Contemporary Management Issues - Sainsbury's Case Study

Contemporary
Management Issues

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Organizational change Different kinds of changes faced by Sainsbury's ..................................1
Kotter's 8-step change model ....................................................................................................2
Corporate social responsibility '..................................................................................................4
PESTLE analysis of Sainsbury's.................................................................................................5
Strategy and Strategic decision...................................................................................................7
Porter’s Five Forces of Sainsbury's.............................................................................................7
Critical review of response of Sainsbury's competitors to same change drivers .......................8
Ethical concerns faced by Sainsbury's .......................................................................................9
Effect of social change, demographic change and globalization on Sainsbury's .......................9
Stakeholder mapping................................................................................................................10
CONCLUSION .............................................................................................................................12
RECOMMENDATIONS...............................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
The Contemporary management issues faced by business firms include issues related to
implementing change and facing industry competition effectively. It is important to quickly
resolve various management issues so that business firms can face obstacles in path of global
success.
Brief Overview of the Case Study: This report is based on the case study of UK based
retail company Sainsbury's the company was established in the year and ha stores in UK.
Sainsbury's acquired Argos in the year which helped the firm increase profits significantly. The
Half year underlying profits at Sainsbury's increased by a fifth to £302m after the takeover of
Argos (Argos takeover boosts Sainsbury's trading, 2018). One of the barriers which remain in
the UK grocery market is the high intensity of competition which affects current profits and
future success of the company. The rise of online grocery shopping and foreign e-commerce
giants such as Amazon entering the UK retail industry have also increased competition in the
sector.
The main aim of the report is to identify the drivers of change and discusses their current
impact on the strategic decision making and other business activities at Sainsbury's of Argos take
over by Sainsbury's. The strategic response of Sainsbury's to various change drivers is provided
in this report using various tools and recommendation on ways through which the company can
enhance their response to change drivers is provided in this report.
MAIN BODY
Organizational change Different kinds of changes faced by Sainsbury's
Organizational change is defined as the action taken by the company in which the firm
changes primary element of the company is revised in a significant manner in order to ensure
continuous growth of the company. This includes alteration in organizational culture,
introduction of new underlying technologies and changes in internal processes of the company.
Different kinds of changes faced by Sainsbury's are provided below:
 Developmental changes: This kind of change occurs when business firms identify an
area which an be improved and contributes to the development of the company. The
developmental change faced by Sainsbury's include the launch of more Argos stores and
collection points in Sainsbury's locations (Sainsbury's is making a permanent change in
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every UK store that will affect thousands of people, 2021). The change driver for this
developmental change is business growth. The firm need to increase profitability from
acquisition of Argos to facilitate continuous development. This is controlled
developmental change for Sainsbury's as the company aims to continue gaining
profitability from takeover of Argos.
 Transformation changes: In this case, business firms have less control over the change
because this change is related to survival of the company. The transformational change
faced by Sainsbury's is related to building digital capabilities and focus on enhancing
online sales because of the pandemic. The change driver behind this is increasing
competition. The rise in online shopping and increasing competition in the digital
landscape by business firms such as Ocado and Amzon. The firm needed to implement
this change in order to increase digital sales and face fierce competition in UK retail
sector. This change helped the company survive the pandemic with 10.7% sales surge in
Argos (Sainsbury's reports rise in grocery sales and surge in online orders, 2020). It was
an essential transformational change as it helped the company face increase in online
shopping because of the pandemic and to face extreme competition in retail sector
because of digital retailers such as Ocado and Amazon.
 Transitional changes: When business firms decide to change their course of action in
accordance with changing external environment, it is referred to as transitional change. In
this kind of change business firms have total control over the change and develop a plan
for implementation of change over specific time period. Takeover of Argos by
Sainsbury's to improve financial health of the company was a transitional change as it
was controlled and implemented over designated time period. The change driver behind
this low profitability of the firm which was boosted after acquisition of Argos.
Kotter's 8-step change model
The two change drivers which will be discussed in this report are the change driver of
low financial health which resulted in the takeover of Argos by Sainsbury's and the competitor
led change driver of increased online shopping and intense competition which resulted in
improvement in digital capabilities of the company. The implementation of change at Sainsbury's
is depicted with the help of Kotter's 8 step change model below:
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