Business and Business Environment Analysis Report - HNC in Business

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This report provides a comprehensive analysis of the business environment, focusing on public, private, and voluntary sectors. It examines the objectives, legal structures, and interrelationships of these sectors, using Sainsbury's as a case study for a private organization. The report delves into the size, scope, and structure of different organizational types, including sole proprietorships, partnerships, and joint stock companies. It explores how organizational functions are interrelated with business objectives and structure. Furthermore, the report analyzes the micro and macro environmental factors impacting business operations, including internal and external analyses of Sainsbury's, and how its objectives and decision-making are influenced by a SWOT analysis. The report concludes with a critical evaluation of the business environment and its impact on the chosen organization.
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Business and Business
Environment
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Contents
INTRODUCTION
.....................................................................................................................................3
MAIN BODY
............................................................................................................................................. 3
TASK1
........................................................................................................................................................ 3
P1. Public, private and voluntary sectors and its objectives and legal structures.
....................................3
P2. Size and scope of different types of organizations.
............................................................................4
The size, scope and structure of a private organization named Sainsbury’s and a selection of public

company which can connect to the objectives of business, their products and services provided by the

respective organization.
...........................................................................................................................5
Business structures and the interrelationships of the diverse functions organization has been evaluated

critically.
.................................................................................................................................................. 5
TASK2
........................................................................................................................................................ 5
P3. How the organizational functions are interrelated with objectives and structure of an organization.
.5
TASK3
........................................................................................................................................................ 7
P4. Micro and macro environmental factors and how it impacts the business operations.
.......................7
TASK4
...................................................................................................................................................... 10
P5. Internal and external analysis of Sainsbury’s.
..................................................................................10
P6. Objectives and Decision-making of Sainsbury’s are influenced by SWOT analysis.
......................11
CONCLUSION
........................................................................................................................................ 11
REFERENCES
........................................................................................................................................13
Books and Journals:
............................................................................................................................... 13
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INTRODUCTION
Business includes several kinds of activities and functions which all are very beneficial to

an individual. With an intention to get source of revenue, an individual utilizes himself in some

productive activities in the business which can be known as business activities. As the time flies

there are many types business which can acknowledge in various forms and which havedifferent

functions in their organizational structure. Business environment refers to an environment whether

it is internal or external it affects the business operations and its profitability of a business (
Agbim,
K. C., 2019)
. The report aims on Sainsbury’s Company which is a multinational supermarket in the
UK which deals and trades in groceries and other merchandise in general. In UK, there are number

of stores to operate in varieties of location. The report is prepared to discuss the types and purpose

of different organization either public, private or voluntary with their legal structure. The report

comprises with different types of organization having different sizes and its scope. In context to

Sainsbury’s, which is recognized as a private organization discussing a structure, size and its scope,

also there linked with the objectives, products and services. The report outlines the various micro

and macro environmental factors and SWOT analysis of the respective company in order to

examine the positive and negative impacts of these factors on the business operations.

MAIN BODY

TASK1

P1. Public, private and voluntary sectors and its objectives and legal structures.

Private sectors:

Private sector organizations are those organizations whose motive is to earn profit only and

these organizations can be owned by government and private bodies or both. When an individual

plans to establish a private sector organization their main cause is to earn profit and the growth and

development of the business. Private sector organization generates their income by making a

contribution to the gross domestic product of a country (
Barnett, M. L., 2019). In the context to
Sainsbury’s, it is a best example to understand private organization which works to earn huge

amount of profits for the business.
The main purpose of the organization is to generate more and
more profit so that the company can grow and develop day by day.

Legal Structure
: Sainsbury’s is a private sector organizations and acknowledged as the
second largest chain of supermarkets in the UK market. Business have different types which

functions with different legal structures in the present time. The respective company is a joint stock

company with distinct legal entity from the holders of the organization.

The legal structure of the organisation is mentioned in the following list:-

Partnership: Partnership is a legal agreement which is done between two or more persons
who are mutually agree to share equal or pre-determined profit and losses.

Sole proprietorship: It is a business in which a business is created by a single owner and
they have unlimited liabilities.
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Company: Companies has a separate legal entity which comes under the company act,
2013. It has two types of companies private limited company and a public limited company.

Public Sectors:

Public sector organizations can be understood as an organization who is completely ruled

by government. These organizations are recognized to serve for the community and citizens with

delivering improved services to them and with no major objective to earn profit. The main

objective of such business is to deliver necessary services to the citizens or local public. These

organizations are sponsored by taxes which is deal in critical services such as housing, education,

social work, health and which is paid by citizens of a country.
Virgin money is a public sector
company
whose main purpose is to provide significance value by offering a positive contribution
concerning the society.

Legal Structures:
Public sector organizations are usually owned by government bodies and
its legal structure is based on an enterprise which has distinct legal entity (
Bastas, A. and Liyanage,
K., 2019)
. A UK Challenger Bank named virgin money has its concentration on residential
mortgages, savings accounts and credit cards.

Legal structure fix the boundaries of public sector organizations that they must stick to in

order to generate income and run competently.

Central Government: These organizations such as department of international
development and environment agency are chiefly managed and controlled by the central

government. Legal structure of such type of organizations is framed by central government.

State government: Operation a business at a state level then the legal structure is
determined by State Government.

Local government: These includes will municipal corporations or local government.
Voluntary sectors
:
Voluntary sectors are those companies which will focus only to perform social activities

and their main aim is not to earn profit but to serve societies. These organizations are not ruled by

government and it is an establishment for the society’s welfare. The main purpose is to serve

various kinds of welfares to the society without earning any kind of profits. The chief example of

such type of companies are
Cancer research in UK. The voluntary factors offers social services by
performing research and various kinds of campaigns which are allied to prevent cancer in the

society.
This type of organisation can be better understood by nonprofit organizations, NGOs, third
sector organisation, or civil society organizations. These are operated by individuals who are not

remunerated for their involvement.

Legal structure
: Voluntary organizations have a very strong structure which will perform
and focus only to serve various kinds of welfares to the society and also receive a great legal
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support from the governments. In UK examination centers for cancer has a very good legal
structure which care for its internal arrangement too and embraces 9 clinical trial units, 17

experimental cancel medicine center and much more.

Legal Structure:-

Trust: It is a non-profit organisation which is framed by trustees on behalf of their
members. They are the ones who assumes accountability for the firm.

Unincorporated associations: This type of organizations developed when two or more
individuals come together with the same objectives.

P2. Size and scope of different types of organizations.

Sole proprietorship
:
Sole proprietorship is a business which is ruled by a single individual and it does not have

any kind of legal discrepancy between business owner and business entity. It is understood that a

business owner operates its business all alone and there are chances that they can recruit other staff

members in their business for the growth and development. It has limited scope as it is handled by a

single owner to start a business, it requires only small amount of penny which has less risk

involvement. This type of organizations usually have small business operations and their size of

organization is also small.

Partnership:

Partnership is the business which is owned by two or more members and are involved and

come into a contract which have certain terms and conditions also sharing a predetermined profit

and loss which is commonly recognized as partnership deed (
Cooley, T. F. and Hansen, G. D.,
2021)
. It is a business which may have any size of the organization small, medium or large which is
highly depends on investment by partners. Partnership is better than sole proprietorship because it

involves two or more members to operate business which cuts the personal responsibility that can

be bear by only one individual. Also, it has limited scope in the organization as members in the

partnership have unlimited liability and this is the cause that these type of business are usually

small or medium in their sizes.

Joint Stock Company:

Joint Stock Company is a business which remarks their business operations in agreement

with the Companies Act. It has distinct legal entity from their business owners and liability is up to

the amount of their share of investment or purchase of share of the company (
Cui, L. and Et.al.,
2019)
. These are the type of companies which usually have large size and have a big scope in the
market. The company scope is large because it has limited liability and grows with a huge amount

of capital by allotting shares to the public.
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The size, scope and structure of a private organization named Sainsbury’s and a selection of public
company which can connect to the objectives of business, their products and services provided by

the respective organization.

As discussed above Sainsbury’s is a joint stock company and labelled as a private

organization in the nation of UK and have a separate legal entity. In UK, it is one of the most known

organization and has a second biggest chain of supermarket in the country. It is a PLC that provides

a various types of benefits to the welfare of society. The respective company provides a range of

quality goods and services to their consumers and have a purpose to provide healthy lifestyle to

their valuable customer. Along with this the respective organization delivers approximately all the

services to their consumers which is a comfort and a great service with an intention to save time of

their valuable customer.

Private sector organisation:

Sainsbury’s is the private sector company which was introduced as the second largest supermarket

chain.

Size:
It is the largest organization which offers employment 111900 employees as per the record of
2020. It possesses Sainsbury’s supermarkets, Sainsbury’s bank and Sainsbury’s local.

Scope
: The organization has its own supermarket, hypermarket, convenience shop and forecourt
shop.

Public sector organizations:

Virgin Money is a public sector company.

Size and Scope
: The size of the organisation has significantly increased and customer base in 2012
with the purchase portion of “good bank”. It is owned by Virgin group.
The operation of business
increasingly throughout the world and has wider scope.

Voluntary sector organization:

Cancer Research Company-

Size: The Company is likely to invest $500 million per year and they are independent largest

organisation which funds for Cancer research.

Scope: It has a wider scope which publishes original studies, opinions and reviews by present broad

and significant impact to diverse addressees.

Business structures and the interrelationships of the diverse functions organization has been

evaluated critically.

It has been critically evaluated that all of the above types of organizations have different

business structures and follow different complexities. In the organizations, there are several

functions embraces such as marketing finance operations and much more, also their management is

fully influenced by the size of the organization (
de la Cruz, M .E. and Et.al., 2018). In respect of
sole proprietorship, all the operations are succeeded by one owner and that is the cause the structure

is small in size. In case of partnership, functions are ruled mutually by the partners at the time of

signing the deed of partnership. While a joint stock company have complexity because their sizes
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are large and they comprises with high work load for their business operations. All these functions
are overlook by department to handle them in a productive way which might create complexity in

the structure of business.

TASK2

P3. How the organizational functions are interrelated with objectives and structure of an

organization.

The organization has different types of a structure such as functional, classical, divisional

or Matrix. Small organizations have classical structure which centralized all the key functions of

the organization. In case of functional structure, employees are categorized into small units based

on job roles and responsibilities and comprises with huge quantity low production services. In

respect to matrix structure, employees are categorized into several groups which are based on the

functions, objectives, goods and services through which they are positioned and each group is

focused on to complete a particular activity (
Fehrer, J. A. and Wieland, H., 2021). As introducing a
large organization Sainsbury’s follows a structure of matrix organizational in which they have

several divisions or units rendering to the needs and functions which are to be fulfilled by the

company.

A business owner tackle many functions which are exists in an organization. No matter

what is the type of organization, these types of functions are very significant to operate all the

activities in a smooth manner. As these functions of organizations are interconnected with each

other and supports the organization to produce a proper internal structure which comprises all the

sections of the organization in which all these functions are divided. The management authority

requires to focus and overlook the coordination and cooperation between those functions and

consequently it turn into the purpose of the organization to manage these in a productive manner. It

is also helpful in maintaining and building a good coordination between several departments of the

organization.
In context to Sainsbury’s, being a UK’s largest organization which follows a variety
of functions in the organization such as finance, marketing, human resource, or operations which

necessitate to maintain coordination in such a manner that it delivers good competencies to the

organization. The functions of organizations along with their interconnection such as follows:-

Human Resource and Marketing
: Human resource is the pillar of organization and it is
very important to manage the resources of organization in a very effective and efficient manner.

This department is associated to the human resource management that are employees and workers

of the organization. With reference to Sainsbury’s, the company have a huge number of employees

for the operations and functions of the organization which requires to be hired and managed in a

productive manner. Whereas marketing is the most important and necessary function of the

business as it provides many ways and techniques to advance the awareness about goods and

services which are offered by the respective company to the desired customers and increase the

production and sales in the organization (
Fotso, G. B., Edoun, E. I. and Mbohwa, C., 2018). The
organizational department utilize several tools and techniques to enhance the interaction of

customer and it is answerable to establish an effective of communication between customers and

organization. In context to the respective company, which has a range of department for the

marketing. While marketing department always has necessary information, relatable to customers
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and clients that requires to be conveyed to other sections of the organization. The cooperativeness
is required for proper management and functioning of the organization.
Coordination is very
important for the company to link with marketing and further branches. The functions of human

resource management and marketing are taken very carefully. As the demand of employee and

worker in each and every section of the organization is taken by HR department. Hence it becomes

very necessary to develop a good coordination between departments so that it does not lack with

the human resource in organization.

Finance department and information technology
: It is very significant to recognize that
information technology plays a very important role in order to meet the objectives of organisation

and to get success for the organisation. IT departments supports in using advanced technology and

helps business. In relation to finance department, the decisions are taken by the finance department

because money is grant by them. This department helps to create budget. In context to Sainsbury’s,

they identified that finance department have to keep record of everything and it has to do lot of

work. It has been identified that information technology department supports to use advanced

technologies which help in maintaining the records of all the things in a proper way with minimum

efforts. This is the way finance department and information technology department are interrelated

with each other. As their respective organisation has operated business at a large scale they have to

contact each other department and this is done by in a possible way due to hierarchy structure.

TASK3

P4. Micro and macro environmental factors and how it impacts the business operations.

Micro environmental factors can be understood as the factors which had their impact on the

organization only while macro environmental factors are those which impacts the whole industry (

Suseno, Y. and Pinnington, A. H., 2018)
. But both these factors impact the goals and decision
making of an organization which is very important to deliberate environmental factors too. There

are many micro and macro environment factors which impacts the business of the respective

company. It is very important for the organization to recognize those factors for resolving them

with an intention to maximize productivity and profitability of the organization. Pestle analysis has

proven great method to analyze external factors of the organization to realize the flexibility in the

business environment which impacts the overall business in several ways (
Hrnjic, A. and Et.al.,
2018)
. Pestle analysis comprises with several factors such as political, economic, social, legal,
technological and environmental which are deliberated into micro and macro environment factors

and impacts on the business functions and operations of the Sainsbury’s Company. The pestle

analysis of the respective company is mentioned below: -

PESTLE
Analysis
Political
Sainsbury’s mainly operates their business in
the market of UK and that is the cause

economic slowdown does not affect the

organization. BREXIT has triggered a

significant drop in the spends of customer

which reason the decrease in the sale as well of

the supermarket in the UK. While it appears
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that, this impact is only for short term but
BREXIT impacts negatively on the business

operation of the respective organization.

Economic
There is a considerable decline in the demands
of products from the supermarket stores due to

increase in inflation rate and endless growth

rate of the income of customers. UK is faced an

economic lack of progress and the respective

company can invest in developing countries

who is economically developed at much fastest

speed. Hereafter the respective company is

also go through from a negative impact of

economic environmental factors on the

business of Sainsbury’s in UK.

Social
An organization can be declared as a
successful when their customers are satisfied

with their services and for which they required

to analyze the needs and desires of their

customers. Social factor is an external

environmental factor which supports an

organization to keep updating about social

trends which help them to measure customer

changing needs. As considering this modern

era where the customers desires to shop which

they can purchase and demand for the

particular goods and services which they

required under one destination (
Kabakova, O.
and Plaksenkov, E., 2018)
. The respective
company follows the current social trends

which is the main purpose that it becomes the

second largest chain of supermarket. Hence,

they need to provide different types of

products and services to their customers with

specific amount of discounts and offers and

other benefits under one definition.

Technological
Being a second largest organization the
respective company understands the

importance of adaptation of advance

technologies in the organization. Technology

advancement results in high degrees of overall

cost of manufacturing of the products and

services which delivers a huge amount of

profits to the organization. The organization

also may have an option to sale their products

and services online which can be a great use of

latest technologies which provides a favorable
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results from the external environment as well.
Legal
In UK, the legal factors have negative impact
on the business operations of the respective

organization (
Krüger, N. and Teuteberg, F.,
2018)
. In UK, a sugar tax is presented which
shows as can you text due to which the

organization requires to their products

modified to fulfill the legal requirements

which desires to save legal expenses. So that

organization necessities to take permission

from the legal management and can sell sugar

foods to the children who are under 16 years

with inappropriate development of the

regulatory authorities.

Environmental
Nowadays environmental factors are greatly
impact the minds of society and government

and aware about using of products which are

ecofriendly. In UK, Government and citizens

need organization to be eco-friendly and

deliver goods and services which are healthy

for the environment and health both.

Sainsbury’s understand the importance of

sustainability and take actions appropriately to

follow this in an effective manner

(
Krishnamurthy, S., 2020). The company has
taken a step to reduce wastage in beef and lamp

supply chain.

The impact of micro environmental factors on the business operations of Sainsbury’s PLC

are mentioned below
:-
Micro

environmental

factors

Analysis

Competitors
The competitors in the market are in good numbers for Sainsbury.
Organization itself
There is good brand image and goodwill in the market for Sainsbury
which had always proven beneficial to the company.

Suppliers
Sainsbury is the second largest supermarket chain and the suppliers play
a vital role in change of micro economic factors (
Level, C. O., 2019).
The suppliers are the ones who provide goods and products to the

company which later is offered to customer.

Market
The company has a wide network in UK and its major business
operations are done in UK itself which shows stability of the company in

a particular market.

Intermediaries
By eliminating the intermediaries, the company avails product and
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services at lowest prices. The cost-effective strategy can bring in more
profit in the organization.

Customers
Being the second largest supermarket chain, Sainsbury has a huge
customer base in the country. The huge customer base has many loyal

customers having a goodwill connect with the company. There are

recurring customers who will end up to the same supermarket provided

any change in market conditions.

It has been evaluated that micro environment provides great impact on the company and it

cannot be managed by company so that it is very essential for the respective organisation that they

should analyze and identify all the macro environment factors that come from external

environment. Pestle analysis provide a base to examine those external factors in order to analyze

positive as well as negative impact. With the help of this analysis an organisation is able to take

necessary precautions in order to meet with those factors.

TASK4

P5. Internal and external analysis of Sainsbury’s
.
SWOT analysis of any firm reflects the internals factors that are strengths and weakness

whereas external factors includes opportunities and threats of a particular company. The external

analysis is carried on considering the market conditions and other external factors affecting the

business (
Obiekwe, O., 2018). Discussing about Sainsbury’s, it is supermarket which provides
various product and services. As mentioned earlier, there will be strength, weakness, opportunities

and threats internally and externally impacting growth of the business in future. For examples;

employees, intellectual property, location or patents are the internal factors which may sometimes

strengths for the organisation and sometimes weaknesses because things required some control

over and change anytime. Price of raw materials, competitors and customer shopping trends are the

opportunities and threats for the organisation.
SWOT analysis will help to understand more about
the 4 attributes precisely
.
Strengths
Weaknesses
Sainsbury has created a goodwill in the
market which attracts many new

customers towards their store.

The customer’s demand is fulfilled
when the company or store provides

variety of products at the same place.

Sainsbury being the second largest
supermarket chain has weak

management layer and top level

management is weak which leads weak

decision making for the organization.

The additional expense for the
customer which is termed as interest is

low in the organization which sets a

less profit margin for the company.

Technological advancement is
necessary for increase in productivity
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of the organization and Sainsbury lags
behind with the same at some

situations.

Opportunities
Threats
Increasing network and customer base
in rural areas can give addition to a new

customer base also.

Online customer base could give
company a new way or strategy to

develop and increase the customer

network.

There are multiple cost-effective
strategies which can help the company

to gain more profit by reducing the

expenses.

The company has initiated operations
in more countries which can earn them

more diverse customers.

Although being the second largest
supermarket chain in UK, there are

many competitors available in the

market.

Globalization has given rise to a greater
number of competitors for the

company (
Mosteanu, N. R., 2019).
P6. Objectives and Decision-making of Sainsbury’s are influenced by SWOT analysis.

SWOT analysis is proven management framework used for analyzing the company’s

strength, weakness, opportunities and threats. It focuses on what is going good with the

organization, what need to be improved, what the company is lacking, to minimize risks, and to

take possible advantages of chances for success (
Molnar, A., 2018). While discussing about
Sainsbury, it has attained a goodwill in market and between the people of UK by offering them a

large variety of products in the same range and category. The strength of the company is marked

where they are trying to expand the customer base and target customer by starting the operations in

developing countries as well. The weakness of the company is known where they need to focus on

management layers of the company which can strengthen organizational structure for better

decision making. The company’s goodwill and brand image can help them to implement more

strategical ideas into practice and work it well in the market. The company can implement strategic
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techniques for reducing the expenses related with cost. It can gain more profits to the organization.
The company should focus on the digital technology advancement also for successful run of the

business in long run. The brand image can be used to bring in sales and create new customer base

and satisfying the existing ones also. The main objective of the Sainsbury’s establishment is that

they want to satisfy their valuable customer with quality food and services and same with

stakeholders by providing good returns.
The company could also evaluate the threats to the
company having a good number of competitors in the market. The company should focus more on

the USP of theirs to attract more customers and generating more demands from the existing

customers.
It has been evaluated from pestle analysis that respective organisation can take on the
systematic study about these factors in order to take advantage of opportunities then they happen.

As well as the organisation may turn these possibilities into their strengths which allows them to

gain competitive benefits. Various macroeconomic factors may have negative impacts to for the

organisation and it will be very critical to be prepare and aware of any risk. In relation to the

respective organisation, it operates its business in a political stability which allows them to perform

and build their brand image positively in the eyes of customer throughout the world.

CONCLUSION

It can be concluded from the above report is that there are three sectors in which the

organization can be classified into which are public, private and voluntary. There are set rules and

regulations which are supposed to be taken care of by the organization as per the legal structures.

While the company sets on expanding the organization into different countries to operate as well,

there will legal structures which can intrude while the business goes on as usual. The operations of

the business can be impacted. The organization have multilevel functions which has multi relations

between each other. These relations help the company to level between managing micro and macro

factors of operating a company. The report also helped to understand PLC and SWOT analysis of

the second largest supermarket giant Sainsbury. It gave a bright insight about the company’s what

is going good and what all they have to improvise and where the company lacks in the market and

the threats that they should be aware of which are there in the market.
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REFERENCES
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consideration.
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indirect path forward.
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Level, C. O., 2019. Business studies.
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Mosteanu, N. R., 2019. Intelligent Foreign Direct Investments to boost economic development–

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