Innovation and Performance Analysis of Sainsbury's

The assignment is based on a study that analyzes the innovation in business using Sainsbury's as a case study. The report concludes that for achieving success, every company needs to innovate at every stage. It highlights various technological up-gradation techniques adopted by Sainsbury's, which contributed to its increasing performance and capabilities. The company's efforts to improve its performance have enabled it to gain competitive advantages globally.

MANAGING INNOVATION
IN BUSINESS

EXECUTIVE SUMMARY
The report will cover about management of innovation in business. Innovation management
means whatever the company does to acquire its growth and profitability. Like many companies
innovate using technologies, or by launching new product to capture new market or existing
market.
This report will explain innovation management by the help of Sainsbury's Plc, a supermarket
company of UK. This company deals with retail market and does a lot of innovation for
successful functioning of the company. Sainsbury plc is founded in 1869 by John James
Sainsbury. There are many competitors of the company in every market it operates and
Sainsbury is capable enough to give a tough competition to them.
In the report all the innovations of Sainsbury plc will be discuss. The company makes innovation
by launching products like Bacon and by opening of different stores in different countries.
Sainsbury mainly focuses on opening of new stores in some area of Scotland, North-East of
England, Northern Ireland and North Wales.
Sainsbury then make innovation regarding product development. As the company focuses on
food sector, they got shifted towards non-food items like CDs, DVDs, Wrapping paper, Cards
etc. And also clothing of TU brand and home ware. After company manage its innovation
through opening up subsidiaries like Argos and Habitat and gains a huge profit from these
subsidiaries. Then the company started online selling with a tag line “click and collect”. After
that company start producing electricity by bio-methane gas which found profitable for the
company. It supports environment and gain customer base. By launching an environment
friendly practise, the company gain attraction of many customers.
After that innovation of Sainsbury in 2018 will be highlighted. All the innovation regarding the
business will be covered. Innovation regarding combination of Asda group with Sainsbury's and
also the increase in product line by launching toys, jewellery, smart home products and luxury
items. By the year end company also involved in the development of digital and technology
department with the changing era, company found it is essential to develop. The company also
launches many apps for the convenience of shopper like chop-chop app. And company also do
digital promotions by launching digital coupons on Eagle eye and shopper can redeem them.
Scan & go solution is also an innovation by the company for promoting digitalize environment.
The report will cover all these innovations.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
About Sainsbury and innovation history................................................................................2
Sainsbury existing innovation performance & capabilities....................................................4
Industry in 2018......................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8
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INTRODUCTION
Innovation Management consists of management in innovation process and the change
management (Schmiedel,2015). It focuses towards innovation in an organisation or industry.
Every organisation in the industry have to deal with innovation towards their businesses. This
report is all about Sainsbury, a super market company. It is a retail company of United Kingdom
and holds the second largest position in chain of supermarkets. Its current market share is 16.9%
in supermarket sector. This report will lay emphasis on description about Sainsbury and its
innovation history. The report will also highlight about existing innovation performance and
capabilities of the company Sainsbury. Trend updates of 2018 will also be highlighted in this
report.
MAIN BODY
About Sainsbury and innovation history
About Sainsbury
Sainsbury is a private limited company which deals in retail trading. It was founded in 1869 by
John James Sainsbury. Its headquarter is in London, UK. Net operating income of the company
in 2018 was £518 million. There are many subsidiaries of Sainsbury, some of them are
Sainsbury's bank, Sainsbury supermarket Ltd., Sainsbury Local, Argos, Habitat, Nectar. As
refereed to the data of Sainsbury, company provides employment to 186,900 people. TESCO and
Uniliver are major competitors of Sainsbury. The Sainsbury also updates its business globally to
capture huge market segment (Dowling, 2019).
Figure 1 : LOGO of Sainsbury
Source : (Sainsbury’s Superstore, 2019)
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Innovation history
The company Sainsbury was founded in 1869 in the world of retail. In 1882, Four new branches
was established in Croydon and first product launched was Bacon. Then, after in 1914 company
was bearing a huge loss as it was the time of first world war and company then promote women
empowerment by providing employment to women of UK and provide them training regarding
their work. Then company started expanding in Northern England from 1936. Then, after
completion of second world war, many stores of Sainsbury got harm by heavy bombing. In the
month of June 1950, Sainsbury started their first self service store at Croydon. 1970 is the era of
end of self service stores and company innovated Modern supermarkets. Because of the huge
success Sainsbury got the title of “the largest initial share on sale” on LSE that is London stock
exchange (Lynch,2017). Further in 1974, A new store got opened by Sainsbury at Cold-ham's
Lane in Cambridge. By the end of 1980 company started expanding in North-East of England,
Scotland, North Wales and Northern Ireland. Then company sold Shaw's and Home-base
Supermarkets in the year 2000 and started concentrated on different market segments like
Sainsbury supermarkets, Sainsbury local, Sainsbury online and Sainsbury bank. From the month
of March in 2014, the Sainsbury became the first retailer company who started converting its
waste food to into bio methane gas, so that they can generate electricity from it.
Now, the whole innovation history will be summarized for better understanding.
Summary of innovation history
Year Innovation
1882 The company expanded in four branches in Croydon. This area is the most
prosperous one and attracts many customers.
“Bacon” releases as its brand product for the first time.
1914 Looses almost one – third of its workforce in first world war.
Then Sainsbury empower women and recruit them, provide training to
them.
1936 The company started expanding in Northern England (Albertini,2016).
1950 In June, First self service store of Sainsbury opens in Croydon.
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1970 Modern supermarkets replaced all the Sainsbury's service stores.
1973 The company got the title of “the largest initial share on sale” on London
Stock Exchange (LSE).
1974 A new store opens at Cold-ham's Lane, Cambridge.
1980 The company Sainsbury started expanding in Scotland, North-East of
England, Northern Ireland and North Wales.
2000 Home-base and Shaw's Supermarkets were sold and focus of the company
shifted towards Sainsbury supermarkets, Sainsbury local, Sainsbury online
and Sainsbury bank.
2014 In the month of march, The company Sainsbury became the first retailer
who converted its food waste into bio methane gas in generation of
electricity (CUSHING,2015).
Sainsbury existing innovation performance & capabilities
 Innovate by indulging in retailing of Non-food items
From the last Five years Sainsbury offers various Non-food items. The company supplies the
product with a very basic range. Like, CDs, DVDs, Wrapping paper, Cards etc (Wurm, 2015).
Now, they are also dealing in clothes and home ware, according to the demand of customers.
They provide clothing range through TU brand which attracts more number of customers.
The Innovation Performance of Sainsbury
The company like Sainsbury which is very huge brand deals with a range of non-food items.
They are intentionally entering into new market segment and found successful in supplying good
quality products. Which brings trust in the customers. They provide customer service and also
value the need of their consumer. Company is now gaining the loyalty of customers.
The Capabilities of Sainsbury
◦ They are giving tough competition to all the companies with same market segment.
◦ Sainsbury contributes more than earlier to the GDP of UK (Rudny,2015).
◦ The company continuously innovate according to the need of the customers.
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◦ Sainsbury is providing high quality products at efficient pricing. They are actually
charging reasonable prices for the quality the company offers.
 Innovation integrate in Subsidiary (Argos and Habitat)
One of the subsidiary of Sainsbury (Argos) always trade strongest of all over Christmas. They
provide the latest range of TU clothing during Christmas and annualised growth increases every
year upto 20% and uplift in grocery almost 1-2%.
Another subsidiary of Sainsbury (Habitat). The stores of this Sainsbury's subsidiary are
preferably concentrated on home ware and they provide the best quality among all over UK.
Every year the sales increases upto 4%.
The Innovation Performance of subsidiaries and Sainsbury
The Argos and Habitat continuously innovate their products for consumers and competitors.
They are facing competition from TESCO and Wal mart. Though, the company increases its
performance through their subsidiaries Argos and Habitat. Argos are providing huge range of
clothing from the brand of TU and Habitat are performing best among all home ware products
that are supplying in UK from different companies. The Capabilities of subsidiaries and
Sainsbury
◦ Both the companies Argos and Habitat are serving the best quality in their market
segment. Thus, they are giving tough competition to all the companies of same
segments (Wurm, 2015).
◦ They are gaining loyalty of customers. The consumers do not want to shift to any
other brand as they feel satisfied with Sainsbury and its subsidiaries.
◦ Sainsbury is successful in creating its brand image and being a parent company of
Argos and Habitat, they are getting advantage of their image.
◦ They subsidiaries are providing employment to local people thus they are
contributing in increasing employment rate of a particular country in which they are
operating. Therefore, they are gaining political support.
 Online innovation in Sainsbury
Earlier Sainsbury was not very much involved in selling their products online. But as following
the trend and want of customers, From 2017 the company Sainsbury started online portal from
which customers can buy the desired products. Sainsbury started with a tag line of “Click and
Collect”. This service is availed in 200 supermarkets and 30 stores of Sainsbury.
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The Innovation Performance of selling online products of Sainsbury
The company is now offering its products online. This bring growth in Sainsbury stores almost
9%. All the stores and supermarket ensure customers for same day delivery. This attracts huge
number of customers, as costumer finds this service of Sainsbury cost efficient and time saving.
The customers are ready to pay the delivery charges of the company as they deliver their
products at home. By availing this service, the company increases its customer base.
The Capabilities of Sainsbury by selling online
◦ The Sainsbury supermarket and stores are getting success by increment in their profit.
◦ Company offers same day delivery which attracts many customer's.
◦ The company is successfully achieving their sales targets by which they are giving
tough competition to the competitors.
◦ They make continuously efforts for retaining existing customers. Like, online selling
That helps the company to gain loyalty from customers.
 Decompose waste food into bio-methane gas
In 2014, the company Sainsbury launched an innovative technique of utilizing its waste food.
They set a special plant for converting waste food into bio-methane gas and supply that produced
electricity in every store of Sainsbury. They are following this technique continuously and this
innovation gave the company huge success.
The Innovation Performance of Bio methane gas of Sainsbury
Although the company invests in plant development. But they are now generating electricity by
decomposing waste food. They save almost 20% of the total electricity expenditure annually
(CUSHING,2015). This technique brings Sainsbury centre of attraction for the whole year. They
are gaining political as well as societal support as they are using an environment friendly
technique.
The Capabilities of Sainsbury by following this technique
◦ The company is getting political support by following this technique, which helps
them to prevent them from legal hazards.
◦ They are showing possessiveness towards environment and inspires many individuals
and organisation to do the same.
◦ Sainsbury gaining attraction from customers. The customers feel that they rely on that
brand which is environment friendly.
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◦ They save almost 20% cost of the electricity expenditure, by which they are
successful in increasing their profit.
Industry in 2018
Retail industry in year 2018
 Employment in retail sector Like, clothing, home ware, grocery store and many more was
2.8 million in 2017. The company is now contributing almost 8% to GDP of UK
(Kroon,2018). In the last year, UK retail industry have seen an acceleration in the number
of store closures as under-pressure retailers have tried to restructure their businesses
(7,500 net store closures in 2018, a 36% increase on 2017). There were 1,423 grocery
stores and 815 were convenience stores in UK.
 In the end of year 2018 the e- commerce consists of 20% of all retail sales. The online
sales in retail sectors are at boom. Due to advancing technology, the retail industry has
marked a huge amount of profit in the year 2018.
 In the year 2018 retail industry is also facing an extreme amount of pressure due to
weakening demand and rising cost. (Wang, 2018). By this app customers easily can scan
their products and check the price and pay accordingly.
 In 2018, “Eagle eye” technology for shoppers offering them best experience. In this
technology, company allow shoppers to redeem rewards and digital offers. This attracts
many customers in the stores because digital technology is faster than the paper coupons.
 The retail sector also launched various app related to their stores in 2018. By ordering
from this app, delivery boys on their electric bikes delivers the ordered products within
one hour (Wang, 2018).So the costumers are getting timely delivery of products and they
are happy and satisfied by the services rendered by company.
 Wages in retail sector hit a ten year high in November 2018 and business rates,
commodity prices and pensions also remain high. It also advertises it online to capture
different market segment and to attract customers.
 For innovation in retail stores the industry has created 150 technology and digital jobs in
2018. For the development of Digital and technological department, various company
hires technicians for the efficient working of the retail stores.
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 The retail industry has also marked an increase in the use of retail CVA’s and
administration, because many of the organizations are unable to reduce their cost base.
(Kroon,2018).
CONCLUSION
From the above study Sainsbury plc was taken for understanding the innovation in business. The
report concluded that for achieving success every company need to innovate at every stage. As
like Sainsbury attains various technological up-gradation techniques which was mentioned in the
report for the success. The increasing performance and capabilities of Sainsbury's were also
discussed in the report. The company gaining competitive advantage globally by improving their
performance. After that innovation and performance of Sainsbury's also mentioned in the report.
The company does a lot of innovation for its sustainable growth in 2018.
REFERENCES
Books and Journals
Albertini, E., and el.al., 2016. A fresh look at intellectual capital in the post-industrial era.
CUSHING, N., QUINN, K. and MCMILLEN, C., 2015. UNIVERSITY OF NEWCASTLE:
RECASTING THE CITY OF NEWCASTLE AS A UNIVER-CITY—THE JOURNEY
FROM “OLDE” NEWCASTLE-UPON-TYNE TO THE NEW SILK ROAD. In
UNIVER-CITIES: STRATEGIC VIEW OF THE FUTURE: FROM BERKELEY AND
CAMBRIDGE TO SINGAPORE AND RISING ASIA (pp. 93-118).
Dowling, N.A., and et.al., 2019. Generic solutions for data‐limited fishery assessments are not so
simple. Fish and Fisheries. 20(1). pp.174-188.
Georgiou, S. and et.al., 2017. Assessing, benchmarking and analyzing heating and cooling
requirements for glasshouse food production: a design and operation modelling
framework. Energy Procedia. 123. pp.164-172.
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Kroon, F., McKeown-Green, J. and Brock, S., 2018. A Critical Introduction to Fictionalism.
Bloomsbury Publishing.
Lynch, B., 2017. An examination of the effect on debt/equity ratios with the adoption of IAS 19:
Employee benefits. International Review of Business Research Papers. 3(1). pp.48-59.
Rudny, W., 2015. Coopetition as a new way of structuring interorganizational relations. Studia
Ekonomiczne. 224. pp.199-208.
Schmiedel, T. and vom Brocke, J., 2015. Business process management: Potentials and
challenges of driving innovation. In BPM-Driving Innovation in a Digital World (pp. 3-
15). Springer, Cham.
Wang, M., and et.al., 2018. Enhanced thermal conductivity of poly (vinylidene fluoride)/boron
nitride nanosheet composites at low filler content. Composites Part A: Applied Science
and Manufacturing. 109. pp.321-329.
Wurm, A.E., 2015. Systematic Innovation.
Online
Sainsbury’s Superstore. 2019.[Online]. Available through.
<https://www.enjoysutton.co.uk/portfolio/sainsburys-superstore/>.
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