Impact of External and Internal Factors on Sainsbury's Business

This report analyzes the internal and external factors influencing Sainsbury's, a prominent UK-based retailer. It begins with an introduction to external factors, emphasizing their impact on strategic goals and market stability. The report then delves into the PESTLE analysis, examining the political (Brexit), economic (unemployment, inflation), social (consumer trends), technological (e-commerce), legal (regulations), and environmental factors impacting Sainsbury's. The SWOT analysis follows, identifying Sainsbury's strengths (expansion), weaknesses (low margins), opportunities (rural growth), and threats (competition). The conclusion summarizes the findings, highlighting the importance of understanding the business environment for organizational success. The report underscores how these factors, both internal and external, shape Sainsbury's strategic positioning and operational effectiveness, with references to relevant academic sources.

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Business is that aspect which deals upon selling and
buying of products which is been sold by an
organization within the market. Business covers various
kind elements which help in circulating of goods and
services in more effective manner. These elements also
impact tendency of business and various elements
related to it. Business environment is the process by
which an organization is able to work in more
organized manner with discipline and order. Business
environment is one of the most important factor which
affects growth of business. Also such environment
make goals and objectives set by an organization
achieved in more effective manner. Scope of this
business environment is wider since it has tendency to
impact functioning of business in more effective
manner. The organization that has been selected for the
poster is Sainsbury which is an UK based retailers
selling products of daily use. Things to be covered are
based upon internal and external factors of business.
External factors these are those factors which makes influences,
circumstances and situation existing within a business to be controlled
in effective manner. Such factors have been impacting working of
business from outside. These factors help in functioning of an
organization in more effective manner through marking out those
elements which directly impacts its success rate within market. These
factors create certain circumstances and situations which affects
external working of organization (Gaganis, Pasiouras and Voulgari,
2019).
INTERNAL AND EXTERNAL FACTORS IMPACT ON ORGANIZATION
INTRODUCTION EXNTERNAL FACTORS
Political factors: These are those factors
which includes policies formed by
government in relation to corporate sectors
which impacts various kinds of business
activities within a country. In political factors
majorly policies related to tax is been
observed by an organization. If policies
formed by government are rigid then it
impacts production capacity of an
organization. In case of Sainsbury Without
any doubt the biggest political factor that
affects Sainsbury’s currently is the imminent
Brexit. It will mean that England will no
longer remain a part of the European Union,
External factors also makes an organization
develop innovative techniques which makes
strategic goals to be achieved in more effective
manner. External factors have been making an
organization attain stability within market. It is
considered as key area of planning taking place
within an organization.
Then stakeholder analysis is been affected which directly impacts
decision making of an organization which leads upon making strategic
goal achieved. These factors influence various situations and helps
management of a business done within proper structure. Stakeholders
make decision only after analyzing these factors over investment to be
done within a business. In this large number of external factors can
have a direct impact on the ability of your business to achieve its
strategic objectives. In order to make sure that these factors is been
analyzed in proper manner PESTLE analysis is been done. PESTLE
analysis is a tool which is been used for analyzing of those factors
which impacts business externally. These factors are political,
economical, social, technological, legal and environmental. This
analysis helps Sainsbury over understanding about the market in more
effective manner. It has further helped in understanding of market

Economic factor: These are those factors which
are based over economic growth of an
organization. Such factors include unemployment,
import and export, inflation with those kinds of
elements affecting growth of an organization. If
due to any reason import rate increases then it
becomes very difficult for an organization to
conduct any kind of imports. It impacts Sainsbury
in a way that mostly road transportation is been
used for making shipping possible across UK. If
the prices of imports increases then shipping
charges and other charges increases which makes
product cost increased. It eventually leads upon
making revenue generation decreased which
reduces profit of Sainsbury.
Social factor: These factors are related upon trends
existing within society and behavior of consumer in
relation over spending. Further the factors make an
organization like Sainsbury understand about various
kinds of factors existing which impacts taste of
consumer and helps in increasing selling of products.
Therefore it is required to be analyzed by Sainsbury in
a way that quality of product is provided to consumer’s
trough making finest product produced.
Technological Factors: Technological factors
are those factors which make dealing possible
through technological advancement which
makes overall improvement of organization
done in more effective manner. It is helpful for
an organization like Sainsbury through making
its production and delivery speed up. Also it
makes e commerce increase which makes
online selling increases.
Legal Factor: These factors are one of the most
important factors which make various kinds of
law used for formation of an organization. Such
factors are based over rules and regulations
helps in making organization work in smooth
manner. Sainsbury is required to follow these
factors in order to avoid legal trouble existing
in future. These laws help in providing selling
of product done in legal manner( Chukhray and
Mrykhina, 2018).
carbon footprint which is not good for environment. So in order to create
environmental awareness Sainsbury is required to use environmental
friendly products. The brand needs to ensure that it’s taking active steps to
curb its environmental impact. Environmental factors dealing upon
environmental related issues

These factors impacts business of an organization
internally and makes working environment
impacted of an organization like Sainsbury. Further
in order to make the analysis over internal factors
done SWOT analysis is conducted. SWOT analysis
is based over those strength, weakness,
opportunities and threats to be identified in more
effective manner of an organization like
Sainsbury(Akhtar and Sushil, Bruijl, 2018). Further
SWOT analysis has been done as follows:
Impact of external factors
Strength
Right expansion moves: This is
one of the most important
strength which has helped in
increasing of profit within an
organization. Since Sainsbury is
small grocery stores which
makes deals within limited range
of product with its right
expansion move that is to
categorize goods leading over
attracting customers.
Weakness
Low margins: Since competition
has been growing in retail sector
various kinds of competitors has
made growth of Sainsbury
restricted. This made profit
decreased due to rise in
competition.
Opportunities
Growth in villages: Gone are the
days when rural areas were not
using branded products. Today
branded products across all daily
use categories are a must even in
villages. This has resulted in a
growth of the supermarket
culture even in remote villages
an opportunity for all retailers
Threat
Competitors: This is one of the
biggest threats existing within
market for Sainsbury.
Competitors is staying ahead of
Sainsbury which makes its sales
impacted in direct manner.References
Akhtar, M. and Sushil, S., 2018. Strategic performance management system in uncertain business environment. Business Process Management Journal.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and changing business environment. Available at SSRN 3192207.
Chukhray, N.I. and Mrykhina, O.B., 2018. Theoretical and methodological basis for technology transfer from universities to the business environment. Problems and Perspectives in
Management, 16(1), p.399.
Eling, M. and Schaper, P., 2017. Under pressure: how the business environment affects productivity and efficiency of European life insurance companies. European Journal of
Operational Research, 258(3), pp.1082-1094.
factors makes organization realized about
the impact of particular factor over it.
Then in the end SWOT and PESTLE
analysis is done in order to improve
business environment.