Market and Operational Analysis of Sainsbury's

This report provides a comprehensive analysis of the market and operational activities of Sainsbury's, including market structure, PEST analysis, SWOT analysis, and Porter's Five Forces Framework. It also discusses the company's quality management, forecasting/capacity planning, inventory management, and lean thinking. The report concludes with recommendations for the organization.

Business Management

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Contents
Summary..........................................................................................................................................2
Introduction......................................................................................................................................2
Marketing Analysis..........................................................................................................................3
Market structure...........................................................................................................................3
PEST Analysis..........................................................................................................................3
SWOT Analysis........................................................................................................................4
Porter’s Five Forces Framework..............................................................................................5
Operations Analysis.........................................................................................................................7
Marketing and Operation Comparison............................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Summary
Strategic management is the process of analyzing, evaluating and implementing the procedure in
the organization. It is essential for the organisation to implement the strategic tools in order to
evaluate the business environment. The organisation can develop the strategies by analyzing the
internal and external environment (Moutinho, and Vargas-Sanchez, 2018). The main purpose of
the organisation is to satisfy the needs and desires of the consumers at the higher level. It is
required for an organisation to provide the quality of product or services to consumers. It is a
duty or responsibility of an organisation to ensure the quality of product or services by
implementing the tools at the workplace (Ansoff, Kipley, Lewis, Helm-Stevens, and Ansoff,
2018). In this report, the discussion is made on the topic of market analysis and operation
management. Sainsbury's has been taken into consideration to analyses the market and its
operation activity.
This report is divided into three parts in which the first part contains the market analysis. In the
second part of the report, the operational analysis has been done on Sainsbury Company. At the
last of the report, the comparison will be done among the market and operational analysis to
evaluate the satisfaction of consumers by products or services of the organization.
Introduction
Sainsbury is a supermarket in the United Kingdom with the share of 15.3% of the supermarket
sector. It becomes the largest retailers of groceries in the year 1922 which was early adopter of
self-service retailing in the United Kingdom (BBC, 2019). The holding company of Sainsbury is
Input Transformation Process Output

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divided into three divisions such as Sainsbury’s supermarket, Sainsbury’s Argos and Sainsbury’s
Bank.
Marketing Analysis
Market analysis is the process of analyzing the business environment. It is essential for an
organisation to analyse the external and internal environment factors in which the organisation
grow in the market. The different tools are used in the organisation to analyse the environment
such as PESTLE, SWOT and Porter’s Five Forces. Current position of the Sainsbury is also
defined in this section with its competitors.
Market structure
Sainsbury has the largest share over the period under the consideration. It holds 42.7 percent of
the share of market. Consumers of the organization give the rating at the first number for its
quality of food. The company operates in the market with the different distribution channels such
as transport, online deliveries and the others. Convenience and online sales of grocery products is
increase with the 3.7 percent and 6.9 percent respectively. The sales of supermarkets is grew by
• Raw material
• Capital
• Technology
• Information
• Human Resources
• Network
• 186900 employees help to
convert the raw material
into output.
• Top management handle
the operational activities
• The company adopts the
technology while
converting the raw
material into output or
packaging the product.
• Company provide
the quality of
grocery products
• £309 Million net
income
• £518 million as
operating income
(Sainsbury’s, 2019)

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one percent in which the main benefit is gain by the Argos stores. The company introduces the
more efficient and flexible structure at the workplace with the leading pay of £9.20 per hour. The
company delivers the high competitive and very promotional market. It has been evaluated that
the delivers £160 million in synergies. The growing revenue helps to increase the Argo stores in
the Sainsbury supermarket at the end of the year with the 281 number of stores. The company
earned £4.7 billion by selling the product online due to which the organization invests the higher
amount in technology in different areas such as rolled out smart shops, trailing digital, trailing
the UK’s first checkout-free grocery stores. Sainsbury’s £1bn reveals to move the competition
authority. Tesco, Morrisons, and Iceland are the main competitors of the company that beat in
terms of revenue (Statista , 2019).
PEST Analysis
Political
 UK implement the multi-party system
that is not beneficial for the
organization as the policies will also
change with the changing party.
 Brexit creates uncertainties and open
door for the organization of UK.
 The country is famous for Foreign
Direct Investment. FDI is beneficial
factor for the organization as it helps to
grew in the market.
Economic
 UK is the country which is positioned
at the 5th largest national economy in
the world in terms of GDP.
 UK is also positioned at the ninth
largest country in terms of purchasing
power. It is beneficial factor for the
organisation because the demand of
consumers is increases.
 The capital city of UK (London) is
famous for financial services in finance
sector in the world.

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Social
 The demand of people will change with
the trends.
 Consumers of UK have high
purchasing power to purchase the
product.
 It has been seen that the people of UK
are educated due to which they have
high living standard.
Technology
 UK is one of the most technological
countries in the world.
 The government of country invests
£28bn in the year 2011.
SWOT Analysis
Strength
 The company has high brand image in
the market.
 It has the opportunity to expand the
business at the international level by
using the brand image in the market.
 The promotion strategy of the
organization is innovative that helps to
attract the consumers.
Weaknesses
 Sainsbury implement the low price
strategy to beat the competitors due to
which it faces the loss.
 The consumers have high bargaining
power due to which the consumers can
easily switch with the brand.
Opportunity
 Sainsbury provides the different types
Threat
 Sainsbury has high threat of

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of products to a consumer that is why;
it has the opportunity to cater all types
of consumers.
 The company can expand the business
in the village to increase the loyalty of
consumers and the sale is also increases
in village.
competitors as they also provide the
similar type of product or services to
consumers such as Tesco, Morrison’s,
Iceland and the other competitors.
 The consumers can easily switch with
the other companies just because of
price strategy.
 The company suffers with the loss due
to cut the prices to beat the competitors.
Porter’s Five Forces Framework
The threat of new entrants  Moderate level of threat of new entrants
 Less capital is required to establish the
business
 Exiting companies have high brand
image in the market

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Bargaining power of buyers  High bargaining power of buyers
 The large number of companies selling
the same products.
 Company provides the product in fewer
prices as compare to the other
companies.
 Switching cost of consumer is high
Bargaining power of suppliers  Low bargaining power
 Large number of suppliers that provide
the services.
 Material provided by the supplier is
easily available in the market.
 Low switching cost due to which the
companies can switch with the other
companies
The threat of competitors  High power of threat of competitors
 Tesco, Asda, and Morrison are the top
competitors of the organisation (Owler,
2019).
Threat of substitute  Moderate level of threat
 There is no substitute of food as it is a

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necessity of the consumers.
 The supermarket can replace the other
supermarket by beating the
competitors.
Operations Analysis
Operational analysis is a method to evaluate the current performance and measuring the
performance against an established set of cost schedule and performance parameters. It helps the
organisation to evaluate the quality of product. It is essential for the organisation to maintain the
process of operation in which they can operate the business. The operation of an organisation is
measure in the different terms such as quality management, inventory management,
manufacturing techniques and the others (Nakamura, et.al, 2015). Operational activities of
Sainsbury are also measure the business in different areas and the activities describes in details:
Quality Management
Quality management is the act of overseeing all activities of the organization that is required to
maintain a desired level of excellence. Sainsbury's quality control and quality assurance are very
different but their motive is same to provide the quality of product to consumer. The organisation
implements the Quality Attribute System at the workplace to ensure the quality of products
(Mišetić, 2017). It also encourages their suppliers to understand their principles and practices of

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sensory evaluation. The organisation takes it HACCP (Hazard Analysis Critical Control Point)
procedure serious to save the employees from different issues. Sainsbury’s quality awareness
among consumers is increases with the 2.2 percentage points over the last 90 days (The
Guardian, 2013).
Forecasting/Capacity Planning
Forecasting is the procedure in which the organization predicts the future growth in terms of data
by analyzing past and present performance. Sainsbury also implement this process at the
workplace to predict the future performances. It has been seen that the demand of consumers is
rises in the coming future by 15-20%. The organisation implements the policies at the workplace
due to which it is able to maintain the quality of product. It also enhances the quality of services
by using the different manufacturing style at the workplace. The service level of the organization
is improved due to which the large number of people attracted towards it. Supply chain will
become more efficient and sales and demand of the product is increases. Sales and demand are
work together to plan more profitable (Ocio, 2019).
Inventory management
It is the component of supply chain management that involves supervising non-capitalized assets.
Sainsbury implement the strategy in which the different departments maintain their own
activities. This process is called independence in areas such as procurement, designs and the
other activities. This method of the organisation helps to ensure the securities of the supplies the
safe inventory without compromising the cost.
Just-in-time and Lean Thinking

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It is a manufacturing technique to reduce the wastage of material. Lean manufacturing is the
process to avoid the wastage while manufacturing the product. Just in time is also the part of this
process that defines the strategy of making the product on time instead of making it before
consumer demand (Sainsbury, 2019). The company produces the product before the time due to
which the quality of product is reduces and chances of wastages is high. It is essential for the
organisation to implement Just-in-time technique because it does not produce the product on
time as the consumer wants the grocery products on time without waiting for the product
delivering time (Hill, 2017).
Marketing and Operation Comparison
By comparing the market analysis and operation activities of the organization, it has been
evaluated that the company meet consumer demand at the certain level. It has been analysed that
the consumers prefers the high quality of product with the low price. Sainsbury provides the
product at the low cost by reducing the wastage in manufacturing process. The company
provides the grocery product and food services to consumer with the high quality.
The division of departments helps the organization to operate the business smoothly. Division
department helps to enhance the quality of product or reduces time. Departments are not
dependent each other to operate the business that is why’ the dependently is low at the
workplace. It has been observed that the consumers are dependent on the grocery product that is
beneficial for the organization.
As per the market or operational analysis, the company forecast the demand of consumers by
providing the different types of product as per their requirement or improving supply chain. The

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distribution network of the organization is effective and flexible in nature. The flexibility of the
company is high as it provides the products or services to consumers.
Polar Diagram
Polar Diagram is used by the company to evaluate the services of the organization. It contains
the five elements such as cost, speed, dependability, flexibility and quality. The diagram is
developed as per these five terms. Cost defines the price in which the company sells the product
to consumers; speed refers the time in which the organisation deliver the services to consumers;
flexibility refers the dynamic nature of the organisation in which they can supply all types of
product to consumers; quality states the high or poor quality of the product or service of an
organisation.
Cost
Speed Dependability
Quality Flexibility
(Source: By Author, 2019)
Grocery
product
Food
Products

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The company provides the food services and grocery product. As per the diagram, it is observed
that the organization provides the product to consumers at the reasonable prices with the high
quality. It is also flexible in nature as the demand of consumers is fulfill as the company forecast
the demand of consumers before delivering the services. The company also provides the product
with the high speed as all departments perform their own activities due to which the
manufacturing or delivering services time is reduces. At the end, it is concluded that the
organisation satisfy the consumers at the moderate level. It requires to improve the
manufacturing process so that the it will provide the services with the high flexibility.
Conclusion
From the above analysis, it has been concluded that Sainsbury is the company that provides the
quality of services to consumers. As per the market analysis, the company has the opportunity to
expand the business at the international level or deliver the services to all types of consumers. It
is observed that the organization maintain its quality with the cost by reducing the wastage. By
comparing the market and operational analysis, it has been observed that the organisation fulfill
the consumer demand as per their requirements. On the basis of polar diagram, it has been seen
that the company provides the product or services at reasonable prices with the high quality. It is
recommended that the organisation has to implement the strategies. The company will attain
success in the near future.

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R. (2018) Implanting
strategic management. Springer.
BBC. (2019) Asda overtakes Sainsbury's to become second largest supermarket. [online]
Available from: https://www.bbc.com/news/business-47784817 [Accessed 8/07/19].
Hill, T. (2017) Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Mišetić, D. (2017) Model for defining the level of implementation of the management functions
in small enterprises. Management: journal of contemporary management issues, 6(1-2), pp.25-
52.
Moutinho, L. and Vargas-Sanchez, A. (2018) Strategic Management in Tourism, CABI Tourism
Texts. Cabi. [Accessed 8/07/19].
Nakamura, T., Yamane, T., Shimoda, E. and Morino, K., Shimizu Corp (2015) Operation
management apparatus, operation management method, and operation management program.
U.S. Patent 9,031,703.
Ocio. (2019) Operational Analysis & Performance Reporting. [online] Available from:
https://ocio.commerce.gov/page/operational-analysis-performance-reporting [Accessed 8/07/19].
Owler. (2019) Sainsbury's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. [online] Available from: https://www.owler.com/company/j-sainsbury [Accessed
8/07/19].

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Sainsbury. (2019) Waste. [online] Available from: https://www.about.sainsburys.co.uk/making-
a-difference/environment/waste [Accessed 8/07/19].
Sainsburys. (2019) Annual Report and Financial Statements 2019. [online] Available from:
https://www.about.sainsburys.co.uk/investors/results-reports-and-presentations [Accessed
8/07/19].
Statista . (2019) Market share of grocery stores in Great Britain from January 2015 to May
2019. [online] Available from: https://www.statista.com/statistics/280208/grocery-market-share-
in-the-united-kingdom-uk/ [Accessed 8/07/19].
The Guardian. (2013) Sainsbury's 'quality and service' underpin improved sales growth. [online]
Available from: https://www.theguardian.com/business/2013/oct/03/sainsburys-quality-service-
sales-growth [Accessed 8/07/19].

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