Sainsbury's Business Environment: Macro Factors and Analysis

This presentation analyzes the business environment of Sainsbury's, focusing on the impact of internal and external factors. It begins with an introduction to the business environment and outlines the significance of both internal and external factors, including customers, employees, and market dynamics. The presentation then delves into the application of PESTLE analysis to examine the political, economic, social, technological, environmental, and legal factors influencing Sainsbury's. It discusses the positive and negative impacts of these macro factors, providing examples such as how exchange rates affect imports. The analysis extends to internal and external factors, identifying Sainsbury's strengths (e.g., brand presence) and weaknesses (e.g., product diversification). The presentation concludes by summarizing how macro factors affect the organization's strengths and opportunities, leading to either expansion and growth or slower growth and lower productivity. The presentation includes a list of references for further study.

Business and Business Environment

INTRODUCTION
 Business and Business environment means collection of all the internal and external
factors including customers, employees, management, demand supply etc. which affect
the business organisation.
 The presentation will discuss internal and external factors that impact on business unit.
 Furthermore, it will describe relationship between various functional units and their
impact on business decisions.

Positive and negative impact of macro factors on
business operations
As all the factors of environment are dynamic and the business organisation need to accept the
changes matched with the environmental factors so that their growth in the market can
continue. Some macro factors can be explained through PESTLE analysis:-
 Political factor
 Sainsbury's is retail company which exposing itself in political environment.
They must diversify their risk so that the impact on the organisation can be eliminated.

Economic factor
 The macro factors which come under economic factors are inflation rates ,exchange rates, taxes,
saving rate, growth rate etc. These factors also directly affect the business of Sainsbury's .
 Negative impact
 Any change in interest rates, growth rates or exchange rates will affect the business of
Sainsbury’s.
 E.g.- Increase in exchange rates will stop Sainsbury's to import the goods from across the borders as
high rates will bring them to lower their profits margin which will lead to loss for the company.

Social factors
Some factors which affect the people and society considered to be as social factors, some social
factors are related to the people culture ,religion employment living standard etc.
 Negative impact
 Changing needs of consumers, cultural difference influence choice of consumers. In such
condition firm has to produce new goods that may fulfil needs of buyers. This would increase cost
of the firm to great extent.
 Also, they are not capable of capturing larger share in the market, Which directly affects the
business and its growth.

Technological factor
Technological factors are related to technology used by business. Technology helps Sainsbury's to
expand their business and improve the work performance.
 Positive impact
 Use of advance technology help business in raising quality of operations and products.
By this way firm can reach to mass audience and can expand its operations successfully.

Environmental factors
 These are those factors which are the duty of every business to follow all the policies which are
made for protection of environment.
Negative impact
 If company does not fulfil its corporate social responsibility, then it will affect
negatively on demand of the Sainsbury to great extent.
Positive impact
 Taking care of consumers, offering quality goods, ensuring protecting environmental
condition may help in improving brand image of firm to great extent.

Legal factors
Organisational are getting legal protection of their property through intellectual property rights .they
can gain this protection through performing all the legal rules and policies.
Negative impact-
 Non performance or acceptance of legal rights might be dangerous and can caused loss
to Sainsbury's
Positive-impact-
 Legal factors help in protecting organisations right by various intellectual right and help
organisation to prevent their product from copying through patents.

Internal And External Analysis To Find Strength And Weakness Of
Organisation
STRENGTHS
 Leading supermarket chain, and strong
brand presence in global market.
 Strong financial position
 Poor staff turnover ratio
 Effective investment policies

CONTINUE
WEAKNESSES
 Brexit brings higher food prices all over world which affect the Sainsbury's
selling at higher prices.
 Poor product diversification strategies
OPPORTUNITIES
 Sainsbury's have opportunity to join with other companies through join venture
or partnership to enter into new markets.

Effects of macro factors on internal analysis
 As strong financial position is the major strength of Sainsbury, this micro element is related
with economic factor. If economic condition of country is not good, then it will affect
revenues of the firm and firm will not be able to generate more demand.
 On other hand due to adequate funds Sainsbury is able to manage its operations in economic
slowdown situation as well. Poor product diversification is the weakness of company, this
element is interrelated with social factor. As company is unable to identify needs of
consumers and offering them products accordingly. This many time affect its sustainability
to great extent.

CONCLUSION
 The presentation outlined macro factors affect strength and opportunities of
organisation in both positive and negative way.
 Positive impact brings organisation to expand and grow whereas negative impact
brings organisations to slower down their growth with low productivity and not
satisfying the customers needs and satisfaction.