BMP3002 Business in Practice: Sainsbury's Environment Analysis Report

This report provides a comprehensive analysis of Sainsbury's, a major UK supermarket chain, examining the interplay of internal and external factors impacting its business performance. The report begins with an introduction to the business environment and its significance, followed by an overview of Sainsbury's. It then delves into the company's internal factors, including strengths, weaknesses, organizational missions, objectives, quality of human resources, organizational structure, and the functioning of top management and corporate culture. The analysis continues with an exploration of the external environment, utilizing PESTLE analysis to assess political, economic, social, technological, environmental, and legal factors. The report also examines how Sainsbury's impacts its external context, considering its influence on political, economic, environmental, and technological aspects. The report concludes by referencing relevant sources. The analysis is structured to provide a clear understanding of how Sainsbury's navigates its complex business environment, making it a valuable resource for business students.

Introduction
Business environment is defined as the combination of
various internal and external factors that impacts on
business functioning and performance in efficient manner.
It facilitates the organisation to identify various
opportunities, provide important resources and help in
planning as well as improve organisational performance,
growth and profitability. It is the marketing term that
consist different factors and forces that impacts business
in positive as well as negative manner. There are various
factors are included in business environment such as
competitors, government, suppliers, customers, political,
cultural, legal as well as technological factors effective
business functioning and productivity. It is the part of
retailing industry and FTSE100. In this report the chosen
organisation in Sainsbury that is second largest
supermarket in United Kingdom founded in 1869 by the
John James Sainsbury. Headquarter of respective
organisation is situated in London, England, UK. In this
report internal as well as external factors are discussed
that affect business performance and productivity. On the
other hand, impact business activities on external
environment is being covered in this report.
Sainsbury And Its Environment
Name of the Student
Internal Factors
Internal factors are defined as the factor that are in control of organisation whether they are tangible or intangible. Internal factors are related to the strengths and
weakness of the Sainsbury
that affect the functioning and performance in positive and negative manner. The factors that affect business positively are consider as the strengths on the other hand,
factors that affect the growth and development in negative manner are considered as the weakness (Aziz, 2017). Internal factors are important part of business
environment that impacts on Sainsbury to attain all defined goals and objective. As organisation have control over these factors so, it changes them accordingly in order
to attain organisational objectives and gain sustainable competitive advantages as well. Strengths and weakness are evaluated effectively that affect business functioning.
All these internal factors are discussed below:
Strengths: Strengths are defined as the internal sufficiency of business that provide benefits to the Sainsbury over its competitors. Automation and
technological advancements facilitate the respective organisation to produce better quality products at affordable prices (Ben-Hador, Eckhaus and Klein, 2021). Success
of marketing strategies and their effective implementation enhance the customer base and profitability. Apart from that there are various internal strengths such as strong
dealer community, higher customer satisfaction and skilled as well as experienced workforce that help business to grow and develop in competitive business
environment. Strong cashflow and effective brand portfolio that help business to expand business and attract more customers in order to enhance brand image and
customer base.
Weakness: Weakness is the area where the organisation need improvement. Sainsbury analysis all weakness and develop effective planning to
improve the specific area that enhance overall performance and productivity. As the organisation invest less amount in research and development programmes that make
it weaker than other competitors, profitability ratio or return on investment is very low that effect the overall organisation (Bolland, 2017). The demand forecasting
system of respective organisation is not good than other competitors so, it affects the market share and customer base as well. Investment in latest technology of
Sainsbury is very low that enhance the overall cost of operations and functions. Apart from that the organisation is not able to tackle all challenges that are raised due to
new entrants that impacts on profitability level of organisation.
Sainsbury forecast all strengths and weakness efficiently and formulates effective planning to enhance strengths and overcome all weakness
effectively. There are various other internal factors that affect business performance in positive and negative manner that are discussed below:
Organisational missions and objectives: Organisations have their own goals and missions and objectives that affect business functioning and
performance directly. Sainsbury develop all goals and objectives accordingly that enhance the profitability and productivity respectively. As missions are main objectives
and purpose for the business come in existence and all decisions are taken to fulfil these organisational missions in effective manner (Franco, 2021). Respective
organisation set their all objectives after analysing all strengths and weaknesses so these are accomplished within defined time according to planning.
Quality of human resources: As human resource or employees are the most important factor that affect the overall performance and productivity of
organisation positively and negatively. Success of Sainsbury depends upon the effectiveness, skills, capabilities and attitude of employees. Respective organisation
controls all human resources in effective manner and enhance their competencies in effective manner by providing them training and development programmes so they
can contribute effective role in business success.
Organisational structure: Organisational structure plays important role in the decision-making process of Sainsbury. To ensure the efficient working
in competitive environment respective organisation develops conductive and transparent organisational structure that facilitates it to take quick and effective decision and
smooth working of business activities as well as functions. Respective organisation creates various changes in the structure of business according to current
requirements.
Functioning of top management and corporate culture: Effective corporate culture as well as functioning of top management is the effective
internal factor that affect business functioning and performance in effective manner. Sainsbury ensures the effective, supportive and transparent business culture that
motivates employees to work in efficient manner and help business to attain all defined goals and objectives effectively (Jebari, 2021). Management department also take
proper decisions that facilitates the smooth working.

External Environment
External factors are factors are defined as the factors that are exist outside the business boundaries and affect organisational functions and performance directly
and indirectly. These factors are out of control of organisation so, Sainsbury analyse and evaluate them efficiently and take effective decisions and planning to
overcome negative impacts and gain various sustainable competitive advantages. External factors affect the decision-making procedure of Sainsbury. As
organisation have to control over these external business environment factors so Sainsbury have to change its strategies and policies to overcome the impacts on
business functioning. External environment provides various opportunities and threats that are properly examined by the respective organisation and formulae all
business strategies accordingly to attain the opportunities and overcome the threats in order to sustain in competitive environment for long period of time (Jiang,
2019). Sainsbury apply PESTLE analysis to know about all information of external environment and gain various competitive advantages in effective manner.
Some factors of external business environment are discussed below:
Political factors: Political factors are defined as the government intervenes in organisation and economy. There are various factors are included such as taxation,
fiscal, trade policies, political stability or instability, environment laws and other regulations that must be consider by the Sainsbury in organisation policies and
decision-making. All these factors affect in business in positive as well as negative manner. As there are continuous changes are happened in government policies
that affect the revenue generation of organisation. Sainsbury analyse all these factors and respond current as well as anticipated future legislations in effective
manner and adjust marketing strategies and policies accordingly in order to attain sustainable competitive advantages. Brexit uncertainties affect Sainsbury in
effective manner and impacts on organisational performance.
Economic factors: These factors are related to the determinants of economic performance which impact on Sainsbury directly as well as affect its
long-term success. Raising inflation rates impacts on prices of organisational products and services. There are some factors are included in economic factors such
as foreign exchange rate, economic growth pattern, interest rates, inflation rates and disposable income of consumers that affect business functioning and
profitability of respective organisation (Mokhova and Zinecker, 2019). Economic factors are break down in macro and micro environment factors that are
evaluated by the organisation and policies are developed for efficient working of business. Rising fuel cost, raising salaries as well as higher competition level
affect Sainsbury effectively.
Social factors: It is also known as the socio-cultural factors that involves attitude of population, age distribution, population growth and health
consciousness affect the working procedure and functioning of Sainsbury in effective manner. As these factors impact on marketing strategies of respective
organisation in order to know about the customers and their needs and demands. Respective organisation evaluates customers attitude and behaviour in order to
gain opportunities to grow and develop business in competitive environment. Healthy eating as well as fair trade movement impacts on business functions.
Technological factors: Technological factors affect on business performance and profitability in effective manner. It impacts on management as well as marketing
department because these requires latest technological aspects in order to sustain in competitive environment (Park and Lewis, 2018). There are various factors
are included such as technological advancements, automation, research and development and innovation that affect Sainsbury in positive as well as in negative
manner. There are various technological aspects are adopted by the respective organisation that help in reducing cost of operations and production as well as
enhance organisational profitability. Sainsbury started online shopping and analytics to enhance organisations performance.
Environmental factors: Environmental factors affect business functioning and performance directly as there are various factors are included such
as climate and weather conditions, geographical changes, scarcity of resources and materials as well. These are the effective issues that are faced by the marketing
team of Sainsbury so, all strategies and policies are formulated accordingly (Schalk and Landeta, 2017). Corporate social responsibility is the factor that is
implemented by the organisation in working procedure as well as recycling and reusing the materials in order to protect environment from any negative impacts.
Carbon footprints and plastic waste that are released by the organisation affect the environment in effective manner.
Legal factors: Legal factors consist various laws, policies and legislations that affect business procedure effectively. Sainsbury follows all these
legislations such as consumer laws, employment legislations and health and safety laws in order to run business in efficient manner and gain various sustainable
competitive advantages.

References
Aziz, N.I.M., 2017. Determinants of islamic banking profitability:
roles played by internal and external banking factors (Doctoral
dissertation, Faculty Of Entrepreneurship And Business, Universiti
Malaysia Kelantan).
Ben-Hador, B., Eckhaus, E. and Klein, G., 2021. Personal Social
Capital in Organizations: A New Scale to Assess Internal and
External Personal Social Capital in Organizations. Social
Indicators Research. pp.1-23.
Bolland, E. J., 2017. Internal and External Analysis.
In Comprehensive Strategic Management. Emerald Publishing
Limited.
Franco, S., 2021. The influence of the external and internal
environments of multinational enterprises on the sustainability
commitment of their subsidiaries: A cluster analysis. Journal of
Cleaner Production. 297. p.126654.
Jebari, C., 2021. Enhancing the identification of web genres by
combining internal and external structures. Pattern Recognition
Letters. 146. pp.83-89.
Jiang, M. S., Jiao, and et. al.,2019. Learning through observation or
through acquisition? Innovation performance as an outcome of
internal and external knowledge combination. Asia Pacific Journal
of Management. pp.1-29.
Mokhova, N. and Zinecker, M., 2019. A Survey of External and
Internal Factors Influencing the Cost of Equity: The Case of Czech
Companies. Engineering Economics. 30(2). pp.173-186.
Park, H. and Lewis, D., 2018. The negative health effects of
external whistleblowing: A study of some key factors. The Social
Science Journal. 55(4). pp.387-395.
Schalk, M. and Landeta, J., 2017. Internal versus external
executive coaching. Coaching: An International Journal of Theory,
Research and Practice. 10(2). pp.140-156.
Tsai, M. C., Lin, S. P. and Cheng, C. C., 2021. A comprehensive
quality improvement model: integrating internal and external
information. Total Quality Management & Business Excellence.
pp.1-18.
How the company impact its context External Environment
As business environment includes various factor that affect organisational functioning and profitability.
Sainsbury also impacts relative external environment through its functioning. Respective organisation offers
better-quality products to its customers than competitors in order to enhance profitability and productivity. As
external environment included various factors like political, economic, legal and environmental factors which
also affected by the Sainsbury. The impacts of Sainsbury on external environment are as follows:
Political and legal factors: Sainsbury organisation implement all political as well as legal regulations in
order to attain all determined goals and objectives within time in effective manner. There are various
regulations are imposed by the government which are related to employment, work health and safety and
consumer legislations (Tsai, Lin and Cheng, 2021). Apart from that Sainsbury builds rules and regulations for
smooth and efficient working of organisation functions.
Economic factors: As Sainsbury is the multinational organisation that deals with variety products and
services and offer them in various countries as well as provides the opportunities of employment. Currently
numbers of employees are working with respective organisation.
Environmental factors: Sainsbury examine all environmental factors and apply them in business functions
and adopt corporate social responsibilities concept in order to protect environment from negative impacts.
The respective organisation provide training to its employee as well as apply recycling process to reduces
waste material in order to save environment (Zhang, 2021). Low emission is effective factor which is adopted
by Sainsbury to maintain safe environment that created effective and positive brand image in potential market
and customer’s mind.
Technological factors: Sainsbury applies different technological advancement, innovation and research and
development to produce better-quality products at affordable prices and with minimum waste. Technologies
help respective organisation to gain various sustainable competitive advantages and impacts on external
environment in positive manner.