Innovation Strategy for Sainsbury: SWOT, VRIO, PESTLE and Porter's Five Forces Analysis

STRATEGY, ENTERPRISE
AND INNOVATION

TABLE OF CONTENTS
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
Explaining internal environment.............................................................................................................3
Explaining external environment.............................................................................................................6
Analyzing competitive forces within the industry...................................................................................7
CONCLUSION..........................................................................................................................................9
REFERENCES........................................................................................................................................11

INTRODUCTION
Innovation strategy is related with conductive creative practices in business that can help
in achieving competiveness for gaining success in sector. In the recent time, there is requirement
to develop effective strategy so that higher profitability and sustainability to succeed in industry
can become possible. The current report is based on Sainsbury which is one of the successful
firm operating in retail sector. In the present time retail sector is growing in rapid speed which
requires firm to largely concentrate on ascertaining internal & external factors so that effectual
innovative strategy can be developed. The current report will involve SWOT and VRIO for
assessing capabilities and resources. Present study will pay attention on determining external
factors through conducting PESTLE evaluation. Industry analysis by applying porters five forces
will be involved in present study.
MAIN BODY
Explaining internal environment
Internal environment is associated with the scenario in which all resources, skills, etc. are
gathered to produce products or services. It becomes essential to analyze the internal
environment by applying suitable technique so that appropriate formulation of strategy can
become possible.
SWOT analysis
It is one of the significant approach utilized for analyzing internal environment of
business so that strengths, weaknesses, opportunities and threats can be identified. SWOT
evaluation of Sainsbury can help in assessing crucial information so that strategic decision can be
made.
Strengths
 The crucial strength that is helping Sainsbury to obtain benefits is its effective planning
for expansion moves. The specified company has given major emphasis on inclining its
effectiveness to operate in market that provides higher profitability (Song, Wang and
Zhu, 2018).

 The specific firm has effective marketing and promotional strategy which is helping it to
cover all type of customer. It is helpful in inclining market share of company which is
one of the significant benefits.
 There is availability of experienced leadership team that is providing assistance in
increasing internal capabilities to cope up with prevailing situations.
Weaknesses
 Inflation in food prices has forced company to use higher charging strategy to maintain
standards of retail sector that has adverse impact on firm (SWOT Analysis, 2021).
Growing cost is declining profit margin that is hampering liquidity position of sector.
 There is factor impacting the company in negative manner is brand switching which is
affecting availability of skilled employees.
Opportunities
 Emergence of social media & digital marketing practice has allowed firm to attract firm
trough utilizing ecommerce platform (Casañ, Alier and Llorens, 2021).
 Partnership, joint venture, etc. options are available for the company for inclining scale of
operational practices.
Threats
 Level of competition has increased due to enhancing number of rivalry in sector which is
one of the biggest threat for the firm.
 There is major influence from ecommerce platform is inclining which is increasing brand
switching behavior of customers that has adverse effect on company.
VRIO analysis
This technique is taken into practice to analyze resources and capabilities which will be
beneficial for Sainsbury to pay attention on evaluating its internal environment.
Resources\
capabilities
Value Rare Imitation Organization Competitive
advantages
Opportunity
for brand
yes No Easily imitate
by similar
Yes Not
permanent