Sainsbury's Business Environment: Departmental Interrelation

This report provides a comprehensive analysis of Sainsbury's business environment. It begins with an introduction to business concepts and the importance of external factors. The report then delves into the interrelation of various organizational departments, such as human resources, marketing, finance, and production, highlighting their roles and objectives. A PESTLE analysis is conducted to assess the impact of political, economic, social, technological, legal, and environmental factors on Sainsbury's operations. Furthermore, a SWOT analysis is presented, identifying the company's strengths and weaknesses, which are then correlated with external macro factors. The report concludes by summarizing the key findings and offering insights into Sainsbury's strategic positioning within the competitive landscape. The report emphasizes the importance of understanding both internal and external factors for effective business planning and achieving organizational goals.

Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 and P2: covered in PPT..........................................................................................................1
TASK 2............................................................................................................................................1
P3: Interrelation among various organizational departments and their objectives.....................1
TASK 3............................................................................................................................................4
P4 Consequence of macro-environmental factors.......................................................................4
TASK 4............................................................................................................................................6
P5 Internal analysis of organisation for identification of strength and weaknesses...................6
TASK 5............................................................................................................................................7
P6 Interrelate strengths and weakness with external macro factors............................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business is an essential aspects for every organization. It is an important activity of
making money through producing an effective products and services. It seems to be an utmost
important enterprises entered into for profit. It is an appropriate techniques of an organization
that seeks to make maximum profit through an individual working towards similar aims and
objectives. There are plenty of external factors that are present in every business environment.
Such as political, economic, social, technology, legal and environment factors that is having
positive and negative impacts on an organization (Avramenko, 2012).
Through consideration of all these aspects company can be able to improve the strength
of J. Sainsbury. Basically, there are various factors that are available within an organization such
as employee motivation, technology capacity and inappropriate delivery etc. It is the primary
role and responsibility of managers to prepare effective planning and policies which assist to
various drive successful in coming time. In the current report, various types of organization and
their main purposes in accordance with various departments are connected together to attain
overall aims of the company.
TASK 1
P1 and P2: covered in PPT
TASK 2
P3: Interrelation among various organizational departments and their objectives
Growth and sustainability of an any business enterprises is relies upon the working of
each and every concern department of an organization (Bovee, Thill and Raina, 2016).
1

Sainsbury is multinational system which provides their business functions in many
countries through offline and online mode. It is the duty of the management of organization is to
align the interests of all the departments of social group with each other for accomplishment of
their desired objectives. There are many department are working in structure. They all have
different roles and support each other in accomplishment of their tasks. The major departments
which are present within the administration includes human resource, finance, marketing,
production etc. Their different functions are interrelated to each other and have direct link
regarding accomplishment of the objectives of organization. The role of such different
departments of Sainsbury is defined below:
Human resource: It is considered as one of the important department within the
organisation which performs the activity regarding planning of the workforce. It helps in
appointment of qualified and skilful employees in different departments according to their
requirements which improves their overall working efficiency. There are many other functions
which are performed by HR department like recruitment and selection, appraisal of performance,
determination of remuneration etc. They provide the salary to the employees according to their
efficiency which motivates the employees of all the department which helps in timely
achievement of goals (Cavalcante, Kesting and Ulhøi, 2011).
Marketing department: The main function of this department is about the advertisement
of products and services which are provided by organisation for attraction of large number of
2

customers. This department also do market research regarding identification of the preferences of
customers and demand of their product. This will provides the opportunity to the production
department of organisation that bring changes according to such needs and attain competitive
advantage.
Finance department: It is said to be utmost important department of an organization on
which the entire company relies. As it has been seen that finance is an essential aspects for every
business concern to attain their future aims and objectives in more effective manner. This will
assist is proper allocation of funds from various sources so that basic needs can be meet out. It
would help marketing department to make use of modern advertisement techniques to collect
necessary funds from different places.
Production department: It is refers to be utmost important department for every
business enterprises which would produce various foods items according to the needs of
customers. It uses the data that is collected through marketing department in respect to make
appropriate changes for their goods for attraction of wide number of customers and make
modification to increase total sales amount for an organization. This departments is connect with
all necessary functions of department to make appropriate products and services for their close
customers (Hair, 2015).
Organizational Structure:
It has been found that company need to follow some effective structure so that proper
planning can be done to attain their aims and objective in more quick time. Some of them are
mentioned underneath:
Function based: It would decided that a well organize structure of Sainsbury can be
made as per the requirements of organization. Such as, Human resources, commerce, finance and
operations.
Geography based: According to this, the owner of an organization divide as per their
various regions of nations where it guides their services and products. It will assist in finding of
demand of customers according to various locations.
Product based: It is necessary to set structure of an organization on regular basis that
diversified products would provided by administration in effective manner. Some examples are
sainsbury is associated in retail sectors that provide various products to their customers.
3

Customers based: In this customers behaviors are determine for structuring organization
in more effective manner. It assist them to make use of innovative ideas in order to make
appropriate alternation in their products as per their preferences (Karagiorgos, Drogalas and
Giovanis, 2011).
TASK 3
P4 Consequence of macro-environmental factors
A PESTLE analysis is a tool or strategy which is used by an organisation to understand all
external factors which impact on a business. This analysis also helps the organisation to
understand about the current market situation in broader way so that they can easily maximize
the opportunities and minimise the threats of an organisation. A PESTLE analysis is a
comprehensive version of SWOT analysis which is used by Sainsbury to understand their
external market factors so that they can control the threat of an organisation and maximize the
their productivity (Kolk, 2016).
PESTLE Analysis of Sainsbury: - PESTLE stands for “political, economic, social,
technological, legal and environmental. Sainsbury is a UK biggest food retail organisation which
is going to make strategy to understand some external market factors which will impact on their
organisation. They have to examine seven external factors which will impact on their business in
future which are follows:-
Political Factor: - Political Factors are those factors which were created by the political
institution, government policies, trading policies, internal political issue which are likely to affect
the business of organisation. The Political factors in the United Kingdom have a great influence
on the performance of Sainsbury. As if there will be any changes in the government policies it
will directly change the customer attitude of purchasing and that will affect the business
performance of organisation. Thus if Sainsbury want to grow in the market they have to study
their political factors so that they can understand how the political factors affect on their business
and they can maximize their productivity (Osterwalder and Pigneur, 2010).
Economic Factor: - Economic Factors is very important for any company to consider
while marketing their product and service. These are those factors which were created due to
interest rates, inflation, increase in taxation, employment or unemployment rates, raw material
cost and foreign exchange rates, rising in cost of fuels etc. Rising in cost of fuel is one of the
4

biggest economical factors that might affect the business of company. Due to rising in cost of
fuel that will impact on supply chain of organisation that would cause increase in the price of
Sainsbury product and indirectly that will hamper the business at the same time. If market have a
good economic condition it will ultimately lead to more profit to the company so it is very
important to have an eye on economical condition of market to earn more profit for Sainsbury
(Osterwalder and Pigneur, 2010).
Social Factor: - Social Factor relates to the cultural aspects, attitudes, beliefs, that will
affect the demand of company’s product. It is very important to keep social trends in mind for
increasing productivity for Sainsbury. It would have to look out for social trends such as lifestyle
trends, consumer attitudes and opinions ,consumer buying patterns ,advertising and publicity etc.
If customer are unhappy with the services provided by organsiation, they have wide range of
other option to purchase the product from there that would lead decrease in the profit of
Sainsbury so now days.
Sainsbury trained their staff to be more helpful and friendlier to the customer so that they
can drive more sales and also they can attract more customer on the bases of the services which
their employees provide to the customer. Sainsbury now days also take part in organising some
charities , raise funds for many different cause , sponsor games , arrange social activities and
many more. This shows that Sainsbury is one of the best retail companies in the United Kingdom
which is not only indulges in profit making but also they are fulfilling their responsibilities for
the society and its surroundings (Pikka, Iskanius and Page, 2011).
Technological Factors: - Technological factor are those factor which relates to the
technological aspects, research and innovation, maturity of technology, emerging technologies,
information and communication etc. It is very important to use to correct technologies for any
retailer. As Sainsbury is very big organisation they have to always keep on implementing
advance version of the technology which they use in their retail company because it is not
possible to do all things manually. For example like checkout system and the inventory
management and computerised stock controlling Sainsbury have to implement these type of
technologies so that there can be less margin of human error and less paperwork. And also they
have to upgrade these technologies time to time so that they can create more opportunity to
maximise their productivity. The online shopping facility is also having a great technological
5

advantage for Sainsbury. If they used more efficient delivery system it would increase the
percentage of profit to the organisation.
Legal Factors: - It is necessary for big organisation like Sainsbury remain compliant
with law. Legal factor relates to the law, regulation and legislation, health and safety regulation,
employment law, tax regulation etc. that will affect the business of Sainsbury. For the well being
of an organisation Sainsbury have to maintain these legal factors so that they can easily increase
their productivity.
Environmental Factors: - Environmental Factors relates to the ecological and
environmental aspects that will affect the demand of the Sainsbury. They have to focus on the
sustainability, packaging, ecological regulations , scarcity of raw materials, pollution targets etc.
Sainsbury have to keep all these things in their mind while doing their business in the United
Kingdom so that they can increase their sales.
TASK 4
P5 Internal analysis of organisation for identification of strength and weaknesses
SWOT analysis is a study which is done by organisation to understand its internal
strength, weakness as well as external opportunities and threats of the organisation so that they
can do their business according to that analysis for attaining maximum profit for the organisation.
SWOT Analysis for Sainsbury
STRENGTH: - Sainsbury is one of the biggest retail shops in the United Kingdom. They
have extremely experienced leadership team which handle their staff in a manner that they can
provide good service to their customer and provide the best product. Sainsbury have wide range
of the products and service which is beneficial for the customer to purchase any type of product
under one roof and also they provide best quality for the products and excellent branding and
advertising. This is the main reason for the Sainsbury to become best retail place in the United
Kingdom for the customer to purchase so many different items at one place and also they have
won so many Quality Food Award as compared to other retailer in the United Kingdom (Reed,
and et. al., 2013).
WEAKNESS: - The company have one of the main weaknesses is that they do not have
any extension plan for their business. It means that if there is any problem with food retailing in
the United Kingdom, it would automatically lead to decrease in the productivity of Sainsbury and
6

also if rising food prices over the world it would have impact on internal business because they
have to sell their productivity on higher price. It also have to face tough competition with every
segment of the retail sector.
OPPORTUNITIES: - The company can look forward to enter into new emerging
markets through joint venture or partnership to explore into new market so that they can increase
their sales. Another opportunity for Sainsbury is that if they installed self checkout machines
which would help company to open their store 24 hours which could ultimately increase the
productivity of Sainsbury sales (What SWOT Analysis is in simple words, 2016). They can also
expand their business by investment in growing economies like Asian, Africa and US etc.
Sainsbury is also having another good opportunity as they provide online shopping faculties. As
now days online shopping increase day by day which is best option to maximize their
productivity and even they have more 150 stores which operates online shopping facilities to the
customer with best quality and delivery services of the product.
TASK 5
P6 Interrelate strengths and weakness with external macro factors
There are different types of strengths and weaknesses which are required to be
determined by company. This will facilitate to utilise strong points to grab opportunities fir
improving productivity as well as profitability of an organisation. Apart from this, firms have to
put efforts to identify weaknesses also to reduce the negative impacts of threats. It is necessary to
make an appropriate plan of action for conducting several tasks or procedures for attaining
desired outcomes on regular basis. A business want to grow and expand themselves in changing
trends of market through maintaining an effective or efficient brand image in front of several
competitive enterprises. Sainsbury have to establish an accurate team to identify strengths and
weaknesses to gain benefits along with reducing threats or issues in company (Shigang, 2010).
External macro factors can be described as to consider elements of PESTEL analysis
which render support to determine negative and positive impacts. It includes several components
such as Political, economic, social, technological, environmental and legal which are mandatory
to be studied. Sainsbury have to observe, analyse and evaluate the effects of macro factors
because they vary in different trends of market. It is also compulsory to be focussed on such
elements while business is required to be expand through introducing firm at new place to
7

country. Conducting a SWOT analysis provide help to determine need to internal or external
factors for enhancing profits of an organisation. Every business want grow on regular basis to
grab more market area and establish as strong brand competitor amongst various other
companies. To gain growth of organisation, it is necessary to identify better opportunities
through studying macro factors in different situations to grab them for improving brand position
in strong competition of market trends.
Political and legal factors are relevant to government authorities for making policies or
regulations which are mandatory to be followed by companies while making any kind of
decision. Sainsburry have to get aware about changes or modifications into legal norms and
implement them into organization for avoiding governmental penalties. It is essential to consider
legislation to run business successfully.
Economical situation and various level of cash-flows in nations are analyze in well
planned manner. Sainsbury require to follow various economic polices regrading various
segments that are crucial for an organization. Certain factors those are influencing the business
are deflation rate, ratio of import and export and currency exchange rate. The positive strength of
Sainsbury is that it is consider as one of the largest retail company whoes operations are done in
various parts regions. In spite of this, high currency exchange rate in few nations would affect the
profitability position of the company.
In accordance with social aspects which is associated with customers aspects, attitudes
and customer beliefs. This will have huge impacts upon fulfilling demand of company as well as
individual at the same point of time. The major strength is associated with R&D team of
Sainsbury that proved as their strength. It would analyze specific trend that are present in the
market. This is associated with manufacturing food items as per their taste and preferences of
customers attitudes and behavior. Because of wide number of employees those are working in
Sainsbury will create the disputes between employees because of cultural differences.
Technological factor is mostly in trend in current scenario of market because companies
are utilizing several software suitable for carrying out their regular procedures for gaining
outputs on daily basis. It is essential for Sainsbury to use technology for improving benefits but it
is considered as illegal to use techniques for disturbing personal belongings of someone. There
are different legal teams those are working in various nations. It would be known through various
regulations by paying extra taxes in proper manner. It will build highly repudiated image to the
8

company. In accordance with this, some limitation are also associated with the company because
they need to follow some legal rule and regulation to operate their business in more valuable
manner.
CONCLUSION
From the above project report, it has been concluded that business is an essential aspects
for an organisation that provide great opportunities to the managers of Sainsbury in order to
understand their strength and weaknesses of an organisation. It would assist them to make use of
positive strengths to improve their overall growth and profitability position in coming period of
time. This will help them to contribute some new process regarding removal of negative aspects
those are associated with the company's internal department. It happens that there is huge relation
among all departments which would provide support each other to attain their individual to make
objectives in more effective manner. Consideration of macro-environmental factors that will
assist in preparation of appropriate strategies which turns out to prove as strength of an
organisation by performing more flexible working environment to their staffs so that better
chances of getting more results can be attained effectively.
9

REFERENCES
Books and Journals
Avramenko, A., 2012. Enhancing students' employability through business simulation.
Education+ Training. 54(5). pp.355-367.
Bovee, C. L., Thill, J. V. and Raina, R. L., 2016. Business communication today. Pearson
Education India.
Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re)
establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
Hair, J. F., 2015. Essentials of business research methods. ME Sharpe.
Karagiorgos, T., Drogalas, G. and Giovanis, N., 2011. Evaluation of the effectiveness of internal
audit in Greek Hotel Business.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business. 51(1).
pp.23-34.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.
Pikka, V., Iskanius, P. and Page, T., 2011. The business enabling network–a tool for regional
development.International Journal of Innovation and Regional Development. 3(3-4).
pp.324-344.
Reed, O. L. and et. al., 2013. The legal and regulatory environment of business (p. 328).
McGraw-Hill/Irwin.
Shigang, Y., 2010. Competitive strategy and business environment: The case of small enterprises
in China. Asian Social Science. 6(11). p.64.
Online:
What SWOT Analysis is in simple words. 2016. [Online]. Available through:
<http://pestleanalysis.com/swot-analysis-examples/>.
10