Report on Business Environment Analysis: Sainsbury and Iceland

This report offers a comprehensive analysis of the business environments of Sainsbury and Iceland, two prominent entities in the UK retail sector. It begins with an introduction to the concept of the business environment, differentiating between internal and external factors. The report then delves into the backgrounds of Sainsbury and Iceland, exploring their structures, scopes, and organizational objectives, and includes a comparison with the NHS. The analysis includes the size, scope, mission, vision, and financial performance of Sainsbury. The report further explores the impact of macro-environmental factors and conducts internal and external analyses, including SWOT and PESTLE frameworks. The report also examines the interrelationships between organizational functions and structures. The report provides a detailed understanding of the factors affecting the productivity, profitability, and competitive strategies of these businesses.

BUSINESS AND BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
P1) (a) Background of Sainsbury and Iceland............................................................................1
P2) Size and scopes of business entities.....................................................................................4
M1) Analysis of organisational structure, size link with its objectives......................................8
P3) (c) Organisational functions and its structures.....................................................................8
M2) Critical evaluation on interrelationships between organisational functions and its impact
on structures..............................................................................................................................10
PART 2..........................................................................................................................................11
P4) (a) Impact of macro environmental factors upon business operations of Sainsbury...............11
P5 (b) Internal and external analysis for identification of its strength and weakness...............12
P6 (c) Explanation about the strength and weakness which is linked with the external factor 13
M3, M4 Description about the Pestle and SWOT model with respect of Sainsbury................13
CONCLUSION..............................................................................................................................16
REFERENCE.................................................................................................................................17

ILLUSTRATION INDEX
Illustration 1: Sainsbury...................................................................................................................4
Illustration 2: Difference between public and private sector organisations.....................................8

INTRODUCTION
Business environment is composition of internal and external factors that affect
productivity and profitability of entity. In this regard, internal environmental factors are
controllable like; management of business operations etc. While, external environmental factors
are uncontrollable for including political, legal, socio-economic etc. The present report is based
on understanding different environmental factors as well their impacts on Sainsbury plc. It is one
of the largest supermarket chain of UK that provides groceries and food items services to a
million customers worldwide. In this regard, structure and scope of public, private and voluntary
sector organisations are to be described. Moreover, different departmental functions of entity
including structures is to expressed through this assignment. However, internal and external
environmental factors including SWOT and PESTLE analysis can be presented that influences
profitability and competitive strategies of Sainsbury. Thus, students are able to understand
several aspects of business environmental factors that are related with further business operations
through this report.
PART 1
P1) (a) Background of Sainsbury and NHS
There are large number of entities in UK that operate in different sectors like;
manufacturing and operations, production, retail, IT and so on. However, some organisations
belong to private and public sectors that is linked with its business operations and decision
making process regarding activities (Lewis, 2013). For instance; decisions related to business
operations are made according to policies created by government for public sector. While, on the
other side, private sector entities are free from regulations in business operations. In this regard,
general background public and private sector entities can describe as below:
Public sector organisations: Under this sector entities, government plays essential role
in business operations also creates policies regarding business activities. However, these
organisations are mostly linked with public welfare and also accomplish government projects.
For example; water supply, school, colleges, healthcare entities etc. There are large number of
entities who work in under public sector of the country in different industries (Pancoska and
Carr, 2014). For instance, Tesco, Sainsbury, Morrisons, Marks and Spencer, NHS etc. In order
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to this, general background including product services, purpose, legal systems of NHS can be
understood as follows:
General background:
It is one of the wide spread health and social care organisation of UK which provide
medicals and treatment services in wide range. However, it is spread all over the world for in
social and health care sector also provide proper hospitalisation (Cantwell, Dunning and Lundan,
2010). Including this, it is also considered that million of people take advantage of its services
globally also getting increased on larger scale in health care and hospitalisation.
Purpose:
Objectives of public sector organisation can be understood as:
 To maximize social welfare and building up society's trust with hospitalisation of NHS.
 To contribute in increasing government fund on large scale for nation's development. To following on rules and regulations made by government regarding business
operations.
Legal status:
It is public sector organisation therefore, it has to follow on some rules and regulations
amended through government policies of UK (Snieška, 2015). However, provisions presented
under government policies are followed on regarding hospital entity and its operations. In order
to this, restrictions on production and distribution of goods are also mentioned that remains
suitable for social welfare and country's social development.
Private sector organisations: These are those entities which are free from restrictions
and regulations regarding business operations. However, director and managers of the
organisation make their own decisions regarding activities for production of goods and
innovations in its quality services (Tibbetts, Jeremyand Danika, 2013). Examples of private
sector organisations in UK are such as; River Island, Iceland, Primark etc. who operates in
different industries.
 Establishment and general background:
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Sainsbury plc is a private sector organisation which works under retail sector. It is one of the
largest supermarket chain of UK with 16.9% shares known for grocery retailer. It spreads across
UK and globe. It is establishment in 1869 headquartered in London. Its chairman is David Tyler
and CEO is Mike Coupe who take decisions regarding management of entire business operations
(Reinalda, 2013).
Product services:
Sainsbury plc is grocery and food retailer of UK that provides its quality services to
customer at maximum level (Hamilton and Webster, 2015). Including this, it also provides online
delivery of goods as per customer convenience.
Purposes:
Objectives of Sainsbury as private sector organisation can be expressed as:
 To maximize sales revenue and profitability of Sainsbury.
 To improve quality services of the organisation increasingly. To expand business entity across the country as well internationally.
Product services: It is private sector retailer of groceries and frozen food items. Including
this, it also known for providing fresh goods to a million people globally has as well has good
reputation (Wetherly and Otter, 2014).
Legal status: It is private sector entity for which decisions related to business operations
are taken by top level managers and main operators. However, government interferes less in
business operations of Sainsbury. Therefore, strategies and planning regarding activities are done
at own level mostly (Willems, Boenigk and Jegers, 2014).
P2) Size and scopes of business entities
Sainbury: Number of employees: Employees are the basic asset of organisation, Sainsbury focuses
on recruiting the best and skilled staff which basically focuses on two major factors that
are efficiency and effectiveness of employees. It is one of the largest chain of
supermarket industry that is why its centre of attention is on maintaining the quality of
staff. According to recent analysis Sainsbury has 162,700 employees working for the
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company on global level (Welford, 2013). In addition to this, there is low rate of
employee turnover that is good for entity and its services. On the basis of this analysis,
effective coordination of workers is gained that influences customer dealing and other
services of entity.
 Size and scope:
Sainsbury is one the largest supermarket chain of UK provides groceries and food items
to a million globally. It has several stores internationally as well enhancing its efficiency on
larger scale. However, different people from different countries demand for its products and
services at maximum level affect further implementation.
Including this, it has around 1400 stores across UK also has large number of customers
globally who demand for its items and services on large scale. Its net income is 470 million
which financially strength and ability to create innovations and further operations (Aishah,
Mbachu and Phipps, 2013). Therefore, it is the largest chain of retail sector famous for its
services also remains able to sustain its market position for long time periodicity.
 Mission and vision:
Sainsbury views its growth in further years at the highest level for providing its services
and ranking 1st order in retail sector organisation of the country. However, its profit margin and
competitiveness is getting increased on large scale affect effectiveness and long term
sustainability in competitive market. It is private sector retailer of UK which is wide spread for
providing groceries and frozen food across the country (Halbert and Ingulli, 2011).
 Gross annual turnover: It is very important for the company to have positive and
increasing gross annual turnover to maintain its market image and stability. Sainsbury
from past many years is serving its services but according to given figures, it was
discovered that Sainsbury Gross annual turnover in 2015 was 23,775m pound, in 2016 it
was 23,506m pound, and in 2017 it further decreased to 23,224m pound (Craig and
Campbell, 2012). Continuous decrease in annual turnover is not a good symbol for the
company, that is why the firm should focus on its development like, whether to innovate
a new product or to make changes in services like offering commodities at discounted
prices, making use of promotional campaigns etc.
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Therefore, it is increasing its profitability from last years rapidly. Its gross annual turnover is
almost in favour of entity and its further operations. As per analysing its financial growth and
proper development, it can forecast that in future time, it will develop its business and
competitive strategies at maximum level.
 Market Share: The company has been the best performer in super market industry but
now it is turning very difficult of Sainsbury to maintain its market stability. Further, with
the decreasing gross annual turnover its market share is also coming down in the graph
continuously (Sainsbury plc, 2016). According to the given figures its market share is
falling rapidly, Sainsbury share fell from 16.9pc to 16.5pc in 12 weeks. Hence, it is the
first time when its market share fallen by 0.4pc points.
 Operations & Scope, Size of Sainsbury:- It is the most popular departmental store of the
UK which provide there customers frozen & non frozen as well home delivery services &
fulfil the needs & wants to their customers.
NHS
 Number of workers: There is around 1.6 million workers provide health and social care
services internationally. Including this, service providers deal with patients effectively to
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Illustration 1: Sainsbury
(Source: Sainsbury plc, 2016).

build up their trust with treatment and hospitalisation (Carroll and Buchholtz, 2014).
Therefore, increasing number of workers is determined for providing its services and
contribution in nation's effectiveness.
 Scope: It places on the top rank for providing treatment services and hospitalisation to a
million people of the country. It is able to build up society's trust with its services at
maximum level.
 Mission and vision: NHS aims to gain society's trust at the highest level in health and
social care also places at the top rank for hospitalisation and taking care of people more
efficiently (Hamilton and Webster, 2015). They work on the basis of there requirement of
the customers & fulfil the needs & wants of there customers.
 Services: NHS is known for providing treatment and hospitalisation to patients at most in
the global market. However, its healthcare and social responsibilities are increasing at
higher level remains able to build up society's trust on larger scale for hospitalisation
(Carroll and Buchholtz, 2014). Including this, there is continues increasing number of
hospitals for taking care of people and reducing health related issues.
 Gross annual turnover: Through analysing workers' turnover ratio, it is recognised that
NHS has the least number of this factor in comparison to other health care entities.
Moreover, number of service providers is getting enhanced at maximum level affect its
further operations and improvement in health and social care.
Therefore, Sainsbury plc is private sector while NHS belonged to publ;ic sector who
provide different services to a million people worldwide (Carroll and Buchholtz, 2014). In this
regard, differences between both entities and their operations can be understood as:
Bases NHS (Public sector
organisation)
Sainsbury (Private sector
entity)
Management and
administration
Management of business
operations are depended on
government policies.
Management of all business
operations are in decision
makers' hand.
Size, scope and structure NHS is wide spread entity in Its scope is wider than public
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comparison to other public
sector organisations of UK.
sector organisation.
Government interferes There is a lot of government
interferes in business
operations of NHS.
There is less government
interferes in comparison to
public sector organisation of
UK.
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M1) Analysis of organisational structure, size link with its objectives
Above mentioned size, structures of public and private sector organisations as Sainsbury
and Iceland respectively are interlinked with their profitability and increasing efficiencies for
business operations. It is considered that entity's growth is depended on its structure and size, its
decision-making process, ownership and so on (Klapper, LewiN and Delgado, 2011). However,
decisions regarding further business activities are made on its business and competitive
strategies.
P3) (c) Organisational functions and its structures
In an organisation, there are various functional department like human resource,
marketing, administration, financial, marketing etc. All functional departments have main
objective is to attain the common business enterprise goal. In the context of Sainsbury, it is the
8
Illustration 2: Difference between public and private sector organisations
(Source: Private vs public sector organisation, 2016).

second largest chain of super market in the UK which have 16.9% share in the super market
sector. Its main aim is to deliver the high quality of product and services to customer and
enhance its market share and profitability (Welford, 2013). For this objective, it makes several
efforts and plays various business functions. There are several functional department and each
department has one manager and many employees. They all carry out the business activities and
function for attainment of the determined objective. On the other hand in the NHS there are alos
several functional department which have interrelationship with organisation objective and goal.
Eaah functional department carry out its activities and function in order to attain the comp[any
objective. In the context of Sainsburry its major objective is to deliver high quality of product
and services and improve profitability and productivity so its each functional department carry
out theory working to attain its objective. On the other hand in the NHS company also focused
on improvement of care services to patients so each department have major objective to attain
organisation common objective. These all organisational functions have linked with the company
objective and structure. The link between the organisation goal and structure of these functional
department are as follows-
 Marketing function- This is one of the major department in the Sainsd burry company
which main function is to promote and advertise the product and services in the market
and attract large customers. In the absence of this marketing department, corporation
cannot attain its desired success. Within business enterprise, in the absence of marketing,
company can not earn profitability and market share. In these various activities are
included such as advertisement, promotion, distribution, packaging etc. It is related to the
organisation goal and structure because firm, profitability is largely depending upon the
numbers of customer and their purchasing speed (Craig and Campbell, 2012). As
marketing department promote the commodity in the market as customer can able to
know the new product. Thus, it can be said that when marketing process effectively carry
out so as customer can attract to purchase. Therefore, with help of marketing department,
Sainsbury company can attain its objective related to improve profitability and market
share. Marketing is interconnecting with the objective & the overall structure of the
business. The marketing is that important element which is help to examine not only
the requirement of customers but also affect the goals & the aims of the entire
business concern. The strategy & the polices of the business organisation are based
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