Business Strategy: Internal and External Factors, PESTLE Analysis, SWOT Analysis, Strategic Plan

This report discusses the internal and external factors affecting business strategy, including PESTLE analysis and SWOT analysis. It also explores the development of a strategic plan for Sainsbury, a renowned supermarket chain in the UK.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...............................................................................................................3
PART A- Internal and external factors ..............................................................................3
1) PESTLE.....................................................................................................................3
PORTERS FIVE FORCE: .............................................................................................4
2) Sainsbury capability (VRIO model)...........................................................................4
3) SWOT .......................................................................................................................5
PART B - Strategic Plan ...................................................................................................6
1) Strategies:.................................................................................................................6
2) Producing a strategic business plan.........................................................................7
CONCLUSION...................................................................................................................8
REFERENCES..................................................................................................................9

INTRODUCTION
Business strategy refers to the business tactics or actions that is used by the
company in respect of attracting customer towards the business. Strategy is mainly
undertaken in relation to strengthening the performances of the company or also setting
the goal which is to be achieved within the stipulated time period (Bentham, 2018).
Present report is based upon the Sainsbury which carries the renowned brand image in
the market and such concept is brought by John James Sainsbury in 1869. It is
examined that they are carried to be the third largest supermarket chain in UK. This
report will include the matter relating to internal and external factors that provide the
information regarding planning for business strategy. It also carries the aspects relating
to undertaking the theories and business tactics for initiating the accurate strategic
management plan.
PART A- Internal and external factors
1) PESTLE
In relation to undertaking the external analysis PESTLE is conducted which helps
company to examine the factors which affects the strategy of business externally
(PESTLE AND SWOT ANALYSIS OF SAINSBURY’S 2017, 2020). It carries the
following such as: Political: Sainsbury causes the major impact during the time of Brexit as most of
the people decided to move from EU. This results in facing issue regarding
importing the goods from abroad. Thus, the impact arises due to facing strict
government norms regarding promoting the business into different countries
(Edwards and et.al., 2019). Economic: The impact which the Sainsbury faces externally is adapted in case of
rise in fossil fuels which results in causing heavy expenses of transportation cost.
It also causes impact regarding fluctuation in interest rate, thus impact arises due
to raising in expectation of getting higher salaries to employees. Social: This is one of the major external factors which results in causing deep
impact to Sainsbury in form of changes in market trends (Mkansi and Nsakanda,

2019). Thus, in such aspects they are preferring healthy and eco friendly
products and also conscious about knowing the dealing of raw material. Technological: Technology play the important role in sustaining business in
market for longer way. The impact arises due to lack of data security or also
home delivery of products within the set stipulated time period. Thus, digital
services are demanded in market by the consumer to order the products online. Legal: In this factor, the impact arises due to changes in government norms such
as in case of sugar tax, it results in reducing the amount or percentages in sugar
drinks. Thus, impact arises regarding delay in taking the right decisions.
 Environmental: The impact arises due to changes in climatic conditions which
arises due to reduce of carbon gases during the time of producing the products.
Thus, the impact arises regarding not delivering the products within the stipulated
time or also getting damaged products due to changes in weather conditions
(Nazareth, 2019).
PORTERS FIVE FORCE:
It is undertaken to analyse the five forces which resulting in examining
opportunity and threat to Sainsbury. It indicates the following such as :
 Power of buyers: Sainsbury carries the high bargaining power as buyer had
wider option to choose the products from particular supermarkets.
 Powers of suppliers: They carry the low bargaining power as Sainsbury deal with
larger number of supplier regarding purchasing the raw material.
 Competitive rivalry: They face competition from the three major supermarkets
such as Asda, Tesco and Morrison. Thus, it arises to be major threats for
Sainsbury regarding promoting the products in market (Shalhoub, Marshall and
Ippolito, 2017).
 Threats of substitutes: It is examined regarding dealing in same products in
market which is similar to other company products. Thus, this is the opportunity
for Sainsbury regarding attracting the customer towards offering the innovative
and useful products in market.

 Threats to new entry: It is mainly faced in relation to carrying the strict
government norms. Thus, in such case Sainsbury faces low threats in entering
into the new market.
2) Sainsbury capability (VRIO model)
This carries to be the internal analysis tool which is mainly adapted in respect of
determining the internal working of the company and also it helps Sainsbury in
examining the competitive advantages. This can be undertaken as follows:
Factors Valuable Rare Imitate Organized
Financial
resources
Yes, highly
valuable (Jellil,
Woolley and
Rahimifard,
2018).
Yes, they are
rare.
No, They are
not so costly.
Yes, Sainsbury
are well-
organized.
Patents Yes, they carry
patent right in
respect of
resources.
Yes, they are
rarely
committed.
Yes, they are
difficult to
imitate (Mussa
and Zhi Zhang,
2016).
No, they are
lack in
managing the
patent rights.
Employees Yes, employees
are valued
(Thompson and
McLarney,
2017).
Yes, they are
highly trained
Yes, employees
are easily
affordable.
Yes, due to high
management
skills.
Distribution
network
Yes, valuable
resource are
undertaken.
No, it not
considered to
be rarely found.
Yes, they are
costly.
Yes, they are
organized in
systematic way.
Through this manner, the strength and weakness of Sainsbury is identified
regarding dealing in various activities to get better results.

3) SWOT
This analysis is mainly conducted to examine the internal factors which helps in
undertaking the business planning in better way (FATRICIA, 2016). It carries the
following such as: Strength: Sainsbury carries the strong marketing strategies regarding retaining
the customer interest towards the business. The quality of the foods and the
services which thy are offering resulting in sustaining the business in market for
longer way. Weakness: Sainsbury deals in single operating market which results in carrying
only the stores in UK. This in case of fluctuation in prices or changes in taste of
the customer regarding food products resulting in declining the profitability which
arises through sales (Haleem and Jehangir, 2017). Opportunities: Sainsbury attains the opportunity regarding dealing in providing
healthier products to their customer, so that they can enhance the business for
longer way. They also carry the opportunities regarding using the technology to
promote the business at larger level.
 Threats: Sainsbury faces threats in resulting to facing tough competition in
market regarding promoting the same products. Threats also arises resulting to
impact of Brexit which resulting in fluctuation in price rate (Devitt and et.al.,
2016).
PART B - Strategic Plan
1) Strategies:
By applying Bowman strategic theory, it carries 8 major aspects and among
such aspects, it helps Sainsbury in dealing on which particular factors:
 Differentiation: It is undertaken regarding providing the high quality products with
enhancing the brand loyalty among customer (Aluko and Knight, 2017).
 Focused differentiation: It aims is to focus on particular segment regarding
differentiating the products.
 Risky high margin: In this business sets high prices with not offering any
complementary services to customer.

 Monopoly pricing: In this monopoly is maintained regarding offering single
products which the choice of buying it or not (Sniehotta and et.al., 2019).
 Loss of market share: In this minimal pricing is set regarding retaining customer
towards the products for longer way.
 Low price and low added value: In these products are to be sold in market with
low pricing and also with low valued added on it.
 Low price: Products are to be made with the motive of carrying the less profit's
margin.
 Hybrid: It carries the mixture of low pricing with good valued added on the
products and also different the products with other company products (Godley
and Hamilton, 2019).
Thus, from this theory, Sainsbury adapts the differentiation factors, through which
they differentiate the products from other company products. As Sainsbury is carried to
be third largest chain of supermarket in UK and thus it is necessary to bring changes in
their promotional technique regarding retaining customer interest towards the business
(McGreevy and et.al., 2019). Thus, by undertaking differentiation in products resulting in
fulfilling the customer needs and demands in better way and also make strong
connectivity through bring changes as per their demands.
Porters generic strategies' theory:
This theory indicates that how company can achieve success through emerging
from competitive environment. It mainly carries the following aspects such as:
Cost: In these, products are to be offered on lower pricing, so that they can enhance
their interest towards the products for particular time period.
Focus: It mainly related to focusing on particular segment through which they promote
their goods and services in better way.
Differentiation: In this differentiation, is to be done regarding differentiating the products
with the other company products.
Sainsbury, uses the Concept of differentiation which is one of the basic needs
examining through external factors. As lot of competitors are emerging in market, thus,
it is necessary the healthy and eco friendly products are provided to customer to retain
their interest towards the business (Souza-Monteiro and Hooker, 2017).

2) Producing a strategic business plan.
OBJECTIVES PLAN STRATEGIC ACTION REVIEW
The key objective is to
reduce heavy
expenses.
The management of
the company must
focus on maintaining
effective financial
plan.
Relocating the office to
more cost-efficient
area. Make a strategic
cost and attain
economies of scale.
Management
and financial
assistants will
review the plan.
To stand out in the
market from its
competitors.
To carry out a
market research and
understand the
strategies adopted
by Asda, Tesco and
Morrison.
Sainsbury must focus
on carrying out
effective promotional
and marketing
techniques.
Marketing and
reach team will
review the plan.
To stringently comply
with the norms and
regulations of the
government.
To prepare a legal
team in order to
make necessary
decision associated
with the legal norms,
rules and
regulations.
Continuously
upgrading with rule and
legislations
implemented by the
government in order to
perform business
activities in legal
manner.
Company
secretory,
advisory team
and legal team
will review the
plan.
To understand the
needs, wants and
preference of the
customers.
To analyse the
current market trend
and preference of
the customers.
To communicate with
the customers and
identify what are their
current needs and
preference.
Research team
and
management of
the company
will review the
plan.
To increase the
market share and
sales of the company.
To analyse the
target market.
To integrate with online
shopping platforms
such as mobile
Research team
and
management of

application and
personal website.
the company
will review the
plan.
CONCLUSION
From the above study, the report conclude the matters relating to carrying
various strategies which resulting in enhancing the growth and sustainability of the
company in larger way. This report is prepared on the bases of Sainsbury company and
also the strategy are undertaken regarding facing issues in expanding the business
externally. It also determines the aspects relating to internal working of the company
regarding managing the activity in better way. It also carries various strategies which
resulting in providing better procedure to sustain in market for longer way.

REFERENCES
Books and Journals
Aluko, O. and Knight, H., 2017. From corner store to superstore: a historical analysis of
Sainsbury’s co-evolution. Journal of Management History.
Bentham, J., 2018. Business and Economics in the News–Sainsbury's and Asda-the
decade's mega-merger. Teaching Business & Economics. 22(3). pp.11-12.
Devitt, C. and et.al., 2016. Stakeholder perspectives on the use of pig meat inspection
as a health and welfare diagnostic tool in the Republic of Ireland and Northern
Ireland; a SWOT analysis. Irish veterinary journal. 69(1). p.17.
Edwards, C. H. and et.al., 2019. A single-enzyme system for starch digestibility
screening and its relevance to understanding and predicting the glycaemic index
of food products. Food & function, 10(8). pp.4751-4760.
FATRICIA, R. S., 2016. SWOT ANALYSIS OF SAINSBURY’S SUPERMARKET. Jurnal
Manajemen Terapan dan Keuangan. 5(1).
Godley, A. C. and Hamilton, S., 2019. Different expectations: A comparative history of
structure, experience, and strategic alliances in the US and UK poultry sectors,
1920–1990. Strategic Entrepreneurship Journal.
Haleem, F. and Jehangir, M., 2017. Strategic Management Practices by Morrison PLC,
UK. Analysis, Lessons and Implications. Middle East Journal of
Business. 55(4182). pp.1-7.
Jellil, A., Woolley, E. and Rahimifard, S., 2018. Towards integrating production and
consumption to reduce consumer food waste in developed countries. International
Journal of Sustainable Engineering. 11(5). pp.294-306.
McGreevy, M. and et.al., 2019. Can health and health equity be advanced by urban
planning strategies designed to advance global competitiveness? Lessons from
two Australian case studies. Social Science & Medicine. 242. p.112594.
Mkansi, M. and Nsakanda, A. L., 2019. Leveraging the physical network of stores in e-
grocery order fulfilment for sustainable competitive advantage. Research in
Transportation Economics. p.100786.
Mussa, H. I. and Zhi Zhang, W., 2016. The Secret behind Strategic Information
Management over the Success of Agro-Processing and Retail Industries-Case
Study Wal-Mart. J Glob Econ. 4(204). p.2.
Nazareth, A. P., 2019, January. How close is the built environment to achieving
circularity?. In IOP Conference Series: Earth and Environmental Science (Vol.
225, No. 1. p. 012070). IOP Publishing.
Shalhoub, J., Marshall, D. C. and Ippolito, K., 2017. Perspectives on procedure-based
assessments: a thematic analysis of semistructured interviews with 10 UK surgical
trainees. BMJ open. 7(3). p.e013417.
Sniehotta, F. F. and et.al., 2019. Behavioural intervention for weight loss maintenance
versus standard weight advice in adults with obesity: A randomized controlled trial
in the UK (NULevel Trial). PLoS medicine. 16(5).
Souza-Monteiro, D. and Hooker, N., 2017. Comparing UK food retailers corporate social
responsibility strategies. British Food Journal.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes
undertaken by next Plc have on themselves and their competition in the UK

Clothing Retail Market?. Journal of Commerce and Management Thought. 8(2).
pp.234-264.
Online
PESTLE AND SWOT ANALYSIS OF SAINSBURY’S 2017. 2020. Online. Available
through: <https://www.123writing.com/free-sample/pestle-and-swot-analysis-of-
sainsbury%E2%80%99s-2017>.