Sainsbury’s PESTLE Analysis: Unveiling the Dynamics of its Operating Landscape

Introduction

Business environmental analysis is important to analyse the external circumstances of running the organisational activities efficiently and in order to analyse the business environment, PESTLE analysis is effective to understand the political stability, economic growth and social development, technological up-gradation, legal framework and environmental sustainability where the organisation can run their operations sustainably (Thompson and McLarney, 2017). The aim of the study is to conduct PESTLE analysis of Sainsbury’s. The company Sainsbury’s is the second largest super market chain in the UK, which is efficient to deliver high quality products at effective price. The company’s vision is to be the most trusted retailer, where people love to work and shop. The values of the company are health of the stakeholders, sourcing the resources by protecting the natural resources, delivering green environmental footprint and maximising values for the overall social communities (Sainsbury’s, 2020a).

PESTLE Analysis of Sainsbury’s

The PESTLE analysis of the company will be evaluated further,

Political:

Political factors have great influence on the performance of the firm Sainsbury’s, where the government debt and consumer debts are high and it in turn changes the customer’s attitude and preferences to make effective purchase decision (Sainsbury’s, 2020b). There is political stability in the UK and support and cooperation of the government further encourage the firm to expand their operations efficiently. Additionally, the incident of Brexit raises uncertainty in the market and increases the cost of international operations which affects the brand operations negatively.

Economic:

Economic sustainability and growth in the UK with high GDP is positive factor which influences the operational activities of the organisation. The decrease in corporation tax is another factor that boosts the profitability of the company. Moderate inflation rate further helps the company to attract the customer in long run and contribute in enhancing the GDP of the country. Increasing competition, employment growth and rise in personal income in the UK are also positively affecting the company’s operational activities (Hamid, Said and Meiria, 2019).

Social:

Increasing population in the UK is the major factors which provide a string market base to Sainsbury’s and additionally, there is social sustainable development with high literacy rate and customer’s purchasing power parity which influence the buyers to make effective purchase decision.

Technological:

New data analysis and Information Technology infrastructure influence the business to run efficiently by ensuring technological advancement. Additionally, the e-commerce growth and rise in online shopping are the marketing trend of the customer which motivates the business to adopt online activities and strengthen their position in the supermarket chain (Hamid, Said and Meiria, 2019).

Legal:

The legal factors including the customer protection laws and non-discriminatory policies and practice as well as Health and Safety of the employees are effective for the company to run their operations ethically (Bentham, 2018).

Environmental:

In the recent era of globalisation, the customers are concerned about sustainable environment and the government initiative further influence the company to take active step to provide green environmental footprint by reserving the rain water, managing food waste, social charitable investment and utilising renewable resource to minimise the greenhouse gas emission (Sainsbury’s, 2020b).

Conclusion

Sainsbury’s has the scope to expand their operations by grabbing the market opportunities of high growth and social development, technological advancement and green environmental practice.

Reference List

Bentham, J., 2018. Business and Economics in the News–Sainsbury's and Asda-the decade's mega-merger. Teaching Business & Economics, 22(3), pp.11-12.

Hamid, A., Said, M. and Meiria, E., 2019. Potency and Prospect of Halal Market in Global Industry: An Empirical Analysis of Indonesia and United Kingdom. Business and Management Studies, 5(2), pp.54-63.

Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by next Plc have on themselves and their competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), pp.234-264.

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