Sainsbury's Business Expansion Plan: Cost-Benefit Analysis & Budget

This project analyzes Sainsbury's business expansion plan, focusing on its entry into the Welsh market. It includes an executive summary, company description, and product/service details. The marketing strategy involves social media and customer segmentation. The project outlines an orga...Read More

THE BUSINESS
CONSULTANCY
PROJECT

Table of Contents
Introduction to company..................................................................................................................3
Business expansion plan..................................................................................................................3
Cost Benefit Comparison Of 3 Project Funding Options................................................................4
Budget – Resource Allocation.........................................................................................................5
Overview Why Would The Proposed Project Be Successful..........................................................6
REFERENCES................................................................................................................................7

Introduction to company
Sainsbury is a retail firm based in London which is also the third largest chain of
supermarkets chain of United Kingdom having 16.9% share in retail market of UK. The
company was founded in 1869 at Holborn, London. The company has 1415 supermarket stores
throughout United Kingdom. The company is employing more than 186,900 employees
throughout their stores in UK. The parent company i.e. J Sainsbury plc is divided into three
divisions which are Sainsbury Supermarkets Ltd (including convenience shops), Sainsbury Bank
and Sainsbury Argos. The company is listed on the London Stock Exchange and is a constituent
of the FTSE 100 Index.
Business expansion plan
Sainsbury is expanding its business operations in new European country which is Wales.
In order to get the desired success in this new market, company is developing a expansion plan
for the next 6 months which is discussed below: Executive Summary: Sainsbury is a UK based firm who is expanding their business in
new market i.e. Wales. Company Description: Sainsbury is the third largest retail supermarket chain of the
United Kingdom which is providing a wide range of products of different brands to the
customers. The company has decided to expand its business for enhancing the
productivity and market share of the company (Garba, 2011). Product and Service Description: For this expansion process, company is providing
products of different brands under one roof. Initially company is providing grocery
products but however the range will be enhanced after the success. Marketing Strategy: The company has decided to use the social media for marketing and
promoting the products in new country. The company is segmenting the customers based
on demographics for providing them products accordingly. The company will also use
the social media for engaging the customers in business activities.
 Organisation and Management: The leaders and managers will choose the participative
leadership and management style for performing the business operations in an effective
manner.
The WBS for this business expansion plan is as follows:

1. Project initiation and planning
 identifying new opportunities
 Identify requirements
 Research
 Management meeting
2. Project implementation
 Rent building or store
 new equipments
 new workers
 training sessions for new employees
3. Project monitoring
 Risk assessment
 performance of employees
 first month financials after expansion
 management consulting
4. Project evaluation and closing
 Project closure
 feedback
Cost Benefit Comparison Of 3 Project Funding Options
Category Details Cost in First Year
Lease. 750 square feet available next
door at $18 per square foot $13,500
Leasehold
improvements.
Knock out walls and reconfigure
office space $15,000
Hire two more
designers.
Salary, including benefits
Recruitment costs
Orientation and training
$75,000
$11,250
$3,000
Two additional
workstations.
Furniture and hardware
Software licenses
$6,000
$1,000

Category Details Cost in First Year
Construction
downtime.
Two weeks at approximately
$7,500 revenue per week $15,000
Total $139,750
Budget – Resource Allocation
The budget for the resource allocation is 20000 € which is segmented properly by the managers
of Sainsbury (Leigh and Waddock, 2006). The budget of Sainsbury for this expansion is divided
into 4 parts. This budget allocation is as follows:
Resources Budget(€)
Human resources 10000
Training and development 2500
Marketing 2500
Equipments and machinery 5000

Human resources
Training and development
Marketing
Equipments and machinery
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
Budget(€)
10000
2500
2500
5000
Overview Why Would The Proposed Project Be Successful
The scope of the proposed expansion is very wide for the Sainsbury as through this
expansion, company can satisfy the demands and needs of customers in Wales. Also due to this
expansion, the company can acquire new customers and sales which is beneficial for enhancing
the profit and revenue for the company (McKeever, 2016).Also through this expansion, the
company has more opportunities to enhance the market share and productivity of the
organisation as new customers are attracted towards the products and services of the company
which will assist the company in achieving sustainability at the marketplace for a long period of
time. However, risks such as low funding, poor skilled workers etc. exists which can be
overcome by the company through the training activities, arranging funds from various resources
etc.

REFERENCES
Books and Journals
Garba, A.S., 2011. Stumbling block for women entrepreneurship in Nigeria: How risk attitude
and lack of capital mitigates their need for business expansion. European Journal of
Economics, Finance and Administrative Sciences. 36. pp.38-49.
McKeever, M., 2016. How to write a business plan. Nolo.
Leigh, J. and Waddock, S., 2006. The emergence of total responsibility management systems: J.
Sainsbury's (plc) voluntary responsibility management systems for global food retail
supply chains. Business and Society Review. 111(4). pp.409-426.