Business and the Business Environment Analysis Report: Sainsbury's

This report provides a comprehensive analysis of Sainsbury's, a major UK supermarket chain, examining its business environment. It begins by defining the business environment and exploring different organizational types, including sole traders, partnerships, and limited organizations. The report then provides an overview of Sainsbury's, detailing its products, services, vision, mission, size, and business objectives. It delves into the organizational structure, highlighting the interrelationship of various functions such as finance, human resources, marketing, and production, and how they relate to the company's objectives. The report also includes a PESTLE analysis to identify macro-environmental factors impacting Sainsbury's and a SWOT analysis to assess its internal strengths and weaknesses in relation to external opportunities and threats, concluding with insights into the company's strategic positioning within the competitive landscape.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
Task 1...............................................................................................................................................1
P1 Different types of organisations and the growth of the international business environment.1
P2 The organisational overview with the different parameters ............................................3
TASK 2............................................................................................................................................4
P3. Organisational functions and its relation with objectives................................................5
TASK 3............................................................................................................................................6
P4 identified and the analysis of various macro environmental factors that impacts on the
business objectives of sainsbury.............................................................................................6
P5. Analysis of internal and external factors and their influences on the decision making
process in the sainsbury..........................................................................................................8
P6. SWOT analysis of the sainsbury and the interrelationship with the external macro factors
or PESTLE............................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

Illustration Index
Illustration 1: Porter's Value Chain Model....................................................................................10

INTRODUCTION
Business environment is the total of all the external and internal factors that can influence
the organisation activities, operations, strategies, tactics, goal, profitability, productivity, decision
making, revenue, organisation structure etc. There are various different type of internal and external
factors which ave direct and indirect impact over the performance of venture. Internal factors
includes organisation culture, value system, organisation structure, human resources, corporate
culture etc. whereas external factors includes political, social, legal technological, environment and
economical. For this report, Sainsbury Plc have been selected which is second largest chain for
supermarket in United Kingdom. It has more than 16.9% share of supermarket sector in the UK. It
is being founded by James Sainsbury in the year 1869. They have more than 1415 stores in all over
the world. Their net income is £471 million which is the data of year 2016. The report includes
different types of organisation structure on the basis of ownership, structure such as public, private,
charity. With that it also includes different department in organisation and inter-relationship
between them. Pestle and Swot analysis of Sainsbury have been also included in this report to
identify internal and external environment of the organisation.
Task 1
P1 Different types of organisations and the growth of the international business environment.
Their are many types of the organisations in which the organisation is divided. On the basis
of their resources or the total worker, total number of shops, shareholders, the market sharing ratio
and the revenue of the organisations will considered. Types of organisations are as follows:
 Sole trade organisation: in this organisations only individual person will owned the
organisation. This types organisations don't required more employees only two to three
helper will enough to handle the organisation (Barkemeyer and Tsang 2014). They have to
followed the different types of laws in which the the buying and selling of then goods will
takes place.
 Partnership: this types of the organisation are formed with the involvement not the two or
more person that will knows as the business partner. But in the partnership the limit has to
be depends of the total number of the partner can be involve will be depend on the basis of
the firms. If it is the banking or any financial firms maximum partner can be twenty only.
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The profit and loss will be dived according to their deed. The for this organisation it has to
follow certain rules and regulation according to partnership act.
 Limited organisation: In the limited organisation the whole business will be depend on the
share holders and the board of the directors which they take the decisions for the
organisation. Liability of such organisation are limited. To start the limited organisation it is
necessary to issue the certification of the incorporations and the most important certificate
for the limited organisation are article of the associations and memorandum of associations.
 Public Limited organisation: In the public limited organisational the liability will be
limited and they offer shares to the public with introducing the initial public offer. But it has
to be listed in the stock exchange. The initial public offer is the step to get the money from
the public and the organisation will invite growth of the international business environment
the whole money for the more expansion not the business. The purpose of the public limited
organisation are to make economic growth and the generate revenue for the government.
 Private limited limited organisation. This types of the business are owned by the small
business entity. In which the the share holder can get only limited shares and the public
trading not as per the organisation will it has to be limited (Yu and Ramanathan 2012.). The
purpose of the private limited organisations are to maximise the profits.
 Franchisee: This types of the business are already well established businesses with the
excellent market goodwill. The owner of the organisation can give franchisee on the terms
and condition of their set up business. The business model will be same as per the
established brand but the owner will be different. The franchisee makes more brand value to
any organisation and the customer has already makes the their trust to that names. The
purpose of such business are the to help for the more business with their own business
model.
 Non Profit organisation: this types of the organisational are for the social welfare and not
to earn any profits. That can be the NGO or the welfare societies, the earning for such
organization are from the charity and donations. The purpose of this organisation are only to
make the development of the society.
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Business environment refers to the factor that impact on the business in terms of internal and
external manner.
The growth of the international business environment will be depend on the certain key
points:
Saturation of the local market: The growth of the international business environment will
be depend on the local market in which the already stable local market can be saturated with the
help of business environment. This saturation will leads to new things in the local market from the
international business environment.
Opportunities in the global market: If the local market of any country will be saturate that
the new opportunities will be arise to the other global players to launch their products in that
market.
P2 The organisational overview with the different parameters .
Sanisbury is the limited organisation which make their organisational structure in a different
way they have large stakeholders and the vision and mission makes the organisation better. The
products and the services always differentiated (Rossi, M., Vrontis, D. and Thrassou, A., 2012). The
legal structure considers the major factor to build the better organisation. The most important is the
business objective which takes to the right directions.
 Background: We choose the sainbury in the report. It is the second largest chain of the
super market in the united kingdom. It was founded in the year 1869 by the jhon James
sainsbury. The total 1415 stores situated in the different locations with 162700 employees.
 Products: they deal in the conveniences goods. The have total 6500 products in their
products lines. They offer fuel and as well they have own banks.
 Services: they deal in the retail market the services which are supplied from them are in the
banking sectors.
 Vision: They started their business with a vision of giving best brand products with the
reasonable prices and to get the costumer trust to maker their business successfully.
 Mission: They have the mission to cover the entire market share with more customers and to
make development of the nations with growth of the business.
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Size of the organisation: it makes more valuable to any business if the organisation make is
larger. The bigger the size of the organisation will depend on the
 Total number of employees. in sainsbury the total number of employees are 162700
 The number of outlets : 1415 stores situated in the different locations
 The total revenue earn by the organisation: in the year 2016 sainsbury total revenue is
23.506 billion. Their operating income is 707 million and the net income is 471 million.
 Business objectives: The business objective always help to get the customers trust as the
sainsbury have their business objective is to deliver the best possible service with great
quality of the products to the costumers.
 Structure of the organisation: to make any organisation in the higher position the structure
of the origination always be effective. The organisation structure include the top to bottom
level of the employees are positioned on the basis of the hierarchy (Cheng and Yeung 2012).
The CEO will be in the top level while other department will work under the CEO such as
marketing, finance, Human Resources and operations. As sainsbury adopted the same
structres.
 The legal Structure: It include the policies and the rules and the regulations of the business
and the other law which makes organisation in a proper manner.
 Stakeholder: to any organisation the stake holder are the key to success for the business it
include the employees of the organisation, customer, shareholders, governmental, creditors
and the institutions. As the same the sainsbury have the same stake holders with their
contribution the organisation became more successfully.
TASK 2
P3. Organisational functions and its relation with objectives.
In order to have effective operations the business firms need to ensure about goals and
objectives so that effective frameworks can be designed to have sustainable development. It has
been noticed that functions of Sainsbury’s is classified in different departments. Classification of
functional departments can be as production, marketing, finance and human resource. By having an
effective coordination between all the departments the business firm can easily have improvements
in terms of values. It allows to ensure that individual objectives of departments are offering support
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to overall goal of organisation. It means the interpersonal relation between functions and objectives
is significant for Sainsbury’s to consider. It leads business to impressive level of success and
allowed to gain competitive advantage.
 Finance: It is a department in which financial values are being referred by the experts in
order to ensure that company is having proper balance between income and expenditure.
Division is accountable to maintain the records in terms of income and expenditure. They
also provide information to managers about financial terms so that better decisions can be
taken for sustainable development. Budget preparation and further terms regarding costing
are also being considered by the department. Loss or profit, assets and liabilities are also key
functional areas which are being referred in order to ensure that long term benefits are being
attained by management.
 Human resources: Department is accountable for effective management of diverse factors
which are associated with employees and their needs. Professionals focuses in the
management of workforce and ensure that they are attaining better opportunities. In this
respect the training is also being offered to employees so that better outcome can be taken
into account. Also, termination and compensation aspects being referred by the HR so that
functional values can be well maintained for long term sustainability (LiPuma and Doh
2013). HR plays a key role in managing employee’s needs and motivation so that business
firm can have better opportunities in terms of workplace environment. The legal operation
ca be handled by the Human resource management division in the organisation as per their
roles and responsibility.
 Marketing: It is a division which mainly focuses on the promotion and sales of products
and services so that better opportunities can be offered to company. By having an
application of diverse marketing tactics the department have efforts to influence customer’s
perception. In other words, it can be said that by having effective marketing the individuals
try to create better awareness in the market in accountable manner. Marketing department
also provides a significant support to the sales of products and services. It allocate sales job
to professionals so that product distribution can be managed effectively.
 Production: Sainsbury’s production division is accountable for effective production of
products so that customer needs in term of demand can be accomplished. Production
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manager is responsible to allot the task to the employees in order to ensure that product is
being manufactured as per standards and needs of customers. It is also significant for
manager to make sure that proper quality of product is being taken into account during
process. Key accountability of the division is to have effective production with a
consideration of quality standards. Fro the production division the main function is to
maintain the product development and utilise the resource for production process in a better
manner.
 Operations: these the most important function in the organisation in which the operation
related work done by these division. As the most important division in the organisation
which they had been significance role in the organisation. The more the operation will be
better the all the division will work according to the system.
The linking of above structure is most important aspect in the sainsbury. The all the
department required the to coordination between them. If the saisnbury is making impact on the
customer is only due to the marketing department with their strategy they trying to make over in the
marketing strategies to get more attention from the customers. The finance will focus on the
monetary value and the next step for the investment will be part of this department. The most
important department will be Human resources that they bring new employees to make all the
structure with a better form.
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Illustration 1: Organisation Structure
source: edrawsoft

TASK 3
P4 identified and the analysis of various macro environmental factors that impacts on the business
objectives of sainsbury
The most important factor on the business environment is the macro environmental factors
which follows:
 Political: This the macro factor which impact on the business objectives depends on the
political factors which includes such as government Innervations makes the sainsbury
business will depend on it. The sainsbury fight with other competitor and the performance e
of this highly recommendable in terms covering market shares. The taxation police from the
government will give benefits to the companies as the corporate tax in the UK is 28%
recently but before it was 30% which means the revenue will be save from they sainsbury
will give benefits on their more budgets. But meanwhile the qualities issues arise in the
sainsbury which makes their business affected on the customers. As result the other policies
from the government will either helpful or it will affect to the businesses objectives.
 Economic: The economic factor will also impact on the business environment in terms of
the global economic in the down ward sloping which makes affects to the business of the
sainsbury (Craig and Campbell 2012). The customer are not able to get enough money and
the purchasing power of the customer will weak due to the inflation in the nations. As a
result the sainsbury give the quality products with the nominal price but the consumer are
not able to spent their income. The UK has already in the debt which sustain the economic
condition in a seviour way. After the Brexit the condition of the economic is more hazardous
to the business environment.
 Social: To every business the social factor will be the most important factors in which to
make impact on their business opportunity. As the consumer want are limited and they want
the products in a low price without compromise in the quality as result the saisnbury have
such capability that they deal in the such services to make customer more satisfied with the
quality products. The companies always focus on the niche market and the products are far
better than the other competitor such as Tesco and ALDI. The corporate social
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responsibilities also sainsbury doing successfully with different activates to attract to the
people.
 Technological: this is also the main factor to impact on the business environment that can
be change in the technology will be the major factor considered for any business. The
organisation like sainsbury the technologies is the important part of their business because
they have number of outlet and the retail super market never run with the technologies. The
different software use to maintain the data and the billing is also done through such
software. The sainsbury also delivered the food online that changes makes increased their
sales with the 25% which is commendable to their implementations. The more use of
technologies in the business will easy for the working and makes the environment better.
 Legal: In the business environment the legislation will impact more on the any business.
The laws and the certain rules have to follow every business to make better business
environment. The law resulted to the employment which has to be considers and the certain
law which are made for the consumer and the also for the organisation law which always
influence to the business environment (Dumas and Reijers 2013). Sainsbury care to the all
the laws to meet their business objectives which has enhance their performance.
 Environment: Every business also affect to the environment in terms of pollutions or the
material which used to make their products also make impact on the environment. Due to
this factors the sainbuyruy always have motto to save the environment buy using
environment free packing products.
P5. Analysis of internal and external factors and their influences on the decision making process in
the sainsbury.
The internal and external factors can be expansion through the Potters value chained model
which leads to get strengthen and weakness of the sainsbury as such:
Primary activities: For every business the most important activities has to perform to makes the
business commitment
 Inbound logistics: will makes the sainsbury a bigger organisation as such they have high
supply chain for delivering the goods, to makes cold goods they better cold storage and the
transport will be better to makes more stock on time.
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 Operations: to every process the operation work will fulfil the primary activities as such the
maintains of the all the order by the costumer will track and according to the order size they
will priorities (Dumas and Reijers 2013). The sainsbury have over load on their operations
of work.
 outbound logistics: it is the same process inn which the sainsbury used to deliver their
goods as per the order of the customer and they are specialise in the fast delivery as per the
commitment.
 marketing and sales: this is the most important factors for every business in the successful
way that is the marketing done by the sainsbury and after that the sales will be the increased
as per the attraction of the consumer through different marketing strategies.
 Services: If the sales will be increased the services will be the next factor and for the
sainsbury the sales is more but the services are not according to their customer satisfaction.
In which they are not able to manage their customers and the re sale is decreasing from the
bed services.
Support activities: it is the internal factor for to any organisations in which the
 Firms Infrastructure: The infrastructure of any business always have the direct impact on
the customer as well the employees (Porter's Value Chain Model, 2016). in the sainsbury
they have large infrastructure as they are the biggest retail chain super market and not only
one store they have 1415 stores overall location which makes difference from their
competitors.
 Human resource management: To every business successful the contribution form the HR
is the most important in terms of proper polices for the employees and the discipline
maintain in the stores of the sainsbury makes better environment.
 Procurement: The better availability of the goods on the time the suppliers are the
important for them to maintain the stock on the time as result the sainsbury have large
numbers of local suppliers with that the organisation get the product in the time.
 Technology: This is the main factor which change the whole business environment as result
the the technology used in the sainsbury is the remarkable (Sena and Shamsuzzoha, 2012).
The online food order portal will attract to the more customers and they are able get the
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product at their homes. But sometimes it has issues with order tracking as per the location
mention from the costumer.
From the above model some are the strength and weakness has occured for the sainsbury:
Strength: The inbound logistic and the marketing and sales team
weaknesses: Services , operations and the Technology
The above factor or both activities will be influence on the decision making process:
The more clear picture will be on the organisation frame and they can take the decision
easily. The porter value chain model will suggest that their primary activities are not in the good
condition in terms of the services they have to reframe the new strategies and this is also the major
weakness for the sainsbury. The support activities are the most important aspect to influence the
costumer such as the HR has to recruit the quality and skilled manpower ans they are changing their
technology to make their business more better.
Illustration 2: Porter's Value Chain Model
(Source: Porter's Value Chain Model,2016)
P6. SWOT analysis of the sainsbury and the interrelationship with the external macro factors or
PESTLE.
The business environment more effective the organisation will focus on their SWOT in
which they can get the outcomes of their strategies. The SWOT analysis of the sainsbury as follows:
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Strength: To every business the most important factors their strength which makes the whole
business more effective. The more strength will makes impact on the competitor which leads to be
in the business success. Sainsbury have so many strength which makes their business profitable.
 The position of the sainsbury in the market in terms of the other competitor is better they are
the second largest retail chain super market organisation from the UK.
 The higher selling of the products of the sainbury makes their revenue more which gives
better outcomes for more expansion.
 Inbound logistics of the sainbury is also the major strength for them in terms of transport,
storage capacity of the stocks, cold storage for the food related products are the best quality
 Procurement is also the makes difference the sainsbury in terms of the suppliers which are
from the local market.
 The firms infrastructure is also the strength for them that they higher numbers of the outlet
and the super market overall locations.
Weaknesses: Every business have the weaknesses also which is necessary to over come it
otherwise it will suffer to the performance of the business as well the business environment.
Sainsbury also have some weaknesses such as:
 Poor services: they are able to get more sales but the services are from which they are not
able to retain their costumers (Rossi and Thrassou 2012). The better the services the more
customers will make trust on them.
 The operations of the sainsbury is in the smaller frame as such they have the workers are not
well trained and they are not working in prominent manner. Also the online delivery of the
food is also influenced the operation as confusion arises in the location taking sometimes
makes poor work qaulity
Opportunities: The sainsbury have higher opportunity to make their business more better. They
have opportunities as such
 to makes their technology more better which can be easily get the food which is order from
the online.
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 Services has to be improved so the more retention from the costumers can be possible and
the revenue also generate from them.
 Market share will be not better due to poor service they have this opportunities also to cover
the market shares.
Threat: This can be hindrances for the sainsbury as they have some weakness and they might be
certain threat to them such as:
 The competitor can take advantage of their poor services and the customer can be shifted to
the other competitor by giving better service to the their customers.
 The economic factor can be the most important factor which is considered the biggest threat
for them. So they have to be careful with other investment in such situations.
The interrelationship of the sainbury SWOT with their extremal macro factor done in the P4
can be the relationship as per their strength and weakness. The political factor can be the strength
for the sainsbury in terms of the taxation policy from the government has to which is now save the
more revenue for the organisations. The economic factor is the weakness for the sainbury as the
inflation in the UK has been arise and the Brexit will be the loss to the sainsbury. The social factor
will be the opportunity and the major weakness as they have to focus on their costumers services.
As result the technologies factor is their weakness and they have to change for more better
outcomes and to achieve the organization objectives. Legal factor is not any challenges for them
and the environment factor also not influence as they are care for the environment by their different
business strategies.
CONCLUSION
It can be concluded from the project report that Sainsbury have very strong brand position in
the market, they are second largest supermarket in United kingdom. The project report includes
Sainsbury organisation structure and different department they deal with. Other than that it shows
that all the department are inter-relate with each other. From organisation's internal and external
analysis that is from PESTLE and SWOT analysis, it can be concluded that they have track record
of producing new and innovative products for the customers, as well as they strong distributed
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channel with the effective portfolio which helps them to cope with their weakness and grab the
opportunities.
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