Sainsbury's Business Environment: Report and Reflection

This report provides a comprehensive analysis of Sainsbury's business environment, focusing on the impact of external factors on its performance. The report begins with an introduction to Sainsbury's, outlining its operations and market position within the UK retail sector. It then applies various analytical models, including PESTLE analysis, Porter's Five Forces, and SWOT analysis, to assess the political, economic, social, technological, legal, and environmental influences. The analysis also examines the competitive landscape and the bargaining power of buyers and suppliers. The report further identifies the key issues faced by Sainsbury's managers, such as competitive pressures and the need to operate within a dynamic environment. Finally, the report includes a personal reflection on the learning experience, focusing on the development of communication skills, and concludes with a summary of the findings and their implications for Sainsbury's strategic decision-making and sustainable development. References from academic journals and books are also included.

INDIVIDUAL REPORT
AND REFLECTION

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Introduction and summary of business case study......................................................................3
Apply theory and model to depict the influence of external environment..................................3
REFRENCES...................................................................................................................................8
PART 2..........................................................................................................................................10
Personal reflection on the basis of learning experience............................................................10
CONCLUSION..............................................................................................................................12

INTRODUCTION
Business environment indicate the sum total of an individual which are outside the reach
of an enterprise but still significantly affect the long term performance of business in order to
attain sustainable development. There are several internal and external forces like employee,
customer, supplier, trend, technology and investor that constitute the operation of business and
directly or indirectly influence the performance of business (Ahmed, Aamir and Ijaz, 2011). For
the better understanding of report Sainsbury company has been selected which is the largest
supermarket chain of UK. It serve to large group of people with the help of its supermarket,
hypermarket as well as convenience shop. Company deals in food and non food item like dairy
product, ready to cook meat, financial services, grocery item, electronics and so on. This report
cover following topics such as understand and demonstrate the model that impact the external
environment of business. Further, draw personal reflection that support the development of
personal skills are covered in this report.
PART 1
Introduction and summary of business case study
Sainsbury company was founded in 1868 and is one of the largest supermarket chains
within United Kingdom. The company basically has three division that include its retail store,
Sainsbury Bank that deal in financial services and Sainsbury Argos. Core purpose of business is
to deliver premium quality good and at reasonable prices so that each and ever residence of UK
can access the services of company. Moreover, company provide employment to huge number
employees like it approximately serve one lac employee and has around fourteen hundred store.
Hence, the company believes in use of advance technology due to which it shifted its business
from physical store to online retail store in order to cater the needs of working class. Moreover,
there are certain external forces that can either negatively or positively affect the performance of
business. So business needs to analyse such factor in order to bind adequate relation with its
stakeholder and attain long term sustainable development (Barnett and Salomon, 2012.
Apply theory and model to depict the influence of external environment
Retail industry data
Retail industry is one of the widely growing economy within UK which earn revenue of
approximately £450 billion by 2018. It consist of department store, market stall and convenience

store where customer find large variety of product along with the alternative which are necessity
item and are consumed on the regular basis. The prime reason for the success of retail industry is
that it always focuses on the latest trend and preferences of customer as they are customer centric
brand. Moreover, retail industry promotes their brand from various sources that does not only
include physical or brick and mortar outlet but also by online presence. Therefore, digital media
helped the company to progress, diversify and mitigate the risk caused due to changes in external
factor.
Key businesses
Strength
 Sainsbury helped the customer to find
supreme quality of product but at low
price which helped the company to
retain and attract the potential
customer. Company design the coupon and card
like Nectar loyalty card scheme that
help the company to retrieve the
beneficial data of customer and
enhance its performance by formulating
effective supplier supply relation.
Opportunity
 Selected company earn huge revenue
from its various division due to which it
can take the benefit of its economies of
scale and can diversify the business to
untapped market.
 It can promote the business through
digital media which can help the
company to engage more traffic.
Weakness
 Although company offer the product at
reasonable prices but there are certain
expenses like procurement cost, hiring
skilled or educated employee as well as
multilevel parking add up cost to the
company. Even after intensive promotion
technique company faces the risk of
switching to other brand, Hence, at
times it become difficult for company
Threat
 The major competitor of Sainsbury
company is Asda and Aldi which
constantly make strategy to remain
ahead of each other.
 Increase role of digitalisation can be a
threat of new entrant to the company.

to retain existing customer (SWOT
Analysis, 2019).
PESTLE analysis of Sainsbury
Political factor: Sainsbury company needs to manage the wide rules and regulation of
government on the areas where it operate its business. Although the major operations of
company takes place in developed country due to which it get the advantage of stable political
condition unlike developing country. Hence, changing regulation or taxation policy can affect the
entry of selected company to the new geographical areas.
Economical factor: The performance of Sainsbury has strong correlation with the
economic cycle. Like, UK promote the globalisation and makes the optimum utilisation of local
resources to fulfil the need of global market which enhances the performance of overall
company. Moreover, in terms of packed food items company is experiencing low demand as
these product are growing with very slow rate. To cope up with this situation Sainsbury can offer
wide rage of organic food items.
Social factor: It refer to the change in taste, trend, preferences and shopping habits of
customer that can affect the business process (Dong, Wu and Hou, 2011). For instance, the
residence of UK prefer to do weekly shopping and get huge discounts. Thus, respective company
promote its product by making the attractive marketing themes like “Cook and Save” that allow
the customer to cook the food easily and conduct budget friendly shopping.
Technology factor: To sustain in competitive market Sainsbury uses the online platform
to take the order from customer and delivery the same in their respective places within stipulated
time period. This affect the profitability dan maintain long term relation by providing high
convenience to customer.
Environment factor: Company operate in such a manner it safeguard the interest of its
employee, society and external surrounding. It takes the initiative to manage the waste and
recycle the product like plastic bags to maintain safe and healthy working area.
Legal factor: It is essential that the Sainsbury render all the legislation or law imposed by
government such as health and safety law. Within this law selected company needs to provide
clean working environment and safe technology to handle that does not compromises the health

of employee. Further, a new tax was imposed on the fatty or highly preprocessed food which
needs to be paid by the company as well.
Porter five force model
Bargaining power of buyer: In term of retail sector the bargaining power of buyer is high
as they have huge alternatives who are already fulfilling the requirement of customer. In such
case Sainsbury company needs to adopt innovation and promote the discounted range
successfully.
Bargaining power of supplier: Sainsbury being one of the largest company due to which
the supplier are not in state to bargain. Thus, there is low bargaining power of supplier due to
which Sainsbury company can bind long term relationship and develop efficient supply chains.
Industry rivalry: The major rivalries of Sainsbury are Tesco and Morrison which deals in
similar type of industry and offer same type of good and services. Thus, the company
experiences high pressure from the rivalries so they need to make strategy to gain long term
competitive advantage.
Threat of existing competitor: In case of intense competition due to strong presence of
existing rivalries like Tesco, Aldi etc. Sainsbury has lower down its price to match up
competitors price. Such strategy can help the company to attract the interest of customer even if
the company experience high threat of existing competitor (Chang, Hughes and Hotho, 2011).
Threat of new entrant: In terms of food retailing company most of the new entrant enter
the market with the motive to cater the needs of local residence. The reason being there is a huge
scope to earn and build long term brand awareness. Although the retail industry attract new firm
but in relation to Sainsbury which is second largest store of UK experiences low threat of new
entrant.
Identify issues faced by the manager of business
Competitive pressure: Due to intense competition it becomes necessary for the company
to adopt the latest technology and keep on bringing innovation (Edquist, C., 2010). Though it is
beneficial but requires huge capital requirement which leads the pressure on the manager of
company in order to lead whole management process.
Operate in dynamic environment: It becomes necessary for the owner of company to
analyse the external and internal condition that can affect the performance of Sainsbury. For
instance, inclusion of fatty tax and increase in demand for high remuneration needs to be fulfilled

by the manger. Further, if the company fails to cater the demand of their employee then it may
leads to the issue like increase in absenteeism rate or switching of workforce to the other
workplace which is unfavourable situation for company.
Conclusion
From the above topic it has been determined that retail sector is an essential part of an
economy that remain competitive and welcome the changes due to which it generate huge
revenue for the economy. Also with the increase in globalisation and digitalisation retail industry
has taken its significant advantage because of which the company it build online presence by
reducing the gap and distance between company and customer. Moreover, SWOT analyses help
the company to identify the internal factor that can help the company to gain core competency by
identifying the opportunity and remain cautious to deal with the threat. Further, external factor
like PESTLE analyses and porter five factor model gives a deep insight to the company
regarding the uncontrollable factor that can hamper the performance of business. Hence, based
on these factors company can take the better decision that can help the company to gain long
term sustainable development.

REFRENCES
Book and Journal
Ahmed, I., Aamir, M and Ijaz, H. A., 2011. External factors and entrepreneurial career
intentions; moderating role of personality traits. International Journal of Academic
Research. 3(5).
Barnett, M. L and Salomon, R. M., 2012. Does it pay to be really good? Addressing the shape of
the relationship between social and financial performance. Strategic Management
Journal. 33(11). pp.1304-1320
Chang, Y. Y., Hughes, M and Hotho, S., 2011. Internal and external antecedents of SMEs'
innovation ambidexterity outcomes. Management Decision. 49(10). pp.1658-1676.
Dong, M., Wu, C and Hou, F., 2009. Shortest path based simulated annealing algorithm for
dynamic facility layout problem under dynamic business environment. Expert Systems
with Applications. 36(8). pp.11221-11232.
Edquist, C., 2010. Systems of innovation perspectives and challenges. African Journal of
Science, Technology, Innovation and Development. 2(3). pp.14-45.
Online
SWOT Analysis, 2019. [Online] Available through:<https://www.marketing91.com/swot-
analysis-of-sainsbury/>

PART 2
Personal reflection on the basis of learning experience
Communication skill: Communication is an essential activity that help to convey or
share all the vital details and information in order to maintain better understanding. During the
time of learning state I worked on my both oral as well as written communication skill as both
are the essential form of communication. Some activities like presentation and group discussion
helped me to work on my oral communication. This helped me to work on the formation of
sentences and where areas where pause is given to derive actual meaning. Whereas, we focuses
more on oral communication but in corporate written communication has also equal preference
as most of the information is shared via email or notice. Due to which I constantly practice on
my grammar part that include article and report writing as well as proper use of punctuation
marks. Therefore, there are certain people who regularly help me to enhance my knowledge and
skill development such as mentor, friends and preparation of assignment helped me to gain
constructive feedback.
Numeracy: As the use of qualitative information such as data or statistic makes the
whole presentation viable and easy to understand for the other reader. Thus, during the various
programme and seminar activity I prefer to use numeracy as it help to gain the better
understanding and make my research more valuable. Inculcating of such practices assist in the
skill development as it helps me to add relevant content in the whole communication and
discussion process.
ICT: With the change in trend people are more becoming technology prone. So to sustain
in competitive world I developed my ICT skill in which I learned all the application of MS office
suite and gain deep knowledge on these subjects. Hence, regular practice and guidance of
professor helped me to enhance the ICT skill which will strengthen my skill and assist me to
practice in the future as well.
Problem solving: Kolb's learning style consist of four stages which depict the learning
style which help me in developing problem solving skill that is explained below: Concrete experience: To solving any case study and make deep discussion to solve the
existing problem I consider or recollect my experiences with whom I have encountered in
my personal life.

 Reflective observation: There can be various ways to deal with the problem but I look for
the most suitable way for which on the basis of analysis I determined the consistency
between my experience and deep understanding of situation. This help in determining
most suitable alternative. Abstract conceptualization: On the basis of experience and understanding I come up with
the innovative idea to deal up with the situation. As person learn from their experiences
so this process helps in determining the solution and suitable fit to tackle the situation.
 Active experimentation: It involve the application of creative idea that will help me as
well as other to solve the problem and implementing new method.
Working with other: This is team building model which include five stages of team
building that help me in the effective management of team. These stages are defined below: Forming: Within this stage I meet for the first time with my team member with the
purpose to attain the organisational objective. Here, I and other members were not clear
about the roles, responsibility and purpose for the creation of team. This made us depend
upon the leader who can guide us and show the direction in order to attain share
objective. Storming: Within this stage the I and other team member has to go theorugh internal
conflict and chaos while up our views forward and reaching out to the better conclusion.
This was a challenging situation for me to formulate effective decision making in-spite of
low coordination and poor mutual understanding. Hence, by the end of this stage we
understand each other which helped up to resolve the interpersonal relationship and
become comfortable with each other. Norming: Within this stage I along with my team member make decision like the task
needs to be achieved. For which the responsibility was assigned to each and every
member. Additionally, team discussion helped to maintain the better understanding. Performing: Due to the increase feeling of cooperation amongst each other we shared the
roles and responsibility to gain the success. I made effort to allot the task significantly on
the basis of team member capability and area of interest. This is the transition stage
where significant effort is made to fulfil the purpose of project.

 Adjourning: This is the stage whether we accomplished our objective so here the team
gets dissolved as the purpose of formation is attained. Here, at this stage I was emotional
because I build connection with the team member with whom I will not work in future.
CONCLUSION
From the above report it has been concluded that an individual needs to develop their
skill on the continuous basis. This help them to groom their personality and perform the task
with proficiency. There are certain skill for the personal development such as communication
skill, problem solving and familiarity with electronic media which needs to be inculcated with
the help of constant practice and constructive feedback of mentor. Therefore, learning
experiences needs to be enhanced through regular practice.