Business and Business Environment: An Analysis of Sainsbury's

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Business and Business Environment
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Table of Contents
Introduction......................................................................................................................................3
Report: LO1 and LO2......................................................................................................................4
Report: LO3 and LO4......................................................................................................................8
Conclusion.....................................................................................................................................14
References......................................................................................................................................15
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Introduction
The internal and the external factors, that affect a company’s operations, are referred to as the
business environment. The factors include the customers, advancement in technology,
government’s rule and regulations, economy of UK, suppliers and the competition in the market
as well. These external or the internal factors have influence or a force to have a change in the
decision making. This study focus on the external or internal factors of Sainsbury, which is the
most wealthiest supermarket in London. The micro and the macro factors have greatl influence
in the strategy or in the decision making. This pupose of the study is to focus on the three type of
organizations, like public, pravate and voluntary organization as well. It focuses on the purpose
and legal structer of those organization (Hamilton et al., 2018). Their size, products and their
goals are explained here. In this study, the two most important tools, SWOT and PESTLE is used
here to analyse the micro and macro factors that affect the Sainsbury company to a great extent.
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Report: LO1 and LO2
Introduction
The purpose of this section of the study is to analyse the private, public, and the voluntary
organizations. It shows the purposes of those organizations and the legal structure, scopes, size
of the organization. It develops Sainsbury’s macro and micro environmental factors, which affect
the company largely.
Task 1
There are many types of organizations like public, private, and voluntary organization. Every
organization has a different structure, different policy, different function and different purposes
or goals. The structure, scope, purpose, and size of the public, private, voluntary organizations
are mentions below:
Public Organization:
Public sectors or the organizations refer to the organization that belong to the government or
operated and owned by Government. These public sectors or the organizations play an important
role to maintain the supply of the local jobs. A most important statutory commission is The
Cabinet Office in UK. Their main aim is to support Cabinet and Prime Minister of UK. The main
aim or the purpose of the public sector is to help the people, without seeing their profit. The
public sector gives people services, like, any goods, military service, police service and
education service also. The public sectors include the state government, local government and as
well as, the central government also. There are large varieties of organization that buy their
products or do their business in the public sector and as a result, loads of confusions are found,
regarding the terminology (Van et al., 2016).
The Cabinet Office, as a main part of the central government, was made stronger to support the
other public bodies to make public work going smoothly. They set many new posts like, chief
executive to help the cross- government. They release the data of the government to make the all
work of the government going more transparently. Their legal structure is Partnership and as a
result, they are benefitted from the other public sectors. It has minimum 2000 staffs.
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Private Organization
The private organizations refer to the sectors or the organization that are private or that are
individual or owned by partnership and government has no part in it. Many corporations, like,
non-profit corporations and profit corporations are included in it. Sainsbury’s is one of the major
private organizations in UK. It is the largest supermarket with around 16% of the share. Their
main aim is to make more profit in order to invest more money into the business so that the
business can grow speedily. UK’s supermarket, Sainsbury’s is worth for 12 billion (Hood et al.,
2016). Their legal structure is public limited type and as a result, if any circumstances happen
every partner gets affected equally. There are three parts in the Sainsbury’s, like supermarket
Sainsbury’s, Sainsbury’s Argos and Sainsbury’s bank. Their one of the main aim is to be known
for doing the right thing, for solving the problems of people by producing the things they want.
Their main strategy is to be the trusted one supermarket where everyone eager to work as an
employee or from where, every customer will shop their needed things (James et al., 2018).
Voluntary Organization
Voluntary organization refers to an union or group, which follows an agreement to fulfil a
purpose of the individuals. There are over 165,800 voluntary organizations in UK according to
latest research data of UK. Wellcome Trust is ranked as the most big charity organization and
largest voluntary organization in UK. The Wellcome Trust is a charity of biomedical research in
London and their aim or purpose is to make improvement of the health of the most intelligent
mind of the brightest student. There are two types of voluntary organization like, NGO and NPO.
Wellcome Trust is a NGO type voluntary organization (Bendell, 2017). The legal structure of the
particular organisation is Non Government Organisation (NGO) that is included in corporation
structure. The corporation legal structure is the most expensive and expensive legal structure.
The Wellcome Trust with the help of the corporation legal structure can hold or take some of the
profit without giving the tax or money to the owner. Wellcome trust is the most wealthiest and
big charitable foundation with around 25.9 endowment (Giannoumis, 2017).
Task 2
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The main importance of the organisational structure is that it defines or explains how to do their
organisational task to have a great benefit or to fulfil their goals or the dreams. There are three
types of organizational structures, as, functional organizational structure, matrix structure and
divisional structure. Sainsbury has functional organizational structure by following which
they made their business structures to fulfil their goals. In the functional organizational structure,
there are many functional departments, like, marketing department, finance department and
many others.
 Every buying or purchasing product in a good company or organization must go through
the purchasing department. There can be find many similarities between the purchasing
department of Sainsbury and others purchasing department store. The accounting or the
financial department are also included in the purchasing department. The financial
department control the entire department to improve their market or productivity. The
relationship between the finance department and the purchasing department of Sainsbury
depend on the feedback system. The purchasing system must learn about the advantages
or the disadvantages that the finance department is facing. It includes many things like
the difficulties during the cash flow and other things. In the same way, the finance
department must know about the purchasing department, like, their expenditure, their
shipment of stocks and other things. The purchasing department must coordinate with the
Sainsbury’s department of finance to make the all work smooth going (Hodgson, 2017).
 Human resource department and the marketing department are not actually as
different. The human resource management recruit many eligible employees to work on
the marketing department, as well as, the other departments. The HRM attracts the right
candidates who qualify through their terms and conditions. The best solution to attract
more people and to get a profitable result is to align or link their strategy of the Human
Resource Management with the business plan or strategy. One of the main rule in
marketing is to keep people happy and to fulfil all their promises, they have made to their
customers. The HRM also fulfil their promises what they made while recruiting their
clients or staffs. HRM works as a bridge between the customers and any business. Day by
day, the expectations of the customers are changing according to the present situations.
The companies also must change their strategies in order to continue their business
smoothly (Sheehan et al., 2016).
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 The HRM always stay tuned about the basic changes and they notify the manager what
changes they need in order to fulfil the need of the customers, as, trending and effecting
products and the growing salary rate. The marketing department works as a medium
between the customers and the company. The HRM trained the workers of the marketing
department to sell their products to their customers with a new approach. The Human
Resource Management trained all the workers of every department. That is why; other
departments like the marketing department, finance department and the purchasing
departing also depend on the HRM department largely.
Conclusion
The different operational functions within the organisational context are related to each other as
observed from the above study. The interlinked functional abilities of an organisation is
developed according to the type of business functions the company performs in the market
economy. Operational departments within an organisation function efficiently due to the
interrelationships of functions within the departmental objectives.
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Report: LO3 and LO4
Introduction
The patricular section of the study shall be identifying and analysisng the external and internal
factors that exists within the national boundaries of the UK in concenrned with Sainsbury, UK.
Various issues and its influenes over the business operations of the organisation has been
demostrated.
Task 3
Sainsbury, which established in London in 1869, is the largest supermarket chain having 502
supermarkets across the United Kingdom. Sainsbury had many competitors in 1995, like, ASDA
Group, Tesco Plc etc. day by day, their business faces some external problems. The tool PESLE
is used here to analyze the external problems that Sainsbury Faced in UK.
Factors Effect/ Influence
Political The most important political factor that affects the polity of UK largely is
Brexit. Brexit means British- Exit. The people of UK are facing many
problems regarding the restriction while recruiting. Due to the hard Brexit,
the people cannot use the free trade agreement. As a result, the cost of the
many company and business were increasing. Labour shortage was one of
the main problems faced by the Sainsbury company. At this point, their
strategy collapsed at a sudden time. The deals, which exist, became
disappear and so, the business does not vote for Brexit. The customers also
stop buying products from the big and wealthy company and as a result, the
Sainsbury company faces a heavy loss (Jensen et al., 2016). The United
Kingdom is a stable and fair country about the constitutional monarchy, but
there are some negative and positive effects of the constitutional monarchy
on the people of UK, as well as on the businesses. The positive political
factor of the UK Constitutional Monarchy is that the rule are regulation are
same or indifferent to everyone and always do the fair thing, but the
negative factors about the UK polity are that there are some uncertainty
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and some hidden corruption. As a result, the people, as well as, the
Organization in UK are not aware of the new laws and break the new rules
or regulations. Thus, the small business, as well as, the wealthy businesses,
like, Sainsbury face many issues and problems.
Economical Economy is one of the main factor on which a country as well as a business
depends. Due to Brexit, the economy of United Kingdom Suffers a lot. The
growth of the economy became slow or even decreased last year. Before
this referendum, the economy of UK was growing or increasing around 1.5
% every year. Brexit makes the economy low in a huge extent. It affects
the business as well as the common people. The economy became so tough
that the small as well as the big companies fail to recruit more staff. The
costs of the staff became heavy even on the Sainsbury company. The trade
cost was much higher in UK and as a result, the cost of the products of
Sainsbury became higher in other country (Begg et al., 2016). UK has a
strong economy than the other countries, but, there some negative and
positive economical factors that affect the people and company or
businesses as well. The positive factors are that it has the highest GDP and
highest population also. As a result, there are many scopes to have a profit
for even the small companies. The foreign company also directly invest
their money in the companies of UK, as a result, the big company, like,
Sainsbury are growing day by day.
Social The communicating issue of the migrants in UK are the most important
social factor that affects many company and business at a same time. The
migrant cannot understand the UK English as much and as a result, they
face some communicating problem with the manager or the
businessperson. They sometime cannot understand the rules and
regulations of the state and that is why they many time falls in legal issues
and the company where they work have to compensate. Thus, the company
faces loss. The migrants in the Sainsbury business many time fails to
follow or understand the terms and policy or what is there main purpose or
goals. As a result, They sometime break the rules of the company or break
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the culture and even they sometime fails to understand what they have to
do. As a result, during the last year, the Sainsbury business costs more
money, more time and even sometimes it decreased the values of the
company. The other social problem in UK is that the average population in
UK are aged. The aged people cannot contribute in the growth of the
economy and even, though, they are experienced have not much
knowledge about the present situation. As a result, the Sainsbury company
also face some issues or problem regarding decision making because the
decision of the aged person don’t match the present situation and
therefore, losses happen in the company (Epstein, 2018).
Technological Technological factor also affect any business as well the external
environment largely. United Kingdom are inventing more variable
technology or advance technology to give a speed to the companies or
business so that they can contribute in the economy of UK. Many wealthy
and big organizations bought and used the costly technologies to fulfil all
their dreams and goals. Small companies cannot afford such technologies
and as a result, they remain in the back for years. The Sainsbury company
uses many advanced technologies to help their staffs and as well as, their
customers too by the some technologies like online shopping app,
interactive map, by which the customers can find easily their stores or the
locations (Gutierrez et al., 2015). The development of technology in UK is
very fast and advanced and there are many expertises to invent some new.
There are some positive and negative impacts of those advanced
technologies on the people of UK and on the companies as well. The
meetings on Skype of the businessperson make use of less time, but, these
meetings are less personal and the impact of the relationship became
reduce among the businessperson.
Legal Disregard of any legal factor or rule can cause of the fall of any company.
The Air Purification Act is one of the main regulations in UK to maintain
the purity of the air and to make a good health of the UK people. Many
wealthy companies like Sainsbury company or other food company can
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afford the machine or technologies to balance the pollutions in the air.
However, the small companies fail to regard the Act because of lack of
money and as a result, the government stay always ready to hold their
collar. Other one of the main problem is copyright issues, which is the
main problem for the big brand or company. The small companies steal and
copy other big brand or company’s picture or logo to sell their products
with the big brand’s name. The Sainsbury also faces this problem, but they
intellectually manage the issue and sometime ignore this problem (Besley,
2015)
Environmental Nowadays, the standard of the environment became very low. The weather
of the UK became so unpredictable that anything can happen anytime.
Pollution is increasing day by day and it is causing some serious disease of
the people of United Kingdom. As a result, the staff or the workers
maximum time takes leave due to their bad health. The big or the wealthy
companies like, face some poor staff issue or lack of staff issue. In the
mountain regions of UK, The businesses are facing many issues, due to the
weather change (Schaltegger et al., 2017)
Table 1: PESTLE analysis of Sainsbury
(Source: Created by the learner)
Task 4
The most big and the wealthy company in UK is Sainsbury, but inspite of a wealthy supermarket
chain, it has some weakesses and threats as well. The tool SWOT is used here to analyse the
internal and external nature of a businese or as well as, of the Sainsbury company.
Strength
 Sainsbury had a good organizational
rapport in the global market, that is the
main strength to all the companies, like,
Sainsbury.
 UK has a very good position in trading
Weakness
 Poor transport is one of the main
weakness or problem to the company,
Sainsbury. Due to the high population
and high industrial rate, the transport
system became very poor and that’s
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and as a result, the Sainsbury company
are greatly profitted and also hold a
good relation with both importers and
exporters to ignore some serious issues
that may happen in future.
 The standard of the education in UK, is
so high and as a result, the companies,
like, Sainsbury ignore trainning period
inorder to avoid the costs of the
trainning. The polity in Uk is fair and
indifferent to everyone and that is the
strength to the Sainsbury company
(Haleem et al., 2017).
why the Sainsbury faces many issues
like spending much time, much money
in transporting their goods or products.
 The growing disbalance in wealth is the
increasing problem to the Uk people.
Day by day, the disparity between the
poorer and wealthiest is growing so
high that the Sainsbury company is
facing more losses and issues (Jones et
al., 2005).
Opportunity
 New partners in trade is a great great
opporrtunity to Uk, as well as to the
comanies, like Sainsbury.
 The riding of the tech waves or the
increasing growth of the tech hubs are
the new oppor tunity to the big
company, like, Sainsbury.
 Nowadys, UK is trying to increase the
intelligent population by giving
education to the migrants, which is
great opportunity for the companies to
appoint those intelligent migrant in
future (Piercy et al., 1989).
Threats
 The relocation of the workers or the
companies, are most growing threats
for UK. Small companies as well as big
and welthiest companies are relocating
their business to avoid the overhead
cost.
 There are some financial crisis which is
the growing threats for UK, as well as,
to the comapnies, because they can face
some issues like labor cost and others
(Eisenberg, 2018).
Table 2: SWOT analysis of Sainsbury
(Source: Created by the learner)
The interrelationship between micro and the macro factors
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