Pest Analysis of Sainsburys in a 3rd World Country

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Introduction of the Company :
Sainsburys is the third largest chain of super markets in the United Kingdom. It was founded in 1869 and has been growing all over the United Kingdom ever since, and today operates over 1000 super markets and convenience stores and employees over 150,000 employees and captures more than 16% of the market share. It is also listed on the London Stock Exchange and is the constituent of the FTSE 100 index. Sainsburys not only provides products to its customers but also services to some extent. The products and services offered by Sainsburys have a wide range from food and drinks to energy providing, clothing to insurance, appliances to banking facilities. Sainsburys has been a growing entity at a growing rate. Though TESCO has overtaken Sainsburys to become the market leader and has expanded not only in United Kingdom but also outside the United Kingdom such as Europe, Asia and North America. Since TESCO has always been a strong competitor of Sainsburys so Sainsburys also has this intention to expand outside United Kingdom, too. It is necessary for a firm or company to carry out a PEST analysis either as a new entrant or to exist and survive in the market to keep it’s self updated with the influence of the macro environmental factors. Introduction of PEST Analysis :

PEST analysis stands for “political, economic, social and technological analysis”. PEST Analysis focuses on analysing the macro-environment in which a business or a firm operates. Each of these factors play a vital role in the overall business environment and one should consider these factors and have vital knowledge of them as they can either make you a success story or may end up shutting down the business. Political factors refer to the economic policy given by the government and the government intervention the economy.This includes areas such as tax policy, labour, law, tarrif and trade restrictions. Political stability is also quite important for the economic growth. While, governments have great influence on health, education and infrastructure of the nation. Interest rate, economic growth, monetary and fiscal policy, inflation and the exchange rates are the important economic factors. These factors play a vital role in a firm’s business strategy and decision making. Every country has it’s own culture and the nation has a strong impact on their living. The social and cultural influences on business vary from country to country. Social factors include the cultural aspects and include health consciousness, language, population growth rate, age distribution, career attitudes. Trends in social factors affect the demand for a company's products and how that company operates. For example, the roles of men and women in the society. Furthermore, companies may change various management strategies to adapt to these social trends Technological factors have vital place in PEST analysis. Some markets are labour intensive and some are capital intensive. Technological factors determine barriers to entry, minimum efficient production level and influence outsourcing decisions. It is one of the major drivers of globalization and is the base for competitive advantage. Innovation is offered to the customers or consumers through technology for example internet banking, smart phones etc. It also enables the firm to produce a product cheaply and to a better quality in standard.

Pakistan is the sixth most populated country in the world with over 180 million people. It is estimated that the 25% of the population belongs to the middle income class. It is also estimated that 55% of the Pakistani population is in the 10-40 years age bracket. The upper middle-income class is estimated at 17 million with relatively high per capita income which favours more consumer spending. The average Pakistani consumer spends 42% of his income on food related products. The upcoming changes in demographic will create opportunities and challenges for businesses in...
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