Business and Business Environment: Sainsbury's Case Study

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Business and Business Environment
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Table of Contents
Introduction.................................................................................................................................................3
Task 1..........................................................................................................................................................4
P1: Explain different types and purposes of organizations; public, private and voluntary sectors, and
legal structures.........................................................................................................................................4
P2: Explain the size and scope of a range of different types of organizations..........................................5
M1: Analyze how the structure, size, and scope of different organizations link to the business
objectives and product and services offered by the organization.............................................................6
TASK 2.......................................................................................................................................................7
P3: Explain the relationship between different organizational functions and how they link to
organizational objectives and structure....................................................................................................7
M2: Analyze the advantages and disadvantages of interrelationships between organizational functions
and the impact that can have upon organizational structure.....................................................................8
D1: Provide a critical analysis of the complexities of different types of business structures and the
interrelationships of the different organizational functions......................................................................9
TASK 3.....................................................................................................................................................10
P4: Identify the positive and negative impacts the macro environment has upon business operations,
supported by specific examples.............................................................................................................10
M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro environment
within an organization...........................................................................................................................12
Task 4........................................................................................................................................................13
P5: Conduct internal and external analysis of specific organizations in order to identify strengths and
weaknesses............................................................................................................................................13
P6 Explain how strengths and weaknesses interrelate with external macro factors...............................14
M4 Apply appropriately SWOT/TOWS analysis and justify how they influence decision making.......15
D2: Critically evaluate the impacts that both macro and micro factors have upon business objectives
and decision making..............................................................................................................................16
Conclusion.................................................................................................................................................17
References.................................................................................................................................................18
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Introduction
Sainsbury is an organization which has grabbed most of the market in the UK as well as in the
other European countries. The Sainsbury is a food supplying corporation who supplies packaged
food items, fresh fruits, and vegetables for the peoples and has been very efficiently doing so.
Due to the implementation of the Brexit the organization faced a lot of problems in the
production and delivery of the products. The PESTEL and SWOT analysis of the organization is
done accurately to evaluate these aspects. The PESTEL and SWOT analysis are used to elaborate
on the issues that the organization could face in the organizational premises.
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Task 1
P1: Explain different types and purposes of organizations; public, private and voluntary
sectors, and legal structures.
There are different types of organizations on which the Sainsbury’s are focusing in order to
enhance the business as well as the reduction in the price of the products and also supplying the
products to the customers without delay and decay of the food products.
Private, Public and charity organizations:
The private organizations are the organizations which are not owned by the government and run
through profit are the organizations which are operated by persons or agencies and the motive of
the organization is to earn profit through the business (Dima, et. al., 2014 ).
The public organizations are those organizations which are operated by the government and
these are publically operated by the agencies and provide public programs, goods, and services
for the people.
The charity organizations are those organizations which work not in order to earn profit from the
business but instead of that, they invest money to provide facilities to the poor who are not able
to afford those facilities by themselves. The Sainsbury’s would be combining with these
organizations in order to reduce the amount of the loss due to the Brexit (Evans, et. al., 2017).
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P2: Explain the size and scope of a range of different types of organizations.
The various scopes of the organization where the organization can implement ways to merge in
order to gain a competitive edge over other organization and enhance the business are evaluated
below:
Sole Traders: Sole traders are generally the business personals who start their own business in
order to provide themselves employment. The Sainsbury’s are trying to establish business with
such traders in order to reduce the Brexit effects on the organization as well as the customers so
that the organization could provide the required products to their customers on time as well as
without decay (Kolk, 2016).
Small and Medium Enterprises: The Sainsbury’s are trying to hold the market with the help of
various Small and Medium enterprises because these enterprises processes the very low areas
and the peoples and these organizations could help the Sainsbury’s to provide their products to
each and every sector of the market easily and this would also increase the number of consumers
for the organization and also generate a very high amount of revenue.
Partnership: The organizations while working always try to enhance the business of the
organization (Menychtas, et. al., 2014 ). The Sainsbury's is among the biggest food product
producing organizations in the UK and in order to enhance the business the organization became
a partner with another food and grocery producing organization that is "ASDA".
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M1: Analyze how the structure, size, and scope of different organizations link to the
business objectives and product and services offered by the organization.
There are various organizations which provide products and services to the customers. The
organizations are divided into parts, that is there are single traders, small and medium enterprises
and there are large organizations like Sainsbury’s.
Solo traders: These are the organizations which are owned and operated by a single person and
the person is subjected to face the loss as well as subjected to enjoy the profits of the business.
the Sainsbury’s required to engage with the business with these organizations in order to
overcome the issues arise due to the Brexit (Georgescu, and Popescul, 2015).
Small and Medium enterprises: These are the organizations which have less than 250
employees working for them and the annual turnover is not more than 50million GBP and that is
why these are termed as SME’s. The Sainsbury’s has also planned to combine with the SME’s of
the European Unions too so that the Sainsbury’s would not supply the products directly to the
customers because it will induce the decay in the quality of the product due to the
implementation of the Brexit and thus they would supply the products to the SME’s and they
would supply the fresh products to the customers.
Charity organizations: These are the organizations which work for the benefits of the required
people and not for earning profits. The Sainsbury’s are trying to engage with these organizations
in order to solve the issues arise due to the Brexit law as well as to prevent the loss this is a great
initiative taken by the organization (Ji-fan Ren, et. al., 2017)
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TASK 2
P3: Explain the relationship between different organizational functions and how they link
to organizational objectives and structure.
There are various types of functions that an organization consider while working in the
organizational premises. Some of the various functions that Sainsbury’s uses for the betterment
of the organization are as follows:
1) Design and production
2) Finance
3) Human Resources
4) Administration
5) Sales and marketing
6) Research and Development
These are the various types of functions that Sainsbury has implemented in its organizational
premises for the enhancement of the organization and better working of it. Based on the nature of
the functions and specialized responsibilities that are shared, portrait the relationships of the
functions (Khan and Quaddus, 2015).
The functions are very much interrelated with each other because the organization is needed to
operate all the functions together for better results. The human resource department plays a very
essential role in the growth of the employees as well as the organization and is interlinked with
all the functions that are performed by the organization. The human resources department is
subjected to manage all the employees of the organization and motivate them to work more
efficiently.
The Sainsbury’s management department is subjected to manage the whole sales department of
the organization the financial part as well, the design and production, as well as the
administrative and the research and development department of the organization and thus all
these aspects, are interconnected with each other (Evans, et. al., 2017).
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M2: Analyze the advantages and disadvantages of interrelationships between
organizational functions and the impact that can have upon organizational structure.
There are various advantages and disadvantages of the interrelationships between the
organizational functions and the impact they have on the organizational structure.
Advantages:
1) The teams are managed by those employees who have very high skills and ability thus it
enhances the quality of the work (Kolk, 2016).
2) The working in teams allows the employees to share the thoughts and knowledge of the
employees.
3) The employees or the staffs are provided with the opportunity to get promoted in the
functional region.
Disadvantages:
1) The organizational functioning of the work would arise unhealthy competition among the
organization (Georgescu, and Popescul, 2015).
2) The teamwork is very essential for the growth of an organization but the bureaucracy
could lead to bad work ethics and very fewer chances of sustainability for the
organization.
3) With a decreasing number of innovations and flexibility, the functional way is not
effective which could lead to bad results while working in the team and thus the
organization would not work well (Menychtas, et. al., 2014 ).
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D1: Provide a critical analysis of the complexities of different types of business structures
and the interrelationships of the different organizational functions.
Various structures and organizational functions are as follows:
1) Traditional structures: There are organizational structures which are based on
functional division and the departments (Evans, et. al., 2017). These structures are
categorized by the management department of the organization. There are three sub-
parts of the traditional structures, they are:
a) Line structure.
b) Line and staff structure.
c) Functional structure.
2) Divisional structure: These are the structures which are based on different divisions of
the organization (Bah, and Fang, 2015). This can be further classified into three sub-
parts, they are:
a) Product structure.
b) Market structure.
c) Geographic structure.
3) Matrix structure: This is the structure which is a pure combination of the function and
product structures. This structure is the most complex organizational structure and the
organization tries to combine the bests for efficient matrix structure development
(Cohen and Kietzmann, 2014).
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TASK 3
P4: Identify the positive and negative impacts the macro environment has upon business
operations, supported by specific examples.
PESTEL analysis of Sainsbury’s in order to demonstrate the negative and positive effects of the
macro environment on the business environment:
 Political: The Sainsbury’s are facing the Brexit problems due to the political issues, the
government of UK and other countries of the European Union were not agreeing on the
same terms and conditions which made them impose these regulations. The increase in
the taxation systems on the goods and service delivery has put on adverse effect on the
business of the organization. Thus the policies are needed to be followed for better results
and safety.
 Environment: The environmental factors are very essential for organizations like
Sainsbury's who sell food products as the major selling components. The Sainsbury’s sell
seasonal vegetables and fruits because the storage products are not that much used by the
customers (Kolk, 2016).
 Social: Social issues that hamper the business of the Sainsbury’s mostly is the change in
the preferences of the customers about purchasing a particular product. The Sainsbury’s
were unable to deliver the products on time and the rates of the products were quite high
and because of the Brexit and that is why the people shifted to different other retailers.
 Technological: Technology is the most essential part of work for every organization. The
Sainsbury’s also use different technologies for the production of the products as well as
the technology mostly used in the Sainsbury’s in order to prepare the products in such a
way that it could be easily preserved for a longer period of time and the products are not
wasted.
 Economic: The organizations are needed to be economic for better results. The most
essential issue that is needed to be addressed and solved during the Brexit that the
Sainsbury’s is facing economic problems due to the implementation of this law and thus
the organization is supplying a very limited amount of products to the trusted customers
(Veit, et. al., 2014).
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 Legal: The Sainsbury’s is required to acquire all the permissions for transporting
products to the country and legal permission is very essential in such case because the
organization would not be able to sell its products in that country and that is why
clearance from the legal board for the exporting of the products to the desired customers
and provide them with the products that too in the required time (Savrul, et. al., 2014).
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M3 Apply appropriately the PESTLE model to support a detailed analysis of the macro
environment within an organization.
The PESTEL analysis is very essential to be done by every organization in order to understand
the market conditions and put efforts in order to get the best outcome.
Political: The political issues are very essential and are needed to be maintained by the
organization because if these are not followed then the organization could face problems. These
problems would put adverse effects on the organizations business (Bah, and Fang, 2015).
Environment: The environment is the most important factor that is needed to be considered
while enhancing the business in a particular region.
Social: The social issues are very necessary to be maintained in order to grab the attention of the
customers and being socially correct helps the organizations to provide better results.
Technology: Technology is the most essential part of a business because the organization is
needed to be active and should know about all the innovations so that they could easily provide
better products and outcomes too (Menychtas, et. al., 2014 ).
Economic: The organizations are needed to be more economical in order to maintain the profit
in the market and should work with low investment but good quality and high outcome.
Legal: The organizations should understand the legal authorities of a particular region and then
produce the number of products so that the organization doesn't get hampered due to the legal
policies (Dima, et. al., 2014 ).
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