This report analyzes the internal and external factors of Sainsbury, including the VRIO and Porter's 5 force analysis. It also covers the impact of change and culture, stakeholder mapping, and strategic planning using the PDCA tool. The report also discusses the impact of COVID-19 on Sainsbury's business and its sustainability for the long run.
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Contents Introduction...........................................................................................................................................3 MAIN BODY...........................................................................................................................................4 Introduction & Identifying issues.......................................................................................................4 An analysis of Sainsbury external environment.................................................................................4 An internal environment analysis......................................................................................................5 The impact and influence of change and culture...............................................................................7 Conclusion.............................................................................................................................................9 References...........................................................................................................................................10
Introduction This report involves the Sainsbury internal and external factors of the organization as internal factors are the vrio and external factor analyzation is porters 5 force. It involves the analyzation of business context and their influence on managerial decisions. It includes the various analytical tools and models which helps in organizational analyzation for the better strategicplanningandbetterresultstothosestrategies.Italsoinvolvesthevarious management practices which are challenging to the business context and the recommended strategies that can be used to resolve that and can get better results from that. It also includes the market size with TAM model and how had covid impacted the business and now can be sustainable for the long run. The analyzation is described below.
MAIN BODY Introduction & Identifying issues. In this report Sainsbury company has been taken for the analyzation. Sainsbury is known as second largest supermarket chain in UK. This company is founded in 1869 and it is founded by John James Sainsbury. It is the largest groceries retailer in UK and having 16% share in an overall supermarket sector in the market. This company is conscious about its quality and taste which makes them serve the best to customers as compared to their competitive rivalry and also offers best ad competitive prices in the market (Oldman, and Tomkins,2018). Sainsbury follows three values in the market which is respecting environment, living healthier lives and sourcing with integrity. In this report it talks about the analyzation of the external environment of Sainsbury and the effects of covid on Sainsbury. It also involves Sainsbury market size, stage in economic cycle and industry opportunities. This also includes the internal environment analyzation which involves the 5 pâs of Sainsbury. It also involves the impact of organization by changing its implementation and also influence the Handyâs theory for the changes of culture in management. It also involves Sainsbury six sigma tool to managing operations and includes the external and internal stakeholders which can impact in decision making of Sainsbury company (Szelagowski,and Berniak-WoĹşny, 2019). Lastly it involves the strategic planning with PDCA tool which helps in business growth and improvement for the better use of resources and making strategies which helps in the expansion of the business and increase its productivity and which overall improves it profitability and increase the market and customer base of company with maintaining eco friendly environment and it is known as more sustainable as compared to other competitive rivalry organizations in the market. An analysis of Sainsbury external environment Porterâs five force is the tool to analysis the external environment of Sainsbury company which tells the threat of a new entrant, suppliers bargaining power, buyers bargaining power, threat from any substitute product and the competitive rivalry in the market. Threat of new entrant As Sainsbury is known as the second largest supermarket chain If any new entrant brings new innovations in the products and the new way or advertising and presenting the product still canât beat Sainsbury as being a new entrant it requires lot of capital and strategies to make place in the market (Abeynayake, Perera, and Hadiwattege, 2021). This company has all the ways to overcome these challenges by innovation and lowering the price slightly as at the end quality matters and this company is known for its quality. Bargaining power of suppliers Sainsbury has the highest supply bargaining power in the market which reduces the overall profitability of the company by increasing the price of raw material. This company can reduce its supply power by building more supply chains in the market which will increase the negotiating power in the companies and try to make same product with experimenting new raw material and product design to reduce the overall cost.
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Bargaining power of buyers Customers demand high in nowadays markets as they wanted to have quality and quantity with competitive pricing. This thing sometimes put the pressure in its profitability in terms of long run as the smaller customer loyal customer base is much more powerful which increases the bargaining power of customers to seek the highest offers and discounts. New innovative products and discounts attracts the customers which can increase its customer base. Threat of substitute services and products It is when customers need is fulfilled with the new or comparative product in a company or outside the company. In Sainsbury the power of substitute product and services is high and, in the market, there are many new or existing unique products in the market which is available in lower or discounted prices (Wirtz, 2019). Sainsbury can tackle this by started being service oriented not only just product oriented and it can also tackle by increasing switching costs to the customers. Competitive rivalry Sainsbury deals in highest competition in the market though it is known as the second largest supermarket chain but have to deal with the high competition. This company can tackle the competitive market by building up differentiation in sustainability and can also increase by building scale in order to compete better in the market to maintain its position and goodwill in the market. TAM is known as the total availability of the market which is the total demand in market for the product and services. Sainsbury has the highest demand of products and services in the market base as it is the well-known company and has the goodwill in the market. TAM is known as the potential of scale in the market which is always measured in numeric terms. This is the tool which is used in analyzing the market of Sainsbury (Criado-Gomis, Iniesta- Bonillo, Mâand Cervera-Taulet, 2018). In industry sector performance its analysis, the financial statement of the company over time. Sainsbury is improving trend in sales gross and revenue margins and decreasing in pretax profit margin, net profit, operating profit and financial cost of Sainsbury. Covid-19 had impacted each and every organization in the market as Sainsbury has suffered huge loss in the market. Organization is affected due to supply chain in the market as suppliers were limited and due to lockdown in some areas it was quite challenging to supply raw materials from one place to another and because of this it becomes difficult to manage the orders at right time (Billings, Coombs, and Brown, 2020). As everything went online and in spite of each company is serving online but also sometimes it become difficult to manage the same productivity level and profitability of the business. An internal environment analysis VRIO analysis is known as the strategic tool which is used in business for evaluating and assessing the resources of an organization and it also determines the competitiveness and strategic advantage of the organization. VRIO is described as valuable, rare, inimitable and organized.
Valuable CompetencieslevelwhichisvaluablehelpstheSainsburycompanyinexploiting opportunitieswhichareavailableandneutralizingthreatsofexternalandinternal environment. It usually allows the business to expand, grow and develop in the market. This company has brand image in the form of social responsibility as they are engaged in social responsibilities and make it transparent (Kumar, and Reinartz, 2018). This company has unique brand image with there good quality of product and services with competitive prices. This company has the high brand recognition and good relationship with the suppliers which helps them to transfer the goods and services globally all around the world and has the effective distribution system in the market. Rare This rare competitive quality helps the organization to build the handful and to build the advantage in the market. Sainsbury has the international presence all over the world and it operates in more than one country and region. This not only increases the customer base but also gives the high cultural exposure (Holloway, and Humphreys, 2019). This company has good problem-solving skills and high in team work, innovation and creativity. It has fair adaptability which helps in adapting different countries laws and culture in such a way to benefits in the profitability of organization. Inimitable In this there are the cost and resources which are unique to the company for the long-term sustainability and it also adds value to the competitive world. Sainsbury high quality food is inimitable as it offers repeat purchase and which increase the consumption the company. It has the multiple stores in various locations which expanded the market of this company in different regions. It has competitive pricing as compared to other rivalries in the market which helps to maintain the customer base. Organized There are some resources which performs as an opportunity for the business growth of the organization. Financial strength is the main benefit point of Sainsbury which supports and also evaluates the acquisition and potential mergers for gaining an advantage in the market. This company also had advancement and integration on technological basis which has efficient and effective operation process. It also has the proper employee training in the organization and invested in development and research. 5 Pâs of Sainsbury There are the various marketing strategies which covers all the pâs of strategy which involves place, product, promotion and price. There are many strategies which involves promotional planning, product innovation and pricing approach of the company. Sainsbury product strategy is offering quality and innovation management with new products and also by enhancing the range of products as Sainsbury also uses biodegradable packaging and also sells their own organic fruits (Salwa, and Sudarsan, 2018). Sainsbury pricing strategy is providing value in return for money, it made the good use of price discrimination policy
which provide food quality with low price. Sainsbury distribution and place strategy has expanded in various region and countries as it has more then 500 chains of supermarket and convenience stores more than 700 which the operating time of 24 * 7. Sainsbury promotion and advertising strategies used by Sainsbury are the various innovative kind of packaging techniques and various methods to increase the sales. This company also uses various marketing strategies with using of slogans and innovative marketing techniques. The impact and influence of change and culture. Kurt Lewin is the model which is used for implementing the change in the organization. Organizational change demonstrates movement of a company from current to desired state. the reason for the same is due to the fact that result of this change is not certain and it may have concerns related to worth of people, coping abilities and competency, because of which people of the company are not in support of this change until and unless they have confidence against status quo (Renuka, Das, and Reddy, 2018). Sainsbury might invest huge amount for status quote eventually resisting change will be taking place in order to avoid future uncertainty of the company. Sainsburyâs change management is known as process of renewingorganizationalcapabilities,directionandstructurewhichservescustomerâs requirements and needs in order of external and internal environment. Handy has influenced culture management for the transition includes power, task culture, person culture and the role culture. Power in Sainsbury is in the hand of few people and they are the ones who are authorized for decision making and enjoys some special privileges. These authorized people then assign the responsibilities to other employees and those employees have to follow the instructions of superiors (Dinh, Karmakar,and Kamruzzaman, 2020). These factors can lead to biasness by managers. In Sainsbury teams are designed to solve critical hassles and achieve targets which means it follows task culture. Teams are formed in a way keeping in mind the common interests and their specializations. This culture motivates each team member to equally contribute and achieve tasks in innovative ways. Sainsburyfollowspersonculturewhichmeansthatindividualskeepthemselvesover organization and in such a culture organization suffers. TQM is the management approach for the long-term success in the form of customer satisfaction. In total quality management all the members are involved to improve process, product and services. Sainsbury are customer focused with new innovative products and packaging (Martinsuo,and Hoverfält, 2018). Sainsbury also involves each employee to the decision-making process and in environmental part. Sainsbury is the integrated system with specialstructureddepartmentwithunderstandingofprinciplesandmissionofthe organization. Stakeholders are the one who stakes the project and plays a important role in an organization. Stakeholders are specifically segmented in four groups which are sponsors, project team, reference group and users (Suppatvech, Godsell, and Day, 2019). Stakeholder mapping is known as the collaborative process which includes discussion, research and debate. This mapping steps involves identifying, analyzing, mapping and prioritizing. Strategic planning
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Strategic planning of Sainsbury is to serve high quality to the customers with maximizing in financial terms with good return on investment. There main aim is to provide customer satisfaction like safe, fresh, healthy and tasty food. This companyâs main objective is fulfilling the obligations to environments and communities from which they can provide high quality products at lower and fair prices. The most worked strategy of Sainsbury is to serve the customer best with new innovative ideas. Itâs also aim is to increase accuracy in the form stock reporting with efficiency which also increase the availability of raw material and products of the company. In a company organizational objective should be asserted properly to measure and get positive and profitable result (Aguilera, and Grøgaard, 2019). Sainsbury also took some steps as a strategy for improving the profit in the organization which involves recreating customers appeal by giving customers best shopping experience. They have few slogans which describes its values towards the customers and organization environment and these slogans also attracts the customers. Planning cycle is the model which is used by Sainsbury and also used to meet the requirement of customers and stakeholders. This is mainly the process which tells how organization should be managed and in which procedure as well as at what terms customers will be served and at what range (Queiroz, Telles, and Bonilla, 2019). The main planning of Sainsbury is to maintain lead position at market base of UK. They have also planned to increase their market share overseas and to bring happy life to each employee working in this organization. They also desire to bring success and benefit to their employees, stakeholders and clients. As Sainsbury is known for its values which involves quality and pricing of the company. Sainsbury should increase their supply chain all over the world so that they can negotiate with the suppliers and can get more option in suitable prices. This company can also try the alternative and substitute raw material to make product more advanced and innovation and can also get the raw stuff at lower prices. This company can also open more logistics for the fast and speedy delivery and can fulfill the requirement of customers in better terms and for better convenient and flexible experience of customers.
Conclusion This report has concluded that each analytical tool and models are equally important to the organization, it helps in the analyzation to each factor and can easily make new and innovative strategies to manage the terms in the organization to maintain the goodwill in the market and increase productivity and profitability. Strategic planning reduces the chances of risk and can helps in long term planning. It also included the 5 pâs of marketing and the influence of culture on management and it also includes the role of stakeholders and their mapping and planning system in an organization.
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