Global Bussines Environment

LO1

Swot Analysis

Swot analysis is done by the company to understand its strength and weakness so that strategies are build to gain opportunity or to protect the company form threat.

Strength: The things in which the company is excels and that differentiate it from other companies in the market (Sarsby, A., 2016). One of the strength of Sainsbury it is famous for providing quality products to its customers and thereby is able to increase its brand image and customers loyalty. Strong promotional strategies and by expanding its product range into clothing and finance the company is able to expand its market share and profit margin.

Weakness: It describes the point where the company needs improvement and its is a negative attribute. Spite of customer loyalty program and promotion customer it is challenges for the Sainsbury to retain customer due to high price competition in retail industry. The company also lower it margin to cut down the cost and attract large customer but it is not beneficial in long term.

Opportunity: It means there are chances of something good due to external factor of the company. The company can expand its business in its domestic and international market by selling its products online and by use of updated technology. Thus, it will help the company in gaining opportunity that is present in the environment and expansion of market share.

Threats: It consists all such factor that affect negatively to Sainsbury company and one of the threats is intensive competition in retail and grocery segment (Lohrke, F. T., Frownfelter Lohrke, C. and Mazzei, M. J., 2018, July). There many competitors in the market specially ALDI and LIDL as they are providing product at lower price at the same time maintaining the quality of the products. So, it's certainly threats for the Sainsbury and thus the company needs to update its technology to bring economic of scale and to attract large customers.

LO2

Impact of government on business operations

There are various policy of the government that affect in decision-making and operations, structure of the Sainsbury company. The way they affect the company are as follows:

Economic policy: These are the policy of the government that affect the decision-making and performance of Sainsbury company (Qi, Y. and et.al., 2017). The market in which the Sainsbury company operates is facing the situation of political instability and the debt of government and consumer are also high. Thus, the political factor or policy has an adverse effect the growth and sustainability of Sainsbury company. The new coalition government is also planning to rise VAT that will lead to increase in the cost of the product and increase in price of product. It also includes Government spending policy such as subsidies provide to certain business or if government increase its spending it would lead to increase in tax rates. Thus, all this situation and political stability create immense pressure Sainsbury on the to plan use strategies and update its technology to reduce the cost of production.

Legal policy: This refers to all rules and regulation of the government that affect the smooth functioning of the business (Cai, W. and Li, G., 2018). Sainsbury company undertake or consider all rule and regulation while operating of its business that includes employment right, national minimum wages, working hours and health and safety rule of employee and customers. In case the company does not compile with the following rules it has to impose to fines and will adversely affect the functioning of the business. The introduction of new legislation related to tax on advertisement for highly process and fatty foods thus the company has to change or modified its product thereby adopting new tax legislation. So, it can be stated that legal policy also help in decision-making and smooth functioning of business.

LO3

Impact of changes in environment on business

There are numerous changes in the internal and external environment of the business, so in order to be competitive the company has to adapt to these changes and make its strategies as per requirement. The way the key drivers of environment affects the functioning of business are as follows:

Marketing department: The function of marketing department in the company is to identify the needs of the customer and satisfy them in an appropriate manner (SHTAL, T. V. and et.al., 2018). It induces the customer to prefer a particular product over another and thus help in increasing the sales and profit margin of the company. So, in order to identify the needs of the customers Sainsbury marketer has to undertaken various social factor such as the needs, preference, value and belief, economical factor that is the purchasing power and employment level. By considering all these factor and using the brand image of Sainsbury company the marketer has an opportunity to introduce new product in the market .

Human resource department: The function of Human resource department is to plan for employee, assign responsibilities to the employee and provide good working conditions (Dechezleprêtre, A. and Sato, M., 2017). The HR is responsible for managing the employee by planning for their training and development, enhancing their skill and motivating them to work effectively for achievement of organizational goals. So, the HRM department of Sainsbury has to consider legal factor such as employment right, National minimum wages, working hour, discriminative policy while recruit and in overall management of employees. The HR also had to consider economical factor such as employment rates, distribution of income it all help the HRM department in decision-making of salary of employees etc. Thus,it can be stated that changes in environment affect as Sainsbury is able to provide quality products to its customers because of effectively management of employee.

CONCLUSION

From the above report it can be concluded that Pestle and swot analysis help the company in gaining competitive advantage and increasing market share of the Sainsbury. Presently this report also concluded that policy of government affect adversely on the structure and operations of the company. At last this report conclude that the company has been successful in adopting to the changes of environment.

For more - United Airlines Case Study

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