BM461: Global Business Environment Report - Sainsbury Analysis

This report analyzes the global business environment of Sainsbury's, a leading British multinational retail store, focusing on external factors that influence its operations. The analysis employs the PESTEL framework to examine political, economic, social, technological, legal, and environmental factors. Political factors include the implications of Brexit and the relationship with Qatar, while economic factors highlight increasing costs and employee salary demands. Social trends towards healthy eating and technological advancements like e-commerce are also assessed. The report identifies key drivers such as technological upgrades, strategies to mitigate Brexit and Qatar-related issues, and changing regulations. It concludes that understanding the business environment is crucial for identifying threats and achieving business objectives. The report references various books and journals to support its findings.

Global Business
Environment

TABLE OF CONTENTS
INTRODUCTION.....................................................................................................................................3
MAIN BODY...........................................................................................................................................3
CONCLUSION.........................................................................................................................................4
REFERENCES..........................................................................................................................................5

INTRODUCTION
Business environment is a combination of different factors both internal and external
that affects the business. It includes all the forces that can influence the business functioning
directly or indirectly. In this report, Sainsbury is taken as an organization, which is a one of
eth leading British multinational retail store, headquartered in UK. This report presents about
the external environmental factors that can affect the business functioning and also the
identifying eth drivers of change that the organization should take into consideration.
MAIN BODY
In order to analyse the factors affecting the business, Pestel analysis is used. A
detailed analysis is stated below.
Political factors (High): There are two major political factors affecting the retail
industry (Camilleri, 2018). One is the implication of Brexit. If UK exits European Union then
it will lead to the increase in cost of imported of products which will consequently increase
the price for the end consumers (Bush, 2019). Second, is relation between Qatar and England.
The Sovereign Wealth Fund of Qatar is having the highest shareholding of Sainsbury and any
issue between the two will affect the market share of Sainsbury. Thus, it has a huge impact on
Sainsbury.
Economic factors (High): The increasing fuel cost has made the transportation goods
expensive and also there is an increase in demand of higher salaries by the employees for
simple task (Quinlan and et.al, 2019). It has affected industry to either lower the margin or
increase the price of its product. Thus, it will also have a high impact on the business.
Social factors (Moderate): The major trend in UK is towards healthy eating. People
are more conscious about their health and no longer prefer junk food. So, it will highly
impact the industry. Sainsbury has already working on healthy products; thus, it will have
moderate impact on the it.
Technological factors (High): The introduction of E-commerce website and
implementation of useful tools like fast check out system (Farroq, 2019). Also, the use of
analytical tools and other technology that can attract more customers. This factor will affect
entire retail industry. Thus, it will have high influence on Sainsbury.
Legal factors (Moderate): The implementation of sugar tax by UK government to
reduce the sugar content in drinks has affected the industry, especially the organizations
having its own brands. Thus, it will have a moderate impact on Sainsbury business.
Environmental factors (Less): With the increase in pressure from government and
consumers with respect to the well being of society and environment, organizations are
forced to take some initiative (SHTAL and et.al, 2018). Sainsbury has already taken steps to
reduce the carbon footprint and also reduced the use of plastic. So, it will have less impact on
Sainsbury business.
Key drivers to be considered
 Technological upgradation
 Strategy to reduce the impact of Brexit and Qatar issue
 Changes in the rules and regulations

 The increasing cost of fuel and salaries
CONCLUSION
It can be concluded that analysing business environment helps businesses in identifying the
threats which can be used in its planning process in order to achieve business objectives. Thus, it
plays a huge role in business success.

REFERENCES
Books and Journals
Camilleri, M. A., 2018. The marketing environment. In Travel marketing, tourism economics
and the airline product (pp. 51-68). Springer, Cham.
Quinlan, C. and et.al, 2019. Business research methods. South Western Cengage.
SHTAL, T. V. and et.al, 2018. Methods of analysis of the external environment of business
activities. Revista ESPACIOS. 39(12).
Online
Bush, T., 2019. PESTLE Analysis of Sainsbury’s. [Online]. Available Through:<
https://pestleanalysis.com/pestle-analysis-of-sainsburys/ >.
Farroq, U., 2019. PESTLE Analysis of Sainsbury’s. [Online]. Available Through:<
https://www.marketingtutor.net/pestle-analysis-of-sainsburys/ >.