of the organisation. Along with that the
company can deal with the forthcoming challenges it is considered as the one of the most
appropriate strategy fort increasing the profitability and productivity of the company. The model
is consist of different elements which are mentioned as
Situation analysis: it is one of the essential element for the growth of the company as it
determine the needs and wants of the marketplace. It give assistance in providing the overviews
of the company that help in surviving in the domestic as well as international marketplace. Due
to this element it is easy to evaluate the capability of the company. In context to that it required
external as well as internal factors of marketplace.
SWOT analysis:

Strength: the company is having the good brand value in the domestic as well as international
marketplace. Along with that the company offering the wide variety of the commodity and
services to the consumers ( Dobbs, 2012).
Weaknesses: the company is facing the issue of low presence in the marketplace as the company
is not expending the network effectively. In context to that the company need to adopt marketing
skills for the forthcoming time.
Opportunity: the company has the opportunity to acquire the international marketplace. Along
with that the company can enhance the profitability of the company.
Threats: the availability of the large numbers of the competitors is the biggest threat for the
organisation that also decreasing the value of the company.
Objectives: the aim of the Sainsbury is to increase the profitability of the company by expending
the networks all over the world with the satisfaction of the consumer.
Strategy: in order to expend the business all over the world the company will utilized digital
marketing which is consist of various social media platforms such as Facebook, Instagram,
chrome, google, Pinterest etc. The company introduce the product to the customers on the social
media sites as in thew modern era the people are highly depend on the social media sites
( Юровская, М.Б., 2017.). The company will target the potential customers that will housewife’s
and working females and female as they look product mostly in order to manage the daily
grocery used in the homes.
Tactic: the Sainsbury will interact with the customers through the social media in order to
develop the business relationship with the consumers that help them in surviving in the
marketplace for the long period of time. With the assistance of that the company improve the
brand value in the marketplace. Along with that the company is able to determine the trends of
the marketplace as well as taste and preferences of the customers. The company will resolve the
problems of the customer that they face at the time of purchasing.
Action plan: the company will increase the employees engagement by hiring the effective
human resources management people for manging the workers of the organisation ( Wijayaand
Hermawan,2018). The manger or the leader provide training and development programmes to
the workers in order to enhance the skills and knowledge in the specific area that boost the
performance of employees in effective as well as efficient manner. Furthermore the organisation
will deal with the digital marketing team in order to increase the value of the company in

appropriate style. Moreover it will give helping hands in boosting the sales of the organisation.
Beside this the company is able to mange the function and operation in a proper way.
Control: in order to mage the operation of the company it is important to manage the
performance of the workers in adequate way. For the controlling and monitoring the workers of
the organisation the company can utilized various employees keep performance indicator tools.
With the assistance of that the company can determine the performance of the employees.
Moreover the manger is able to deliver the the feedbacks to the workers ads per the performance
that can be positive as well as negative ( Chaffey, 2012). The organization deliver this roles and
responsibility to special hired team of human resources management in order to increase the
value of the company and profitability as well as productivity of the company.
CONCLUSION
From the above report, it has been identified that there are several factors that affects the
growth and development of company. PESTLE analysis helps in identifying the macro
environmental factors and SWOT and VRIO helps in determining the competitive advantage of
the company.

REFERENCES\
Books and journals
Chaffey, D., 2012. SOSTAC marketing planning model guide, smart insights. retrieved on
March, 25, p.2015.
Dobbs, M.E., 2012. Porter's five forces in practice: Templates for firm and case analysis.
In Competition Forum (Vol. 10, No. 1, p. 22). American Society for Competitiveness.
Fengyi, Z., 2021. The Analysis of Asda-Sainsbury’s Merger/Acquisition. Journal of Finance
Research, 5(1), pp.1-6.
Isabelle and et.al 2020. Is Porter's Five Forces Framework Still Relevant? A study of the
capital/labour intensity continuum via mining and IT industries. Technology Innovation
Management Review, 10(6).
Juliana, J.P.E. and Nyoman, Y.N., 2019. Factors influencing competitiveness of small and
medium industry of Bali: Porter’s five forces analysis. Russian Journal of Agricultural
and Socio-Economic Sciences, 89(5).
Phan, S., 2021. The effect of pestle factors on development of e-commerce. International
Journal of Data and Network Science, 5(1), pp.37-42.
Schleimer, S., 2018. Accounting and Financial Analysis of UK Supermarkets. GRIN Verlag.
Wijaya, P.K. and Hermawan, A., 2018. E-Marketing Applications Based On Virtual Reality
Using Sostac Planning Method On Sales Property. Tech-E, 1(2), pp.16-25.
Yasobant, S., Patel, K. and Saxena, D., 2019. Hastening One health collaboration in Gujarat,
India: A SWOT analysis. J. Public Health Policy Plann, 3(2), pp.22-24.
Юровская, М.Б., 2017. Use of the SOSTAC model and SMART method in developing
marketing campaigns. In Наука, образование, общество: тенденции и перспективы
развития (pp. 238-239).
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