Business Strategy Assignment - Sainsbury, UK

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
LO 1 ................................................................................................................................................1
BRIEF INTRODUCTION OF ORGANIZATION ....................................................................1
Influences and impacts of macro business environment..............................................................2
LO 2.................................................................................................................................................5
INTERNAL ANALYSIS AND CAPABILITIES OF SAINSBURY.........................................5
LO 3.................................................................................................................................................7
APPLY PORTER'S FIVE FORCE MODEL AND EVALUATE THE COMPETITIVE
FORCES IN ORGANIZATION..................................................................................................7
LO 4...............................................................................................................................................10
APPLYING MODEL, CONCEPTS, INTERPRET AND DEVISE STRATEGIC PLANNING
FOR SAINSBURY....................................................................................................................10
CONCLUSION .............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
Business strategy is a framework prepared to achieve vision, mission and objective of the
organisation. It is the tool that aims to achieve competitive advantage for the organisation over
another competitor. Every business aims that its business strategy should be such that it can't be
duplicated by others. The present study is done on Sainsbury, a large retail supermarket of UK.
Apart from this a briefing is done on macro environment of Sainsbury that includes legal,
political and ecological environment. Furthermore, it also includes social, economic and
technological factors that affect the business environment (Comino and Ferretti, 2016). In
addition to this there are several factors that are present within the internal environment of the
business that is discussed in detail. Apart from this, the present study contains Porter’s Five
Forces model that is described to identify the competitive strategy of the company. Furthermore,
the present study contains theories and concepts for the interpretation of strategic direction of the
organisation.
LO 1
BRIEF INTRODUCTION OF ORGANIZATION
Sainsbury is a large retail chain in UK, which was supported by John James Sainsbury in 1869 as
well as has 16.9% share of the retailing market. It mainly offers food products and groceries.
Currently 186900 employees are working in its organisation. Its net income is £309 million and
operating income is £518 million. In addition to this it offers 32000 varieties of products.
Mission: To be the consumer's first choice for food by delivering products of outstanding quality
and great service at a competitive price and working 'faster, simpler and together.
Vision: To be the most trusted retailer where people love to shop and work.
OBJECTIVES
Following are the objective and mission of Sainsbury-
 To maintain simplicity and efficiency in delivering and offering services and products.
 To make improvements in products so that demand of new customers can be meet
 To increase sales by offering better services and encouraging teamwork
 Respecting each individual in the organisation (Gürel and Tat, 2017).
 To deliver great service to the customers
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 To make use of new technologies so that waste can be minimized and productivity can be
increased
 To offer value added products to the existing range as well as new customers
Influences and impacts of macro business environment
The business environment is considered to be a complex, dynamic and multifaceted in nature and
it also has a far-reaching impact on the business growth and survival as well. Every business
organisation gets affected and influenced because of the macro environmental elements or
factors. Sainsbury's aims at effectively analysing the macro business environment so that it can
identify its impact and influence on the internal elements of organisation. The PESTLE analysis
framework is being utilized for examining the macro environmental components (Zahari and
Romli, 2018.). This analysis effectively examines the influencing factors of the business
organisation. Following is given the brief description of the PESTLE analysis:
Political component
This consists of tax policies, labour laws, foreign trade policy, environment laws,
government stability, legislative regulation of an economy, trade restrictions and so on.
Sainsbury's is a multinational company thus it is greatly influenced by the political changes of a
country it is operating in. The globalisation approach implemented by Sainsbury's may lead to
bring great opportunities as well as challenges for the company. Increasing pressure from World
trade organisation regulation have influenced retail, operations of Sainsbury for a long run. Like
changes in taxation policies where local government is looking for specific change in tax policy
with regard to carbon foot print.
For example, in the UK economy, debt rates on consumers and on government are very
high, that leads to bring impacts on the attitude of customers and also on conditions of business
organisation. In this kind of situations, the company has to focus on operating in such marketing
conditions and also focus on effectively running the business operations and activities
continuously (Nurmi and Niemelä, 2018).
Economic component
These factors lead to bring significant impact on how company does business. This
includes interest rates, exchange rates, economic growth or stability of a country, inflation
situations, disposable income of customers and so on. Sainsbury's business operations and
activities may get affected and influenced due to the lifting prices of fuels. However, changes in
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economic factors have significantly influenced Sainsbury's business because of recession, debts,
unemployment, hike in food prices. Further, Downward pressure on consumer spending denotes
inequality in consumer ability of spending for which it is important for the firm to focus n
consumer buying behaviour and preferences. Increase in cost agencies leads to affect the supply
chain of the company. One more example of economic factors that may lead to affect the
activities of Sainsbury's can be the recognition crunch. This factor may bring immense impact on
the gross revenue of the company because the customer will lead to have less buying power. In
contrast to this is that customers will be more focused on their disbursements and buying less
expensive products which can be stated as good impact on the net income of Sainsbury's.
Social component
These factor are also called as the socio-cultural factor and this may include shared
attitudes and beliefs of target- market customers. Social factors lead to greatly impact and
influences the products, services and operations of the company. These factors are age
distribution, career attitudes, social beliefs, population growth, education rate, health
consciousness and many more. The broader attitudes towards migration is negative in UK which
impacts ability of Sainsbury to bring international managers and leaders to manage operations in
country. Also changes in media outlets is also influencing public opinion in UK with can assist
Sainsbury on leveraging better market and position of its products.
The social factors lead to bring dramatical changes on the shopping habits of people that
may affect the UK grocery business Sainsbury's for example. British people or shoppers choose
for their big weekly food shopping rather than spending money for numerous trips to the local
convenience stores. And this leads to bring great influences on the sales and profits of the
Sainsbury's supermarket business. One more example can be that in the fast pace world,
consumer prefers such places for shopping where they can have all the products under one roof
only. Due to these changes, Sainsbury's gains many benefits as it has stores that provide all the
food products as well non-food products.
Technological component
This is the most influencing factor which affects business operations and activities.
Business organisation gets influenced on its marketing operation and management activities due
to the changes in the technological factors. The technological advancements and up-gradation
lead in bringing immense impacts and influences on how any company produces its products and
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