Applied Corporate Strategy Project Report Pdf 2022

Applied Corporate Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Question 1(External Analysis).........................................................................................................1
Introduction of the retail industry and strategy............................................................................1
Pestle Analysis.............................................................................................................................2
Porter's five forces.......................................................................................................................3
Question 2 (Internal Analysis).........................................................................................................4
Human Resource .........................................................................................................................4
Technical Resources....................................................................................................................5
Financial Resource ......................................................................................................................5
Intangible Resource ....................................................................................................................5
Physical Resource .......................................................................................................................6
Question 3 (Evaluation)...................................................................................................................6
Suitability.....................................................................................................................................6
Acceptability................................................................................................................................6
Feasibility.....................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Corporate Strategy refers to the strategic plan that defines the overall goals and objectives
of the organization. It defines the ways and plan of action that is need to be followed by the firm
for achieving the business objectives. It provides directions to the retail industry for gaining
competitive advantage. The project report is based on Sainsbury case study. It is the second
largest Supermarket chain in UK. The report mainly define about the strategy of acquisition of
Argos by Sainsbury. Argos Ltd is a Catalogue retailer and subsidiary of Sainsbury. It mainly
operates from Ireland and United Kingdom.
The study will cover the external analysis of the organization in which it will conduct the
Pestle Analysis as well as Porter's five forces. Furthermore, the report will define the 6 important
issues that can be identified as the opportunity or threat. Assignment will conduct internal
analysis of the resources and competences of the firm. Lastly, the report will evaluate the
suitability, acceptability and feasibility which the company has formulated in their strategies.
MAIN BODY
Question 1(External Analysis)
Introduction of the retail industry and strategy
The case study is based on the Sainsbury acquires Argos. Sainsbury is the second largest
supermarket chain in the UK. It is founded by John James Sainsbury in the year 1869. Argos
limited trades both by online and physical shops. It is established in the year 1972 by Richard
Tompkins. This company is subsidiary of Sainsbury. It is one of the largest retailer in the UK.
Sainsbury acquires the Argos in £1.4bn. The combine business is attractive for the customers and
are creating value for the shareholders. The supermarket chain earlier facing the rivalry. 845
stores of Argos are about to close in coming year. Thus, the Sainsbury acquisition is helpful for
the firm. The profits of the firm gets improved by this acquisition. The sales of Sainsbury's
products get boosted. In last financial years the Sainsbury's revenue has increased up-to 11 %
but due to rise in inflation there is drop in the profits by 8% in 2017. However, the Argos
business has performed well and there is increased in its total revenues. Till now the Sainsbury
has 59 concessions of Argos inside its grocery stores and are planning to accelerate more in
upcoming years.

Pestle Analysis
It is a strategic framework that helps to analysis the potential impact of external macro
factors on the retail industry. These factors are shaping the Retail industry landscape -
Political Factor – As in the year 2016 the Britain has voted to leave the European Union. Thus,
the Brexit has significant implications on the business of Retail industry. The UK political
relationship with the Qatar has impacted the retail industry. Qatar is the Arab country which is
recently undergone from the political crisis (Yuliansyah, Rammal and Rose, 2016). The firm is
imposed by its neighbouring countries including UAE and Saudi Arabia. All the countries are
UK alliance. Hence, if the UK government takes side of Saudi group than the political resonance
with the Qatar can decay. For example, the Qatar sovereign wealth fund holds 26% Stake in
Sainsbury. It has significant influence over Sainsbury's board. Any conflicts and disputes with
the Qatar can affect the Managerial operations of the firm.
Thus, this creates a threat for the retail industry due to Qatar has imposed by Saudi
Arabia and UAE. Sovereign Wealth funds of the Qatar is also held the 26% of share in the retail
industry. Therefore, the retail industry's managerial decisions can get influenced.
Economical Factor – Due to Brexit come into existence the value of pound sterling is lowest in
comparison to Dollar. For example, As the Sainsbury has acquired Argos it gives financial
headaches for coping up with the currency hedges. High inflation rate affects the retail industry
profitability. The high food prices affects the consumer demand of retail products. The customers
who are price conscious are tended to show switching behaviour. While its competitors Aldi and
Iidi is offering products to the consumers in discounting prices. Therefore, its negatively
impacted the food retailing market.
Thus, this creates opportunity for the retail industry to offer discounting prices to its
customers in order to increase profitability and gain customer's retention.
Social Factor – The high inflation rate due to the Brexit has changed the customers shopping
behaviour. It is huge consumer market. The population of the UK is at growing stage. According
to the research the population is able to reach 74 million by 2039. The people are getting older.
This impacts the labour market. To cater the older market also create the opportunity for the
retail industry.