Impact of PESTLE Factors on Sainsbury's Business Performance

This report presents an executive summary analyzing the impact of PESTLE factors on Sainsbury's business, focusing on opportunities and challenges within the global business environment. It evaluates how changes, particularly due to COVID-19, have affected the company's profitability. The report includes a PESTLE analysis covering political (Brexit), economic (worker expectations), social (health-conscious consumers), technological (online shopping), legal, and environmental (plastic waste) factors. It examines the government's impact on Sainsbury's operations, especially during COVID-19 lockdowns, and assesses the company's proactive and reactive strategies to environmental changes, including its quality assurance processes. The conclusion summarizes the effects of governmental and environmental factors on Sainsbury's structure and operations, highlighting the key findings from the PESTLE analysis and its impact on the business's financial performance, referencing relevant academic sources.

Global Business Environment

Executive Summary
The report has been analysing the impact of the PESTLE factor on the Sainsbury business
in the term of opportunity and challenges. The report has been also evaluating that the change in
business environment does not affect the business in big term but due to this Covid-19, the
profitability of the business is highly get affected.
Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
LO1..................................................................................................................................................3
PESTLE analysis of Sainsbury Company...................................................................................3
LO2..................................................................................................................................................4
Impact of government on structure and operations of Sainsbury company................................4
LO3..................................................................................................................................................4
Impact of change in business environment on Sainsbury company............................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................1

INTRODUCTION
PESTLE analysis is a model which is generally followed by the company in order to identify
the impact of external environmental factors on the decision-making of the company. So, this
report will conduct the PESTLE analysis of the Sainsbury company to know the opportunity they
adapt and the challenges they face due to environmental changes.
MAIN BODY
LO1
PESTLE analysis of Sainsbury Company
 Political: Because of the Brexit, UK leaves the European Union which have serious
consequences for all businesses of UK along with the Sainsbury (Bentham, 2018).
Because of high prices of imported goods, the company is facing challenge of increase in
the cost of their products to deliver to the end customer in order to earn profit.
 Economical: Because of the high expectations of the worker related to their salary
increment even if they are doing a simple task such as stocking shelves, manning the
checkout etc. So, this factor causes the challenge of reduction in the company’s
profitability.
 Social: In today’s world customers are more concerned about their health and chose
healthy food in their lifestyle (Perera, 2017). So, Sainsbury company by adapting it as an
opportunity and sells the healthy food options to the customer’s as well.
 Technological: Due to Covid-19, the customers are using technology for online shopping
and payment. Sainsbury adapt this as an opportunity and make fast online delivery
service to their customers.
 Legal: As Sainsbury is following all the rules, regulations and guidelines set by the UK
government and adapting it as an opportunity. Social factor does not affect the Sainsbury
decisions.
 Environmental: Wastage of plastic is the bigger issues faces by the company and
individual for the country (Uekert and et.al., 2020). By packing the product into single
use plastic, Sainsbury company adapt this factor as an opportunity.

LO2
Impact of government on structure and operations of Sainsbury company
During this Covid-19 situation, government impose the temporary lockdown restrictions on
all the businesses including the Sainsbury company which have great impact on the operations of
the business (Höhler and Lansink, 2020). The impact of lockdown on the company is that their
profitability is reduces by 623 million. Profit of the company is generally affected by the cost
associated with the social distancing measure, weaker sales of fuel, lower financial service
profitability etc.
LO3
Impact of change in business environment on Sainsbury company
Uncertain business environment and change in business environment does not have great
impact on the company because company follow the strategy which are both proactive and
reactive (Riley and et.al., 2020). The food product of the business passes through three stage of
quality assurance such as quality control, sensory appraisal and development. Because of its
smart strategy planning, company always deals with all the environmental changes.
CONCLUSION
The report concludes the impact of the government and business environment on the
operations and the structure of the Sainsbury company. The report also concludes the PESTEL
analysis of the Sainsbury company and the impact of this factor on the profitability of the
business.

REFERENCES
Books and journals
Bentham, J., 2018. Business and Economics in the News–Sainsbury's and Asda-the decade's
mega-merger. Teaching Business & Economics. 22(3). pp.11-12.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Riley, E. and et.al., 2020. Including health impacts in environmental impact assessments for
three Australian coal-mining projects: A documentary analysis. Health promotion
international. 35(3). pp.449-457.
Höhler, J. and Lansink, A. O., 2020. Measuring in the impact of COVID‐19 on stock prices and
profits in the food supply chain. Agribusiness.
Uekert, T. and et.al., 2020. Photoreforming of food waste into value-added products over visible-
light-absorbing catalysts. Green Chemistry. 22(10). pp.3262-3271.
Online
Global Business Environment. 2021 [Online]. Available through:< https://us.sagepub.com/en-
us/nam/global-business-environment/book270053>
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