Understanding the Business and Economic Environment of Sainsburys

This report assesses the economic and business environment of Sainsburys, a leading UK-based supermarket chain. It includes a STEEPLE analysis, microeconomic factors affecting demand, determinants of supply, and challenges faced by the company.

Understanding the
Business and Economic
Environment

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Structure of retail industry......................................................................................................3
Overview of the company......................................................................................................3
Nature of Company................................................................................................................4
Steeple Analysis.....................................................................................................................4
Microeconomic factors affecting demand..............................................................................7
Determinants of Supply..........................................................................................................8
Problems and Challenges faced by Sainsburys......................................................................8
Conclusion.......................................................................................................................................8
References .......................................................................................................................................9

Introduction
Business environment could be determined as aggregate of factors and aspects that results
in impacting upon operations and activities carried out by a business organisation. For instance,
it is inclusive of customers, stakeholders, market trends, government regulations, etc. which
result in affecting and influencing business operations and activities carried out in market.
Sainsbury Plc is a leading business organisation engaged in serving groceries to customers in
their supermarkets established all around the United Kingdom. Products offered by Sainsburys
are of high quality which facilitates in maintaining strong market position among major
competitors in the market. This report assessment will be comprised of knowledge based upon
economic and business environment is context of respective business organisation (Mohamed,
and Lashine, 2020).
Main Body
Structure of retail industry
The respective business organisation is engaged in carrying out business operations and
activities in the retail industry. For instance, there are enormous number of supermarkets of
Sainsburys in United kingdom which facilitates in serving a large number of customer base.
With a large amount of competition brands in UK market, respective business organisation is
operating in Competition economic market structure. In order to hold a strong market position in
competition economic market structure, business organisations operating in the same are
required to maintain upright quality of products as well as meeting customer demands. The
skilled workforce and quality products offered by Sainsburys in their retail supermarket chain
results in being the primary reason behind strengthened market position among other competition
brand operating in grocery retail industry. Retail industry facilitates direct reach and interaction
of businesses with their customers in marketplace in order to provide them with desired products
and services with delightful shopping experience. Sainsburys is one of the largest business
organisation which contributes in making up the retail industry of United Kingdom (Wong, and
Aspinwall, 2021).
Overview of the company
Sainsbury Plc is a UK based Public Limited Company with large supermarket chain in
consumer market of United Kingdom engaged in serving groceries and other consumer products

to their customers. Being established in the year 1869, it has been headquartered in London,
United Kingdom. Moreover, respective business organisation has been operating with a large
number of supermarket over 1500 within the geographical boundaries of UK. The respective
company has been providing employment to over 180,000 employees engaged in carrying out
business operations and activities in their different business units. Sainsburys has been listed in
LSE and FTSE 100 in the name of SBRY which allows respective organisation to acquire
sufficient amount of funds from their shareholders (Poon, 2019).
Nature of Company
Being a Public Limited company, respective business organisation has allowed investors
to invest in their company by providing them with part of ownership in the company. For
instance, Sainsburys Plc has been registered the companies act in order to carry out their
operations and activities in the market. In addition to that, shareholders and investors of
respective business organisation participates in company's decision making practices in order to
contribute their thoughts and ideas towards the same.
Referring to retail business industry in UK, respective company holds a leading market
position with one of the largest customer base within United Kingdom. In addition to that,
raising funds through issues of shares to general public facilitates in fuelling up business
operations with sufficient amount of funds and investment in order to accomplish determined
goals and objectives. The shareholders of respective business organisation has limited liability
according to their shares in the company (Haksever, 2020). Being a part of retail industry in UK,
primary values of respective business organisation includes generating profit out of business
operations, maximising values of shareholders, building up loyalty of customers, etc.
Steeple Analysis
Steeple Analysis could be determined as framework or model which facilitates in
identifying and determining macro environment factors that impact upon business operations and
activities. For instance, it includes various different classifications of these Macro environment
factors including Social, Technological, Environmental, Economic, Political, Legal, and Ethical.
Social Factors
 Healthy lifestyle: The preference of customers is observed to be tend towards
consumption of quality food products in order to maintain a healthy lifestyle. For
instance, it includes specific ingredients as well as manufacturing procedures that makes

a food healthy and nutritious. In addition to that, quality products offered by respective
business organisation will facilitate in meeting customer demands of maintaining healthy
lifestyle with consumption of quality food products. Therefore, this positive social factor
associated with respective business organisation will facilitate in increasing overall sales
of products offered by Sainsburys.
 Fair Trade Movement: This movement of fair trade involved concern regarding where
the food or ingredients has actually came from. For instance, customers in society are
tend to pay extra for their consumption of Food products in order to ensure that farmers
get sufficient profit of supply of food products and ingredients to these business
organisations. Furthermore, respective business organisation has been provided with a
opportunity to contribute additional values towards farmers by charging a little bit extra
from their willing customers. Therefore, consideration of this fair trade movement will
facilitate in attracting additional customer base towards products and services offered by
the company (Shetzer, Stackman, and Moore, 2021).
Technological Factors
 Data driven analytics: The modern analytical tools and technological elements facilitate
in gathering and analysing required information in order to ensure improvisation and
enhancement of existing scenario of workplace. For instance, use of technologies such as
Big data analytics and AI (Artificial intelligence) could be taken into consideration by
respective business organisation in order to acquire required information and knowledge
to respective business organisation.
 Online shopping platform: Though, respective business organisation has introduced a
online shopping platform but it has been suspended due to various technical problems
faced by customers. For instance, these technical issues faced by customers include bugs,
login issues, frequent logouts, etc. which resulted in worst experiences to customers in
shopping with Sainsburys. Furthermore, this issue has been resulted a negative factor for
company as it has led to loss of customers.
Environmental Factors
 Plastic Waste: The respective business organisation has been resulted in being a major
contributor to plastic waste with the use of single use plastic packaging rather than
consideration of recyclable plastic packaging. For instance, this negative factor of

respective business organisation has been resulting in degradation of sustainability in
environment as well as increasing plastic waste in environment. Furthermore, it could
further result in loss of customers due to environment friendly approach of people in
society.
 Strategic sustainability plan: Sainsburys has been planning for maintaining
sustainability in environment with consideration of reduction in carbon emissions,
contributing efforts towards recycling, reduction in waste, etc. that will contribute
additional values towards sustainability in environment. Moreover, it will result in being
a positive factor for respective business organisation in attracting additional customer
base towards products offered into consumer market (Murashova, 2017).
Political Factors
 Uncertainties due to Brexit: The movement of Brexit has been resulted in rise to high
level of uncertainty in political environment. For instance, it has resulted in being a
negative aspect for respective business organisation in carrying out their business
operations and activities in an efficient manner. In addition to that, high uncertainty in
business environment incurred various negative impact upon company including
increasing cost of operations, ineffective supply chain, access to customers, etc.
 Qatar and England Relationship: Sovereign Wealth Fund of Qatar is the major investor
as well as shareholder of respective business organisation. For instance, enhanced
relationship of these economic nations will further facilitate in maintaining a good
engagement with their investor or largest shareholders. Therefore, it has been expected
for these economic nations to have a good relationship in near future which will be
beneficial for respective business organisation.
Legal Factors
 Regulatory approvals: Being a large scale business organisation, Sainsburys require
various different decision-making practices in order to accomplish goals and objectives.
For instance, there is a requirement for regulatory approvals for every additional strategy
to be implemented in order to expand business. In addition to that, it includes quality
check of product, legal implications, ethical audit of activities, etc. which allows a
company to carry out business operations and activities in an ideal manner (Ramírez, and
Fennell, 2020).

 Sugar-tax: With the introduction of sugar-tax in UK, respective business organisation is
required to reorganise their strategies in order to save these taxes. For instance, strategic
planning for less consumption of sugar in development of their products will facilitate
Sanisbury in saving taxes to be paid for sugar. On the other hand, high consumption of
sugar in development of their products could lead to higher taxes to be paid for the same.
Ethical Factors
 Health and safety: Management representatives engaged in respective business
organisation are aimed at maintaining health and safety of employees in workplace. For
instance, this determined factor is a major necessity to be taken into consideration in
workplace which further contribute values towards efficiency and productivity in
workplace.
 Effective communication: Effective communication plays a crucial role in workplace
which facilitates in maintaining coordination and collaboration among employees in
carrying out business operations and activities. Sainsbury has undertaken fewer
management levels in order to promote open communication in workplace which allows
employees to communicate with each other in an effective manner.
Economic Factors
 Rising cost of fuel: The rising cost of fuel would lead to increasing expenses for
company in consumption of transportation services to supply their products as well as
acquiring input or raw materials.
 Increasing household income: With increasing household income, people in society has
higher pocket allowance which will further result in increasing overall sales of products
offered by company.
Microeconomic factors affecting demand
There are various microeconomic factors which results in impacting upon demand of
products offered by respective business organisation which are as follows:
 Price of product: Lower prices charged by respective business organisation facilitate in
increasing demand of their products offered in consumer market.
 Consumer confidence: Strong brand image of sainsbury contribute additional values
towards increasing demand for their products (Joplin, and et. al., 2018).

 Employment: Increasing employment among people in society result in increasing
demand for products offered by respective company.
Determinants of Supply
 Price of product: Price of the product and supply are directly proportional to each other
which means it increases with the increase in price.
 Price of alternative or substitute: If the price of substitute falls, customers shift towards
the same which result in increase in supply for products of respective organisation.
 Government policy: Favourable government policies regarding production and supply
of product result in reduction in cost incurred to company which further result in
decreasing supply of that particular product.
Competitiveness of UK market
With the increasing economic development, there has been a rise in establishment of
additional business organisations which has further resulted in increasing competition in the
market. For instance, respective business organisation needs to implement efficient strategies as
well as approaches in order to hold upright market position among other competitors in the
market (Uddin, and Boateng, 2019).
Problems and Challenges faced by Sainsburys
 Online shopping application: The failure of online shopping application has been
resulted in being a major problem faced by respective business organisation.
 Plastic Waste: Being a major contributor in plastic waste, operations and practices of
respective company has been resulting in degradation of sustainability in environment.
 Uncertainties due to Brexit: Uncertainty in business environment due to Brexit has
resulted in being a barrier in maintaining smooth flow of functioning of respective
business organisation.
Conclusion
From the above report assessment, it could be concluded that Sainsburys is a leading
business organisations engaged in serving a large customer base with their quality products. For
instance, the above mentioned report is highlighting macroeconomic factors impacting upon
operations and activities carried out by respective business organisation. Furthermore, it also

demonstrates factors influencing demand as well as determinants of supply of products offered
by respective business organisation.

References
Books and Journals
Haksever, C., 2020. Total quality management in the small business environment. Business
Horizons, 39(2), pp.33-41.
Joplin, and et. al., 2018. The macro-environment and work-family conflict: Development of a
cross cultural comparative framework. International Journal of Cross Cultural
Management, 3(3), pp.305-328.
Mohamed, E. K. and Lashine, S. H., 2020. Accounting knowledge and skills and the challenges
of a global business environment. Managerial finance.
Murashova, O. V., 2017. Environmental component of sustainable development. In Актуальные
проблемы экономической безопасности (pp. 71-73).
Poon, S., 2019. Business environment and internet commerce benefit—a small business
perspective. European Journal of Information Systems, 9(2), pp.72-81.
Ramírez, F. and Fennell, D., 2020. A comprehensive framework for ecotourism and wetland
restoration: the case of Bogotá, Colombia. Journal of Ecotourism, 13(2-3), pp.128-151.
Shetzer, L., Stackman, R. W. and Moore, L. F., 2021. Business-environment attitudes and the
new environmental paradigm. The Journal of Environmental Education, 22(4), pp.14-
21.
Uddin, M. and Boateng, A., 2019. Explaining the trends in the UK cross-border mergers &
acquisitions: An analysis of macro-economic factors. International Business
Review, 20(5), pp.547-556.
Wong, K. Y. and Aspinwall, E., 2021. Characterizing knowledge management in the small
business environment. Journal of Knowledge management.