Applied Corporate Strategy

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Applied
Corporate Strategy
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INTRODUCTION...........................................................................................................................4
External and Industrial analysis to identify Opportunities and Threats......................................4
Analysis of Resources and key competences..............................................................................9
SAFe criteria applied to a strategy implemented by organisation.............................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Corporate strategy is defined as a strategic course of action that is being duly undertaken by
an organisation with an aim to fulfil its objectives and goals. The strategy is unique to every
business depend upon their industrial sector along with the situation as well as requirements that
operates with and its marketplace (Aluko and Knight, 2017). By adopting corporate strategy
entity can ensure maximum competitive advantages along with high profitability. By
implementing best effective corporate strategy within business Organisation Company can
successful lay down foundation to their enterprise that will reach their company towards new
heights. Present report has been conducted on Sainsbury, is perform their operations in retailing
sector. In these report formative discussions has been conducted on micro and macro analysis
with the help of pestle evolution. This report covers VRIO and Porter 5 forces, lastly SAFe
criteria is also undertaken in this report.
External and Industrial analysis to identify Opportunities and Threats
Sainsbury operate their functions as a leading Supermarket store in the provinces on UK.
Company provide different type of product as well as services to large base of consumers.
Sainsbury is having 16.9% share holding in supermarket industry. In addition to this company is
having integration of three different divisions that are super market, bank and Argos.
Figure 1: Retail Market of United Kingdom
(Source: Retail Market of United Kingdom, 2019)
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Entity is having second position in retail industrial sector, while at this time Asda is having third
position in retail sector. Main motive of the merger is to pool large base of resources and
facilitate business functions in order to generate large consumer base and grab more market share
comparatively to Tesco in order to become leader in retail industrial segment. Apart from that
merger was supposed to take place earlier but the Competition and Markets Authority (CMA)
block the merger by giving the statement that, this can further lead towards increase in product
prices in the retail marketing segment and can dampen existing competition level. This period of
time both the companies are waiting for the decision of the proposal where ASDA and
Sainsbury’s intend to merge their operations for mutual benefit decision. By evaluating the
situation organisation management effectively undertaken external evaluation in order to gain
formative insight about the threads as well as opportunity that are prevailing in macro
environment
In order to undertake micro environment evolution Sainsbury manager is undertaken use
so pestle analysis
PESTLE Analysis
Political:
This factor is mainly linked with different type of governmental policies like tax policies,
entry regulation, employment law, political stability etc. All these elements affect business
functioning of an entity (Goffee and Scase, 2015). It has been evaluated that UK offers stable
political system through which they can take number of advantages. As by abiding all the
political aspects Sainsbury can ensure effective support from government and can ensure
maximum profitable advantages. However entity may face threat related to the overall
profitability organisation due to International wars and terrorist attacks between countries. In this
Sainsbury is required to take use of strategies and tactics in order to reduce negative impact of all
these factors while maintaining adequate stock of raw materials in order to fulfil consumer
demand in hard times.
Economic:
Economic factor is mainly related with the elements like economic stability and in
stability, credit acceptability, borrowing rate, growth rate, inflation and interest rate and more. In
relation to this United Kingdom provides strong economic system with excellent form of
infrastructure as well as manpower facilities. With the help of this Sainsbury can increase their
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profitability and productivity in best effective manner. Apart from that due to the situation that
has been created because of brexit Sainsbury can face number of difficulties related to the man
power and increase in tax rates. In this company is required to develop strategies through which
they can satisfy their customers with low price products.
Social:
This factor involves elements like demand and living style of individuals, beliefs, values
and perception of individuals living in any community in a country. In relation to this, Sainsbury
is required to effectively conduct market analysis as to evaluate expectations and demand of
consumers and make ensure that the business activities does not harm their perceptions (Setting
sustainable sourcing standards. 2019). As by evaluating this company can effectively able to
positively influence buying behaviour of consumers. Apart from that company may face threats
due to dynamic changes of consumers and low cost products offered by rival firm. In this entity
is required to take use of strategies and tactics s in order to serve customers more effectively than
competitors.
Technological:
Technology is changing on a constant and dynamic way that makes corporate entities to
update their technological system on regular basis in order to ensure high competitive
advantages. As Sainsbury is having second position in retail industrial segment of UK. Thus, it
has been evaluated that technological process of entity effectively adopts every change in
technology consequently in order to serve their customers with the best. However company is
facing threat of the same advancement that can be brought by competitors that Tesco, Aldi,
Marks and Spencer. In this situation Sainsbury is required to undertake strategy through which
they can adopt Hi-Tech technological advancement in the workplace structure in low cost as to
ensure both profitability and productivity.
Legal:
It includes relevant legal laws as well as regulations like patent violation, health and
safety, export and import regulation and more. In this Sainsbury is required to implement all the
legal laws that are necessary for retail organisation. In this entity is also required to ensure that
there is strict enforcement of all laws in their organisational structure and does not tolerate any
kind of breach of law as this can negatively affect goodwill of company in marketplace. It has
been evaluated in the year 2010 entity was faced legal obligation because of over packaging
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(Sainsbury's taken to court over excess packaging, 2019). This makes entity to face heavy
penalty that are being imposed by government of United Kingdom. It largely affect Goodwill of
company does in order to overcome in this is required to ensure that no such cases can take place
in entity as this can affect profitability along with loyalty of customers towards organisation.
Environmental:
It has been evaluated that nowadays both customers and government having positive
attitude towards environment. It has been identify the government imposed different type of
environmental law such as waste disposal, energy consumption that are essential for entities to
abide in order to conduct their functioning in well define manner. In this Sainsbury is required to
ensure that their business does not affect environment in anyway. It has been identified that
company is taking use of renewable resources and launch a 20 by 20 sustainable plan through
which they can conserve environment in a well define way (Sainsbury's launches 20 by 20
sustainability plan, 2019).
By taking advantage of the above evaluation management of company can effectively
evaluate external environmental factors and can overcome threat in order to ensure maximum
potential advantages.
Along with this company management is looking forward to take use Porter Five Force
analysis for evaluation as to have proper insight about respective sector within which they
conduct their operations.
PORTER FIVE FORCES
Porter’s five forces is an effective analytical tool with the help of which organisation can
effectively able to identify competitive forces that are prevailing in respective industrial sector.
With the help of this Sainsbury can able to evaluate all the threats and can overcome them with
the use of strategies and effective measures. With the help of this analysis company can improve
their understanding related to retail industry. Mentioned below Porter’s five forces analysis in
context with Sainsbury is being define:
Threat of new entrants:
Threat of new entrants is relatively low in retail organisation as in this there are already
established business organisations who offer high quality product and services to customers. This
makes new entrants to invest large amounts in order to establish themselves. In relation with
Sainsbury it has been evaluated that company is having second position in retail marketing
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segment. This makes entity to not require worrying about new entrance. Instead of this
management of company is required to effectively focus on reducing their services and product
prices in order to ensure their leading positioning in respective segment, with the help of this
company can ensure long-term sustainability.
Threat of substitutes:
It has been analysed that threat of substitute is high in retail sector as there are number of
entities like, Tesco who offer same product and services with competitive price to customers and
gain their attention with different facilities (Gnan, Montemerlo and Huse, 2015). In relation with
Sainsbury this is important for entity to take use of effective marketing research in order to
evaluate need and demand of customers. With the help of this entity can fulfil actual desires of
customers. With the help of this company can ensure maximum loyalty and can introduce the
product that are actually required by individuals.
Bargaining power of customers:
This has been identified that there is large number of retailing organisation that offer
same products and services, this makes bargaining power of customers is relatively high. In this
industry different type of organisation who offer same product and services to customers. In
these consumers can make their focus towards the ones who offer qualitative product with low
price. In this it is essential for Sainsbury to undertake strategies through which they can satisfy
their customers with low pricing in order to ensure the long-term loyalty towards entity.
Bargaining power of suppliers:
Bargaining power of supplier is low in retail industrial segment. Company is having
second positioning in respective industry thus large number of suppliers is attracted towards
company in order to gain use profitable advantages. This makes entity to influencing suppliers
and negotiates the price of raw materials; as if suppliers engage in the process of intense
bargaining then they may face threat of losing contract with Sainsbury. With the help of this
respective organisation can ensure maximum satisfaction from customers by offering them high
quality products with competitive price range.
Competitive rivalry:
With the large presence of different type of key players retail Industry is having high
competitive rivalry. It has been stated that leading organisation undertake strategies through
which they can offer different type of product and services with low price. This increases
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competition and can directly affect profitable entries. In order to overcome this situation
Sainsbury is required to make collaboration with competitors in order to ensure maximum
advantages through company can ensure maximum market share holding in marketplace with
high base of consumers.
Figure 2: Porter Five Force Analysis Model
Analysis of Resources and key competences
It is important for an entity to effectively identify all the factors that are prevailing
respective industrial segment as to invest their resources effectively and ensure maximum
possible advantages. In relation to this, Sainsbury’s management undertake use of VRIO and
SWOT analysis to ensure maximum advantages.
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SWOT ANALYSIS
STRENGTHS WEAKNESSES
 Sainsbury operates their function as
largest Supermarket chain in retailing
sector with having more than 1, 50,000
employees who serve customers
worldwide (Goffee and Scase, 2015).
 Entity is having strong branding entity
take use of attractive advertising such
as online campaign, ads, social media
through which attract attention of
customers from all around the world.
 Sainsbury is having 600 and more than
supermarkets along with 800
convenience stores in the provinces of
United Kingdom.
 With the help hi tech technology and
innovation Sainsbury conducted
operations through which they offer
high quality product and services to
customer at relatively low price.
 Sainsbury is facing weakness due to
high competition that prevails in retail
industrial segment. In this it has been
evaluated that entity is having already
existing organisation offer low price
product in order to encourage
customers towards their entry.
 Major weakness that affects Sainsbury
business operation is frequent switch
off customers to other brand. As
leading entities take use of online
platforms to influence behaviour of
consumers and offer them high
discount. This makes Sainsbury hard to
lower down their prices as they offer
best effective and high products to
customers.
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TOWS ANALYSIS
SAINSBURY'S
STRENGTHS (S) WEAKNESSES (W)
 Large and competent
Workforce
 Large Chain of Stores
 Strong Brand Image
 Strong Advertising
 Low cost products of
rivals
 Brand Switching
OPPORTUNITIES (O)
 Stable Political State
 Effective economic
conditions
 Technological
Advancements
 Rising awareness
among consumers
THREATS (T)  Introduction of low
cost goods by rivals
 Changing Legal
regulations
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VALUE CHAIN
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VRIO ANALYSIS
VRIO is defined as analytical tools with the help of which organisation can effectively
able to evaluate resources with the help of which entity can gain more competitive advancements
in marketplace.
Valuable
Valuable are defined as those aspects that have value for company and further provide
benefit to entity in order to accomplish objectives in time effective manner. Sainsbury valuable
elements are:
Strong brand image: Entity is having strong market presence as they offer high quality
product and services to customers that create value for entity and further provide maximum
satisfaction to consumers.
Offerings: Product and services that are being offered by companies of high quality and
according to the demands and needs of consumers. This help company to create large base of
loyal consumer base who does not shift tends towards other alternatives.
System software: Respective organisation is undertaking use of Retalix system, it is
specially design for company in order to execute task in proper time frame.
Personnel: Sainsbury is having highly skilled and competent workforce those who
effectively conduct their functions for betterment of company (Elfarmawi, 2019).
Rarity
It includes factors that are extraordinary as well as unusual. These factors aid company to
ensure their unique positioning in marketplace. Mentioned below components of Sainsbury are:
Offerings: Product and services that are being provided by Sainsbury in Marketplace are
of high quality as company use of high technologies and innovations that is hard for other
entities to copy.
System software: Entity is taking advantage of Retalix system this is formed according to
the unique need and requirement of company and involve specific features through which
company conduct their operations.
Personnel: This has been identified that Sainsbury workforce has all the essential
competency skills and knowledge that are required by entity to perform their operations.
Inimitable
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It includes those resources that are not imitated by competitors, mentioned below
imitated resources of entity are:
System software: System software implemented with entity workplace can be only used
within entity. This system software is hard to be imitated by any other organisation.
Personnel: Employees and staff within company are provided with continuous
development and training measures in order effectively overcome with complex situation in a
well define manner and gain significant advantages from them. This makes Sainsbury workforce
one of the most imitable resources.
Organized
It involves all resources that are properly organised in order to fulfil in order to fill
organisational goals
Personnel:
Individual in workplace structure of Sainsbury organised in other effective manner so they
can deal with complex situation and can undertaker effective decisions even in intense situation
for organisation betterment.
SAFe criteria applied to a strategy implemented by organisation
Sainsbury is one of the leading organisations in retail industry sector and offer high quality
product and services to customers. Company is having effective form of potential to launch new
product according to the need and requirement of consumers in order to provide the maximum
satisfaction. It has been identified that company is looking towards a merger with ASDA. Main
motive of this is to ensure in marketplace and emerge out to be a company is looking towards a
merger with ASDA. Main motive of this is to ensure high shareholding in marketplace and
emerge out to be a leader. In relation with this, safe analysis is being undertaken by management
of company:
Suitability:
It has been identified that retail marketing segment is highly competitive and involve
different type of threats that can affect positioning of Sainsbury. In relation with this strategy, it
has been identified that entity undertaken by Sainsbury can prove to be suitable as they provide
entity to use resources at a large extent and can serve large base of customers. It will help them
to ensure high stake holding in marketplace and ensure timely accomplishment organisational
goals.
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Acceptability:
In order to initiate merger process Sainsbury is required to gain acceptance from
individual within organisation relation to offering lower prices of their offerings. As this is the
only way through which company can ensure maximum loyalty from consumers (Bansal and
Song, 2017). In this Sainsbury and Asda is required to undertake strategy related to offer high
quality product at low price in order to compete with the organisation like Tesco.
Feasibility:
It has been identified that Sainsbury and ASDA merger turn out to be feasible at it lead
entity to integrate different set resources and capital it also allow both the entities and offer
commodities at low price. Along with this with taking use of high technology and innovation
Sainsbury can surely satisfy dynamic need of consumers and contract their attention towards
company offering this will lead them to become global leader in retail industrial segment.
CONCLUSION
As per according to the evaluation it has been concluded that corporate strategy act as a key
success for an organisation as it allow entity to take conduct operations in best effective manner.
In this by taking use of pestle analysis company can evaluate factors that prevailing in external
environment and can overcome threats by taking advantage from opportunities. Along with this
by taking use of Porter’s five force analysis companies can identify threats that are prevailing in
retail sector and can develop strategies against them along. With the help of SAFe analysis and
sure maximum satisfaction from customers by offering them quality products at low price.
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REFERENCES
Books and Journals
Aluko, O. and Knight, H., 2017. From corner store to superstore: a historical analysis of
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ANTREAS, D., 2017. Ratio and Frontier Analysis for Assessing Corporate Performance:
Evidence from the Grocery Industry in the UK. Decision Science, 44, p.177.
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sustainability from corporate responsibility. Academy of Management Annals, 11(1),
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Chang, J. F., 2016. Business process management systems: strategy and implementation.
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Charter, M. and Polonsky, M.J., 2017. Reviewing Corporate Environmental Strategy: Patterns,
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Davies, A., 2016. Best practice in corporate governance: Building reputation and sustainable
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Elfarmawi, W., 2019. Correlation Between Customer Relationship Management System Usage,
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Gnan, L., Montemerlo, D. and Huse, M., 2015. Governance systems in family SMEs: The
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Goffee, R. and Scase, R., 2015. The Real World of the Small Business Owner (Routledge
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London.
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Herrmann, D. and Felfe, J., 2014. Effects of leadership style, creativity technique and personal
initiative on employee creativity. British Journal of Management. 25(2). pp.209-227.
Jeston, J., 2014. Business process management. Routledge.
Jocovic, M. and et. al., 2014. Modern business strategy Customer Relationship Management in
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Jones, P. and Comfort, D., 2018. Storytelling and corporate social responsibility reporting: A
case study commentary on UK. food retailers. Journal of Public Affairs, p.e1834.
Kaul, D., 2017. Customer Relationship Management (CRM), Customer Satisfaction and
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Online
Sainsbury's launches 20 by 20 sustainability plan. 2019. [Online]. Available
Through:<https://www.fcrn.org.uk/research-library/sainsburys-launches-20-20-
sustainability-plan>.
Setting sustainable sourcing standards. 2019. [Online]. Available Through:
<https://www.about.sainsburys.co.uk/making-a-difference/our-values/our-stories/2017/
setting-sustainable-sourcing-standards>.
Sainsbury's taken to court over excess packaging. 2019. [Online]. Available Through:
<https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8006654/
Sainsburys-taken-to-court-over-excess-packaging.html>.
Sainsbury's and Asda may have to offload 460 stores to seal merger. 2019. [Online]. Available
Through:<https://www.theguardian.com/business/2018/sep/27/sainsburys-and-asda-
could-close-400-stores-to-complete-merger>.
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