Business Environment and Organizational Analysis: Sainsbury Report

This report provides a comprehensive analysis of Sainsbury's business environment, exploring various aspects of its operations. The report begins with an introduction to the concept of the business environment, emphasizing the importance of internal and external factors in achieving organizational goals. It then delves into the different types of business organizations, including private, public, and voluntary sectors, along with their legal structures, using Sainsbury as a key example. The report also examines the size and scope of different business entities, comparing Sainsbury to organizations like the BBC and Cancer Research UK. Furthermore, it analyzes the interrelationship between different organizational functions, such as purchase, marketing, accounting, R&D, and HR, and how these functions are interconnected with organizational objectives. The report also covers the macro environment, including its positive and negative impacts on business organizations, and conducts an internal and external analysis of Sainsbury, including a SWOT analysis to illustrate the interconnection between strengths, weaknesses, and the external macro environment. The report concludes with a summary of the key findings and provides references to support its analysis.

Business Environment

Table of Contents
INTRODUCTION.......................................................................................................................................3
PART 1........................................................................................................................................................3
P1. Explain different types of business organisation which is available in public, private and voluntary
sector with their legal structure................................................................................................................3
P2. Explain about the size and scope of a different types of business entity..........................................5
P3. Explain about the relationship between different organisational function and how they are
interconnected with organisational objectives.........................................................................................7
PART 2........................................................................................................................................................8
P4. Explain about macro environment including its positive and negative impact upon business
organisation..............................................................................................................................................8
P5. Conduct internal and external analysis of specific organisation.......................................................9
P6. Explain how strength and weaknesses are interconnected with external macro environment........11
CONCLUSION..........................................................................................................................................12
REFERENCES..........................................................................................................................................13

INTRODUCTION
Business environment is understood as the concept of business where different internal and external
factors play crucial role in accomplishing the goals of an association. The one thing which is necessary
to be understood within this particular concept is that organisation must consider all of this factor before
taking any of the decision else problem may arise in future time period. This file is based on Sainsbury
which is one of the retail sector industry of UK which has been effectively handling its business in
different nations. The main aim of the organisation is to provide some best possible services as
compared to rivalry firm.
This respective assignment will contain number of information which is related with different
sector organisation including their size and structure. In any of the organisation, it is necessary to
maintain relation with different department so this particular area will also be focused the most. While
talking about second part, the most important thing which will be considered in this assignment is that
how external factor may affect the business including their positive and negative impact. In addition,
SWOT analysis will be also mentioned in it.
PART 1
P1. Explain different types of business organisation which is available in public, private and voluntary
sector with their legal structure.
Business organisation is a place where number of people as well as resources are required for
conducting any of the business activity. The aim of an entity is to attain goals by taking effective
decision where chances of losses can reduce. Different form of entity can be seen in current scenario
which is based on structurer and size of a business. Some of the business organisation has been
discussed below:
Private Organisation: The form of business organisation which is handled by group of people
with the motive of earning profit is known as private organisation (Chaouk, Pagliari and Moxon, 2020).
The perfect example of private organisation is Sainsbury. Below, some of the private organisation are
explained below,
 Sole Proprietorship: This is the form of business which is to be performed at smaller ground
where work is needed to be managed by single person. Here, legal obligation is not required in it.

Kurt Geiger is among famous sole trader in UK which is dealing in footwear. It mainly focuses
towards women’s shoes as compared to any other retailer in UK.
 Partnership: This types of entity is to be managed by minimum 2 members where maximum
number of limit is of 20. This form of business reduces the work by dividing the percentage of
responsibility among available partners. Talking about partnership firm, the best example of
partnership firm is Mumsnet which was founded by two friends named as Carrie Logton and
Justine Roberts.
 Company: This types of organisation are required to perform their work at greater platform
where legal requirements are also in high numbers. Legal process of Companies Act 2006 is
required to be followed in it for incorporating the company. Sainsbury is one of the company
which has been registered under Companies Act 2006 (Zahari and Romli, 2019). Sainsbury is
one of the perfect example of private limited company and in case of public limited company
BBC can be the option to point out in an example.
Public Organisation: The business form where maximum percentage of involvement can be seen
from the side of government is known a public organisation. The major purpose of this types of business
is to focus upon providing services to large number of people. The organisation which can be suitable in
the public sector is BBC.
Legal Structure:
 Central: It is the main body which has the power to manage every single activity where they
also focuses that how any of the work is needed to be done by considering different factors.
 State: This types of public organisation is responsible for manaing the business activity within
specific area. Here, work is always provided by central body.
 Local: This types of structured business has the responsibility of managing business at local
level where local government takes active participation.
Voluntary Organisation: This form of business is commenced for the purpose of performing
business activity as social service. One of the suitable example of Voluntary organisation is Cancer
Research Centre UK (Guo-rong, 2018).
Legal Structure:

 Charitable Trust: This are the form of organisation which is managed by the fund that has been
collected through different process.
 Unincorporated Association: These are those organisations which are commenced by specific
number of people where their main motive is to provide different types of services to people.
P2. Explain about the size and scope of a different types of business entity.
In any of the market, different types of business can be seen where some of the them performs
their activity at smaller ground and some of them work at bigger ground which completely depends
upon their size and scope. Talking about Sainsbury, it is one of multination company which is involved
in the sector of retail and grocery. It is one of big four retail sector organisation in UK.
 Purpose of Business: The main aim of a business is to provide services to their customers at a
low amount of money which can also allow them to attract more number of customers.
 Size and Scope: In current scenario, Sainsbury is dealing in almost 70 different nations and there
are around 120,000 employees who are connected with Sainsbury in current situation. It is one of
the reason which makes company itself a bigger organisation (Hamilton and Webster, 2018).
 Products and Services: In present scenario, company has been dealing in the grocery product
where they also do home delivery as a part of their services.
 Market Share and Profit Share: It is one of the company which covers around 15.3 percentage
of total market while talking about the profit share which is £635m in the year 2018-19.
BBC: These is among one of top organisation within public sector where its headquarter is located in
London, United Kingdom. It is one of those company which is managed government. In present
scenario, it can be said that BBC is among one of the oldest broadcasting organisation.
 Business Purpose: Looking at the scenario of a company, their main purpose of conducting
business is to provide proper education by keeping them update and entertaining them with the
help of different types of program.
 Size and scope: The company like BBC which has been operating worldwide have around
22000 employees where there are still some of the nation where company is not performing in
current scenario where company wold like to perform in future time period where they can easily
succeed.

 Products and Services: In context of product, BBCC is providing broadcasting including radio
as well as web portals. On the other side, some of the services which are being offered by BBC is
television, online articles and many more (Hilton and Platt, 2018).
 Market share and profit share: It is one of biggest organisation in terms of employees engaged
with organisation whereas their overall income is around £70 m.
Cancer Research UK: It is one of voluntary entity where management is working to develop
awareness about Cancer so the ratio of overall death due to Cancer can be reduced. Currently, they have
been working within UK but have an aim to expand their entity at world level.
 Business Purpose: The main purpose of the company is to work in the field of research where
they can develop medicine through which number of patient can be reduced and even awareness
can be developed.
 Size and scope: It is one of those charitable organisation which is independent where highest
number of volunteers are working in the form of students, doctors as well as researcher etc.
 Products and Services: They mainly provides the technique through which problem related to
cancer can be resolved. Some of the services included in it is chemotherapy and radio therapy.
 Market share and profit share: This particular organisation just works for the welfare of public
where there is no motive of earning profit.
Scope Micro enterprises Medium enterprise Large enterprise
Internal This are the
organisation where
business activities are
performed at smaller
ground which means
that if they want to
expand their business
then they have the
option to work in the
area of expansion like
more capital
(Chattopadhyay and
This types of
organisation can work
within the area of
providing effective
products and services.
As this types of
company have higher
number of employees
which means that they
can easily complete
their work in specific
time period.

Bhawsar, 2017).
External There is a scope that if
organisation performs
better then chances of
business takeover
increases in it.
This types of
organisation have the
scope where they can
merge with other
bigger organisation for
attaining their goals.
Process of Acquisitions
can be seen within this
form of business entity.
P3. Explain about the relationship between different organisational function and how they are
interconnected with organisational objectives
There are different types of organisational function which plays huge role within the business
organisation. Some of the organisational function has been discussed below:
 Purchase Function: It is among important department which purchase raw material for the
business organisation. It interrelates with manufacturing department and according to that it
decides about the quantity to be purchased for manufacturing the products. In context of
Sainsbury, it is among the important function because it may allow to reduce unnecessary
expenses through which profit can be increased.
 Marketing Function: This function has an important role within Sainsbury and guides how
company can promote their business. Here, it co-ordinates with manufacturing department and
according to the quality of product it can easily do favourable kind of marketing for attracting
higher number of customers.
 Accounting & Finance Function: It need to be understand that in organisation like Sainsbury,
accounting department plays crucial role because their contribution directly determines whether
company will accomplish their goals or not. It can interrelate themselves with HR department
where it can determine about the expenses which is needed at the time of hiring and giving
training to employees.
 Research and Development Function: This department has its own role where it tries to do
research on market or product for taking competitive advantage. Here, department take the help

of marketing team to determine about the requirement of customers and according to that they
try to conduct their research process.
 Human Resource Function: It is also among one of the important function within the entity like
Sainsbury where they work marketing team to explain about the requirement of candidate. Here
marketing team conduct further work where they advertise about the requirement of company
which certainly helps in performing their work in effective manner.
Organisation structure: It is the organisation structure which simply explains about the roles
and responsibility which is being given to any of the employees within the organisation. It is mainly
used for providing information that how any of the work is to be done. Some of the types of organisation
structure are listed below:
 Functional Structure: It is one of the organisational structure where company forms different
department according to the roles and responsibility where departments heads are appointed who
will be held responsible for every activity. Only those people are appointed as head who have
experience in particular field.
(Figure 1: 4 Types of Organizational Structures. 2018)
 Divisional Structure: It is the structure which is followed by number of organisation where
different groups are formed and according to the requirement, proper resources are provided to
them so that they can perform effectively (Fernandes, 2017).

(Figure 2: Divisional Structure: Definition in terms of Business Management)
 Matrix Structure: It is defined as organisational structure where organisation focuses on two
way of reporting. This types of reporting are beneficial as well as result oriented because there is
less chances of errors in it.
(Figure 3: Understanding Matrix Organizational Structure)

In context of Sainsbury, they have adopted functional structure for performing any of the business
activity in a systematic manner. This process has been important for the success of Sainsbury because
proper guidance to subordinates can be provided due to which chances of errors reduces in it.
Interrelation among various functional areas
Organisation can only perform better in that respective situation where they are able to develop
interrelation with other departments head. Below, some of the interrelationship different department of
Sainsbury has been discussed below.
 Interrelationship between marketing and purchase department: In any of the organisation,
marketing department plays necessary role where they also adopt different strategies as per the
requirement. In context of Sainsbury, marketing department and purchase department discusses
about the product which is needed to be purchased. It certainly allows them to find the audiences
through which their goals can be accomplished.
 Interrelationship between marketing and finance department: Marketing department of an
organisation has the responsibility to conduct detail research in market (Hillary, 2017). For this
respective thing, Finance department of Sainsbury provides funds that how much fund is
required for doing depth marketing research. It allows the department to conduct their work in
smooth manner.
PART 2
P4. Explain about macro environment including its positive and negative impact upon business
organisation.
It need to be understood that performing business activity is not an easy task. Different types of
effect can be seen upon business organisation due to which it becomes essential for any of the entity that
they should be able to analyse external factor before making any of the business decision. Here,
company like Sainsbury have the option to take help of PESTLE analysis. This will certain help
organisation to take some of the decision through which goals can be accomplished easily. To find
impact of external factor, PESTLE analysis has been explained beneath:
 Political factors can be defined as the external factor where interference of government policies
and decision taken by government agencies does have an impact upon organisation. Organisation
like Sainsbury must try to follow all of the decision which are being taken by the government so

that effective decision can be obtained. After Brexit, import duty has been increased due to
which company has to pay extra charges and that have a negative impact (Preuss, 2017). On the
other side, government of UK has been promoting retail sector organisation due to low taxes are
to be paid and that have addition advantage for Sainsbury.
 Economic Factors is explained as a factor which have a huge impact upon business entity. It
mainly focuses on inflation rates, currency rate, different tax rates, import, export charges and
other as well. It need to be understood that company like Sainsbury should bring changes in their
working style as per economic changes so that goals can be accomplished. It has been seen that
wages rates have been amended where organisation has to pay additional amount which
increases the cost due to which it becomes difficult for Sainsbury to retain more number of
employees. It has a negative impact. The positive side is that company gets the opportunity to
earn foreign currency as it operates in different part of the world which is a positive side.
 Social Factors has a connection with preferences, culture and believes of people towards the
organisation. In context of Sainsbury, their customer’s behaviour towards organisation have huge
impact upon entity. It has been seen that people wants to concept of one stop and even Sainsbury
have been focusing into it which has a positive side on company. In addition, there are number of
people who focuses towards their health and prefer organic products which has been reducing
profit percentage for Sainsbury (Springer, Cham.Hillary, 2017).
 Technological factors have a huge role for business entity and they generally guide that work
can be completed in easiest form. Sainsbury is among those firm where they have strong
believed upon latest technology which has been able to attract more number of customers
towards the organisation and have positive impact. Although, there is a positive side but negative
side says that technology changes at a rapid speed due to which higher expenses do incur for
company which reduces percentage of profit.
 Legal Factors is related with laws and regulations which are necessary to be followed by every
business entity. It is necessary to understand that laws and regulations guides that how
organisation needs to perform. Following this laws and regulations increase the overall burden
upon company and that does have a negative impact. But, it is needed to be understood that it
directly improves the faith among customers which can be positive side for organisation like
Sainsbury.

 Environmental Factors has a huge importance in current scenario. It is said that if any of the
organisation fails to perform by considering environment in mind then it becomes difficult for
them to sell their products. In context of Sainsbury, they are one of those organisation which
focuses on environment and sells only eco-friendly product which has a positive benefit but on
the same time eco-friendly products reduces the profit margin which is a negative side for an
entity.
P5. Conduct internal and external analysis of specific organisation
There are certain things which is always needed to be focused by organisation so that their
performance can be improved. In the same manner, it is necessary for the organisation like Sainsbury to
identify about their strength and weaknesses. For finding out strength and weaknesses company can
easily conduct SWOT analysis which gives information about internal position of the company. In
detail, SWOT analysis has been discussed below:
SWOT Analysis on Sainsbury
Strength Weaknesses
 It is one of those firm which works
according to the rules and regulation
which has been allowing to maintain
customers base.
 They purchase raw material from local
suppliers due to which high export duty is
not required to be paid by them.
 Sainsbury easily introduces new
technologies for performing better.
 Sainsbury has to chances their working
style as per changes brought within laws.
 It has been seen that number of time
company takes feedback from customers
but unable to bring those changes within
the entity.
 They take time to understand about the
changes brought by political parties.
 Company deals in rear number of organic
products.
Opportunity Threats
 They can bring changes as per the
feedback given by customers.
 There is a huge threat for Sainsbury from
its rivalry firm like TESCO, ASDA,