Business and Business Environment Analysis of Sainsbury's Report

This report provides a comprehensive analysis of Sainsbury's business environment, examining various organizational types, structures (including flat structures), and their relevance to the company. It delves into the impact of Brexit on Sainsbury's operations, utilizing the PESTLE analysis to highlight both positive and negative consequences. Furthermore, the report presents a SWOT analysis, evaluating the company's strengths, weaknesses, opportunities, and threats, and discusses the influence of micro and macro factors on Sainsbury's strategic business decisions. The report concludes with an overview of Sainsbury's business objectives within the context of the current business environment.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
Different Types, Size And Scope Of Organisation................................................................1
LO 2................................................................................................................................................6
An Analysis Of Two Types Of Organisational Structure And Ensure A Clear Understanding
Of The Relationship Between Different Functions At Sainsbury's........................................6
LO 3...............................................................................................................................................10
Report on impact of Brexit on Sainsbury's business organisation and also use PESTLE tool to
highlight the negative and positive impact on business. .....................................................10
LO 4...............................................................................................................................................14
Swot Analysis of Sainbury's and its impact of micro and macro factors on business decisions
..............................................................................................................................................14
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

INTRODUCTION
Business environment can be defined as sum of all internal and external factors that affect
overall working of organisation to great extent. Sainsbury company is the UK based retailer
company deals in food, clothing, property investment services and banking sector. Sainsbury was
established in 1869 and it also takeover Argos Parent home retail group in April 2016 at £1.4
billion. Sainsbury closes most of the Argos stores and converted them into the large Sainsbury
supermarkets. Present report is based on business and business environment of Sainsbury
company at the time of Brexit.
This report includes the types of organisation and their purpose. Further it defines the
organisational structure and their interrelationship with various function in the organisation.
Report explains with the positive and negative impact of PESTLE analysis on business operation
in Brexit time and lastly it ends with the description of SWOT Analysis and impact of micro and
macro factors on Sainsbury's business decision and objectives.
TASK 1
Different Types, Size And Scope Of Organisation
Different types of organisation
There are many organisations those which have different purpose and ownership
(Organization: Meaning, Definition, Concepts and Characteristics ,2019)
Organisation can be classified into different types based on their mode of incorporation, liability
of the members etc. The most common types of organisations on the bases of ownership are:
 Public Organisation
 Private Organisation
 Voluntary Organisation
Classification of organisation on the bases of size is as below:
 Micro Organisation
 Macro Organisation
Public Organisation: The public Organisation is usually comprised of organisation that
are owned and operated by the government and exist to provide services for its citizens.
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The major objective of such an organization is to render concerned service to people
while at the same time earning enough to keep functioning better, to get better infrastructure and
to pay its employees (Torry, 2017). For example: BBC (British Broadcasting corporation) is
working as public company in UK. It is the British public service broadcaster that circulate news
to people. The main purpose of organisation is to broadcast all detail on time. It provides radio,
web portals services as well to mass audience. It comes under tertiary sector, as it works in
service industry.
Private Organisation: These are such firms in which owner takes all the decision for the
firm and there is no intervention of government. Purpose of private organisation is to maximise
profit an expand business across the world. For example: Argos is working as private
organisation, it was take over by Sainsbury. Sainsbury offers range of grocery items, cloths,
home accessories to its consumers across the world. Enterprise continuously work to raise its
profitability and make efforts to open new branches in other locations as well (Carney and et.al.,
2015). It comes under secondary sector.
Voluntary Organisation: This is the type of organisation that provides health care
services to people and work for social welfare always. Its main agenda is to improve well-being
of people. Some UK based Voluntary Organisation is Welcome Trust. Its main agenda is to
help every one. It is global charitable foundation that comes under tertiary sector.
Micro Organisation: A Micro organisation is small business that employs a small number of
employees. A micro organisation is usually operated with fewer than 10 people and its turn over
is under £2 million and turnover is and is started with small amount of capital. Most micro
organisations specialize in providing goods or services for their local people. It includes Lawn
and landscaping, street vendors, carpenters, plumbers etc.
Micro organisation serves a vital purpose in improving the quality of life for people in
developing countries. Some UK based Micro Organisations are- Boss Brewing Company
(Faherty and Stephens, 2016)
Macro Organisation: Macro organisations are the part or subsidiary of the private
organisation. The share of these business are less liquid, and their valuations are more difficult to
determine. These are big size firms that have more than 250 employees in organisation. For
example: ALDI is working as macros firm. It can be sole trader, partnership firm etc. Sole trader
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is the type of firm in which owner is responsible for whole liability of company. Whereas
partnership firm is the type of business in which both partners share profit and liability.
Difference among these organisations
Public
Organisation
(BBC)
Private
Organisation
(Sainbury's)
Voluntary
Organisation
(Wellcom,
Trust)
Micro
Enterprise
(Boss
Brewing
Company)
Macro
Enterprise
(Aldi)
Vision and
Mission
Vision of
BBC is to
enrich people
lives and
inform them
or educate
them.
Mission of this
organisation is
to be
customer's
first choice for
food,
delivering
products of
outstanding
quality and
great service
at a
competitive
cost through
working
faster, simpler
and together.
Adopting right
long term
strategy and
priorities.
Improve the
mobilization
of the
abundance of
natural
resource in
country.
Vision of
macro
companies are
to maintain
sustainable
relationship
with the
customer.
Objectives The major
objective of
such an
organization is
Objective of
this
organisation is
to achieve
Objective of
Voluntary
organisation is
to provide
Its objective is
to spread
industries and
trade in an
Objective of
this type of
organisation is
to earn profit
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to render
concerned
service to
people, It
organises
various
programs so
that large
number of
people get to
know about
recent news
and daily
activities.
target,
increasing
sales and
profit
maximization(
Carney and
et.al., 2015).
social services
to poor, needy
neglected, old-
aged, the sick
and the down
trodden.
economically
backward
areas. This
helps in the
development
of overall
economy(Fah
erty, and
Stephens.,
2016).
expand their
business.
Legal
Structure
Board of
director run
the business
and
shareholders
have right to
vote in
company. It is
essential to
sell shares on
stock
exchange(Torr
y, 2017).
It runs by the
board of
directors on
behalf of the
stakeholder. It
must have its
memorandum,
and Article of
association
This
association is
governed by
the
constitution,
legal
documents
which govern
the association
Owner,
partner are
responsible for
all the
liabilities of
company. It is
not necessary
to sell shares
to stock
exchange.
It runs by the
board of
directors on
behalf of the
stakeholder. It
must have its
memorandum,
and Article of
association
Scope Scope of BBC
is wide. As
this
There is a high
Scope of
Private-sector
Wellcome
trust become
an irresistible
Boss Brewing
Company has
scope to grow
Aldi can enter
into new
locations and
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organisation
are operated
with
government
and they for
serve best to
people of UK.
organisations
such as
Sainsbury. As
It has huge
scope to enter
into
international
market and
provide
services to
foreign
consumers as
well.
global force
today. It has a
definite place
on modern
state but also
perform vital
functions and
providing
social services
to poor, needy
neglected, old-
aged, the sick
and the down
trodden.
well but due to
financial
constrains its
scope to grow
in
international
market is
limited.
can establish
its branch in
global market
successfully.
Market Size
and Share, No.
of Employees
Enterprise has
generated
revenue of
£4.954 in the
year
2016/2017.
billion, . It has
20916
employees.
Net income of
the firm is
129.1 million.
It has
generated
revenue of
£10.2 billion
in 2018, It has
approx.
83000
employees
across the
world.
In the year
2017 company
has done
£125.9 billion
Investment.
Recently there
are around
2,057
employees
those who are
contributing
well in
accomplishing
goal of
business unit
£32 million
revenue was
generated by
the firm.
Company has
employed 650
workers.
In the year
2010 company
has generated
53 billion
revenue.
Recently it has
10000 stores
in more than
20 countries.
stakeholders There are Qatar Primary Consumers Investors
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many
stakeholders
of BBC such
as television
viewers,
investors,
government,
managers,
employees of
the firm They
all get affected
with the
overall
working of
BBC.
Holdings
LLC,
BlackRock
Inc.
Stakeholder-
Board
members,
communities,
employees,
volunteers.
Secondary
Stakeholder –
Government,
Interest
groups,
investors.
Employees
Investors
Suppliers
Communities
Suppliers
Consumers
TASK 2
An Analysis Of Two Types Of Organisational Structure And Ensure A Clear Understanding Of
The Relationship Between Different Functions At Sainsbury's
Organisation structure:-
It is a system that outlines how certain activities are directed in order to achieve the goals
of an organisation. These activities can include rules, roles and responsibilities. It also
determines how information flows from level to level within the company.
Flat organisation structure:-It refers to an organisation structure with few or no levels of
management between management and staff level employees. The flat organisation supervises
employees less while promoting their increased involvement in the decision-making process
(organising staff, 2019). Mostly this structure is followed by private organisation because the
levels of management and employees are less in number (De Vries and Van der Poll, 2016).
Sainsbury follows this organisation structure as it helps the firm in smooth functioning of
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business and minimising chances of conflict in the firm. This helps in raising motivation level of
worker and retaining them in the organisation for longer duration.
Illustration 1: flat organisation
(source:-The 5 types of organizational structures: past 3, flat organisations,2015)
Organisation structure of Argos was flat and Sainsbury also applied the same structure
after acquiring Argos. they have fewer management levels, with each level controlling a board
area or group. Argos organisation focus on empowering employees rather than adhering to the
chain of command. This structure allows for increasing communication which believes to be the
source of the higher than normal profit.
Tall organisation structure: - The structure in which there are multiple layers of
management from top executives down to low-level managers and employees. As an
organisation grows, the number of management level increases and the structure grows taller.
Mostly this structure is followed by public organisation because the levels of management and
employees are high in numbers (Närman, Johnson and Gingnell, 2016). As Food retailer and
financial service provider it follows tall organisational structure. It is not possible to involve all
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employees in decision making process while providing financial services to consumers thus, use
of tall structure is suitable and worthwhile.
Organisation chart
(source:-organisation charts and structures, 2019)
Organisation structure of Sainsbury's is flat as company involve employees in decision
making process. It takes suggestion of workers so that correct decision can be made in business.
Relationship between various function of organisation:-
Human resource and finance:-
Human resource department is responsible for hiring the best candidate those who have
skills and knowledge about relevant field. It looks upon the experience of people before
recruiting for particular post. HR department retain its workers so that recruitment cost can be
minimised. This helps financial department to manage funds in appropriate manner. On other
hand finance department provides funds to HR team for running HR practices such as training
and recruitment. This helps in the best utilisation of resources and generating more funds in
Sainsbury (Huang, Rundle-Thiele and Chen, 2019).
Human resource department recruits qualified people in the organisation that enhance the
profitability of the organisation by using minimum resources. This profit helps to finance
department for future investments of the organisation.
Marketing and production department:-
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Marketing department is responsible for promoting brand and generating demand as well.
Marketing team conduct market research in order to know about needs of consumers, by this way
production team can modify its existing products and can design asper the requirements of
consumers so that sales can be increased. On other hand production department produce high
quality products so that marketing team can convenience people and can offer satisfactory goods
to them (Jara-Rojas and et.al., 2018). The production or marketing function of the sainbury
maintains a good relation with each other such as marketing functions provides detail of the
needs and wants of the customer to the production department. So, the production department
produce goods according to customer's need and wants. Both department helps in rising
profitability of the organisation.
Sales and marketing function:-
Successful companies need efficient sales and marketing departments. A sales function
focuses primarily on expanding the organization’s customer base, and a marketing function
focuses on promotional activities. An organization depends on a healthy relationship between its
sales and marketing functions because if marketing department does good promotion and
advertising of the product that increase sales of the organisation.
The sainbury has a separate Marketing and Sales department. The company
advertises mainly through T.V and radio and through adverts in magazines and newspapers. The
major influences on the price of the product are costs by the producer, competitors prices,
regional pricing and select prices. The sainbury is establishing closer links with suppliers by
sharing vehicles. This helps the company to meet its objectives because it allows them to know
the target customers than sale department directly sales their products to their customers without
help of intermediator.
Marketing and logistic department:-
logistic and marketing might seem to be diametrically opposed. Logistics deals with the
nuts and bolts of handling and delivering products. On the other hand Marketing is a
combination of creative activities and the detailed analysis that backs them up. However, these
two departments within any company have a symbiotic relationship. That means what happens in
one department directly affects the other.
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In sainbury the marketing function that works drives increased sales and when it does, both
production and logistics systems get stressed. Once products are made, they need to get from the
factory to the store or customer. Logistics has to not only take care of this but ensure that there is
enough excess capacity to handle the next hot product. When a company's marketing focus
shifts, reverse logistics take care of getting products out of stores or accepting returns from
customers.
TASK 3
Report on impact of Brexit on Sainsbury's business organisation and also use PESTLE tool to
highlight the negative and positive impact on business.
Sainsbury is the oldest and largest retailer supermarket chain in UK but due to some
reason there is a continuous downfall in the market relating to its lack of marketing strategy,
changing management techniques and unhealthy acquisition concept which results in destruction
of customers interest in their business. Due to Brexit, company lost its financial performance in
terms of profit, share price and other investment activities (J Sainsbury SWOT and PESTLE
Analysis, 2019).
PESTLE Analysis closely examines the impact on Sainsbury company:
Political Factors – Sainsbury company deal with a dozen countries and also have to conduct
operations in different political situations. Further it explained as ~
Positive Aspect Negative Aspect
Sainsbury company is the retailer company so
more benefits arises from Britain area but
after Brexit political situation of UK was very
bad and there were poor trade agreement, but
still authorities have developed relationship
with other countries. This has helped in
increasing trade activities and generating
more income as well.
At the time of Brexit, government not
change the norms to give any country
their benefit which result in heavy
losses. Poor trade relationship affected
import and export that has reduced profit
of company to great extent.
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