Sainsbury's: Business Structure, Objectives, and Functions

This report provides a comprehensive analysis of Sainsbury's, a major UK supermarket chain. It begins with an introduction to the company and its history, followed by an examination of its organizational structure, size, and scope within the context of different business types (private, public, and voluntary). The report delves into the interrelationships between various organizational functions, such as marketing, finance, human resources, production, IT, and research and development, highlighting their links to the overall organizational structure. A detailed SWOT analysis of Sainsbury's is presented, including an assessment of the impact of this analysis on business objectives and decision-making. The report concludes with a summary of the key findings and insights into Sainsbury's operations and strategies. This assignment is available on Desklib, a platform offering AI-based study tools for students.

SAINSBURY
1

TABLE OF CONTENTS
SUB TOPIC 1- INTRODUCTION.................................................................................................3
SUB TOPIC-2 DIFFERENT TYPE, SIZE AND SCOPE OF ORGANISATION.........................3
Different type, purpose of organisation in context of their size, structure and scope................3
Structure, size and scope of Sainsbury and their link to objective, products and services..........4
Critical analysis of complexity of different business structure and the way they are related to
organisation function...................................................................................................................5
SUBTOPIC 3...................................................................................................................................5
INTERRELATIONSHIP BETWEEN VARIOUS FUNCTION OF THE ORGANIZATION
AND ITS LINK WITH ORGANIZATIONAL STRUCTURE...................................................5
SUBTOPIC 4...................................................................................................................................8
SUBPOINT 5.................................................................................................................................11
SWOT analysis of Sainsbury.....................................................................................................11
Influence / impact of SWOT analysis on business objective and decision making..................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
2

SUB TOPIC 1- INTRODUCTION
Sainsbury's Supermarket is listed as the second largest chain in the United Kingdom, it was
founded by John James Sainsbury in 1869 in Drury Lane London. Sainsbury's has managed to
maintain its position in the top 3 due to major products and changes, having constantly fought
with the Tesco and Asda chains. He started out as a food merchant, later introduced packaged
products, and expanded his vision along the way. He used many marketing methods to get the
simple stores out of print, which led to the creation of the current empire. At the moment,
Sanisbury is not only a 2nd place supermarket in size, but it is much more for buyers , because it
has a wide range of products, affordable prices, offers, various baby products, medicines,
household products and even beauty products.
SUB TOPIC-2 DIFFERENT TYPE, SIZE AND SCOPE OF
ORGANISATION
Different type, purpose of organisation in context of their size, structure and scope
There are various types of organisation working in external environment that is private,
public and voluntary having different purpose and objective to be achieved. They also have
different organisation structure, scope and size that can be illustrated as follows:
Private company: These are enterprise that are owned and manage by single or various
individuals to earn higher profit margin by delivering qualitative services to customers. Private
company cannot issue share to public for subscription in order to get capital for smooth running
of business. The scope of private company is medium as they are able to expand their operating
in international market to enjoy maximum revenue and market share. Likewise ASDA is private
firm in retail sector of United Kingdom that huge market share and scale of operation across
worldwide. Private firm may have small, medium, large size in terms of stores; employees and
revenue such as ASDA have large size with number of employees working for growth of firm
(Siswanto and et.al., 2021).
Public company: On the other hand public companies are firm that are owned by government
but managed by stakeholder that has been elected to take all decision for growth and expansion
of business. Sainsbury PLC is one of the example of public limited company that have huge
market share, scale of operation that is second largest supermarket chain in UK. Moreover,
Public limited company have word added at end as PLC that represent individuals that it is
3

public company and they can have invest their money in share of firm. Ownership of public
company is shared among the shareholder through free trading of share on stock exchange
(Trontelj, 2017). The main purpose of public limited company is to offer qualitative products or
benefits services to customers so that their needs can be fulfilled in best possible manner.
Therefore they are mainly operated to delivered services or benefits to people.
Voluntary company: The organisation that have small scale operation, limited number of
customers and mainly operated to delivered services to customers rather than earning profit.
Their main purpose is to provide support, reasonable products and services at free of cost so that
people have better lifestyles to life. Furthermore this company have limited scale of operation in
external environment and mainly owned by one or two member that wants to make life of people
better. Thus their main motivate is not to earn profit but make lifestyle of people effective
through providing support and care. Likewise Save the children is one of the largest voluntary
organisations of United Kingdom that is running to provide support to people rather than earning
profit margin. So they are non profit organisation funded by member for growth and
development of economy.
Structure, size and scope of Sainsbury and their link to objective, products and services
Sainsbury is second largest company in supermarket retail chain that offer varieties of products
and services to meet requirements of customers in best possible manner. The company have
different size, scope and structure that are directly linked to objective, products and services.
Likewise the Sainsbury is public limited company that has been founded in 1869 having 1428
number of shops at different location to delivered services to range of customers. The company
have earned revenue of around 28993 billion; operating income is 986 million and number of
employees 111900 that are working for growth and expansion of business for longer time frame.
Thus, company have wide scale and size of operation that contribute in meeting expectancy of
range of customers thereby enhancing overall revenue and market share of firm (Friesen, 2020).
The size and scope are related to products and services of company as Sainsbury wants to be first
retail stores in UK. So it has recruited and retained talented employees within firm so that it can
easily achieve the end objective in limited time frame.
Sainsbury have hierarchy organisational structure, in which there are various level of
authorizes on the basis of chain of command that need to be followed by each individuals in the
firm. Moreover in such company there is high authority and control which contribute in
4

maintaining quality of products and services provided to customers. The order are given from top
to bottom in the hierarchy thus each individuals must have to follow its superior order to
complete its task in best possible manner (Benzer and et.al., 2017). Therefore, effective
organisational structure of Sainsbury has contributed in coordinating diverse range of people to
work together as a team for achievement of company goals. At the same time reduce the
confusion and conflict between individuals regarding the task that need to be completed by each
employees in the firm.
Critical analysis of complexity of different business structure and the way they are related
to organisation function
It can be critically analysis from above understand that there are various business structure such
as functional, hierarchy, matrix and divisional. The functional and hierarchy are common and
simple organisation structure such as in function people are segmented into department related to
specific function. While in hierarchy the superior provide order to subordinate related to the way
particular task need to be completed for organisation benefits. On the other hand, divisional and
matrix is complex organisation structure in which a subordinate receive order from two or more
superior which may resulted in confusion and conflict (Skrastins and Vig, 2019). All these
structure are related to function of company as they helps in design type of function that each
individuals need to perform so that company is able to delivered services to customers in limited
time frame. Likewise in function organisation structure each department is segmented on basis of
function that is human resources, financial and marketing. Effective working of all such
department leads in growth and expansion of business in competitive market condition thereby
achievements of end goals. So, it can be interpret that organisation structure is related to
company functions.
SUBTOPIC 3
INTERRELATIONSHIP BETWEEN VARIOUS FUNCTION OF THE
ORGANIZATION AND ITS LINK WITH ORGANIZATIONAL STRUCTURE
For the effective working of business the most essential aspect is the effective working of
the organisational functions of the business (Tomaiuolo and et.al., 2019). The reason underlying
this factors that if the functions of the business will not be effectively undertaken then this will
negatively impact the working capacity of the company. Moreover in addition to this the
employees will not perform their functions in proper and effective manner then this will decrease
5

the efficiency of them as well as the overall company. All the business functions of the company
are interrelated with one another and delay in one function can affect the overall working of the
company and other functions as well. Hence it can be stated that there is relationship between
different functions of the organisation that is being seen in Sainsbury and these are also linked
with the organisational structure of the company. The reason underlying this fact is that if the
organisational functions are not performed in proper and effective manner then this will affect
the overall organisational objectives and structure of the company. Hence the interrelationship
between different functions performed at Sainsbury is as follows-
Marketing and finance function- the marketing and finance function are very important
for the success of Sainsbury. There is a great relationship between both these function that is
marketing and finance. The marketing is the department which is directed towards promoting the
product and services of the company within the highly competitive market. In order to market the
product and service is the most essential aspect is the finance. The finance is being handled by
the finance department of the company and every decisions relating to finance is taken by
finance department only. Hence the budget for the marketing department is also approved by the
finance department only. That there is a great relationship between both this function as if they
will not be proper communication between these two function then the performance of the
company can be effected to a great extent (Niemi and Pekkola, 2019).
Human resource and production function- In addition to this human resource department
and the production function of the company also has a great relationship between both of them.
The reason underlying these factors that affect the human resource department is the one which
deals with the number of vacancies within the company. On the other hand the production
function is the one which is related with manufacturing the product and services within which IT
companies dealing (Chen and et.al., 2018). The production function requires the maximum
number of human resource and this can be fulfilled by the human resource department. Hence
communication between both these departments is very important as the production department
gives the requirement of human resource to the HR department and intern the HR department
hires and recruit the relevant and reliable people at the valid positions.
IT and research and development department- the business operates in the external
environment and it is very essential for the company to time-to-time analyse the changes taking
place within the external environment from stop hence the research and development department
6

is the one which effectively analyses the changes taking place within the external environment
and what is the impact of those challenges over working of Sainsbury. In addition to this the
major changes taking place within the external environment is in the field of technology. Hence
the IT department of Sainsbury is the one which work in the analysis of the latest technologies.
Thus there is a great relationship between both is function that is research and development and
IT. The research and development department options vary continuously analyses the changes
within the technological department and it is communicated with the IT department so that the
changes can be implemented in effective and efficient manner.
Thus in the end it can be evaluated that there is great relationship between different
functions of the business. Hence it can be stated that for the success of the company the most
essential aspect is to maintain a balance between all the functions of the business. This is
necessary in order to attain the objectives of the business. The reason underlying this factors that
when all the functions of the business are performed in effective and efficient manner then this
result in effective attainment of all the objectives of the business and the profitability increases to
a great extent.
Along with this it is also essential for Sainsbury to manage the organisational structure of
the company in addition with the functions of the business (de Oliveira and et.al., 2018). The
reason underlying this fact is that when the organisation structure of the company is good then
this will provide clear guidance to the employees that how they can manage the working and
operate in the same and intended manner. Hence the organisational structure be followed by
Sainsbury is the hierarchical structure. The reason underlining the use of hierarchical structure is
that under this method there is proper flow direction that is there is clarity that which employee
will report to which superior and how the decisions will be communicated with the superiors to
the subordinates.
7

With the above image it is clear that the structure is being followed within the hierarchical
manna. It is clear that the working of the company is being undertaken within the hierarchy that
is the area manager direct to the store manager then the deputy manager and then with the for the
department managers. In addition to this the department managers also have their subordinates
and the communication flows
SUBTOPIC 4
Business environment is a sum of micro and macro economic factors associated with the
business entity. All the micro and macro environment are a sum of different factors. Micro
environment factors can be demonstrated in the following points.
Financial stability of company
This is a key micro environment factor that influences the business operations of
company. Financial stability immensely influences the overall business operations of the
8

company. Sainsbury Company owns an effective financial resources influence the business
operations of company. Financial stability allows the business entity to ensure the effective
management of the financial resources part of the company (Guardado, 2018). This is a core
micro factors affect the overall business operations of the Sainsbury Company. This can
strategically be understood that the organisation needed to ensure the best level of management
of the financial resource of company. Financial stability makes it more stable for the organisation
to ensure the best level of growth objectives in favour of the organisation.
Human resource of company
Micro factor also involve human resources associated with the business entity. This has
been demonstrated that the company needed to ensure a smooth flow of the management of the
human resources part of the business entity (Karaconstantis and et.al., 2020). Every company
seek quality and skilled human resources that can offer best level of growth opportunities in
against to channelize the overall business operations of company. Management of the Sainsbury
Company also channelizes constant training and employee development campaign to guide the
overall operation efficiency of the company.
Talent management operations
Talent management is also a part of the micro factors associated with the company. This
can be stated that human resource department of the business entity. Talent management is one
of the prominent practices associated with the business entity. Micro factors are mostly internal
in nature that involves strategic direction of company. Human resource team at the Sainsbury
Company is the one that channelizes the talent management operations of the business entity.
The above mentioned factors are the micro factors influence the overall operations of the
business entity. This can be strategically be defined that it become essential to deliver the overall
business objectives set by the organisation. Micro factors always support the business objectives
and strategy of the company to deliver the overall business objectives of the business enterprises.
PESTLE Analysis
Macro environment analysis is a summarises of the different factors associated with the
PESTLE Analysis. This is an analytical tool involve elements and factors like political,
economic, social, technological, environment and legal factors.
Political Factor: Are among the core business environment factor influence the overall business
operations of the Sainsbury Company. This is comprises with the political situation of the
9

business entity. In United Kingdom political situation and environment is very stable in nature.
This allow the company to mitigate all its different business objectives (Yadegari and et.al.,
2020). Government in United Kingdom is very progressive in nature that also supported the
Salisbury Company in achieving the overall business objectives of company. The political
stability of the government allows the business entity to formulate long term policies and
decision making against channelizing the business operations.
Economic Factor: are also among the crucial macro factors influence the overall business
operations of the company. Per capita income of the people in country allow the Sainsbury
Company to convince people to buy luxury products in the respective market. This is also
analysed that inflation in the economy of United Kingdom is very controlled in nature due to the
monetary and fiscal policies deliver by the government in United Kingdom. This is analysed that
economic factor drive the company to deliver all its various business objectives. The GDP
growth rate of the United Kingdom is also impressive when it comes to compare with the other
developed nations. This can certainly ensure that economic factor would allow the company to
achieve and meet the overall business objectives.
Social factor: are a major macro factors affect the business operations of company. This has
been analysed that the social factor contribute majorly in the overall growth of the company.
Trends, fashion, attitude of people, social aspect and many such elements are a part of the social
factor. This has been entertained that the social factor allows the company to reach massively the
overall business objectives of company (Jensen and Larsen, 2019). It is significant for the
company to take competitive advantage in the respective market with support of the social factor
as it allows the company taking competitive advantage in the respective market.
Technological factor: is a crucial macro factor influence the overall business operations of
company. Technological advancement and growth of the United Kingdom has become one of the
major reason behind the overall growth and success of the business entity. Sainsbury Company
has effectively utilised the technical development of the country in order to channelize the
business operations of company (Robina-Ramírez and Human, 2020). The organisation is
utilising technology in making sales, customer service, relationship management, marketing and
all its key functional areas. This can ensure that technical development of company become the
major reason behind the overall success sof the Sainsbury Company.
10

Environment factor: is also a major macro factor affecting the business operations of company.
Sainsbury Company tries to deliver the eco friendly products that can ensure the health care of
the people in society. This is also ensure that the company has been involved in various social
responsibilities such as plantation, green energy and many such as a part of the environment
facto in order to take competitive advantage under the respective market.
Legal factor: involve laws of country. Sainsbury Company follows all the legal requirements in
against to deliver the overall business operations of company.
The above mentioned factors are the different macro factors affect over the business
operations of company.
SUBPOINT 5
SWOT analysis of Sainsbury
Sainsbury is the second largest supermarket chain of the UK and leading organization in its
industry. The SWOT analysis is a tool which helps the manager of the company in situational
analysis of the organization. It is one of the techniques with the help of which the managers can
identify the current strength and opportunities available to the company along with the weakness
and threat the company is facing. It helps to review the internal and external factors impact over
company performance.
 Strengths: The strength of the Sainsbury reflects that the company have strong brand
image over the local customers because of that they have huge sales turnover every year.
The strong brand portfolio of the company states that the company can easily expand to
new product category with existing and new customers. Not only that the company also
have strong and highly skilled workforce and for this the company spend lot of funds in
training and development program. The current market share of the company is 14.9%
which is largest among their competitors of same sector (RASHID, 2020).
 Weakness: The weakness of the Sainsbury company is that they invest huge funds in
research and development which increases their cost because the company are
environmentally friendly. Even the company is investing lots of funds but is not able to
compete industry and competitors in term of innovation. Another weakest point of the
company is that their food profit margin is quite low and the impact of which is that they
are unable to earn more profit as per industry remark. Because of the various new
11

entrance in the market the Sainsbury unable to tackle this challenge and also not able to
take competitive advantage.
 Opportunity: The new taxation policy set by the UK government is acting as an
opportunity for the company with the help of which they can increase their profitability.
The Sainsbury company can also adopt new technological innovation in order to expand
their business in foreign markets. The company can use their own online shopping
websites and other social media platforms for the same purpose. The trends are changing
over the period of time and every time these new trends bring opportunity for the
company to provide new and unique products and services to the customers. Because of
the low inflation rate it brings stability in the market and the impact of which is that the
buying patterns of the customers are increasing (Haleem and Jehangir, 2017).
 Threat: New environmental regulations set by the government is a threat for the existing
products of the company. As the highly profitable products of the Sainsbury is seasonal
in nature and high demand because of the non-availability of product decreases the profit
earnings of the company. Not only that one more threat for the company is that rise in the
price of the raw material which force the company to make increment in the prices of
their products if they want to earn profit. And in case if they won’t do that, they may lose
their position in the market (Giusti, Maggini and Colaceci, 2020).
Influence / impact of SWOT analysis on business objective and decision making
The SWOT analysis that has been performed is appropriate as it helps in understanding the key
strength, weakness, threat and opportunities of company. It helps in gathering information
pertaining to the way company can make effective use of its existing strength to make optimum
utilisation of available opportunities. At the same time the way it can save itself from threat by
overcoming the weakness for growth and success of enterprise for longer time frame. So, the
way SWOT analysis impact on business objective and decision making can be illustrated as
follows:
 The Sainsbury have strong brand image, products portfolio and large market share that
provide opportunities to company to effectively expand its business operation in
international market to earn maximum profit margin (Gürel and Tat, 2017). So, this
12