Analysis of Sainsbury's Business Environment: UK Market Dynamics

This report provides a detailed analysis of Sainsbury's business environment, focusing on its operations within the UK market. It begins with an introduction to Sainsbury's activities, including its retail food, clothing, financial services, and property investment. The report then delves into the application of Porter's value chain model to analyze Sainsbury's internal environment, examining primary activities such as inbound logistics, operations, outbound logistics, marketing and sales, and services, as well as supporting activities like human resource management, firm infrastructure, technology development, and procurement. Furthermore, the report explores the micro-environmental forces impacting Sainsbury, including customers, suppliers, competition, and the general public. It concludes with an assessment of the internal business environment model, specifically a SWOT analysis, highlighting Sainsbury's strengths, weaknesses, opportunities, and threats, along with a brief summary of its operations in the UK market and the services it provides.

Business Environment-2

Table of Contents
INTRODUCTION...........................................................................................................................3
1.The Sainsbury company and the activities it does to make money in the UK markets...........3
2.The value chain model to analyse the internal environment of the Sainsbury with its primary
or supporting activities. ..............................................................................................................4
3.Micro-environmental forces of Sainsbury that may impact on the main activities of
business. .....................................................................................................................................6
4.The internal business environment model and its usefulness - ...............................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment is refer as the collection of the all the internal or external factors
that effect the organisation for instance demand and supply,advancement in technology, social or
market trends, economic changes and customers needs or desire etc. Sainsbury is one of the
largest chain of London,UK which is done its operation in retail food and clothing, financial
services and property investment and founded in 1869 by John James Sainsbury and Mary Ann
Sainsbury. Lets discuss more in detail about the internal or micro environmental factors of the
Sainsbury along with the reflection of the usefulness of academic model.
1.The Sainsbury company and the activities it does to make money in the UK markets.
Sainsbury mainly operates in the convenience store, the online grocery and general
merchandise, and also operate in providing financial service. Geographically, there are almost
more than 1100 supermarket and their chains solely in UK. However, Sainsbury makes most of
its money by selling food in the markets of UK where out of total revenues generation of last
year almost 25 euro out of which 2.5 euro approximately came only from convenience stores and
through digital platforms and its non-food sales revenue is just over 1 euro (Akhmetshin “and
et.al”2017). Sainsbury is the only supermarket with its own financial services which includes
Sainsbury bank and Argos financial Services Entities apart from Tesco but its less interested in
shifting to new fields although it offers mobile telephones, digital entertainment and pharmacies.
Sainsbury is now planning in adding two new food stores in a week and many of those
supermarkets by the next year, but still company only represent approx. 4% of selling. As
compare to total revenue of 5%, those convenience stores sales are expanding at over 14%
yearly. Moreover, the company also see huge growth at those stores which are located at
traditional local place and the distance is only 15 minutes drive away as it become convenient or
time saving for the buyers.
Its also increases its profit of about 10% by investing the value in the real estate through the
leasebacks agreements and the sales as over the last five year Sainsbury selling its properties of
about 1.3 euro and collect maximum profit of about 320 euro. The company always proved to be
best in their core business with a long record of increasing quarterly sales and market share of
UK that has grown around 15%.

2.The value chain model to analyse the internal environment of the Sainsbury with its primary or
supporting activities.
The value chain model of porters is extremely popular in the business environment and the
primary activities that Sainsbury mainly involved is the selling or producing activities to its
targeted buyers. Through this process the Sainsbury can realise that all the process or functions
in the business do not consider the same scrutiny level. Lets discuss more in detail below about
the topic and how the company would able to achieve the objectives in their internal
surroundings of the business.
Inbound logistics – Without examine the inbound logistics, the company may face various
issues mainly in product development part. Its one of the essential component for the Sainsbury
to develop a strong connection with their supplier as their assistance is vital in order to receive,
distribute and store the product (Blanchard., 2020). It requires company to focus on each and
every step of modification process converting the goods from raw materials to finished goods.
Some of the main examples the company can consider is distributing the raw materials
internally, the main components to start the production, recovering the raw materials etc.
Operations – its involves both the manufacturing as well as service operations. The essential of
examining the operational activities occurs when the raw materials arrives, the main example of
this activities are packaging, testing and machining along with the maintenance and repairs of
equipments. Its the requirement for Sainsbury to look over the operational activities to assure the
improvement in the productivity, increasing the efficiency and to ensure competitive success.
Outbound logistics – It includes the delivery of product by passing through many different
brokers and some of the activities are warehousing the products, order handling, scheduling, and
delivering to its final destination (El-Bash, 2020). Its become more essential for Sainsbury to
give prime importance to the offered products when those are perishable and demand quick
delivery because if those activities are run in timely manner with minimum price or delivery
processes put a least negative impact on the quality, it automatically increase the customer
satisfaction and expand further development opportunities.
Marketing and sales – the marketers and sales brokers play crucial role here as Sainsbury have
to invest on the activities like selling or marketing. Sensibly implementation of marketing
activities can help the company to develop its brand equity and also to stand out from its

competitors. The promotional activities, quoting, pricing, building relation with channel
members and advertising etc. are consider the main segments of such activities. Those activities
can either be pull or push in nature that purely depend on the objectives or guidelines of the
business and the current placing in the marketplace (Gaganis ,Pasiouras, andVoulgari, 2019).
Sainsbury should need to be careful about the false commitments and try to avoid it as it cannot
be fulfilled by the product department later and may be impact the on the profitability of the
company.
Services – To ensure the loyalty from the customers, Sainbury's pre or pot sales services play an
essential role here. Sainsbury must exploring its support activities in order to avoid damaging its
brand reputation and rather use as a medium to spread the positive or genuine communication by
providing timely or efficient services.
Secondary activities -
Those activities includes the role in coordinating or easing the primary value chain activities.
Sainsbury can acquire great benefit in achieving their organisational gaol if they carefully
examine the secondary activities. The activities explained more in detail below -
Human resource management - Sainsbury can evaluate the HR management process by
examination of various aspects of HR which includes the selection, recruitment, planning and
training, rewarding or bonuses, and all other human management activities. Through the
effective HR processes, Sainsbury able to decrease its competitive pressures which is based on
the performance, motivation, and expertise of its workforce (IslamiMulolliand Mustafa, 2018).
The cost minimisation is also achieved by the company if they carefully analyse the cost related
with the hiring or training along with its return and can expand the importance of this value chain
if they show great dependence on the talent of the employees.
Firm infrastructure – These includes the different range of activities such as quality and
strategic management, financial planning and accounting, legal structures etc. If infrastructure
management is productive in the organisation; it can allow the Sainsbury to make the
optimisation of the value of overall value chain and in order to build up the competitive
positioning in the market than the Sainsbury can control the infrastructure activities.
Technology development – Almost all the value chain activities largely depend upon the
advancement of the technological support in this emerging market (Komljenovic ,Loiselle and
Kumral, 2017). Its essential for the Sainsbury to realise the importance of the technology

development in the overall management functions such as, marketing, production,
finance,personnel department and they further be divided into the product or process activities.
The product research design, automation, software technology, customer service based on
technological support, are some of the main examples which also includes research and
development department.
Procurement - this process involves the purchasing the equipments that may be vary including
from purchasing or modification of machinery, supplies of raw material, necessary tools and
those useful items products which is requires for producing finished goods (McFarlane and
Curran, 2016). Sainsbury should need to carefully examine their procurement activities because
its necessary in the optimisation of the inbound, outbound and operational value chain.
3.Micro-environmental forces of Sainsbury that may impact on the main activities of business.
The main factors of Sainsbury explained in detail below-
Customers - Who you approach and what the customers are such as B2B, B2C, local or
international and their main reasons for buying the goods will play the crucial role in the
Sainsbury including how you approach the buyers and the marketing strategies used whether its
online or at physical stores and the services offered by the company can effect the overall growth
of the business.
Supplier – they consider the major part of the business and can control the success of the
Sainsbury when they carry the power (Obati ,Awino and Ogutu, 2018). The power comes in
hand of the supplier when they are the sole or one of the biggest supplier of their particular
products. As the buyer is not play the important part to the suppliers business but the supplier's
goods is the core area of the buyers business.
Competition – those who dealing in the same or similar types of goods or services as your
business than those considers as your competitors, the strategy they use in selling the products
should be taken into account. The major competitor of the Sainsbury are Tesco, Morrisons,
Aldi UK as they also engaged in the retailing or clothing or financial services. So, Sainsbury
should understand how the price and product differentiation impact their product or they get
ahead of them.
General public - Sainsbury has a duty to provide the satisfaction to the public. Any plans or
action taken by the company must be taken into account from the view of public because they

can help you to reach your goals or prevent them as well. So, to achieve the major development
and expand the business, it essential for any organisation to fulfil the desire or wants of the
public.
4.The internal business environment model and its usefulness -
The paragraph explains the detail analysis of the Swot of Sainsbury -
Strength – Sainsbury is investing great amount of fund in the research and development of its
employees as a result they acquire highly qualified workforce and also motivated them so that
they can achieve more in future (Remeikienė, Čepel,andGasparėnienė., 2019). The company also
invests in creating its brand portfolio as it help them globally if they want to expand into new
market.
Weaknesses – Sainsbury is considered as one of the leading business across the country
although they face many hurdles in moving to different products segments with it present
culture. In the era of new technology, Sainsbury need to made investment in order to develop
new products, right now the process of investment in technologies is not up to the par as per the
vision of the company.
Opportunities - the consumer behaviour and its new trend in the market can provide the new
opportunities for the Sainsbury as they can help in building new revenue streams and
diversification into new goods also (Vasilev, “And et.al” 2017). The inflation rate may effect the
profitability of the company as the low rate can brings more stability in the market, enable credit
at lower rate to the buyers.
Threat – Local distributor' presence and their growing strength in specific global market may
represent a sign of threat and slow down the growth of Sainsbury. Increasing raw material or the
demand of the seasonal products which is likely occur during the peak season may effect the
profitability of the Sainsbury. The influence of Brexit on prices is also a matter of concern.

CONCLUSION
It has been concluded that, the report explains about the Sainsbury business and their operations
in the UK market and type of services they provided in aim of earning money and way of
survival in this tough competition. The report also go through in detail about the internal
environment of the Porters value chain modal and their essential factors and the impact they
create on performance of the Sainsbury. Moreover, it provide detail analysis of the micro-
environment forces and their effect on the key activities of the business along with the reflection
of the academic modal of Swot analysis or their usefulness in Sainsbury company.

REFERENCES
Books and Journals
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