Applied Corporate Strategy

Applied Corporate
Strategy

Table of Contents
INTRODCUTION...........................................................................................................................1
EXTERNAL ANALYSIS...............................................................................................................1
PESTEL analysis.........................................................................................................................1
Porter’s five force analysis..........................................................................................................2
INTERNAL ANALYSIS.................................................................................................................3
SWOT analysis............................................................................................................................3
Value chain analysis....................................................................................................................4
VRIO Analysis.............................................................................................................................6
EVALUATION...............................................................................................................................7
SAF criteria..................................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODCUTION
Corporate strategy indicates to an eventual pathway that considered by a company that
assists the company that assist the organisation in getting an effective edge within the market.
Apart from it, corporate strategy offers effective vision for an organisation to properly
accomplish its set aims and gaols in appropriate manner (Armstrong and Harman, 2019). This
assignment is supported to Sainsbury plc which is the second largest chain of supermarket in
UK. The firm is currently entering into a merger joint venture with Argos which is an another
retail company located in UK. The Report will covers a brief external analysis of the retail sector
within the UK as well as internal analysis of the resources and key competencies of the
company. Furthermore, the report also consists evaluation of the strategy of joint venture SAF
criteria.
EXTERNAL ANALYSIS
PESTEL analysis
It is an analysis which is conducted by the management of a company to determine the
impact of the external factor of organisation. Retail sector within the UK has been a forever
evolving industry and there are different extrinsic components ion the business environment
that create a large impact on this sector. This analysis and impact of external factors are
mentioned as under:
Political- This factor consist different elements like government policy, stability, instability,
taxation policy, corruption and many more. If there are any kind of change occur in these
components then they affect the business of companies of particular sector. In UK, Brexit is
the main factor which highly affect the business of retail industry and also influence the
compan8ies who are operating in that industry. It will mean that England will not longer
remain a part of the European Union, directing to maximised import rates. After UK's exit
the inflation rate is increased that affect the business of Sainsbury in negative manner.
Economical- Different components like inflation, deflation, foreign exchange, interest
rate etc. are considered by this factor. Sainsbury's is highly dependent on road based transpiration
so when the prices of fuel like petrol and diesel are maximised then it economically affect the
company (Baena, 2019). Another economic concern for respective company is that of increasing
salary expectations which reduce overall profit.
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Social- This factor include different components like culture, values, needs, demands, taste
and preferences, lifestyle and many more. Now these days, people aspires to shop from a
supermarket in which ll required products they can get under one roof (Benza and et. al.,
2019). This positively affect Sainsbury because it provides the consumer a level of
fulfilment of saving their time and cost. By offering healthy and quality products it also
provides the satisfaction of customers needs of healthy food items.
Technology- This factor of pestle analysis consider different elements like innovation in
technology, research and develop, advance technology, artificial intelligence and many
more. In this factor favourably affect retail industry because organisations make
technological innovation ion term of fulfilling the needs of their customers. By offering
online food service and the option of collecting their purchases from their local stores, the
company make an effective contribution in fulfilling consumers needs. This advancement in
technology can minimise the overall cost of manufacturing of the products.
Environmental- It consist different factors like weather, climate, environmental law,
pollution act, carbon footprints and many more. This factor also influence retail sector or the
organisation which operate within it. Sainsbury produce a high level of carbons footprints
that bis highly affect to the current environmental conditions. The firm also use plastic in the
packaging of its products which create negative impact on environment and also affect
image so the company.
Legal- this factor consider all the rules, laws and legislations that are formulated and
developed by the national authorities of the company for the effective running of the firm.
The management of Sainsbury effective follow all the law of different nations in which it
operate which favourably affect the company. The company follow properly follow different
laws like consumer protection act and others which assist in effective running of the firm.
Porter’s five force analysis
This concept was developed by Michael Porter in 1979 to facilitate the companies to find out
the competitive forces that are accessible with an industry (Gravagnuolo, Angrisano and Fusco
Girard, 2019). All the five forces of this analysis Are defined as under:
Threat of new entrant- It is perceived low risk for Sainsbury as the retail market
composition where approx 70% of the grocery market share is embarrassed by the big four
supermarkets. Apart from it, to establish a business in retail sector, there more funds is required
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