Value Chain Analysis of Sainsbury's

BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Sainsbury's..............................................................................................................................3
Application of value chain model to examine the internal business environment of Sainsbury's
................................................................................................................................................4
SWOT analysis.......................................................................................................................6
Reflection...............................................................................................................................7
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9

INTRODUCTION
Environmental business analysis is a term used to denote the process of identification and
assessment of external and internal environmental factors affecting a business firm. This analysis
is helpful in understanding threats and opportunities associated with various factors so that
preventive measures are taken or opportunities are exploited. It is essential for business firms to
conduct an environmental analysis as it provides detailed information about internal and external
factors affecting the company. This improves the decision making process as each decision is
taken after considering primary environmental factors affecting the firm. The present report
environmental analysis of Sainsbury's which operates in the supermarket sub-sector of British
retail sector.
MAIN BODY
Sainsbury's
The retail sector is divided in sub-sectors on the basis of model used by the retail firm to sell
goods to the end user. The sub-sectors of the retail industry include convenience store, discount
store, department store, multichannel store, supermarkets and many other. J Sainsbury PLC
which is traded as Sainsbury's is British retail giant which operates in the supermarket sub-sector
of the retail sector.
Sainsbury's was founded in the year 1869 and is currently headquartered in London. is the
second largest supermarket chain in UK and a leading member of the British retail industry.
Apart from the Supermarket chain of the company Sainsbury's Supermarket Ltd, Sainsbury's
bank and Sainsbury's Argos are part of the firm. Sainsbury's Supermarket Ltd offers wide range
of products from groceries to clothing and electronics. The retail firm also sells a range of own
label products which include basics, by Sainsbury's and My goodness! Apart from 1428 physical
outlets in UK and Republic of Ireland, Sainsbury's sells their goods to consumers through online
channels. The main source of income for the company is through the sale of goods available in
their supermarket chain. The company offers a loyalty card service named nectar to their
consumers. This scheme gives consumers reward points for shopping at Sainsbury's or partner
firms which can be redeemed by the consumer during their next visit to the enterprise.

Sainsbury's is part of the FTSE 100 index. The market share of Sainsbury's in the UK retail
sector for the February 2020 was 15.3% with rise in 0.3% increase in year on year sale
(Sainsbury’s Returns To Growth But Big Four Continue To Lose Market Share, 2020). As of the
year 2018, the largest shareholder in the respective firm I'd Qatar Holdings LLC with ownership
of more than 21.99% of shares. Qatar Holdings LLC is controlled and owned by the government
of Qatar. One
Application of value chain model to examine the internal business environment of Sainsbury's
Value chain analysis
The set of activities conducted by a business firm of a particular sector to offer valuable and
profitable products to their target consumer base are a part of its value chain. Value chain
analysis is used to understand the value chain of a company in a detailed manner (Arenas-Gaitán,
Peral-Peral and Reina-Arroyo, 2021). The information gained from this analysis is used for
strategic planning and improving decision making of the company.
Value chain analysis of British retail firm Sainsbury's is provided below:
Primary activities
These business activities are associated with creation and delivery of products or services which
provide value to the consumer. Primary activities are related to the sector of the firm as they
contributor creation of main products of the company.
Inbound logistics: The process of obtaining raw material from suppliers is included in this part of
the activity. In context of Sainsbury's, the firm is focusing on combining four food centres into a
single large centre in Bradford. The firm has developed another warehouse in East Midlands in
order to effectively online deliver their products. In addition to this, the. company sources more
than 12,000 products from more than 70 nations. The firm takes responsibility of ensuring that
each raw material for their products is of high quality and sustainably sourced.
Operations: This activity involves creation of the end product and adding value to the product as
it moves through the product line (Ou-Yang and et. al., 2018). In relation to Sainsbury's, The
firm produces large number of products in order to capture the needs of large consumer base.
The company sources their products from outside of UK from more than 70 as a means to reduce
costs by shifting manufacturing process to low cost areas.
Outbound logistics