Business Environment: Sainsbury's and UK Retail Report

This report provides a detailed analysis of the business environment, focusing on the UK retail market and Sainsbury's supermarket. It begins by differentiating between public, private, and voluntary organizations, followed by an examination of micro, small, medium, and large-scale orga...Read More

Business and Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
P1. Different Types of organization. ..........................................................................................1
P2. Size and Scope of the organizations. ...................................................................................3
P3. Organization structures and functions..................................................................................6
PART 2............................................................................................................................................7
P4 Identification of positive and negative impact of Macro environment factors on UK retail
market Using Pestle analysis:......................................................................................................1
P5. Internal and External assessment of UK Supermarket to identify its strength and
weaknesses. ................................................................................................................................2
P6. Strength and weaknesses interrelated with external macro factors. ...................................4
Conclusion ......................................................................................................................................4
REFERENCES ...............................................................................................................................5
Books and Journals.....................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business Environment refers to all the external as well as internal factors or elements
affecting the various functions of an organization including the customers, employees, business
regulations, management of the company. Internal Factors are those which are not able to control
by the organization and Internal factors are those which able to control by organizations. This
report will identify and describe the size as well as scope of various types of organizations. The
report will focus on identifying the factors affecting the business operations of Sainsbury, a UK
super market and the aim of this assessment is to gain knowledge and understanding about
impact on business functions on the retail sector of UK. Pestle analysis and SWOT analysis and
Porters Five Model forces is also taken to identify the positive and negative impacts the macro
environment has upon the UK Sainsbury's Company.
PART 1
P1. Different Types of organization.
Difference between public, private and voluntary organization. To evaluate differences
three different organizations working in different sectors has been taken into account.
Basis of Differences Public Private Voluntary
Ownership These are mainly
owned and funded by
government. The
national health service
organizations of
United Kingdom is
wholly owned by
government sectors
(Ramadan. and
Ahmad, 2018).
The private
organization are
wholly owned by sole
proprietor, partner or
as a joint venture who
has an acute interest in
profit earning and
maximization of
profit. Sainsburry
company being a UK
based retail chain of
It is usually owned and
run by a group of
people which have
purpose rising the
society. These are the
organizations works
for the welfare of the
society. They
contribute towards
wipe-out the
prejudices from the

the super market has a
sole aim of earning
profit and enhancing
its expansion and
becoming the leading
supplier (Begg, van
der and Levy, Eds.,
2018).
community started at
midget platform not
having the motive of
earning the profit.
DCA, EURAD are
NGO's among the
organizations in UK
working as voluntary
organization.
Meaning The public company is
able to list to its share
in the stock exchanges
for the intention of
purchase by general in
the public eye.
The private limited
companies is not
suitable for public
listing of shares. They
raise money by selling
shares and debentures
to shareholders.
The voluntary
organizations being a
non registered
company cannot take
part in these and
normally has a small
area of transaction
which does not require
large amount.
Business Aim Maintaining the well
being of the people is
the main intention of
public sector
enterprise. There arr
many public sector
enterprises in UK
which are rendering
health assistance, free
The main aim of
private organization is
to make huge amount
of profit. In this sector
there no intention of
benefiting the
society. The profit
earned by the these
private sectors are
The main intention of
Voluntary
organizations are
welfare of the society
not the aim of profit
earning. Organization
such as DCA,
EURAD are the
working for the

facility of food in a
best way.
some distributed to
shareholders as
dividends and some
proportions are kept
for reserve.
welfare of the society
y eradicating the
poverty.
Mission and Vision The vision of the
public company is
safeguarding and
protecting health of
people in UK with the
mission of [providing
regular examination.
Sainsbury being a
profit making firm
wants to achieve its
vision of leading
supermarket chain in
UK. The mission and
vision of these sectors
are only making profit
(Solodilova, Malikov
and Grishin, 2018.).
DCA, EURAD being a
voluntary
organizations has
vision of safeguarding
society and mission is
what the amount of
profit is earned is use
for the society not for
personal use.
P2. Size and Scope of the organizations.
Difference between Micro,Small, Medium and Large Scale organization.
Basis Micro Small Medium Large
On the basis of
operation
The scale of
operation of
micro
enterprises are
small. The
capital and
platform of
operation of
The scale and
scope and size
of these
organization is
small as they
are control and
owned solely
proprietor or
Medium
organization
have a
moderate scale
of operations
and an average
size
employment to
Big organizations has a
large scale of operation
with huge amount of
fund investment. And
the profit of these
enterprises is so large.
The projects of these
large enterprises is big

the firm is also
small.
corporation, so
they are
generating
small revenue.
minimum
workers. They
have usually
greater
investment
funds of which
create higher
revenue
(Turban, E.
and et.al,
2018.).
and cost and revenues
are also in large term.
On the basis of
Turnover
The micro
structure has a
smallest
amount of
turnover
which do not
surpasses
beyond $1
million.
The small
structure
create
$1million and
$25 million
turnover in a
specific year.
The medium
size structure
create between
$25 million
and up to $250
million
turnover in a
specific year.
The large business is
intended by business is
where the turnover
surpasses $350 million.
On the basis of
Workforce
The micro
business is
operate either
by solitary
person or by
group of
people and
The small
scale
operations
tends to have
minimum 20
and maximum
50 workers
The medium
size enterprise
has approx
100-120
workers
working at a
particular
Th large or
multinational level
organizations have
more than 120 workers.
All the workers
working have a
common goal of

generally in
micro
enterprises
there are no
workers.
working at a
particular
working place
at a particular
time.
place at
particular time
on a single
program.
achieving the
organizational target.
On the basis of
growth and
sustainability
The micro
enterprises
have less
growth rate.
And
sustainability
is also not for
long period.
The small
scale
enterprise
growth rate is
some times
high and some
time low.
Subsidies
provided by
government in
proper way
increase the
growth rate in
great extend.
And
sustainability
is depend on
the profits and
also help by
government
(Namvar, and
et.al, 2018).
The medium-
size enterprise
growth rate is
average but
more than the
small and
micro
enterprises and
the level of
sustainability
is as per the
profit of the
firm.
The Growth rate of
large enterprise is
adorable. The profit is
very high which
directly increase the
growth rate of the
business. And the level
of sustainability is for
long period and
sometimes going for
lifespan.

Market Share The market
share of Micro
enterprise is
very less.
The market
share of Small
scale
enterprises is
not so high no
so low.
The market
share of
Medium
enterprise is
moderate but
more than
micro and
small scale
enterprises.
The market share of
large scale enterprise is
more than all those
enterprises. The market
share is very much
huge.
Profit Share The Profit of
micro
enterprise is
low as it
sometimes not
able to cover
up the cost of
operation.
The profit
share of small
scale
enterprises is
not so high not
too low, it
covers the cost
of the
operation.
Subsidy given
by government
increase the
profit of SSE.
The profit
share of
medium
enterprises is
average but it
is more than
micro and
small scale
enterprise.
The profit share of
large enterprise is in
huge amount.
P3. Organisation structures and functions.
The Structures on the basis of size and scope of operations- Their are three structures
which differentiate organisations in terms of size and scope are Matrix Structure, Divisional
Structure and Functional Structure. Sainsbury has matrix type of structure which has function

and division both being a international retail market. It is a loan-blend form of organizational
structure which has goodness of both divisional and functional structures. Sainsbury has
contrary departments merchandising different trade good and managers assisting wide range of
services needs to have a matrix kind of structure so as to perform activities in a structural way.
Every organization has a particular structure which tends to differentiate it from other firms
regardless of the level of scale of operations.
Transnational, International and Global organisation structures- The type of firms
structures being transnational, international and Global organisations influenced specific section
of market which helps in deciding the market share and profit of the firm. International structure
included those firms which export and import business in the country having no investment
outside the domestic country. Those firms which has investment in world wide are the global
enterprises. The transnational structure is a complex type of structure of firms which have
investment in foreign institutions (Kopnina and Blewitt, 2018).
Interrelationship between functions and mission and goals and objectives of organisation.
To become a leading retail store in UK is the mission and Vision of Sainsbury. The
functions taken into consideration are-
Human Resources Management- HRM is a crucial part of the organisation. As the human
resources is the assets of the business. Managing human resources so as to maintain quality of
operation as in Sainsbury. Human Resources in both human natural is mandatory for
organisation to lead in the world.
Marketing- marketing is being the most crucial function of the organisation. This being one of
the most important to know the growth and opportunities in the market. Sainsbury's marketing
strategies is very effectively and efficiently conducted by the management.
Finance- To start a business whether micro, small, medium or large, each one needed fund.
Without fund a single task cannot be started. Each and every organisation has to plan the budget
before starting the operation (Ayios, 2018.).
PART 2

P4 Identification of positive and negative impact of Macro environment factors on UK retail
market Using Pestle analysis:
For the growth and development of economy and GDP of the UK market, retail
marketing has a great contribution in it. It is being one of the major player and generating vast
amount of revenue from it. But there are some macro- environmental factors present there which
affect its retail marketing in UK (Beatty, Samuelson,and Abril, 2018.). The impact of PESTLE
analysis that is been used for the assessment of UK's retail market is as follows:
1. Political Factors: Political factors like government policies and regulation of the retail
industry is the major element that impact the operations of a retail firm in UK market as
affect its revenue and profitability of the market. M & S, Asda, Tesco, Plc and
Sainsbury's mitigated their operation and control the functionality of the firm in a very
adverse manner due to political instability. The retail market has to look after the better
management of its organisational actions and control them to gain a good sustainability to
overcome such situations.
2. Economical Factors: To control the business operations in better way firms like M & S
and Asda cuts off their work force or reducing the functional capability to control the cost
requirements of the firm due to some major economical factors. Unsuitability of the
economic factors has caused firms like M & S to shut off their outlets which has
impacted their revenue generation. For better growth and development of an enterprise
positive economic conditions are must while a negative environment will definitely has a
impact on its core competencies.
3. Social Factors: It has a great impact on basic functionality of the organisation and its
core operations. Structural functioning and management reshuffling at Sainsbury's is due
to social factors which has a great impact on it's work force and functions which has
created a risk for the employee's of the firm to face a job cut. This will also impact the
overall actions of the enterprise (Caiazza, Shimizu and Yoshikawa, 2017).
4. Technical Factors: To increase the production capacity and running of the retailing
organisation advancement in technology has a great impact. Firms like Tesco, Plc
cropped 17,000 jobs just to implement the latest technological tools and measures, as will
help these firms rise in their operational capabilities. The implementation of technology
can be beneficial for both retailer as well as customers also.

5. Legal Factors: To function effectively the organisation has to follow properly the legal
obligation by a retail firm in UK market. By following these legal rules, it will make the
firm to build a strong customer connection and stack holder trust level. This will make
firms like Tesco or Asda to give a good financial performance in the market.
6. Environmental Factors: Customers prefer better and ozone-friendly products and
services due to concern in environmental issues. It is also affected by the environmental
concerns such as packaging, waste reduction, renewable energy, etc. related to
environment are there before the retail sector. These changes will help the retailing firm
to come up with effective and new ideas.
P5. Internal and External assessment of UK Supermarket to identify its strength and weaknesses.
SWOT Analysis
Strength Weaknesses
With the rise in improvement of economic
conditions and technological stability has great
impact on the operation of a retail
organization. The retail organization has been
seen the most larger growth and increase in
revenue level in past five years in UK.
Sainsbury retail super market is growing more
and more than compare to other retail super
market in UK.
On the other hand, the retail organizations has
very deep impact on economy of UK by
catering a broad scope of their requirements
still they are not up the mark in structural setup
that act as the major loop hole for retail
industries. Their are many firms using
traditional approach of working which makes
them slow and hike in the cost of operations
and chance of errors (Gunasekaran. and et.al,
2018).
Opportunity Threats
The opportunities in retail market is advance
compare to other sectors. Retail sector has very
good opportunities for improving its service by
adopting latest technology and resources. By
taking advantages of opportunities which make
The lack of innovation and unwilling of
adaptability of technical furtherance can prove
a terminal threat of retail organization striking
its revenue generation and customer

company more profit for firm. satisfaction plane.
Competition level is also very high in retail
sector which also become the threat.
Porter's Five Forces Model
 Bargaining power of Buyer- The buyer plays a crucial role in the operation of the
organisation. They have prime cause behind the revenue generation of firm.
Bauer need good quality of products at reasonable price for that they do
bargaining. To control the bargaining power of buyer its is better to manage the
requirements and bargain in a systematic way to sustain profit margin.
 Bargaining Power of Suppliers- The retail firm are deep dependent on their
suppliers who furnish them amended services and products. The finer direction of
bargaining by suppliers and their interest will help the organisation to gain a
healthier sustainability.
 Thereat of new Entrant- In retail market, globalisation has emerged many new
retail industries which leads to hike in competition and has influence the
profitableness of Asada and Sainsbury retail firms.
 Threat of Substitution- This is the component that will effect the retail structure
that are not deep-rooted in UK market and thus requires to introduce and innovate
a trade good and service that will be able to meet the necessitate of the customers
and in a finer style. The implanted firm are immune but the undertaking which
are in their initial stages will be deeply impacted by evolution of innovative
commodity and service.
 Competitive Rivalry- Competition is cut through in the retail sector in UK. The
competition level is impacting the development and growth of retail sector. The
rise in rivalry will also cause the price of the product and services to fall down.
Apart, from this it also affect the revenue and profitability of the firm. The
operational activity is also affected by competition rivalry (Molnar, 2018).
On the basis of above investigation this can be assist that the business activity in UK retail
market will effect the growth and development of a retail industries in a finer manner. Hike in

economic condition and customer base is a major powerful point of a firm while the lack of
modern approach and strong competition by UK markets.
P6. Strength and weaknesses interrelated with external macro factors.
1. External factors have great role in affecting the strength and weaknesses of UK
retail sector. The growth and development is closely related by the strength and
weaknesses of organisation. The political and social factor has significant role in
identifying the strength and weakness of the organisation (Luthans, and Doh,
2018). The political and social component will ascertain the customer inferior of
the retail organisation that will help the administration of these organizations to
sort strategical plans of action to accomplish their competitive demand and supply
the necessitate of their customers and shareholders in a much amended way.
Furthermore, the transformation in economic stableness of market will lead to the
emergence in its potential customers and will thus lay a very heavy causation on
its income generation. The judicial and environmental facultative will cause the
firm to gain a finer market share, carry out its trading operations in much effectual
style and come up with advanced and amended services that will lay a very deep
influence on whole ability of a business structure. On the other hand, it will assist
the firm to gain a good competitive reward over its challenger. Apart from this,
the technological component that are been taken in circumstance by firm will lay
a very important and deep influence on a retail firm. This factors will assist in
amended adoption of innovative services that will influence the functional
capableness of an organization in a bigger way (Kopnina and Blewitt, 2018).
Conclusion
In the above report it can concluded that on the basis of that the business is largely
impacted by its functional and operational environment. The assessment of different organisation
, their size, function and scope support in finer way in handling the operational activities of the
firm. On the other hand, internal and external factor has deep role in influencing the growth and
development of the retail sector and the interrelatedness with strength and weaknesses is been
included. Porters five forces, SWOT Analysis and Pestle Model is taken for analysing the impact
of macro environment on the retail sector of UK.

REFERENCES
Books and Journals
Ayios, A., 2018. Trust and Western-Russian business relationships. Routledge.
Beatty, J.F., Samuelson, S.S. and Abril, P.S., 2018. Business law and the legal environment.
Cengage Learning.
Begg, K., van der Woerd, F. and Levy, D. eds., 2018. The business of climate change:
Corporate responses to Kyoto. Routledge.
Gunasekaran, A. and et.al, 2018. Agile manufacturing practices: the role of big data and
business analytics with multiple case studies. International Journal of Production
Research. 56(1-2). pp.385-397.
Kopnina, H. and Blewitt, J., 2018. Sustainable business: Key issues. Routledge.
Luthans, F. and Doh, J.P., 2018. International management: Culture, strategy, and behavior.
McGraw-Hill.
Molnar, A., 2018. Giving kids the business: The commercialization of America's schools.
Routledge.
Namvar, M. and et.al, 2018. Simplifying sensemaking: concept, process, strengths,
shortcomings, and ways forward for information systems in contemporary business
environments. Australasian journal of information systems. 22.
Ramadan, H.I.M. and Ahmad, S.B., 2018. The impact of business environment on performance
of manufacturing SMEs in Palestine: The empirical evidence. Asian Journal of
Multidisciplinary Studies. 6(2).
Solodilova, N.Z., Malikov, R.I. and Grishin, K.Y., 2018. Potential for development and
limitations of regional business environment. R-Economy. 1(2).
Turban, E. and et.al, 2018. Business-to-Business E-Commerce. In Electronic Commerce 2018
(pp. 123-166). Springer, Cham.

Ramadan. and Ahmad, 2018. Begg, van der ,F and Levy, . Eds., 2018 Turban, and et.al, 2018
Kopnina and Blewitt, 2018Molnar, 2018.Gunasekaran. and et.al, 2018Beatty, Samuelson. and
Abril, 2018Solodilova, Malikov. and Grishin, 2018Luthans. and Doh, 2018Ayios, 2018. Namvar
and et.al, 2018.

REFERENCES
Books and Journals