Reflective Analysis of the Internal Business Environment

This report analyzes the value chain model by Porter and provides an overview of Sainsbury, including SWOT analysis. It also reflects on the value chain management and its benefits.

Reflective Analysis of the
Internal Business
Environment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Value chain model by Porter.......................................................................................................3
Sainsbury's overview...................................................................................................................5
Internal environment analysis by value chain model..................................................................6
Reflection on value chain model.................................................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
The value chain model is a framework of the Michael Porter which help to analyze the
specific activities through which company can create competitive advantage and value. Inbound
logistic includes transportation, including receiving, scheduling etc (Barnier and Wright., 2017).
This report will cover Sainsbury for the study which is the largest chain of supermarkets
in United Kingdom. This report will analyze value chain model by porter and explain this
properly. It will also provide overview of the company in detail which is aim of the overall
project. This report will include SWOT analysis of the Sainsbury and analyze companies
strength, weakness and opportunities and threats . In the end of this report will provide reflection
on the value chain management and explain how this chain work and what are the benefits of
value chain model.
MAIN BODY
Value chain model by Porter
There are two activities in Porter's value chain model which is supportive activities and
primary activities. Primary activities has direct impact ion the companies activities such as sales,
production of goods, services, products and maintenance (Harrington and Carawan., 2016).
These activities are important for the company to convert Row material into the finished goods
and provide to the Customers, so they can satisfy their needs and their demands. These activities
are consisted with some elements which are -
Inbound Logistics
Inbound Logistics are the process which involve storing, receiving and internal
distribution of the Row material or the products or service basic ingredients. It is important for
the companies to create better relationship with the (supplier) of their row material so company
can value and add some value in their products.
Production
Production is the process where companies employees convert input into the finished
products or half-finished products (Katz, Du Preez and Louw., 2016). Operational function of
the company are the guiding principle for the creation of the product value.
Outbound Logistics
Outbound Logistics are the activities which is refers to the delivery of the services and
product to the consumers. Outbound activities include includes transportation of the goods,

distribution of the goods, storing and instance. Marketers and distributor of the company delivery
the product direct to the customers, or they store in the companies so customers can buy those
products and satisfy their needs and their demands.
Marketing and sales
This is one of the important process of the company where company advertise their
products in the market so customers can know about the product and what are the specification in
the product and how product can help them to full fill their needs (Leonidou And et.al., 2017).
This helps to make new customers and company can increase their growth by using the products
marketing. There are some tools which is used by the companies for their product promotion.
This includes digital marketing. Sale, T.V advertisement etc.
Services
Services include all activities which maintain the products or service value to customers
as soon as a relationship has formed which can be based on the procurement of products &
services. The service profit chain model is another model which is specifically designed for
service management and organizational growth.
Support activities of the value chain model
Support activities in the Porter's value chain model assist with the primary activities of
this model and these activities are form on the basis of any company. For example- Activities
like HRM is important for the primary activities, but they also support other activities of the
company.
Firm infrastructure
Firm infrastructure concern with the supportive activity of the company which enable the
company to maintain their day to day operations (McFarlane and Curran., 2016). Activities such
as Finance management of the company, line management, and handling of the administrative
are the perfect example of these activities which helps to create value for the company.
Human resource management
HRM is supportive activities of the firm because HR manager of the company recruit,l
select and train the right employees for the company. They provide the support to the company
and bring skillful employees for the company, so they can run the companies activities.
Technology development

Technology development are the activities which helps to develop products of the
company and improve the services. Technology development includes IT department of the
company, development of new products for the company, improvement and innovation of
company's workplace.
procurement
Procurement are also considered as a supportive activity of the company. It is related to
the procurement to the services customers gets from the company (Milani., 2019). There are
some activities such as negotiation to get the best prices, making good relationship with the
supplier, product purchase agreement with the companies supplier are the best example of
procurement. Each and every company use primary and supportive activities as a building blocks
so company can enable to create valuable products, distinctiveness and services for the
customers, so they can satisfy the demand and needs of the customers and company can take
growth in the target market, and they can also increase their reputation on the market and gain
competitive advantages.
Sainsbury's overview
Sainsbury is the 3rd largest chain of supermarkets in the UK. Its headquarter is in the 33
Holborn, London, UK. It has approximate of 16.3% share of the supermarket sector (Tupac
Shakur raps That Inspired Black Lives Matter. 2020). It was founded in the year of 1869 by John
James Sainsbury. This company became the largest groceries retailer in the year of 1922. It is
stated that for becoming the market leader and improving brand image, Tesco overtook
Sainsbury's. It has approximate of 186,900 employees which helps it out in accomplishing its
goals. It is listed on the London stock exchange. It is also stated that it used several strategies
which helps it out in improving its brand image and becoming the market leader. Marketing
strategy is one of the best strategy which help out in promoting its products. Value chain also
makes it able to identify tasks and activities which have priorities and on which it requires
focusing. With the help of PESTLE, SWOT and Value chain model proposed by Porter's it
modifies its strategies and policies by giving priorities to each task. As per the value chain
model, it is stated that it is good at marketing, sales and other activities and it is the main strength
of this company. PESTEL tool help Sainsbury company to understand which factors are
affecting their business and SWOT help Sainsbury company to know where they are standing in
the market and what are their strength, weakness, opportunities and threats. This tool creates a

big success of this company take the advantages in the market by overcome from their weakness,
and they also gain the opportunities which is arrived for the company. This help Sainsbury
company to create a huge reputation in the market, and they were enabled to show their presence
in the market where already big brands establish their business.
Internal environment analysis by value chain model
Value Chain Model of Sainsbury
Value chain Model plays important role for of Sainsbury to run their internal activities
and functions of the company, This can also helpful for calculate Sainsbury strength, weakness,
opportunities and threats to take advantages in competitive market (Pati And et.al., 2018). Here
are primary and supportive activities of the of Sainsbury-
Primary activities
Inbound Logistics
In is important for of Sainsbury company to make good relationship with their product
supplier because their support is also necessary for company to distribute, store and receive the
products. Without analyzing this activity company can face problem related to development of
products. Sainsbury has to look for every aspect of goods transportation from the Row material
top finished goods. Company superiors are creating good relationships with their supplier, so
they can get quality products in low cost.
Operations
After arriving of the Row Material in companies workplace, employees convert row
material into the finished goods (Qiu, D. and Chang., 2019). Employees convert and manager of
Sainsbury provide employees right guidance and solve their problem related to the operation
activities, When employees convert resources into the finished goods then they send it to their
departmental outlet. Company mainly focusing on their manufacturing department, so they can
improve the quality of the products, and they can improve and maximize their efficiency.
Outbound Logistics
Sainsbury company deliver their product to the customer by passing through the
different ways. Some outbound logistics of the Sainsbury are warehousing, process of they order
delivering the product to their final destination which is their departmental stores in the UK.
Sainsbury company is optimizing their Outbound Logistics, so they can explore competitive
advantages, and they can also achieve the Business growth objectives.

Marketing and sales
Sainsbury is promoting their products in different marketing platforms such as Facebook
because it is less expensive, and they can target audience according to customers needs. This
help company to take high growth advantages, and they increase their goodwill in the market.
Services
Customer service options are available on Sainsbury's website, they are improving their
customer services to they can create between shopping experience for the customers. Customers
services are available for 24/7 so customers can call whenever they are facing problem related to
their product.
Secondary activities
Firm infrastructure
Finance management of the Sainsbury company is good because they are having strong
financial resources (Salyova and Taborecka-Petrovicova, J., 2017). They are using finance to
improve quality of the product and training of their employees so they can achieve high growth.
HRM
HRM of the help Sainsbury company to build strong workforce to run their operation.
Employees must be qualified, and they should have experience to work in Sainsbury company.
Hr manger recruit and take interview of the candidates.
Technology
Sainsbury is taking advantages of the new technology treads, customers can pay through
the credit cards and company also provide cashback on digital payment.
Procurement
They are having good relation with their supplier, so they get Raw material in less cost,
money which they save in row material are used for training purpose.
SWOT Analysis of Sainsbury
Strength
 Sainsbury has taken the right moves in which they were able to convene to the small
grocery stores to expand their business with them. Sainsbury create numbers of
merchandise stores which help them to make proper supermarket chain.
 Sainsbury comes among the UK's top 4 supermarkets.
Weakness

 Sainsbury is facing problem related to the brand sweating, they are organizing customers
locality programs but still they are facing this problem.
 With the increment of composition in the market, online shopping sites are creating
problem for them.
Opportunities
 Sainsbury have opportunities to expand their business in the rural areas because demand
of the grocery products are increase in the village area as well so Sainsbury have good
opportunity to expand their business more
Threats
 Competition is the main threat for the Sainsbury because they are getting Competition
from the both new and existing competitors.
 Other brands are selling their product in low prices, so they can gain competitive
advantages which affect Sainsbury product prices as well.
Reflection on value chain model
In my opinion Value chain model plays important role for business because this helps
Sainsbury company to understand their internal activities, and they also recognize that which
activity in their company is more valuable and where they can take more advantages. Company
should use this model to overcome from their weakness. After the analysis of value chain of
Sainsbury company I come to know that, they should focus on their production activities because
their product is less than compare to the TESCO (Tresna., 2017). If Sainsbury company focus
on this then take can overtake TESCO company, and they can become one of the best retailer
company in the all over the United Kingdom.
Other thing which value chain model help to find is manufacturing process, they should
also focus on their manufacturing process to gain competitive advantage. They can use lean
manufacturing to maximize waste from their raw material, so they can provide quality product in
affordable price range.
CONCLUSION
As per above report has analyzed value chain model in the context of Sainsbury. This
report has been provided overview of the company in detail which was aim of the overall project.
This report has been concluded SWOT analysis of the Sainsbury and analyze companies
strength, weakness and opportunities and threats . In the end of this report has been provided

reflection on the value chain management and explain how this chain work and what are the
benefits of value chain model.

REFERENCES
Books & Journals
Barnier, B. and Wright, C., 2017. The many facets of risk: internal auditors need to consider the
variety of perspectives business functions have for managing risks. Internal Auditor.74(2).
pp.20-22.
Harrington, L. and Carawan, M., 2016. The high-performance audit team: today's complex,
evolving business environment demands more of internal auditors. Internal Auditor.73(6).
pp.62-64.
Katz, B. R., Du Preez, N. D. and Louw, L., 2016. Alignment of internal and external business
and innovation domains. South African Journal of Industrial Engineering.27(1). pp.61-74.
Leonidou, L. C. And et.al., 2017. Internal drivers and performance consequences of small firm
green business strategy: The moderating role of external forces. Journal of Business
Ethics.140(3). pp.585-606.
McFarlane, J. and Curran, R., 2016. Business Organizations The Internal Environment.
Milani, F., 2019. Internal Business Context. In Digital Business Analysis (pp. 47-77). Springer.
Cham.
Pati, R. K. And et.al., 2018. Business model design–performance relationship under external and
internal contingencies: Evidence from SMEs in an emerging economy. Long Range
Planning.51(5). pp.750-769.
Qiu, D. and Chang, C. C., 2019, May. The establishment of self-building internal business
incubator to motivate enterprises’ innovation. In Engineering Innovation and Design:
Proceedings of the 7th International Conference on Innovation, Communication and
Engineering (ICICE 2018), November 9-14, 2018, Hangzhou, China (p. 447). CRC Press.
Salyova, S. and Taborecka-Petrovicova, J., 2017. The impact of internal determinants and
environment on market orientation of businesses from Slovak foodstuff
industry. International Review of Management and Marketing.7(2). pp.83-91.
Tresna, P. W., 2017. External and Internal Environment Analysis (A Study in Tasikmalaya City
Embroidery Industry). Review of Integrative Business and Economics Research.6(1).
pp.401-11.

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