Understanding the Business and Economic Environment

This report analyses the industry analysis and structure of the retail industry, STEEPLE Analysis, and the competitiveness of the UK market for Sainsbury's in the UK retail industry.

Understanding the
business and economic
environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Industry Analysis........................................................................................................................3
Structure of the chosen industry..................................................................................................4
STEEPLE Analysis.....................................................................................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment encompasses all those factors which basically affect the overall
operations of the company and includes customer, competitors, stakeholders, suppliers,
regulations and certain government activities. Economics is the study of scare resources which
ensures the better allocation and its effective use and measures the great variety of other complex
issues which is concern to the society. It is the main concern which is related to the higher
success and the growth of the community in which they are having the overall consideration in
the market(Panda and Gupta, 2022). This report is based on the Sainsbury's which is the public
limited company that is operating their business in the retail sector, It is the second largest chain
of supermarkets which is operating its business in UK as they are having 16% share of
supermarket sector. An organisation is founded in 1869 by John James Sainsbury & its
headquarter is in London, England, UK. This respective report will analyse the industry
analysis and also explain the structure of the retail industry. Moreover, it will cover the
STEEPLE Analysis in which determinants of demand and supply is being explained and also
define the competitiveness in the target market.
MAIN BODY
Industry Analysis
Industry analysis is the branch of specific branch of manufacturing, trade and services. It
is vital to understand the industry in which the company is operating its services and it is also
essential for the business by which they understand the market secnerio and the operations.
Retail industry is being chosen from the UK standard industrial classification(SIC 2007).
Moreover, There are various types of business which are operating in the same industry and
includes small supermarket, conventional stores, supermarket and online trading. Morrisons and
Asda are the leading supermarket chain which is suffering by reducing the overall sales of the
company and it is being derived and evaluated that all the functions is being controlled by the
industry by which the firm can sustain in the market in long run.

Structure of the chosen industry
There are various companies which are operating in the retail industry and they are
considering the centralised, operations and regional business. Moreover, centralised business
functions includes the duties and roles which is vital for the store planning and the HR
manager(Liu and Xia, 2022). These are the certain resources that are ensuing the flow of goods
and services in the particular market segment and they are fulfilling the requirements of their
buyers who are living I the UK. There are various types of business which are operating their
business in with single store retailer and the chain of companies in the world.
STEEPLE Analysis
This is the framework of analysis the impact of external factors and it is being stated that
this give the detail introduction of the macro factor. There is the acronym for STEEPLE analysis
which is meat with social, technological, economical, environmental, political, legal and ethical.
In relation to Tesco, there are certain aspect which are given below:
 Social factors: These are the aspects which cover the cultural, social norms, value and
the belief of the people in which they are further living. As per the time changes, people
are more dominating towards the organic goods by which Sainsbury's can capture the

large customer base by which they can sustain in the market and generate huge
profitability as well. These are the aspects which directly influence the habits and the
attitude of the people for buying particular offerings.
 Technological factor: In the current market, there are certain change in which the
various business are operating ad changing its services in order to full-fill the needs of the
target market. When an organisation is working with innovative and advance technology
then they can attract the large group of customer so that they can rightly sustain in the
competitive market. The current introduction of Sainsbury's eCommerce store is majorly
helpful which cater the tech friendly generation.
 Economical factor: These are the aspects which is inspiring the overall consideration in
the target marketplace. Sainsbury's is operating with all the economical aspects which are
given below:
Analyse the microeconomics factor which is directly affects the demand of goods &
services with the demand curve:
Demand is the choices or the desire of the people in order to purchase the particular
goods and services and they are having the limited buying capacity to buy the specific
commodity in the respective market.
There are various factors which are impacting the demand are given below:
 Given price of products: It is being known that the respective prices of the goods and
services can directly impact the demand and tends to increase or decrease the overall
demand of commodities in target market. In relation to Sainsbury's, as the particular price
of goods tends to increase then the demand for their respective goods tends to reduce in
the target market(Alam and Grose, 2022).
 Income of the consumer: It is being analysed, when the buyer is having the huge
income level which leads to rise the entire demand of respective commodities and
services in the particular market. As the buyer is having good income level then the
demand for Sainsbury's product tends to rise.
There are various factors which are impacting the supply of respective goods in the target
market are given below:
Supply is the concept that is defined as the total amount of commodities and services
which are available for the further sale by which firm can increase its overall profitability. In

relation to Sainsbury's, There are various aspects that is impacting the entire supply of goods in
the target market are illustrate below:
 State of technology: These are the aspects which is ensuring the entire flow of
commodities and services in the target market. When the Sainsbury's is using the updated
technology by which they are ensuring the proper supply of goods and services in the
target marketplace.
 Number of firms in the market: There are numerous firms which are conducting in the
retail industry & there are firms which are having the overall functionality in the
business. When large number of companies are operating in the same industry then it
leads to slow-down the overall supply of commodities in the target marketplace. In
context to Sainsbury's, there are many firms which are operating in retail industry such as
Morrisons and Asda, they are giving tough competition as they are operating in the same
sector.
Explain the competitiveness of the UK market & its impact on future of the business.
It is defined as the competitiveness is the word which define the entire market scenario in
the large market which also assist an organisation so that they can sustain in the market in long
run(Troise and et. al., 2022). This is being analysed that they are expecting 11% in the last of the
2020 & it is being analysed that trading economics global model in the large market. This also
assist the Sainsbury's, is the well-kbown company in the global market & they are focuses on
offering quality product in the large market segment.
Examples of random shocks which could analyse the UK government fiscal policy &
analyse if there is an monetary & fiscal policy influence the economy of UK.
Random shock is defined as the major critical situation that is being occur & involves the
global pandemic with the huge outburst of COVID-19 & this, there is the major restrictions in
different countries and the globe and they are continuously fighting against this. This is
influencing the economy of the United Kingdom. It is being stated that the government put the
huge taxation on export & import by that this leads to slow down the overall economy and
government is putting huge restrictions on travelling in order to travel from one place to another
by that many sector is being badly impacted in the market. All the taxation policy is being
formulated in the market and they are using the appropriate results and they are focusing in the
effective working of the business by which they can rightly contribute to the economy of the

business. The government bodies of UK is imposing major restrictions in the export and import
of goods & services in the target market.
 Environmental factor: These are the aspects that is concerned with the ecological
balance in the business environment by which sustainability can be retain in the target
market. In consideration to Sainsbury's, they are focuses on initiative for enhancing the
entire business environment by which they can effectively maintain the sustainable
environment. Furthermore, there are basically emphasis on 2 phase as they are using
recycle, reuse, remove and reduce by which company can ensure the proper working in
the target market.
 Political factors: Such factors which is related to the stability and the overall working of
the government. When taking the consideration of UK, there is the stable government
that also assist the Sainsbury's for ensuring the better working of the business in the target
market. These are the aspects that is related to the operations of the business so that they
need to work with all the rules and procedure by which they can ensure the better
working of the company and they can rightly ensures the political environment of UK.
 Legal factor: Various polices that is basically affects the entire overall operations of the
company and that is to be taken into consideration in the target market. In relation to this,
The food retailing industry commission which frame various rules that is required to the
organisation who can be effectively operating in the same industry(Wegwu, 2022).
 Ethical factors: Certain aspects which involves the better communication, respect and
the honesty by which they ensures the proper working of the employees within the
organisation. In relation to Sainsbury's, they are giving the effective working and offer
the better working culture by which they can retain in the market for long period of time.
Analyse the business problem & challenges which is being faced and criticise on the macro
effects of a business decision.
It is being known that Sainsbury's is operating its business and it is being completely
controlled by the government bodies of UK. With this, They are conducting the better flow of
services with all the rules and regulations by that they can rightly retain in the market for long
time period of time. But due to the time, limited company, they can not think in the market and
they can not expect certain change that does not are the proper working of the government
bodies.

CONCLUSION
It is being concluded that, there are certain type of business that are being conducting in
the market & their role by which they can ensure the better functionality profits & revenue in the
target marketplace. Furthermore, STEEPLE Analysis, This is being accessed to evaluate the
influence the macro factors on business environment. In economical factor, demand & supply are
the 2 aspect that are ensuring the entire flow of commodities & services in the target market.

REFERENCES
Books and Journals
Wegwu, M.E., 2022. DEFENSIVE STRATEGIES AND FIRM’S RESILIENCE IN A
DYNAMIC BUSINESS ENVIRONMENT. World Bulletin of Social Sciences, 6, pp.41-
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Troise, C. and et. al., 2022. How can SMEs successfully navigate VUCA environment: The role
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Change, 174, p.121227.
Alam, Q. and Grose, R., 2022. Shifting sands in the regional business environment in Australia.
In Regional Businesses in a Changing Global Economy: The Australian Experience (pp.
1-10). Routledge.
Liu, X. and Xia, T., 2022. The innovation paradox of political capital in transition economy firm:
Innovation and political capital. Journal of Business Research, 142, pp.775-790.
Panda, A. and Gupta, R.K., 2022. Understanding Organizations and Business Ecosystems in
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Koleša, I., Burger, A. and Dickmann, M., 2022. The effects of institutions on emerging market
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