Business Strategy: Strategic Management Plan for Sainsbury

This report provides a strategic management plan for Sainsbury, including analyses of internal and external environment, evaluation of resources and capabilities, implementation of Porter Five Forces, and identification of growth platforms and strategies.

STRATEGIC
MANAGEMENT
PLAN

Table of Contents
INTRODUCTION.........................................................................................................................3
PART A...........................................................................................................................................3
Analyses of internal and external environment and evaluation of organizations resources and
capabilities...................................................................................................................................3
Implementation of Porter Five Forces and evaluation of competitive forces of given market
sector for business........................................................................................................................7
Identification and justification of organizational existing or potential competitive advantage...9
Devise valid strategies and tactical objectives for achieving organizational objectives...........10
PART B.........................................................................................................................................10
Critical evaluation for several types of strategic directions available for business...................10
Justification and recommendation for appropriate growth platforms and strategies.................11
Evaluation of measures by which selected strategy can be monitored in order to ensure success
...................................................................................................................................................12
CONCLUSION............................................................................................................................12
REFERENCES............................................................................................................................14

INTRODUCTION
Business strategy is described as the strategies and processes developed by business
entities in order to get a competitive edge in their sector of business. Business strategy is the
composition of decisions taken and actions performed by a business to achieve their
organizational objectives (Business strategy, 2021). Strategic management comprises of
formulation and implementation of initiatives formed and taken by a business to meet desired
targets and standards. In other words, a business strategy is a long-term plan which is created for
an organisation to reach desired future state. It is a clear set and document of plan actions which
describes the course of action followed by a business leader to achieve organizational objective.
The part one of the prospective project reports focus on examining internal and external elements
at Sainsbury's in order to determine their influence on the company's strategic decisions. The
second section of the study provides an in-depth justification for different strategy and choices
that Sainsbury might employ in order to get greater potential advantages in the business area.
PART A
Analyses of internal and external environment and evaluation of organizations resources
and capabilities
Pestel analysis of Sainsbury
In order to examine the external business environment, PESTEL analysis of Sainsbury
has been explained below:
Political factors- The political environment of Sainsbury countries in which they govern
and operate can have a significant influence on the worldwide operation of the company. As far
as Sainsbury is concerned, adoption of the Brexit policy may have harsh consequences for the
relevant organisation within the United Kingdom (Aithal and Aithal, 2019). Sainsbury's import
procedure is disrupted, as the UK is excluded from the EU would restrict the country's external
trade activities.
Economic factors- Continuous economic changes and changes, including changes in the
exchange rate, employee rates, labor rates, peak times, deflation and inflation, etc. might
potentially affect Sainsbury's profitability within the company industry. Higher fuel costs might

lead to more complex and expensive trading, which in turn can reduce the profit margins the firm
has obtained. In addition, the present COVID pandemic scenario in the world has also resulted to
unfavorable economic consequences (Pestel analysis of Sainsbury, 2019). In the following year
as well, the relevant element will probably impact Sainsbury's company plans and procedures.
Social factors- The trendy lifestyle of veganism might influence the selling within the
market of Sainsbury's dairy and animal goods. In the context of general market development as
well as institutions supporting their commercial operations within the same might be the
continuing improvement of current technology systems and instruments extremely important.
Technological factors- Sainsbury has been able to supply its trucks with the newest
technology. Recently, Sainsbury offers an option to sell online goods and to purchase from the
local stores. Sainsbury's Enabling organisations worldwide to learn about their operations are
advances technological in analytics, such as the use of big data and artificial intelligence. For
supermarkets like Sainsbury's, analytical improvements may be utilized to construct extremely
precise models describing how much a certain product (prevention of waste) will be sold and at
what price (maximizing profits).
Environmental factors- Today, the government and the people of a country demand an
organisation. And thus, the government of the United Kingdom. In fact, Sainsbury supports and
works towards the UN Sustainability Goals (Sainsbury’s macro environment analysis, 2019). In
the beef and lamb supply chain, it has begun to decrease its waste. Sainsbury is also focused on
reducing its operational carbon emissions.
Legal factors- The governing body formulates the legal process and structure in order to
help regulate the commercial practices of the company. In order to function easily on the
international platforms, Sainsbury must also incorporate the legal frameworks of the conduct of
business into its organizational policy and procedures. As stated in the annual reports, most of
the companies in the supermarket industry are responsible for producing carbon footprints in the
environment. The existing state of the environment is worsening as a result.
SWOT analysis of Sainsbury
For identifying the internal business environment of Sainsbury, a detailed SWOT analysis
has been explained underneath:

STRENGTHS
 Business expansion- The Sainsbury
growth plan has proven extremely
beneficial for the firm, since it has
helped to acquire new markets that the
company had previously untapped
(SWOT analysis of Sainsbury, 2021).
The credit is paid for the company's
imaginative expansion strategies to
position itself effectively as one of the
strongest brands in the grocery sector.
 Pricing strategy- Sainsbury's price
tactics are also an asset for the
corporation as it assists the company
in attracting a significant part of its
consumers. The firm is certain that
catering goods are cost-effective and
improve quality, so that sales can be
persuaded in advance and quality of
service can be properly ensured. The
firm has also maintained a strong
market reputation since it provides
clients with a choice of items in an
inexpensive range.
 Promotional strategy- It is also
possible to say that Sainsbury's
advertising methods and instruments
are highly innovative and different
from the other companies. In order to
capture the attention of prospective
WEAKNESS
 High competition- Furthermore, the
profits of organisations in the grocery
business have decreased with
increased worldwide rivalry. The
market is fragmented into numerous
segments and different companies
capitalize on their shares, reducing
Sainsbury's overall sales and
impacting its profitability margins.
 Customer switch- One of Sainsbury's
most likely disadvantages was the
customer segment's ability to convert
to competitor firms. The retention of
consumers is a highly tough issue in
the supermarket sector, as the client
might choose to change according to
their requirements (Barbosa,
Castañeda-Ayarza and Ferreira, 2020).
As a result, Sainsbury cannot keep
existing consumers and prohibit them
from switching to other firms as a
drawback.

consumers and to guarantee that sale
operations are maximized and
increased, the firm thinks that its
marketing agendas are a highlight of
its distinctive sales proposal (Bindra,
Parameswar and Dhir, 2019). In
addition, Sainsbury is constantly
prepared to provide its client base with
numerous coupons and discounts to
guarantee that client happiness is
optimally promoted.
OPPORTUNITIES
 E-commerce- The use of e-commerce
may assist to invest more in new
releases and offers so as to develop
and extend the variety of e-commerce
products in various markets and to
enhance productivity in the next
phase.
 Tap remote areas- The development
of stores in remote locations may also
provide Sainsbury an improved edge
and leverage so that it becomes more
aware of its brands and gains a good
reputation among persons who live in
their areas.
THREATS
 Increased competition- Sainsbury's
main danger may be viewed by its
competitors, like Tesco, Aldi, etc. In
the UK grocery business, the
competing firms likewise enjoy
substantial market share. Sainsbury's
battle with competitors to do more
lucrative and competent operations in
the sector involved (Dyer and et.al,
2017). The rivalry in the UK
supermarkets is quite severe and each
company seeks to gain the competitive
edge to assist shine the other
companies. Therefore, in order to react
in an efficient and successful way, the
firm needs to be highly forceful in
terms of rival movements and
strategies.
 Global pandemic- Moreover, the

current pandemic might potentially be
one of the major dangers to
Sainsbury's commercial operations
(Sainsbury SWOT analysis, 2021).
The epidemic has limited clients'
mobility and has caused a huge
worldwide recession, which in turn
might have a negative influence on the
company's sales and profitability.
Resources and capabilities of Sainsbury
Sainsbury is a multinational company that provides customers worldwide. The firm
assures the progress and optimal acquisition of resources in order to satisfy the criterion of
success on such a wide platform in order to facilitate and lead its operation without insufficiency
or incompetence (Elbanna, Al Katheeri and Colak, 2020). In order to overcome all obstacles on
the market, company provides appropriate supplies of human capital, financing acquisition,
technology power, management skills and machines, etc. As per the critical study, Sainsbury's
main capability may be obtained from profit margins, promotions and price strategies.
Implementation of Porter Five Forces and evaluation of competitive forces of given market
sector for business
Porter Five Forces of Sainsbury
New companies can present substantial challenges to established businesses by emerging
inside the grocery industry. This is due to the fresh innovations, innovative ideas and USPs that
new companies with enhanced business processes and superior pricing strategies provide. This
might be evaluated. In Sainsbury, although the firm now has a solid market position, it may be
harmed in the next period by the success of new businesses, given that its sales and earnings are
divided into the same. Therefore, its strategic approaches must be highly active in order to stay
up with the changing world situations and become one of the strongest leaders in its sector.
A detailed Porter Five Forces Model of Sainsbury has been explained below:

Power of suppliers- The need for increased supplier margins might lead to a decrease in
Sainsbury's profit scale. As Sainsbury provides to and serves the worldwide consumers, the
supply chain network is quite broad. It is therefore clear that Sainsbury's business practice cannot
be affected by the prevailing factor (Esmaeili, 2015). However, Sainsbury is necessary in our
strategic approach to use the exercise negotiation and settlement with suppliers to achieve
optimal leverage and to ensure a speed-up in the appropriate manner. There are several methods
in which organization’s negotiating strength is to create suppliers' effective supply chain and
generate loyal suppliers that rely fully on the organisation.
Power of buyers- A demanding bunch might be buyers. You want to achieve maximum
efficiency by spending the least possible amount of money. This put a pressure on the
profitability of Sainsbury Plc in the long run. The negotiation strength and the capability of the
consumer to ask for higher discounts and grows with the smaller and stronger Sainsbury Plc
client base. The purchasers expect the company to offer excellent products and services with
reasonable prices and other benefits. The increase in client trading percentages can have a major
impact on Sainsbury's total market margin. The firm therefore needs to position itself
wonderfully within the market industry and cater to the customers at reasonable prices in order
for it to battle the relevant factor effectively and responsively.
Competitive rivalry- If the existing competitors in a sector have strong rivalry, prices
will drop and the overall profitability of the industry would suffer. Sainsbury (J) Plc is a strong
competitor in the retail industry. This rivalry has a detrimental effect on the long-term
profitability of the company overall (Fedushko and et.al, 2021). There are several methods in
which the organisation deals with strong competition amongst departing retail industry
competitors. The organisation builds a durable distinction and also creates a scale so that they
may compete more effectively on the market and achieve better results and raise the size of the
market rather than only compete in the small industrial market.
Threat of new entrants- The new retail entrants provide more innovation and introduce
new approaches to the organisation by decreasing costs and giving consumers with new value
offers by means of a less pricing strategy. The Sainsbury organisation innovates new goods and
services in the marketplace and new products produced by it draws new customers to the
company and also gives the previous customer incentive to buy their products from Sainsbury. It

is extremely vital for the organisation to work on its strategies and develop some effective
strategies for overcoming rivalry and obtaining additional competitive advantages so that they
may minimize the window of extraordinary profits on behalf of the new organisation.
Threat of substitution- In the field of fresh products and services, the profitability of the
sector is affected by the same demands on customers in various ways. It is therefore very
necessary for the organisation to analyze the organization's strategies and activities to produce
unique products on the market so as to give customers with unique products and services
(Hladchenko, 2015). The organisation addresses the threat of product and services substitution in
the marketplace in several ways. The company knows the client's fundamental demand rather
than what the consumer buys. The company also increases the costs for consumers to switch.
The availability of substitute items on the market diminishes the retention of the consumers of
the companies as customers continually move to other companies in order to obtain replacement
of various products not available in a specific company. The failure of certain goods to make
certain products available can also impact Sainsbury to purchase the same from the rival
companies.
Identification and justification of organizational existing or potential competitive advantage
 Marketing strategies in the supermarket business are considered to have a very productive
and expanding contribution. It helped the company to establish itself as one of the UK's
major supermarket names. The product awareness produced by the company's marketing
methods and plans was excellent and advantageous to the organisation. Perhaps the firm
has benefited on every digital device to speed up its marketing dimensions and assure its
profitability among the target customers.
 The firm's decision-making procedures are also extremely culturally based and assist the
company develop integrity within its business function (Hubbard, Rice and Galvin,
2015). Sainsbury's decision-making criterion is extremely strong and enables the firm to
take advantage of the appropriate chance at the right time. It also leads to the future
acquisition of market benefits opportunities.
 Sainsbury's current consumer group presents a highly respected business picture.
Sainsbury's transparent operations throughout years of business have contributed to the
company’s development of the confidence and confidence of individuals in the market. It

has also contributed for such a long time as a key component in the success and stability
of their individual companies.
Devise valid strategies and tactical objectives for achieving organizational objectives
 In order to meet a range of persons within the market environment and to optimize the
creation of more advanced profit and the acquisition of a greater market share in the
supermarket sector, the rising trend for healthy food and supplements must also be taken
into account. ·
 The company should comply with all the legal rules and regulations and must integrate
them in a competent manner in order to minimize additional legal intervention
opportunities within the company's organizational practices.
 In order to promote the environment and ensure the sustainable business operations are
performed in an appropriate manner for the growth and stability of the company, the
company must focus on formulating certain competences and reliable waste management
methods, and concentrate its attention on reducing plastic use.
 The significant growth in the internet shopping sector can also help the company improve
its international brand awareness and increase global sales by Sainsbury (Jabbar and
Hussein, 2017). The firm thus has to work overwhelmingly to acquire the world's most
sophisticated and efficient technology to capitalize on them to expand the company's
business and speed up the company's success.
PART B
Critical evaluation for several types of strategic directions available for business
The important factor in the organization's strategic analysis and planning is that it helps
the organisation to provide business strategic modulation so that its business and operations are
effectively implemented to stop strategic management and also helps the organisation to make
effective decisions to succeed. It also helps the organisation to organize its business activities
and aligns its business processes to meet its objectives and goals.
Market penetration- With the help of the Sainsbury Organization to join the worldwide
market, market penetration might be viewed or categorized as an updated strategy (Koval, 2020).
The company offers several methods for developing its market position and performance and
helps the organisation take advantage of chances to expand its business.

Product development- The plan for product development allows the company to reach
its strategic goals very adequately and effectively. This plan calls on Sainsbury to guarantee that
goods producing value and an adjusted approach for consumer segmentation are developed. For
the purposes of generating product values (Rascão, 2020). The Sainsbury need a great deal of
money and labor to reach its aims and objectives. They are also asked to spend in research and
development to discover current market requirements and increase their consumers' abilities.
Diversification- Sainsbury Company may also use the diversification approach to lay its
basis and base on the fresh market by releasing some new and creative goods. The organisation
also needs to work with potential enterprises in order to develop its company and take on
additional opportunities. You have to rely on the strategies of expansion to enter into and expand
your income from overseas markets. In order to create and build new customers for the firm, the
organisation chosen aims to increase its brand image and awareness on the Global Platform.
Justification and recommendation for appropriate growth platforms and strategies
The company is encouraged to focus on the implementation and application of revised
product and strategy, so they may achieve their objectives and obtain more competitive market
advantages. Some of the strategies which can be recommended are stated below:
 The company is also recommended to engage on the internet platform to promote sales
and products to increase market growth and prospects.
 Sainsbury's company has to develop its price plan at extremely reasonable costs to
guarantee its sustainable development and expansion in order to obtain a greater client
base (Steiss, 2019). This approach supports Sainsbury in gaining more benefits and
increasing its revenue and profit margin, so as to obtain possibilities to provide its
employees with a suitable pleasure.
 The company is also encouraged to be highly self-confident and self-confident in the
pandemic's safety and precautionary approach. In order to enhance the health and well-
being of workers and consumers, it is necessary for the company to set safety and health
standards.
 In order to help develop and strengthen their strategy with a view to increasing their
profit margin and expansion targets, it is further advised to Sainsbury's organisation to
focus on the diversification and expansion platform.

Evaluation of measures by which selected strategy can be monitored in order to ensure success
 Feedback loop is an updated method or device to assist the company in identifying its
consumers' thinking processes and opinions to satisfy their needs. Consumers are of great
importance to the business and it is extremely necessary that they resolve their questions
and analyze their tactics effectiveness in order to make the changes accordingly.
 So, it is highly necessary for the Sainsbury firm to assess and monitor its strategy to
overcome the potential for unpredictability. There are many ways in which the Sainsbury
firm is able to properly analyze and manage its strategy.
 Financial performance is very crucial for the organisation and greatly needed by the firm,
so that the success of its plan can be identified and assessed. Evaluations may be made
that modified strategy may assist the company improve its profitability and its financial
position, where the profitability and financial position of the business are decreased by a
bad or appropriate strategy (Wills, 2020). The organisation analyses its financial accounts
to assess and monitor the financial soundness of the firm.
 Sainsbury may also rely on a number of strategies in order to give appropriate counsel in
accordance with the company's various plans. Strategic maps aid the business in
evaluating the details and impact of strategies in the company's domain. Strategic
mapping is a notion or approach that aids a business in facilitating a proper and updated
set of growth in order to comprehend the company's uncertainty factors and outcomes.
CONCLUSION
According to the above-mentioned research, it is critical for the business to implement
revised strategies in order to combat uncertainty and achieve greater success. It is critical for the
Sainsbury organisation to investigate the external and internal variables that influence its
success. According to the findings of the aforementioned study, Sainsbury's has modified
competitive tactics and advantages in the marketplace in order to achieve success and achieve
their aims and objectives in order to increase their profitability. In order to evaluate and
understand their competitive advantages and market position in the market, the company is also
using numerous modified frameworks such as pestle analysis, Porter's five forces model, and
SWOT analysis. In order to understand the competition and competitive position company
within the market, Porter Five Forces model has been implemented.

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