Understanding the Business Environment - Desklib

This report provides an in-depth analysis of Sainsbury's operation, market structure, company goals, stakeholder analysis, PESTLE analysis, and Porter five force. It also discusses the impact of external factors on the company's performance and suggests areas of improvement for further success.

UNDERSTANDING BUSINESS ENVIRONMENT
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Table of Contents
INTRODUCTION...........................................................................................................................3
Main body........................................................................................................................................3
TASK 1............................................................................................................................................3
Introducing SAINSBURRY........................................................................................................3
Sainsbury Operation....................................................................................................................3
Company Goal.............................................................................................................................3
Market Structure..........................................................................................................................4
Legal form of the company..........................................................................................................4
task 2................................................................................................................................................4
Stakeholder analysis....................................................................................................................4
TASK 3............................................................................................................................................6
PESTLE Analysis........................................................................................................................6
Porter five force...........................................................................................................................7
TASK 4........................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business environment refers to the atmosphere which allow the operation to operate the
functions and execute the plans of action in effective as well as efficient manner. it deliver
assistance in encouraging the workers of the association for completing the task in appropriate
manner ( Voiculet, and et.al 2010). The present report is based on one of the leading enterprises
of UK Sainsbury in which report will examine the operation, market structure of the association.
Furthermore the report will demonstrate the objective of the association and the area of
improvement for the further success of the company.
Main body
TASK 1
Introducing SAINSBURRY
Sainsbury is one of the leading multinational retailers organisation which is renowned for
dealing in groceries and miscellaneous goods in domestic as well as international marketplace.
The company is headquartered in the United Kingdom and sells its products to satisfy the large
numbers of customer for the profitability. It is one of the the largest retailers in terms of returns
transactions in the international market. The organization has a large market share in UK and has
opened various stores worldwide and locally in to increase the productivity and profitability of
the company.
Sainsbury Operation
The company is primarily traded in the grocery market and caters to all customer needs related to
the brand. The organisation provides wide range of products along with unique product apart
from grocery that includes fixtures, decorations and electronics, household commodity
(Akpoviroro, and Owotutu, 2018). SAINSBURRY operates the largest retail sector and has high
sales in the UK's market area. Along with that the organization strives to outperform the
technology business to help drive growth. But it brings more income and it can be used to invest
in business food unit.
Company Goal
One of the 's main motives for SAINSBURRY is to enhance brand and transparency loyalty in
the market area so that it can attract more patrons and address their taste and preferences. The
company's other goal is to surge sales in the highly competitive market with the assistance of
digital technology. This is because it is the best plans of action to operate a new business for in
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the era of covid 19. The companys aim to expand the purchaser base by lowering the purchase
price of products and increase the network all over the world. In addition, the company is
committed to responding to new market trends and preferences, attracting large customers and
reducing competition.
Market Structure
The company's market structure is oligopolistic and there is fierce competition in Market , which
uses the same method to operate a similar business model ( Matović,2020). For instance the
Tesco is also an organisation which utilized similar framework for increasing the approach in the
marketplace. In addition to the , the main advantage of such a market structure is that it is very
unlikely to lose patrons. There is a lot of competition in the market, but because of this customer
preference, the receives changes when the price of the product is low or high. Therefore, it is
significant that the organization adopts innovative strategies to keep its customers loyal. In
addition to this, Sainsbury trades to bring more business and reduce competition through
strategy. The organization seeks to offer a variety of high quality and standard products at the
company so that customers can make a better decision for purchasing the product. Therefore, the
organisation is able to secures customers according to this type of market structure of
SAINSBURRY .
Legal form of the company
Public Sector: This organization is operated by the state administration and all finances and
conclusions are operated by legal or ruler agencies. At the same time, the main goal of such an
organization is to practise resource efficiently and deliver benefit the public. For example, ESPO
is an organization of the UK Government sector that generally offers different products and
services. All of the company's revenue is invested in public services rather than utilized in
personal use ( Khajeheian, Friedrichsen, and Mödinger,2018).
Private Sector: It is managed and operated by an individual and its main purpose is to benefit
the organization. The provides essential services to its customers with little or no government
involvement. Such companies use innovative ideas to run Business and win customers.
Volunteer Sector Organizations: Their main purpose is to provide social welfare services to
their customers, rather than making a profit, as their main purpose is to develop society.
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task 2
Stakeholder analysis
Sainsbury gives both internal and external stakeholders of the company equal position to
sustaining achievement. It also affects business decisions as well as the operation of the company
and must be maintained. furthermore, the Sainsbury can generate a huge amount of revenue for
the if it manages its stakeholders well.
Internal Stakeholders:
Shareholders: They are renowned as investors of the company that encourage commercial
actions and decisions. At the same time, Sainsbury's gave the shareholders the right to make
company decisions for the further welfare of the association ( Hamilton and Webster, 2018).
Employees: This is one of the most vital sources of evidence for organizations to assistance
them run their business in effective manner and signify the company in the external market. In
addition, it is essential to maintain the company as it helps to satisfy customers and the proposals
also help the company make important decisions. In addition to this, Sainsbury satisfy their
employees through appreciating their work by making practice of financial and non-financial
inducements.
Board members and executive committee: The administration is indispensable for corporation
as it has key involvement in taking relevant decision for commercial enterprise. In Sainsbury all
the decision are taken by higher consultant and board and it put their extreme contribution in
discovery the right business plan for the company and its operation for further success.
External stakeholder
Local communities: The external environment influence business and some of its factor can
definitely and undesirably affect the growth of business enterprise. Moreover, if local societies
are not elaborate in commercial then organization will not be able to sustain in marketplace as
business exist within that boundaries (Grenčíková, Kordoš, and Sokol 2019). Although
Sainsbury perform activities like CSR in order to contribute toward the welfare of communities
and development of society.
Supplier: Sainsbury make sure that sellers are taken into deliberation while manufacture
business model of the corporation as it play vital role in association. Along with this, most of the
products raw material for industrial purpose are purchased by Sainsbury through dealing with the
various dealers available in the marketplace. Therefore, due to that company is able to sell high
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quality standard of products to their patrons. Therefore, it is important for Sainsbury's to
maintain a healthy relationship with Supplier and customers in order to produce the highest
quality products. The manger or the responsible person of association build trust among the
people or customers
Customer: Sainsbury is a customer-centric business as all revenue from comes from the
purchases of consumers. Along with , they are the main source of the company and therefore
have a great impression on business operations. Sainsbury sells a full range of products ap per
taste and preferences of customer in order to deliver values. In addition, Sainsbury takes care of
customers by offering them adequate Customer Services and Worth such as Faithfulness
Program . It attracts them and gives discount to the customers at big occasions and to boost or
enhance their sales ( Ghicajanu, 2019).
Competitors: Impact the market area by offering similar products and services. SAINSBURRY
conducts market research on before introducing a new product, but allows to identify the
competitive areas of operating business in the marketplace. Therefore, it is important to identify
them as they have a direct impact on your business and your customers. To respond to
competition, SAINSBURRY is utilizing a variety of marketing techniques, that including digital
marketing media and platforms to decrease the competitive advantage. Therefore, it is important
that the Company keep them nearby and keep the customers up to date about the new Company
products or the services.
TASK 3
PESTLE Analysis
It is known as a tactical plans of action that allows organizations to determine exterior factors
that can affect a company's performance in both negative and positive manner. It is also an
abbreviation for Political, Financial, Societal, Technology and Lawful and Ecological. In
addition, companies need to do this to recognise factors that impact their business.
Politics: This includes factors such as Government guidelines that organizations supposed to
follow strictly in order to compete in the market. apart from that, it is currently implementing
blockade and COVID policies, which has impacted the growth of SAINSBURRY as was unable
to enlarge its occupational due to trade restrictions. Companies operate in different countries and
have different tax systems in the retail sector, but they need to be controlled by the organization
and affect the entire financial sector ( Davids, 2018).
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Economical: This is one is considered as essential factors for an organization as it is responsible
for managing the company's revenues and the impact of the company's products as well as
productivity. In addition, if SAINSBURRY is traded at good GDP rates in countries, patrons will
devote more on their maintenances and allow the organisation to generate more revenue.
SAINSBURRY needs to keep this factor in mind and take corrective action to evade any sort of
issue, as changes in economic rates directly affect the income level of its patrons. Therefore, if
the income of is low, the sales of the company will decrease. Therefore, they play an important
role in running a business, changing the prices and demands of an association.
Social: This element primarily deals with customer need and preferences, as well as trends in
new markets. It also affects the business, but if the company cannot produce products according
to market and customer demand, it cannot increase the company's overall growth and sales of
association. In addition, Sainsbury needs to familiarize new marketing tools to increase sales
and patron approach. Therefore, it evidently demonstrations that social factors affect Sainsbury's
performance in the market, and the company can focus on all these facts and find a suitable
solution for them as it is ( Cypher, and et.al 2019).
Technology: This is one of the key factors that had a positive impact on the business during the
coronavirus era. In addition, SAINSBURRY uses digital marketing to enhance the auctions and
preserve smooth business operations within leading organization. In addition, technology
development is one of the effective tool for attracting the customers as people are engaged in
digital world or technology. Due to that the company can increase the brand value.
Environmental Factors: Being sustainable in external areas, it has a significant impact on the
operation of the company as a business. However, SAINSBURRY requires environmental
management to be adopted by the organization to protect the environment from toxic chemicals.
The company carry out CSR activities in order to contribute to the development of society and
invigorate rural people. Organization can avoid use of plastic and all its processing functions are
environment related important ( Cepel, M. and et.al 2019).
Legal: This element consists of laws and regulations enacted by the Administration to preserve
peace in society. In addition to this, SAINSBURRY was found to comply with instructions such
as company law and labour law to avoid government interference. In addition, prior to entering
food production, SAINSBURRY was licensed to show that the organization is legal and
registered under the law.
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Porter five force
Buyer Bargaining Power : SAINSBURRY's customers have a high bargaining power because
of fierce rivalry in the retail sector and are likely to have similar products and alternatives
obtainable. Patrons' taste and preferences change as per the days are passing, so companies need
to meet and satisfy their customers in order to retain them. In addition, SAINSBURRY has
begun to offer high quality goods to patrons at low prices.
Supplier Bargaining Power: Due to the lack of high bargaining power of suppliers, a large
number of suppliers were available in market areas and serving the product and services . In
addition, if the price of a product changes, the supplier will switch effectively. Therefore,
Sainsbury uses an effective business model to provide customers with high quality products and
services at a reasonable price.
Alternative Threats: Fierce competition in the market provides customers with different
products and services, giving them the opportunity to modify products in the Supermarket
section. At the same time, customers focus on getting - products with high quality and reasonable
price, so SAINSBURRY offers them. Although the organization seeks to offer innovative offers
to its customers in order to increase their loyalty to the brand ( Belyaeva, 2018).
Competitive competition: There is fierce competition in the retail industry, and patrons can
choose between them. In addition, customers focus only on getting good nourishment at a low
price, so they can get good products at a reasonable cost. Sainsbury's follows a low pricing
strategy.
Entry Threat: Flexible standards and regulations increase the likelihood that new stores will
open and competition will intensify. In addition, the price of and the products of should not be
similar to the competitors of , but they can be used with legal permission. Therefore, Sainsbury's
can lose market share, and and need to manage profits. As a , new competitors are trying to limit
their profits by abandoning their initial profits and later bringing huge profits to the . Therefore,
the company can expand its business to other areas and respond to the changing business
environment.
TASK 4
In order for to succeed in the long term and short term, it is very important for companies to
meet the altering desires of superstores and carry healthier products to the market. At the same
time, the financial stability of the company due to the pandemic caused them to be closed for
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several months due to trading boundaries and altering customer favourites, which was a big
blow. The company's marketing strategy is also traditional , but it has not been able to attract
large customers and sales have not increased. Organizations also face a lot of competition, so it's
important for companies to use innovative marketing techniques ( Băeşu and Bejinaru, 2020).
Therefore, here are some area of improvement and deliver assistance organizations address long-
term and short-term issues. companies are encouraged to utilize advanced technology to improve
their functionality and provide quality standard products to their patrons. At the same time, the 's
better technology helps recover the patron's shopping experience. Businesses must also follow
current pandemic guidelines in order to attract patrons and make them feel that shopping at
SAINSBURRY is safe.
 Digital encourage customer to leverage online business management through marketing.
This allows organizations to expand their network and business to other marketplace. In
addition to , this type of marketing allows SAINSBURRY to enhance brand awareness in
the market by sharing data about the newly launched products on several social sites.
Even though operational advertising benefits organizations in classify customer
preferences, favourites, and purchasing cycles. Therefore, has many advantages for
enterprises to use digital technology efficiently.
 It is to be counselled to corporation that it is able to take comments from the consumer
because it will assist in understanding the growing regions which want to be advanced via
way of means of corporation. In addition to this, comments from personnel are
additionally essential as they could up with modern concept to meet the want of
consumer in powerful way. Moreover a healthful relation want be controlled via way of
means of corporation so as live aggressive in longer term.
 Furthermore, corporation can use KPI equipment so as to degree fulfilment of
corporation in order that overall performance of agency may be advanced.
 Apart from this, it's going to assist the agency in expertise the location of corporation in
marketplace place with the intention to permit SAINSBURRY to make adjustment
withinside the commercial enterprise case. Thus, the usage of KPI device will permit in
assembly the strategic dreams in powerful way via way of means of giving the evaluation
of commercial enterprise or any section.
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Moreover, this notion will now no longer most effectively assist in longer term however it will
likely be useful for the corporation in quick because it will beautify the income of the consumer
thru logo fee and product offerings supplied via way of means of SAINSBURRY . Also if
income will growth so will economically balance of corporation to be able to permit the agency
to put money into new commercial enterprise opportunity. During the time of pandemic on line
commercial enterprise become the primary cause for reinforcing income of corporation so this
may permit SAINSBURRY to fulfil with the brand new modifications in coming 12 months and
to setup new dreams. With assist of on line advertising it will likely be clean for the corporation
to overcome the opposition as evaluate to conventional way. The corporation also can open 24/7
to be had keep on excessive streets with more carrier centres in order that marketplace income
may be increased . The promoting of the corporation will assist in boosting the income and it
ought to additionally decrease down the rate of top class first-rate product so as to growth
revenue. The corporation also can offer loose clinical take a look at up for antique age and fitness
offerings so as to entice consumer because it will advantage the agency in superb way. For
enhancing the marketplace function it's miles crucial for SAINSBURRY to feature new
merchandise of their corporation.
CONCLUSION
From the above file it's been concluded that SAINSBURRY hold their outside and inner
stakeholders satisfy. It has been summarized that so as to be a hit it's miles essential for
corporation to evaluation the outside marketplace place because it effect at the commercial
enterprise operation. The examiner has analysed PESTEL and Porter 5 pressure so as to
recognized the elements with the intention to have an impact on the corporation growth.
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REFERENCES
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Cypher, and et.al 2019. Communication activities in the 21st century business
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Davids, F.J., 2018. Understanding business strategy factors that support or impede moving
business capabilities to a cloud environment (Doctoral dissertation, University of Cape
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