Contemporary Management Issues

This report analyzes the contemporary management issues faced by Sainsbury's and Argos after their merger. It discusses the drivers of change, SWOT analysis, PESTLE analysis, and Porter's five forces. The report also provides recommendations on how the organization can enhance its responses using Kurt Lewin's change management model.

Contemporary
Management Issues

Table of Contents
Introduction......................................................................................................................................3
Sainsbury’s has strategically responded to these drivers of change with consideration for the
nature of the pressures for change...............................................................................................4
Sound recommend how the organisation might enhance its responses highlighted above.........8
Recommendations: -........................................................................................................................1
Conclusion.......................................................................................................................................2
References........................................................................................................................................3

Introduction
The fast changing global environment has affected large number of organisation and
industries in the present scenario. Effective policy making is one of yhje important specst that
can help organisations in the process of strategic decision making. Organisations are now
working towards laying their emphasis on strategic decision making so that they are able to
maximise the overall benefits that can be received from such decisions. Present report is based
on case study analysis of Argos that has been take over by Sainsbury's . This take over and
merger has resulted into a complete transformation of the present operations at Sainsbury's that is
going to affect its present and future functioning (Johnson, 2020). Present report is based on
analysing the drivers of change and the way it is posing a impact on the strategic decision
making process and other commercial and operational activities of Argos. Sainsbury has
strategically responded to such drivers of change in consideration with the overall pressures that
are part of the macro environment. Based on such analysis there are further recommendation that
are formulated to enhance the decision making process in the coming time period with
application of relevant change models.
Case scenario: The changing environment is leading to lot of changes that are required
to be done for the purpose of dealing with the uncertainty. For this purpose Argos is willing to
takeover boost for sainsbury's present trading situation. The retail sector is changing very fast
that is leading to some specific changes that are required to be in done in order to survive in this
highly competitive market (Esch, Schulze and Wald, , 2019). The present half year profits at
sainsbury has resulted into a takeover catalogue where there is more cost saving and adding to
more enhancement in the trading intensity of both the brands.
Strategy formulation: Mergers and acquisitions are regarded as popular business
strategies that organisations are looking for the purpose of expansion in new markets for the
purpose of getting a competitive advantage. It can also be very helpful in the process of
acquisition of new skill sets or new technologies. There are basically two types of mergers that
includes strategic mergers and financial mergers (Basar, 2018). A strategic merger is related
with having a thoughtful growth strategy. In amazon the organisation has analysed mainly two
types of operation related synergies that is cost and revenue. Cost synergies that is cutting of cost
by taking advantage from overlapping resources and operations by consolidating it into one

entity. In strategic merger it is base on redudnat facilities, workforce and business units that are
major areas of operations.
Revenue synergies: These are based on altering the competitive for further creation of
opportunities to change the overall market dynamics to enhance the sales of products and raise
prices.
Sainsbury’s has strategically responded to these drivers of change with consideration for the
nature of the pressures for change
Major drivers of change: There are different drivers or Catalysts of change that may lead to
require of change in organisations. Many times organisation may face issues because of
inadequate attention to such drivers of change. Some of such drivers has affected Sainsbury and
Argos and is going to posses a impact on its strategic decision making process.
Marketplace requirement of success: the changing customer needs leads to requirement for
business to succeed in the market (Keebler, Albertelli Jr and Mascarenhas, 2017). It may lead to
changes in the speed of delivery, level of quality, need of innovation, enhancing the level of
present customer service. In case of sainsbury and Argos this requirement has lead towards need
for merger.
Business imperatives: It is a driver of change that is related with the requirement for
organisation to be strategically successful in the market. It is creating a need for systematic
rethinking and changes that are required in organisations products, goals, branding, pricing
strategies. The present strategic decision making and strategic plan of Sainsbury and Argos is
formulated for the purpose of addressing business imperatives.
In the changing scenario for Sainsbury it has become important to analyse different
factors associated with the brand that can assist in the process of making evaluation of the way
different external forces have affected the present functioning of business (Elster, 2017). For this
purpose there is evaluation of the internal and external factors that are affecting the business
functioning.
SWOT analysis:
SWOT analysis is a basic internal analysis tool that is used for the purpose of managing
understanding the different perspectives which can assist sainsbury and Argos together in the
process of achieving the required competitive advantage after the merger.
Strength:

 Sainsbury is having its vision as Britain's most trusted retail brand. For this they have
also launched their sustainability plan. For which the brand has identified its major five
core values that will be reflected in its merger statement with Argos and is important for
long term functioning of this organisation.
 The merger between Sainsbury's and Argos has provide both companies with an immense
tenacity over the market share by providing their high quality products and services
through their various outlets and online store. Sainsbury's gained a strong hold over the
online market space by utilizing Argo's web and delivering platforms as their strength in
order to provide products and services quicker to customers relative to their competitors.
Weakness: -
 The merger has impacted the working of both companies due to countless jobs bring cut
after Sainsbury's emphasised on establishing themselves in the online market space
(Hernández-Betancur, Montoya-Restrepo and Montoya-Restrepo, 2018). This has
disrupted the internal workings and caused confusion within the communication channels
combined with detrimental press and protests by employees has also negatively affected
the brand image leading to decline in profits which has turned out to be a weakness of the
merger.
Opportunity: -
 The merger has provided Sainbury's and Argos an opportunity to expand their line of
products and services by utilizing both their strengths and knowledge of market. The
expansion will ensure a higher customer base is attracted combined with new products
and services being priced at affordable pricing. This will help in broadening their market
share and positively establish their brand image.
Threats: -
 The merger has prompted other companies such as TESCO, Morrison's and ASDA to
look into the future aspects of potential mergers. This has created a threat for Sainsbury's
as the market space is limited and a future merger of these companies can increase the
competition extensively. Such a scenario will result in aggressive pricing of products
which can reduce the quality of products and service suffer in long run.

PESTLE analysis:
while a organisation is willing to adopt certain changes because of the changing
requirement of environment. There is need to focus on several forces that are part of external
macro environment an may affect the future strategic formulation process. So in the present
situation of Sainsbury having merger plans with Argos there are some of the factors that are
going to affect its future functioning post merger as mentioned below:
Political factors: there are lot of political decisions that may posses a impact on the
present functioning of Sainsbury and its future strategies (Ghasemaghaei, Ebrahimi, and
Hassanein., 2018). For instance, presently the Brexit scenario has posed a challenge for may
retail sector organisation. Especially in Saisnbury 30 percent of the goods sold came from
European union has resulted into difficulty in getting settlement.
Economic factors: The changing economic situation also has a significant impact on the
present functioning of Sainsbury. The present covid situation is also going to posses a effect on
the way various organisations are functioning. GDP of UK has contacted between 1.6 percent
between January and march as per office for national statistics. There have been lock-down
restrictions. England also went in third lock-down in early January having similar type of
restrictions across other parts of the country. This instances has lead to difficulty in physical
retail outlets to manage their sales. The overall purchasing power of people is also affected that
is reduced because of contraction in the personal disposable income. Many citizens have lost
employment which is resulting into higher unemployment all this aspects of the economy may
affect the retail industry.
Social factors: The present merger of sainsbury with Argos may result into benefits for
the present loyal base of customers. Sainsbury is a brand having differentiation advantage in
terms of offering wide range of food products to their customers. Argos is a catalogue retail
brand (Fathi and et.al.,, 2019). The acquisition of Argos by sainsbury is going to assist their
present and future base customers in having combined advantage of the different product range
and services that is offered by both the brands in present time period.
Technological factors: the evolving phase of technology is resulting many brands to
adopt the new technological development so that it can help them in maximization of its welfare.
For this purpose presently as retail brands both Argos and Sainsbury are working towards using
data driven analytics to derive the customer insights. In the present situation with the outbreak of

COVID virus many brands are working towards enhancing their digital and online presence in
order to create a crucial impact on its customer base.
Legal factors: The merger and acquisition results into lot of legal considerations that are
required to be followed and implemented in order to have adherence to such regulatory
frameworks. Apart from this there are various legal frameworks that have to be compulsorily
adhered by Argos and Sainsbury post their merger that is anti trust laws, discrimination laws,
copyright, patent laws customer protection laws, employment laws, data protection act and
health & safety act.
Environment factors: There are lot of factors that are part of external environment that
may posses a impact on the organisation internal strategic decision making. Sainsbury and Argos
together are working towards proper implementation of certain measures that can help them in
contributing towards environment protection and safety. Such as they are working towards
management of their operational waste (Kitsios and Kamariotou, 2018). Sainsbury is having
strategic sustainability plans that can assist them in reduction of plastic usage, carbon emissions
that can help them in having a higher competitive advantage. The core value of sainsbury that is
sourcing with integrity is focussing on organisation commitment to source all key raw materials
sustainability as per independent standards.
Porters five forces:
There are different forces that may affect the present organisation functioning. In context of
Argos and sainsbury, there will be analysis of such forces and its impact on the future strategic
decision making of the business:
Bargaining power of buyers: Argos as a retails sector brands is having a strong brand portfolio.
Sainsbury is also one of the popular retail brands with a diversified range of products and
services (Church and et.al., 2019). Further automation of activities has resulted into consistency
of quality and has enabled the brand in scaling up based on present demand in the market. Such
aspect of the retail brands are going to help them in the process of managing the bargaining
power of customers in coming time period.
Bargaining power of suppliers: Sainsbury and Argos are having a strong base of suppliers that is
offering them a competitive advantage in long run. The overall bargaining power of suppliers is
moderate because sainsbury and argos both are established brands and the merger scenario is

going to offer them with advantage of having long term associations with their existing supplier
base.
Threat of substitution: Argos and sainsbury together are having certain key strength factors such
as Argos is the largest retail brand with having 800 stores across UK. This brand is offering wide
range of product both offline and online mediums. It is going to assist both the brands in the
process of having lower threat of substitution. As argos is able to serve approx 130 million
customers and 18 million household across UK. It may lead to difficulty in substitution of the
products from any other existing brand.
Threat of new entrants: The present strategic decision of merger of Argos and Sainsbury will
not be much affected by the threat of new entrants. That is it can be said that overall threat of
new entrants is low because the brand image established by these two brands is positive and it is
not possible for a new entrant to challenge the competitive position. Further, the
Competitive rivalry: In context of retail sector organisations in UK there is presence of strong
rivalry. This forces is related to the number of present competitors that may give tough
competition the present competitive position of Sainsbury. The present case of merger of Argos
and sainsbury is going to lead towards reducing the competition level. Sainsbury is having a
diversified business area and a stronger market share that is going to help in maintaining the
situation of consistent profitability.
From the above made analysis it can be summarized that as per the present case scenario
of merger of Sainsbury and Argos is going to result into achievement of higher competitive
advantage for the organisation.
Sound recommend how the organisation might enhance its responses highlighted above
LEWINS CHANGE MANAGEMENT
Kurt lewin's change management model is based on understanding the process of organisational
change as par of three stage theory. It is used for the purpose of analysing the organisational
change is adopted and the way it involves different transactions before achievement of stability
or equilibrium in the process of organisational functioning.
Stage 1: Unfreezing: It is the first stage of business transactions that is one of the most
critical stage in entire process. It is related with improving the readiness and willingness of
people by fostering of realisation to move from the present zone to a future transformed business
situation.

At this stage, there is analysis of the thinking process, existing organisational structures and old
behaviours for the purpose of managing the different functionalities in this scenario. It is related
with the already prevailing scenario in the organisation just before the change is being adopted or
implemented (Andolfi, 2019). Such as in Sainsbury the main aim of purchasing Argos is to
broaden its present product range, reduction of the negative impact of the various competitive
forces and having acquisition of online delivery business of Argos.
Another major aim that lead to requirement of merger for Sainsbury includes offering
customer with higher added value and a more convenient shopping experiences. With the
requirement of moving along with the technology many organisation poses plans to focus on
online channels (Hinrichsen and Andersson, 2019). Future of the retail industry also lies in the
online commerce because of need of the customers is to have more and similar range of product
availability as they are present in offline stores.
Stage 2: Change: This stage is regard as the transition or the stage in which there is
actual implementation of change. It mainly involves accepting some new ways of performing
certain business transactions. It is the stage in which actually the instances get unfrozen and
actual change is being implemented.
In context of Argos and Sainsbury the organisation after post merger will work towards carefully
planning, encouraging the involvement of individuals and having proper communication across
the organisation in order to endorse the change.
Changes: in the context of merging:
In Sainsbury and Argos, the merger has lead to further integration of the head office
functions for both the departments across different functional departments that includes finance,
retail, human resources, technology and commercial. There were changes in terms of cutting
various senior leadership roles after this merger (Williams, 2020). As per the statistics of office
for national statistics it is reflect that retail sector is going through lot of changes because of fast
changing customer shopping habits. So reports have predicted that there is need of some
strategies and measures that can result into dealing with such fast changing external
environment.
Further in Argos, the super market chain has also revealed that Argos will be closing 70
of its stores they are willing to open brand concessions in their own supermarkets. The merger
resulted into a sense of momentum across the business that was accelerated by streamlining of

the structure and then further responding to the customer needs more quickly. There was
integration of business to unlock the efficiencies so that there can be further investment in those
aspects that matters most for their present base of customers (Sainsbury's to cut hundreds more
jobs after Argos takeover, 2020).
The organisation is now making efforts after the 2016 acquisition of Argos. With the
changes in structure of organisation there are lot of integration that took place between
departments. So, further hundreds of job roles were cut during this process. It mainly include
maximum of senior leadership roles that was affected in this situation. In September, the
supermarket chain has further revealed that they are going to close up 70 of Argos stores as they
are opening brands concessions.
Stage 3: Freeze: (Refreezing); It is the stage at which people are from the transition
stage to a more stable state that can be regarded as the equilibrium state. The refreezing stage is
the ultimate stage where people are internalizing new working ways or accepting the new ways
of working by establishing of new relationships. In Argos and Sainsbury this aspect is related
with reinforcing and strengthening the new changed and new behaviour of working (Andonova
and Losada-Otalora, 2017).
After there will be merger now in the present scenario there will be cost savings and improved
profitability. Apart from this there are further plans of sainsbury to merge with ASDA in coming
time period. After merger with Argos sainsbury being second largest supermarket of UK had per
taxied profits for a time period of 28 weeks to 22 September. But in some instances profits were
also hit by costs that are related with restructuring og store management teams (Ou and Verhoef,
2017). Argos is now considering the preparation or integration of ASDA deal that is to be
considered presently.
The merging of Argos and Sainsbury is a well a tactical decision to have greater footfall in the
stores that can help them in having more cost saving measures.
This merger lead to a scenario where the existing competitors of Sainsbury and Argos have
better options for their shopping requirements. Such as sainsbury post merger decide to fill the
extra space with Argos outlets. Customers further also liked the idea of combining the grocery
shopping for Christmas while picking some gifts from Argos. It lead to achievement of higher
satisfaction level for the existing customer base as their dual objectives were resolved at one
place (Sainsbury's to cut hundreds more jobs after Argos takeover, 2020).

Further there have been warnings that is after the instances of merger there will be requirement
of more marketing and promotional activities on part of organisation in order to create higher
customer awareness.
From the above made analysis of the change in Argos and sainsbury it can be said that
there is monopolisation of the supermarket sector. It is resulting into retail sector brands to
delight their customers by offering them with low prices, improving the overall convenience and
offering endless variety of products.
Ans off matrix:
For the purpose of analysing different growth strategies for Sainsbury and Argos. For this
purpose there is evaluation of future growth prospects (Dorigo and et.al., 2018). There is analysis
of some of the future growth strategies as mentioned below:
Market penetration: It is a strategy that is focussing on enhancing sales of existing product. For
this purpose Sainsbury can work towards maximising the present range of products. With
enhancement in the present variety there can be achievement of higher market share (André,
Choand Laine, 2018).
Product development: It is focussed on introduction of new products in the existing market
segment. This strategy can be used by sainsbury where there can be new launches that are to be
made in their already existing markets.
Market development: In this Strategy the main emphasis is to enter a new market segment by
focusing on new market and using the existing range of products.
Diversification: In this strategy the main focus of Organisation is on entering a new market by
new product introduction. In Sainsbury, after the merger there can be launching of new product
range in a completely new & different market segment (Whittington and et.al., 2020) .
From the above made analysis of the four strategies that are part of ANS off matrix it can
be said that there are several recommendations that are drawn based on such evaluation of the
most suitable strategy for Sainsbury post merger with Argos.

Recommendations: -
 The company should utilize their knowledge about the market and promote products and
services aggressively to customers through various channels such as social media,
retargeting and other digital platforms in order to attract potential customers. They can
provide various offers to encourage potential customers to opt for their products relative
to competitors.
 The company should look into expansion as a part of its market development strategy as
various regions are still untapped by them. This expansion will not only result in
increased profits but provide a boost in brand image as well. They can provide products
and services that curtail to the needs of customers in that particular region to establish a
better relationship with them.
 They need to focus on diversification to branch their products and services within new
market segments. The diversification will ensure that there is product differentiation
relative to their competitors providing them with a marketing edge and increasing
profitability.
 The company should engage in aggressive promotional strategies and advertising
campaigns amalgamated with lucrative offers such as discounts and coupons in order to
form a loyal customer base.
 The company should focus on expanding their online presence by providing various
products and services other than groceries. This will positively impact their sales as
customers will be introduced to a one-shop go experience enabling them to purchase
various products from one location. This can be combined with exclusive online offers
and deals to promote sales and better engagement with customers.
 The company can improve its inventory management by better forecasting its product
demand in order to reduce inventory loss both in-house and in channel. This will provide
them with a better understanding of their inventory and save them form unnecessary
financial loses.
 There can be development of effective growth strategy that is a new business model that
can be developed for the purpose of achieving higher market share. There can be focus on
using it as a strength to influence the present loyal customer base.
1

Conclusion
It is summarised from the above made analysis that the merger and acquisition are the
strategies that assist organisations in the process of further achievement of higher market share
and better revenue. For the purpose of analysing the internal strength of business it becomes very
important to conduct SWOT analysis that can lead towards evaluating its impact on the business
functioning. There are different strategies that can assist organisational in formulation of suitable
strategies as per usage of ans off matrix that helps in determination of required strategy. Based
on the overall analysis there is understanding of the different strategies that can be adopted by
organisation for the purpose of achieving higher market share after the merger.
2

References
Books and Journal
Andolfi, I., 2019. Acusilaus of Argos’ Rhapsody in Prose: Introduction, Text, and
Commentary (Vol. 70). Walter de Gruyter GmbH & Co KG.
Andonova, V. and Losada-Otalora, M. eds., 2017. Multilatinas. Cambridge University Press.
André, K., Cho, C.H. and Laine, M., 2018. Reference points for measuring social performance:
Case study of a social business venture. Journal of Business Venturing, 33(5), pp.660-678.
Basar, P., 2018. The analytic hierarchy process method to design strategic decision making for
the effective assessment of supplier selection in construction industry. Research Journal of
Business and Management, 5(2), pp.142-149.
Church and et.al.,, 2019. Handbook of strategic 360 feedback. Oxford University Press.
Dorigo and et.al., 2018. Swarm Intelligence: 11th International Conference, ANTS 2018, Rome,
Italy, October 29–31, 2018, Proceedings (Vol. 11172). Springer.
Elster, J., 2017. Strategic uses of argument (pp. 97-119). Routledge.
Esch, M., Schulze, M. and Wald, A., 2019. The dynamics of financial information and non-
financial environmental, social and governance information in the strategic decision-
making process. Journal of Strategy and Management.
Fathi and et.al.,, 2019. Strategic Planning of Tourism with an emphasis on Spirituality Based on
New Integration of Multi-Criteria Decision-Making Techniques. International journal of
Tourism & Spirituality, 4(1), pp.93-123.
Ghasemaghaei, M., Ebrahimi, S. and Hassanein, K., 2018. Data analytics competency for
improving firm decision making performance. The Journal of Strategic Information
Systems, 27(1), pp.101-113.
Hernández-Betancur, J.E., Montoya-Restrepo, I. and Montoya-Restrepo, L.A., 2018. Strategic
decision-moment: Beer game comparison between two colombian universities. The
International Journal of Management Education, 16(3), pp.504-514.
Hinrichsen, Y. and Andersson, K.G., 2019. European decision support modelling of long-term
external doses received in inhabited areas contaminated by a nuclear power plant accident–
1: Initial relative dose rate contributions from different contaminated outdoor
surfaces. Journal of environmental radioactivity, 204, pp.143-153.
Johnson, J., 2020. Delegating strategic decision-making to machines: Dr. Strangelove
redux?. Journal of Strategic Studies, pp.1-39.
Keebler, D.W., Albertelli Jr, P.D. and Mascarenhas, B., 2017. A multi-criteria strategic decision
making model to assess renewable energy forms. International Journal of Strategic
Decision Sciences (IJSDS), 8(2), pp.1-10.
Kitsios, F. and Kamariotou, M., 2018. Decision support systems for strategic information
systems planning: an approach for logistics strategic management. International Journal of
Decision Support Systems, 3(3-4), pp.207-221.
Ou, Y.C. and Verhoef, P.C., 2017. The impact of positive and negative emotions on loyalty
intentions and their interactions with customer equity drivers. Journal of Business
Research, 80, pp.106-115.
Whittington and et.al., 2020. Exploring Strategy Text and Cases. Pearson UK.
Williams, I. ed., 2020. Contemporary Applications of Actor Network Theory. Springer Nature.
Online
3

Sainsbury's to cut hundreds more jobs after Argos takeover, 2020 [online], Available
through<https://www.standard.co.uk/news/uk/sainsbury-s-job-cuts-argos-takeover-
a4340526.html>
4