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SWOT and PESTLE Analysis Assignment
Diploma in Business
Unit Number and Title
Unit 1 Business Environment
B. Short essay
Sainsbury offers wide range of home products. Vision and values remained unchanged and their goal have been refined to reflect commitment towards customers. Sainsbury’s strategy is to know customers in a better way. This is done by providing great products and quality services. A sustainability plan is launched which look after the process of the business by focussing on goals. It shows a journey to find the opportunities and different challenges that are related to the business. To achieve the vision of the organization our management is working and improving customer satisfaction. About 1700 employees have joined female mentoring program and about 1200 have enrolled in our leadership programme. Its business provides great food at low price and helping the customers live healthier lives. Keeping the customer health as prime, decisions are taken to remove sugar from various products. 98% of palm oil used to manufacture Sainsbury brand products are certified sustainable. Business environment is the combination of both internal and external environment which affects organization in lots of ways (Grant, 2016). It is important to know the strengths and weakness of the organization by conducting analysis.
To maintain position in the market an organization has different objective which depends on the operation of the business which helps management to fulfil the demands of the customers and its employees in the market. The organization has to meet the desires of the customer by providing high quality services. Sainsbury has main focus to contain its customers by giving finest services to them. To give dividend to stakeholders Sainsbury fulfil all their demands. Management has the responsibility towards the creditors such as customers, suppliers, raw material etc. Most of the organizations depend on stakeholders for their financial help, so it is the responsibility of organization to meet their demands. Generally stakeholders are divided into two type internal and external stakeholders.
The objective of the organization can be long term or short term that should be finished in a particular time period. Different organizations are linked with each other and they jointly provide quality services to the customers. Due to connection between different organizations the services provided to customers has improved a lot (Scott, 2013). By this merger interrelationship between the organizations has became strong which resulted in high quality service. These organizations can work along because their clients are same, management can give services like food facility, hotel facility, transport, etc. This type of services joins the organizations in context of services. Through this interrelationship clients get quality services and demands of the customers are been fulfilled. Sometimes cultural difference delays in providing services because employees are not able to adjust in different working environments. It may also reduce the profit margins of the organizations. In a simple manner we can say that the main aim of the organizations is to provide customer satisfaction and earn profit. The union of the organizations tells that both market share and efficiency of employees has made increase of the profit made by the organization. Quality service is makes the customers to retain in the organization.
Section 1: Positive and negative impact of macro environment on the business operations
Macro environment means the factors that affects from the outside boundaries of the organisation. This environment affects the economy at large scale and also enhances the market share of the organisation. With that the organisation need to undergo the change in the management policies and practices. The organisation would know the competitors move and their strategies to survive in the change environment (Gouldson and Murphy, 2013). Sainsbury would able to find the prices to be fixed for the products and services which they are offering by the analysis of macro factors and competitors prices. The positive impact is that it clearly shows the market factor and how it can help in assisting the internal environment of the organisation by clearly depicting the customer perception towards the products. Management would have the better control over the financial management risk and profits by taking into account the stakeholders requirements. It helps to calculate the overall performance of the Sainsbury by comparing the competitor’s steps in the market.
The negative impact could be that if the organisation doesn’t take into account macro factors in decision making or functioning of the operations it can suffer the loss. And if it is not analysed properly or wrongly analysed the whole organisation would be affected in terms of financial crisis. On the hand, management would not able to identify the competitors move and can financial reputations by decrease in the market share of the Sainsbury (Scott, 2013).
Section 2: Internal and external analysis to identify the strength and weaknesses
Both the analysis helps the Sainsbury in identifying the strengths and weaknesses of the organisation. The internal analysis is usually done on every department of the organisation to identify the weak section and core strength by using suitable techniques. It helps in identifying the internal operations are working effectively and thus they have ability to achieve the desired objectives. Internal analysis is effective tool in solving the problems of the employee through giving personal attention to each employee’s in Sainsbury (Rothaermel, 2015). It would also help to know the low productive sections and what are the reasons for their weaknesses or failure and what can be done to improve the productivity of the sections. This analysis is usually conducted by the top management by delegating to Human Resources head. With all this it also helps in comparing with the competitors.
The external analysis can be best done through PESTLE model by identifying the external weaknesses and strengths. This analysis helps to know the USP of the organisation that differ it from the competitors. By analysing the political, economical, social, technological, legal and environmental factor the organisation would know that where they are lacking behind and they could modify their plans and policies accordingly (Armstrong and Taylor, 2014). For example: Sainsbury has different business strategy as compare to its competitor which provide that competitive advantage to survive as leading retail organisation. By proper analysing of internal and external the organisation can improve their performances and can make the benchmark for the other organisation.
Section 3: Strength and weakness are linked to the external macro factors
The organisation is affected by the external factors and it these factors are normal to organisation to attain the sustainability stage. It depends on the organisation that how it link with the strength and weakness of the organisation. Sainsbury is influenced directly and indirectly by external market which sometimes organisation is not able to identify. Strength and weaknesses are both opposite strengths give competitive advantage whereas weaknesses give other organisation competitive strength. The external factors should be evaluated so that the organisation could work on weaknesses and try to reduce the same. Macro factors affects from the outside boundaries which could have positive and negative impact (Grant, 2016). PESTLE analysis is the best way to link with strength and weaknesses of the Sainsbury. By analysing social environment the organisation would aware about the eco friendly methods to be adopted for the products and services by considering this point Sainsbury would achieve customer satisfaction which can be linked with the strength of providing quality eco friendly services. With advancement of technology the Sainsbury should see that this factor would turn as a weakness or strength for the organisation. Weakness would be that the employees can’t resist the change in technology. With change in legal rules and regulations the business can be greatly affected it could have positive and negative impact too. External factors also include political, economical and environmental factors that are to be considered while determining the strengths and weaknesses of the Sainsbury (David and David, 2016).
Section 4: SWOT and PESTEL analysis in order to develop depth understanding of the impact of macro environment
SWOT analysis is the common technique that helps in knowing the strength, weaknesses, opportunities and threats of the organisation with their impact from macro environment. If the organisation is not able to use this technique of analysing then it will not able to determine the internal hidden factors in the organization. It is the best tool to identify the internal and the external factor and to evaluate them accordingly. By using SWOT the Sainsbury can see the impact of macro environment affecting the business. By seeing the opportunities to enter into the international marketing in developing country like India etc. and threats from the competitors could be analysed in term of prices, taste and preferences and quality of the competitor products and how the threats can be converted into strength (Shabanova et.al. 2015).
PESTLE analysis helps in identifying the political, economical, social, technological, legal and environmental for deep understanding of external environment. These kinds of factors affects in terms of political issues from the political party like heavy donations from organisation during elections time, social issues affects the society where the Sainsbury has to see that they are using re-cycling process in their product marketing. The technological issues in terms of advancement in technology and licensing the costly software and legal issue related to change in policy of government. It is best analysis technique for Sainsbury to identify the competitors in the market and set a trend for the industry to compete in environment (Ho, 2014)
By undertaking the study for analyzing the different organizational types and their objectives of working, I have gain knowledge about the difference between public, private and charity organization. The study has provided the information about Sainsbury and NHS that are operating their business in public and private sector of UK. According to study I have carried out that, organization is meeting the objective of all the stakeholders in the organization by which they feel motivated and retain with the organization for longer tenure. I have observed that organization is meeting the short term and long term objectives both by serving quality services to the clients. For quality services to the present clients, the organization is using the different aspect of marketing and structural process that used for managing the operations. Moreover by conducting the research I have analyzing the specific structure and size of the organization like Sainsbury which is operating its business in retail sector of UK market. For analyzing the effectiveness of organizational approach and activities I have used the tools like PESTLE and SOWTthat has helped me to understand the impact of macro and micro environmental factors. By using SWOT analysis tool I have evaluated the strength, weakness and opportunities for organization in UK market.
Additionally, I have leant how to apply the SOWT analysis for identifying the impact of internal factors on organizational process to develop the plan and strategy to meet the business objectives. For analyzing the impact of internal factors, I have considered the online reports about organization and survey that have been conducted by agencies of UK. By considering the strength and weakness organization will able to plan the activities according to areas of improvement which will help to promote the business. Apart from that, by using the PESTLE analysis tool I have evaluated the factors such as political, economical, social, technological and legal that has significant impact on the business planning of Sainsbury. By applying this tool, I have gained the knowledge about the impact of external factors that influencing the external business environment of Sainsbury. In the current scenario, external factors of market are having direct impact on the business operations of Sainsbury. I have learned that how to maintain the position in the market by analyzing various trends in the market. It is the best way under which management can evaluate the overall performance try to find out the drawbacks of the services thus they try improving the services. Now, I can say that by using both the tools I have analyzed the effectiveness of organization in the highly competitive environment. By using the analysis has helped me to understand the positive outcome of macro environment analysis is that it clearly defines the market position of organization and clearly states the customer perception towards the organization.
Books and journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.
David, F. and David, F.R., 2016. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.
Gouldson, A. and Murphy, J., 2013. Regulatory realities: the implementation and impact of industrial environmental regulation. Routledge.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Ho, J.K.K., 2014. Formulation of a Systemic PEST Analysis for Strategic Analysis. European academic research, 2(5), pp.6478-492.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill.
Scott, W.R., 2013. Institutions and organizations: Ideas, interests, and identities. Sage Publications.
Shabanova, L.B., Ismagilova, G.N., Salimov, L.N. and Akhmadeev, M.G., 2015. PEST-Analysis and SWOT-Analysis as the Most Important Tools to Strengthen the Competitive Advantages of Commercial Enterprises. Mediterranean Journal of Social Sciences, 6(3), p.705.