Marketing Fundamental Analysis & Evaluation: Sainsbury's Report

This report provides a comprehensive marketing fundamental analysis and evaluation of Sainsbury's, a leading UK retailer. It examines external factors using PESTLE analysis, covering political, economic, social, technological, environmental, and legal aspects, including the impact of COVID-19 on Sainsbury's operations. The report also delves into internal factors affecting the organization's growth, such as cash flow and human resource management. It highlights challenges faced by Sainsbury's due to the pandemic, including customer and employee protection, cash flow management, and adapting to government support programs, while also noting the company's efforts to reorient operations in the post-COVID-19 environment. The analysis includes discussions on Sainsbury's strategies to address changing customer preferences and the adoption of new technologies to enhance sales through online platforms.

MARKETING
FUNDAMENTAL
ANALYSIS AND
EVALUATION

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
External analysis of the organization...........................................................................................3
Internal factors of organisation....................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
There are many factors that influence the overall functioning of the firm and also affect
the goals and the objective. These factors includes different types of external as well as the
internal factors that gave the positive or the negative effect on the performance of the
organization (Hein, Vrijens and Hiligsmann, 2020). Sainsbury is one of the leading company in
UK and it is also the largest firm in the sector of retail industry. It provides food products,
electronic items, basic necessity things, etc. to the customers. It also offers various services to the
people of the UK and the business of Sainsbury is expanded to the other countries (Sainsbury’s,
2021). Sainsbury also provides goods and services to the consumers through the online or with
the help of social media platform. This report shows the external as well as the internal analysis
of the firm and also shows the impact of the covid- 19 on the activities or the functions of
Sainsbury. This report also shows the adverse effect of the pandemic situation on some factors
that creates various issues or the challenges for Sainsbury like the protection of the customers
and the employees, shoring up of the cash and liquidity of the firm, support programs of the
government, etc. It also shows the reorienting operations of the Sainsbury after the covid- 19
pandemic situation.
External analysis of the organization
External analysis refers to the analysis of outside factors where factors are those elements
that directly affect the performance and the outcomes of the organization. These factors include
economical, political and social environment of the business that influence the business success
from outside (Fengyi, 2021). The external factors have the power of directly influence the
activities and the functions of the firm. They gave a positive as well as the negative impact on
the overall performance of the company. In order to analysis or examine the external factors and
their impact a firm can conduct pestel analysis.
Pestle Analysis
Pestle Analysis is the analysis of the external factors or the external environment of the
company which directly or indirectly affect the company. It refers to a tool which can be used to
analysis the macro environment of the enterprise. This analysis includes some external factors
such as political, economical, social, technological, legal and environmental factors. It also
allows or offers a firm in order to form an impression of the external factors that can gave a

direct impact on the new or the existing business or the industry (Wright and et.al., 2019). This
analysis help the company to easily examine the current status and the trends of the market or the
recent market situations. These factors gave an impact on the operations of the firm. Following is
the pestle analysis of Sainsbury:
Political factor: Political factor includes the policies that are run by the government and also
the interference of the government in the company. These factors mainly includes the taxes and
the tariffs and it also involves the trade restriction and the trade reforms that are imposed by the
government. The government interference directly gave the impact on the operations of the
business and upto what extent the government or the other private institutions can influence the
industry. Sainsbury is one of the leading company in UK and influence by the political factor as
the government of UK imposed taxes on the corporate income . The company has to pay the
taxes on their worldwide profits (Noble and et.al., 2019). After covid-19 pandemic situation
Sainsbury is facing the problem in paying extra taxes to the government that has it increased the
expenses of the firm. There is a negative impact on profitability and productivity of Sainsbury as
after covid-19 government of UK changed many policies like tax reforms, trade reforms, etc.
Because of the coronavirus import and export from the other countries is becoming a big
problem as all the activities as well as the countries regarding the trade are affected. So, this will
also create hurdles or the obstacles for the growth and the development of Sainsbury.
Economical factor: These factors includes interest rates, inflation, wage rate, growth or decline,
unemployment and cost of living etc. Economical factors have long term effects on the
institutions as these factors influence the economy of the country. This factor is related to the
economic condition or the situation of the company. Now a day the economic condition of UK is
not so good. UK faces the problem of currency inflation, higher interest rates, increased taxation
level, etc. COVID-19 is responsible for the economic condition of the UK and even of the whole
world. The UK's economy suffers a lot due to the coronavirus and faces the problem of inflation.
The impact of this factor on Sainsbury is that the percentage of the profits of company is
decreasing (Casañ, Alier and Llorens, 2021). As Sainsbury is a retail company and provides
basic necessity products or goods to the customers but due the pandemic situation Sainsbury
have to shut down the stores and can not be able to provide goods and services to the consumers.
Sainsbury have to decrease the prices of its product because of pandemic situation the
government of UK imposed high tax rates on the corporate income of the firm so the it face

losses. For example many small scale industries have to shut down their businesses at the time of
pandemic situation due to the less of capital, less resources, tight labour supply, etc (Saudi,
2021).
Social factor: These factors includes cultural norms, population growth rate, health and safety
etc. Social factors also includes customers and social organizations. In general terms it includes
public. The common social factor that affect the company is demands of the customers. The
demand directly affect the company's profit. Sainsbury is affected or influenced by the social
factors as the preferences of the customers are changing day by day (Kordana and Słyś, 2020).
These factors are helpful for Sainsbury in order to make better marketing plans and strategies. It
also includes customers and social organizations that affects the demand and supply of the
products. Sainsbury make strategies according to the changing market trends and the preferences
of the consumers such as reduction in the prices of products, free online services, etc. This can
assist the firm to attract new as well as old customers. On the other hand, due to the covid-19
pandemic situation the demand of the customers also fluctuate. Because of social distancing very
few customers are arriving at the stores. This affects the sales of the organization and gave a
negative impact on the growth as well as the development of Sainsbury And now Sainsbury is
having only the online platform for the sales of the products which leads to low profit rates of the
company (Debnath and et.al., 2021).
Technological factor: Technological factor refers to the new technologies that are introduced in
the market. It also includes the social media platform mainly the online shopping websites. These
technological factors are affecting the production and sales of the company's product. This factor
gave a negative as well as positive impact on the businesses. The negative impact includes the
difficulties for the firm in order to adopt the new technologies or to introduced the technological
change (Baumli and Jamasb, 2020). As Sainsbury is a multinational company and also having
the online platform for the customers so this factor give a positive impact on the company. After
the pandemic most of the customers prefer online shopping for them. And becomes favourable
condition for the Sainsbury in order to increase the sales of the company. As there is no sales
from the stores because of covid-19. The only one way to increase the sales is through the
online platform. So the organization is getting positive impact and results through the use of new
and advanced technologies that facilitates customers in terms of digitalization and

modernization. This will help the Sainsbury in finding the temporary solution to overcome the
crisis situation.
Environmental factor: These factors are mainly or generally concerned or connected with the
effect of the surrounding environment and also have a power to influence the ecological aspects
as well as the operations of the firm (Deák and et.al., 2021). Environmental factor includes waste
disposal laws, environmental protection laws, rules and the regulations related to the energy
consumption etc. The ethics of the business enforce every organization to acknowledge the
environmental factors. The impact of these factors on Sainsbury toy company is that they have to
use the good quality products. And also encourage the workers to make an eco-friendly
environment. Sainsbury always use best and eco-friendly material for their products. It also
import raw material from the sustainable resources. After the covid-19 crisis situation Sainsbury
took various important steps in order to save the environment as well as the lives of the
employees and the customers. Sainsbury make it compulsory to wear the mask for the workers at
the stores and also facilitates them by regularly sanitizing the stores properly. Sainsbury also
provides free sanitizers and the masks to the employees as well as to the customers who visit the
store. It also follows the rules regarding the maintenance of the social distancing (Do Thi and
et.al., 2021). For example the other retail companies like Marks and Spenser have not
contributed towards the environment and also not focus on the safety of the workers as well as
the customers that gave negative impact on the productivity of the firm.
Legal factor: Legal factor includes the rules, regulations and the laws made by the government
of the country. The laws such as consumer protection laws, health and safety laws, etc. are
affecting the companies. According to this factor if a company violates any rules or laws the
legal action can be taken by the public against the company. For example if the quality of the
product is not up to the mark or the customer felt cheated by the company they may take legal
actions against the company. Sainsbury have trusted and satisfied customers by producing the
good quality products as well as the services till now (Debnath and et.al., 2021). So the company
is having happy and satisfied customers and the list of the customers is increasing day by day. It
also includes some common policies of an organization such as wages distribution policy , no
discrimination policy, safety of the employees, etc. Sainsbury is also having happy and satisfied
employees in their company. It pays handsome wages to the employees. And also takes care of
the safety of the workers. There is no discrimination in the company on the basis of sex, colour,

etc. Sainsbury never violates the rules and regulations of the business. After the coronavirus
pandemic the government of UK make changes in the various rules and regulations regarding the
company's policies. The government make it compulsory for the firm to pay 50% salary to the
employees but at the time of lock down the Sainsbury faces many problems and it have to
terminate some workers because of the financial losses. This will impact the overall functioning
and the operations of the firm and also causes various issues or the challenges for the employees
of the company. On the other hand the Sainsbury also took several steps in order to support the
families of the terminated employees such as it provides basic necessity things or the food
products to them (Nandonde, 2019). This will help the organization as well as the employees to
overcome the covid- 19 pandemic situation or the crisis situation.
Internal factors of organisation
Internal factors of the organisation refers to the factors inside the business that affect the
growth of the organisation such as cash flow, employment, human resource management
(Phadermrod, Crowder and Wills, 2019). Changes in these factors that affects the growth of the
business are considered as the internal factors of the organisation. In order to analysis the internal
factors of the organisation SWOT analyses is used. It is consist of four different aspects of
company such as strength, weakness, opportunities and threats. It helps the company to
understand the current position. J. Sainsbury is a retail company supply chain that is involved in
the production and sales of grocery, home items and other daily consumable products. Following
is the SWOT analysis of the Sauinsbury's current position in order to analysis the impact of
Covid-19 on the organisation (Stone, and et.al., 2019).
Strength
It refers to the internal factors that offers power to the organisation. Strength of Sainsbury
include the quality of product (Elavarasan and et.al., 2020). It is the major strength of the
organisation as company provides good quality of products at effective price. It helped the
organisation to survive during the pandemic. People were more likely to prefers healthy products
at effective price during Pandemic. Highly skilled workforce of the Sainsbury is also a major
strength of the organisation that helped to company to sustain and provide food product to the
customer during the impact of Covid-19. With the help of effective and successful training of the
employees Sainsbury built highly skilled workforce in the organization. It leads to the effective
production and safety of customer and employees is also a strength of the organization. The

stable financial position of the organisation during the lock down helped the company to keep its
employees and customer s safe. For example in Marks and Spencer many employees left the job
because of the weak financial conditions or the stability of the company and it is not able to
protect rights of the employees and the consumers. Customers of Sainsbury are satisfied with the
products and that lead to the increase in the customer loyalty towards the organization. Company
has achieved a high level of customer satisfaction with the help of 30000+ own labelled products
ion the market (Vlados and Chatzinikolaou, 2019). Customer and employee relations are
effective and helped in the survival during pandemic.
Weakness
Weakness refers to the ineffective areas of the organisation that are creating barriers in
growth of the organisation. The major weakness of the organisation is high attrition rate in the
workforce of the company. It increase the cost of the products in the organisation that lead to the
decrease in the profit margin of the business (Quezada and et.al., 2019). Increased workforce on
the company can determined as weakness as it has to spend more time and capital in training and
development of the employees as compared to its competitors. Company had to spend a lot more
in order to keep its employees safe during the pandemic. Increasing prices were also a major
weakness of the company as the impact of Covid had caused an uncertainty in the economy of
the country along with the scarcity of supplies. It created increased in the cost. Company had to
increase the price of the products and as a result the sale of the organisation was dropped.
Another weakness of the organisation include the company has limited success outside its core
business. Even after being the successful in the retail market. It has failed to increase the
business outside retailing (David, Creek and David, 2019).
Opportunity
It refers to the internal factors of the organisation that can be utilized to improve the
growth of the organisation. It can also facilitates the firm in order to achieve the competitive
advantage. Opportunities can also refers to the new facilities or the strategies that a firm can be
able to adapt in order to gain the growth and the development of the enterprise (Longhurst and
et.al., 2020). Sainsbury's is one of the largest company in the retail industry, the effective use of
these opportunities may improve the business that will provide competitive advantage in order to
increase its position in competitive market. Providing 24 hours of services to the customers will
help the organisation to increase its productivity as well as the profitability. It also help the

company to gain the trust and the satisfaction of the customers. After the covid- 19 pandemic the
consumers mainly focuses on the healthy and the organic food that will helpful for them to
increase the immunity power so that they can reduce the effect of the coronavirus. As Sainsbury
provides good quality and the healthy food for the consumers so this will encourage them to buy
the goods and services from Sainsbury. At the time of lock down Sainsbury also provides online
services to the buyers that will result in the favourable condition for the firm as well as to the
customers (Giusti, Maggini and Colaceci, 2020). So, Sainsbury plays a supportive role for the
customers at the time of pandemic situation and also can be able to achieve or gain the
opportunities in order to overcome the crisis situation.
Threat
Threat refers to those factors that have the power or the potential to gave adverse effect or
to harm the companies operations. It also have the power to influence the overall activities or the
functions of the firm. It includes some factors like increasing competition, increase in the cost of
the raw material, insufficient supply of the labours or the workers, unavailability of the adequate
resources, etc (Costantino and et.al., 2019). There are some natural disasters like the drought,
earthquake, etc. are also become the threat for some of the organizations. After covid- 19 the
government of UK changes many rules for the companies and also introduced new policies in
order to facilitates the citizen of the country as the coronavirus gave various adverse effects on
the retail industry as well on the other industries also. Sainsbury also faces several challenges or
the problems at the time of lock down such as there is a shortage of the labour and the workers so
the firm has to manage the functions on the basis of the less employees. It also faces the threat of
the unavailability of the raw material from the sustainable sources that will affect the
productivity and the efficiency of the enterprise. Sainsbury tries to support the customers at the
time of pandemic situation but because of the emergence of the new threats due to the covid- 19
the control or the management is not in the hands of the firm. It have to manage the situation on
the basis of the availability (Bai and et.al., 2021).
So, in this way the internal factors such as the strengths, weaknesses, opportunities and
the threats gave the impact or influence the overall functions or the operations of the company
and also help the firm to know the exact position in the market. The firm can also be able to
know the upcoming issues or the challenges that have to be faced in the future due to the new

entrants in the market or due to the changing demand of the customers (Byrnes, and et.al., 2021).
This will also assist the organization to achieve the healthy competitive advantage.
CONCLUSION
From the above report, it can be concluded that there are various factors whether the
external or the internal factors of the firm have the power so that they can be able to influence
the working, productivity and the profit percentage of the company. These factors can gave the
positive as well as the negative impact on the company's growth and the development. It can also
be concluded that the examine or the analysis of the external and the internal factors can show
the correct and the effective path to the enterprise. This will help the industry or the business to
lead towards the success. As Sainsbury is one of the biggest or the largest leading company in
the retail industry that provides or offers the best quality products as well as the services to the
customers. So, it can be concluded that the company can analysis the effect of the external
factors with the help of the pestel analysis as this model consist the political, economical, social,
technological, environmental and the legal factors. These factors facilitates the enterprise to
easily and smoothly analyse the external factors that effect the company. On the other hand the
Sainsbury conduct the SWOT analysis of the firm in order to know the strengths, weaknesses,
opportunities and the threat that can directly affect the growth and the development. However, it
can also be concluded that after the covid- 19 pandemic situation the overall economy of the
country get affected and this will also gave the adverse effect on the working of the industries or
the businesses. Because of the coronavirus UK faces the problem of inflation that affect the sales
and the production of the Sainsbury and on the other hand the technological factors gave a
positive impact on the firm. These factors help the company to find the temporary solution in
order to overcome the crisis situation through using the online or the social media platform.

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Online
Sainsbury’s, 2021. [Online]. Available through
<https://www.crunchbase.com/organization/sainsburys-supermarkets-ltd>
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