Business Environment Analysis: Sainsbury's SWOT & Organizational Structure

This assignment requires students to perform a SWOT analysis on Sainsbury's Plc based on the provided online source and discuss their findings. Additionally, students need to analyze the organizational structure of Sainsbury's, using the diagram provided, and explain how it contributes to the company's business strategies.

THE BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................2
P1)Different types of organisation.........................................................................................2
P2) Scope and sizes of different organisations.......................................................................8
Public sector-..........................................................................................................................8
TASK2...........................................................................................................................................11
P3) Relationship between different organisational functions with objectives and structure.11
TASK3...........................................................................................................................................14
P4) Impact of external macro environment of firm's activities............................................14
TASK4...........................................................................................................................................16
P5) SWOT analysis of Sainsbury.........................................................................................16
P6) Interrelation between strength and weakness with macro factors.................................18
REFERENCES..............................................................................................................................20

INTRODUCTION
Business environment is a surrounding and all those circumstances where an organisation
performs its activities and functions. In terms of the economy “Business” is an activity that is
been done by human being, which include several operations such as buying and selling,
manufacturing- conversion of raw goods into usable or for further process. “Environment” is a
set or group of various things that are related to to economy, politics, legal, social, and cultural
factor. These are surrounded to a business any fluctuation occurs in this whole organisation has
to bear that (Aterido, Hallward-Driemeier and Pagés, 2011). This concept is very important to
understand by business person as to perform all its activities and operations in effective and
appropriate manner.
Sainsbury Plc is one of the biggest supermarket in London marketplace. At present it has
become third largest retail company and is very effectively carrying out its operations. It is
introducing more store around 1200 all around world and employees in numbers will be 16500.
large number of customers are served by it. Vision of Sainsbury-
 It wish to serve healthy food.
 Avail qualitative items.
 Providing opportunities of employment.
 Safe guard environment.
 To grow in competitive market.
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TASK1
P1)Different types of organisation.
Notes:- Different types of organisations that are present in market to perform different activities.
They all are having their own values, views and purpose. Some firms are focusing for earning
maximum profit for its survival whereas there are many who are working as for welfare of
public. Organisations and companies varies from each other as they have different structure,
surrounding, cultures, values and belief.
2

Notes:-
Public sector are those organisation where government has authority to govern all activities and
functions of a business. The legal aspect of public sector is that central government of a nations
is paying for goods where as local government of the country is responsible for paying upon
services that are get provided by Council tax.
For instance- McDonald is an American organisation which lies under this sector. This is a very
recognised organisation in whole world as it is availing its products and services in most
effective manner. Its hamburger is very much known to all and are preferred much by every one.
Purpose
 McDonald's purpose is to serve its customers in right and good manner.
 Quality is most concern of them.
 Satisfying customers with their hardship and efforts.
3

Notes:-
Private sector organisation is not under control of government. Products and services to
customers are provided by individual person who is whole sole responsible for carrying out each
and every aspect of this. These firm are more concern to earn profits and want to maximise their
wealth for its sustainability. There are number of legal functions that are present and important
for private sector firms, it basically depends upon category in which this sector is lying. Most
important aspect that must be followed while establishing a firm in private sector
MOA(Memorandum of association) and AOA(Article of association) is very essential to get
registered in Company Act,2013.
For example- Virgin group is a investment company which is leading in a global market. It is
performing its activities in around 50 countries and is having 5000 employees. It is a private
sector firm which does not have any governing authority from the department of nation's
government.
Purpose
 Its main objective and purpose to establishment is to serve customers appropriately so
that they can be able to get maximum profit out of them.
 It also want expand its business at those area where it haven't yet tapped.
4

Notes:-
Voluntary sector is an organisation where an individual initiates to get into an activity for a
particular purpose. There are number of voluntary organisation that are performing some or the
other activity mostly for welfare of society. These are established so that to only serve customers
rather that earning profits.
Example- Diabetes UK is a voluntary based organisation. It was established in 1939, at present
era 350 groups are there which are very actively performing operations and functions for
society's welfare.
Purpose
 Its purpose of establishment is to concern more for customers and to develop them from
facing crises.
 Non profit organisation.
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6

Notes:-
Sole proprietorship- A sole proprietorship is the least difficult and most normal structure began a
business. It is a unincorporated business claimed and keep running by one individual with no
qualification between the business and the proprietor. You are qualified for all benefits and are in
charge of all your business' obligations, misfortunes and liabilities.
Features:-
 It is very easy to establish.
 Its activities are performed in very confidential and safe manner.
 Resources are very limited.
Partnership- It is a plan in which at least two people share the benefits and liabilities of a
business wander. Different courses of action are conceivable: all accomplices may share
liabilities and benefits similarly, or a few accomplices may have constrained obligation.
Features-
 Unlimited liabilities are there with the partners of the firm.
 There is very high risk in diffusion.
 Availability of capital is very high at time of formation.
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Government company- This business is an association that has the majority of the accompanying
attributes: 1)It is a different legitimate substance with the ability to contract in its own particular
name and that can sue and be sued. 2) It has been designated the money related and operational
specialist to bear on a business.
 These are established with the government.
 51% shares of capital are provided by nation's government.
 Government are whole sole liable for managing and controlling operations and functions
of this company.
Cooperatives- It is an association of people joined intentionally to meet their basic financial,
social, and social needs and goals through a mutually possessed and fairly controlled venture".
 The membership in this sector is open as any one can get into its operations and function.
 Interest on capital are very limited.
 The surplus are availed to the required members so that benefits can be provided in the
society.
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P2) Scope and sizes of different organisations.
Public sector-
This offers help to social gathering and they play out their exercises to address the issues
that confronted by individuals. They work to upgrade the solid and standard condition for the
social welfare. This part association performs corporate social duty action with the goal that they
can give help to individuals. Government assumes imperative part in the development and
advancement of such firms since this sort of business element offers help to the development of
country. The market range of open segment association is expansive as correlation with private
part.
Size of McDonald's: There are more than 4 Lack representatives are working in around 120
nations and around 150 outlets are opened by this business with the goal that they can give
products and ventures to its clients.
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Products/ services: Paneer Salsa, Chicken Maharaja Mac and many more eatables are are offered
by company to clients which are satisfying the needs and wants to them in an appropriate and
effective manner. Services that company is providing to clients is on 24 hour basis that is also
pleasing customers very properly.
Vision: To be very effective and best server in the field of work.
Mission: They are committed to improve their operations and enhancing our customers'
experience continuously.
Stakeholder: Ministers and counsellors, Local government chamber, Political leaders Courts,
business houses.
Objective: They have primary goal to give quality item and administration to post and to give
greatest fulfilment to them. They guarantee to give item when and where it is required by clients.
2) Private segment
This segment play out their exercises to create increasingly benefit since they have key
goal to amplify the productivity rather than social improvement. They need to make constructive
picture among the clients with the goal that more individuals can be pulled in toward them. This
sort of association is not under the control of government but rather it is required to take after the
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influenced laws and Acts. They have target to take care of the demand of market by its supply.
They ceaselessly work to enhance their exercises with the goal that most extreme fulfilment can
be given to individuals.
Size of Virgin Group: This organization is managing in around 50 nations and have around 5000
representatives. Its number of clients are expanding step by step.
Products/ services: Airlines, electronics media, financial and banking sector.
Vision: To change the business for good.
Mission: Its mission is to make credible thing in their operations so that they can be able to
sustain in market for so long.
Stakeholders: Developers, Owners or management, Carriers, Industry and promotion gatherings
Objective: This organization has goal to grow their market range and to produce increasingly
benefit. They have key target to give extravagance experience to its clients.
3) Volunteers association
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It is unique in relation to private and open organizations since they have target to ensure
and secure the social gathering. They give help to society so they can live with elevated
requirement. There are some steady factors as Funder, trustees and Volunteers.
Funder- They are the general population who give budgetary help to people and corporates. They
assume critical part with the goal that business can run their operations in more powerful way.
Trustees-They give direction and support to organizations so associations can play out their work
in viable way. It gives help to individuals and business which are confronting issues.
Volunteers-They play out their work to give help to society and don't charge cash from them.
Such individual puts their best exertion in each region with the goal that they can give most
extreme help to them
Size of Diabetes UK: There are many administrations that are offered by such association. Many
individuals and organizations are related with wilful association so they can offer help to social
gathering. In Diabetes UK, there are around 40000 representatives are working.
Products/ services: They are serving customers with charities and provides medicines and
required things for their problems.
Vision: To serve people suffering from various health issues especially diabetes.
Mission: Sustain in market with effective services to clients.
Stakeholders: Volunteers, Children, Donors, Other NGO, Parents
Objective: They have target to give better administrations and treatment to individuals who are
confronting medical problems. This firm about new and updated innovation for the treatment
with the goal that they can address the issues in better way.
TASK2
P3) Relationship between different organisational functions with objectives and structure.
Sainsbury is a retail company and it is very essential for it to serve customers in more
effective and efficient manner so it has to segregate is functions in different departments. This
will assist firm in performing activities and such manner that set standards and objectives can be
attained properly and customers will also get satisfied because of quality services provided to
them (Avramenko, 2012). All functional sections of an organisation are very much
interconnected with each other as because, each and every activity is get influenced if any of the
department changes its actions. There are several departments which are performing their
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individual actions and they are very much connected with aims and structure of a company.
Following are different departments which are actively working in Sainsbury-
 Human resource- This is an important department in an organisation as because it helps
in sourcing manpower in other sectors of the firm. This section helps in providing good
and qualified employees as per the needs and profile. Entire preparation regarding
recruitment and selection process are planned by them as they has this big responsibility
upon them. Their core tasks is to do interview sessions, choosing them financing and
paying (Commander and Svejnar, 2011). According to organisational structure this assist
in operating activities in a smooth flow and ultimately firm's objectives and goals could
be able to get achieved with its support.
 Finance department- This is a department in firm which provide financial services to all
other sections so that crises and problems can be properly managed. It look out all factors
that are related to manufacturing and overheads, and make several strategies so that cost
can be reduced in best possible manner if possible. If other departments are need of fund,
then it is duty of this division to provide them as quick as possible. This will help in
meeting firm's objectives as through this proper growth can be obtained.
 Marketing- This department help an organisation in creating awareness about its goods
and items that it is willing to offer and that it is already providing to customers. This will
contribute in various activities such as advertising with several techniques on TV, online,
newspaper, magazines etc., This aspect really plays a vital role in development and
expansion of an organisation as because, it will promote firm' operations in more
attractive manner so that customers could take interest in services (Dahan and et. al,
2010). These are interlinked with other as because if it will not do its part in effective
manner then other divisions also face problems regarding their operations. Depending
upon structure of firm it is also very necessary to do marketing with reference to that this
will help other sectors to manage accordingly. Information has to be shared with other so
that customers will know about company and its product, if it will not performed then
awareness can not be created.
 Research and development- This department tries to do several researches so that more
effectiveness and quality can be inculcated in products and services that are offered by
company to customers. This assist in developing new ideas in the process and product of
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firm. This play essential part as because through this company and its various department
will be able to know what actually market is in need of and according to that changes and
development can be performed (Fernando, 2011).
 Manufacturing and production- Through this division different departments of Sainsbury
will be able to know in what quantity production is performed and this will help in
knowing the number of products that company can be able to present in the stores. This
will help in attaining organisation objectives and set standards.
As per the structure and objectives of the firm it is very essential for all the department to
be set as because this will help in attaining in organisation goals and set standards as well. It is
very important for the company to divide its work into several sections so that they can be able to
attain all the work and operations of it in effective and appropriate manner. If company need to
do marketing it is very essential for other department to work and support appropriately to attain
the objective of marketing section. If any of the department is in need of fund then it is very
essential for firm to concern with the financial sector.
Organisational structure
(Source: Organisational chart, 2015)
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TASK3
P4) Impact of external macro environment of firm's activities.
Sainsbury is the biggest food retailer placed in UK, its current business environemnt affects
UK's grocery retailers industry. Macro environment consist of broad environmental factors that
impact all supermarket which are available in a single chain (Gebauer, Paiola and Edvardsson,
2010). These factors impacted on Sainsbury as well as its competitors. PESTLE analysis is
helpful in identifying macro environment factors that directly affects condition of business. This
analysis is helpful to understand negative and positive impact of environment , these factors are
described as below:
Political factors : This factor is based on government rules and regulation,
political factors having great impact on performance of Sainsbury. In UK market consumers as
well as governments debts are high, this directly impacted on consumers attitude or beliefs and
condition of business, for this business experiences high pressure. Sainsbury mainly focuses on
developing their business condition at continuous basis (Halbert and Ingulli, 2011). Company
operate their organisation in these complicated market situations.
Positive impact : Some time political factors are not in favour of company, so on that situation
Sainsbury has been able to sustain a continuous growth for the reason of its better relation with
consumers and high offering of goods and services with high quality at low price.
Negative impact :Government authorities are changed, so all political norms are also affected by
this. So tax and tariff rates are changed.
Economic factors : These are major factors that play an important role in firm.
Economic factors affect cost, demand, profitability and price of products. It has direct
relationship with capital of an organisation. High rising princesses and unemployment are two
major elements of economic factors that impacted on Sainsbury. Evident economical factor is a
major factor that affect the condition of big firms including Sainsbury. It as a huge effect on
overall sales of company due to less purchasing power of customers.
Positive impact : At the time of product defloration in economy prices of product decreases
which are helpful for customers as they can buy goods at low price.
Negative impact : Some time company introduce their products at high price but after a period
of time people get bored with same products. At that time demand of product is decreased
because of high price.
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Social factors: In today's scenario there is high increase of social trends in food
products, which cause benefit for Sainsbury, it is a great opportunity for company (Hamilton and
Webster, 2015).
Positive impact: The cited company mainly focuses on producing those products which are
socially accepted in large scale in current market.
Negative impact : There are lots of competitors available at market place , they affect the sales of
Sainsbury directly. Some time customers are not satisfied with offering services and products of
single retailer on that situation they can easily switch to other retailer or brand.
Technological factors: It is very much important for an organisation to use correct
techniques at correct place. Sainsbury is biggest retailer store and it produces large number of
different goods, so it is not possible for it to be done things manually (Kang, Lee and Kim,
2010).
Positive impact: It adopt various tools and techniques for better production, so that they can
easily offers products and services to their potential customers.
Negative impact: Some time new and innovative technique can harm employees and workers
because of lack of knowledge and proper guidance.
Legal factor : It has directly impacted on execution of of organisation. Sainsbury
is bounded thorough many issues and conflicts related to legal factors. Legislation and policies
influence performance of organisation as well as employees.
Positive impact : As a big organisation Sainsbury sales all kind of products such as alcohol, so
they need government permission to sale these goods fairly at market place.
Negative impact : Some time legal actions are not effectively performed by Sainsbury so
government can take legal action against company and punish them.
Environmental factors: It is important for an organisation to act in a social
manner for keeping environment safe and secure. This need to follow carbon foot print to
maintain condition of firm at market place. They putting their best affords to reduction of carbon
footprint .
Positive impact : Reduction of carbon footprint having a good effect on over all environment
(Klapper and Love, 2010).
Negative impact: If firm is not using their resources appropriately, then it may cause loss in
future.
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TASK4
P5) SWOT analysis of Sainsbury.
The SWOT analysis is helpful in identifying internal and external factors, which is described in
detail as under :
Strength  Sainsbury is most biggest retailer in UK. It captures a wide area
of market. It is popular for its variety of products.
 Strength is power for every organisation, that has positive
impact on business and its performance.
 Their major strength is that they hire well educated people in
their firm for better operation (Mahmood and Hanafi, 2013).
 High educated people are helpful in achieving organisational
targeted goal.
 Company recruit well skilled people for making better
relationship with customers in order to attain profit and
success.
Weaknesses  Sainsbury doesn't have any extension plan for future , it is the
main weakness of company.
 It has only placed in UK market.
 If any problem arises with food products in UK then it will
cause conflict for Sainsbury business.
 Company try to adopt new techniques which are available in
market place but some time it cause issue in operating new
machines and tool because of lack of knowledge.
 It is not taking any part in promotional activities, this would
restrict the firm to expand globally (Oh, 2010).
 It has limited power campaign to face and beat its competition
through rendering better service against new dis countered
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products.
Opportunity  Opportunities are beneficial for employees as well as
organisation.
 The major opportunity of Sainsbury is emerging economics
such as India, china and Brazil etc.
 These economics areas are helpful in providing wide market
and large number of working population.
 Sainsbury put all affords in minimising cost of over all
production and expenditure, so that they can make huge profit
through sales and revenues (Reinhardt and Stavins, 2010).
 Another opportunity of firm is its provide online shopping
facilities which give satisfaction to their customers in order to
attain high profit.
 They adopt some innovative tools and techniques such as
checkout machines so that it is easy for customers to taking
advantage of 24 and 7 outlets services.
 Expansion in product line which increases wide range of
products.
Threats  Company is affected by high recession rate which leads to
careful money spending by consumers which affects sales of
company. To overcome this problem cited firm has to introduce
new goods or make changes in existing goods according to
economics situation.
 Competition rate is high in economy as there are large number
of retailers who are dealing in same product line.
 Availability of substitute increases larger options for customers
as they can consume products for other companies (Siewiorek
and et.al, 2012).
 Customers service should be effective so as to retain loyal
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customers for the firm.
 Labour rates are increasing rapidly so Sainsbury has to follow
minimum wage regulation which implies that cost of labour will
be larger for Sainsbury.
 Employees are paid higher then the minimum wage act which
are enacted by government authorities.
Impact of external and internal factors of SWOT analysis of company:
The strength and weakness or firm represents the internal factors and opportunity and
threats are represent external factors. It is necessary for company to consider culture, expertise
knowledge, unique qualities and all resources in an effective manner for effective running of
organisation. These all aspects are helpful in effective operation of each and every activity in
respect of earning profit and shares. After considering these aspect firm get to know about their
own strength and weakness. Sainsbury is focuses oh hire well educated people in their firm for
developing their strength to maximising growth and success. Firm needs to give better career
opportunities for their employees to maintain them for long time. The major threat of firm is
entrance of new product with advance feature, increasing in number of competitors, unstable
legal and political issues. Sainsbury focused on adopting new and advance technologies for
making effective changes that are required for met with customers needs and wants.
P6) Interrelation between strength and weakness with macro factors.
As business environment is performing and understanding for an organisation (Sainsbury), it is
very essential to understand impacts and influence of factors that has a direct association with
operations and activities of a firm. Micro and macro environments are elements that come under
this aspect. Internal analysis are SWOT- strength, weaknesses, opportunities and threats of an
organisation. Whereas, external analysis are PESTLE - political, economical, social,
technological, environmental and legal factors.
Environmental factors do have interconnection with each other as because with them as
because they both are aspect with are related to organisation's functions and activities. The only
difference that is between these two are macro factors are those elements which can not be
controlled whereas micro factors such as strengths and weaknesses can be controlled properly
(Teece, 2010).
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For instance- If any political changes takes place in external environment then there are
chances where Sainsbury will get benefit from this. Similarly if changes by government in
policies and rules related to retailing then problems can get arise. Company's strength can be get
affected by external factors. Many times it happens that organisation is has some weakness as
mentioned expansion of firm is within UK only and difficulties are also faced in using new
technologies. Changes in technological factors in market may be helpful for firm so that they can
be able to meet up with changes. Both factors are this way interlinked with each other and are
very much influencing them as well internal and external aspect plays very important role in
smooth functioning of firm's operations if performed and evaluated in proper manner. Strength
and weaknesses are having very direct influence from the macro factors. Any changes and
fluctuation in external factor with has its positive and negative impact on strength and
weaknesses (Ullah and Lai, 2011).
There is a direct relationship between SWOT and PESTLE. As if any changes takes place in
external factors its direct impact gets upon the strength and weaknesses of gthe firm. It is very
essential to understand the impact of these factors so that they can be able to overcome the
negative influence that takes place in an organisation. As Sainbury's stregnth is that it has
covered many areas in various nation hence it is very necessary to understand all the negative
impact that can hamper its strenth in market.
CONCLUSION
As per above study it can be concluded that business environment is the key to growth and
success of organisation. This is important for Sainsbury to compete with global standards so that
they can meet expectation of market. There are many companies in market which operate in
public and private sector. Many issues are faced by such companies which are due to internal and
external factors. External factors are related to political issues, governmental frequent changes,
environmental etc. These problems are stated in above mentioned topic under PESTLE analysis
of company. This is important for business to manage such factors effectively so that it can not
creates problems in future operation of organisation. There are different functional department as
Finance, HR, production and distribution department that provides assistance to company to
eliminate such errors. The above stated strength and opportunity are effective tool that helps to
achieve goals and objective of company.
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Online
SWOT analysis of Sainsbury’s Plc. 2017. [Online]. Available through:
<https://writepass.com/journal/2012/06/swot-analysis-of-sainsburys-plc/>. [Accessed on
17th June 2017].
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