Business Strategy Analysis

Business Strategy

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................1
LO1..................................................................................................................................................1
P1 Pestle Analysis .......................................................................................................................1
LO2..................................................................................................................................................3
P2 Swot analysis..........................................................................................................................3
LO3..................................................................................................................................................1
P3 Analysis of Sainsbury's strategy using its competitive position.............................................1
LO4..................................................................................................................................................3
P4 Strategic management plan for Sainsbury..............................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Business strategy is the planed action and moves or decision of the company in order to
attract large customer base and gain competition advantage in the industry. In this report
Sainsbury has been taken as organisation which is leading retailer of groceries in UK with the
largest chain in supermarket. It was founded by John James Sainsbury in 1869 in Holborn,
London, United Kingdom. This report discusses about the analysis of various internal and
external environment factor and capabilities of Sainsbury. This report also throw light on macro
environment that affects the performance of company. This report also evaluates its competitive
force by using porter's Five Force model. At last this report prepares a strategies planning of
Sainsbury by using various ranges of models and concepts, theories.
LO1
P1 Pestle Analysis
Pestle Analysis is the evaluation and analysis of all external environmental factor that
impact performance of Sainsbury. This analysis is mostly done by the company at the time of
launching a new product or product line to understand various factor that operates in
environment. The Pestle Analysis of Sainsbury is as follows:
Political Factor: It includes the policy of the government such as Political stability or instability,
tax policy that might impact the decision-making and functioning of organization
(Venkatachalam, 2018). UK is facing political instability due to Brexit as the UK decided to
leave European union as a result it impacts the import of the Sainsbury Company. It also leads to
increase in cost of imported product which at the end passed to the customer. The inflation rate
also increase that leads to unemployment, increase in debt thus decreasing the purchasing power
of the customer. The company can use various marketing mix or tools to influence the customer
in order to ensure continuous spending for gaining maximum profit. So, as the company operates
its business in UK it had to undertake political instability while making strategies for achieving
its objectives.
Economical Factor: It includes various factors such as interest rate, unemployment rate, tax
rates and exchange rate that help in determining performance of economy. This factor has
adversely affected the functioning of Sainsbury due to stagnation or slows down of economic
development. There is high inflation rate, employment rate and decrease in consumer spending
and the value of pound in the economy. The increase price of fuel had also affected the company

as it’s mainly dependent on road transport for delivery of its product across UK. That has
resulted in increased cost of product and hence decreases the profit margin of Sainsbury
Company. So, the company needs to expand its business in new market and should not much
depend on road transport.
Social factor: This factor helps in determining the custom, values and belief of the population in
which the company operates its business (Gause, 2016). It is also useful in identifying the
population trends such as lifestyle and career attitude, age and income distribution and emphasis
on health and safety. The customer taste and preference changes contiguously so the marketer of
company needs to identify the needs of the customer and satisfy in the best possible way.
Customers around the globe and in UK also are more conscious about their health and thus prefer
healthy diet. Sainsbury has to change its fast food menu by including various other option such
as organic food and salad. Company should also promote fair trade movement of product as
nowadays customer is more interested to know from where the food has come. Thus, it can be
stated that social factor help Sainsbury in attracting large number of customers.
Technology factor: This factor refers to the pertaining technology and update technology that is
used by the company to decrease the cost of product. It includes level of innovation, research and
development, technology awareness among the market and technological changes. Customer in
present business environment prefers online shopping more so the company has updated its
technology by selling its product online. Thus, it gives ease and comfort to its customers by
delivering the product at their doorsteps. Sainsbury by introducing e-commerce store enable the
company to cater tech friendly generation. The company by advancement in its analytics can
build accurate model that will helpful in estimating the sales of the company by minimizing
waste and maximizing profit. Thus, the development in technological will help the company in
bring economy of scale and will increase profitability.
Legal Factor: This factor includes certain rules and regulation that the company needs to follow
while operating its business (Aithal, 2017). Some of them may overlap political factor such as
employment law, discriminative laws, consumer protection law and health and safety laws. The
company has to consider these laws in its operation for successful and ethical trading. Sainsbury
is affected by legal factor as the government has introduced tax on advertisement for fatty and
highly processed food. It restricts the functioning of Sainsbury from conduction promotional
activities and marketing of fatty foods. Thus, the company needs to modify its product such as