Business and Business Environment Report: Sainsbury's Analysis

This report provides a comprehensive analysis of Sainsbury's, a major UK supermarket chain, within the context of the business environment. It begins by exploring different organizational types (public, private, and voluntary), their purposes, and legal structures, using Sainsbury's as a key example...Read More

BUSINESS AND BUSINESS
ENVIRONMENT

INTRODUCTION
Business Environment includes the surroundings in which several factors are exist that
influence functioning and operations of company. It consist of individual, entities and other
elements that may be controllable or uncontrollable by firm. The factors exist in business
surroundings includes supply and demand, customers, management, manpower and business
regulations. Managers of organisation needs to consider those forces so that effective policies
and strategies can be formed (Añón Higón and Driffield, 2011). It helps them in meeting
business challenges successfully & render directions for growth. This assignment is based on
Sainsbury's which is largest supermarket chain of United Kingdom. The report covers different
types and purposes of firm as well as their scope, size and legal structure. Interrelation of distinct
functions and their link with objectives and positive & negative impact of external environment
is discussed. In addition to this, strengths and weaknesses of firm is determined by conduction
SWOT analysis and their link with macro factors are defined in this project.
TASK 1
P1: Different types & purposes of organisations and their legal structures
In competitive market place, different types of organisations are exist such as private,
public and voluntary. All these firms have their distinct purpose and legal structure. These
structure should be followed by every business firm and they also require to act according to
that. Each firm run for different purpose, some are operate for the purpose of earning profit while
some are for providing welfare to society.
Public:
Organisations run under this sector are owned by government of respective nation. There
are completely managed and controlled by legal authority. The main purpose behind running
public organisations is yield profits as well as work for welfare of society also. These businesses
are funded by government that is gathered through taxes and fees which is paid by citizens of
country (Bar-Isaac and Shapiro, 2013). National Health Service is works under public
organisation.
Company overview:
NHS is an health care organisation of England which is funded publicly. It administers
healthcare services to English residents of country and they provides some of these free of cost.
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The company is run by health department and is funded by general system of taxation (Bhaduri
and Ha-Brookshire, 2011).
Purpose:
Major purpose of NHS is to enhance health and well being of patients and people of
society by professionalism, innovation and care quality.
Types of legal structure: Central government: The issues and affairs of whole nation is handled or controlled by
this government. Printing of denomination and tax collection are that activities that are
managed by them. State government: Affairs or issues of particular state are controlled and managed by
state government. For example, in order to promote higher education among public,
various policies are formulated by this legal authority (Craig and Campbell, 2012).
 Local government: This government works at local level only and handle affairs of
particular area, city or town.
Private organisation:
These organisations are owned and operated by private entities only. Their main purpose
is to generate high profits by providing high quality goods and services to customers. They
mainly emphasizing on creating some value for customers and satisfy them. Sainsbury's is a
private firm which deals in grocery products.
Company Overview:
Sainsbury's is second largest supermarket chain of United Kingdom that have 16.7% of
share supermarket industry. It is a retail company that is headquartered in Holborn, London,
UK. Stores of firm are operated in number of locations all around the world.
Purpose:
Main aim of company is to earn high profits by deliver effective and high quality goods
and services to potential customers at economical cost.
Types of legal structure:
1. Partnership: These are firm which are established by 2 or more individuals by signing an
agreement called partnership deed (Cross and Miller, 2011). It is a document that
includes all the terms & conditions of running business in partnership. Each partner have
equal rights and equally responsible for profits and loss.
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2. Sole trader: In this type of business firm, an individual run its business solely and
perform its all activities and operations. Requirement of finance is less in this business
and all profits and loss are bear by single individual only, i.e., the owner.
3. Limited companies: These enterprises are limited by 2 types, i.e., limited by share and
grantee.
Voluntary organisation:
Voluntary firms are operates for single purpose only and that is society welfare. These
organisations are emphasize on providing benefits to local people and help them in improving
their living standard (Hilton and Platt, 2013). Earning profits is not the purpose of voluntary
firms but these only work for helping society and fulfil their basic needs. For instance: Maytree.
Company overview:
Maytree is one of the charitable firms that assist people who are in suicidal crisis. They
restore hope among them so that they can re-engage with their life. Company provides its
services 24 hours and has large volunteers team who spend nearly about 77 hours with each
individual in order to render them best services.
Purpose:
Main purpose of organisation is to provide right guidance to people who lose hope and
are in suicidal crisis. Human rights, housing, poverty, renewing social contracts are the key
areas.
P2: Size & scope of range of various types of organisations
Scope and size of each company is distinct and varies according to its business activities
and nature. Below mentioned are the size and scope of different types of business firms which
are as follows:
Public
 Vision: “ To deliver best health care services to public and contributes in their healthy
lives”.
 Mission: “ To offer quality care to each individual on regular basis”.
 Size: The company is performing its operations in numerous countries of United
Kingdom by distinct legislations. Around 1.4 million of people are working within firm
for providing high quality health care services to public (Klapper, Lewin and Delgado,
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2011). It provides its services in several countries like Whales, Scotland, Northern
Ireland and England.
 Scope: Various kinds of healthcare services are administered by company to local
residents of country at free of cost. Organisation also offers services like cardiac
rehabilitation, paediatric, physiotherapy, autism assessment etc.
Private
 Vision: “To become leading global retailer with interest of yielding high profits”.
 Mission: “To administer high quality goods to customers at economical cost and
maintain good relationship with customers”.
 Size: At present, firm perform its operations in 40 countries with around 1415 stores. The
company has approximately 181,900 employees who are working for providing goods
and services in effective manner (Luo and Zhao, 2013).
 Scope: Sainsbury's offer grocery products, frozen food, fish, meat, petrol etc. Among all
stores of company, many of them sells only grocery products which depicts that firm
have high demand of its grocery products.
Voluntary
 Vision: “To secure economic & social rights of every individual”.
 Mission: “To perform activities that promotes welfare of society & its individuals”.
 Size: It is an autonomous non profitable trust which is running with the aim of providing
guidance to people who suffer from suicidal crisis. They provide their services 24*7 to
needy people.
 Scope: Company's objective is to create solutions for eliminating poverty and administer
guidance or directions to individuals who try to attempt suicide.
Stakeholder analysis:
It is the frame work that is utilized by company in order to evaluate their key stakeholders that
are associated with business. This analysis assists in determining contribution and needs of
stakeholders in proper manner.
 High power: Fascinated people.
 Low power: Less fascinated people
 High power: Less fascinated people
 Low power: Fascinated people
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TASK 2
P3: Relationship between different functions of firm and how they link to organisational
objectives & structure
A firm has its different departments which are performing its functions form the common
purpose of serving customers in better way and attaining targets and objectives of company in an
effective and efficient manner. Coordination among these office is basic for smooth running of
business activities and that can be accomplish through appropriate correspondence channel
(Savrul, Incekara and Sener, 2014). . Each division of a venture are interlinked and furthermore
impact the activities of other office subsequently successful correspondence is required among
troughs. Practical bureau of association are as per the following
Human Resource Management:
HR department oversees organizations profitable resources i.e. its representatives. It
incorporates capacities like enlistment, determination, payrolls, staying up with the latest
government impose laws and so forth. HR supervisor requires a legitimate correspondence
channel with administrators of other division so they can enlist the candidates based on their
aptitudes and learning essential for specific empty position.
Marketing department:
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Prime purpose of marketing is to promote their services and goods effectively in market
and communicate its benefits and value to customers in structured manner. Its function and
activities are more rely upon finance department as it expects reserve to play out its tasks like
advancement, situating of item, statistical surveying, client overhauling and so forth and store is
overseen by fund office (Siewiorek and et. al., 2012).
Finance department:
This is an important department in whole organisation as without proper availability of
finance, no operations of firm will be perform in proper manner. The fundamental tasks of this
office is to assign budgets, overseeing accounts, balance sheet and planning spending plan.
Monetary explanation of an organization are overseen by administrators of these office so they
should have data about the store utilized by different divisions in playing out their activities and
to when they need to raise reserve to satisfy organization's necessity.
Types of organisational structure:
Flat organisational structure:-
Flat organisational structure alludes to the even structure which has not very many levels
of administration amongst officials and workers. Sainsbury' has Flatter authoritative structure in
term of traverse of control and doesn't have isolate bureaus of human asset, look into, open
connection and so on (Wallace, 2017).
Matrix hierarchical structure:-
Framework association has a network shaped revealing relationship among its level of
administration where workers have all the more then one supervisor. It is the mix of two kind
authoritative structures, for example, practical structure and task based structure (Krell, 2013).
Functional organisational structure:-
Practical authoritative structure is a various levelled structure where representatives are
partitioned into a few division as indicated by the zone of specializations like showcasing, fund,
look into, IT and so forth and they are administered by utilitarian director of that office.
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TASK 3
P4 Identification of positive & negative influence the macro environment has upon operations of
business
Business condition alludes to different elements exhibit in the association's condition
which might possibly be under the control of association yet has an effect over the development
and gainfulness of an association. Variables of BE are ordered into two classes i.e. Inner and
outer factor. Internal condition alludes to the elements which speaks to the shortcomings and
quality of an organization (Ward and et. 2011). It incorporates Objectives, Corporate culture,
Human Resource, Labor association and so forth., where as outside condition comprises of
different components that give chances to development and stances dangers that influence its
activities. Political, Economical, Social and Technological are outer components and their
negative and positive effects are given beneath:
Political factors:
Political variables alludes to changes that are purchased by government in laws and
strategies that may influence business activities. It incorporates factors like exchanging
approaches, war, psychological oppression, struggle among nations.
Positive effect:- For a positive outcome Sainsbury's must recognize the political solidness of
country and plan techniques likewise.
Negative effect:- With the adjustment in legislature of UK in 2015 outcomes in alteration of
strategies of the organization.
Economical factors:
These components are identified with the conservative structure of a nation that may influence
business tasks. It comprises of expansion and emptying approaches, swapping scale variance,
temperate patterns and so on.
Positive effect:- As in may 2017 there is increment in expansion rate in showcase from 2.6% to
2.9% this is a great change for Sainsbury's as client incline toward less expensive item and it is
Discount general store (Yayla and Hu, 2012).
Negative effect:- When inflation rate builds it brings about lessening in deal and benefit of the
organization.
Social factors:
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This incorporates factors like social perspectives, attitude, cultural aspects taste and inclinations
of client. These traits influence the decision of client identified with acquiring of item and
administrations to a huge degree and the way business works (Zott, Amit and Massa, 2011).
Positive effect:- Sainsbury's gives item as per the need of client alongside rebate that assistance it
in pulling in more clients.
Negative effect:- Competitors like Tesco, Sainsbury are putting forth 24 hour opening
administrations this technique influence piece of the overall industry of Sainsbury's and results in
decrease of its piece of the overall industry.
Technological factors:
It for the most part incorporates factor that prompts change in innovation neighbourhood and on
worldwide scale. Variables included are innovative up degree, contender's innovation and so on.
Positive influence:- To get positive outcome Sainsbury's need to refresh its innovation which
decreases time alongside cost in activities.
Negative influence:- Now-a-days stores are moving to utilize advances like self administration
checkout to help their administrations however Sainsbury's is as yet not versatile to such
advances which may bring about diminishing number of clients.
TASK 4
P5: Internal and external analysis of firm to identify strengths and weaknesses for organisation
SWOT is conducted to distinguish the situation of company in the market by assessing
the strength,weakness, opportunity, threats. It is supportive in discover the interior and outside
position of the association. Inside incorporates quality and shortcoming and outer is opportunity
and dangers of the association. SWOT of Sainsbury's are as follows:
Strengths: It is one of the general store driving organization in retail division. It is worked
in excess of one nation like Europe, china, USA. Sainsbury's work number of stores each year.
With the goal that's the reason they extend there business. It has claim mark so they would sale
be able to in vast sum in the market. Sainsbury's is sure with there item they continually giving
the best quality to their costumer and on the off chance that if purchaser isn't fulfilled than they
give discount to them or guarantee to supplant that item (Klapper, 2016).
Weaknesses: Sainsbury's confront a placing issues that is the reason individuals feel that
there is a low quality items are accessible in the market. The organization needs to enhance the
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ad crusade with the goal that association can change the recognition in regards to their item in
the psyche of customers. Inside of the Sainsbury's isn't that much compelling so every day
footfall turn out to be low so firm needs to enhance the physical proof with the goal that
organization can build the deal.
Opportunities:Sainsbury's ought to grow there business in rising economies. Eg India,
Brazil where monstrous populace are there so they can simple purchase their items. So
development of the organization will enhance. What's more, association additionally have an
open door in USA. The firm will contribute $3.4 billion to grow the U.S. Stores. Current stores
in US is 1600. Organization additionally grow their business in U.K. Number of stores right now
introduce is 700 and firm will accomplish up-to 1300 stores in 2022 ((Dibrell, Craig and Hansen,
2011).
Threats: Sainsbury's confront intense rivalry in the market and the contender organization
is Walmart, Tesco, top l and so forth in worldwide market. Waitrose is the greatest association
that give intense rivalry to Sainsbury's in UK .The real development challenge in USA, and
Brexit vulnerability influence in EU. This is the genuine risk of the each retail business.
P6: How strengths & weaknesses interrelate with external macro factors for organisation
Weaknesses and Strengths of business are interconnected with macro factors. So,
managers of Sainsbury's needs to consider those and compare these with strengths and
weaknesses of firm, for example, practical, social, legal, environmental, economical and
technological and afterwards take choices and detail key arrangements. Interrelationship between
macro forces and strengths and weaknesses of firm are as follows:
Political: Political elements incorporates making of tenets and control for survival in
showcase on long haul premise. Sainsbury's attempts to keep up great association with client and
this is incredible quality for firm. It enables organization revenue driven expansion and
consequently it to can without much of a stretch get by in the market. By this they can lessen the
shortcoming.
Economic: Sainsbury's can win more income by making different arrangements and plans
to draw in numerous shoppers. At the season of swelling organization must offer their item at
bring down cost (Siewiorek, 2011).
Social: By fulfilling every one of the requirements and needs of shoppers can
straightforwardly gain more incomes. So it can convey great nature of item at a lower cost and in
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this manner it can expand the altruism and notoriety in the market. This prompts be greatest
quality which can specifically expand the income of association.
Technological : Advanced innovation utilized for generation of good nature of items and
this aides in keep up great position in the market. For drawing in individuals in aggressive
market Sainsbury's embrace refreshed systems. By this firm can gain more benefit and
furthermore keep up great picture in the market and therefore it gives solid rivalry to other
association. With the assistance of this factor organization spare their chance and additionally
cost likewise which profited to them keeping in mind the end goal to accomplish long haul
objectives and destinations inside foreordained time frame (Savrul, 2012).
Legal: Legal variables incorporates all laws and controls which is made by legitimate
expert. Laws identified with well-being and security, ecological, hostile to separation and
purchaser rights influences working of big business emphatically and consequently this is quality
of the Sainsbury's. Choice of UK to leave EU prompts confront distinctive lawful issues by this
organization free its entrance to market and it prompts shortcoming of element.
Environmental: Sainsbury's define different vital and operational plans to advance
ecological mindfulness among clients. In introduce time, association and in addition individuals
of society worry about nature. Foundation of 'Green Policy' causes the undertaking to wind up
carbon unbiased and aids moral exchanging, zero waste to landfill and well-being advancing
business is the quality for Sainsbury's.
CONCLUSION
As per the above mentioned report, it has been concluded that the surroundings in which
business is operated is termed as business environment. Various types of organisations are
running in market which has their own scope, size, purpose and legal structure. Some businesses
are run with the aim of earning high profits while some are working for society welfare. There
are different functions performed within company and each are linked with its objectives.
Operations and activities of organisation are impacted by various factors that are exist in
business environment in negative or positive way. So, for minimizing the negative impact of
those factors, manages needs to consider these and formulate effective strategies and policies
according to that.
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REFERENCES
Books and journal
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Online
Business Environment. 2017. [Online]. Available
through:<https://www.slideshare.net/NikhilSoares/business-environment-
featuresmeaningimportanceobjectives-porters-model>
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