Corporate Strategy And Business

Running head: CORPORATE STRATEGY AND BUSINESS
CORPORATE STRATEGY AND BUSINESS
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1CORPORATE STRATEGY AND BUSINESS
Introduction
Owing to rapid globalization throughout the world, business organizations have engaged in
the strategizing of effective means by which they can induce growth and development of their
operations and activities. There are various types of corporate strategies that can be adopted
by business organizations for the purpose of propelling the growth of their business activities
(Ismail 2016). These strategies can be identified to be market penetration, market expansion,
product expansion, diversification and acquisition or mergers. The strategy of market
penetration involves the selling of existing products in the same market for the purpose of
expansion or increase of market shares. The strategy of market expansion refers to the
introduction of existing products in new markets to induce increase in revenue. The strategy
of product expansion refers to the addition of new products in the existing market whereas
the strategy of diversification refers to the introduction of new products in new markets. The
strategy of mergers and acquisitions refers to either partnerships or purchase of one company
by another in order to expand the line of products and thereby its market share (Johnson
2016). The essay will further focus on the application of such growth strategies in the
business operations of organizations, which currently operate in the world. The particular
case that will be analyzed further pertains to the merger between the two supermarket
companies operative in the United Kingdom, namely Sainsbury and Asda
(About.sainsburys.co.uk 2020). For the purpose of an analysis of the growth strategy of
merger adopted by them, the external business environment of the two companies will be
evaluated in details in order to identify the opportunities and threats that the companies may
have faced, and which led them to the adoption of this particular growth strategy.
Furthermore, the key drivers for the implementation of the merger strategy will also be
identified along with the measurement of the suitability, accessibility and feasibility of the
merger strategy using the SAF framework.

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Discussion
Overview of Sainsbury
Sainsbury plc is identified to be one of the largest supermarket chains in the United
Kingdom. The company was founded by John James Sainsbury in the year 1869, with the
first shop being established in the Drury Lane of London. The present headquarters of the
company is located in London, in the United Kingdom. The company has divided its business
operations divided into three broad section namely the Sainsbury Supermarkets Limited,
Sainsbury’s Argos developed after their acquisition of the British catalogue retailer Argos
Limited, and the Sainsbury’s Bank (Sainsburys.jobs 2020). The vision of the company is to
become one of the most trusted retailers by harnessing the talents of its employees
incorporating diversity and creativity in their business processes. The mission of the company
is to make investments in the training and development of their employees so as to be able to
offer the best shopping experiences to their customers (Sainsburys.jobs 2020). The
organizational culture of the company is identified to be rewarding, exciting and enjoyable
for the employees and other members of the organization, making the company a ‘Great
place to work’.
Overview of Asda
Asda Stores Limited is identified to be a British supermarket and retailer with its
headquarters in Leeds, in West Yorkshire. The organization was established in the year 1949
by Peter Asquith, Fred Asquith and sir Noel Stockdale. Among the various services offered
by the company to its targeted customers, the most important are identified to be retail,
provision of mobile phone services through the use of the British EE network, petrol filling
stations and financial services. The company is a subsidiary, with its parent company being
the American multinational retailers Walmart Inc. The mission of the company is to ensure
maximum customer satisfaction through the provision of high quality products and services

3CORPORATE STRATEGY AND BUSINESS
and maintaining a pleasant environment for living. The vision of the company is to become
one of the most trusted retailers (Asda.jobs 2020). The organizational culture of the company
is aimed at providing the employees and other members of the organization with the freedom
to utilize their talents, capabilities and skills so as to provide the customers with the best
quality of products and services (Corporate.asda.com 2020). Along with this freedom, the
employees are also provided with adequate training development and support so as to bring
about their personal and professional development.
Analysis of External Business Environment
An effective analysis of the external business environment in which an organization
operates is essential for the identification of the various opportunities that can be utilized by
them as well as the threats that they may be faced with from various external forces
(Akpoviroro and Owotutu 2018). There are certain frameworks that can be applied in order to
evaluate the external business environment of Sainsbury to evaluate the scope of the merger
strategy that has been adopted by it. The external business environment of Sainsbury will be
further evaluated using the frameworks of the PESTEL analysis and the Porter’s Five Forces.
PESTEL Analysis
The framework of PESTEL provides for a strategic identification of the various
political, economic, social, technological, environmental and legal factors operating in the
external environment of a business organization, which may ultimately result in affecting its
business activities and operations (Shtal et al. 2018). The analysis of these external forces, as
operative on Sainsbury plc., can be evaluated to be the following:
 Political factors – The political factors affecting the business operations of Sainsbury
include the political stability and level of corruption in the United Kingdom, which
are both low (TheGlobalEconomy.com 2020). The recent event of Brexit has also had