Value Chain Model and its Application in Sainsbury

This report discusses the value chain model and its application in Sainsbury, a leading supermarket chain in the UK. It explores the different activities in the value chain and how they contribute to the company's competitive advantage. The report also analyzes the inner environment of Sainsbury and provides a reflection on the value chain model.

Essay

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Value Chain Model- ....................................................................................................................3
Sainsbury-....................................................................................................................................4
inner environment- ......................................................................................................................5
Reflection on the value chain model-..........................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Value Chain Model is set of the various activities which company operating in the
peculiar industry execute in order for delivering precious products for marketplace. It is
developed by the Michael Porter in 1985.
Sainsbury is leading supermarket unit in whole UK. The company is founded by J.
Sainsbury in 1996. The above report includes the description of the Value Chain Model. Further
the report include the company and application of the Value Chain model. The inner
environment of company is being prescribed. Report ends with the reflection of the Value Chain
Model on the Sainsbury.
MAIN BODY
Value Chain Model-
Value Chain model is the procedure where a company find its support and primary
activities who adds values to their last products and further than examine this action for reducing
cost or raising distinction. It represents inner activities in which organization engaged for
transforming the inputs into outputs.
Value chain model is the strategy instrument which is being utilized for analysing inner
company's activities. The main aim is for recognizing, that activities which are least precious i.e.,
differentiation advantages or source of the price for company and that can be improved for
rendering competitive advantages (Ouzrout and et.al., 2018). With the help of inner activities,
investigation bring out organization's competitive disadvantage or advantages. Organization
which compete with the differentiation advantage will be trying to execute its activities which
can be finer than rivals. If company competes with the price advantages, they will try to execute
inner activities at the lower costs than market price or for rendering superior products by which
company can earn profits.
The Value chain model is pioneer by Michael Porter in the 1985. It represents inner
activities in which organization is engaged for producing products and services. It is made up of
primary activities which add worth to the last product instantly and assist activities. It contains
the different activities that are primary activities and secondary activities (Fjeldstad and Snow,
2018). These primary activities consider the operations, inbound logistics, marketing and sales
outbound logistics. These activities are directly involved in the selling and producing product to

the targeted consumers. The company's performance can be improved easily with the help of
theses. Secondary activities consists of company's infrastructure, human resource management
technology development and procurement. The activities play a major role in facilitating and
coordinating primary value chain activities. The company can be further benefited by these in the
future.
Sainsbury-
Sainsbury is leading firm in the retail sector. The company had it's had quarter in London,
United Kingdom. It was established in 1996. Company is the largest supermarket chain in whole
United Kingdom with 15.3% of share in the supermarket share (Hernandez Serrano, Greenhill
and Graham, 2015). It was established by John James Sainsbury. The Value Chain analysis of
activities which Sainsbury's is in the services of particular industry for organizing, conveying
goods and services in market. Sainsbury's value model analysis has to be carried out for finding
order of the activities which can be performed by company-
Inbound Logistics-
The value chain model of Porter which Sainsbury is being followed by them consists of
several approaches like Logistics room (Koc and Bozdag, 2017). In which company goal to link
accurate stores on geographical basis so that appropriate store can be reduced the transport land
mile. The Sainsbury's had established the dual decker truck for carrying the loads. Their drivers
are trained for driving the lorries proficiently.
Operations-
The major transport operation which is being performed by company is cutting CO
discharge. Primary operations of Sainsbury is for infilling the lorry, collecting products from
renders and delivering them back to the stores. The subsidiary operation concentrate on way of
transportation burden which has lead for improvements of the 1.5%.
Outbound Logistics-
The Sainsbury uses several delivery options for the non food products that are modular
delivery, click & collect, Saturday delivery and many more. As consumers of the 3PL renders are
Sainsbury's have developed 20 distribution centre networks. The company offers specific
importance to their outbound value chain activities when its offer the goods which are perishable
and needs speedy delivery to final customers (Yanzheng, Zengxiang and Changhong, 2015).
When outbound activities are punctually controlled and managed with the best cost & the goods

delivery procedures that puts minimal negative impact on the quality of product and services. So
that they can render the satisfaction to the consumers and can raise the growth opportunities for
company.
Technology development-
Sainsbury is developing technical integration in production, distribution, human
resources and marketing functions that are needed by company for the overall development of
the firm (Kehoe and Mateer, 2015). That can distributed among process and product
technological development functions. Some of these which are used by the company are data
analytics, automation software, product research design etc.,
Marketing and Sales-
Sainsbury's marketing and sales activities consider promotion, sale forces, valuation,
promotional activities, building social relation & quoting, and channel selection with the channel
unit. Organization could use marketing funnel formulation to the composition its sales and
marketing activities. Marketing scheme could either pulling or pushing in the nature, reckon
Sainsbury's business goal, competitive dynamics, brand representation and actual stagnant in
marketplace. By this company can create their brand name equity of company and helping it to
position out from the competition. It indicates need for ensuring coordination among various
value chain activities.
Human Resource Management-
HR management would let company for reducing combative push which is supported on
commitment, skills and motivation of their manpower (Horng, Chang and Chen, 2016).
Sainsbury could attain its cost diminution subjective by examining training and hiring cost with
the relational return. Huge habituation of organization on the worker's natural ability would raise
importance of the value chain activity.
inner environment-
SWOT Analysis is the strategical preparation techniques can be utilized for helping an
organization or individuals for identifying the strength, weaknesses, opportunities and threats
which are accompanying to the competition in the business or planning of project.
Strength
The biggest strength of Sainsbury is its high brand value. The company has a great brand
value within market as well as have the brand image which helps them to expand in wider

geographies. Due to high brand equity, company is able to enlarge its customer base as well as
gain market share. Another strength of this company is it's highly innovative and creative
promotion strategies. The company has a well-through innovation strategies that help them to
entice the customers and thus provide them the competitive advantage (Curry, 2016).
Weakness
The major weakness which has dominated the company is low margin. Due to the
growing competitor within retail industry as well as risk in online marketing, the company
generally have lower margin and thus their profit ratio tend to fluctuate and remain unstable.
Another weakness that has affected the company to a great extent is its growing costs. The price
of the products of company are generally high in comparison to other competitors due to which
only the upper class people are able to spend in its products. This has limited their customer base
to only upper class and have neglected other class or groups.
Opportunities
The golden opportunity which is being available to the company is growing awarenesses
as well as demand of the customers for online platform. The company can extend their online
presence across different regions as well as can grow themselves in villages. Most of the people
in rural areas have become technology-oriented thus this the best opportunity which is available
to the company. Another opportunity which company can avail is the mode of market entry.
Company can seek the support of joint ventures as well as partnership to enter the other foreign
market and thus can extend its product line.
Threats
The biggest threat which might hinder the position of Sainsbury is the presence of
competitors within marketplace as well as presence of fierce competition. Due to the growing
distribution of its competitors like TESCO, Asda, Sainsbury might face downturn which might
affect their operations to a great extent (Kawharu, 2018). Another threat which may affect the
competitive position of Sainsbury is exposure to different legal regulations. As the company
operates in wide range of countries thus it remains exposed to different legal rules and regulation
which might affect its operation. Besides this, the changing political situation can also impact it's
supply chain.

VRIO analysis of Sainsbury:
VRIO analysis determine the inner resources of the organisation and identifies that these
resources will provide the benefits of the competition to the business. In the business of
Sainsbury VRIO analysis helps to improve the resources which gives the larger benefits of the
competition.
Valuable: This resource which provides value to the business of the Sainsbury are termed as the
valuable resources. For example employees are the valuable resources of Sainsbury because they
are the biggest productive output of the organisation. The resources which leads to the success
and growth of the Sainsbury are valuable resources
Rare: It refers to this resource which is used by few organisations in their business. For example
in the business of Sainsbury the rare resources are financial resources because only some
companies could acquire the financial resources of the business (Hammad, 2015). Employees of
the Sainsbury are also hard to find by other organisation because same skills and talent is not
possible to find in different persons.
Imitable: The resources of the company which is hard to imitate are known as the imitable
resources. For example patents are difficult to imitate so in Sainsbury patent is the resource
which does not allow the product which have patent. Resources which are patent is very costly to
imitate for other organisation
Organisation: Under these resources when the business achieved the benefits in the competitive
markets by identifying the all the valuable, rare and imitable resources. Financial resources,
patent, and network distribution are helps to reach the goals of the Sainsbury (Manly, 2016). For
example with the help of these resources Sainsbury increases their profits and productivity in
their business and make the effective image of the brand in the minds of customer.
Reflection on the value chain model-
With the help of Value Chain model, Sainsbury could choice and point superior quality
raw materials and developing faithfulness among consumers on footing of that. The brand equity
of company can be developed through this Value chain. The company can gain competitive
differentiation by advancing and fasting the delivery of the product and services which is being
offered to their final consumers. It can be helpful for improving their human resource practices.
So that they can perform the operational and functional activities (Frederick, 2019). The costing
can be reduced, finding finer deal with the provider and offering advanced quality goods at the

low-priced. They can render the consumer supports and analyse operational activities for
expanding presence in the geographical dispersed area. Sainsbury by using Value Chain model is
instrument for doing reversed integration. It could be further through by purchasing and merging
suppliers for ensuring availability of raw materials on time. The efficiency of operations can be
maximize for reducing waste and the integration of sustainability for the waste in their business
operations. Company could learn from the value chain practices for ensuring that quality of their
products and services which is helpful for their competitive analysis and thus they can ensure for
maintaining quality at each stage of their production (Zamora, 2016). The company has to
remain cost effective so that they can adhere the set of laws and regulations which are
regularised in the whole United Kingdom. Sainsbury has the resource advantages that consists of
outbound and inbound logistics, infrastructure, strong HRM system that are important for
ensuring competitive advantage for company. Thus, company can have a huge opportunity and
development for their further operational activities and gain profit margins for company.
CONCLUSION
Above report it has been stated that the value chain model is helpful for analysing the
major opportunities for company so that they can gain huge profit and revenues for company.
Company can easily compete with their rivals with the help of these model so that they can gain
their achievements for company. They can improve the quality of product and services which are
provided by company to their consumers. The operational and functional activities of company
can also be upgraded for further growth of the organization.

REFERENCES
Books and Journals
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and creative industry. In Thriving in a new world economy (pp. 198-203). Springer,
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Hammad, A., 2015. Strategic Change and Its Management to Expand Business Through
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