Sainsbury’s Market Environment Evaluation

Introduction

Analysing the business environment is essential for the multinational corporate firm in order to evaluate the external and internal business environment to conduct the operational activities strategically and it is effective for the firms to analyse the business environment for developing appropriate decision for the organisational success (Nandonde, 2019). The aim of the study is to analyse the external and internal business environment in the business of Sainsbury’s. In this regard, the PESTEL analysis and SWOT analysis are effective to analyse the macro and micro environmental condition for the firm respectively. The study also provides a scope to evaluate the impacts of the environmental analysis on the organisational decision making practice. Sainsbury’s is the second largest super market chain in the UK, and the brand is efficient to raise revenue by more than £29.456 billion and hire more than 186900 employees to run their business efficiently (Sainsbury’s, 2020a).

Demonstrating macro environmental factors

PESTLE analysis is effective to analyse the macro environment for the business and in this regard, the PESTEL provides a scope to analyse the political stability, economic growth and social development as well as legal structure of the business, environmental factors and technical advancement in the retail industry. The PESTLE analysis for Sainsbury’s will be represented further.

Analysing micro environmental condition

The SWIOT analysis is effective to analyse the microenvironmental factors for the business where the SWOT analysis provides a scope to identify the strengths and weaknesses, as well as acknowledge the future opportunities and threats in the market. The SWOT analysis for the company Sainsbury’s will be analysed further.

As per the SWOT analysis, the major strengths of the organisation Sainsbury’s are brand image, quality products, strong employee base and good pricing strategy, where the firm is efficient to develop their market share and expand the businessefficiently (Sainsbury’s, 2020b). Theorganisation is efficient to develop effective product line with quality products which further helps the brand to improve the businessactivities and expand the operational acuitiessuccessfully. The company has financial strength which in turn helps the business to invest in production and research and development activities to manage the product line and expand the businessstrategically (Sainsbury’s, 2020c). Additionally, strong loyalcustomer’sbase is also other strength for theorganisation, where the brand is successful to satisfy the customers by delivering quality products and efficient services. The customers are loyal and they try to make effective purchasedecision from the organisation. On the other hand, the weaknesses are low margins, growing cost of the products and lack of marketing promotionalactivities, where the firm fails to expand their businessstrategically across the retail sector around the international markets. On the other hand, there are some opportunities which are growth in e-commerce, expansion of the online shopping activities, market expansion, customer’s demand growth, rising national Income of the country and digitalisation of the business, and these opportunities further provide a scope to the business of Sainsbury’s to expand the business by developing effective marketing tactics and strengthening their online activities to target and retain the loyal customers for long run (Sainsbury’s, 2020d). Thethreats are high numbers of competitive brands, various substitute products and intense competition, for which the company fails to expand their business and strengthentheir position in the global retail industry (Rothaermel, 2016).

Analysing the impacts of micro and macro environmental condition on organisational decision making behaviour

The macro environment factors such as political stability, influence in international trade and foreign investment and customer preferences towards online activities are influencing the company to make effective decision of presenting online website and launching mobile application for retaining the customers in long run.

The environmental factor further influence the decision of Sainsbury’s to reduce carbon emission by utilising renewable resources like solar panel and reserving the rain water for production as well as the organisation is efficient to manage waste and maximise social community values by investing in social developmental projects (Sainsbury’s, 2020d).

The micro factors of strong brand image and revenue growth are influencing the decision of the firm to develop more quality products and focus on product diversification strategy in orders to reduce the threats of substitute products in the market (Sainsbury’s, 2020e).

The micro environmental factors such as customer preferences towards online activities and e-commerce growth are also influential factors which motivate the firm to develop the decision of increasing online activities in order to retain the online buyers in long run (Ansoff et al., 2018).

The technological enhancement further influence the brand to increase their creativity and innovation to serve the customers by online activities and implementing latest technology in promoting the brand and serving the customer across the globe.

Conclusion

It can be concluded that, the macro and micro environmental factors are effective for the business Sainsbury’s to expand their operations where political stability, economic growth and social development are beneficial for the organisation to grab the market opportunities of high retail industry growth, improving online activities and e-commerce activities.

Reference List

Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R., 2018. Implanting strategic management. Berlin: Springer.

David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach, concepts and cases. London: Pearson–Prentice Hall.

Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African Community. Global Business and Organizational Excellence, 38(4), pp.54-61.

PANDEY, B.C., 2017. Nike Inc-Complete Analysis: SWOT, PESTLE and Marketing strategy. BookRix.