Business and Business Environment Report: Sainsbury Analysis

This report delves into the intricacies of the business environment, examining both internal and external factors that influence organizations. It begins by defining and differentiating various organizational types, including public, private, voluntary, and small and medium enterprises (SMEs), highlighting their objectives and characteristics. The report then explores organizational structures, contrasting tall and flat structures, and analyzes the relationships between different departments, such as marketing, finance, and human resources, within a business context. Furthermore, it applies PESTLE and SWOT analyses to Sainsbury, a prominent public company, to assess its macro-environmental influences and internal strengths and weaknesses. The interrelationships between these factors and their impact on business strategy are also discussed, providing a comprehensive overview of business operations and strategic planning.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
LO 1 ................................................................................................................................................3
P1 Different types of organisation .............................................................................................3
P2 Difference between various organisation ..............................................................................5
LO 2 ................................................................................................................................................7
P3 Types of organisational structure and Relationship between different department ............7
LO 3 ................................................................................................................................................9
P4 PESTLE analysis of Sainbury................................................................................................9
LO 4...............................................................................................................................................11
P5 Internal external analyses of business..................................................................................11
P6 Interrelationship between strength weakness and macro factors.........................................14
CONCLUSION .............................................................................................................................14
.......................................................................................................................................................15
REFERENCE.................................................................................................................................16

INTRODUCTION
Business environment consists of two main factors: internal and external. Internal
component includes human resource, financial capabilities, suppliers, competitors etc. and
external factors are such as politics, economic, social elements etc. Public, private, voluntary
organisation and the small and medium enterprise and all work in the different way. Current
assignment will explain different type of organisation and their purpose. Furthermore, it will
explain the organisation structure and the interrelationship between the different functional unit
in the organisation. In addition, it will explain the SWOT and PESTLE analysis of the Sainbury.
And also the interrelation between the companies' strength, weakness with macro environmental
factor are explained as below.
LO 1
P1 Different types of organisation
Public organisation
Public company is the company whose share are freely traded on the stock exchange.
And also it is control and operated by the government personnel. It is mandatory for the public
company to publish the annual report and make public details about there finance and business
activities( Salar and Salar, 2014).
Purpose – The main purpose is to serve high quality and satisfactory product to the customers.
Example of public company is NHS. Sainbury etc. And Sainbury can make partnership
with NHS for expanding its business and hence it will be beneficial for both company and help
in fulfilling its corporate social responsibilities.
Private company
Private company is the company that issue share and also have share holder but do not
trade on public. And also there is no intervention and control by any government body. And
there is no strict rules and regulation for private company. There are mainly two types of private
company. First is Sole trader in which the ownership is in the hand of one person, who solely
responsible for the decision making of the business. Its asset and liability completely fall on the
shoulder of the individual. The second type is Partnership where two or more people share
ownership and take all the decision in the company and also take responsibility for managing the
company .

Purpose – The main purpose of private company is profit maximisation. Mainly profit is the
reward for the risk which was assumed and also second purpose is to expand the business in any
possible manner.
The example of private company is John lewis partnership is one of the leading retail
industry in UK which offer products like clothes, jewellery, cosmetic etc.
Voluntary organisation
Voluntary organisation is the organisation that focus on helping people in any possible
way and also help to develop the society. And work on the benefit for the society without
thinking of the profit. And there is no intervention or control of any government body . It
regulates by its own member to serve the society.
Purpose – The main purpose of voluntary organisation is to serve and enrich the society . Its
agenda is to maximise the interest of the peopled not to maximise the profit. The money raises by
the organisation are generally invested back in the society or use for developing the society.
The example of voluntary organisation is well come trust as it aim to achieve extra
ordinarily improvement in the health care. Partnership of Sainbury and well come trust will help
Sainbury to focus on the need of the society. And hence it enhances Sainbury to provide quality
of product and also it can help the company to full fill its corporate social responsibility. And by
that brand image of the Sainbury will also improved.
Small and Medium enterprise – Small and Medium enterprise are specifically those who have
fever number of employees in the enterprise. Also, they are known for there innovation and
creative skills .Hence give competition to the economic sector. They create many jobs and also
have skilled employees(Gupta, 2015).
Purpose – the main purpose of small and medium enterprise is to achieve sustainable growth in
the industry and achieve good amount of profit.
The example of small and medium enterprise is Softwire enterprise in which it provides
IT consultant and also it is growing day by day with good amount of profit .
By the partnership of Sainbury and soft wire enterprise, Sainbury's all IT services are being
manage and conduct by the Soft wire enterprise. And also its skills employees can help the
Sainbury in many ways.

P2 Difference between various organisation
NHS John lewis
partnership
Well come trust Softwire
enterprise
Objective The main and
foremost
objective of NHS
is to keep people
healthy and also
reduce illness and
also provide
quality of the
product to the
customer and also
satisfy them in
any possible
manner.
The main
objective is to
make sufficient
amount of profit
and sustain in the
industry and also
making efforts for
growing in the
sector. And also
keep performing
in the better way
to become one of
the leading
industry.
The main
objective is to
serve the society
and help the
people in the best
possible way.
And also enhance
the power to
support superior
research in UK
and worldwide.
The primary
objective is to
generate
innovative idea
and also sustain
growth and
improving
technology. And
also it objective is
to enhance the
skills.
Vision Deliver better
health services
and prevent
people from
illness .
Vision is to
sustain and
enhance the
position in
outstanding
retailer and also
to maximise
profit (Shabanova
and et.al., 2015).
To become the
global health
research and
promote global
services
To be the one of
the most effective
organisation and
engage in
promotion of
innovative ideas
and skills.
Mission To provide
quality services to
the people and
also to satisfy the
Mission is to
make sustainable
profit and drive
business success.
Mission is to
improve the
health of people
and trusting
To sustain in the
industry and
provide better
skills employees .

customers by the
services.
colleagues 's
ability and
judgement .
Size , share and
scope .
Count in the list
of top 10
companies with
1.7 million across
England and also
it is continuously
expanding day by
day and growing
rapidly
Company has
wide scope to
grow well, as it is
continuously
expanding its
operations into
international
market thus, has
wide scope to
grow.
No. of employees
– 83000
And also it
generates revenue
around 10.2
billion . And also
have wide scope
as the customers
are satisfied and
company is
planning for
international
expansion in
different
countries which
further increase
the brand of the
company and by
these generate
maximum profit .
Well come trust is
very famous and
leading charitable
trust and growing
in terms of
technology and
other services.
It has wide scope
as it is planning
for the expansion
and planning to
serve maximum
people in
different
countries .
No. Of employees
less than 250 and
annual turnover is
50 million and
scope is to expand
the business and
also sustain the
growth of the
business . And
also recruit skills
employees. And
achieve maximum
profit.
Legal structure Public company
can sell there
share in stock
exchange. And
major decision of
the company are
taken by the
Private company
can not sell there
share to public
through initial
public offer
(Oraman, 2014).
The legal
structure of well
come trust is
same as the trust
or an
incorporation.
The liability of
small and
medium
enterprise are on
the shoulder of
the owner .

board members
About
stakeholder
Working
members,
employees,
customers,
managers, board
member.
Customers and
employees,
friends and family
members .
Member of trust Customer,
manager, owner,
employees
Organisation
structure
It follows tall
organisational
structure
It follows flat
organisational
structure
It follows matrix
organisational
structure
It follows flat
organisational
structure
LO 2
P3 Types of organisational structure and Relationship between different department
Public company – The firm follows tall organisation structure because in public company there
are huge number of employees so public company prefer for tall organisational structure as it
will be easy to communicate and decision making become very easy, and also improve the
coordination of the company(Tall Organisational Structure, 2019).
Private company – Follows flat organisational structure as it has direct contact between the
manager and the employees in the organisation. Flat structure are mostly preferable because it
gave fewer chances of the conflict as no middle man is involved in these. And also help in quick
decision making (Van Wormer and Besthorn, 2017).
Voluntary organisation -voluntary organisation follows matrix in which there is horizontal and
vertical communication in which it improves and make communication easy and also there is fast
response and also there is flexibility in the organisation .
Small and medium enterprise – As in small and medium enterprise has very less number of
employees so it uses flat organisational structure because employees can directly communicate
with the manger. And also in small organisation it is preferable to use flat organisation structure .
Sainbury uses tall structure as it is public company and it there are many employees in
the company so there will be less chance to contact directly to the manager so hierarchy will be
much convenient way for communication. And by this coordination also increases and it helps

in decision making . Tall structure usually simplify and clarify authority, responsibility and
accountability in organisation
Relationship between different department
Marketing department and Finance department
The marketing department focus is on selling product and services to the customer by the
help of marketing techniques and aggressive promotion, advertisement to achieve the targeted
sales. And finance department monitor the financing structure of the company and also it
manages the finance. The interrelationship between finance and marketing structure is that for
marketing product and services the marketing department need finance for the heavy
advertisement and promotion and that finance is being provided by the finance department. So,
finance department has to play the major role for interacting with the marketing department. So,
that Sainbury's both the department work effectively (Oraman, 2014). if marketing department
does not get adequate funds then it may affect their working and progress. On other hand
marketing team continuously work to raise cash inflow in the business. If marketing team does
not perform well then it finances department will not have adequate funds to distribute. As
Sainbury follows tall structure that helps in making effective decision without any delay . By this
way all the departments will be able to perform well and they will complete their duty on time
without any disturbance.
Marketing department and Human Resource department
Human resource management is the wide concept it includes recruiting , selection,
training and development, motivating etc. and also human resource management help the
employees to perform in the effective way and achieve organisational objective. And marketing
Illustration 1: organisation
structure

means to sell the product and services by the help of promotion and advertisement. And in the
organisation marketing and human resource department go hand in hand that is human resource
department work is to recruit and select the right candidate and marketing work is to know the
demand of the product so that hr would able to recruit the worker that will help the organisation
to full fill that particular demand of the product. And hence it will be beneficial for
Sainbury(Massa, Farneti and Scappini, 2015). Tall structure of company sometimes impact
negative on business unit because due to which information take time to get passed in each
department. Thus, marketing team will not be able to communicate directly with HR department.
In such condition confusion may take place and enterprise will get failed to recruit talented
people those who can work well in marketing unit.
Purchasing department and finance department
If the coordination between the purchasing department and finance department go in the
right direction then sainsbury can achieve the desired goals easily. The purchase department
wants to purchase the material and inventory and it required the funds which is being provided
by the finance department. And also the purchasing department 's responsibility is to ensure that
to purchase goods cheaper price so that it help the finance department to save funds. And by this
coordination of finance and purchasing department Sainbury will work in the positive direction
and also cost of the goods will be save if purchasing department work in the right direction
(Sammut‐Bonnici and Galea, 2015).Tall structure of company has positive impact as it helps to
work in the effective and efficient way . And help the flow of communication in smooth and
positive way.
LO 3
P4 PESTLE analysis of Sainbury
There are various macro factors that impact on business unit in positive and negative
manner. These are explained as below:
Political factor
Political factor are the factor which affect the business by the political intervention. In
this government may influence the organisation by imposing new taxes. Political factor include
fiscal policy, trade tariffs and new tax duty that might affect the business to the great extent .
And all the political factor has to be taken on account for the smooth flow of sainsbury business .
There are many positive impact of the political factor as if the government introduce the policy

which favour the Sainbury and help to work the organisation in the effective and efficient
manner and also the negative impact was at the time of Brixit the policies are not stable and the
condition of the economy was not good and also there are many unemployed people. By the time
of Brixit the economy was in stable and also political factor play negative impact to all the retail
industry as passing different policies and tax duty which affect the business and Sainbury has to
carefully understand the policy so that it work in appropriate way.
Economical factor
Economical factor are the factor which include inflation rate, foreign exchange rate,
saving rate etc.. These are the factor which influence the organisation function. As at the time of
Brixit the economy was fall and the GDP of the country was decrease and by these the
purchasing power of people was very low as people don't have money to spend on Sainbury and
by these the sales of Sainbury automatically decrease (Giannakis, Harker and Baum, 2015).
Social factor
Social factor influence the organisation in many ways which include customer behaviour,
preferences, taste, belief and also there attitude which play the great role in the market. Sainbury
has to understand the customers' belief and attitude and accordingly design the market message
for the retail industry. Social factor also have the positive impact as there different preferences
may help the sainsbury to improve in the great extent .and negative factors are as at the time of
Brixit the whole economy changes and also there are different customs and belief of the
customers and Sainbury need to have a careful study on the customers' preference and taste so
social factor influenced sainsbury to the large extent .
Technological factor
As we know technology is developing very fast day by day. Technological factor are the
factor which affect the operation of the business in favourably as well as unfavourably. This
factor involve research and development, technological changes, the level of innovation etc. As
technology has both negative and positive affect. The negative impact is that at the time of Brixit
there was an impact on cost structure in retail industry and also Sainbury. By online purchasing
the customer does not have a direct relationship with the owner and also online purchasing lack
in quality of the product and hence the value chain structure decreases.
Legal factor

Legal factor are the factor which impact the business in many ways. It includes many
rules and regulation such as discrimination law, antitrust law, consumer law, protection law,
health and safety law etc. which might affect the business because of new rules and regulation
which was implemented by the government. The positive factor is that if the rules and regulation
are made in regard of the sainsbury then it will be beneficial for the organisation. And negative
factor is that many new rules and regulation may impact the business which effect the working of
sainsbury because it might interrupt the business.
Environment factor
Environment factors include all those that influence the surrounding of the environment.
This factor is very crucial for many industries. And also Sainbury is affected by the environment
al factors as Sainbury is the food retailer industry in which it is majorly affected by the whether
as by the change in the climate food product might got affected. And also there are many ethical
issues which are linked to the retailer industry such as selling organic food , treatment of pets
etc(Giannakis, Harker and Baum, 2015).
LO 4
P5 Internal external analyses of business
SWOT analyses of Sainsbury
Strength
 The marketing strategies which the Sainsbury is using is very highly successful that
supports business in generating high revenues.
 High level of satisfaction of customers is another strong point of business unit.
 Training and learning programmes of the Sainbury are very impressive, that is why all
the staff of the firm are able to perform well in business unit(SWOT Analysis:
Theory,2019).
Weakness
 The demand forecasting is very poor.

 It is operating at limited locations thus, expansion plan is very weak.
 The weakness of the Sainbury is that it invest less on the new technologies thus,
wastage is high and operational cost of the firm is very high.
Opportunity
 Favourable trade policies can significantly affect the way of doing business.
 Globalisation is another big opportunity for the firm , as it will be able to enhance its
revenues.
 The new changes, preferences and trends of the customer which is a biggest opportunity
to redesign the products according to the needs of the customers.
Threat
 New area and environment regulations are threat for the existing product of categories.
The products are limited which dissatisfied the clients(Mellor, H.W., 2018).
 Sometimes the changing demand of consumer impact the profitability of the company.
 High competition is a biggest threat for the Sainbury.
Micro and macro factors impact on Sainbury business decision and business objectives:-
Social culture factor:- social factor can impact on the decision making process and objectives
directly and indirectly to the Sainbury. The culture, lifestyles, customs and values play
significant role in the company. Sainbury has to make changes in its products designing and
marketing designing and have considered cultural beliefs of mass audience. This will be helpful
in making them satisfied towards the brand and generating high revenues(Mellor, 2018).
Technology factor:- Technology environment affect the objectives and business making process
of the Sainbury because technology is not constant it changes day by day and its important for
organisation to implements this technique. It doesn't confine the technology changes it also
includes the manufacturing process, products, techniques etc. it refers to the advancement and