Research Report: External Environment and PESTEL Analysis of Sainsbury

This report presents a PESTEL analysis of Sainsbury's, a major UK-based supermarket chain. It examines the external factors impacting the company's operations, including political, economic, social, technological, environmental, and legal aspects. The analysis delves into how factors such as Brexit, economic fluctuations, consumer behavior, technological advancements, environmental regulations, and legal frameworks influence Sainsbury's. The report highlights key drivers of change, such as customers and technology, and concludes that a thorough understanding of the external environment is essential for effective decision-making. The report also emphasizes the importance of market research, ethical business practices, and adapting to changing consumer demands and technological advancements to maintain a competitive edge in the retail industry. The conclusion stresses the need to determine external factors to analyze changes in business at an appropriate level.

External Environment
Research and Analysis

Table of Contents
INTRODUCTION.................................................................................................................................3
MAIN BODY........................................................................................................................................3
PESTEL Analysis (Sainsbury)..............................................................................................................3
CONCLUSION.....................................................................................................................................6
REFERENCES......................................................................................................................................7
Books &Journal:................................................................................................................................7

INTRODUCTION
In business sector, environment plays important role because activities are carried out
within us earnings of market. Business environment are those which includes both external
and internal factors affecting overall organisational structure (Pupo, 2020). External
environment it refers to factors which occur outside the organisation and impact upon
activities functions and operations. With changing period of time environment of business
sector has been also changed and it has become important to be aware about Sachin are metal
factors which impact upon operations Sainsbury, largest supermarket headquartered in UK.
The enterprise is located globally and has number of subsidiaries such as Argos, habitat,
Home Retail Group etc. Main purpose of this report is to understand the external environment
and research analysis of business. This report comprises of PESTEL analysis on firm
operating environment.
MAIN BODY
PESTEL Analysis (Sainsbury)
It is a framework which is used by enterprise to determine and examine external
factors affecting organisational activities. It is a time consuming process because reliable
information is needed to use this framework. Through use of pestle analysis it is easier to
make decisions about business and to implement effective decision making. It is duty of
manager to make ensure that appropriate frameworks are used which help in carrying out
business activities in most efficient manner. This enterprise does not have a direct impact on
enterprise operations but affect indirectly. This is a reason why it is important to conduct a
proper market research analysis as well as carryout brainstorming sessions so that reliable
information and data is being gathered by organisation (Çitilci, 2020).
In context of Sainsbury, they also used this analysis through which they are able to
make decisions regarding the external factors which affect their workflow and overall
structure. Moreover, it gives them Idea and makes them aware about how they can improve
and strengthen their base of a firm.
Sainsbury
It is the largest supermarket which is headquartered in United Kingdom and operates
its activities at global level of market. They have large number of competitors such as
Amazon, Walmart, Tesco, Asda etc. As the operator global level they use addict strategies as
well as tactics accordingly through which they gain competitive advantage. The operation of
company is expanding at more foreign countries and due to this there are many factors which
business operations. These sectors are identified by carrying PESTEL firm work which is
further mentioned below-
Political factor
It is a component of a PESTEL analysis in which it reflects the involvement of
government with an economy of a country. Moreover it focuses on environmental law trade

restrictions political stability or instability in foreign countries, tax policy labour law and
many more. In reference of selected enterprise, they are being affected by political factors for
example Brexit have a significant impact on enterprise which live is there expansion of
business. Moreover, political relations between UK and Qatar will also affected the Sainsbury
level of operations at wider scale. The change of political conditions between other foreign
countries is impacting the overall profit and margin ratio of company business.
Economic factors-
This is another component of this framework in which states how enterprise gets
affected by economic conditions or situations. It focuses on economic growth exchange rates
inflation or deflation rates disposable income of consumers etc. In relation with chosen
entity, they also get impacted by these economic factors such as decline in GBP after Brexit
affect the earning of corporation. Due to this on-going current situation of covid-19, decrease
in GDP of a country has been also affecting company’s profitability. These sectors are
necessary to be focused by organisation so that effective distance between is being carried
out (Lin, 2019).
Social factors
These are those type of external factors which includes areas such as shared believes
values behaviour attitude of population and many more. Such type of factors has a direct
impact on marketers as well as customers and which impact workflow of entity. In context of
selected entity, manager of a company shows that products and services are being carried out
and distributed by properly considering these elements of social factors so that positive
relationship is built between both the parties. Moreover they adapt sustainable business
practices with aim to support customer and & also due to this business practices they have a
high demand of organic food by their customers.
Technological factors-
In business sector, with changing period of time every enterprise or businesses is
being connected with technology. This is because of changing market and customer
expectations and demands. Technological factors include use of advanced software and
hardware, artificial intelligence etc. In this digital era, b2c and B2B business both are
dependable upon these technological factors and also they impacts at organisational level in
many ways such as new ways of producing goods and services, distribution system and
communication system within a target audience has been improving and developed. In retail
industry, many of the organisations are using high end system in their management with aim
of gaining competitive benefits (Rialp-Criado, 2017). In viewpoint of Sainsbury, they too
use technology in their business as data driven analytics to gain retail consumer insights in
effective manner which help in proper decision making and doing marketing of a brand.
Environmental factors-
Then arises environmental component in which it focuses on pollution climate change
weather, waste management etc. The sector has been also focus by many enterprises
because of global environmental impact on activities. This is also crucial because of
increased use of raw materials and scarcity, carbon footprint and many more.

Furthermore it has been also evaluated that selected corporation perform their
business activities in ethical way and which increases substitute a period of a
company. They focus on this component such as by reducing operational waste and
recycling them, elimination and reduce of carbon emissions as well as foot prints and
developing strategic sustainability plan for longer period. Also, environmental
practitioners of enterprise make ensure that practices are used in such a way the results
are achieved ethically and appropriately (Bedianashvili, 2016).
Legal factors-
These are those types of external factors which includes equal opportunities laws and
legislation advertising standards consumer rights and laws product safety and labelling, etc. It
is important for enterprise which are operating at a globally as well as national level to be
aware about out legal or illegal activities so that it is easier to make decisions. In relevance
with selected enterprise, they assures that retailing activities and operations are being done in
legal way a without affecting any law right of a consumers. For example- organisation takes
regulatory approvals and standardized their products under government associations through
which they are legally able to sell consumable products to people.
Therefore after analysing above conducted framework, it has been critically violated
that it is essential to have a great knowledge of external environment and analysis so that
decision making processes is carried out in effective manner (Jaakkola, 2016).
Key drivers of change-
From evaluation of above discussed entertain there are various types of drivers of
change which are needed to be adopted by management and are mentioned as follows-
 Customers- Customers are being considered as important drivers of change which
is to be undertaken by management of selected company because products and
business activities are done within the market and between customers. These are the
sources through which corporation game profit and sales revenue. The impact upon
entities and wider scale and it is not possible for entrepreneurs or businesses to carry
out their activities without them. Demand and need of consumers are changeable on
the basis of which decision making is being done in entity.
 Technology- It is another important key driver of change which is to be undertaken
by management of Sainsbury. This is because everything has become digitally and
use of technology is increasing at rapid scale. Throw this driver, change in a business
sector has affected at wider level.
Therefore, through analysis of key drivers of change which is to be undertaken by
management has been explained briefly. So, it is examined that external factors need to be e
determined so that reason for change in in business is analysed at appropriate level.

CONCLUSION
After a brief analysis of above report, it has been concluded that research analysis
required to be determine external environment factors within a business area. This report
gives brief information about use of PESTEL Analysis and its impact on business operations.
It has been stated that it is essential to examine environmental factors so that it is easier to
make decisions and adapt with change in effective way.

REFERENCES
Books &Journal:
Pupo, 2020. PESTEL analysis of environment state responsibility in Ecuador. Neutrosophic
Sets & Systems,34.
Çitilci, 2020. The Importance of PESTEL Analysis for Environmental Scanning Process.
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Lin, 2019. PESTEL Analysis of Smart Tourism Public Service Informatization in
Chengdu. Journal of Hebei Tourism Vocational College, (3), p.2.
Rialp-Criado A, Komochkova K. Innovation strategy and export intensity of Chinese SMEs:
The moderating role of the home-country business environment. Asian Business &
Management. 2017 Jul 1;16(3):158-86.
Jaakkola, 2016. Is more capability always beneficial for firm performance? Market
orientation, core business process capabilities and business environment. Journal of
Marketing Management,32(13-14), pp.1359-1385.
Bedianashvili, 2016. The Global Business Environment, European Integration and the
Cultural Potential of Social-economic Development of Georgia. Globalization &
Business.
Haggège, 2017. Business model performance: five key drivers. Journal of Business Strategy.
Du Preez, 2016. Declining tobacco production: analysing key drivers of change(Doctoral
dissertation, University of Pretoria).
Pantano, 2018. Technology and innovation for marketing. Routledge.
Alt, 2016. Social Customer Relationship Management. Grundlagen, Anwendungen.