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Sainsbury's is a well-established retail company that has been operating in the UK for over 140
years. The company's success is influenced by a combination of internal and external factors that
can have a significant impact on its performance. This presentation will take a closer look at the
various internal and external factors that can impact Sainsbury's, including how they can affect
the company's bottom line (Duan et al., 2020). We will explore topics such as company culture,
management structure, operational efficiency, competition, consumer behavior, government
regulations, global events, demographics, social media, weather, technological advancements,
supply chain, and geopolitical events.
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Internal factors are elements within a company that can affect its performance and operations.
These factors are under the control of the company and can be changed or managed by the
company. They include but are not limited to: the company's culture, management structure,
operational efficiency, human resources, innovation, IT and technology, financial resources, and
overall strategy (Distanont And khongmalai, 2020). These internal factors can have a direct
impact on the company's ability to achieve its goals, grow, and stay competitive in the market.
They are also known as micro-environmental factors, as they are specific to the company and can
be controlled by the company.
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External factors are elements outside of a company that can affect its performance and
operations. These factors are beyond the control of the company and can include: the economy,
competition, consumer behavior, government regulations, global events, demographics, social
media, weather, technological advancements, supply chain, and geopolitical events (Feng et al.,
2019). These external factors can have a direct impact on the company's ability to achieve its
goals and stay competitive in the market. They are also known as macro-environmental factors,
as they are external to the company and cannot be controlled by the company. These factors can
change rapidly, and companies must be able to adapt and respond to them in order to remain
successful.
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Internal factors can have a significant impact on a business like Sainsbury's. Here are a few
examples of how internal factors can affect the company:
• Company culture: A positive company culture can lead to increased employee
engagement and motivation, which can result in improved performance and productivity. On the
other hand, a negative company culture can lead to low morale and high turnover rates, which
can negatively impact the business (Coreynen et al., 2020).
• Management structure: A clear and effective management structure can lead to better
decision-making and a more efficient use of resources. Conversely, a poorly structured
management team can lead to confusion and inefficiency, which can negatively affect the
business.
• Operational efficiency: Sainsbury's relies on efficient and effective operational processes
in order to meet the needs of its customers and stay competitive (Hameed et al., 2021). If
operational processes are not running smoothly, it can lead to delays and increased costs, which
can affect the company's bottom line.
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• Innovation: Sainsbury's could stay ahead in the market by bringing new products,
services, or technologies to the market. If the company is not able to innovate and adapt to
changing market conditions, it can fall behind its competitors.
• Human Resources: Sainsbury's needs a skilled and motivated workforce in order to
deliver excellent customer service and meet the needs of its customers. If the company is not
able to attract and retain top talent, it can negatively impact the business (Hutahayan, 2019).
• IT and Technology: Sainsbury's needs to keep up with the latest technology in order to
stay competitive and to improve its operations. If the company is not investing in technology, it
can fall behind its competitors and have difficulty meeting the needs of its customers.
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External factors can also have a significant impact on a business like Sainsbury's. Here are a few
examples of how external factors can affect the company:
• The economy: The overall health of the economy can have a big impact on Sainsbury's.
In times of economic growth, consumers may have more disposable income to spend on non-
essential items, while in times of economic recession, they may cut back on spending.
• Competition: Sainsbury's operates in a highly competitive retail market and must
constantly strive to stay ahead of its competitors (Karabag, 2019). This includes keeping prices
competitive, offering a wide range of products, and providing excellent customer service.
• Changes in consumer behavior: Consumer behavior is constantly evolving, and
Sainsbury's must be aware of changes in order to stay relevant. For example, the rise of e-
commerce has led to a shift in the way people shop, and Sainsbury's must adapt to this change in
order to remain competitive.
• Government regulations: Government regulations and policies can also have an impact
on Sainsbury's. For example, changes in tax laws or environmental regulations can affect the
company's bottom line (Rana et al., 2019).
• Global events: Sainsbury's, as a major retail player, is affected by global events such as
war, pandemics, or natural disasters. These events can cause disruptions in the supply chain,
change consumer behavior, and affect the overall economy.
• Demographics: Sainsbury's need to be aware of demographic changes in the population
and adapt their products and services accordingly. For example, the ageing population would
require more health and wellness products, and the younger population would require more
technology and digital services.
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• Social Media: Sainsbury's reputation can be affected by social media, as customers can
easily share their experiences, good or bad. Sainsbury's need to be aware of their online
reputation and respond accordingly.
• Weather: Sainsbury's is affected by weather conditions, as extreme weather events can
disrupt transportation and logistics, causing delays and increasing costs. Additionally, bad
weather can also discourage customers from visiting the store, leading to lower sales.
• Technological advancements: Sainsbury's need to keep up with the latest technological
advancements in order to remain competitive and improve their operations (Huy et al., 2021).
They also need to be aware of emerging technologies that could disrupt their industry, such as
automation and artificial intelligence.
• Supply Chain: Sainsbury's relies on a global supply chain to source products, so
disruptions in the supply chain caused by political instability, natural disasters, or other events
can lead to increased costs and delays.
• Geopolitical: Sainsbury's is affected by geopolitical events such as trade agreements,
tariffs, and sanctions, which can affect the cost and availability of products.
• Environmental factors: Sainsbury's is affected by environmental factors such as climate
change, which can lead to disruptions in the supply chain, increase costs, and affect consumer
behavior (Ciampi et al., 2021).
In conclusion, Sainsbury's, like any other business, is affected by a wide range of internal and
external factors. By understanding these factors and how they can impact the business,
Sainsbury's can make better decisions and take steps to mitigate the negative effects of these
factors.
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In conclusion, Sainsbury's must be aware of the various internal and external factors that can
impact its business. Internal factors such as company culture, management structure, operational
efficiency and innovation are crucial for the company's success. External factors such as the
economy, competition, consumer behavior, government regulations, global events,
demographics, social media, weather, technological advancements, supply chain, and
geopolitical events can also greatly affect the company (Duan et al., 2020). By understanding
and adapting to these factors, Sainsbury's can make better decisions and take steps to mitigate the
negative effects of these factors. It's important for the company to be prepared for unexpected
events and to keep an eye on the environment, in order to remain competitive in the market.
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