Business Environment and Operations Analysis

This assignment is a comprehensive analysis of the business environment and operations of Sainsbury's Plc. It involves a SWOT analysis of the company, exploring its strengths, weaknesses, opportunities, and threats. Additionally, it examines the relationships between PEST and SWOT analyses, providing insights into how these frameworks can be used together to inform business strategy. The assignment also includes an organizational chart, illustrating the structure of Sainsbury's Plc. Overall, this analysis provides a detailed understanding of the business environment and operations of Sainsbury's Plc.

THE BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Covered in ppt........................................................................................................................1
TASK 2............................................................................................................................................1
P3) Relationship between different organisational functions.................................................1
TASK 2............................................................................................................................................4
P4) Impact of macro environment on the firm.......................................................................4
P5) Sainsbury's internal and external analysis.......................................................................7
P6) Interrelation of macro factors and strength and weaknesses...........................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment is a term which is framed by two unique words "Business" and
"Environment". Business is an action where merchandise and administrations are traded as far as
for cash. It is a zone where operations and capacities are completed by distinctive association.
At point when these both enjoy together it turns into business condition, subsequently it is said
to be as internal and external variables that has an immediate effect upon exercises of an
organisation. It is become very essential for companies to be aware of several aspects of
environment which can be a factor of growth and down fall as well (Aterido, Hallward-
Driemeier and Pagés, 2011). All the elements of environment has very direct impact upon
operations and functions of a company, hence it has to be taken in consideration that how these
components has to be tackled.
Sainsbury plc is one of the recognised organisation dealing in retail sector in United
Kingdom. Its has been declared as second largest supermarket and is having 16.9% shares in
retail industry. It is known for its innovation that it introduce in its store and big retail outlets. In
September 2016, company has very successfully completed the process of acquisition of Home
retail group.
TASK 1
Covered in ppt.
TASK 2
P3) Relationship between different organisational functions
In an organisation there are different tasks that get performed so, it become very essential
for it to separate all its activities into different departments so that functions and operations does
not get hampered and smooth flow can be pertained. This will ultimately help in attaining long
term objectives of firm (Avramenko, 2012). This is very helpful as because it is a concept
through which firm will be able to perform all tasks in desired manner. Although departments are
made but still all are interconnected with each other as suppose if Sainsbury is in need of new
employees in finance department so it has to be convey to HR section so that they can be able to
arrange and line up interview sessions as per need of finance division. Similarly all are very
much interlinked with each other.
1

Human Resource
Human resources management is one of the major element in an organisation as because
to perform each an every task employees are very much required. This department act as a
central spin for an organisation as it avail human resources to other departments as per their
requirements. Internal recruitment are comparatively inexpensive to external method.
(Commander and Svejnar, 2011). This division gives preparing and advancement program to
enhance aptitudes and capacities of candidates. Primary motive and function of this department
is recruit , choose, preparing, finance, pay and so forth. The Sainsbury should be responsive in
hiring right candidate and should communicate with the marketing functions in practices of the
firm. The organisation should should evaluate in skills of the candidate as per the requirement of
sales department in order to achieve the stage of firm norm effectively.
Finance department
This division gives financial aid to business. Records are maintained regarding incomes
and expenses. It oversees fund and helps in reducing production cost as much as possible.
fundamental goal of this department is to organise and manage funds from both internal and
external sources (Dahan and et. al, 2010). It is interrelated with other department as because
functions can only be carried out with help of funds and this department avail it to all those
required sections of the firm. The Sainsbury company should be responsive in working as per the
needs of the budget provided by the organisation the provided budget of the marketing
operations and the sales operation of firm should also contribute in their profitability of the firm
to large extent.
Marketing
Marketing department focuses on necessities and needs of consumers and then after they
produce products and services indicated by their request which can fulfil their requirements and
wants. Fundamental target of this division is to fulfil desires and wants of buyers. In this they
manufacture products then they packaging is done as required, give commercial(Advertisement)
through daily papers, TV, online and so on along these lines, that an ever increasing number of
clients think about its products and enterprises and furthermore buy them. It ultimately assist in
business expansions and to grow. This section is connected with other as because until and
unless marketing does not take place customers will not be able to know about products and
2

services that company is availing to them. If such situation take place then all invested money
and resources will get hampered through it.
Research and development
This department is present in an organisation as to to proper research and then develop
and mould the products as per market needs. Its primary goal is to make changes in current
products and services of organization and after that delivering new goods and make operation
procedure successful. Organization conduct survey study as a research method to think about
promoting procedures, contenders, and to do showcase investigation. Innovative work empower
organizationto limit expenses and improves profitable outcomes.. Research should be possible
inside and additionally remotely (Fernando, 2011). Inward research takes less cost and less time.
If proper research is conducted then manufacturing and other department can be easily able to
carry out their performance otherwise chances may occur where company could face huge lose
as well. This will help in attaining organisational set standards. The marketing department is
having great organisation with the research and development department of the sainsbury. As
marketing function to analyse the market trends and contribute it to the research and
development department and contribute to product change in the products design as per the needs
of the market trends.
Manufacturing and production department
As organisation also many times get indulge in production of goods and various items
hence, firm divide this section as production and manufacturing department where are designing
and transformation of raw materials into finished good is performed and then it forward them to
retail stores where the cited organisation is mainly focusing. This will help in attaining objectives
and aims as required manner as because being a part of a company it is performing its 100% and
efforts are introduced by employees in effective and efficient manner.
Through this it can be claimed that all activities of firm are very much interconnected and
interlinked with each other, it become hard if any of one does not perform its part in appropriate
manner. Hence, top level management of Sainsbury need to be very dedicated and they have to
be concerned about every departments and if any of them are facing any kind of hurdles and
issue it has to be resolved by as soon as possible and it is the duty and responsibility of manager
in firm to take care of these important aspects._M1_1497963418_1498031451
3

(Source: organisational chart 2015)
TASK 2
P4) Impact of macro environment on the firm
Environment is an element which carries all internal and external components which has
direct and indirect impact upon operations and activities of a firm (Gebauer, Paiola and
Edvardsson, 2010). To understand positive and negative impact of macro environment on tasks
and functioning of firm external audit is very essential which can be carried out with help of
PESTLE analyses.
Political factors
In UK, the government and buyers have high rate of obligations which directly affect the
states of mind of customer as well as business situation which direct to awesome weight. In such
situation, Sainsbury's need to put their efforts to perform in these conditions which helps them to
4
Illustration 1: Organisational chart

run the business consistently. It has many advantages as because with several aspect of political
norms retail sector is also getting opportunity to expand itself in the market. Though market
condition is not in favour still company is able to sustain in this severe conditions because it is
having a great heritage and offerings are very attractive which is supporting them to survive in
crucial scenario.
For instance- Political factors includes many aspect such as tax law, stability of nation's
government, defence and military policy. Positive impact can be if organisation is availing retail
services to customers and government declares tax rate to be decreased on several products then
it can be positively influence the company.
Negative impact of it can be that if new governing authority in nation comes and they hike the
tax rates upon import duties then it become difficult for company to import product due to high
rates. Then company will raise prices of their products and services this will lead in switching
customers from this brand ultimately entire operation will get suffer.
Economical Factors
This element plays a very important role in the activities of firm. It has impact upon
demand, price, cost and profitability of a company. Due to unstable economy, the rate of
unemployment has convert into two primary element in monetary factor that will made changes
in Sainsburry fundamentally(Halbert and Ingulli, 2011). Due to rise in the price of sustenance
items and widespread unemployment that will help in efficient lessening in generation of eating
products. In this situation, Sainsbury's is recommended to grow its business organisation into
new processing activity.
For example- Positive impact is that when government decreases the inflation rates then it will
help the firm in earning revenues more, as customers will spend more and more money for goods
and services.
Negative impact falls will hike in inflation rates will lead in high price of products which will
affect behaviour of customers and buying will be done by them with very careful manner as
money is less and prices are high that are not affordable, this will affect operations of firm.
Social Factors
Clients in present time period, favour those places who can provide all products at one
place. Sainsbury has to a great extent income through this strategy as they make presentation of
non-sustenance products. In addition, other social elements like increase in the number of female
5

workers which has come about abatement in local dinner making. Consequently, the request
instance of a certain products is processing as early as possible. Sainsbury makes them display
case subject that being "Cook and Save" which advances products which are anything but hard to
cook. These products in this way, enabling clients to make the financial plans extend further
(Hamilton and Webster, 2015).
Positive impact- Sainsbury will be able to avail more services with the enhancement of women
in present time. Society are very rational at present time, as company is availing exactly as
required by customers then definitely growth can be possible.
Negative impact- As company is providing limited product hence customers have many other
option also so they will switch the brand which lead in loss of business.
Technological Factors
Online retailing of Sainsbury is developing progressively. The annual reports of
Sainsbury's confirms the ceaseless change in the administrations that has been provided on the
web which brings about increasing of offers by 25% a seemingly endless period of time. Due to
advanced technology, company is able to serve customers in more and more effective manner
and time is also utilised in other activities as because equipments have supported in reducing
time of several tasks and operations.
Technology has to be adopted by firm as it is very important aspect effectively using this will
lead Sainsbury in attaining its set objectives, customers will more get attracted towards services.
Negative impact is that manpower will face problems in adapting new changes regarding
technologies as they are not much aware of them this will lead in terminations and job resigning
employment will get increase because of this.
Legal Factors
Legislation law and scheme impelemented by government helps in the execution of
enterprise in future . For example, the law that indicates some other duty on publicity of oily and
passing handled food that will cleverly managed by Sainsbury by doing adjustment in its
products.
Opting government laws will be very supportive as government themselves will guide firm to
carry out operations,
Legal actions if not performed by Sainsbury then government can take steps against company.
Environmental Factors
6

To perform as a socially capable way to save the earth solid and ought to be prime
thought process of any association (Kang, Lee and Kim, 2010). Along with this, Sainsbury
supported itself, a socially dependable enterprise by presenting, Reduce, Reuse & Recycle
approach that are productive in overseeing waste, reusing and bundling.
Positive impact- Organisation has opted the strategy of corporate social responsibility where it is
promoting to reduce in wastage, reusing aspect, this concept is very influential which can attract
customers more.
Negative impact- As company if the act is not carried forward in appropriate manner then
customers will not support the firm and will switch to other brands.
P5) Sainsbury's internal and external analysis
Internal and external analysis is a method through which a company can be able to know
factors that are helpful and may be problematic at several areas. To identify this, the
organisation need to do SWOT analysis through which it helps the manager of an organisation to
make decision and implement corrective measures after proper evaluation of these factors which
helps the company to achieve their desired targets and goals therefore it is considered as best tool
the best tool that can be helpful to know various factors that can hamper working of an
organisation.
Strengths
Strengths are the positive aspect of business that are very effectively support organisation
to perform all its activities. Diversified investments are recognized assets or capacities of
association that it has and are known to be fruitful. Sainsbury's has broadened singular speciality
units that are not associated. This empowers it to limit hazards on the off chances (Klapper and
Love, 2010). The store chain comprehends the significance of manpower, therefore they provide
training to their staffs, it also has a training colleges for employees that concedes 10000 of its
partners yearly. Quality staff give better administrations than clients subsequently expanding
consumer loyalty.
Weakness
Company is being very old in retail sector many competitors has move ahead of it like
TESCO and ASDA, this create a situation where it can not able to avail opportunities as in terms
7

of leading in market. It also had many issues with inventory and supply chain management team
this has affected in its products and services as well. Also one research study says that as it
opened an outlet which was not effectively carried its operations and those who have invested in
that were got disappointed with this (Mahmood and Hanafi, 2013). The weakness that can
considered in company's account is that rising prices of food is also impacted selling of
companies products and eatable products, as because it's items prices are also hiked due to this,
which is resisted by customers of society. Competition is also very stiff which is taking places
within same segment group henceforth it has also become a problem for company which has to
be taken in consideration so that they can be able to overcome all their weaknesses and can
survive to give tough competition to other companies who are dealing in same sectors
Opportunities
As company is dealing in retail sector, so it has wide range of opportunities that it can
avail as customers are more prefering such senario nowadays.There are many chances that
company can be able to avail as it can introduce its stores in China's market and there are large
number of crowd so it can be one of advantage that company will get in upcoming time. With
help of increasing supermarket it is able to reach to extent and potential customers can also be
attracted by them in future time. Economic condition in both UK and China is becoming stable at
present time so it become easy and suitable for firm to carry out its operation and activities in
effective manner (Oh, 2010.). It is been studied that nation is counted in highest purchasing
power of customers. To increase sales organisation could use self checkout machines so that
they can be able to open their outlets for 24 hours. Also it can expand its business in nations like
Asia and Africa where customers are very much attracted towards offering of Sainsbury.
Partnership and joint venture methods can be adopted by it to enter into new market as to expand
and capture shares of new area this will assist in exploring itself in very positive and appropriate
manner.
Threats
One of the biggest threat that company will face is competition, Tesco, Wal-mart and
Carrefour all are performing same kind of activities so it become a constraint for company as
they can overtake shares of market, this will affect pricing strategy of firm and profit shares can
be compromised with this (Reinhardt and Stavins, 2010). Now a days, cyber crime are in hike
this can also affect online business strategy of company and will lead to significant lose in
8

several data from its database. Malfunctioning of computers many a time causes threat for
company which hamper operations of it very badly. Increasing globalised market is also a
threatening factor for firm which can be managed in effective manner will lead to a great
opportunity.
P6) Interrelation of macro factors and strength and weaknesses
Macro factors are those aspect of business environment which has direct impact in
operations of an organisation. With help of PESTLE analysis external macro forces that affect
activities can be identified and firm can take several actions against it. Political, economical,
social, technological, legal and environmental factors are element which affects company and
these has to be manage then only firm will able to sustain and grow in market. SWOT analysis is
an audit technique which is helpful for knowing strengths, weaknesses, opportunities and threats
that a company can have while operating business operations.
These factors are very much interconnected with each other as because they are focusing
upon environmental factors which are affecting company's actions and different departments and
functional areas. They both need brainstorming techniques so that exact impacts can be
identified, and according to them further activities can be performed in effective manner. It is an
incident that PESTLE and SWOT both has a letter 'T' in SWOT that gives best association
between these two vital appraisals (Siewiorek and et.al, 2012). SWOT follow a more adjusted
strategy and helps an organization to determine internal elements it has control over and external
impacts on which it can not do any kind of controlling act, yet needs to plan for. Doing an
intensive PESTLE examination causes organizations to all more profoundly break down dangers
segment in SWOT. With in-depth study of external macro factors organisation can be able to
know what are the strengths and weaknesses that has to be taken in notice which will lead in
operating all the activities in appropriate manner.
Political changes if arises it will directly impact upon strength of the company and then it
need to restructure and re plan all its strategies is more appropriate way so that they can meet
those challenges that are affecting firm functioning (Teece, 2010). Similarly, government of all
those nation where Sainsbury is dealing if introduces new norms and regulation then it become
very difficult for the firm to manage and perform all its activities in smooth and effective
manner, their strengths will directly get affected with this and their operations will get hampered.
Economy of the nation also plays a vital role if it get changes, any kind of fluctuation takes place
9

in rate of interests and currency rates then strength and weakness has it direct impact. Social
factors includes lifestyle, living standards, social culture and values, if in case customers
preferences changes as it happen in a very frequent manner as they are rational and they move
according to trends of market so they have their own choice upon several products and services
that they desires, so if that get changes then company will face great lose, because targets and
segmented group as their strength is will get affected and customers will switch to other brands
this will reduce shares of company and it many time would have to face downfall in competitive
market (Ullah and Lai, 2011).
This way both the factors of external macro elements PESTLE and Strengths and
Weaknesses are very much interconnected with each other which helps the company to know
about the situation arises in future that will them to achieve desired goals and objectives this firm
will be able to know several problematic areas and according to them proper and effective
strategies can be made and the hurdles can be handle appropriately.
CONCLUSION
This report it has been concluded that an effective business environment helps in
achieving extent of success for every organisation. The main types of business are as follow: -
public sectors are concerned with those companies which are operate and owned by government
of UK, private sectors are privately owned and not part of government. Along with this, in
comparison of both sectors the size and scope of private organisations is wider than pubic
organisation. Managers of Sainsbury plc should have implement effective strategies and policies
in order to meet their goals and objectives from target market. The structure of every business
organisation is depend upon its objectives and both are interrelated with each other. To find out
strength and weakness of their firm, employers have to implement SWOT and PESTLE analysis.
So as they can easily identifies the factors that are affecting them. In addition these factors
impact on positively or negatively on growth and success of cited company by reducing the
performance of its employees. So as their leaders have to provide training and development
sessions to employees for improving their productivity and achieving pre-determined goals and
aims of company.
10

REFERENCES
Books and Journals
Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms’
growth? Business environment and employment growth across firms.Economic
Development and Cultural Change. 59(3). pp.609-647.
Avramenko, A., 2012. Enhancing students' employability through business
simulation.Education+ Training. 54(5). pp.355-367.
Commander, S. and Svejnar, J., 2011. Business environment, exports, ownership, and firm
performance.The Review of Economics and Statistics. 93(1). pp.309-337.
Dahan, N.M. And et. al., 2010. Corporate-NGO collaboration: Co-creating new business models
for developing markets. Long range planning. 43(2). pp.326-342.
Fernando, A.C., 2011.Business environment. Pearson Education India.
Gebauer, H., Paiola, M. and Edvardsson, B., 2010. Service business development in small and
medium capital goods manufacturing companies. Managing Service Quality: An
International Journal. 20(2). pp.123-139.
Halbert, T. and Ingulli, E., 2011.Law and ethics in the business environment. Cengage Learning.'
Hamilton, L. and Webster, P., 2015.The international business environment. Oxford University
Press, USA.
Kang, D., Lee, J. and Kim, K., 2010. Alignment of Business Enterprise Architectures using fact-
based ontologies.Expert Systems with Applications. 37(4). pp.3274-3283.
Klapper, L.F. and Love, I., 2010. The impact of business environment reforms on new firm
registration.
Mahmood, R. and Hanafi, N., 2013. Entrepreneurial orientation and business performance of
women-owned small and medium enterprises in malaysia: competitive advantage as a
mediator.International Journal of Business and Social Science. 4(1).
Oh, S., 2010. New role-based access control in ubiquitous e-business environment. Journal of
Intelligent Manufacturing. 21(5). pp.607-612.
Reinhardt, F.L. and Stavins, R.N., 2010. Corporate social responsibility, business strategy, and
the environment. Oxford Review of Economic Policy. 26(2). pp.164-181.
Siewiorek, A and et.al., 2012. Learning leadership skills in a simulated business
environment.Computers & Education. 58(1). pp.121-135.
11

Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning.
43(2). pp.172-194.
Ullah, A. and Lai, R., 2011. Modeling business goal for business/IT alignment using
requirements engineering.Journal of Computer Information Systems. 51(3). pp.21-28.
Wild, J., Wild, K.L. and Han, J.C., 2014.International business. Pearson Education Limited.
Xue, X., Shen, Q. and Ren, Z., 2010. Critical review of collaborative working in construction
projects: business environment and human behaviors. Journal of Management in
Engineering. 26(4). pp.196-208.
Yoon, J., 2012. Detecting weak signals for long-term business opportunities using text mining of
Web news.Expert Systems with Applications. 39(16). pp.12543-12550.
Zeng, L., Li, L. and Duan, L., 2012. Business intelligence in enterprise computing
environment.Information Technology and Management. 13(4). pp.297-310.
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].
Relationships between PEST and SWOT. 2017. [Online]. Available through:
<http://smallbusiness.chron.com/relationships-between-pest-swot-10083.html>.
[Accessed on 17th June 2017].
12