Business and Environment Analysis: Sainsbury's Report, Module 1

This report provides a detailed analysis of Sainsbury's business and its environment. It begins with an introduction to different types of organizations, including public and private limited companies, and their growth in the international business environment, with examples like Sainsbury's, B&M Retail, and Bewdley Development Trust. The report then delves into Sainsbury's background, vision, mission, and business objectives. It examines key business functions such as production, marketing, finance, and human resource management, highlighting their interdependencies. The core of the report involves a PESTLE analysis, assessing the political, economic, social, technological, environmental, and legal factors impacting Sainsbury's operations, along with their positive and negative effects. A SWOT analysis is also conducted to identify the company's strengths, weaknesses, opportunities, and threats. The report concludes with a critical reflection on the key findings and their influence on the decision-making process within the organization.

UNIT 1 – BUSINESS AND
BUSINESS ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................2
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................4
PART1.............................................................................................................................................4
1.1 Introducing different types of organizations and the growth in the international business
environment.................................................................................................................................4
1.2 Explaining background details of the above organization with their vision, mission and the
business objectives.......................................................................................................................5
1.3 Examining the different business functions that are been done in the Sainsbury
organization and further, using an organization .........................................................................6
PART 2 ...........................................................................................................................................8
2.1PESTLE Analysis of the company with positive and negative impact..................................8
2.2SWOT of the company to determine key weaknesses and strengths. ..................................10
2.3 Critical reflection of key findings and how they influence the decision making process.. .12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
An organization is defined as the entity which may be the company, institution, or the
association that comprises one or more people for the common purpose and the goal. There are
different types of the organizations that exist in market today like the public organization, private
organization, partnership joint ventures etc. They all work differently from one another in
international market. In this report we are going to analyse the forms of different types of the
organization in the international market and analysing the advantages and the disadvantages of
different types of the structure of the organizations, Further in this report will are going to see the
PESTLE and the SWOT analysis of company Sainsbury and its key finding in decision- making
process.
MAIN BODY
PART1
1.1 Introducing different types of organizations and the growth in the international business
environment.
Public limited organization-
The public limited company is the one company whose ownership lies with the public (Orchi,
2019). Anyone interested in the companies' affair is able to buy the companies share from the
stock market. In this company the individual financial liability is restricted to the fixed amount of
sum and this sum is mostly the value of their investment in the company. The company
Sainsbury in U.K. Is public limited company that implies that the public that is interested in
company can by its share from the stock exchange. These are the companies that are growing in
the international market today.
Private limited organization-
The private limited company is that company whose ownership lies in the hands of few people.
There stocks are not traded on stock exchange because the ownership and control lies only with
the few people (DAMTEW, 2021). A private limited company also has a limited liability and
limited no. of shareholders in the company. The B&M retail company which sale grocery and
merchandize is the fastest growing company is U.K. It was founded in 1978 but now has
international business in many countries (Winship, 2020). These companies are also making

there presence in the international market and growth of these companies are also higher
compared to other companies as decision making power lies with few shareholders.
Community interest company-
The community interest company is the company that only aim is to favour the community
interest, and they don't run for maximizing profits as there interest is only to promote the social
interest of the surrounding people (Mason, 2020). These are the companies that are very east to
set up and run on regular basis by putting back the extra profit for the community services. The
company Bewdley development trust is the company that work as the CIC in U.K. This company
do not work much on the international level because there aim is maximize the social interest of
the people (Rainsford, and et.al., 2018).
1.2 Explaining background details of the above organization with their vision, mission and the
business objectives.
Sainsbury public limited organization-
Sainsbury the company started in 1869 when its first store opened London. It started as the fresh
food store and later it expanded its services into providing packaged groceries to its consumers.
In current times Sainsbury Sells products over 15000 as it is the one of the largest supermarket
chain in the U.K. It is public limited company and owns 14.9% share of the supermarket sector.
The vision of the Sainsbury is to make itself the most trusted retailer whose work and the
products people love and shop. The offering of organization to its consumer is to offer the great
quality products at the reasonable prices. Its new slogan defines its mission that is “helping
everyone eat better”
The legal structure of the Sainsbury organization is that it has more no. of shareholders and the
liability of each shareholder is limited as it is the limited company. Its structure can be based
describe as a hierarchy that every one follow in the organization. Goal of this company is to
maximize the profits in the favour of its shareholders. The Stakeholders of this organization are
its employees, managers, directors, shareholders and its consumers. Company works for the
every shareholder in order to attain higher level of success.
B&M Retail company-
The B&M retail company which stands from Billington & Mayman started its first store in 1978
and today it work as private owned retail organization. Today it has variety of retail stores all

over the world and is employing around 32000 people. The B&M companies sales product such
as the food, housewares, home textiles, small electrical products, DIY products, consumer goods
and many more in the market. As of 2021 its has over 686 stores worldwide, and from 2016 to
2018 the company opened around 100 stores more in the market. The company is growing on the
international market with its mission that is giving the consumer the environment and the product
that they demand from the company and work collectively in team to make it the largest retail
store in the world. The B&M company legal structure is not that complex because it has only two
owners since 2004 that is Simon and Bobby Arora. Less complex structure of the company helps
the company in fast decisions and that in turn has helped company in growing faster. It also has
limited liability that means the company and share holder both are different from one another
and in every case the shareholders will not be liable for the company's losses.
Bewdley development trust-
This development trust work as a community interest company in U.K. There are the
organizations that are community bases and engage their services in the community development
of economy. These type of organizations started from the companies (Audit, Investigation and
community enterprise) Act 2004. These act was specially designed for the social enterprises that
want to work for the community development. There aim is not to maximize profits rather they
work for some social objective. The Bewdley development trust was started in 2006 and offers
various projects. It was started after the devastating flood in the small town Bewdley. Its work
under the guidelines that says “maximum flexibility together with the community
accountability.” By using wide range of methods the aim of the company always remains same
that is to help and create a strong inclusive economy. The CIC are the limited companies
regulated by the different companies act in the different countries. In U.K. it happened after
2004.
1.3 Examining the different business functions that are been done in the Sainsbury organization
and further, using an organization
It is very important that the organization with all different departments to gain that level of
efficiency that will ensure organizations goal on time. The Sainsbury has different internal
departments, and they work with in each other in close connections in order to ensure that the
organization goal is achieved as soon as possible. Different type of departments are given below-

Production
function
Research and
development
Sales and
marketing
Human resource
management
Accounting and
finance
The production
function of the
Sainsbury is to
produce the good
and services that
are demanded by
its consumers.
(Heikkilä, Kaipia,
and Ojala, 2018).
Research and
development is
the department in
Sainsbury that
innovated and
create new
products.
Sales department
is that department
in Sainsbury that
is responsible for
selling products
in the market
through various
types of
promotions.
Human resource
management is
the department
that ensure that
all the right
people are being
placed at the right
place according to
their skills (Stone,
Cox, and Gavin,
2020).
Accounting and
finance is the
department that is
concerned with
all the financial
transactions and
is responsible for
recording them.
It works in
coordination with
the all the other
departments in
order to make
sure that the
products are as
per the demands
of the consumers.
These work with
coordinating the
department of the
production in
ensuring that all
the creative and
innovative goods
are produced as
per the consumer
demand.
This is that
department which
works with all the
other departments
in order to ensure
that the goods
demanded by the
various consumer
are reaching
them.
This is another
department that
works with all the
other departments
to ensure that the
human resource
demand of all the
departments in
the organization
are being
fulfilled.
This department
try to ensure that
it works with
the various other
departments in
the organization
in order to
provide them with
the budget and
tracking all the
income and cash
flow statements.
The advantages and disadvantages of working with coordinating all the internal staff members
are given below.
Advantages Disadvantages
It helps Sainsbury in ensuring that there is no Sometimes procedural problem in the

misunderstanding between different
departments.
organization can happen because of the
complex and varieties of functions.
It helps in ensuring good relations between the
members.
Unnecessary loss of times is also another thing
that will eventually cause delay in reaching
objective.
It also helps in creating the problem-solving
attitude with frequent communication.
There are times when there is lack of
understanding and rivalry between departments
than communication process can not be
successful.
It helps in linking different areas of
knowledge.
All the departments when work together leads
to confusions and conflicts.
PART 2
2.1PESTLE Analysis of the company with positive and negative impact
PESTEL analysis is framework commonly used to identify the business environment
under which a company operates. PESTEL stands for Political, Economical, Social,
Technological Environmental and legal factors which affect business operations. The PESTEL
analysis highlights impact on business brand (Kluza, Ziolo and Spoz, 2021).
Political Factors:
Sainsbury is the second world largest super market store in UK. Thus, company mainly operates
in United Kingdom, it is not affected by the economic slowdown in the other nations. But UK
has existed from European, then it will have certain impact on Sainsbury's business. Sainsbury's
performance will be affected by political factors of UK. Government and the consumer debt
being high presently there, in order to impact on attitudes of the customers because of business
conditions experience is high. Political factors includes governments policies, tax policies,
environmental law, political stability etc. will affect Sainsbury's business operations. For
example, if the government bring new trade restriction that will lead company to change their
process as well. The positive political factor is more widespread for the economic sectors. So,
this treads of integrating is enhanced and increase industry to develop abroad. If the country is

stable then it gives positive impact on Sainsbury's company. While if the country is not stable
then it gives negative impact on company growth.
Economic factors:
The macro environment factors are inflation rate, interest rate, saving rate, foreign exchange rate,
aggregate investments and aggregate demand in an economy. Efficiency of the financial market
in UK, Sainsbury's can easily assess vibrant financial market and also availability of liquidity in
the market of UK. To expand future globally. The exchange rate of UK can impact company
investments plans short term as well as long term. Inflation rate in the market post is recession in
the year 2018 will result in increases inflation rate in UK economy which affect company also.
Skill level of the employees in UK market is great which will give positive impact on the
company. The fast growing economy has contributed more to develop company. But if the
inflation rate change then it will give impact on market share Sainsbury's products.
Unemployment rate and High inflation rate are the two main element of the economic factors
that affect company significantly. Here, the demand of the company product and services
decreases due to high prices of products. So in this situation company could be expand their
business in new market.
Social factors
These factors are culture expectation and norms, population, age distribution, health and safety,
career attitudes etc. so such factors help company plan better their marketing strategies. The
large part of business revenue was come from the sale of fast food items. The UK population is
shifting towards health conscious so it not includes fast food items. Nowadays people prefer
place where all products in one roof. So Sainsbury's has got more benefited from this strategy,
thus they launched non-food products as well. Other social factor is increase female in workplace
has result in decrease in the domestic meal making. Here the demand of product is increase.
Sainsbury's has marketing theme that is Cook and Save which generally promotes products
which are very easy to cook.
Technological factors:
It means developments and innovation in technologies. The recent launch of company E-
commerce store is helpful towards business to current technological friendly generation. Still,
company have many aspects of bran improvement upon better customer user experience. If the
brand start use of modern data based system like AI and big data then they will able to

understand better the demographical needs of customers to them. Theses also help company to
increase sales and better marketing campaigns. The Latest technology that is based on innovation
implementation by the competitors of the company so, now Sainsbury's also have to focus on
innovation to cove whole market place. If the company is using the latest technology then it will
give positive impact on the company success and growth. But, if the business is not using or
adopt new and innovate technology then it will give negative impact on success and growth of
the organization. The online food delivery is expanding increasingly so it gives positive impact
on Sainsbury's company. It also concluded by offering online food delivery company increase
their sales.
Environmental factors:
These factors are mostly affected by surrounding environment and also influence by ecological.
So, to act as socially responsible the Sainsbury's company primary motive is to keep
environment safe and healthy (Effiom, and Edet, 2018). Even UK is also offer subsidies to invest
in renewable sector. Therefore, the company provide themselves as social responsible
organization by introducing Recycle, Reuse and Reduce approach which is very efficient in
managing recycle, waste and packaging. So it gives positive impact on company success. But if
the organization not take action on environment healthy and safe then it will give some negative
impact as well.
Legal factor:
These factors include quotas, import or export, changes to legislation and taxation. The legal
factors also affect company directly. The policies and legislation made by the government
influence performance of Sainsbury's directly (Kulish, and et.al., 2018). For example if the law
introduced new tax on advertisement for highly and fatty foods which has been native by the
company by making modification in their products. Legal factors affect organization such as if
the export ban for a particular product which a business export so it affects the business
(Kusmono, and et.al.,2021).
2.2SWOT of the company to determine key weaknesses and strengths.
SWOT analysis is approach used mainly to evaluate company competitive position.
SWOT stand for Strength, weaknesses, opportunities and threats. The SWOT assesses external
and internal factors and current as well as future potential.

Strength of the company
 Listed company: Sainsbury's is a listed company under London stock exchange. So the
people easily buy their share and trade as well. So company is one of the largest
supermarket in United Kingdom.
 Innovation promotion strategies: here, the company adopt most strategies for promotion
is highly innovative and also good pitch of the brand directly against company
competitors.
 Company is having good employee strength and company have good IT infrastructure.
Weaknesses of the company
 Company is weak in globalization
 Inventory management is not good
 Rising food prices across the world that impacted on company that they sell at high prices
 Stiff competition within segments of retail sector affect the business
 Sainsbury's is facing huge losses for past two years which outcomes in decrease annual
revenue and the net profits as compare to the current year (Dorji, 2020)
 Usually retail industry face lot of risks from the switching brand. However, String loyalty
promotion and programs are held but still, company finds difficult to retain their
customers
Opportunities of the company
 Performing economy in China and United Kingdom.
 Wider market
 24 hours services also introduce to attract new customers
 Mergers with successful company will help Sainsbury grow globally in efficient way
(Effiom, and Edet, 2018)
Threats of the company
 Increasing globalization is also challenging for company
 Growing penetration of the e-commerce businesses can affect Sainsbury's
 Political factor
 Legal factors
The rules and regulation by the government is the threat for the company. So the legal
factors and political factors as well as economic factors are the threat for the company. While

environmental factors, social factors, technological factors are the strength of the company. So
company can minimize threats such as competition by covering wider market that is because low
risk in their operations. Legal factors by simply modifying their products, company can
minimized their threat. Political factors is by providing long heritage of offers on the company
products. So company knows aim is to minimize or reduce weaknesses and also avoid threats of
the business. Sainsbury's has good brand image, so they will have positive impact on their
growth and success. Company use social media marketing to create awareness of their products.
Social media marketing tools are Facebook, Instagram, twitter, YouTube etc. by use of this tools
company easily attract new customers in different areas. Moreover, through investing in
developing countries, Sainsbury's can operate with the low margin and cheap labour while
provides their product on competitive prices.
2.3 Critical reflection of key findings and how they influence the decision-making process
The above report has analysed the business and its adjoining environment in the context
of the chosen Sainsbury organization. I discovered the various micro (internal) and macro
(external) factors that seem to pose a significant impact over the structure of the organization. I
found out that all the different factors that influence the Sainsburys superstore helps in
determining the organizational layout and also facilitates the business size and scope. Inspire of
the fact that the British supermarket company has a broad product range and has tough market
competition, I surmised from the report that there is still a good amount of ripe opportunities for
the goods and service firm in the entire market share.
I also learnt that there are distinct types of organizations with their varied functions and
production scales. The simultaneous concise comparison of two other firms besides and in
contrast with Sainsburys made me realize that the conspicuous inter-relationship among different
business functions are inversely related to the particular organizational structures. For instance,
the report clearly draws the line among the key differentiators of the organizational types namely
– the legal structures, size and scope, and its key stakeholders.
Furthermore, I learnt from the report findings that macro environmental factors such as
Sainsburys market/economic trends, findings and partnerships, and various demographic
regulations tremendously influence the strategic planning of the company (Upadhyay and et.al.,
2022). It also affects the business management techniques of the firm that has a major impact on

the decision-making process of the existing and potential consumers. I noticed that over the years
Sainsbury has promoted health conscious foods and drink goods including a 1950s based fair
trade movement that holds up the humanitarian rights of impoverished cocoa and coffee
producers after delving into further research I came to know that this movement was a part of the
bigger alternative trade organizations (ATO) group that supports small scale suppliers who are
mostly natives of the land.
This showed me that the Sainsbury organization is not only a consumer centric firm but it
also takes strong CSR initiatives embedded into its business policies and plans that helps in
alleviating the poorer sections of society too. Business tactics like these not only increases sales
and revenue growth but also empowers people to purchase more from the company because it
makes them feel cared (Zak and Hasprova, 2020). This was one of the prime insights I gained as
to how intrinsic factors, however small, can also make huge differences when it comes to
influencing the buyers' decision-making faculties.
Conversely, I also observed the fierce competition, supplier networks, distribution
channels, and public and media image that Sainsbury has gained over the years have somehow
led to a gradual decline in its sales output and customer retention. Then I realized that micro
factors like these can potentially damage a long-standing brand image thereby negatively
impacting the decision-making procedure. Although if these factors combined with macro
environmental aspects such as a stable demography, economic feasibility, social, and cultural,
etc. are put to good use then there is a likely chance that the organization can flourish well given
the right business direction.
CONCLUSION
The above report covers different types of organizations such as public company, private
company and community interest company. Along with this, the above report background detail
of the company that is their products, size, scope, vision, mission and objective etc. In additional,
the above report also examine different business function of organization with their advantages
and disadvantages. Moreover, the above report also analysis macro environment. So, after
making PESTEL analysis of the company it can be concluded that the business is affected by the
macro environment such as if the inflation rate (that is high) and unemployment rate (high) are
the main factors which affect company. Still, effective initiatives taken by business against these

factors are highly appreciated maintaining its growth sustainable. Furthermore, the report also
elaborate SWOT of the company.

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