Business Environment


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The business environment comprises internal and external factors which influence the overall functioning of business units. Sainsbury's is the second-largest chain of supermarkets in the retail sector. It specializes in dealing with different types of products (Aterido, Hallward-Driemeier and Pagés, 2011). This report discusses the purpose of different types of organizations with their missions, goals and objectives. Different ways are adopted to meet the objectives of the different stakeholders. It evaluates the responsibilities of the organization to allocate resources. Further, fiscal and monetary policies are assessed and the competition policies are ascertained through which the pricing and output decisions can be determined.

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1.1 Purpose of different types of organizations and comparison of missions, goals & strategic objectives with similar organization

In today's context, there are various types of organizations which serve to fulfil the single objective which is associated with generating profits. It is essential to determine the vision, goals and objectives for the purpose of sustaining the business environment for a longer duration of time. There are three types of organization which operates in accordance to meet strategic objectives.

Sole proprietorship

It is a single legal entity which is operated by a single individual. The purpose of this entity is to generate maximum profit out of various operations (Baron, 2003). They are legally obligated to the reforms and need to be handled by themselves. For instance: Kurt Geiger is a retail sector brand which operates in the footwear industry for the purpose of generating profit.

Listed company

They are the companies which serve a wide range of customers by making the best profit along with providing valuable experience to the customers regarding the purchase of products and services. For instance: Sainsbury is a listed company which functions for the purpose of generating maximum profits.

Non-profit organization

These are those organizations which do not operate for the beneficiary purpose. They carry out various activities for the betterment of the public. For instance: National Health Service England is an organization which operates for the welfare of the public.

Organizations have different missions, goals and objectives which they serve to sustain for a longer duration of time. Sainsbury integrates all the activities to serve the best quality of product to the customers to create a positive impact on the customers to whom they are offering their products (Berger and Udell, 2002). The main objective of Sainsbury is to make the products available to a wider number of customers. By modifying the offering procedure Sainsbury can enhance its customer services in more appropriate manner. This will help Sainsbury to function in an efficient manner over the performance parameters as per the standards ascertained by them to cater large number of customers.

1.2 Stating the extent to which an organization can meet the objectives of the different stakeholders

There are several stakeholders which are associated with the overall functioning of the organization. Sainsbury is associated with several stakeholders that help the company in enhancing their performance which further results in longer sustainability. The stakeholders of Sainsbury are discussed below:


They are the important stakeholders which make resources available to Sainsbury to make the offering to the customers (Björklund, 2011). All the information related to the customer requirement needs to be passed on to the suppliers to make goods available to the customers with the help of these stakeholders.


They are the key personnel who determine the growth and development of Sainsbury as they operate to meet their requirements by making appropriate offerings of the products. Sainsbury adopts proper planning and assessment tactics to identify the needs of the customers and fulfil them in an appropriate form.


These are those individual who carry out the entire functioning of Sainsbury to fulfil the requirements of the customers. As per the transformation into the business environment, Sainsbury is required to ascertain an effective framework related to the performance and reward them for meeting the objectives.

Sainsbury can prioritize the entire work and program the activities in a systematic manner so that different objectives of the stakeholders can be achieved (Bowman-Amuah and Accenture Llp, 2003). Thus, the entire information can be floated in a proper form which results in delivering the best values as per their needs and requirements.

1.3 Stating the responsibilities of an organization and strategies employed to meet them

Responsibilities play a very dynamic role within organizations as effective strategies are implemented to meet them. Sainsbury plays a significant role in fulfilling their responsibilities towards them.


They are the major elements which help Sainsbury to meet its objectives. Making the entire information available to suppliers will make the product available as per the requirement. Through this, Sainsbury will be able to meet the customers' expectations with the help of them. This will enhance the growth and development perspectives of the organization.


The firm performs responsibilities by serving the customer in the best and fulfilling their requirements as stated by them. Sainsbury can ensure to provide better services by modifying customer assistance policy and adopting effective work behaviour to meet the requirements of the users.


Sainsbury determines their responsibilities towards employees by providing an efficient workplace so that they are able to carry out operations in a proper form (Chavis, Klapper and Love, 2011). The employees are provided with lots of growth opportunities which help them enhance their performance. This influences their entire work and they become responsible towards the work which is assigned to them.


2.1 Economic system attempts to allocate resources

The economic system plays a significant role in allocating resources and meeting the demand which is present in the marketplace in which it operates. The demand and supply of the products and services are interrelated with each other. The economy needs to be balanced in a proper form to fulfil the requirements as the resources are limited. The major emphasis is laid upon providing effective goods and services to the customers. This helps the organization sustain itself in the economic system by providing better services to attain the growth perspective over a greater extent.

Sainsbury operates in the free market economy in order to make the offering of the goods and services to a wider range of customers. The entire economic system of Sainsbury is determined as per the demand of the customers. All the decisions are made through the market mechanism which influences the entire economic system (Chow and, 2011). All the prices of the products and services are determined with the profit-seeking objective which helped Sainsbury to allocate the resources in an appropriate form. Thus, the equilibrium of price is determined between the customers and the suppliers that are satisfied with the products and services offered by them.

2.2 Assessment of the impact of fiscal & monetary policy on business organization & their activities

The fiscal and monetary policy regulates the activities of a business organization and has a greater impact on the entire performance. The fiscal policy is determined by the government against the tax which is paid by them to the government. With the increase in the income tax, the people spend less money in comparison with the earlier spending over the purchase of goods and services. Thus, the entire activities of Sainsbury related to the product offering are affected by it. This cuts down the demand for the products and services which are being offered at a greater price.

Likewise, monetary policy determines the proportional distribution of money in relation to the demand and supply of products and services. Lowering the interest rates that are associated with the products which are being offered to the customers will raise the demand as the money is available in sufficient amounts to buy (Hazlina Ahmad and, 2010). Moreover, with the lowering of the interest rate the purchasing power of the customer will be increased. Hence, Sainsbury will be able to attain better and higher profits by making the offering of the product and services.

2.3 Impact of competition policy and regulatory mechanism on the activities of the organization

Competition helps the organization frame up the policies in order to ascertain growth in the business environment. The policies which are associated with competition are inevitable as they are regulated by proper mechanisms to assure proper trade activities within the marketplace where it operates. With an effective competition policy, Sainsbury is able to carry out various activities and compete with the other brands of supermarket chains which are present in the United Kingdom.

The market of the UK is very intense from the competition perspective as they need to adopt those activities which enhance their performance criteria and make them able to meet the market trends in an effective manner (Hult, Hurley and Knight, 2004). Moreover, with the regulatory mechanism the entire activities will be enhanced such as wages of the workers, employment opportunities and an effective working environment for the betterment of the employees. With the help of these activities, Sainsbury will be able to effectively deal with the impact of competition policy and regulatory mechanisms on the activities which are being performed by them. With the proper follow up of the regulatory framework Sainsbury will able to sustain over the longer duration of time and help to standardize the growth perspective of Sainsbury.

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3.1Ways through market structure determine the pricing and output decisions of business

Pricing and output-related decisions need to be ascertained in a proper form as they are the essential components which help the business to operate in the market economy. The pricing and output decisions determine the overall functioning of Sainsbury to make high profits.

The market structure of Sainsbury is perfectly competitive in which the customers are able to make choice regarding the purchase of the goods and services offered to them. Sainsbury is the identical chain of supermarkets in the UK economy which allows the customer to make the choice regarding the purchase of products. However, the prices of the products are not determined by Sainsbury as they are influenced by the competitive prices which are present in the market (Sen, 2011). The strategies related to pricing need to be formulated strategically so that Sainsbury does not encounter huge losses and meets the demand of the customers in an effective manner. Sainsbury needs to consider all the aspects that are related to the price and output decisions of the customers regarding the products and services offered by them.

3.2 Different ways through which market forces shape organizational response with example

The market forces shape the entire organizational response in an proper manner with the help of efficient handling of the several perspectives which are associated with the organization. The different type of market forces which helps in shaping the organizational response is discussed underneath:

Demand and supply

These are the important aspects that influence the entire operations of the organization in an appropriate manner. All the market forces are involved to meet the requirements of the customers. For instance: Sainsbury can make modification in the product range which are offered by them. Through this, they will be able to cater large number of customers and meet the requirement in an appropriate manner.
Customer's expectations: They are the essential element of the market force and proper response needs to be given in order to meet the requirements. For instance: Sainsbury needs to prioritize its offering to meet the customer expectations and provide quality products to them (Kaplan and Norton, 2001). This will increase customer satisfaction as the options are being modified through which they can make their choice and meet the customer requirements.


This plays an important role as this helps in enhancing the employee's skills to make the offering and shape the market as per the response of the customers. For instance: Sainsbury can provide customers with the online option to make an order for the products which are required by them. This will help in responding in an effective manner to the demands of the customers.

3.3 Business and cultural environments of Sainsbury

Sainsbury has a strong business culture in the context of integrity, discipline, and a helping approach towards society and also they set stronger beliefs and trust of customers than other supermarkets like ASDA and TESCO. Many European Union policies affect the business environment of Sainsbury such that it is targeted by the Climate Change Act to limit the emission of carbon and its compounds. Moreover, it is committed to sports activities like the Active Kids programme and the Paralympics. It has social impacts on long-term partnerships, having ten farmer development groups. Salisbury is transforming its corporate culture through some values like providing the best food and health, making a positive impact on communities, respecting for environment, having great infrastructure to work, maintaining product quality and offering services at fair prices (Sekaran, 2006). In the early 1990s, Sainsbury prevents itself from the competitive change in the market by maintaining its ethics and values. So this approach is used across the business, there are more than 157000 employees working in over 1000 stores increasing Sainsbury's retail chain.

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4.1 Significance of international trade on UK business

The UK is expanding its business through international trading. It has a flourishing economy due to a large developed market. Sainsbury is the second largest leading retailer in the UK. International trades have broadened the horizons and markets for Sainsbury, attaining benefits by exchanging resources and services. For many raw materials, it has to export materials from other countries. It is also exporting its commodities and services to many regions worldwide, due to which it is attaining profits. Similarly, many other countries require engines and machinery which they import from the UK (Solomon, 2014). It also gives the benefit of reduction in transportation cost and communication costs. Moreover, Sainsbury PLC is also getting opportunities for technological advancements and innovative ideas in international business. There is a significant role in international trading at Sainsbury as it widens the retail outlets all over the world and also increases the sustainable growth of business. It also becomes easier for Sainsbury to exchange its intangible assets like knowledge, skills, ideas and technology worldwide, giving rise to an increase in employment rate and investment opportunities. By trading over the world its brand image is also increased. Further, it offers opportunities for low production costs, for instance, McDonald's has many franchisees in many countries and it imports its products at low prices and availability.

4.2 Impact of Global Factors on UK Organisations

The global factors are directly influencing the operations of Sainsbury. The rise in economies of developing countries threatens international business. It should concern an important issue as due to globalisation it becomes easier to expand the business organisation. The main global factors affecting the UK organisations are Political, Economic, Social, Technological, Environmental and legal issues.

  • Political: If the government of any country is not in favour, then the organisation may find it difficult to establish its business unit in that country. Government rules and regulations also have an impact on UK business organisations (Teece, 2010). However, WTO's policies can also affect Sainsbury as well as other organisations.
  • Economical: Economical factors like inflation rate, taxations, exchange rates, tariffs and quotas on imported goods highly affect the business trade between two units so economic conditions should be in favour of Sainsbury. The economies of China, India, Russia and Brazil are growing drastically threatening the UK economy.
  • Social: The Company should make synergies with other organisations as well as other countries worldwide. There must be a wide social network of organisations across the world so that businesses can survive. It is very crucial for business unit to understand the customs, habits, traditions, likes and dislikes of society.
  • Technological: Business organisations should also be availed of technological support to survive in a competitive market. Modern techniques and innovation of new products are also some major factors like online shopping, bar code systems, and automation techniques that are boosting the UK economy. For example, in the UK many firms are technically sound so it is giving support to other developing countries.
  • Environment: Changing in weather and temperature will impact many industries like agriculture, poultry, farming, tourism and leisure (Xue, Shen and Ren, 2010). Global warming and the greenhouse effect are important issues to consider for Sainsbury.
  • Legal: There are many legal factors affecting the business of Sainsbury globally and nationally, like discrimination of age, legislations, employment-based law and monetary policies are responsible legal forces.

4.3 Impact of the European Union Policies on UK business organization

European Union Policies have a greater influence over the entire business operations of Sainsbury. The UK business unit needs to follow all the rules and regulations in order to make the offering of the products. European Union policies help Sainsbury to transect the respective business activities to exchange the product with the other EU countries without any barrier.

The policies were reformed to provide licenses to easily make the exchange of goods and services among different nations and countries (Hutt and Speh, 2005). All the conditions are properly monitored to identify the unfavourable conditions which impact the performance of Sainsbury. With the identification of the negative aspects, European Union Policies helped Sainsbury to increase the production target and increase the sales outcomes.


The business environment needs to be analyzed in a proper manner which helps in the allocation of the resources so that the entire functioning of the organization is carried out in an smooth manner. All the environmental aspects are monitored in a proper form by regulating the entire functioning to determine the sustainability of Sainsbury. All the aspects are presented while considering all the policies associated with the growth and development perspective of Sainsbury.


  • Aterido, R., Hallward-Driemeier, M. and Pagés, C., 2011. Big constraints to small firms' growth? Business environment and employment growth across firms. Economic Development and Cultural Change.
  • Baron, D.P., 2003. Business and its Environment (p. 2). Upper Saddle River, NJ: Prentic
  • Berger, A.N. and Udell, G.F., 2002. Small business credit availability and relationship lending: The importance of bank organizational structure. The economic journal.
  • Björklund, M., 2011. Influence from the business environment on environmental purchasing—Drivers and hinders of purchasing green transportation services. Journal of Purchasing and Supply Management.
  • Bowman-Amuah, M.K., Accenture Llp, 2003. Attribute dictionary in a business logic services environment. U.S. Patent 6,601,234.
  • Chavis, L. W., Klapper, L. F. and Love, I., 2011. The impact of the business environment on young firm financing. The world bank economic review.
  • Chow, A.T., and, 2011. Broadband network with enterprise wireless communication system for residential and business environment. U.S. Patent.
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