Reflective Analysis of Sainsbury's Value Chain Model

This reflective analysis explores the usefulness of the value chain model in understanding the internal environment of Sainsbury's, a leading supermarket chain in the UK. It discusses the primary and supporting activities of the value chain and highlights the benefits of using this model for strategic decision-making.

REFLECTIVE ANALYSIS

Table of Contents
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................3
Value chain model.......................................................................................................................3
Sainsbury.....................................................................................................................................4
Internal environment of business.................................................................................................5
Reflection on usefulness of value chain model...........................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Reflective analysis is the procedure to reflect own thinking after considering the internal
environment of business or other things effectively. It helps to cater opportunity to significantly
examine personal experience. Reflective analysis aid to think back on what person will learn and
analysed. The present report is based on Sainsbury’s organization, operates their large
supermarket chain in UK, they operate number of stores across nation with skilled labour. It
explains value chain model, describe the overview of company and justify internal environment
of business (Holweg and Helo, 2014). This study clarifies the usefulness of value chain model in
context of understanding current environment of firm.
Value chain model
Michael Porter proposed value chain analysis model under which value chain is defined
as collection of essential activities that is performed and managed by organization to create value
for their consumers. It creates added value which leads to greater success and competitive
advantage. It is also known as Porter's value chain analysis as management concept that provide
high profitability for business rather than before. This model is focusing on activities and
systems with central principles and consumers rather than on accounting and departments
expenses categories (Jung, 2014). It links functions and systems to each other and show what
effect this has on profit as well as costs. Value chain analysis model makes clear way where a
source of loss and value amounts is found in company effectively. Along with this, this model
helps organization to analyse particular activities through which they can gain competitive
benefits and create value. It is consists of number of actions, namely secondary and primary
activities. Primary activities immediate effect maintenance, production procedure, support and
sales of products or services. All these activities is consisted of different elements such as
inbound logistics; production, outbound logistics; marketing and sales, & service.
Within porter's value chain model support activities assist primary activities, they form
basis of business. Human resource management is one of the best support activities that helps to
manage primary activities effectively through work. Firm infrastructure, HRM, technology
development and procurement is included in support activities. Value chain model is quite
beneficial as it helps to improve ability of company to capture, manage and track consumers as
well as marketing necessitate to better estimate planning, production, design and service
activities for systematic cost estimates with all appropriate traceability (Ouzrout and et.al., 2018).

By using the four basic stages organization analyse its abilities and capabilities of work. With
value chain model, firm can easily determine those activities where they can easily reduce cost,
eliminate waste, increase production & profitability and optimize efforts. Activities analysis
provides insights information into components that brings higher value to end user. In simple
words it is the set of essential activities that business will carries out to create higher value for
their target audience. General purpose of value chain is proposed by porter that firm can uses to
determine all of their actions and see how it connected with each other. However, this model is
used to analyse the internal activities of companies in specific sector.
Sainsbury
Sainsbury is operated their business in UK effectively, it is the third biggest chain of
supermarkets in nation within amount of share of supermarket industry. The organization is
founded by John James in 1869, in London. By providing the best quality products or services to
its consumers company had become the leader in retail sector, they earn profit rather than its
business competitors within marketplace effectively. J Sainsbury Plc is the holding organization
split into three divisions, each division earning good profit. In current time firm open their giving
store, it designed especially for consumers to shop and browse then leave empty-handed, it is
open in London where people have opportunity to use pre-paid tokens in order to take products
from shelves and give to individual in need. The main agenda of company is to offer the best
quality of products and convenience. They have more than 2,300 supermarkets, Argos stores as
well as convenience outlets across UK and Ireland. Recently organization is driving towards
online businesses where they provide online services or grocery products to its customers within
market place.
Holborn is the first store of Sainsbury's, after getting success they operate many stores
effectively out of their national territories. Company talks with Walmart in respond to merger
with Asda which form the biggest UK supermarket business. They opened one of the biggest
shops in nations an extension of their existing outlets in Crayford, which is currently has over
100,000 sq ft of retail space. Sainsbury's have 186,900 employees who are able to perform
highly effective and contribute to gain competitive advantages by delivering products on time
without delay. They operate Sainsbury bank where organization provides financial services to
local people some of them include child trust funds, credit cards, different kinds of loans and
saving accounts.

Internal environment of business
The value chain model is used to examine internal environment of Sainsbury's with
relevant supporting and primary activities of business.
Primary activities-
This activities of company are directly consists in selling and producing products to
target consumers (Caridi and et.al., 2014). With the help of analysing primary value chain
functions it can improve performance of business for further growth.
Inbound logistics-
Organization is not manufacturing their own products, they have strong relationships with
goods providers who cater different types of commodities to company. Products are ordered by
them as per needs and it is assured that situation such as stock out will not be arisen as it is
context to be most unfavourable and inappropriate condition for company. Company managed
their inbound logistic effectively, they stored final products in warehouses and then sent it to
different stores of their business according to the requirements. Apart from this organization is
mainly focusing on saving costs, they purchased products in bull after considering the demand in
market which is quite beneficial for longer term growth and success. They mostly focused on
improving inbound activities that help management to operate business in retail sector, with the
better and well-developed activities organization effectively design their strategies that cater
better sustainability to operational actions.
Operations-
Organization is not carry out manufacturing procedure and due to this reason Sainsbury's
operation is quite different from other firms (Frederick, 2014). The main operation carried by
company is connected with distribution of products where goods are purchased from suppliers
and then provided to consumers through physical stores that has been opened by organization
globally. Operations of business on basis of which they are able to deliver differentiated services
to its consumers as per their demands and expectations. It caters great opportunity to enhance the
products quality which help to attract people rather than before towards purchasing goods and
also allow business to design appropriate strategies according to needs.
Outbound logistics-
Sainsbury's is operating their business on wider basis due to which they have large
number of warehouses in different areas. It directly helps organization in appropriate

management of products sent accordant requirement obtained from their physical stores.
Company is able to have their own transportation network through which they can transfer range
of products from warehouses to their physical outlets efficiently. With the help this activity
organization is able to save time and cost required in product distribution into marketplace.
Marketing and sales-
Sainsbury's will develop their sustainable plan for future business growth in order to
promote their brand and to serve better services to its workers (Edgington, 2017). Sales force,
promotional activities, pricing, quoting, channel selection and building connects with channel
members is the marketing as well as sales activities of company. They use marketing funnel
technique to structure and manager their marketing actions appropriately. Strategies of marketing
is be pull or push in nature that is depended on company business objectives, competitive
dynamics, current standing and brand image in marketplace.
Services-
Organization is able to provide post and pre sale services that plays vital role in
developing and improving consumer loyalty. Modern people consider post sales services as
essential as promotional as marketing activities. Organization apply their support actions to
avoid damaging reputation of brand, instead uses as technique to transfer positive word of mouth
due to timely, efficiently and quick support services.
Figure 1 Value chain model

(Source: Value Chain Analysis, 2018)
Supporting activities-
Supporting activities of company is also essential like primary activities that plays vital
role in facilitating and coordination primary value chain functions.
Firm infrastructure-
The infrastructure of Sainsbury's denotes different activities such as legal matters
handling, quality management, planning, accounting, strategic management and financing (Flood
and et.al., 2014). Company have effective infrastructure management that permit them to
optimize value of whole value chain. They control each activity effectively to that aid to
strengthen business competitive positioning in market.
Human resource management-
Sainsbury’s human resource management effectively perform their accountabilities, they
recruit, selects and trained employees in order to build strong and effective workforce who are
able to gain competitive advantages. HRM help to reduce competitive pressure in company
based on commitment, motivation and skills of their employees (Herz and Flämig, 2014). Firm
achieve their cost minimization objectives by determining training and hiring costs of applicants
with their relative return. Heavy dependence of organization on staff talent and skills will
maximize importance of value chain support activity.
Technology development-
In recent time, technological advanced period, almost all value chain functions is highly
depend on technological support. Technological integration in marketing, production,
distribution and human resource activities needed company to realise significance of technology
implementation as well as development. It divided into procedure and product technological
development actions. Data analytics, technology supported and automation software is developed
in Sainsbury’s department which make them able to perform effectively.
Procurement-
In value chain procurement included in buying inputs that range from machinery,
supplies, equipment, raw material and other products necessary for manufacturing finished goods
(Piotrowicz and Cuthbertson, 2019). Due to their connection with different value chain activities,

organization carefully considers their procurement functions effectively to optimize inbound,
outbound and operational value chain.
Reflection on usefulness of value chain model
After applying value chain model in Sainsbury’s I am able to determine the internal business
environment of company. Value chain model is flexible strategy tool that help to consider
competitors and personal place in sector value system. With the help of this model I am capable
to understand the strength of business and their capabilities to manage primary and secondary
activities. It is useful thing that uses to create and diagnose competitive benefits on
differentiation and cost. Value chain model is very useful and beneficial method; it helps me to
understand company operation effectiveness and problems included with promise of taking
customer value promises because it centring attention on actions required to deliver value
proposition. By using this value chain model it can provide me much deeper understanding of
organization strengths and weaknesses that impact on business growth & success in market for
longer period. Value chain model help to analyse internal activities of Sainsbury’s and
management structure that cater great knowledge. It lets me obtain better understanding of wider
broader competitive period. It allow company to identify profitable value by creating activities,
by using these actions, it help me to understand how firm established cost drivers of each
procedures. With the support of this model, business is able to analyse areas with low cost of
way to raw materials, innovation procedure technology or distribution channels. Furthermore,
value chain model support disaggregating business into their tactically relevant functions,
thereby developing clear overview of internal firm.
CONCLUSION
From above analysis it has been concluded that Sainsbury managed primary and secondary
activities within retail sector. t help to examine and determine internal environment of firm and
their capabilities in order to deliver products or services. Value chain model works by dividing
company activities and breaking it down into suitable pieces, so that business can see entire
image of cost drivers, then take appropriate changes according to requirements. Furthermore, it
has been summarized value chain framework proven that firm value chain is useful in identifying
and understanding essential concepts to gain core competencies as well as competitive advantage
in marketplace.

REFERENCES
Book and Journals
Holweg, M. and Helo, P., 2014. Defining value chain architectures: Linking strategic value
creation to operational supply chain design. International Journal of Production Economics. 147.
pp.230-238.
Jung, S.C., 2014. The analysis of strategic management of samsung electronics company through
the generic value chain model. International Journal of Software Engineering and Its
Applications. 8(12). pp.133-142.
Ouzrout, Y and et.al., 2018. Supply Chain Management analysis: a simulation approach of the
Value Chain Operations Reference model (VCOR). arXiv preprint arXiv:1811.01683.
Caridi, M and et.al., 2014. The benefits of supply chain visibility: A value assessment
model.International Journal of Production Economics. 151. pp.1-19.
Frederick, S., 2014, September. Combining the Global Value Chain and global IO approaches.
In Center on Globalization, Governance & International Conference on the Measurement of
International Trade and Economic Globalization Aguascalientes, Mexico (Vol. 29).
Edgington, D., 2017. Wright and Sainsbury on higher-order vagueness. In Vagueness (pp. 307-
314). Routledge.
Flood, M and et.al., 2014. Status of key Australian fish stocks reports 2014.
Herz, N. and Flämig, H., 2014. Understanding supply chain management concepts in the context
of port logistics: an explanatory framework. Transport. 29(4). pp.376-385.
Piotrowicz, W. and Cuthbertson, R., 2019. Last mile framework for omnichannel retailing.
Delivery from the customer perspective. In Exploring Omnichannel Retailing (pp. 267-288).
Springer, Cham.