Business Environment Analysis: Sainsbury's Case Study Report

This report provides a detailed analysis of the business environment, exploring various organizational structures and their functions. It begins by defining different types of organizations, including profit, non-profit, and governmental entities, highlighting their key features and importance. The report then delves into the size and scope of business enterprises, differentiating between small, medium, and large businesses, and examining the organizational structure of firms. A significant portion of the report focuses on Sainsbury's, a major UK supermarket chain, using PESTLE analysis to identify the positive and negative impacts of the microenvironment on the UK retail sector. It also analyzes the internal and external factors affecting Sainsbury's, identifying strengths and weaknesses, and explaining how these relate to external macro factors. The report concludes with a summary of findings and references to support the analysis.

Business & Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Description on the various kind of profit, non profit and non governmental organizations..1
P2 Define the Size and scope of business enterprise and difference between the small,
medium and large enterprise..................................................................................................3
P3 Description on the organizational structure and function of firms. ..................................4
TASK 2 ...........................................................................................................................................7
P4 pestle model, identification of positive and negative impacts the micro environment has
upon UK retail sector. ............................................................................................................7
P5 Description on the internal and external factors of the UK supermarket to identify the
strength and weakness. ..........................................................................................................8
P6 Description n how strength and weakness interrelate with external macro factors. ........9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business environment is consists of external as well as internal factors of the firm. This is
helpful in relation to achieve the aim of the enterprise. This kind of factor are very helpful in
relation to find out the strength, weakness, opportunities and threats. It is helpful in order to
make the growth and sustainability of firm in the market. The business environment so the region
in which various kind of components of firm are interrelated to which other so that firm can able
to operate its function effectively (Adeoye and Elegunde, 2012). The growth and development of
firm is overall dependent on the working of enterprise. The present report will outline the
business activities of Sainsbury's, it is one of the largest supermarket chain of UK, it is beneficial
in relation to provide groceries services to worldwide customers. In addition to this report will be
inclusive of various factors as are internal and external environment factors, differed
departmental functions etc.
TASK 1
P1 Description on the various kind of profit, non profit and non governmental organizations.
There are some prominent features of business environment as are-
1. Dynamic- The environment of business changes as per the needs and change in the
market place due to introduction of new product and technologies. There are various
kinds of factors which are responsible in relation to making alteration or those factor
which are useful in order to enhancing the operation of the firm (Arasti and et.al., 2014).
2. Complex- There are various kinds of sources, due to which varied forces arises in this
manner it is essential to have modifications in the existing terms and conditions in the
venture.
3. Multifaceted- in this it can be said that the when the changes are alternated are
introduced in the new venture, all the observer have differed point of views in relation to
the occurrence (Cavalcante and et. al. 2011). In this focus is need to be given to the
function that objective which are set by the companies should be achieved in order to
meet this all out effectively.
4. Extent and impact of procedure- under any of the firm the growth and success factor is
directly depends on the conditions of working of business environment. If the
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introduction of small modification and changes cam affect the working of the enterprise
in the large manner.
Differed kind of organization are defined in following manner as are-
The organized group of people with the particular purpose such as are business and
government department. Organization are set up in relation to provide benefit to the customer so
that they are able to perform their work in an effective manner (Chow and et. al. 2017). There are
various kinds of organization, profit, non- profit and government organization. These all are
build to serve the people in the effective manner. This is defined in following manner as are-
Profit making organisation- the business and other kind of enterprise whose primary goal is to
making profit. Thy need to put major focus on the goals and it is helping the community and the
main motive is to generate the large amount of profitability in the market. They render services
to public so that they can create some amount of profitability in market.
Importance of profit making organisation-
1. Employment generation- The profit is the term which can be generated by making
investment in the large amount of money so that they are able to derive larger
profitability.
2. Profit is essential for survival of business- The profitability is essential in order to have
survival and growth of enterprise. The term profit means survival, with the help of this
the firm can sustain it functions in market for longer period.
3. Reward for risk taken- The profit is reward for risk taken in enterprise. This term can be
taken as return on the investment.
Hence, it can be said the main objective of this kind of enterprise is to profit maximisation.
These all are in various forms like sole proprietorship, partnership, business organisation and
facilities. These all work in the differed manner. In the sole proprietorship all business activities
are run and managed by the individual proprietor (Haidar, 2012). At the time when partnership is
formed with the help of two or more person and they work as to manage the all business
activities. It can be understood with the help of example as are- Sainsburry is the privately
owned company, the main goal is to generating larger amount of profitability. They deliver
services to the customer sop that main goal can be achieved.
Public organisation- These are the those firms which are controlled and managed by the
government authorities at the national and differed state levels. Under these business units the
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main motive is to provide all kind of product and services as per the requirement of the society.
The funds to this kind of the organisation is allocated by the various types of taxes and fees
which are used to be taken from the citizen (Kian Chong and et. al., 2011). This kind of business
units works as to provide all types of product and services to the customer by understanding their
demand. In this the main sources can be taxes, fees and rents which are given by the government
with the various state authorises.
Voluntary organisation- This is entirely differed kind of sector of economy. This kind of
business units work towards bring development in the societal requirement in relation to provide
proper care and supports (Klapper and et. al.2011). The main aim of this kind of venture is to
provide financial, legal and personal support to the various sectors and individuals this all are
very helpful in relation to support to various sectors and individuals who takes various initiative
in order to grow and develop the business personalities.
P2 Define the Size and scope of business enterprise and difference between the small, medium
and large enterprise.
Small business Medium enterprise Large enterprise
In this the equality held by the
founder and family.
There are owners and other
professional key roles, so that
they all can perform their
business activities effectively.
In this mostly public investor
held the equity.
It is manager by the owner of
the enterprise
It is managed by the owner
and other professional key
roles.
There is large amount of
professional management in
the enterprise.
In the there is short term
planning and it is planned by
the owner of the firm.
There is long termed planning
and it is mostly get done by the
key executive so that all things
can be done in expertise
manner (Lee and et. al., 2012).
There is distributed making of
decision which can be done
with the help of organizational
hierarchy.
There are limited personal
opportunity to have the
development in the
The personal development is
limited to the only few
There is long term planning
and it is need to be done with
the large number of dedicated
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individuals. numbers of employees. teams.
Sainsbury is the largest supermarket chain in UK and it works as to provide grocery and food
items to the number of customers. By providing effective services they are becoming the 1st
retailer chain in the retail sector. On addition to making their services effective they need OT
perform their business activities as per the demand of customer and innovation is need OT be
carried out.
Mission and vision- under this it can be said that Sainsburry view its growth in further years at
the highest levels in relation to providing good services to customers. In addition to this, it profit
margin and competitiveness is getting increased on the large scale and this affects the long term
sustainability in competitive market (Palo and Tähtinen, 2011.). The main aim is to provide good
and services, which are helpful to full fill the desire of customer in the market. Thus, it can be
said that the continuous increase in the annual turnover is not the good sign of the business
enterprise. In this manner the firm need to focus over various innovation as are to change sin the
service like provide product and services in the discounted manner, will be helpful to making the
use of promotion campaign etc.
Market share- in this it can be the best performed in the super market industry but in these days
it is becoming very typical for sainsburry to maintain its market stability. In addition to this
decrements in gross annual turnover is working as coming down in the graph in continuous
manner.
P3 Description on the organizational structure and function of firms.
a) Organization structure refers to that kind of framework but it is helpful in order to develop the
activities of business so that there can be increment in productivity and profitability of enterprise
(Palo and Tähtinen, 2011). The structure of an enterprise is defined various activities as are task
allocation, coordination and supervision and this all work towards achieving aims of en
enterprise. This also determines that how information is need to flow from level to level. The
sainsburry's have various kind of organizational function in the effective manner, this will be
helpful in order to generating the large amount of profitability in enterprise. It is need to be
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efficient, flexible and caring so that firm is able to gain sustainable competitive advantage in
market. There are various kinds of structure as are-
Functional structure- It is one of the common type of organizational structure in which the
activities of enterprise is divided into smaller sections and it is based on functional areas as are
IT, finance and marketing.
Illustration 1: Functional structure
(sources: )
For example- There are separate department for each enterprise as are marketing, accounting and
engineering. In this all the functional heads will directly report to CEO.
Divisional structure- It is the kind of organizational function into division. This is need to be
done in systematic manner, divisional structure of firm tends to have increment in flexibility. Its
broke down on the basis of product, market and geographic structures of firms.
1. Product- Divisional organization structure works as to organize each business activities
into geographical, product, market and service groups.
2. Market- This is divided into the markets which will be helpful to attend its objectivity
and profitability of enterprise.
3. Geographical structure- This means having differed branches at different locations. It
may be termed out as geographic; structure.
Types of structure-
Tall structure- in this there are having many levels of hierarchy. The employees are having
various opportunities for promotion. The span of control is narrower.
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Flat structure- This is an organization structure and there is no level of management. They
supervise its employees in less manner while promoting them.
Matrix structure- It is the combination of division and functional. This term is derived as hybrid
structure.
b) Complexities of transnational, international and global organisation structure
Transnational company: Transnational corporations are those corporations who operates in
several countries. These organisations are also known as Multinational corporations. (MNC).
International Company: International companies are those companies who have no foreign
direct investment and they manufacture products and services only in their home country. In
other words they're exporters and importers.
Global organisation: These organisations have investment in dozens of countries in order to
maintain robust headquarter in one which is usually in their home country.
The complexities faced by transnational, international and global organisations are described
below:
Transnational company: The complexities of transnational companies is managing needs of
different functional, geographical and product stakeholders. The command structure used by
transnational corporation might produce ambiguity and conflicts.
International Company: The complexities of international organisations are managing the
amount of import and export from home country to another. They have to learn different import
and export policies of different countries in order to avoid uncertainty.
Global Company: Global organizations face a complex set of challenges characterized by
diversity both inside and outside the organisation across every aspect of the business itself and its
strategy drivers.
c) Functions relations with overall organisation mission and objectives
There are different functions in organisations which are described below: Production: Production is the core function of the organisation. The goal of Sainsbury is
to provide effective and efficient quality goods to consumers. Thus, it is an essential
function of the organisation where management has to focus on quality and quantity. Purchase: In order to manufacture goods and services, organisations requires raw
materials for the products. The procurement function is essential for the organisation. To
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accomplish the goals and objectives of Sainsbury it is essential for Sainsbury to purchase
quality raw materials. Strategy and management: The role of strategic and management function of Sainsbury
is to prepare precise strategies so that goals and objectives can be accomplish effectively
and efficiently. Finance: The role of finance management of Sainsbury is to manage and allocates
budget in an appropriative way so that company can cope up with risks and uncertain
situations.
 Human resource: The role of human resource management is to manage and allocates
human resource in an precise way so that employees remain motivated and satisfied.
TASK 2
P4 pestle model, identification of positive and negative impacts the micro environment has upon
UK retail sector.
There are various factors which is inclusive of internal as well those factors which are
having uncontrollable influence in relation to making of decision in enterprise. IN this manner
there is need to defined the PESTLE analysis in the following manner as are-
Political factor- There are various kinds of things which are affecting the legal and political
system of the enterprise in large manner. There is need to be proper and effective policies which
is helpful in relation to having development in product and services of enterprise. It is inclusive
of the various kinds of elements as are foreign trade system, trading, government polices etc. in
this term it can be said that the political factors affects the working of enterprise in large manner.
The Sainsburry need to follow prescribed rules and regulations by the legal authorities so that
they are able to produce the product in expertise mode (Lee and et. al., 2012).
Economic factor- There are various kinds of processes which is helpful in relation to generating
the growth of enterprise in large manner. It is inclusive of various factors like tax rates, economic
polices and inflation system. In this the foreign exchange are and interest rate are having huge
impact on the working of business enterprise (Haidar, 2012). The economic crisis in the
European market affect the economy of UK and its leads creating the situation of recession.
Socio culture factors- In this lifestyle of people are changing in badly manner and it is having
direct impacts on the sale of good and services of the sainsbury to its customers. In this it can be
said that the every region of people have differed taste and preferences. In order to cop[e up with
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this it is essential to provide good and services with the help of variation (Lee and et. al., 2012).
In these the restriction are based on differed kind of norms and values prevailing in market.
These all kind of factors will be helpful in order to developing the culture and society.
Technological factors- It is very important factor as it is helpful in relation to develop the
product and services in the large manner. The Sainsburry need to use the technological factor
which will be helpful to attract the customer’s in the large manner. The main aim of having
technology is to creating the innovation in the services of business enterprise. The sainsburry
need to have proper knowledge of inventory system and it can be dine with the help of
innovation facilities (Klapper and Parker, S.C., 2011). These all kind of activities will be helpful
in relation to gathering the trust of the customer so that firm is able to create the large amount of
profitability and productivity.
Environmental factors- it is strategic tool, it is helpful in relation to identification of external as
well internal elements which can affect the working of enterprise. In this the analysis is need to
do as it affects the performance of enterprise. In this important analysis and all micro and macro
element need to understand as this all are helpful in order to generate growth and development
opportunities as to deal with the firm services effectively (Palo and Tähtinen, 2011).
P5 Description on the internal and external factors of the UK supermarket to identify the strength
and weakness.
This is defined in following manner as are-
For inside investigation of Porter 5 drive model will be utilized that help with portraying the
small scale condition, Sainsburry is made out of, which is depicted beneath:
 Risk of New Entry: The danger of new section is dependably terrify any association. It
influences the economies of size of organization and impact its general business. There
are numerous new businesses which work at little scale yet make enormous effect on
inward condition of business enterprise like Sainsburry.
 Customer Power: Sainsburry is driving nourishment retailer and comprise real offer of
clients. Buyers affects the matter of firm in a few ways. In the event that organization
unfit to take care of their demand, they will move to options and which brings about
reducing in development of organization (Christopher and Holweg, 2011).
 Focused Rivalry: Sainsburry is encompassed with rivalry. Huge retailers like Tesco,
Aldi's etc. It should have high impact on the association in extraordinary degree.
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 Dangers of Substitutions: Sainsburry face absence of risk of substitution, as the majority
of the buyers favour nature of sustenance which is served by the association.
 Provider Power: Sainsburry does not impact by providers as the vast majority of the
assets are produced in the association itself and restricted assets are bought from outside
providers.
P6 Description n how strength and weakness interrelate with external macro factors.
Political Factor
Strength:-
Sainsburry is a strong global brand which works as to helps in providing products and
services to international consumers by analysing all political situations.
Shortcoming:- Main disadvantage is that items offered by organization are not successful as far
as giving each client the level of fulfilment which they want.
Economic Factor
Quality:- Main quality is that it creates stream of cash in an economy by creating marketed items
and administrations.
Shortcoming:- Main drawback is that it needs information about economy where organization is
giving merchandise and ventures.
Social Factors
Quality:- Advantage is that organization is giving marketed items in view of confidence and
morals relating specifically area.
Shortcoming:- Social issues are created which hurts organizations notoriety in specific zones
where products are being conveyed.
Technological Factors
Quality:- Techniques utilized by organization are advantageous in creating items and
administrations for a specific area.
Shortcoming:- Its primary downside is that a few outlets are not all that monetarily solid and that
is the reason they can't change to new and most recent innovation.
Legal factors
Qualities:- The principle positive component for organization is lawful framework which
Sainsburry tries to dissect and use keeping in mind the end goal to give products and enterprises.
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