Business Environment Analysis Report: Sainsbury's Case Study

This report provides a comprehensive analysis of Sainsbury's business environment. It begins by examining the various types and purposes of organizations, including private, public, and voluntary sectors, along with their legal structures, using Sainsbury's, the Crown Prosecution Service, and the British Heart Foundation as examples. The report then delves into the size and scope of these organizations. It further explores the interrelation between different organizational departments and their link with objectives, such as human resources, marketing, finance, and production. The impact of macro-environmental factors on Sainsbury's is then assessed, followed by an internal analysis to identify its strengths and weaknesses. Finally, the report examines the interrelation of macro-environmental factors with the identified organizational strengths and weaknesses, providing a holistic view of Sainsbury's operational context.

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Various types and purpose of organisation along with legal structure..................................1
P2 Size and Scope of various organisations................................................................................4
TASK 2............................................................................................................................................5
P3 Interrelation between various kinds of organisational departments and their link with
objectives.....................................................................................................................................5
TASK 3............................................................................................................................................6
P4 Impact of macro- environment factor....................................................................................6
TASK 4............................................................................................................................................7
P5 Internal analysis of organisation for identification of strength and weaknesses...................8
TASK 5............................................................................................................................................9
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses 9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment consist of both external and internal factors that can have a
positive and negative affect on business operations. This majorly includes employees, customers,
supply and demand etc., external environment basically involves factors that are beyond the
control of company (Kolk, 2016). Company on which the entire report will be focussed is
Sainsbury's which is a public organisation. This assignment will throw light on different types
and its purpose of organisation whether public, private and voluntary sectors. Size and scope of
various kinds of companies is explained in this report. Other than this, relationship between
firm's function and how they are linked with organisational objectives is mentioned in this report.
Lastly, strengths and weaknesses that are linked with external macro factors of a given company
is included in this assignment.
TASK 1
P1 Various types and purpose of organisation along with legal structure
Every company works with the purpose of gaining maximum profits and providing better
services to its customers. They have different legal structure which they follow for operating its
business in a better manner. Thus, it is prime duty of the managers of various organisation is go
through these legal structure so that it can be explained to its fellow employees in an effective
way. Therefore, various kinds of and purpose of organisation along with its legal structure are
explained below for having a better understanding:
Private Company:
Companies that comes under private sector are own and govern by them, government
doesn't play any role in this. They are not allow to sell their shares to public sector companies
which restrict them from gaining maximum profits (Karagiorgos, Drogalas and Giovanis, 2011).
Company that is taken in this assignment is Sainsbury's which is a private organisation
and comes amongst second largest chain of supermarket in United Kingdom. They have around
1,415 shops in different locations and approximately 181,900 number of employees are working
for providing maximum benefits to the organisation.
Purpose of Sainsbury's:
Main purpose of Sainsbury's is to provide best quality services and facilities to its
customers so that they can win loyalty of consumers for a longer period of time. Along with this
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they are incorporated latest tools and technologies for manufacturing goods and products in a
best possible way (Hillary, 2017).
Legal Structure:
Partnership: It is an agreement that is signed between two or more individual who are
with concern prefer to work in partnership. All the profit and loss are shared by both and they
combinely work for gaining maximum profits.
Sole proprietorship: In this, companies are owned by by an individual and they are
known as sole traders. Individual owns unlimited liabilities and have proper control over
business operations.
Advantages and Limitation:
Advantages Limitations
Owner enjoys the entire control in there
business.
They are need to follow legal agreements.
Shareholders and owners both have limited
number of liabilities.
Generating more amount of funds is quite
difficult for them.
Public Organisation: These are the organisation that are governed and regulated by regulatory
bodies of a particular nation. They have a control over all the operations that are related to public
education, military forces, public transit and many more.
Crown Prosecution Services, that majorly works for criminal legal documentation in
England. Company was established in the year 1986 and till date they have around 6000
representatives (Hoang and Rothaermel, 2010).
Purpose of Crown Prosecution Services:
Their main purpose is to provide appropriate services to its clients in terms of giving
legal advices and to criminal offense. Along with this, try to give adequate solutions for
resolving problems of different circumstances.
Legal Structure:
Central Government: They looked after departments that comes under state and central
government.
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State Government: They play their role in making some contribution in functioning of
state as well as their agencies.
Local Government: They basically give functions that are related to management of
public companies (Helms and Nixon, 2010).
Advantages and Limitation:
Advantages Limitations
Work for providing benefits to public. Funds which they want are limited
Make proper use of resources that are available
to them.
They doesn't have financial freedom for
borrowing money from different sources.
Voluntary Organisation: Companies that are included in this works with the help of volunteer
who prefer to work with their own will. They perform their activities with the motive of
providing better facilities instead of earning a large number of profits.
British Heart Foundation is work for the welfare of the society, this organisation was
established in the year 1961, and since than they are giving adequate services to people who are
suffering from heart diseases (Hamilton and Webster, 2015).
Purpose of British Heart Foundation: Purpose of this organisation is to treat all the people who
are suffering from heart diseases so that environment can be made free from heart diseases. In
order to spread awareness they are conducting seminars in different locations and this move by
hem is providing maximum benefits is making people aware at large number.
Advantages and Limitation:
Advantages Limitations
Government is also supporting this
organisation for their works which they are
doing for the betterment and welfare of people.
All the activities are unplanned and
uncontrolled so, it is quite difficult for them in
grabbing opportunities.
Other people are also taking active
participation in this and they are providing
funds as well.
There is no guarantee of continuity as it can be
withdrawal any time.
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P2 Size and Scope of various organisations
Companies that comes under this like Sainsbury's, Crown Prosecution Services, and
British heart foundation have their own size and scope which makes them unique form one
another. It depends upon the locations in which they are situated and located (Hair, 2015) . So,
all these are explained below for better understanding:
Sainsbury's:
Size: Company holds up a market share of around 16.9% in the market of United
Kingdom. Company was founded in the year 1869 by John James Sainsbury. Company majorly
deals in retailing and comes amongst top 2 companies in UK. Their headquarter is situated in
Holborn, London. Approximately 1,415 shops have been opened by them in different locations
and a large number of people are working there are giving their best efforts for providing
maximum benefits to its customers.
Scope: There are different kinds of products which are provided by Sainsbury's, they are
make commodities related to household products, which tastes goods and different from other
products.
Vision: Firm majorly work with the motive of providing excellent quality of products to
its customers so that they can win loyalty of customers. Apart form this, they are working with
the vision of becoming one of the major company in the field of retailing (Grimpe and Kaiser,
2010).
Mission: Company's mission is to become one of the leading organisation around the
world so as to sustain a better position at market area. Along with this, they are manufacturing
goods which are best in quality.
Crown Prosecution Services:
Size: Company is working at small level and they are giving services related to legal
advices to police and different kinds of investigating agencies. They basically help them in
identifying whether an individual is guilty or not. Organisation is actively working in England
and Wales.
Scope: Crown Prosecution Services can established their services in different areas where
they have not expanded yet as a result it will help them in providing better services and facilities
in these areas as well (Goleman, 2017).
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Mission and Vision: Company's prime vision and mission is to give excellent quality of
services and facilities to its customers so that it could be helpful for respective investigating
teams and squad as well.
British Heart Foundation:
Size: This organisation is working for the welfare of the society so that every individual
live their life happily. British Heart Foundation majorly working for the people who are suffering
from heart diseases. At the moment, firm is giving its services in United Kingdom and they are
primarily working with the motive of eliminating all the issues that are related to heart diseases.
Scope: British Heart Foundation are working with the purpose of eradicating health
problems from the society so that a healthy environment can be maintained in the society.
Mission and Vision: In terms of British Heart Foundation, their mission is to treat all the
people who are suffering form heart related problems. In context with vision they are trying to
adopt new technologies which is enabling them in providing better facilities and services to its
clients (Demil and Lecocq, 2010).
Stakeholders analysis: They are considered as an very important element for all the
organisation who are working in different sectors. Further it can be classified into two categories
i.e. internal stakeholders: they are considered as an essential element who helps companies in
executing their plans effectively. External stakeholders: This includes people who are related to
pressure groups, regulatory bodies and their views are taken into consideration for making proper
decision for their business operations.
TASK 2
P3 Interrelation between various kinds of organisational departments and their link with
objectives
If a company want to get success than it is essential that they adopt things that are
different from one another as a result it will make them unique form others. In terms of
Sainsbury's they are maintaining a better understanding between different departments in an
organisation. It provides with an opportunities of identifying internal and external strength and
weaknesses in order to manufacture goods as per the choices and preferences of customers. Its
link with various departments are stated below for having better understanding (Edquist, 2010) .
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Human resource department: They are considered as a basic department that works for
the providing maximum benefits to companies. They main motive is to hire eligible candidates
through the process of recruitment and selection process. Along with this, they provide with the
training programmes so that employees can improve their skills and knowledge.
Marketing department: This department cannot come into being unless ample amount of
products are not manufactured. So both the department can be linked with each other thus, prime
responsibility of marketing department is to conduct a research of the areas where company
wants to sell their products. In terms of Siansbury's marketing department is helping them in
knowing the choices and preferences of customers so that products can be made accordingly.
Finance department: Conduction of proper planning is done under this, finance
department plans a budgets on quarterly basis so that company can have an ideas about how
much money are to be spend for accomplishing a particular task (Eling and Schaper, 2017) .
Further for doing this process in a better manner Sainsbury's has incorporated latest machineries
and as a result it is giving them effective results.
Production department: This the department that work for manufacturing goods of
different varieties according to the needs and wants of customers. For this, marketing department
provides with the information that can help them in doing so. Therefore, increase in sales and
profitability can be seen in Sainsbury's.
TASK 3
P4 Impact of macro- environment factor
It has been located that, every single business firm that delivers items to customers in different
geographical areas mostly gets suffer because of many macro and micro environmental elements.
Sainsbury's which is carrying a large chain of different stores along with supermarkets, these
elements can majorly put both negative or positive impact on business organisation. In present
context, in order to locate the effects Pestle Analysis is being done underneath:
Political factors: Sainsbury's which is doing business in around 58 countries of world has
to follow rules and regulations of every single nation if they wants to run business in a successful
manner (Cavalcante, Kesting and Ulhøi, 2011). Positive impact: In context to Sainsbury's, they go through different health policies which
has been made by firm in order to deliver hygienic services to customers.
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 Negative impact: Raise in tax rates can affect profit of this organisation.
Economical factors: It has been located that this element plays an important role when it
comes to run or enhance business of Sainsbury's. Profit margins can be affected if a nation will
face recession. Positive impact: Good economical based countries can be targeted by Sainsbury's in
order to perform well.
 Negative impact: Less income rates of customers can affect profit margins of this
company.
Social factors: Education, age, value, belief, atmosphere and many more comes under
this element of external environment. Positive impact: Reputation can be raised up if company is having good image in front of
its customers (Bryman and Bell, 2015).
 Negative impact: Lack of education is an issue under this.
Technological factors: New tools of technology can be considered as major impact on
business of Sainsbury's. Positive impact: Decrease in expenses with the help of internet (Promotional activities).
 Negative impact: Wrong adoption of technique may lead to face different losses.
Legal factors: Rules and regulations of government comes under this factor. Positive impact: Belief of customers can be enhanced through using different laws while
manufacturing process.
 Negative impact: Penalties can be faced by Sainsbury's.
Environmental factors: It is the duty of Sainsbury's to keep on looking at different
aspects in order to keep environment clean. Positive impact: Environmental friendly products will help company in raising reputation
of company among rivals.
 Negative impact: Reduction of brand image if not considered in an appropriate manner
(Cascio, 2018).
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TASK 4
P5 Internal analysis of organisation for identification of strength and weaknesses
It refers to the analysis done to evaluate the competitive point of the organization. This is
internal analysis which includes its strength & weakness with the external evaluation of threats &
opportunities in the organization
Strengths
Diversified Investment: Sainsbury have invested in different business units which are
correlated to each other. This has reduced the risk of the company as its money is not fixed in
only one business, if they will not generate revenue from one business unit it can get support
from the other business units (Avramenko, 2012).
Prime Human resource: It majorly focuses on quality training of its employees. It
provides training to its 10000 staff yearly. Highly trained staff is successful in satisfying their
customers.
Superior branding & Promotion: Sainsbury has adopted excellent promotional strategies
to build its market image. It uses latest campaigning methods to attract its customers towards the
brand.
Weakness
Dependency on UK market: Sainsbury is UK based retail company which is highly
dependent on UK market which is noticeable as largest weakness.
Difficulty in hiring employees with skills: Its difficult for the Human resource
department of the Sainsbury to find out employees with quality skills as per the requirement of
the company.
Fluctuation in food Prices: Fluctuating prices of the food is increasing constantly which
has also increased the prices of food product of the brand. This has the negative impact on the
sales as they are sold on higher prices now (Barnett and Salomon, 2012).
Stiff competition: Sainsbury has to face heavy competition from the retail market.
Opportunities
Connect with online marketing: Sainsbury should opt online marketing strategies as they
are the most trendy effective mode of shopping preferred by the customers.
Wide market: Sainsbury could enter into new market spaces through partnership & joint
venture with other companies.
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Advance technology: Sainsbury should introduce self automated checkout machineries in
their stores with the availability of 24*7 for its customer. This will increased sales of the
company.
Threats
Increasing globalization: It is the biggest threat for Sainsbury with the increase in
globalization new entrants are also entering in the retail sector which will increased its
competitions (Boons and Lüdeke-Freund, 2013).
Consumer oriented services: Sainsbury major objective is to meet consumer satisfaction
by providing them high quality this leads face difficulty in managing their revenue ratio.
TASK 5
P6 Interrelation of macro-environmental factors with organisational strength and weaknesses
For growing in a rapid speed it is essential that company linked their external factor with
its strengths and weaknesses. This will help them in evaluating positive and negative impact that
can affect its business operations.. Therefore, factors are explained below along with its strengths
and weaknesses:
Political: This is the basic factor that are to be looked after by all the companies, if they want to
established themselves in a particular area or nation. This includes rules and regulations along
with laws and legislations so that better conduction of activities can be done (Borio, Drehmann
and Tsatsaronis, 2014).
Strengths: Different nation have different rules that are formulated by the regulatory
bodies according to the situations and circumstances. Further it includes policies that are related
to taxes, excise duty, etc., so, it is mandatory that they follow these in order to improve their
brand image in front of customers and nation as well.
Weaknesses: As Sainsbury's is actively working in United Kingdom along with its
nearby places as well this is restricted them in generating more amount of money. As a result its
not providing that much revenue which company actually wants.
Economical: Economical condition of a country vary from nation to nation in some areas there
can be preferable conditions or not. Thus, it is crucial that regulatory bodies while making
economic policies considered all the factors that are present in market environment (Bovee,
Thill and Raina, 2016).
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