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A case study on Sainsbury Assignment

   

Added on  2021-02-18

34 Pages9150 Words337 Views
STRATEGY INTO ACTION

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Identification of organisation.................................................................................................1Key strategic and cultural issues at Sainsbury's.....................................................................4Reasons behind initiating change process at Sainsbury's ......................................................5Key stages in change process at Sainsbury's .........................................................................6Challenges threatening change process at Sainsbury's ..........................................................7Application of theoretical and strategic models.....................................................................91. Lewin's Change Management Model...............................................................................101.1 Critical Review...............................................................................................................102.Kotter's 8 Step Change Model...........................................................................................102.2 Critical Review...............................................................................................................113. SWOT Analysis of Sainsbury's .......................................................................................123.2 Critical Review...............................................................................................................12Diagnosis..............................................................................................................................124. McKinsey 7-S Model.......................................................................................................134.1 Critical Review...............................................................................................................13Diagnosis..............................................................................................................................14Proposed Strategic change at Sainsbury's............................................................................14End result of change process at Sainsbury's ........................................................................14CONCLUSION AND RECOMMENDATIONS..........................................................................15EVIDENCE REVIEW ..................................................................................................................165.1 Critical Review...............................................................................................................166. Porter's 5 forces................................................................................................................186.1 Critical Review...............................................................................................................187. Korey's Model..................................................................................................................227.1 Critical Review...............................................................................................................228. The Schendel and Hofer Model........................................................................................228.1 Critical Review...............................................................................................................229.Glueck's Model..................................................................................................................22

9.1 Critical Review...............................................................................................................2210.Balanced scorecard..........................................................................................................2310.1 Critical Review.............................................................................................................2311. Maslow's needs of hierarchy model...............................................................................2411.1 Critical Review.............................................................................................................2412. Hertzberg’s Two-Factor Theory.....................................................................................2512.1 Critical Review.............................................................................................................25REFLECTION...............................................................................................................................25REFERENCES..............................................................................................................................28Index of TablesTable 1: SWOT Analysis...............................................................................................................12Table 2: Porter's 5 Forces...............................................................................................................19Illustration IndexIllustration 1: Financial Performance of Sainsbury's.......................................................................2Illustration 2: Challenges to change in management.......................................................................8Illustration 3: Lewin's Model.........................................................................................................10Illustration 4: Kotter's 8 Step model..............................................................................................11Illustration 5: McKinsey 7-S Model..............................................................................................13Illustration 6: PESTLE Analysis ...................................................................................................17Illustration 7: Porter's 5 Forces......................................................................................................18Illustration 8: Balance Scorecard...................................................................................................22Illustration 9: Maslow's needs of hierarchy model........................................................................23Illustration 10: Herzberg's 2 factor theory.....................................................................................24

INTRODUCTIONManagement is an art in which planning, organising, staffing, directing, coordinating andcontrolling functions are done in a systematic process. This ensures that business activities of anorganisation are done smoothly (Luthans and Doh, 2018). Leadership is a technique ofmanagement in which managers and leaders utilise the strategies created by them and implementit in such a manner, that organisational goals and targets are achieved. Management andleadership are pre requisites for any company, if they wish to succeed in tough and competitiveindustries. Sainsbury's is an organisation that has chains of supermarkets across UK and it is thesecond largest in the respective industry. It has over 180,000 employees. They have generated anet income of £377 million in 2017, but has recently been facing hardships with theirmanagement and leadership departments. There has been severe crisis in Sainsbury's overall business performance and they are onthe verge of losing sustenance. This assignment will assess Sainsbury's current management andleadership scenario and highlight key issues with regard to their strategies. Reasons behindcauses for changes in organisation will be identified and key stages in this process will beoutlined. It will also analyse challenges that endanger the changing process andtheoretical/strategic models will be applied so that positive changes can be brought intoSainsbury's. TASK 1Identification of organisationThere are hundreds of organisations that are currently operating their business activitiesin various industries within UK. Among them is a famous company, Sainsbury's, a groceryretailer that has been running operations since 1922. It is currently the largest retail organisationin this country. It was founded by John James Sainsbury in 1869, t which was started with thepurpose of providing fresh food and groceries to different localities across the city. They aimedat offering products of high standardised quality at low costs (Galliers and Leidner, 2014). Theyhad a slow start towards growth as company did not merge with other organisations. Sainsbury'swent public in 1973 and gained huge investments through London Stock Exchange. They have1

been growing ever since and as of 2017, their revenue goes up to £26.2 billion. It has over 1,400shops across UK. Sainsbury's sell products that include stationery, toiletries, clothing and accessories, foodproducts, drinks, organic eatables, home and kitchen ware. Their management uses variousmarketing and branding techniques so that they are able to attract customers. They havecelebrities and famous personalities as their brand ambassadors and stay true to their slogan of“Live Well for Less”. Their staffing procedures involve regular changes in different departmentsof their organisation (Fullan, 2014). They try to appoint efficient individuals that can help ingrowing their company. There are mainly 3 divisions of organisation, which include Sainsbury'sSupermarket Ltd, Sainsbury's Bank and Sainsbury's Argos. Their largest shareholder is QatarInvestment Authority and they have 21.9% shares in this company. Dilemmas and issues that Sainsbury's management and leadership is experiencing:There has been 1400 job cuts in the past year and 4000 jobs at the organisation werereorganised.2Illustration 1: Financial Performance of Sainsbury's(Source: Sainsbury's outperforms Tesco among consumers, 2018)

Their profits have reduced by £94 million in the past year, because of the price cuts thatwere implemented.They are currently facing tough situations with trade and their shareholders are notgetting enough dividends lately (Ackers and Black, 2018).The Sainsbury's Bank is unable to cope up with new innovations, which has created manyissues for their customers.Leaders are unable to guide subordinates, as they themselves are uncertain of how andwhat strategies to be implemented because of lack of resources (Sainsbury's is in dangerof spreading itself too thin, 2017).The news of high cuts of over 2,000 jobs in the company has created a bad reputation inindustry.There has been a fall in their market share as well. Due to their price cuts, they are facing issues with chain supply and operationsmanagement.As of 2018, Sainsbury's has faced severe issues regarding their management. This had ahuge impact on employees that were on commercial positions. They had to cut costs ofoperations in the company. Management of Sainsbury's has seen increasing in losses and fallingof their sales. This is because of the high competition in the industry. The glitches in theirupdated technology is an evidence of how their management has wrongly implemented it. Thishas led to a huge loss for customers, which is the main reason of their withdrawal from the bank.They had issues with telephone systems as well. The continuous changes in job positions andrestructuring has created ambiguity among employees at Sainsbury's. This has led to anunhealthy and unethical environment in organisation. Their brand image has been gainingnegative reviews over the past year. Sainsbury's has created new proposals for their employees,on which they have signed petitions against it as they will be suffering losses of pay that is worth£3,000 each year (Trouble in store as Sainsbury's sales plunge for second year, 2016). Thisshows that there are no proper strategies planned and implemented by this company.Key strategic and cultural issues at Sainsbury'sThere are numerous issues that Sainsbury's is facing with regard to management andleadership. These include various strategies issues in the organisation. They are unable to dealwith the stiff competitive market and are in grave danger. 3

Some of the key issues of organisation include: Online StrategiesOver the past few years, online services have paved its way into the market. This hasgiven Sainsbury's an opportunity to sell their products over the internet. But management has notbeen successful in creating strategies for online sales. They do not have the right design,structure, content and strategic marketing techniques for the purpose of generating sales (Brattonand Gold, 2017). Their online banking website and applications have severe glitches in them asthey are not able to implement innovative technology properly. This is one the reasons why theirprofits have declined in the past year. Profit growth/Market share strategiesSainsbury's management and leadership have been creating improper strategies regardingtheir profit growth and market share. Both of them have seen a decrease and continue to do so.They work under pressure due to cut throat competition; which is why, managers areexperiencing difficulties in creating strategic plans which leaders too, are unable to implementeffectively (Luthans and Doh, 2018). They are not optimally utilising their available resourcesand instead putting them in unnecessary areas.Staffing strategiesThe recent restructuring of Sainsbury's human resource management, has caused issues instaffing strategies and managers are unable to appoint right people for different jobs in eachdepartment. This is the main reason as to why production and sales have seen in decline.Operations and business functions are done in an unsystematic, inefficient and ineffectivemanner in the past few months. Corporate StrategiesThe corporate strategies of Sainsbury's is considered to be the main root cause of declinein their profits. There are employees that lack proper communication skills as most of them arefrom different parts of the world. They are unable to work with uniformity and generally facediscrimination with regard to race and gender. Due to this, employees are able to perform in anoptimal manner, which directly leads to low productivity and insufficient generation of sales andprofits. Sainsbury's worth is no longer as important as it was in the past years and these issueshave yet to be addressed (Ackers and Black, 2018). The culture of organisation is interrelated tomanagement and leadership, hence, the reason why proper strategies have not been created and4

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