Analyzing Company Growth and Strategies

The provided assignment involves analyzing a company's growth and strategies by applying various models such as PESTEL, five force model, SWOT, and TOWS analysis. The report aims to demonstrate how these models help in identifying opportunities and threats, and subsequently inform effective business strategies for growth. It also emphasizes the importance of managing innovation networks and risk management in a company's success.

MANAGING INNOVATION
ASSESSMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Q1. External analysis for the industry.........................................................................................1
Q2. Internal analysis for company..............................................................................................5
Q3. Marketing grid......................................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Innovation management is allows to organization to manage and respond external and
internal opportunities for use its creativity to introduces new ideas, processes or products. It is
effective and valuable for managing the thinks which are related to innovation of product and
services (Aalbers and Dolfsma, 2015). It is the sets of tools that allow manager to cooperate with
a common understanding of processes and goals. The present study is based on the “Sainsbury”
which is the retails public limited company. It is established the larger supermarket chain at UK.
It has the 186900 number of employees with the 28.456 billion annual revenue. Study lays
emphasis on the internal and external analysis of the company with the PESTEL and 5 forces of
industry. It will also show the resources and competence for company. It is also highlighted by
marking grid for company growth.
MAIN BODY
Q1. External analysis for the industry.
Sainsbury's is currently second largest supermarket chain and group at UK. Its customer
profile similar to the tesco but it has the largest opportunities to grow their market and shares at
marketplace with high growth and brand image. At present they are make strategy that help to
focused on offering low price of product every day with little and fewer promotions. Sainbury 's
performance in food sector has less because of many factors are affect to the company and its
performance. It has the better position from the Asda of coming with competition from Aldi and
Lidl. For analysis the opportunities and threats there is required to analysis the PESTEL and 5
forces analysis of the industry (Bican, Guderian and Ringbeck, 2017). By this management is
able to make changes in their strategies according to requirements. PESTEL and 5 forces
analysis are as follows:
PESTEL analysis
The current environment is affecting to the business and whole retail industry by both
macro and micro environmental factors. The PESTEL is used to identify the future trends with
the political, economical, social, technological, environmental and legal factors.
Political factors
This factor is affect to the business by introducing governments factors. This includes
government policy. Tax policy, labour law, environmental law and so on. This factors are impact
1

to business and its operations by making changes in government policy. Brexit sparked is effect
to industry by including high inflation, devaluation of pound and sluggish economy. At the time
of Brexit pound price was devaluation, that time peoples of industry have not proper money to
grow their business and purchase of raw material. Its result is declines the consumer spendings
which is negatively affected to UK supermarket industry.
Economic factor
Economic factors I significant impact on organization and whole industry performance.
That factors are includes economic growth, interest rate, exchange rate, inflation and so on
(Biemans, 2018). Following the Brexit pound rate in very lowest against the dollar as that
financially wake of it. This gives the financial problem to the humans of industry. With this food
price is also inflation and the long economic in the UK. At that time Aldi and lidi offers their
products with high rate of discounts and this affect to business very badly. At that time Sainsbury
is growing very slow with low and falling food price.
Social factor
Economic factors are primary factors of the changes in peoples shopping habits which are
also affected to the growth of whole industry. There is social factor which is also impact to the
shopping habits of the customers and growth of company. This can be affected by the fewer
changes in peoples tastes and preferences but at the time Brexit, shopping habits of customers are
directly affected because there is price of pound is lowest. By these customers are not able to do
shopping of their needs and wants products and discounters are give some discounts to peoples.
For that Sainsbury is developed online shopping stores with discount, by this they are gets
growth and increase their sales to customers.
Technological factors
The technological landscape changes are impact to business and management by
introducing new technology at marketplace (Cohendet, Parmentier and Simon, 2017). There are
most of the businesses are adopting the digital revolution for operate their business online but
Sainbury is not left this trend. They are introduced the digital services like online shopping
centre and various services. By these customers are attracted towards it and make good profits
for company and whole retail industry. This affect to whole industry who they are not using the
technology in their business.
Environmental factor
2

The environmental factor is affect to business and its operations of UK retails industry by
rising the ethically and environmentally changes. Consumer are wants from the firms tom adopt
practices such as paper packaging and recycle material packaging because of poly begs are
harms to environment and animals. There is new environmental factors which is faced by the
whole industry that is foods sector. Customers are also wants the waste foods are stopped it is the
greatest environmental challenges which are faced the industry. This is harm for their
environment and this affect the business and whole industry of retail sector.
Legal factor
Legal factors are affect to business and its operation by introducing and increasing the tax
rates (Frow and et.al, 2015). Legal factors are includes the healthy and safety law, equal
opportunities, advertising, consumer rights and laws, product labelling and safety of products are
important for the company and whole industry of UK. Newly sugar tax is introduced by the UK
government with the positive aim which is to reduce content in sugar drinks. This will impact to
supermarket brand products. Government is restricted marketing and promotional efforts of high
fat, salt and sugar drinks product to children which are under 16. This help to make goods health
of children by using sugary drinks.
That all are external environmental factors of PESTEL analysis and this are affect to
business and its growth. For more analysis and knowing about their opportunities and threats
there bis required to analyse porter five force model. This model is help to analysis the more
external factors. It is a powerful tool of competitive analysis for determine the principles of
competitive which are influence the market and whole industry of retail sector. It has the five
forces that are bargaining power of supplier and buyer, threats from substitutes and new entry
and competitive rivalry's. Each factors and forces are discussed below:
Bargaining power of buyer
The bargaining power of buyers are looks at the ability which is affect to the pricing and
quality of product and services. Customers are had the high bargaining power by the availability
of other supermarkets at their local place (Ganguly, Nilchiani and Farr, 2017). That are offers
similar products related cost and price of product. This makes the products switching cost and
giving customers power for choose products with same price range. Customers bargaining power
is high when customers are procured large volumes and supplying industry consists of several
3

small operators. This affect the whole industry because in that have various supermarkets and
they have same products with related price of product.
Bargaining power of suppliers
Suppliers are influence the price of product and its work process. In the industry have
various suppliers they are easily can switch to competition because suppliers actually influence
the price is control in industry suppliers. But the supermarket suppliers has the low bargaining
power because of many suppliers in the retail industry for compete to each other. There are
supplier can easily replace with the other suppliers that are give power to get products from the
suppliers at the lowest price. This improve their profits margins and leads the losses to suppliers.
So by this bargaining power of suppliers are affect to the business and whole industry of retails
sector as well as it growth and operations (Goffin and Mitchell, 2016).
Threats of entry
The barriers are from the new entry into the industry are high, new businesses are hardly
entered in the market by high cost and strong competition. New entrant are offer the high quality
products at very low prices to attract the customers from the low cost leaders. Foods sector has
the effective and valuable changes for making it effective and valuable through growth of
company. Possible barriers are entry includes the economic scale and high investment of costs.
New comers are with the hight brand loyalty and image at marketplace then it is impact to
business and its growth. Strong player is entrant into the industry then it attracts customers are
attracted towards its and break their existing customers.
Threats of substitutes
In the industry has the lots of products and services, businesses are price takers. That
products with the different price and mostly have the low price. Many marketer are make price
of product at cost and price for attract more customers for high margin of profits. That is not
good for company and industry growth. But threats to retails sector has very high for all items.
Substitutes products are affect to customers because they are purchase from anywhere at the
marketplace. For that Sainsbury is offers the food products directly to customers and also non
foods products. This affect to business and its distribution to compete (Lager, 2016). Threats are
determined by the brand dependability of customers, strong customers relations and new trends.
Competitive rivalry
4

In the high competitive industry, firm can have no control on their price and services of
products. This will give negative impact on the firm and for their competitive rivalry. In the
contrast industry is monopoly, businesses fully controls on their price and services of products.
Sainsbury has the competitive rivalry from the big supermarkets, that are provided similar
products and services like foods items, clothing, electronic etc. that all are marginally is similar
cost which makes product switch cost low. By these buyers are easily switch to other lower price
s supermarkets. This biggest and critical situation for the peoples of industry. Rivalry between
existing players is likely to be high when players are the same size and comparable strategies.
These are the 5 forces which are analysis opportunities and threats of industry. By this
Sainsbury is able to make the strategies for improve that threats by using the opportunities of
firm. It is effective and valuable for growth of company and whole industry.
Q2. Internal analysis for company.
Internal analysis of the Sainsbury is help to know about the strength and weakness of the
company. By this company is able to find their weakness and overcome that by using their
strength. Analysis of the strength and weakness of company are as follows:
Strength
It is one leading company which is leads in industry, that has the numerous strength that
are enabled to expand at marketplace. That are help to protect the market share in existing
marketplace and also help to penetrating new market.
 Their strength is human and staff members and financial strong. Highly successful at go
to market strategies for its products.
 Their humans staff members are eligible and innovative. They are give effective and
valuable changes to firm by these customers. By these customers are attracted towards it
for work and managing things (Nikolova, Kuporov and Rodionov, 2015).
 Highly skilled workforce through successful training and development program. This
give huge investment on the training and development resources.
 By these employees are able to give their hard contribution to achieve work goals and
also motivated to achieve more for the Sainsbury.
Weakness
5

Sainsbury has the strength as well as some weaknesses that are give negative impact on
the growth of company. That is the area where management can improve their performance by
using the Strength and build on its competitive advantage and strategic position.
 Investment on the research and development is low. Management can improve and
increase the investments on their research and development process.
 Agros is the weakness of the Sainsbury. For that company have to increase their profit
margin. This help to make the effective and valuable changes for growth of company.
 There are needs to more investments on the new technology. This gives the expansion
and this help to make different type of planning for the growth of Sainsbury (Prokop and
Stejskal, 2017).
 Its profitability ratio and net contribution of company is low in the industry as compare
from the others.
VRIO model
The VRIO analysis is help recover the internal sources are provided the sustainability to
competitive advantage. This is also mentions at each stage there are various resources are can be
improved which is provided a greater competitive advantage. That have 4 stages such as value,
rare, imitable and organization. Each stage are discussed below:
Basis Valuable Rare Imitable Organization
Local foods products Yes
Skilled employees Yes Yes
Distribution network Yes Yes Yes
Financial resources Yes Yes Yes Yes
Long term competitive
advantage
Yes Yes Yes Yes
 Valuable stage shows that the financial resources of company that are necessary to
recover its local food products are valuable resources for the company. There staff
members and employees are also valuable resources to the firm. They can also give extra
training and development to them (VRIO model, 2017).
6

 Rare stage is shows that are rarely available in the firm and affected as well. Sainsbury
has strong financial resources that are rare and not easy to available for all companies.
Their employees are also rare, because that have high skilled and trained employees they
are give their hard contribution to achieve growth and goals of company.
 Imitable stage is shows that are imitable for company like distribution network of
Sainsbury is very costly to imitable by the competition. Competitors are invested
significant amount when they are imitated a similar distribution system.
 Organization is the last stages of this model, financial resources are organized to capture
the values for identify by the VRIO analysis. These resources are used strategically to
invest in the right place at right time. That make use of opportunities with the threats.
Q3. Marketing grid.
Swot is using form look the core strength, weakness, opportunities and threats of
company. It is important to analysis that making new and valuable strategies for overcome that.
SWOT and TOWS matrix are as follows:
SWOT analysis
Strength
 Retails sector has strong strength by online sales. Sainsbury is earned the high profit
margin by the online marketing and shopping centre. Argos is leading delivery services
and this competitive advantage against competitors.
 Company has the strategic distribution of its channels are strength that gives flexibility to
its customers. By these customers are gets the effective and valuable performance of
product (Aalbers, 2015).
 There staff members and employees are strong strength of company because they are
highly skilled.
Weakness
 Company have to investment on their research and development because it is low and
that is not goods for growth of company.
 Argos losses are a weakness of the company because there is required to increase the
profit margin.
Opportunities
7

 The population is the major trends for the retailers like Sainsbury. They have opportunity
to develop their food process system by introducing the healthy foods.
 To use the new technology.
 It is have opportunities to give shape and design to product for make attractive that. B y
these customers are attracted towards it.
Threats
 Company has threat from new entrant and substitutes products. New entrants are come in
the market with the low cost of product and attractive as well. That is also threats from
the substitute product which are also provided by the supermarket chain.
 Pound rates are lowest at the time of Brexit. That is also threat for the company. This
affecting to the retails and whole industry process.
TOWS matrix
This concerns threats, opportunities, weakness and strength. This extent by the SWOT
analysis (Bican, 2017). That are falls into the four categories like strength-opportunities,
weakness-opportunities, strength-threat and weakness-threats.
 Strength opportunities is had the relationship between that strength are increase by the
use of opportunities. That are help to make effective and valuable for growth of company.
That have strength of skilled and qualified employees at that they can more improve by
using their opportunities to give proper shapes to products. By this their strength and
opportunities are together work give growth in strength by using opportunities.
 Weakness opportunities is also had relations. Weakness can be overcome by the using
opportunities. Sainsbury has low research and development process for that company can
use their opportunity is new technology. Technology are help to done research on market
and also development of its. So, opportunities are help to overcome the weakness.
 Strength-threats are have relations like they have strength their online stores and
shopping centres by this Sainsbury is able to overcome the threats of new entrant. That
have online stores at their they provide all the products and services. By these threats of
new entrants are not affect to the company.
 Weakness-threats, Sainsbury has threats from the low pound rate and weakness is had
Argos losses (Biemans, 2018). Threats are considers on the weakness of the company.
Marketing grid
8

Marketing grid of the Ansoff model is a model that has proven for the company and it is
very useful in the business and its growth. This model is help to growth in the products and
services. This help to make the strategies for growth of Sainsbury. That consider the 4 growth
strategies in the product and market grid.
 Market penetration is the sell more for the same products and services in the current
market. This try to change in the customers who are regular clients and best relationship.
This help to achieve economic scale by effective manufacturing.
 Market development is says the sell new products and services at the new market. By
this company is able to done growth in the sells. By this new customers are known about
the product (Cohendet, 2017).
 Product development, by this company can do the product development in the existing
products. It is best and effective for growth of company.
 Diversification is most risky type of strategy. This also decrease risk, because a large
corporation and sainsbury can decrease their risk.
These model is help to make the new strategy for the company growth.
CONCLUSION
From the above it had been concluded that the external and internal environmental factors
has affect tom company and its growth. Report had been covered by the PESTEL and five force
9
Illustration 1: Ansoff model
(Source: Ansoff model, 2017)

model that has important for analysing the opportunities and threats of company. By that
management has able to make the strategies for the changes. It had been also shows by the
SWOT and TOWS analysis of the company by this company and management has overcome
their weakness and threats by using the strength and opportunities. That had been important for
the growth of company.
10

REFERENCES
Books and journals
Aalbers, R. and Dolfsma, W., 2015. Innovation networks: Managing the networked organization.
Routledge.
Bican, P. M., Guderian, C. C. and Ringbeck, A., 2017. Managing knowledge in open innovation
processes: an intellectual property perspective. Journal of Knowledge Management.
21(6). pp.1384-1405.
Biemans, W., 2018. Managing innovation within networks. Routledge.
Cohendet, P., Parmentier, G. and Simon, L., 2017. 13. Managing knowledge, creativity and
innovation. The Elgar companion to innovation and knowledge creation. p.197.
Frow and et.al, 2015. Managing co‐creation design: A strategic approach to innovation. British
Journal of Management. 26(3). pp.463-483.
Ganguly, A., Nilchiani, R. and Farr, J. V., 2017. Technology assessment: managing risks for
disruptive technologies. Managing Technological Innovation: Tools and Methods.
pp.25-54.
Goffin, K. and Mitchell, R., 2016. Innovation management: effective strategy and
implementation. Macmillan International Higher Education.
Lager, T., 2016. Managing Innovation & Technology in the Process Industries: Current practices
and future perspectives. Procedia Engineering. 138. pp.459-471.
Nikolova, L. V., Kuporov, J. J. and Rodionov, D. G., 2015. Risk management of innovation
projects in the context of globalization. International Journal of Economics and
Financial Issues. 5(3S). pp.73-79.
Prokop, V. and Stejskal, J., 2017. Different approaches to managing innovation activities: An
analysis of strong, moderate, and modest innovators. Engineering Economics. 28(1).
pp.47-55.
ONLINE
Ansoff model. 2017. [online]. Avaible thorugh:
<https://www.12manage.com/methods_productmarketgrid.html>
VRIO model. 2017. [Online]. Avaible thorugh: <https://www.business-to-you.com/vrio-from-
firm-resources-to-competitive-advantage/>
11