Business Strategy for Sainsbury: PESTLE, SWOT, Porter's Five Forces Analysis

This report analyses the internal and external environment of Sainsbury using PESTLE, SWOT and Porter's five forces models. It identifies the existing and potential competitive advantages of the company and recommends valid strategies and tactical objectives to achieve the overall strategic objectives.

BUSINES STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART A...........................................................................................................................................3
1- Analysing PESTLE and Swot of company..............................................................................3
2- Analysing and critically evaluating competitive environment using Porter's five forces
model............................................................................................................................................7
3. Identification and justification of the organization’s existing and potential competitive
advantage.....................................................................................................................................8
4. Valid strategies and tactical objectives in order to achieve the over-all strategic objectives. .9
PART B .........................................................................................................................................10
1. Critically evaluating different types of strategic direction available for organization..........10
2. Justification and recommendation in relation of the most appropriate growth platform and
strategies....................................................................................................................................11
3. Evaluation of the ways and means by which the selected strategies can be monitored in
order to assure the success.........................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management plan refers to the ongoing planning, analysis, evaluation,
monitoring and assessment of all the important attributes of the organization in context of
achieving the major goal and objective in efficient manner. Business environment is dynamic in
nature that leads to create potential challenges for the business organizations (Bindra,
Parameswar and Dhir, 2019). Therefore, strategic management plan is highly mandatory for
business organization as it helps in setting the major strategic direction. The present report is
based on the Sainsbury PLC which is established in the UK. It has been determined as the second
largest chain of the supermarket. It is one of leading retail firm that is focusing on expanding
(Sainsbury, 2020).
The report will critically analyse the internal and external environment of Sainsbury that
will assess its strategic decision making. Appropriate models such as- PESTLE, SWOT and
Porter’s five forces will be used. On the basis of the analysation recommendation will be made.
Furthermore, critical evaluation of different strategies direction will be done and most
appropriate will be selected for Sainsbury.
PART A
1- Analysing PESTLE and Swot of company.
There are different types of models and strategic frameworks available in the corporate
world, that applied in the context of a company or sector, for purpose of determining factors that
impact either negatively or positively. In the context of Sainsbury, PESTLE and SWOT analysis
models are utilized, to define the certain factors such as;
PESTLE analysis-
Political factor-
Political stability, tax rate, trad policy and other terms are included in category of
political factor. Any kind of change related to each term may put direct impact on a sector and an
organization that operate under that (Nandonde, 2019). In case of retail industry, Brexit put
negative impact on retail industry, which means it affects in similar manner upon Sainsbury,
which may plan to expand its venture in the new market. It may lead to decrease the
effectiveness of business operations and create more barriers for growth.
Economic factor-

Changes related to economic growth, income level, employment, etc. put impact on
business strategy of Sainsbury as it operates under retail sector, which encompasses all these
terms. Due to Brexit and pandemic, economic progress and other factors are affecting negatively,
which means firm may face challenge expanding venture in a new market, which is a challenging
task for it.
Social factor-
Market trend, buying behaviour of customers, interest and their lifestyle changes may
affect current and further business practices (Papoutsis and et.al., 2018). In case of Sainsbury,
these terms may put positive impact because organization may take initiative to consider all
market trend and always take initiative to understand the buying attribute to target market, before
taking any action or implementing strategy.
Technology factor-
In the recent time, technology advancement plays significant role in growth and success
of retail industry that mean it impacts positively upon Sainsbury business strategy. It may enable
marketer to promote new strategy all over the world that help to gain the attention of potential
stakeholders such as investors, customers and suppliers. As each stakeholder may tend to work
with those companies that have positive and good brand image in the market.
Legal factor-
Due to pandemic and Brexit factors, there are some regulatory changes might be done,
which may put negative impact on Sainsbury. As it may drive the attention of management
toward complying new rules and making change in the context of existing practice. It may lead
to increase more complications for management to deal with current circumstance that affect
business performance and effectiveness of operations.
Environmental factor-
Environmental sustainability is the main concept or factor that may put direct impact on
Sainsbury business expansion strategy in positive manner. It may drive the attention of
organization toward improving and enhancing CSR practices that help to retain potential
stakeholders and gain the attention of new.
Stakeholder analysis-
High power and high interest- (Keep satisfied)

Government and owner of the company as key stakeholders hold high extent power and
also interest to increase profitability (Stakeholder Analysis, 2022). It is important for
management to keep them satisfied as always.
High power and less interested- (Manage closely)
Suppliers and shareholders hold high power, but they are less interested too in the context
of business growth, because they have many options in the market to work with. So, it is
essential for management in the Sainsbury to manage them more closely.
Low power and high interest- (Monitor)
Customers and senior executives, may have low power to put negative impact on
company, but they are highly interested to grow with an organization like Sainsbury, which in
turn lead to obtain unpredictable benefits. Thus, monitoring related to these stakeholders is
important for management.
Low power and interest- (Keep informed)
Employees do not hold low high power and interest, so management keep them inform
about new strategy and plan to tend to implement into practical manner, for purpose of achieving
goals.
SWOT analysis-
Strengths-
Skilled and diverse workforce, effective leadership and management styles, are the key
strengths of Sainsbury, which allow company to grow rapidly and in competitive manner (Yao
and et.al., 2022). It helps to expand business in the new profitable market.
Weaknesses-
Lack of expansion or market existence is the main weakness of chosen supermarket, that
may impact negatively upon its growth and strategy formulation as well as implementation
process.
Opportunities-
Technology advancement and talent pool availability are the best opportunities that
Sainsbury and its management may grab, which enable them to enter into profitable and
productive market, across national boundary.
Threats-

Pandemic, regulatory changes and Brexit, are the major threats that may put negative
impact on supermarket, in term of creating challenges that lead to decrease the operational
efficiency, but for short term period.
Mckinsey's 7s model-
Structure-
With appropriate structure, Sainsbury may obtain competitive advantages while running
venture into retail sector, where competition level is higher. As internal capability, firm have
powerful factor, that it may utilize to grow and reach desire results.
Systems-
Effective technical infrastructure in the supermarket may establish workflow and chain of
decisions, which may impact positively upon its success, in both national and international level
that in return lead to increase profitability.
Styles-
By using the best management and leadership styles, in the Sainsbury, leaders and
managers may contribute to achieve aim, in term of retaining and influencing skilled workforce,
among which each candidate is able to perform productively.
Staff-
Employees engagement is one of those factors that may impact negatively upon
Sainsbury, as in the company management may not engage candidates in decision-making
process entirely.
Skills-
Managers and leaders in the supermarket, may develop plan to train candidates by
developing and implementing plan related to training programme, which help to develop skills
and improve the same among employees.
Strategy-
With effective management and leadership approaches, organization may succeed in the
market as it may have capability to develop the successful business plan that achieve sustainable
and essential aims.
Shared values-
With employees, they may share mission and vision, which drive their attention toward
achieving these appropriately.

2- Analysing and critically evaluating competitive environment using Porter's five forces model.
For purpose of critically examining competitive environment in the context of Sainsbury,
porter's five forces model is applied. As the current framework encompasses different forces and
these are;
Bargaining power of suppliers-
The degree of this force is low, because number of suppliers available in the retail
industry, whether it is UK or any other nations (Porter's Five Forces. 2022). Thus, it may
decrease the bargain power of suppliers and impact positively upon company in term of
enhancing power to build relation with new suppliers, who are able to provide and deliver quality
services. It can be critically evaluated that low bargain power may not allow supplier to put any
impact on pricing and other form of decisions in the Sainsbury.
Bargaining power of customers-
The extent of this force is high, because customers have number of options in the market
related to products that Sainsbury may provide to them, which may impact negatively upon firm.
It may lead to decrease the effectiveness and efficiency of company, which is not suitable for its
brand image and reputation in the market, where potential stakeholders are available. It may put
a lot of pressure upon chosen supermarket, that affect the way firm and its management work in
the world of business, where competition level is higher.
Threat of new entrance-
The degree of this force is low, because of new business expansion process expenses, that
is higher and challenging than setting own venture in the existing market. Thus, Sainsbury due to
this factor may take pleasure of increasing profitability and productivity, which is quite essential
and beneficial for its rapid and competitive growth in the business world. It may drive the
attention of company toward developing and implementing business expansion strategy, which
lead to increase profitability and customer base. As it is not that easy for any organization to do
that, without having appropriate resources.
Threat of substitute products and service-
The threat of any substitute item and service is low, because Sainsbury offer those
products to customers, which substitutes may not satisfy customers as they do not have many in
the market. This factor may put positive impact on company in form of driving management
attention toward retaining potential customers and gaining the attention of new across national

boundary, which lead to generate more profits and revenue than last few years or months that
might be help to gain competitive advantages in bulk.
Competition in the sector-
The degree of this current factor is high, because each and every organization in the retail
industry attempt to gain competitive benefits, which means they effort to increase the
competitive level in the overall sector. It may put negative impact on Sainsbury in term of
increasing and creating more barriers to business expansion process that firm may tend to
implement into practical manner.
3. Identification and justification of the organization’s existing and potential competitive
advantage
Competitive advantage has been determined as all those factors that allows organization in
order to produce goods and services in more effective way as compare to the rivalry firms.
Sainsbury is a retail firm that is dealing in the production of the retail goods and services. The
company has approached the large number of customer base in all over the world (Chang, 2018).
The company is focusing on expanding after experiencing ineffective growth period. However,
existing potential competitive advantage of the firm is enabling the organization in terms of
experiencing growth and facing the challenges that are occurring in the business environment
(Our business strategy, 2021).
The existing and potential competitive advantage of Sainsbury includes effective strategies
that leads to make Sainsbury superior from their competitors and those are-
Ethical way of trading- It has been found from various studies that Sainsbury has
adopted the ethical way of trading which act as a supportive system for the organization. the
organization has been proven highly effective enough in terms of performing all the mandatory
ethics that should be performed by the business organization. Thus, this leads to make the
organization superior from its competitors.
Cost strategy- This refers to the low-pricing strategy. As Sainsbury has the large base of
consumers in which there are low income consumers and high income consumers as well (Porter,
2019). Therefore, organization has adopted the low cost strategy in which the low prices is being
charged from the consumers in against of buying the product. Thus, in this manner the
organization is effectively focusing over the all types of consumers.

High quality products- The major competitive advantage of Sainsbury is that it is
providing high quality products in low price. TESCO is one of the biggest competitor of
Sainsbury that has also adopted the low cost strategy however, in context of providing high
quality in products, Sainsbury is effective in comparison of TESCO. In this manner, Sainsbury is
experiencing the competitive advantage.
Provenance and sustainability- This is one of the major existing and highly potential
competitive advantage of Sainsbury that makes company superior from its competitors.
Sainsbury has been proven highly effective in terms of performing the concept of sustainability
which has added to the goodwill of Sainsbury at the national and international market
(Christensen, 2019). Thus, with this competitive advantage company is facing no disruption from
the environmental communities and often their products are being promoted by environment-
friendly organizations and communities.
4. Valid strategies and tactical objectives in order to achieve the over-all strategic objectives
Strategies and tactical objectives are the attributes that has been planned by the business
organization in order to achieve the over-all strategic objectives. Strategic objective cannot be
achieved without planning the valid strategies and tactical objectives. The major strategies and
tactical objectives for Sainsbury that will help firm in context of achieving over-all strategic
objectives are-
Increasing social media presence- This is one of the best strategy that can be adopted
by Sainsbury as the major goal pf the organization is to increase the customer base which helps
in increasing the extent of operations. However, currently social media presence of Sainsbury is
not effective and this is impacting the growth of the firm. Therefore, organization must increase
their social media presence which helps in attracting the large number of customers (Evans,
Bratton and McKee, 2021).
Creating impressive storefront- Customers must be attracted in order to increase the
extent of operations. Therefore, this is one of the major strategy that should be adopted by
Sainsbury. The stores of the organization must be created in effective way that leads to attract the
large number of customers.
Increasing in sales- This is one of the tactical objective, Sainsbury must set the tactical
objective such as- increasing the sales up-to 20% by the next year. Thus, this kind of tactical
objective grab the attention of the organization towards the specific objective and effective

strategic planning can be done on the basis of this. In this manner, objectives have been achieved
in effective manner.
Approaching CFS- CFS refers to the customer feedback system. In technological
context, Sainsbury has not grown yet which is creating the major threat for the organization.
Currently, customers are highly active over online and technological context therefore, Sainsbury
must adopt this element (Arrigo, 2018). In this feedback of the customers can be reviewed and
on the basis of that new actions can be taken that will be highly beneficial for the firm.
Thus, the above explained points are the valid strategies and tactical objective for the
Sainsbury that could help in achieving the over-all strategic objectives of the organization.
PART B
1. Critically evaluating different types of strategic direction available for organization
Strategic direction refers to the plan which is needed in order to implement in the
organization in order to achieve the progress towards the fulfilling the major goal of the
organization. There are different types of strategic direction that are available for Sainsbury are-
Porter’s generic strategy
Porter’s generic strategy refers to those strategies that are concerned with the Cost
leadership, differentiation and focus strategy. The cost leadership refers to keeping the low cost
of the product in the market. Thus, this strategy has been already adopted by the Sainsbury
therefore, currently this would not assure higher benefits (Barney, 2020).
Differentiation strategy in the porter’s generic strategy refers to the strategy in which
company produces the different range of products. Product differentiation provides the higher
competitive advantage as with the help of this, firm can effectively become superior from the
competitor within producing the large number of variety in the product.
Focus strategy direction is also available for Sainsbury in which the firm can focus over a
specific segment of consumers and the sales in that particular segment is being increased. In this
manner, Sainsbury can establish focus over the segment that has to be approached in order to
increase the market share (Petrova and et.al., 2022).
Bowman’ s strategic clock
This strategy provides the options in terms of identifying the current position of the
company in the market based on the price and perceived value. This strategy is based on taking
the strategic decision in order to take the strategic direction (Porter and Millar, 2019). Thus, this

strategy is based over two attributes and those are price and the perceived value in the market.
Thus, in this manner Sainsbury can know its current position in the market which will guide
organization in terms of taking the most appropriate decision.
2. Justification and recommendation in relation of the most appropriate growth platform and
strategies
The most appropriate growth platform and strategies for the Sainsbury is using the mixture
of porter’s generic strategies and bowman’s strategic clock. Focus strategy of the porter’s generic
strategy will be highly beneficial for the company as the organization has already adopted the
cost leadership and differentiation strategy. Sainsbury is a retail firm that offer different variety
of products in low prices. Thus, this is the exiting competitive advantage of the firm. Thus, in
order to achieve the goal and objective of the firm adopting the focus strategy is highly
beneficial.
In focus strategy Sainsbury can approach the consumer from aged between 20-50 and the
products related to healthcare of the Sainsbury cab be promoted. Currently, consumers are highly
conscious about their health (Wang and et.al., 2018). It has been found from various studies that
consumer prefers healthy product. Therefore, focusing over specific segment in this context will
lead to assure higher benefit to Sainsbury.
Furthermore, using bowman’s strategy will guide Sainsbury to take appropriate decision
for this new focus strategy within analysing the current prove and perceived value in the market.
As a result, more appropriate decision can be taken by the Sainsbury in this context.
DEVISING STRATEGIC PLAN FOR SAINSBURY
Background- The strategic plan is based on approaching the customers aged between 20-
50 who are highly conscious about the healthy products and who gives preference to health
more.
Organization structure- Implementing focus over employee’s preference as with the
help of this effective organization structure will be established which leads to help in achieving
the major goal. For current strategy hierarchical organization structure will be adopted.
Vision- The vision of the company is aligned with increasing the market share until the
end of the year.
Mission- The mission is to adopt effective marketing mix strategies in order to achieve
the selected strategic direction.

Marketing mix- In this Sainsbury will focus on producing healthy products which are of
low price and assures higher efficiency. Furthermore, the products will be made available at the
online and offline platform and the promotion will be done within using social media platform.
Strategy formulation- Focusing on the specific segmentation of consumer who aged
between 20-50 and are highly conscious about health.
Implementation- Plan will be implemented after discussing it with everyone and taking
opinions of employees as well.
Evaluation- Evaluation will be done within using the measurable techniques that
involves effective reporting system.
3. Evaluation of the ways and means by which the selected strategies can be monitored in order
to assure the success
Monitoring the strategies are highly important as it helps in knowing whether the selected
strategies are going on track or not. Effective monitoring strategies helps in assuring the effective
outcomes at the end and often helps in achieving the final goals and objectives. Strategic plan
cannot provide effective outcomes without implementing the monitoring strategies as it leads to
assure the higher level of success (Direction, 2022). Thus, the major ways through which
Sainsbury can monitor the strategies in order to ensure the success are-
Effective reporting system- This is one of the effective way through which the strategy
can be monitored. Effective reporting system will lead to have the exact and specific information
in relation of the strategies. Also, the errors can be known in fast manner. The accountability can
also be mentioned in effective manner which helps in taking up the responsibility the responsible
person when the things does not work in accordance with the plan (Tipurić, 2022).
Identification of small errors- Small errors leads to create the higher impact over the
strategies. Therefore, focus over the small errors will be formulated so the instant action can be
taken by the Sainsbury.
CONCLUSION
From the above report it has been concluded that strategic management plan plays crucial
role in guiding the organization in context of taking strategic decision Strategic decision enable
organization to adopt the effective strategies that are highly effective for the organization.
Furthermore, report has concluded that is important to analyse the internal external and
competitive environment of the organization in order to form the effective strategic decision.

Thus, in this manner on the basis of the critical evaluation of the business environment
appropriate decision can be taken that would be beneficial for the organization. Moreover, report
has evaluated the available strategic direction option that are available for the selected
organization. Appropriate recommendation has been made on the basis of the evaluation and the
preferable monitoring strategies is implemented. Thus, the final conclusion that is being arrived
is that strategic management plan is highly important in order to assure the higher growth and
success to the organization.

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