BM461 - Global Business Environment: Sainsbury's PESTEL Analysis

This report provides a PESTEL analysis of Sainsbury's, examining the external macro environment factors affecting the company. The analysis covers political factors, including the impact of Brexit on imports and labor supply; economic factors, such as employment rates and the falling pound; social factors, including changing consumer preferences; technological advancements like self-checkout; environmental considerations like carbon footprints; and legal factors related to employee protection. The report identifies drivers of change, such as organizational culture and leadership style. The analysis uses secondary research and is presented in a structured format with an executive summary, main body, and references, adhering to Harvard referencing style. The assignment fulfills the requirements of the Global Business Environment module, demonstrating an understanding of the external factors impacting a UK-based company.

Sainsbury`s PESTEL
analysis
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
MAIN BODY...................................................................................................................................3
REFERENCES ...............................................................................................................................6
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EXECUTIVE SUMMARY
PESTLE analysis is one of the most important tool for an organisation to scan the
organisational external macro environment that helps to analyse the factors which directly affect
on their profitability. Respective approach helps in adding some extra factors such as
international aspects in order to compete in business environment in successfully manner.
Respective report is based on Sainsbury and impact of Macro environment factors on their works
and activities.
MAIN BODY
PESTEL stands for political, economic, social, technological and environmental with legal
factors that affect on business in both direct and indirect manner in context of Sainsbury that are
as follows:
Political factors:
In 2016 UK voted to leave the EU, that would bring serious consequences for Sainsbury
and other English supermarket chains (PESTLE Analysis of Sainsbury’s, 2019). Leaving the EU
make it very much difficult for super markets to affordably import products from abroad that
directly enhance cost of operating. With an increase in cost of foreign products likely to be
passed it into end consumer.
The another major issue faced by Sainsbury that businesses employing the lower skilled
workers from the outside of UK and it could be more difficult as respective workers are expected
to offered only a year visa which directly affect working of respective organisation in order to
gain fruitful outcomes.
Economic factors:
Employment rate is one of the most potential and positive factor for any business
division, when in an economy employment rate remain high that contributes in reduction of
inequality and prevents relative poverty (Beaven, 2019). In context of sainsbury with help of
high employment rate the purchasing power of consumers rises and they able to purchase more
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products and services. As data shows the UK employment rate was estimated at 76% points
higher than a year earlier but lower then .1% points lower than last quarter (Labour market
overviews, UK: November 2019, 2019).
Sainsbury has warned that they faced the impact of cost pressure from the Brexit vote
decline in uncertainty in value of Pound which directly affects on their sales at its supermarket.
As they faces higher imports following the fall in value of pound against dollar that impact
negatively on their profitability (Sainsbury's warns over 'uncertain' impact of pound's Brexit
slide, 2019s).
Social factors:
In past few years the taste and preferences of consumers rapidly changes that forced to
close down their large stores and have to work remotely by opening their small stores that helps
to reach at large no. of consumer base.
Opening of Jack's new store in their newest location in Northport that give competitive
threat as bargaining power of buyers enhances (Wu and et.al ., 2019.). With people now a days
prefers to home delivery and online shopping that are suits to their lifestyle in that aspect they
able to satisfy consumer needs in proper manner.
Technological factors:
To remain always competitive in marketplace Sainsbury introduce facility of self check
out that reduces the possibility of cheating and also save cost and time in order to gain potential
outcomes ('You can’t cheat then?': the Queen learns how self-checkout works on visit to
Sainsbury's, 2019.).
In context of Sainsbury and Tesco they provide loyalty point or coupon to attract the
consumers in positive manner by giving them advantages to shop more and more (How
supermarkets get your data – and what they do with it, 2019). So it can be said that their club
card and online services helps to reach at large no. of consumers.
Environmental factors:
Supermarket chains are majorly accountable for the large carbon footprints in context of
transporting products and the change in climate directly affect on their business activities. For
that they they focus on minimization of plastic wastage to create sense of belongingness in
consumers.
Legal factors:
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In context of Sainsbury they use various laws and regulations in order to protect the self
interest of employees by giving equal wages without any kind of discrimination in between men
and women that proved beneficial in their business and its profitability. They never involved
child labour and always consider minimum laws to protest self interest of employees.
Drivers of change:
In context of Sainsbury the major driver of change is organisational culture as they
provide opportunities to all for sharing their views and opinions and other one is leadership style
which is autocratic and applied in organisation by John Davan Sainsbury.
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REFERENCES
Books and journals:
Beaven, K., 2019. Strategic Human Resource Management: An HR Professional's Toolkit.
Kogan Page Publishers.
Wu, Y. and et.al ., 2019. The role of neuropeptide Y and peptide YY in the development of
obesity via gut-brain axis. Current Protein and Peptide Science. 20(7). pp.750-758.
Online:
'You can’t cheat then?': the Queen learns how self-checkout works on visit to Sainsbury's, 2019.
[Online]. Available through. <https://www.msn.com/en-gb/news/royal-family/you-cant-
cheat-then-the-queen-learns-how-self-checkout-works-on-visit-to-sainsburys/ar-
AABJOAE>.
How supermarkets get your data – and what they do with it, 2019. [Online]. Available through.
<https://www.theguardian.com/money/2013/jun/08/supermarkets-get-your-data>.
Labour market overviews, UK: November 2019, 2019. [Online]. Available through.
<https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentande
mployeetypes/bulletins/uklabourmarket/november2019>.
PESTLE Analysis of Sainsbury’s, 2019. [Online]. Available through.
<https://pestleanalysis.com/pestle-analysis-of-sainsburys/>.
Sainsbury's warns over 'uncertain' impact of pound's Brexit slide, 2019. [Online]. Available
through. <https://www.theguardian.com/business/2017/mar/16/sainsburys-pound-brexit-
argos-growth>.
Labour market overview,
UK: November
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