Business Environment Analysis Report: Sainsbury's PLC (2024)

This report provides a comprehensive analysis of Sainsbury's PLC, examining its business environment. It begins by defining the business environment and then explores different types of organizations, including private, public, and voluntary sectors, detailing their purposes and legal structures with Sainsbury's as a case study. The report then delves into the size, scope, mission, vision, and objectives of various organizations, including Sainsbury's, the National Audit Office, and Cancer Research. Furthermore, it investigates the interrelationships between different organizational functions within Sainsbury's, such as production, marketing, human resources, and finance. The report also analyzes the positive and negative impacts of macro-environmental factors, using PESTEL analysis to assess political, economic, social, technological, environmental, and legal influences on Sainsbury's operations, and includes SWOT analysis. The conclusion summarizes the key findings regarding the business environment's influence on Sainsbury's PLC.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1Different types of organization and their purposes.................................................................1
P2 Explain the size and scope of a range of different types of organisations.............................3
TASK 2............................................................................................................................................5
P3 Relationship between different organisational functions.......................................................5
TASK 3............................................................................................................................................6
P4 Positive and negative impacts of macro environment upon business operations..................6
TASK 4............................................................................................................................................8
P5Internal ans external analysis..................................................................................................8
P6Interrelationship of strength and weakness with external environment..................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The combination of external and internal factors which effect the operating activities both
positively and negatively is refer to as business environment. The factors which effect the
business environment are clients, suppliers, customers, technological, political and many more.
This assignment takes into consideration Sainsbury Plc company which is the famous and second
largest super market with its headquarter in United Kingdom . It was founded by John James
Sainsbury in 1869. The presented document gives the brief about the different types of
organizations with there legal structure. In addition to this the project throws light on the
different department of an administration and their interrelationship with each other. Lastly, this
written report and which is mainly done focuses on identification of micro and macro
environmental factors with the help of SWOT and PESTEL analysis.
TASK 1
P1Different types of organization and their purposes.
Business environment refers to the surrounding environment of an organization which consist of
external and internal factors that impact on company's both positively and negatively.(Andersson
2015) Factors such as customers, clients, employees, technological, business regulations,
political etc. There are specifically three main types of administration which is public, private
and voluntary organization. Each organization have their own purpose which need to be achieved
within predetermined time period so s to increase the revenue generation. The purpose and legal
structure of each organization is explained below:
Private organisation: It is an organization which is carried out by group of individuals or by
single person, not by any legal authority. Main aim for which the private organization is
established is just for the sake of making profit. One of the example of private organization is
Sainsbury Plc which is one of the famous retail industry in UK.
Purpose: Main purpose of private sector organization is to survive by earning huge amount of
profit. Whereas the main purpose of Sainsbury Plc company is to make quality foods so as to
help customers to eat healthier food products.
Legal structure:There are mainly three types of legal structure for private organization which is
explained below:
1

Sole proprietorship- It is the simplest business which is operated by the single owner and is not
the legal entity.
Partnership- It is the formal agreement between two or more parties so as to carry out business
operation all together by sharing equality ration of profit and loss of the company.
Limited company- It is the corporate structure where the owners and the member of the company
are liable for the debts only to the extent of the amount of funds invested by them.
Therefore, Sainsbury Plc is a public limited company which is carried by members in order to
render healthy foods to the citizens.
Public organization: This type of organization are operated by the governing body. Its main aim
is to render services for its citizens.(Bocken 2016 One of the example of public sector
organisation is National Audit Office which is one of the independent parliamentary body
located in United Kingdom.
Purpose: Main purpose of public sector enterprise is to render public services not to make profit.
Whereas the purpose of National Audit office is to audit the money value within the management
of public policy.
Legal structure:The legal structure of public sector organization is divided into three categories
which is stated below:
State government- This is a government which shares their political power with the federal
government and it main responsibility is to makes laws and regulations for state.
Local Government- This types of government are also refer to as local council whose main aim is
to handle the communities needs like town planning, public recreation facility and many more..
Central Government- It is the supreme governing body whose main role is to oversee the
national defence, finance and to protect the right of citizens.
Therefore, National Audit Office follows the central government structure who oversee and
manage the audit of money value so as to render public service.
Voluntary organization: This is an organization which is commonly formed by the group of
individuals so as to accomplish their common interest and goals. (Bocken. and Shor 2015))One
of the example of voluntary organization is organisation is Cancer Research which is situated in
United Kingdom
2

Purpose: The main purpose of Cancer Research organization is to conduct research about the
prevention,diagnosis and treatment of disease so as to minimise the death rate which is mainly
due to the cancer taking place.
Legal structure:There are mainly two types of legal structure for voluntary organization and
they are explained below:
Trust- It is type of organisation which is established by a team mainly for the purpose of
charity. In addition to this it doesn't have separate legal entity but it is the relationship with the
trustee who carries out the business on the behalf of other member.
Association- It consist of group of individuals who enter into an agreement so as to accomplish a
mutual objectives, aim and purpose other than profit.
Therefore, Cancer research organization is an association of which the member major purpose is
to minimize the death rate which is caused mainly due to cancer.
P2 Explain the size and scope of a range of different types of organisations
There are mainly three types of an organization namely public, private and voluntary and
each have their respective size, scope, vision and mission which are explained below(Charter,
2017):
Private organisation:
Background of company: Sainsbury is a private limited organisation and it was founded by
John James Sainsbury in 1869 at United Kingdom.
Products and services: Sainsbury Plc company classify its products into hypermarket, super
market and convenience shop etc.
Size: In Sainsbury Plc company there are 181,900 employees who all are working to
accomplish organizational goal. In addition to this, it has approx 1415 shops worldwide so as to
serve across all over the world.
Scope: Sainsbury Plc company not only serves their products and services in United Kingdom
but also in all over the world.
Mission & Vision: Sainsbury Plc company vision is to be the the world largest super market
retailer company. Whereas, mission of the company is to serve clients’ by rendering quality
food items at reasonable prices.
3

Objective: Main objective of Sainsbury Plc company is to give good financial return to
investors.
Public organisation:
Background of company: National Audit Office is a public administration company which
was founded in 1983 by the government of United Kingdom.(Trevino, 2016))
Products and services: Company mainly specialise in auditing the money value so as to render
public services.
Size: In National Audit Office,there are approx 798 employees who are working to achieve
organizational aims and objectives.
Scope: National audit office not only offer services of auditing money value in united kingdom
but also serves in different areas of UK so as to give assurance to the public.
Mission & Vision: To promote good governance by enhancing accountability in the public
sector as well as to promoting social responsibility.
Objective: Objective of National audit office is to provide best environment to their workers
by enhancing continuous learning and improvement in team work.
Voluntary Organisation:
Background of company: Cancer Research is a voluntary organization which was founded
in 2002 with its headquarter in United Kingdom(Deasy. 2016).
Products and services: Cancer Research Company is as charitable organization which mainly
deals in providing better treatment and services to the people who all are suffering from cancer
diseases.
Size: In Cancer Research Company there are 3,960 workers and 40,000 volunteers who all are
working to achieve the target of an organization.
Scope: Cancer Research Company render its services in countries like England, UK etc.
Mission & Vision: Mission of the Cancer Research Company is to prevent and cure cancer
through interdisciplinary research. Whereas the vision of the company is to provide highest
level of safe and compassionate care for patients suffering from cancer diseases.
4

Objective: main objective of the cancer research company is to decrease the death rate which
is mainly cause due to cancer disease.
TASK 2
P3 Relationship between different organisational functions
In order to accomplish organizational aims and objectives its the prime responsibility of
the manager to classify each operational activity of an organization into different departments.
So the the manager of Sainsbury Plc company divides each operational activities of an
organization into different functional department. Moreover each functional area are interrelated
with each other and their interrelationship with each department of Sainsbury Plc company are
explained below(Georgescu and Popescul2015):
Production and Marketing department: Its the key responsibility of marketing department of
Sainsbury Plc to sell out the product and services rendered by the production department in the
target marketplace. So it can be said that there is the interrelationship between the production and
marketing department as they helps in increasing the revenue generation for the company.
Marketing and Human resource department: Its the prime responsibility of human resource
department to recruit and select the best marketing manager for Sainsbury Plc company who can
easily influence the customers to purchase their products. So it can bes said that there is the
interrelationship between marketing and human resource department of Sainsbury Plc company.
Finance and Production department: In order to produce products with best quality there is
the huge requirement of funds to the production department of Sainsbury Plc company. So in this
case company should accumulate funds from the finance department so that they can carry out
there respective operational activities smoothly.(Hair Jr 2015) Thus, it is proved that there is a
interrelationship between finance and production department of Sainsbury Plc r company.
Production and research and development department: Major aim of Sainsbury Plc company
is to satisfy the needs of customers, so taking into consideration the needs and preferences of
customers production department produces products. But the production department cannot
produce goods as per the needs of customers without the help of Research and Development
department. As the research and development department major role is to identify the needs and
preferences of the customers that are changing with the change in time. Thus, it is proved that
5

there is the interrelationship between production and research and development department of
Sainsbury Plc company.
Thus, overall it can be said that each department of an Sainsbury Plc company are interlinked
with one another so there should be proper coordination and communication among each
department of individuals. Thus it helps in accomplishing organizational aims and objectives on
specified time schedule.
TASK 3
P4 Positive and negative impacts of macro environment upon business operations.
Macro environmental factors refers to those which are not under the control of the
organization. Sainsbury Plc takes into consideration pest analysis in order to identify the factors
affecting the business.(Patrick 2016) Each macro factor have positive and negative influence on
Mark and Spencer company and they are explained below:
Political: Political factors are under the control of government which consist of trade
policy, labour law and many more. Positive and negative impact of political environment on the
Sainsbury Plc company are explained as follows:
Positive impact Negative impact
If the Sainsbury Plc r company follows and
mould itself as per the changes taking place in
the political factors then it helps in reducing
source value and helps in building of brand
value of the company.
Negative impact of political factors on
Sainsbury Plc company is that tit affect the
operational activities of the company .
Economical:These factors includes inflation rate, rate, exchange rate, economic growth and
many more. Positive and negative impact of economic factors on Sainsbury Plc company are as
specified below:
Positive impact Negative impact
If there takes place reduction in the inflation
rate then it helps in increasing the purchasing
If there takes place ups and downs in the
economical factor like rise or increase in
6

power of workers working in Sainsbury Plc
company.
inflation rate then it affect the strategies of the
company which is the negative impact on
Sainsbury Plc company.
Social: These factors consist of changes taking place in religions, rules , culture,and norms of the
society. Positive and negative impact of changes in social factors on Sainsbury Plc company are
explained below(Pearson, 2017):
Positive impact Negative impact
If the Sainsbury Plc company takes into
consideration the needs and preferences of the
society then it will help in boosting up the
revenue for the company.
Similarly, if the Sainsbury Plc company
ignores the society needs and preferences then
it will negatively impact the brand image of the
company.
Technological: Advancement in technology is taking place in the modern era which
impact the Sainsbury Plc company both positively and negatively and they are explained below:
Positive impact Negative impact
Changes in technology advancement will lead
in increasing the profitability level for
Sainsbury Plc company.
If the Sainsbury Plc r company adopts the
changes in technology then again the company
have to render training and development
session to their workers which is the costly
method.
Legal: It refers to the laws which are passed by the government according to which the
Sainsbury Plc company have to process out its operational activities. Positive and negative
impact of these factor are explained below:
Positive impact Negative impact
Helps in building long term relationship with
investors if the Sainsbury Plc company carries
out it process legally.
If the company carries out its process legally
then it is a time consuming process as well as
costly.
7

Environmental: These factors refers to the surrounding which keeps on changing and
are uncontrollable factors like tsunami, earthquake etc. Positive and negative impact these
factors explained below:
Positive impact Negative impact
If the company produces eco friendly products
then it will helps in increasing the productivity
and profitability level of the company.
Similarly if the Sainsbury Plc company doesn't
create goods which are environment friendly
then it will negatively result in decrease in
demand of the customers.
TASK 4
P5Internal ans external analysis
Internal and external analysis must be done by every organisation so as to identify the
strength and weakness of an organization.(Rong, 2015) This can be done only with the help of
SWOT analysis. So the Sainsbury Plc company uses the SWOT analysis in order to identify the
strength, weakness, threats and opportunities so as to accomplish the organizational goals
smoothly without any hurdle.
Strength Weakness
Major strength of the Sainsbury Plc company
is its clear brand image and multiple channel of
presence .In addition to this right expansion
move from from small groceries store to
convenience store which is the major strength
for the company.
Main weakness for Sainsbury Plc company is
inability to enhance its market share because of
inadequacy in capital. In addition to this
increase in employee turnover is also a
weakness for the company.
Opportunities Threats
Opportunities which the Sainsbury Plc
company can avail is by expanding its market
share in Asia by producing traditional dresses
as per their requirement.
Major threat to Sainsbury plc company is the
competitors like mark and Spencer which gives
the stiff competition to the company in the
market place.
8

P6Interrelationship of strength and weakness with external environment
Macro environment refers to as external factors like political, technological and many
more which impact on strength and weakness of Sainsbury Plc company environment. Therefore
interrelationship of strength and weakness with external environment are mentioned
below(Schaltegger and Wagner,2017):
Political factor: Political include government policy,norms and regulations. Major strength of
Sainsbury Plc company is clear brand image which is achieved just because the company adopts
the changes taking places in government laws and norms. Whereas the weakness is unable to
expand its market in foreign nation this is just because company doesn't accept the changes made
by other nation government.
Economical factor: This factor consist of tax policy, deflation rate, interest rate, inflation rate
etc. Clear brand image is the strength of the Sainsbury Plc company this is because company
accepts the changes taking place in economical factor. Whereas, the company is unable to
expand its market in foreign nation which is the weakness for the company and this is because
the company ignores the changes taking place in inflation rate, tax policy etc.
Social factor: This factor play an important role for the development of Sainsbury Plc company,
if the company takes into consideration the needs and preferences of society while producing
product(Sekaran and Bougie2016)s then will help sin boosting the clear brand image of
company. Whereas major weakness of company is employee turnover which is because the
company just treat their workforce just the machine as well as does not reward them for their
better performance.
Technological factor: This factors refers to the upgradation of software technology that are
taking place in modern world. When the Sainsbury Plc company adopts the changes taking
places in the technology then it helps in achieving the major strength of the company that is its
clear brand image in the market place. Whereas, the weakness of the company is that its is
unable to expand its market it is just because the company ignores and does not bring the
advancement in technology in the company.
Thus, over all it can be conclude that there is the strong interrelationship among the strength and
weakness of the company with macro factors.(Sodeyfi, 2016) If the Sainsbury Plc company
mould itself as per the changes taking place in the eternal factors then it will help in achieving its
strength. Whereas if the company does not takes into consideration the changes taking place in
9

macro factors then it will be suffer from major weakness like inability to expand, employees
turnover etc.
CONCLUSION
From the above mentioned report it can be conclude that there are three types of
organisations namely public, private and voluntary, each have there own purpose and legal
structure. In addition to this each organization have there respective size, scope, vision and
mission. There should be a proper communication and coordination among various departments
within an organisation because it helps in improving the decision making process of an
administration as well as helps is accomplishing organisational aims and objective. Moreover
through this report it can be conclude that external environment greatly impact on company
performance both positively and negatively. The manager of the company use SWOT analysis
so as to examine the strength and weakness of the company. Thus, with the help of such analysis
company can overcome their weakness and can easily accomplish the organizational aims and
objectives. Lastly, it has been concluded that there exist an interrelationship between the strength
and weakness of the company with the external macro environment.
REFERENCES
Books and Journals
Andersson, U., Forsgren, M. and Holm, U., 2015. Balancing subsidiary influence in the
federative MNC: A business network view. In Knowledge, Networks and Power (pp. 393-420).
Palgrave Macmillan, London.
Bocken, N.M. And et. al 2016. Product design and business model strategies for a circular
economy. Journal of Industrial and Production Engineering. 33(5). pp.308-320.
Bocken, N.M.P., Rana, P. and Short, S.W., 2015. Value mapping for sustainable business
thinking. Journal of Industrial and Production Engineering. 32(1). pp.67-81.
Charter, M., 2017. Greener marketing: A responsible approach to business. Routledge.
Deasy, S. and et. al. 2016. Controlling use of a business environment on a mobile device. U.S.
Patent 9,247,042.
Georgescu, M. and Popescul, D., 2015. Social Media–the new paradigm of collaboration and
communication for business environment. Procedia Economics and Finance. 20. pp.277-282.
Hair Jr, J.F. And et. al2015. Essentials of business research methods. Routledge.
10

Patrick, P., Oracle International Corp, 2016. System and method for an infrastructure that
enables provisioning of dynamic business applications. U.S. Patent 9,262,127.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Rong, K. and et. al 2015. Understanding business ecosystem using a 6C framework in Internet-
of-Things-based sectors. International Journal of Production Economics. 159. pp.41-55.
Schaltegger, S. and Wagner, M., 2017. Managing the business case for sustainability: The
integration of social, environmental and economic performance. Routledge.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Sodeyfi, S., 2016. Review of literature on the nexus of financial leverage, product quality, &
business conditions. International Journal of Economic Perspectives. 10(2). pp.146-150.
Storey, D.J., 2016. Understanding the small business sector. Routledge.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do
it right. John Wiley & Sons.
11