A Comprehensive Business Environment Analysis Report for Sainsbury's

This report provides a comprehensive analysis of Sainsbury's business environment, exploring both internal and external factors influencing its operations. It begins by defining different types of organizations, including public limited, private limited, and voluntary sector entities, with a focus on their purposes, visions, and legal structures. The report then delves into the relationship between organizational functions like marketing, finance, HR, production, and risk management, linking them to the company's objectives and structure. It examines Sainsbury's organizational structure, including functional, divisional, and matrix structures. Furthermore, the report assesses the impact of macro-environmental factors such as political, socio-cultural, legal, environmental, and technological factors on Sainsbury's effectiveness, highlighting the significance of PESTEL and SWOT analyses in understanding the company's strengths, weaknesses, opportunities, and threats. This analysis provides a valuable insight into Sainsbury's business strategy and its adaptation to the dynamic business environment.

Business and Business
Environment

INTRODUCTION
Business environment is composition of internal and external environmental factors that
impact on activities. Internal environmental factors are controllable including management of
business operations. While external factors remain beyond control involves political, social, legal
and other determinants that affects organization's environment. The present report is based on
understanding different environmental factors and its influences of Sainsbury. It is well known
public limited retail sector company of UK that provides grocery and food items to million
people at high level. Through this study, learners are able to understand different sectors'
organizations including their size, vision and different legal structure. However, links of various
departments to present organizational structure can be determined. Including this, environmental
factors and their impact on entity's effectiveness is understood through this report. Along with
this, PESTEL and SWOT analysis to recognize strength and weaknesses for business operations
are identified.
TASK 1
P1 and P2) Different types of organizations
There are several kinds of organizations that work in different sectors. These are as
follows:-
 Public limited organizations
 Private limited companies
 Voluntary sector entities.
Public sector organization:- Under public limited company, government interferes in
business operations. Therefore, business activities related to production and distribution of
products and services provided by company is considered under government instructions due to
following their rules and regulations. These entities have to follow rules and regulations of
government policies regarding business activities. There are various public limited companies
that work in different sectors in the UK such as Tesco, Sainsbury, etc. For example: ABC public
limited company produce a soap. inn this case, production of soap can be done as per the

customers and government. It is a duty of public limited company to give the services to there
customers and then earns a profit. In this example company should decide and give the
preference of the customers in there production activity.
Purpose:-
 To provide healthy and secured services to public
 To obtain social welfare and aware society related to business operations
 To take advantage of government policies for entity's implementation related to operating
business activities
 To contribute in country's economic growth and different fields
Vision: - The scope of public limited companies is interrelated to increasing in
profitability of entity and social welfare. However, public limited companies are useful for
accomplishing government projects that impacts on nation's effectiveness. For example: If a
public limited company established as p[er the government rules, then there main objective is to
provide such a product which are beneficial to the society and there welfare.
Size:- Public sector organizations are of different sizes including small and large. In
comparison to private limited organization, its size is small. While, in comparison to voluntary
sector entity, its scope is large.
Legal structure:- There is a lot of government interfere for operating business activities
in public limited companies.
Growth of international business environment:- Public limited organization is
developing in the global environment. It is useful for the economic as well as social development
of nation to improve efficiency in global market.
Private sector organization:-
Purpose:-
 To enhance profit earning capacity at a large scale
 To develop market efficiency and attracting a large customer base
 To increase productivity of firm and sustaining valuable position in the market by facing
competition
 To increase scope of organization through establishing new branches in other countries

Vision: - Private limited companies' scope is large in terms of profit maximization. In
this regard, different branches of organization are established for its expansion. Thus, these
companies view its long term sustainability through enhancing productivity and profitability of
entity.
Size: - These organizations are wide spread at national and international level. In addition
to this, private limited organizations have various branches that present their enlargement to
make a strong position in the market.
Legal structure: - There is less legal formalities to run private limited companies.
Including this, there is less government interference present in operating business activities.
Growth of international business environment: - Private sector companies are wide
spread and activate business operations within countries. However, these organizations are
crucial for global business environment because of effective fund for transacting goods. Hence as
per the above, private sector enterprise are those where there are less control of government and
there main motive to earning profits. For example: ABC is a private manufacturing company,
which produce food products, in this case there main motive is to provide products to the
customers and earning a profits as per the services which are rendered by them to the customers.
Voluntary sector entities:- These are nonprofit organizations that aim to achieve social
welfare at a high level. Thus, firms that come under voluntary sector help to needy people and
there is a little government intervention in business operations. In addition to this, social sector
firms are operated by individuals and they decision-making for services provided by companies.
In the UK, national health services (NHS) provide hospitality services to various patients at a
large scale to recover them effectively worldwide.
Purposes:-
 To provide effective services to needy people
 To contribute in social and cultural development of country
Vision:- Voluntary sector organizations are of small sizes that focus on providing social
services only. These entities less concentrate on gaining profit because of effective social
services.
Legal structure: - There is no legal structure to form nonprofit organizations. However, no
government interference is there to operate business activities.

Growth of global business environment: - The voluntary sector organizations play a crucial
role to improve efficiency of other nations through social development. In this regard, it impacts
social and entire effectiveness of civic sectors are obtained through these businesses. Non-profit
organization main motive is to give services to the customers. For example: NGO'S, Women
Health care organisation etc. are the part of the voluntary enterprise, which are organised to give
there help and support to such person which are facing many social issues such as domestic
violence, Abasement of children etc.
TASK 2
P3) Relationship between organizational functions and their link with objectives and structure
There are different departments available for producing groceries and food items. It
includes finance, marketing, HR, production and operation, risk management and different
departments that functions for operating business activities (Arnold, 2015). However, various
organizational functions can explain in brief as below:-
Marketing:- It is related to product quality features and its value in market. Under this
department, marketing manager of Sainsbury analyzes customer demand and various essentials
such as; product, price, place and promotion. Therefore, on the basis of market position,
innovative ideas are generated by manager to advertise goods and face competition. It influences
business and competitive strategies of organization to sustain its value in market.
Finance:- Financial manager of Sainsbury recognizes economic structure and different
monetary tools of organization (Sainsbury, 2016). For example; income statement, balance sheet,
profit and loss account, cashflow statements etc (Belás, 2015). It represents actual financial
position of business organization. As per identifying actual economic profile, different ideas are
generated for further business operations and increasing profit earning capacities of organization.
However, it is interlinked with entire business activities that impacts on its market position to
face competition.
HR department:- It is related to focuses on employees performance and their
contribution for performing job. In this regard, HR department of Sainsubry applies different
strategies for encouraging employees for better performance and effective contribution in team
building. However, HR manager of entity recruits, selects and organizes training for improving

working efficiencies of employees (Beynon-Davies, 2013). It is helpful for personal and
professional development of workers can be impacted that is helpful for organization. In
accordance to this, it is interlinked with other departments of organization to gain entire
implementation and creating positive environment of firm effectively.
Production and operation department:- Manager of this organizational department
prepares strategy for producing and supplementing goods adequately. It is useful for optimum
allocation of resources that affects management of organizational activities. Along with this,
proper ideas are generated for production and supplement of products supplied by Sainsbury. In
addition to this, presented department activities are interlinked with other departments' functions.
For instance; different ideas are obtained related to marketing, finance and risk management
department (Cousins and et.al., 2014). Therefore, production and operation department manager
makes decisions regarding business activities for transaction of goods and improving efficiencies
of firm at high level.
Risk management:- Through this organizational functions, emerging risks are managed
to gain effective business operations as well carrying on business smoothly. Thus, it includes
activities of recognizing risks and preparing strategies related to its reduction. It is interconnected
with other departments and different activities of business organization to increase business and
competitive strategies of firm. In this regard, management of risks and changes in environmental
factors are managed effectively for proper marketing and various business operations.
Hence, different organizational functions of Sainsbury are essential to coordinate each
other for increasing effectiveness of firm. In this regard, marketing and production departments
are interlinked for competitive advantages. Distribution of products and customer satisfaction
level is determined through coordination of both of these departments. In addition to this, human
resource management department is crucial for increasing working efficiency of employees and
getting their great contribution for entity's effectiveness (Cross and Miller, 2014). Hence, it is
determined that all organizational departments presents organizational structure that represent
firm's actual value and market position including strengths and weaknesses.
Organizational structure:- Above mentioned all organizational functions are interlinked
to each other and further creates structural framework related to operating business activities.
However, different structures are formed can describe as follows:-

Functional structure:- This structure is composition of task accomplishments and
verities of ideas related to business operations. In this regard, different ideas are obtained for
implementing services of Sainsbury (Khilji, 2015). However, this structure aims to present
different functions regarding marketing, production and managing risks occur at workplace is
determined. In accordance to this, different tasks are accomplished by preparing strategies for
entity's implementation at high level.
Divisional structure:- Under divisional structural framework, different functions and
departments get segmented for analyzing actual business performance. However, different
aspects such as finance, production and overall business activities are presented in different way.
Therefore, different organizational functions are obtained systematically. It is beneficial for
larger companies and for organizations who are wide spread (Lewis, 2013). In accordance to
this, market position and varieties of functions regarding marketing and cost structure, called the
matrix structure, is a hybrid of divisional and functional structure. Typically used in large
multinational companies, the matrix structure allows for the benefits of functional and divisional
structures to exist effectiveness is determined through this structure.
Matrix structure:- It is mixture of functional and divisional structures of organization to
represent environment and different strategies of Sainsabury. However, matrix framework is
related to presenting overall business entity's performance. It is considered that forming matrix
structure is useful for multinational companies which is good for improving efficiency at high
level (Pancoska and Carr, 2014). It influences profit earning capacity and business strategy
including strengths and weaknesses to achieve adequate production and distribution of goods and
services provided by entity effectively.
TASK 3
P4) Macro environmental factors impact on Sainsbury's effectiveness
Macro environmental factors are those determinants which remains uncontrollable and
impacts on business operations of Sainsbury. Therefore, changes in these factors determine
positive and negative aspects of firm (Reinalda, 2013). These environmental factors include

political, socio-cultural, legal, environmental and technological substances. Due to changes in
these factors, business performance get impacted can understand as follows:-
Political environmental factors:- It includes government policies, tax and interest rates
including market structures. Thus, changes in these tools affect business environment and
effectiveness of firm at high level. It is determined that dynamics in government policies
regarding rules and regulations such as tax rate, foreign exchange rate and interest rates.
However, fluctuations in these rates impact on financial position of organization. In this regard,
decreasing in rates influences economic position positively. It is because company has to pay
less amount for taking loan and also reserve and cash is increased through this process.
While, on the other side, increasing in foreign exchange, tax and interest rates affects
financial position of firm negatively. Therefore, organization will have to pay more fund for
taking advantage of different services. Thus, it is recognized that political environmental factors
affect business organization's operations as well its financial position of company. In this regard,
it is obtained that changes in these environmental factors.
Socio-cultural environmental factors:- For analyzing these factors, social status,
lifestyles and their interests that change time to time. Due to differences in people choice and
interests, varieties of issues are occur for operating business activities (Snieška, 2015).
However, social and cultural factors get impacted on business environment of Sainsbury. In
accordance to this, providing services regarding people interest and choices affect market
position and competitive strategy of firm. However, it increases productivity and profitability of
firm in both aspects positive as well negative. Thus, socio-cultural environmental chnages affect
business performance and strategies to create atmosphere and efficiency of entity. Along with
this, providing services which is differentiated form people choice affects business environment
of retail sector company negatively. However, variances are occur in environmental factors that
impacts on business performance and different strategies of firm.
Technological factors:- Organization sets aim to increase quality of services by adopting
latest technologies. Therefore, it is determined that there are changes in technologies are
obtained that impact on environment of Sainsbury. In accordance to this, it is recognized that
technological changes leads to increase effective services that impacts on productivity and
profitability of firm at high level (Tibbetts, Jeremy and Danika, 2013). It influences demand and

customer satisfaction related to services of entity. In this process, it impacts competitive
advantage and making place in market. Thus, technological changes improves qualitative
services of organization and remains crucial for enhancing better quality services for expansion
of firm and maintain attraction of customers towards goods and services provided by company.
In addition to this, technological changes impacts on business performance and activities
negatively too. It depends on customer choice and demand in different ways. It is determined
that it is risky for Sainsbury to accept technological changes and providing different quality
services for differences in customers' choices. Moreover, adopting new machinery items and
equipment remains costly. In this case, due to inefficient fund, organization is unable to purchase
new machines and tools. Including this, using innovative tools and techniques are risky for
attracting consumers effectively due to cut throat competition. Thus, in such cases, it is obtained
that changes in technologies affect business operations and different environmental factors in
positive and negative forms.
Economic environmental factors:- Sainsbury is public limited company which is
contributed its efficiency in nation's effectiveness. However, changes in economy and different
economical factors affect business and its environment in positive and negative manner. In this
regard, market structure and changes in government policies related to measuring competitive
determinants as strengths, weaknesses impact on organization's market position (Wetherly and
Otter, 2014). Therefore, fluctuations in these economic factors affect business performance of
firm. In accordance to this, it can be determined that external environmental factor as economy
affects business performance and organizational structure to present its business and competitive
strategies make place in market. Hence, through economic environmental changes, it is obtained
that changes in economy and market structures affects business environment of retail sector
organization to contribute in country's effectiveness.
Legal environmental factors:- Due to changes in legal factors of Sainsbury impacts on
business entity and its operations to present business and competitive strategy of firm. However,
it is required for entity to follow rules and regulations of government regarding country's
effectiveness for consumer and employees' protection. In this regard, it is determined that
changes in these policy rules impacts on business organization's performance to present
structure, Including this, different factors are impacted such as finance, customer satisfaction and

performing business activities are presented to obtain business and competitive advantages.
Thus, legal environmental factors impact on organization's performance to make position in
market through which its capacity and different affects can be obtained (Willems, Boenigk and
Jegers, 2014). Hence, it is determined that legal factors impact on organizational structure and
environment of firm positively as well negatively.
Environmental factors:- These are uncontrollable factors affect on business and its
environment to face competition. However, uncertain dynamics impacts on market position and
different positive as well negative aspects of firm. Therefore, different business and position of
firm is affected through changes in environmental factors. However, it represents positive and
negative factors of firm reagrding market position and sustainability in competitive market.
Hence, changes in macro environmental factors affect business and its environment in
both ways as positive and negative (Cross and Miller, 2014). Thus, getting adjusted according to
changes in these determinants impact on business and competitive strategies as represents
different results to sustain its position and facing competition. However, both positive and
negative aspects are affected due to changes in environmental factors of organization. Therefore,
it is required to manage all these changes by preparing strategies and implementing to create
balance and sustainability in competitive market for long time period.
Thus, it is determined that changes in external environmental factors impacts on business
performance in positive and negative aspects. Therefore, by adopting innovative techniques are
useful to generate more effective quality services of Sainsbury. For example; providing better
featured goods increases productivity and profitability of firm. It influences profit earning
capacity of organization. While, on the other side, due to changes in customer interests, worse
quality products can be determined that affects business organization negatively. Therefore,
different outcomes are presented to represent business performance. In this regard, it has been
analyzed that changes in uncontrollable environmental determinants affect business and
competitive strategies of entity.

TASK 4
P5) Internal and external analysis for Sainsbury to recognize strengths and weaknesses and its
impact on decision-making process
Internal factors of organization are helpful for proper management of evaluating
controllable things to increase efficiency of firm. Under such factors, different tools are obtained
for example; employees' performance and their contribution for increasing organization's
effectiveness. In this regard, it is related to production and distribution of goods including
services provided by company is presented. It is determinant of organizational functions and
their coordination for reaching out set target of firm. However, strength of business operations
and environment related to workers' per recognizing quality services and dealing with customers.
It impacts on productivity and profitability of organization to make position in market related to
business and competitive strategies (Arnold, 2015). Along with this, internal analytical factors of
business environment is composition of various tools and techrformance is determined through
this analysis. In accordance to this, manager of firm analysis internal factors of business
environment that impacts on management of business activities. For instance; different
substances are involved in this process for recognizing quality services and dealing with
customers. It impacts on productivity and profitability of organization to make position in market
related to business and competitive strategies. Along with this, internal analytical factors of
business environment is composition of various tools and techniques for increasing efficiency
and qualitative services of firm.
External environmental factors are those uncontrollable determinants which are beyond
handle and disturbs organizational structure to present firm's effectiveness. It includes different
factors such as; political, legal, social, economic and environmental components that affect
competitive strategies and performance of firm. Due to changes in these environmental factors,
manager of Sainsbury requires to prepare different strategies for implementation and creating
balance over business activities. In this regard, it is evaluated that change in environment, people
choices, technologies impacts on services provided by company (Lewis, 2013). However,
variances are occur in these factors that affect business and competitive strategies. Apart from
this, it is obtained that changes in external environmental factors affect on business performance