Applied Corporate Strategy

Applied Corporate
Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
Question 1 : External Analysis .......................................................................................................3
Question 2 : Internal Analysis..........................................................................................................7
Question 3 : Strategy Evaluation...................................................................................................12
REFERENCES .............................................................................................................................15
Appendix........................................................................................................................................18
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INTRODUCTION
Corporate Strategy can be defined as a set of corporate actions with the primary aim of
achieving goals and objectives of an organisation (Bereskin and Hsu, 2016). Organisations that
are successful in the market keep revising their corporate strategies from time to time in order to
identify and address areas that are that need improvement. Having a corporate strategy is
important fr an organisation as it determines the way in which the various business processes of
a company support its goals and objectives. The company chosen for this report is Sainsbury
which is the second largest supermarket chain in the United Kingdom. The company is
headquartered in London and was founded in the year 1869. The report comprises of an industry
as well as industry analysis in order to identify opportunities and threats. An analysis of the
resources as well as key competencies is also carried out for which VRIO analysis has been used.
Question 1 : External Analysis
PESTEL Analysis
Business Environment can be defined as a collection of both internal as well as external
factors like supply, demand, market trends etc. A PESTLE analysis is a framework that helps
organisations in analysing various external factors that can influence its performance in the
market. The PESTLE analysis for Sainsbury is explained below -
 Political Factors – When the United Kingdom put forward its decision to leave the
European Union, the decision seriously impacted the overall business operations of
Sainsbury. The company faced difficulty in importing products from other countries of
the world (Mihova, Nikolova-Alexieva and Angelova, 2018). Due to this, Sainsbury will
have to increase the overall price of its products which can lead to customers spending
less on buying its products and services. Therefore, this factor can pose a threat to the
respective company from carrying out its operations effectively (Anyango and et.al.,
2013).
 Economic Factors – Economic Factors play an essential role for all organisations across
different industries (Pestel analysis of sainsbury, 2020). These factors comprise of
demand, supply profitability etc. of which inflation as well as unemployment in the
United Kingdom are two elements that will affect Sainsbury (Dierkes and Schäfer, 2017).
This factor can act as a threat as due to increase in the number of people being
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unemployed and high prices of food products will lead to a decline in the demand of
company's products. Therefore, the company should consider expanding itself in new
markets which will enable it to manage such threats and risks that are associated with the
various economic factors. Sainsbury has been incurring benefit from the rising prices of
products and it has also been able to increase its profit margin by passing on the prices to
customers.
 Social Factors – In today's world customers do not prefer shopping from multiple stores
at a time which means that they like shopping at places where all products are available
under a single roof (Eccles and Youmans, 2016). This is an opportunity for Sainsbury as
it can introduce non-food products. Also, factors like increase in the population and
females working for different organisations etc. have led to a decrease in the process of
making food in households which is an opportunity for the company as demand for
certain types of products has gone up (Tsui and Ngo, 2016). Also, after acquiring Argos,
the company has constantly been adapting its stores according to the needs and
requirements of customers. The shoppers are more likely to demand flexibility in the way
they shop as well as the speed in which retailers like Sainsbury complete their orders
(Sainsbury's sets out how Argos acquisition will accelerate strategy of making customers'
lives easier, 2020).
 Technological Factors – Technological advancements have had a positive impact on the
company's operations as web and online-based operations has increased (Sila, 2013). This
is a great opportunity for Sainsbury to expand its food delivery business overseas in
various emerging markets. Constant innovation and improvement of this will lead to an
increase in the overall sales of the company as majority of people today have access to
smartphones and a high speed internet (Engert and Baumgartner, 2016). Sainsbury's
knows that the expectations of its customers will continue to rise and technology is
among one of these factors. Therefore, if used effectively, technology can act as a
strength and enable the company to satisfy the needs of customers effectively.
 Environmental Factors – Increasing awareness about the environment among people
has led to creating a great pressure on different organisations including Sainsbury to act
responsibly in order to keep the environment safe (Mokana, 2016). Sainsbury should
consider this as an opportunity and carry out various campaigns to promote the idea of
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