Business and Business Environment Report: Sainsbury's Analysis (2019)

This report analyzes Sainsbury's, a leading UK supermarket chain, within the context of its business environment. It begins by classifying different organizational types (public, private, and voluntary sectors), outlining their purposes, legal structures, sizes, and scopes, with specific examples like the Crown Prosecution Service and Oxfam. The report then examines the interrelationship between different departments within an organization, emphasizing the importance of coordination and the link to organizational structure and objectives. Furthermore, it explores the positive and negative impacts of the macro environment, utilizing PESTEL analysis to assess external factors. Finally, the report conducts an internal and external analysis of Sainsbury's using SWOT analysis, interrelating strengths and weaknesses with macro factors to provide a comprehensive understanding of the company's position and challenges in the market.

Business and Business
Environment
Table of Contents
INTRODUCTION......................................................................................................................3
TASK 1......................................................................................................................................3
P1 Different types and purpose of organisation.....................................................................3

P2 Size and Scope of different Types of Organisation...........................................................6
TASK 2......................................................................................................................................8
P3 Relationship between functions of different departments in an organisation and manner
in which they link to organisation structure and objective.....................................................8
TASK 3......................................................................................................................................9
P4 Positive and negative aspects of macro environment........................................................9
TASK 4....................................................................................................................................12
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses............................................................................................................................12
P6 Strengths and weaknesses interrelate with external macro factors.................................13
CONCLUSION........................................................................................................................15
REFERENCES.........................................................................................................................16
INTRODUCTION
Business Environment is a combination of different types of internal and external
elements that may not be controlled by business organisations but put deep impact on
organisation growth, productivity, profitability and performance (Anıl and Ficici, 2017).
Internal factors that may affect functioning of business organisations are suppliers,
customers, employees, shareholders while external elements include governmental rules and

regulations, technological factors, economic conditions and competitors’. Present case study
has been conducted on Sainsbury’s which is one of the leading chains of supermarket
headquartered in London, EC1, and United Kingdom. Company was founded in the year
1869 by John James Sainsbury's and perform their business services in relating sector. In this
report discussions have been made on size and scope of different organisational structure
along with their legal construction. In addition to this, interrelationships in between different
departmental heads of company with their functions are included in this report. Lastly,
SWOT and PESTEL analyses of different macro factors is done in order to evaluate strength
and weakness.
TASK 1
P1 Different types and purpose of organisation
There are so many different types of organisations performing their business activities
in three different sectors namely, public, private and voluntary sector. All these organisations
work with a motive to satisfy essential needs of consumers and gain strong earnings
simultaneously. Along with this, effective functioning of these organisations results in high
end revenue generation for a country government which results in gaining high rate of GDP.
In this present scenario, a report is required to present before shareholders of Sainsbury’s in
an Annual General Meeting in order to explain different types of organisational structure. By
doing this, company is effectively planning to expand their value distribution and supply
chain of networks. Mentioned below there are some basic different public, private, voluntary
organisation along with their essentials:
Public Organisation:
Organisations working in public sector are wholly or partially owned and controlled
by government. These organisations mainly run their business activities in order to provide
welfare to society rather than a perspective to earn profit. Public sector organisations offer
wide range of services includes health care services, education services, transportation,
communication and infrastructural services. In relation to this, Crown Prosecution Services
situated in Wales and England offer their services related to providing legal advices to police
and other investigative agencies that is mainly related to criminal prosecutions.
Purpose: Crown Prosecution Service (CPS) is mainly a principle prosecution agency
headed by Director of Public Prosecutions. CPS was founded in the year 1986 with a core

purpose that is to find actual criminal offence on an individual. Agency is situated in England
and Wales and works with a motive to render effective legal advices to police and other
investigative agencies.
Legal Structure: Organisation running their business services in public sector are owned and
controlled by government and other related institutions. Further, government structure is
mainly segregated into three different layers that include local, state and national government
sector. Public organisations legal structure is mainly depend on particular type of government
managing, running and controlling it.
State Government: Organisation working under this structure are wholly and partially
owned and controlled by authorities of state government.
Local Government: Companies running their business services in this structure is
administrated and managed by local government.
Central Government: This is an organisation in which major share are authority of
controlling and managing is done by central government authorities.
Private Organisation:
Organisations performing their business functions in private sector are owned,
managed and controlled by sole personnel, group of person, companies and other related
financial institutions. Companies running their services in this sector have a main motive that
is to earn more and more profit (Toedt, 2014). In order to start a private organisation effective
and proper organisational structure is formulated and further formative operations are
conducted in order to earn a base of loyal customers. In relation to this, Sainsbury’s which a
second largest and leading chain of supermarkets situated in United Kingdom offer wide
range of services through superstore, convenience shop, hypermarket and forecourt shop.
Company perform their services in relating industry.
Purpose: Sainsbury’s one of the largest UK based retailer and financial provider
organisation run their business functions with a purpose to review their supply chain and
expand their services into other alternative sources within and outside UK. Company is
effectively purposed to offer food and drink deliveries to their store. Along with this,
Sainsbury’s planning to hire British Staff in order to secure their labour supply in effective
way.

Legal Structure: Legal structure of private organisations is described below in brief:
Sole Proprietorship: Organisations running their business functions in this sector are
fully owned, managed and controlled by a sole individual. In this types of business structure
there is no formal and legal distinctions in between owner and a government authority.
Partnership: When two or more than person come together to run a business in a
combined manner is termed as partnership. It is mainly a formal written agreement in
between two parties where they make certain agreement over share of profit and loss in
business. Companies working as a partnership have a common motive that is to earn more
and more profit while serving people.
Company: It is type of organisation in which there is not offering of shares done by
individuals to public through a medium of Initial Public Offer. Companies performing their
functions in this sector run their business activities with a motive to earn large amount of
profit.
Voluntary Organisation:
Organisations running their business functions in Voluntary sector are mainly owned
and controlled by group of individuals. Main motive to run activities in this sector is to
provide welfare services to community and society. In relation to this, Oxfam which is a
combination of 20 individual charitable organisations conduct their services with a same
purpose that is to offer different types of non profitable services to population. There are
various types of organisations that are included in Oxfam confederation that include,
religious cooperation’s, trade unions, foundations, charitable organisations, foundations and
other non-profitable organisations.
Purpose: Charitable organisation like Oxfam performs their functions with a purpose
to eradicate poverty from all around the world and raise living standards of individuals.
Legal Structure: Voluntary organisation legal structure is mentioned below:
Unincorporated Organisation: It is a form of organisation in which a group of
individuals sign an agreement to work together in a combine way. They perform their
activities other than a reason to earn profit. In Unincorporated organisation members are duly
responsible for any kind of obligation.

Trust: It is a form of voluntary organisation, in which there is a formal agreement in
between two individuals in which a person provide former rights of a property or a fund to
trustee.
Limited Organisation: In this form of voluntary organisation, there is limitation on
number of members and their holding of shares in an organisation.
P2 Size and Scope of different Types of Organisation
There are different types of organisations perform their functions within three
organisational heads namely public, private and voluntary (Otoo and Drechsel, 2018). Each
and every organisation has different set of size and scope as to conduct their business
operations within governmental structural framework. Mentioned below there are different
size and scope of various organisations described:
Public Organisation: Organisations that are owned, managed and controlled by government
entities are known as public organisations. Crown Prosecution Services (CPS) situated in
England and Wales is a non-ministerial department offering their legal advices to police and
other investigative agencies if formative way. CPS provide their services in secondary sector
as they take raw informations form police and investigative departments and offer them final
report. Mentioned below there is a size and scope of CPS:
Size: Crown Prosecution Services perform their administrative services in the region
of England and Wales with a common motive to bring right individual in right criminal
prosecuting. CPS organisational structure includes overall number of 14 teams working in a
supervision of Chief Crown Prosecutor. Agency employs more than 6000 individuals in their
organisational structure.
Scope: Crown Prosecution Services perform their services in effective manner and
has a scope to take advantage of digitalisation in their functions in order to ensure fast flow of
in formations and related data in both internal and external structure of organisation.
Private Organisation: Organisations those who are owned and controlled by an individual
or a group of individual counted under private organisations. These organisations basically
have less intervention form government authorities. Sainsbury’s is one of the UK leading
supermarket chain with holding more than 16.9% shares in supermarket sector. Company is
engage in the services that are being offered through the medium of Superstore, Supermarket
and more. Sainsbury's Perform their business operations in primary sector industry as they

extract natural resources and provide that same to individuals through the medium of
superstore, supermarket and shops.
Size: Sainsbury’s offer their supermarket services in all over the world with having
more than 186,900 employees and estimated number of 1415 shops around the world.
Company offer wide range of services, through the medium of supermarkets and superstores
as to gain more loyalty from their consumers. Company offer their services in effective way
and gained more approximate amount of 518 million Euro as an operating income.
Scope: Sainsbury’s hire potential and competent employees who have effective skill
to raise standard of company in terms of delivering extensive range of services. Their
employees have formative communication skills and can speak in 50 different languages
residing in 24 different time zones. Sainsbury’s perform their services with a scope to expand
their services and reach out to those consumers which is yet not reached by company.
Voluntary Organisation: These types of organisations are managed by certain group of
individuals who willingly come together for a common accomplishment of goal. Oxfam is a
formal association of independent charitable organisations who work together for a purpose
to erase poverty from all around the world and effectively raise living standards of
individuals. Oxfam run their operations as an Tertiary sector organisation as they mainly
provide welfare services to individuals rather than goods.
Size: Oxfam is working in a collaborative manner with other independent charitable
organisations. Organisation is proving their welfare services in around 14 different countries.
They perform their services with a motive to eradicate poverty and other related issue from
all around the world. There are numerous numbers of volunteers working with Oxfam as to
provide welfare services to people and uplift living standards of population.
Scope: Oxfam can provide their humanly welfare services in other regions of globe
where they haven’t reached yet.
TASK 2
P3 Relationship between functions of different departments in an organisation and manner in
which they link to organisation structure and objective
In order to perform business functions in smooth and effective way it is essential for
an organisation to ensure that effective coordination and relation is prevailed in their working

structure. It helps them to maintain a smooth and effective interrelation with each of their
departmental units and formulates steady growth (Charfeddine, 2016). For this managers of
Sainsbury’s properly ensure that goals and objectives are clearly defined to each of their
individuals so to accomplish organisational predefined goals in effective manner. Mentioned
below there is an interrelationship in between departmental units of Sainsbury’s:
Illustration : Organisational Structure
(Source: Organisational Structure, 2019)
Human Resource and Finance Department:
Human resource department of Sainsbury;s have authority and responsibility to hire
potential individuals in effective candidates for each or their departmental units. HR
department of company is accountable to recruit skilled and knowledgeable candidates who
can effectively showcase their talent in organisation with an ease. Along with this, it is
important for HR managers of company to raise skills of their existing employees by
providing them required training and update them about latest technology that has been using
by company. In order to accomplish this target in effective manner there is a requirement of
fund that can only be sourced after the evaluation done by organisation finance department.
While HR department, provide skilled and talented workforce that can help finance
department to deliver qualitative services. This interrelationship benefits Sainsbury’s to

expand their services in food and drink sectors in effective way and serve their consumers
with great quality by ensuring high profitability rate for company.
Research and Development and Production Department:
Research and development department of Sainsbury’s is one of the most important
departmental units have responsibility to ascertain actual needs and preferences of
consumers. Research and Development department of company aid production department by
providing them knowledge that is related to current behaviour of consumers and latest
technology. This will benefit production department to update their production process by
using innovative technology and gain more competitive edge in market. While on the other
hand, production department in return helps R&D department by offering them information
related to any kind of required changes in product and services. This interrelationship benefits
Sainsbury’s to improve their process if production by strengthening company technological
measure. This will help them to gain more competitive advantages against their competitors
and acquire large share in marketplace.
With the interrelationship in each of their departmental units Sainsbury’s can
effectively raise performance level of their employees and ensure stable growth of company.
Along with this interrelationship benefits company to analyse necessary related gaps and fill
them in accurate given time in order to strengthen organisation internal working structure and
gain more competitive advantages against their competitors.
TASK 3
P4 Positive and negative aspects of macro environment
Siansbury’s is second largest super market chain of UK, therefore it is very much
important for them to study the impact of both internal and external factors which can affect
the operations of their organisation. Following are the positive and negative impacts of macro
environment on their functionality:-
1. Political: Political factors are concerned with the political conditions of a nation, it is very
important for Siansbury’s to study the political conditions of the nation in which they are
performing their operation. This will lead them in gaining the complete information about
the government policies, which can affect their functionality (Charfeddine, 2016). This will
also help them in making their strategies according to them, so that they do not get fix any

problem associated with them. Beneath are the positive and negative impact of political
factors which can affect Siansbury’s : Positive: The political condition of UK is very much stable and they also have
very good policies for organisations who want to expand their business in
different parts of countries. These will helpSiansbury’s in getting some additional
benefits from government in their taxation, so that they can provide products at
lower cost. Negative: The trend of online marketing is very much popular and government of
UK have very attractive policies for them, which can help them in developing
their business in environment of UK.
2. Economical : This is one of the most important external factor, which is not in control of
any organisation and also can affect the performance and profitability of them (Toedt,
2014). Siansbury’s use to perform their functionality in the business environment of UK,
and it is very important for their analyst to understand the economic conditions of nation.
This will help them in making strategies which can lead them to gain some additional
profits and also in moving with conditions of nation. Positive : The economic condition of UK is very much stable and it is very
pleasant for Siansbury’s to perform their functionality and also help in developing
their business. Negative : There are several factors which are unstable in market like, rates pf raw
material and transportation which will lead in creating problem.
3. Social :This the factor in which organisation like, Siansbury’s have to study the issues
related to society. This include change in trend and demands of customers along with
other condition like, demographic i.e. population, occupation, age etc. Positive : Proper study of this factor help them in gaining appropriate detail of
new trends towards which customers are going, so that they can make change
according to it. Along with this, it also help in gaining about the quantity of
products in which it is required to deliver

 Negative : The change in trends and customer’s demand will leads in huge loss to
organisation, as older products get obsolete and customers do not need them any
more.
4. Technological : This is very important for analysts ofSiansbury’s to study the new
technologies which can help their organisation in improving the functionality and also
their profitability. This also help them in improving the customer experience and
decreasing the cost of their revenue.
 Positive : This can helpSiansbury’s in introducing the technologies which can
improve the operationally of their organisation. This also help them in reducing
the cost of their functions and maintaining the resources. Negative : This can increase the maintenance cost of organisation and also lead to
distribution in employees related to working with new technology.
5. Legal : This is very important for an organisation like Siansbury’s to study the legal
factors of nation, so that they can make their strategies according to them. Study of this
factor will lead them in reducing the conflicts related to legal issues, otherwise
organisation can face several problems which can affect their financial conditions. Positive : This can help Siansbury’s in understanding the different legal factors of
UK, so that they can make their strategies according to it. This also helps them in
ensuring that they are following all the rules and regulations, so that their
customers can buy products with full faith (Oto and Drechsel, 2018). Negative : Breaking of any law in organisation will lead to several problems to
organisation like, penalties and can cause to damage in long term sustainability of
them.
6. Environmental : It is very important for an organisation like Siansbury’s to follow the
environmental rules and regulations of nation. This will help them in performing the
operations of them in a manner by which environment do not get affected. Positive : This help organisation to perform the activities in a manner in which
they do not harm the environment and also lead them in doing some additional
works which can make some contribution in welfare of environment.

 Negative : Ruining any law or regulation of environment legislation of nation can
lead to several problems to organisation like, cancelation of licence and financial
problems.
TASK 4
P5 Internal and external analysis of specific organisation in order to identify strengths and
weaknesses
SWOT analysis is one of the strongest tools which are used by analysts for identifying
the internal factors which can affect the functionality of organisation.Siansbury’s have to use
to this tool so that they can analyse their strengths, weaknesses, threats and opportunities.
SWOT analysis of Sainsbury’s is as follow:-
Strengths: Sainsbury’s is one of the biggest super market chain of world and UK, this
is one of the most powerful strengths of them. As the employee strength of them is around
150,000 and which is a very healthy size of work force in an organisation. The leadership
team ofSiansbury’s is full of experience which help them in making effective strategies for
future. Along with this, the main strength of them is their effective and attractive
advertisement and promotional strategies used by them. There are about 400 super market in
all over UK and about 800 convenience store all around. Each and every store them in full of
about 30,000 products out of them 20% products are their own labelled.
Weaknesses: Sainsbury’s, is very big organisation of UK and one of the biggest chain
of super market in world, therefore there business is depends on several factors which
increases their weaknesses.The main weaknesses of them is fluctuating rate of material used
by them and also the increasing rates of food products all around the world (Hussin, 2017).
Along with this, change in policies by government of nation also cause huge problem for
them. Also the increasing competition is very big problem for them, as this leads to decrease
in profitability and market share of Siansbury’s.
Threats: As the business environment of UK is very friendly for businesses and they
use to provide several facilities to different organisations, so that they can invest there. This
has increases the threats of new entrance in market for Sainsbury’s and also increase the
threat of tough competition. Also, there are several products product which are provided by
their competitors that are same and lower in price or can be same in price with more qualities.