Business Strategy

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
External environmental analysis..................................................................................................3
Internal environmental analysis...................................................................................................5
Competitive analysis....................................................................................................................6
PART B............................................................................................................................................7
Evaluation of different types of strategies...................................................................................7
Strategic Plan...............................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is an action plan formulated by businesses to achieve its goals. It
provides direction to be followed to achieve success. It is a combination of actions and decisions
which helps in accomplishing the purpose like achieving effectiveness, mobilising resources,
taking competitive advantage etc. In this report Sainsbury is taken as an organization. It is the
leading supermarket chain in UK. It was established in London. It provides general merchandise,
food, clothing, home products, electronics and financial services. This report covers the
formulation of strategic business plan for the organization based on the analysis. It includes both
internal and external environmental analysis to identify the organization's capabilities and to
know the competitive position of the business Porter's Five forces model is applied.
PART A
External environmental analysis
To understand the impact of external environmental factors on the business or the
industry as a whole Pestle analysis is used. It will help marketers to analyse and monitor the
external factors and their impact on the organization. A detailed analysis of it is done below.
Political factors (High): This factor relates to the government role and interference in the
business. This factor is driven by political stability and instability, tax policy, trade restrictions
etc. Currently, Qatar, an Arab country, is under going crisis with a blockade imposed by Saudi
Arabia and UAE. All these countries are allies of UK and if UK takes the side of Saudi group
then its political relation with Qatar will hamper (Fosher, 2018). This will affect the entire retail
industry. The sovereign fund of Qatar holds 26% stake in Sainsbury. So, any type of tension with
Qatar will affect the business operation of Sainsbury.
Economic factors (High): This factor have an adverse impact on the business operation
and profitability. These factors include change in foreign exchange rates, change in interest rates,
economic performance of the country, disposable income of consumers etc. In the past few years
the prices of diesel and petrol have been rising at a slow pace (Kush, J., 2017). Also, the
implementation of high fuel tax will cause the price of fuel to rise more. So, high fuel price will
result in increase in transportation cost. This have an effect on entire industry. Overall, it will
affect the business operation in form of reducing profit margin or increasing the price for the
consumers. Another issue is rising salary expectation of the employees. As Sainsbury employees
large number of workers to perform simple task so its becomes difficult for it to increase the

salary and it will also increase the expense of the Sainsbury. Thus, the impact of these factors
will adversely affect the functioning of the business.
Social factor (Low): This factor relates to change in attitude, belief of the consumers. It
includes health consciousness, age, population growth etc. In UK, the consumers are more health
conscious and there is a trend towards healthy eating (J Sainsbury SWOT & PESTLE Analysis.
2019). Following this trend and making healthy dietary changes will help organizations in long
term success. This trend will affect the whole industry. Sainsbury has already adopted the change
and it also provides the complete nutritional information about the product and how material is
acquired. This factor will have less or no impact on the Sainsbury's business operation.
Technological factor (High): It refers to the technological advancement in the business
operation and its impact on the business. Mostly if business adopted the emerging technology it
will help in building its business and attracting more customers, otherwise it will become
difficult for business to survive (Grünig and Morschett, 2017). The emergence of artificial
intelligence and advancement in analytics has helped business to know more about business
operation and consumer insights. It will positively affect the industry if properly implemented.
Sainsbury has not implemented any of these technologies in its operation but development and
implementation of these technologies will help in increasing the profitability of Sainsbury.
Legal factors (Moderate): This factor refers to all the legal laws and regulations within
which organizations needs to conduct its business. It includes employee welfare law, consumer
law, health and safety law, advertising standards laws etc. the new sugar law levied by the UK
government which aims to reduce the sugar content in drinks by 20% in 2020 will adversely
impact the business (Yaxley, 2017). Also, there is a new law for banning advertisement of high
fat, salt and sugar food or drink product for children under the age of 16 will also affect the
marketing and promotional tactics of organizations. The introduction of these two laws will
affect the entire industry. This has affected the Sainsbury's promotion practices. It has started
producing product based on these laws. But, overall, it has a moderate effect on the Sainsbury
business operation.
Environmental factor(Moderate): It refers to the negative impact businesses create over
the surrounding environment. The scarcity of resources, increasing pollution, increasing threat
to life has put the pressure on organizations to take some initiative for the environment.
Organizations through its CSR initiative take some step to reduce the negative impact. Increasing