Global Business Environment: PESTLE Analysis of Sainsbury's, UK

This report presents a PESTLE analysis of Sainsbury's, a major UK supermarket chain, examining the external factors influencing its business operations. The analysis covers political factors (e.g., Brexit), economic factors (e.g., fuel prices, wages), social factors (e.g., health consciousness), technological factors (e.g., e-commerce), legal factors (e.g., regulatory frameworks), and environmental factors (e.g., carbon footprint). Each factor's positive and negative impacts on Sainsbury's are discussed, providing insights into how the company can navigate challenges and capitalize on opportunities within the global business environment. The report concludes that Sainsbury's must effectively manage these PESTLE factors to maintain its market share and ensure sustainable growth. References to supporting literature are provided using the Harvard format.

GLOBAL BUSINESS ENVIRONMENT
1

EXECUTIVE SUMMARY
Sainsbury's is a prominent player among the supermarket chains operating in the UK.
The organization faces a tough competition in the industry along with various other factors
which can be classified as the political factors, economic factors, social factors, technological
factors, legal factors and environmental factors. The factors include hike in the fuel prices,
imminent Brexit, carbon footprint contribution, changes in customer needs and behaviours, etc.
Each factor has it positive and negative impacts which have to be dealt by Sainsbury's effectively
and efficiently in order to sustain and capture the market share in the economy.
2

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK...............................................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
3

INTRODUCTION
Global business environment is referred to the global scenario which affects the working
situation of the indigenous organization. It has an impact on the decision making and resource
utilization of an organization. Sainsbury's is a UK based supermarket chain which was
established in 1869. At present, it is the largest supermarket chain in UK with more than 1500
stores across the country (Doh, Luthans and Slocum, 2016). The study revolves around the
PESTLE analysis of Sainsbury's, UK.
TASK
The pestle analysis refers to the analysis of the Political, Economic, Social,
Technological, Environmental and legal factors which have an impact on the internal business
operations of an organization.
 Political factors: The factors that occur due to the political decisions or instability in the
country and which affect Sainsbury's are termed as political factors such as imminent
Brexit.
Positive impact- The positive impact of the Imminent Brexit is that presently the effects are
minimal can not be particularly determined.
Negative impact- The negative impact of the imminent Brexit is the it will lead to increase in
import rates and hence it will lead to rise in product pricing which will ultimately provide market
to competitors who are offering same products at lower price.
 Economic factors: The economic factors refers to the various actions in the economy
such as hike in fuel prices, higher wage movement at sainsbury's.
Positive impact- The organization will look for the alternative means of transport which would
positively effect the organization in future (Hamilton and Webster, 2018).
Negative impact- Due to the hike in fuel prices there will be increase in the price of products and
ultimately Sainsbury's will lose the low income customer group.
 Social factors: There are various social factors like health consciousness of customers
and fair trade movement which have an impact on the operations of Sainbury's.
4

Positive impact- Fair trade movement is about informing customers about the source of their
food and hence the customers tend to pay extra to the organization for their fair trade (Kasemsap,
2018).
Negative impact- Sainsbury's is known for its fast food and due to the increasing health
awareness people have shifted to healthy food routine and hence Sainsbury's must include
healthy food in their menu.
 Technological factors: There are various technological changes introduced by the
company which effect the operations at Sainsbury's.
Positive impact- The e-commerce store is effecting the operations of sainsbury's in a positive
way. It helps in facilitating the new techno savvy generations.
Negative impact- The unavailability of the proper network or the server break down has a
negative impact on the working of Sainsbury's.
 Legal factors: Every organization has regulatory framework which need to followed by
the personnels.
Positive impact- The regulatory framework leads to efficient decision making at Sainsbury's.
Negative impact- Delay in regulatory framework can often lead to losing the opportunities.
 Environmental factors: These are the factors which are caused due to the environmental
conditions and affect operations at Sainsbury's.
Positive impact- Sainsbury's is looking for the alternatives in order to decrease their contribution
in environmental wastage.
Negative impact- Sainsbury's produces a huge amount of plastic waste and is the cause to
emission of carbon gases which is contributing to the increase in pollution (Kokodey, Gnezdova
and Lomachenko, 2018).
CONCLUSION
From the above report, it can be concluded that internal operations of Sainsbury's is
affected by various Political, Economic, Social, technological, Legal and Environmental factors
which have various positive and negative impacts.
5

REFERENCES
Books and Journals
Doh, J. P., Luthans, F. and Slocum, J., 2016. The world of global business 1965–2015:
Perspectives on the 50th anniversary issue of the Journal of World Business:
Introduction to the special issue.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kasemsap, K., 2018. Mastering business process management and business intelligence in global
business. In Global Business Expansion: Concepts, Methodologies, Tools, and
Applications (pp. 76-96). IGI Global.
Kokodey, T., Gnezdova, I. and Lomachenko, T., 2018, October. Modeling the global business
environment based on polycyclic theory. In The International Science and Technology
Conference" FarEastСon" (pp. 487-499). Springer, Cham.
6