Contemporary Business Environment Assignment with Sainsbury’s (GC01764)

Table of Contents

1.0 Introduction.

2.0 Overview of the Organization.

3.0 The key elements of the internal environment of organizations and the interaction with the external environment

3.1 Internal environment factors.

3.2 External environment factors.

3.3 Market economy functions and the role of government

3.4 The economic environment of the United Kingdom for Sainsbury’s plc.

3.5 The countries benefit from trade with each other

3.6 The growing impact of the European Union on Sainsbury’s.

4.0 PESTEL and SWOT of Sainsbury’s.

4.1 Pestle analysis of Sainsbury’s.

4.2 SWOT analysis of Sainsbury’s.

5. Conclusion.
6. References.

1.0 Introduction

According to Sainsbury’s Annual Report (2019), in the United Kingdom, there are many giant companies that have satisfactory reputations and fame. In these highly competitive companies, Sainsbury’s has a significant name and fame. In 1869, it earned second place in the UK. The firm has many great products.  Its main aim is to serve the customers and to make customers happy in their everyday life. Their promise is that people will live well for less. This report consists of the explanation of factors of the internal environment with the connection of the external environment of Sainsbury’s. Then this report identifies the economic functions and the government’s role to develop the economic condition in the UK. Finally; the PESTLE and SWOT analysis of Sainsbury’s are made in the report to identify the position of Sainsbury’s in both external and internal situations. (Sainsbury, 2020)

2.0 Overview of the Organization

In the United Kingdom, Sainsbury’s is the 2^nd biggest retailer in the grocery sector. In every supermarket sector, Sainsbury’s has a 16.0% share. It is known as the first self-service retailer, and its headquarter is in London, UK. Sainsbury’s first shop was in Drury Lane in 1919. The establisher of Sainsbury’s is John James Sainsbury’s and it was established in 1869, Holborn (Sainsbury’s 2020). The name of the CEO of this supermarket is Mike Coupe. In 1922, it became the greatest retailer of groceries. It had 1415 shops in 2017 and this number has been increasing day by day. At first, the store began as a retailer of foods and then it amplified into a box of many groceries like meat and bakery. In 1951, the shop was fully completed. The primary products of this store are Hypermarket/Superstore, supermarket, convenience shop and forecourt shop. In 2019 the revenue, operating income and net income were £29.007 billion, £312 million and £219 million respectively. The numbers of employees in 2019 were 116,400 (Sainsbury’s Annual Report, 2019).

3.0 The key elements of the internal environment of organizations and the interaction with the external environment

3.1 Internal environment factors

According to Mukher, S (2019), the internal environment is very important for a company because it is directly linked with the company’s success and achievement. If a company wants to be successful, it needs to rule the internal environment. The internal environment stuffs help to handle the external parts. The external environment factors are tough to organize but the interval environment can be organized in many better ways. There are many examples of internal environments, which are:

Value system: Value system is an informal term that involves all features of value that ordain health and can be beneficial to the firm in the future. It is very essential for the internal business environment. If a business values its system, the business will definitely achieve something better.

Corporate culture: Corporate culture means the faith and communication that encourage how a firm’s workers and management communicate and manage the external business performance of work. Good communication between higher management and lower management is a key element in corporate culture. (Mukher, S 2019)

Organizational structure: Organizational structure defines how activities are directed for accomplishing the particular goals of a firm. The main thing in an organizational structure is to have a great ability of a proper decision-making method in a business. Moreover, the organizational structure represents the communication pattern among various departments to gain the objectives. It can be matrix structure, functional structure, divisional structure, bureaucratic structure and so on.

Human resources: The success of a business is depended on a worker’s ability, behavior, manners, skills and how they represent themselves. A human resources department usually works on it. They are the ultimate party who are responsible for the success or failure of a firm.

Vision, Mission and Objectives: The vision is what a company wants to fulfill. The mission is the key to achieving the vision and the objectives are general work for gaining the goals. So, these three things are very important for a business organization because they distribute to the other bodies of the firm for attaining an outcome.

Labor Unions: A labor union is an organization that performs and looks after the activities of employees. Labor union helps the worker unit. There are four types of unions in business. These are craft unions, industrial unions, general unions and federations. Sainsbury’s uses these internal factors; which make it successful in business.

Physical Resources and Technological Capabilities: In business, physical resources need to keep up in order to execute their works and technological capabilities. These resources are experience, accumulated skills and intellectual properties, software license and patent.

3.2 External environment factors

According to Bush (2016), the external environment means the outside parts of businesses that affect a company’s power to achieve its goals. It is quite impossible to handle its environment but it is as important as the internal environment is. This environment consists of six factors- political, legal, economic, technological and social.

These elements are important for Sainsbury’s growth and this helps to increase the market strategy. These elements also help to increase the business cycle, financial status, interest rate and income and also to produce good quality stuff. External factors are affecting Sainsbury’s in different ways. The key factors that affect Sainsbury’s business are consumer income level, current Covid-19, inflation, interest rate, currency exchange rate, socio-cultural factors, technological advancement, political and economic factors etc. In addition to these, there are other reasons of Sainsbury’s gets affected by an external environment……………………………

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