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Corporate Strategies for Sainsbury and ASDA

   

Added on  2020-10-04

23 Pages5788 Words246 Views
Corporate Strategies

Table of ContentsINTRODUCTION...........................................................................................................................3MAIN BODY...................................................................................................................................3Question 1 : External Analysis of UK Market environment ......................................................3Question 2 : Internal Analysis based on Resources and Competences.......................................7Question 3 : Evaluating Suitability, Acceptability and feasibility strategy in Context to Bothcompanies. ................................................................................................................................11REFERENCES..............................................................................................................................14

INTRODUCTIONCorporate Strategies are related to the corporate business which seeks organisation toinitiate corporate actions in achieving company objective. This process motivates the employeesto work harder to beat the competitors by their planning strategy and action. Thus, Corporatestrategies is a continuous process which adopts by the organisation to engage investor to builttrust in the business. Present report is based on the Sainsbury and ASDA company. Theses bothcompany are entering into the potential merger in UK. Sainsbury was the second largestsupermarket chain in UK holding 16.8% shares in supermarket sector. ASDA is also a thirdlargest supermarket retailer in UK. With the process of merger they have earned a combinedprofits of at least 30% shares in the UK grocery market. Reports will include PESTLE analysis and 5 forces to identify the issue occurs in theorganisation and also identifies the opportunities and threats that analysis the strategy in theindustry. It also includes Internal analysis relating to resources and competences in theorganisation. Lastly report ends up with various strategies such as suitability, acceptability andfeasibility to link internal and external issues in the industry. MAIN BODYQuestion 1 : External Analysis of UK Market environment PESTLE Analysis: ~ Political - The factors which affect externally is related to Brexit. It means withdrawal of UKfrom European Union. The effect is that UK had to reduce the per capita income which affectsthe GDP rate, trade and investment in the market. If company wants to expand their businesstheir biggest challenge is to face the new norms and polices imposed by government (Rugmanand Verbeke, 2017). Frequent Taxation changes serves risk in the foreign markets and face toughcompetition to enter into the foreign market.~ Economic - These factors mostly affects the external business cycles of the organisation. Asthe services depends upon the interest rates and the goods are imported and exported on the basisof the rates which they are imposing (What is corporate strategy?, 2019). To deal in differentsector economic factor plays a major role in terms of exchange rates and employment rates.Every country had different style of working and also changing rates is the major issue in theupcoming days. This defines the employment and unemployment rates in the country.

~ Social - The factors which affects the external environment are related to ageing populationand their cultures which they are implementing in the organization. Social factors mostly reflectsthe lifestyle of the people and continuous changes in demand and taste in the products (Backman,2017). External factor affects through social changes in the form of social networking siteswhich causes more trafficking in the market.~ Technological - The factors which influencing super market are in terms of new discoveries oftechnologies in the market. To impact on market or to face tough competition new productalways helps the companies to make new position in the market. Technologies can be vested ifthe process of patent arises which results in affecting the environment by increasing thecompetitors to develop new product. ~ Legal - The factors which had a great impact on environment is related to labour cost andvarious rules imposed by the government regarding to taxation. Regulation of corporategovernance and rules of ownership are the major criteria affecting the company working. ~ Environmental - The factors which influence the environment are related to global warming,climate changes and waste of the products if they are less in demand. The changes may occursdue to natural calamites, droughts and heavy pollution which reflects the working in theorganisation.As per the above discussion various opportunities and threats are identified under the PESTLEanalysis. PESTELPolitical Government policies regardingindividual rights = OBrexit =TEconomic Exchange rate = T Expansion of business = OTechnological technological advancement =O Infringement = O Frequent changes in technology = TLegalGovernment norms regardingindividual rights = OHigher labour cost = TEnvironmentalEco-friendly products = O

Hygienic products = OChanging weather conditions = TFactors Opportunities ThreatsPoliticalOpportunities in Sainsburyhelps to expose their businessinto new sector. This can bedone by implementingfollowing techniques such asadvertising the companyprofile and their products andservices (What is PESTLEAnalysis? A tool for Businessanalysis, 2019). Organisevarious campaign and surveysto attract the customers towardtheir services providing insupermarket chain.Threat may affects thecompany in case of Changes intax or at the time of BREXIT.As when the time of BREXITarises, it withdrawal the UKfrom the European Unionwhich results in reducing51.9% business from tehcountry. This is the majorthreat which affects thebusiness to run smoothly. EconomicOpportunities arises in case ofdifferential growth rates whichhelps the companies to importand export their goods andservices. This procedure helpscompanies to earn income andgrow their business to newscale (Caviggioli and et.al.,2017). Threats arises on the basis ofexchange rates which stops thecompany to grow in differentsectors and expand theirbusiness. As every country hasdifferent rates to import goodsand services so they have tomanage their strategiesaccordingly. SocialSainsbury examine socialfactors related to changes inculture and fashion. UsuallyThreats may arises in casesocial media marketing.Advertisement carries the

customers are attractedtowards the new product and ifthe company satisfies them itresults to more growth of thecompany. This is the majoropportunity which everycompetitors implements togrow their business in themarket (Kazanjian, Drazin andGlynn, 2017).biggest power to attract thecustomers towards theirbusiness. Failure in promotingthe products and providingservices results in threats tobusiness. Technological Sainsbury uses to grow theirbusiness is that to bring newproduct in the market byinnovating high securedtechnology. This results insaving chances frominfringement of the productand its production details(Matt, Hess and Benlian,2015).Threats may arises in case offrequent changes intechnologies which affects thecustomers for timely deliveryof services. As if thetechnologies are changing ittakes time to track the previousrecords which affects theinterest of customers in thebusiness.LegalSainsbury while dealing inmerger is related to rights ofownership, as in legal factorsvarious laws and rules areimplement which protect theinterest of owners (Argenti,2018). Government normsregarding the ownership rightsprotect their rights and sharesin the global market.Threats in company results tohigh rates of labour cost. Thisis the major criteria whichaffects the company due tochanges in labour cost whichresults in facing huge lossesand delay in productivity.

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