Business Management: Analysis of Sainsbury's Business Environment and Strategies

Running head: BUSINESS MANAGEMENT
March 13
2019

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Table of Contents
Introduction................................................................................................................................3
About Case (Sainsbury).............................................................................................................3
External Environment Analysis.............................................................................................3
PESTLE Analysis...............................................................................................................3
Opportunities and Threats..................................................................................................5
Key Drivers of Change.......................................................................................................5
Industry Analysis...................................................................................................................6
Porter Five Force Frameworks...........................................................................................6
Complementors Analysis...................................................................................................7
Value Net...........................................................................................................................7
Market Segment.................................................................................................................8
Strategic Group..................................................................................................................8
Industry of Sainsbury.............................................................................................................9
Competitor Analysis and Blue Ocean....................................................................................9
Strategy Canvas..................................................................................................................9
Critical Success Factors.....................................................................................................9
Blue Ocean strategy.............................................................................................................10
Critical Factors can be used for Value Innovation...............................................................10
Red Ocean Vs Blue Ocean Strategy.................................................................................10
Factors Leading to Red Ocean.........................................................................................10
Strategic Customer...............................................................................................................11
Internal Analysis..................................................................................................................11
Organizational Resources of Sainsbury...........................................................................11
Competitive Advantage for Sainsbury.............................................................................12
Resource Based View..........................................................................................................13
Value Chain Analysis...........................................................................................................14
Primary Activities............................................................................................................16
Supporting Activities.......................................................................................................17
Benchmarking......................................................................................................................18
SWOT Analysis...................................................................................................................18
Strength............................................................................................................................18

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Weaknesses......................................................................................................................18
Opportunities....................................................................................................................18
Threats..............................................................................................................................19
TWOS Matrix.......................................................................................................................19
Dynamic Capabilities.......................................................................................................20
Evaluate the Strategy: Sainsbury ASDA Merger.................................................................20
Power/Interest Matrix.......................................................................................................20
SAF Framework...............................................................................................................21
Conclusion................................................................................................................................22
References................................................................................................................................23

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Introduction
Today’s business environment is unstable and regularly changing due to which owners of the
business are dealing with numerous challenges in creating suitable plans for the business,
specifically in developing nations having limited studies and knowledge related to the
organizational strategies (Saleem, 2015). Therefore, it is essential for the top managers as
well as entrepreneurs to evaluate the business environment to have effective and suitable
strategies (Ibrahim and Primiana, 2015). The purpose of this paper is to analyse the business
environment of Sainsbury and the strategies it uses to succeed in the market. The paper will
also analyse the industry in which Sainsbury is operating its business. Besides this, it will
evaluate the strategies used by the company with the help of SAF Framework.
About Case (Sainsbury)
Sainsbury is the second-biggest supermarket chain with a 16.9% share in the industry of
supermarkets of the United Kingdom. John Sainsbury established the company in 1869, with
a shop in London (Sainsbury, 2019a).
External Environment Analysis
PESTLE Analysis
Political Forces
The United Kingdom's political factors have a major influence on the Sainsbury's
performance. Presently, in the United Kingdom, the debts of the government and consumer
debts are high. This influence the attitudes of the consumer and therefore businesses deal
with great pressure (Bulmer and Quaglia, 2018).

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Economic Forces
After Britain exit from the European Union, the pound value went decreasing against the
dollar value of 31 years. With the food price inflation and the depressing wage growth in the
United Kingdom, numerous of the households became price conscious changing their habits
of shopping (Bulmer and Quaglia, 2018).
Social Forces
The economic factors are the main cause of the intense change in the shopping habits of
people that was majorly influenced the grocery industry of UK (Baiocchi, Minx and
Hubacek, 2010). Numerous of the shoppers in Britain are leaving their bulk weekly shopping
and in its place, they are spending their money on a different convenience store, particularly
the internet shopping and discounters.
Technological Forces
Sainsbury has established digital services such as click and collect services the time customer
place the order, online food shopping. The sales of online retailers have been increased over
80% and the number of orders increased around 20% during the year that has supported
Sainsbury to cope up with the quick changing behaviour of the customers (UK Fast, 2019).
Legal Forces
Government policies and rules have a direct influence on organization performance. For
instance, the rule related to establishing a new tax on the advertisement of fatty and highly
processed foods. In order to comply with government legislation, Sainsbury has modified its
products (Kolios and Read, 2013).
Environmental Forces
The environmental factors raise pressure on the organization to perform in a socially liable
way in order to maintain a safe environment. Sainsbury has organized different campaigns to

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promote recycling, reuse, reduce approach in order to manage waste, recycle products, and
packaging (Sainsbury, 2017b).
Opportunities and Threats
Opportunities
The demand for healthier and lower fat food is increasing in the market because they cause
cardiovascular diseases. Sainsbury is focusing on a broad product range, which contains low-
fat ingredients. For example, the company introduced 1% fat milk, which supports it is
gaining popularity in the market (Sainsbury, 2017).
Threats
The decision of Britain related to leaving the European Union, lead to numerous economic
political turmoils for the country. The value of pound decreased to its lowest value, which
reflects that customers are less willing to invest a high amount in numerous sectors (Bulmer
and Quaglia, 2018).
Key Drivers of Change
Social lifestyle
Lifestyle of the customers has now become a key notion for understating people and their
relationships with society. Active consumerism has become a resource for fashioning new as
well as maintaining old lifestyles not traditionally associated with ‘old age’ (Government
Office of Science, 2015). The altering perception of people towards fatty food products and
adopting healthy food products is changing the future of the society as well as retailers in the
United Kingdom.