Applied Corporate Strategy: Sainsbury and Asda Merger Case Study

Applied corporate
strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1. External analysis to identify opportunity and threats and assess industry attractiveness.......1
2. Resources and key competences of organisation and identify core competences..................3
3. Strategy Evaluation.................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Corporate strategy encompasses corporate action of firm with aim to accomplish
objectives of company with aim of achieving competitive advantages. Moreover,
corporate strategy estate a clear define long term vision which an organisation set, seek
for creating corporate values as well as for motivating staff to apply appropriate action
for gaining satisfaction of customers (Foucault and Frésard, 2019). In simple terms,
corporate strategy is continuous procedure which need constant efforts for engaging
investors in trusting business firm with their money because they help in increasing
equity of business.
This report is based on case study of Sainsbury and Asda merger. Sainsbury's
which is part of retail industry founded in 1869 and its founder was John James
Sainsbury. Its headquarter is located at London, United Kingdom and also serving in
UK. Assessment will going to conduct external analysis for identifying opportunities and
threats available for them in business environment. Along with this, industry analysis will
also conduct by using porter's five force model. In addition to this, internal analysis of
Sainsbury and Asda merger will conduct for identifying strength and weakness of
company. Unique capabilities of company will demonstrate by linking it to competitive
advantages using VRIO model. Furthermore strategic evaluation will also going to
conduct.
MAIN BODY
1. External analysis to identify opportunity and threats and assess industry
attractiveness
External analysis means examination of industry environment of an business
firm. This involve factors like competitive position, competitive structure, dynamic,
history and many more (Köhler and Zerfass, 2019). Primary purpose of conducting
external analysis is to determine opportunity as well as threats within industry and also
any segment which result in growth, profitability and volatility for organisation. For
external analysis PESTEL will going to conduct by company which is based on merger
of Sainsbury’s and Asda :-
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 Political – It have wide impact on working of an organisation because at the time
of merger there are several rules as well as regulation which Sainsbury’s and
Asda have to follow. Thus, changes in these law result in reduction of usage of
raw materials that effects the selling of various products. Sainsbury and Asda
merger is going to be affected because of this as availability of certain product
may fall in shortage which results in loss in selling of these products. Along with
this, low minimum wages result is higher profit for company and result in higher
chances of merger survival.
 Economical – This factor include inflation rate, foreign exchange rate, interest
rate, gross domestic product and many more. Emerging market work as
opportunity for merger of Sainsbury's and Asda because emerging market have
potential customers who has rising disposable income which will boost their
affordability. Thus, establishing stores in emerging market result in increasing
demand of such products within population and result in adding profitability of
business.
 Social – The social factors that impact Mergers and Acquisitions are a direct
reflection of the society that Mergers and Acquisitions operates in, and
encompasses culture, belief, attitudes and values that the majority of the
population may hold as a community. The class distribution among the
population is of paramount importance: Mergers and Acquisitions would be
unable to promote a premium product to the general public if the majority of the
population was a lower class; rather, they would have to rely on very niche
marketing. Moreover, digital marketing is an opportunity for Sainsbury's and Asda
merger as they can also facilitates customers through online shopping
(Oppenheimer, 2019). As it will help customer who have mobility issue by
providing flexibility to them as they can purchase daily needed products by sitting
at home.
 Technological – Digital market is technological factor which work as an
opportunity for Sainsbury's as they can also facilitates customers through online
shopping (Oppenheimer, 2019). As it will help customer who have mobility issue
by providing flexibility to them as they can purchase daily needed products by
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