Sainsbury's Business Environment: Stakeholder Analysis and Impact

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This report provides an overview of Sainsbury's business environment, analyzing both internal and external factors influencing the organization. It differentiates between public, private, and social enterprises and examines various business structures. The report includes a PESTLE analysis and microenvironment assessment of Sainsbury's, along with Porter's Five Forces model to evaluate competitive intensity. A stakeholder analysis identifies key stakeholders such as suppliers, employees, customers, and the local community, and assesses their requirements. The report also discusses Sainsbury's strategies for addressing business challenges, such as managing competition and adapting to post-Brexit economic conditions, highlighting the company's efforts to maintain market share and meet stakeholder expectations. Desklib offers a range of similar solved assignments.
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BUSINESS THE BUSINESS ENVIRONMENT
ASS 2

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Executive summary
In this report Sainsbury is the enterprise that has been considered whose overview has been

highlighted. Difference between public, private and social enterprise is considered in the study

along with different business structure. Pestle analysis and microenvironment of the enterprise

has been discussed. Porters five model is used and stakeholders’ analysis has been performed in

the report.

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Table of Contents
Introduction
......................................................................................................................................4
2: Demonstrate an understanding of the nature of the environment that organisations operate in
. 5
3: Illustrate and explain the impact of environmental forces on organisations at a micro and

macro level
.......................................................................................................................................6
4: Assesses the significance of impact of environmental forces at an organisation, market sector

or industry level
............................................................................................................................... 9
5: Demonstrate an understanding of requirements of a variety of stakeholders to chosen

organisation
....................................................................................................................................10
6: Measure and appraise the effectiveness of the responses of organisations to policy actions

taken by key stakeholders
.............................................................................................................. 12
Conclusion
..................................................................................................................................... 13
Reference list
................................................................................................................................. 14
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Introduction
Business environment deals with both external and internal factors of business so that they can

control their business issues.
Sainsbury PLC is the enterprise that will be considered in the
report. Discussion based on public, private, and social enterprise will be performed along with

different business structure in the public sectors. Relation between macro and micro factors of

Sainsbury will be considered. Stakeholders process analysis and key strategies that the

organization has considered to decrease business issues will be highlighted in this report.

Sainsbury Plc is the third largest retail industry in UK community. John James Sainsbury has

founded it in the year 1869. Net income of the organization is 518 million pound in the year

2018 and headquarter is present in London (Sainsburys.co.uk, 2019).

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2: Demonstrate an understanding of the nature of the environment that organisations
operate in

Public enterprise sectors

This organization owned by state and it is controlled by using public authority. Government set

different laws for the public sector for welfare of the community and government operate the

business by using taxes. For example, British Council is the public organization that guides UK

to improve their cultural relation and educational opportunities (Britishcouncil.org, 2019).

Private enterprise sectors

Individual sets private sectors and entrepreneurs have intention to make profit while executing

the business. They follow government business laws and regulation in order to decrease the

chance of chaotic attitude and governmental penalties. For example: Greenergy is the enterprise

in UK that sells fuel and green concept in order to make their environment green in nature

(Greenergy.com, 2019).

Social enterprise sectors

This organization applies different commercial strategies to increase improvement in social,

financial, and environmental well being. Profit of these sectors is used to improve lifestyle of

people and to handle social issues (
Ridley-Duff and Bull, 2015). For example, Integrated care 24
is the social enterprise that is highly concerned about health condition of UK community.

Different structure of private sectors is as follows:

1. Perfect (Pure) Competition

It is a theoretical market structure in which enterprise tries their level best to sell identical

product, market share plays no role on price and buyers have perfect information about the

enterprise past present and future.

2. Imperfect (Monopolistic) Competition

In this section, organization used to sell dissimilar goods that adversely affects perfect

competitive market scenario.
Bellini et al. (2016) opine that imperfect competition deals with
real life scenario and share market play a vital role in pricing strategy of the enterprise.

3. Oligopoly

As asserted by
Ashkenas et al. (2015), oligopoly market is the market where only few firms are
dominated. Therefore, this market provides less scope to new businesses to establish it in

competitive market.

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4. Monopoly
Single seller characterizes this market structure and seller does not face any kind of competition,

as entrepreneur is sole seller of goods in the market.

5. Laws of Supply and Demand

Laws of supply deal with the quantity of goods and price of goods is directly related with market

share rate (
Bellini et al., 2016). On the other hand, laws of demand state that customers demand
is to decrease price of goods in order to fulfil their demand.

In case of Sainsbury, this organization is exit within imperfect competition as it sells different

goods and follows UK government laws and regulation such as Company Act 2006 in order to

decrease taxation error (Sainsburys.co.uk, 2019).

3: Illustrate and explain the impact of environmental forces on organisations at a micro

and macro level

Micro and macro environment of Sainsbury in UK

Strength

In UK, it serves about 90 million customers in a week that improves their share market up to

16% (ft.com, 2019). It won Quality Food Award in the year 2010 that attracts more customers

from the international community and it guides them to raise their oral advertisement rate.

Sainsbury follows consumer law of UK that guides them to eliminate illegal activities of their

business (Sainsburys.co.uk, 2019).

Weakness

At present, this organization has no extension plan due to which it faces stiff competition from

their competitors. Technical issues in the year 2015 adversely affect their online service

(Sainsburys.co.uk, 2019). In order to manage this issue, Sainsbury is focus on technological

factor that is computerised check out procedure and prepares back up plan so that they can

decrease complex issues based on online shopping service.

Opportunity

Sainsbury has introduced lower fat food in order to decrease obesity and cardiovascular disease.

It has 169 stores that guides them to deliver 100,000 orders in a week (Sainsburys.co.uk, 2019).

In order to decrease pricing issues, they strictly follows price of fuel in UK so that they can

maintain their maturity phase without any hindrance.

Threats

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After Brexit, UK is presently facing recession issue (BBC News, 2019). National minimum wage
regulation has been implemented by the enterprise to manage labour cost threat. Most

importantly, the threat that the enterprise is facing in recent days is stiff competition from their

competitors such as Aldi, Tesco, Lidl and Morrison (Sainsburys.co.uk, 2019).

PESTLE analysis of Sainsbury

Figure 1: PESTLE analysis

(
Source: Marttunen et al., 2017)
Factors
Analysis
Political
Globalisation factor has improved
Sainsbury’s business opportunity in

international market. Presence of proactive

government and political stable situation in

UK allows the enterprise to establish their

business in UK society (
The Economic
Times, 2019
)
Economical
Rising cost of fuel in UK is one of the most
important factors that affect pricing strategy

of enterprise. Presence of large population

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guides the organization to sell diverse range
of product. Improvement of FDI (Foreign

Direct investment) rate guides the company

to raise their profit margin (ft.com, 2019).

Social
Sainsbury is involved with raising funds,
charity, arrange social activities, and sponsor

games in order to improve their responsibility

for society.

Technological
Technological improvement factor in UK
allows Sainsbury to improve their online

shopping facilities. It has been observed that

this enterprise has focused on computerised

check out means in order to decrease the rate

of human errors and therefore, it creates a

positive impact on their business activities.

Legal
This organization follows rules and
regulation of UK government such as

competition laws, health and safety laws,

legal laws and so on so that they can decrease

discrimination issues, employees’ salary

issue and therefore, it guides them to manage

all their business issues according to its

priority.

Environmental
UK government is giving pressure to well
established organization to follow reduce,

recycle and reuse approach in order to make

their environment friendly in nature (BBC

News, 2019). In case of Sainsbury, they are

trying their level best to decrease their carbon

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footprint operation so that they can bring
green approach in their business policies.

Table 1: PESTLE analysis

(Source: Sainsburys.co.uk, 2019)

4: Assesses the significance of impact of environmental forces at an organisation, market

sector or industry level

Figure 2: Porter's five forces

(Source:
Burns. and Dewhurst, 2016)
Threats of new entrants

As per viewpoint of
Burns and Dewhurst (2016), threats of new entrant brings innovation in
service and senior team try their level best to reduce overall cost of the product in order to attract

more customers from community. In order to improve innovativeness in Sainsbury service and

product, senior team has spent more money on their research and development. This organization

all time tries their level best to serve standard quality product in front of customers so that they

can discourage new players in the retail industry.

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Bargaining power of suppliers
Organization buy raw material from multiple suppliers and suppliers who are in dominant

position sell raw material in perfect price that creates a positive effect on enterprise pricing

strategy. In case of Sainsbury, senior team maintains good relation with their third party

manufacturers. Moreover, they need to follow bargaining power strategy of Nike and Wal-Mart

so that they can get right amount of raw materials as per their requirement (Sainsburys.co.uk,

2019).

Bargaining Power of Buyers

Buyers want to buy best product with minimum price as possible (
Allen et al., 2016). Sainsbury
provide discounts and offers during special occasion, season so that they can maintain their

production and sales streamline.

Threats of substitute service and products

When a service and product meets similar service users needs in different ways, than a enterprise

suffers in their profitability margin (
Allen et al., 2016). Sainsbury follows switching cost
approach so that they can offer right price against their service and this strategy allows it to

manage stiff competition rate.

Rivalry among existing competitors

Presence of rivalry in existing market always compel the company to lowers down their product

and service price and they have to maintain outstanding product standard to compete in better

way. In case of Sainsbury, they identify their competitors’ strategy and change their service and

product in order to consider their game changing trends. Production and operation manager of

the enterprise often takes suggestion from experts so that they can maintain unique feature in

their business activity (Sainsburys.co.uk, 2019).

5: Demonstrate an understanding of requirements of a variety of stakeholders to chosen

organisation

Stakeholders’ analysis process

As asserted by
Allen et al. (2016), stakeholders analysis is an essential technique that current
organisation uses in order to identify their stakeholders and analyse their needs. It has been

observed that Stakeholders management is the first step that guides the enterprise to win support

from stakeholders.

Stakeholders of Sainsbury

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Suppliers, business partners, and distributors
Business partners of Sainsbury have the ability to take decision against their business issues.

Suppliers and distributors provide right raw material to the enterprise in order to decrease

wastage issues (Sainsburys.co.uk, 2019).

Employees

Sainsbury provide benefits and incentives to their employees in order to keep their employees all

time motivated. Acceptable working hours and perfect pay scale is provided by the organisation

to their employees in order to make their working environment perfect.

Customers

Service users are prime stakeholders for the enterprise. Sainsbury set their product price as per

customers needs and modifies their business strategy in order to attract more users from the

community.

Local community and government of UK

Sainsbury strictly follows rules and regulation of UK government so that they can decrease

illegal activities and it raises transparency in their business. They follows Company Act 2006,

working time Regulation 1998, UK labour law and so on to decrease taxation error, local parties

chaotic attitude and penalty issues (
Ashkenas et al., 2015).
Stakeholder mapping

Identifying:

Current engagement objectives are prepared by the recent demands of internal and external

stakeholders. Brainstorming action is considered by the enterprise that is learning from past,

creative thinking, highly aware about the social issues and increment in service diversity.

Analysing

Sainsbury uses analysis tool so that they can visualize complex attitude in their business.

Mapping

Senior team add expertise, willingness, and value in their criteria chart to decrease business

issues as per its priority. The senior team of organisation follows sample mapping so that they

can manage their business issues by considering their past example (Sainsburys.co.uk, 2019).

Enterprise keeps updated information about the employees and customers. Sainsbury mostly

manage all-important criteria of suppliers, distributors, and business partners. They keep minimal

contact with local authority and they anticipate and meet needs of government.

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Prioritising:
Senior team engage right stakeholder in their business so that they can save both money and

time.

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Keep information completely
Manage most thoroughly
Regular minimal Contact
Anticipate and meet needs
Customers
Employees
Government of UK Local authority
Suppliers
Business partners
Distributors
Figure 3: Stakeholders mapping
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6: Measure and appraise the effectiveness of the responses of organisations to policy actions
taken by key stakeholders

Specific actions to meet the needs of stakeholders along with its effectiveness

Action 1: Implementation of organic foods in their business

In order to attract more diet conscious customers, increment of healthier food in their business

provides greater business opportunity and it guides the enterprise to keep social trends. In order

to bring innovation in their business, Sainsbury spends huge money in their research and

development sector to raise their sustainable development in business.

Action 2: Apprenticeship scheme to support British agricultural sector

Sainsbury invest huge sum of money in their Big data project so that they can generate

innovative techniques for their farmers and therefore, they can get right quality of raw materials

from their suppliers. Moreover, Sainsbury Development Group tries their level best to decrease

farm related threats in order to serve quality product in front of their customers

(Sainsburys.co.uk, 2019).

Action 3: Collaborate with World Cocoa foundation and Ethical trading initiatives

Fair Development Fund is prepared by the enterprise so that they can address global challenges

that retail industries are facing in recent days. Sainsbury believes that collaboration is the only

strategy that can guide recent enterprise to face global challenges and therefore, it participate in

Ethical trading activities,
World Cocoa foundation to provide detail idea about globalisation
challenges in front of international community. This strategy brings transparency in their

business in front of stakeholders (Sainsburys.co.uk, 2019).

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Conclusion
Senior team of Sainsbury try their level best to decrease their product price and they also wants

to introduce new product that will be perfect for modern economic condition of UK. Different

example and definition of public, private and social sector has been explained in the report.

Relation between macro and micro factors of Sainsbury has been considered. In order to

globalisation challenges, it collaborates with international funding activities. Customers are the

prime stakeholder for the organisation.

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Reference list
Sainsburys.co.uk. 2019. [online] Available at:

https://www.about.sainsburys.co.uk/~/media/Files/S/Sainsburys/documents/making-a-

difference/sourcing-for-sustainable-development-update-2018.pdf [Accessed 5 Jun. 2019].

Allen, R.W., Porter, L.W. and Angle, H.L., 2016.
Organizational influence processes.
Routledge.

Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015.
The boundaryless organization: Breaking
the chains of organizational structure
. John Wiley & Sons.
BBC News. 2019.
UK Politics - BBC News. [online] Available at:
https://www.bbc.com/news/politics [Accessed 5 Jun. 2019].

Bellini, C.G.P., Pereira, R.D.C.D.F. and Becker, J.L., 2016. Organizational structure and

enterprise systems implementation: Theoretical measures and a benchmark for customer

teams.
Information Technology & People, 29(3), pp.527-555.
Britishcouncil.org. 2019.
How we are run | British Council. [online] Available at:
https://www.britishcouncil.org/about-us/how-we-are-run [Accessed 5 Jun. 2019].

Burns, P. and Dewhurst, J. eds., 2016.
Small business and entrepreneurship. Macmillan
International Higher Education.

ft.com 2019.
41 charts that explain the UK economy. [online] Available at:
https://ig.ft.com/sites/numbers/economies/uk/ [Accessed 5 Jun. 2019].

Greenergy.com. 2019.
Greenergy The leading national provider of road fuel. [online]
Available at: https://www.greenergy.com/ [Accessed 5 Jun. 2019].

Marttunen, M., Lienert, J. and Belton, V., 2017. Structuring problems for Multi-Criteria Decision

Analysis in practice: A literature review of method combinations.
European Journal of
Operational Research
, 263(1), pp.1-17.
Ridley-Duff, R. and Bull, M., 2015.
Understanding social enterprise: Theory and practice. Sage.
Sainsburys.co.uk. 2019.
Sainsbury's. [online] Available at: https://www.sainsburys.co.uk/
[Accessed 5 Jun. 2019].

The Economic Times. 2019.
Definition of Imperfect Competition | What is Imperfect
Competition ? Imperfect Competition Meaning - The Economic Times
. [online] Available at:
https://economictimes.indiatimes.com/definition/imperfect-competition [Accessed 5 Jun. 2019].

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