Business Model Innovation Nexus: A Cross-Industry Study

The provided content explores the nexus between business model innovation and strategy making. It presents a cross-industry mixed-methods study that examines how businesses innovate their models to stay competitive. The articles discuss frameworks for analyzing supply chain performance, design science perspectives on business strategy modeling, multilevel models of team goal orientation, information exchange, and creativity. They also touch upon dynamic business model analysis for strategic foresight in production networks and the relationship between business strategy and marketing tactics. Moreover, it highlights the importance of understanding how top managers' beliefs about opportunities can influence their strategic actions.

INDIVIDUAL WRITTEN REPORT

Table of Contents
Individual Written Report..............................................................................................................1
INTRODUCTION...........................................................................................................................3
ORGANIZATIONAL PROFILE.....................................................................................................3
STRATEGIC THEORY .................................................................................................................3
Identification and justification of Ansoff’s model.......................................................................5
APPLICATION OF STRATEGIC CHOICE MODEL TO THE CHOSEN COMPANY..............5
CONCLUSION................................................................................................................................9
References......................................................................................................................................11
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INTRODUCTION
This individual report is based on the application of strategic models which are used by
the Sainsbury Company for making strategic choices. Sainsbury is a public company dealing in
the retail sector. It was founded by the John James Sainsbury before 147 years in London.
Headquarter of the company is situated at 33 Holborn, London, United Kingdom. Sainsbury is
the second largest supermarket chain in the UK (About Sainsburry, 2016). It deals in various
segments such as forecourt stores, hypermarkets, super centers, superstores and supermarkets. In
this aspect, this report will assess the individual performance of Sainsbury with the application of
Strategic Model .
ORGANIZATIONAL PROFILE
Sainsbury is a public limited organization situated in London, U.K. It is the second
largest chain of supermarket in the UK consisting 16.9% of supermarket share. John James
Sainsbury established its first shop in 1869 at Dury Lane Street of London. In 1922, it became
the largest Grocery store of London and was first in implementing self-service retailing stores in
the United Kingdom (About Sainsburry, 2016). Right now, Company, J Sainsbury plc has been
spread into 3 divisions that are Sainsbury Convenience Stores Ltd (Sainsbury Local), Sainsbury
Supermarkets Ltd and Sainsbury Bank. Its head office is situated at Holborn, United Kingdom.
161,100 employees are working in Sainsbury. Its largest shareholders are Lord Sainsbury of
Turville (4.99%) with Judith Portrait (3.92%). Judith Portrait also acts a trustee of various
Sainsbury charity and trust. Largest investors of this retail sector are sovereign wealth fund as
well as Qatar Investment Authority holding 25.999% of company's shares. It has also been listed
in London Stock Exchange (About Sainsburry, 2016).
STRATEGIC THEORY
Ansoff’s Strategic model
This is a strategic planning tool which can be used as a framework by Sainsbury. The
Ansoff’s model helps managers and executives to make future strategies for growth of
organization (Igor Ansoff: Strategic Management, 2014). The model comprises of four strategies
that can be adopted by organizations like Sainsbury for future growth. These include the
following:
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 Market penetration- This is the least risky strategy in which an organization can grow by
using its existing products and services (Bock and et.al., 2012). This strategy is focused
on increasing the market share. Hence, there is no need for organizations like Sainsbury
to change its market segments as the growth can be achieved with the existing markets. In
this strategy, more products and services can be sold to the existing customers or to the
new customers in the existing market segments (Hoppitt and Laland, 2013). Ansoff’s
model provides four methods of implementing this strategy such as price decrease,
increasing promotion and distribution, acquiring a rival and modest refinements of
products. For example, decrease in price results in increasing of demand for the product
which will lead to increase in customer base and will also help in increasing revenue.
Sainsburry while implementing Ansoff's model it is required to lower its price for
penetrating its product in the market (Estampe and et.al., 2013).
 Market development- Ansoff’s model provides a strategic choice to the companies like
Sainsbury in which they can achieve growth by expanding to new markets on the basis of
its existing products and services (Markides, 2013). This strategy can be implemented by
making different customers segments, new areas of country or expanding to foreign
markets. For example, sainsburry wants to expand its market of existing product then in
that case it has to open its stores in new market sectors.
 Product development- This is another strategic option which is provided by Ansoff’s
matrix. This is the second strategic choice provided by Ansoff’s model. In this, new
products and services can be created by organization for achieving growth. It comprises
of bringing expansion in the product range. However, for this, Sainsbury may require to
make investment in research (Morris and et.al., 2015). This strategy can be implemented
by branding the product, joint development of ownership etc. For example, in order to
develop products range sainsburry is required to develop new products along with the
existing products in the market.
 Diversification- Through this strategy, Sainsbury can grow by introducing new products
in new markets (Medarac, Vignali and Vignali, 2016).
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Identification and justification of Ansoff’s model
The chosen strategic model that can be used by Sainsbury is Ansoff’s matrix. This model
has been chosen for various reasons. Firstly, the model will provide various alternatives to the
chosen retail firm for pursuing future growth. Therefore, it provides a support in case one
strategy does not turn out to be successful (Peterson, Arregle and Martin, 2012). This is because
the model comprises of four strategies such as market penetration, market development, product
development and diversification.
Further, this model will provide a simple as well as quick method to the managers of
Sainsbury to analyze the risks of business growth. The quadrants of the matrix denote the
increase or decrease in risk. Therefore, this model provides a holistic view to the managers of
organization regarding the increase or decrease ion risks if they pursue a particular strategy for
growth (Rothaermel, 2015).
The choice of this model is justified as it presents market penetration as the safest path
that can be followed by Sainsbury for future endeavors. In this way, the managers of the
organization can determine the most feasible option for future growth which has the least risks
associated with it (Shumaker, 2012). Hence, Ansoff’s model allows the organizations like
Sainsbury to choose the best possible option. Further, this model will help the organization to
identify the opportunities available to it. In this way, adequate information will be provided by
this model which will assist in making effective strategic choices.
APPLICATION OF STRATEGIC CHOICE MODEL TO THE CHOSEN
COMPANY
Ansoff’s Strategic model - This model helps in depicting alternative growth strategies. It
focuses on Sainsbury present, potential products while considering the ways to grow.
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( Source- Igor Ansoff: Strategic Management, 2014)
This model provides following growth strategies in perspectives of chosen retail firm:
1. Market Penetration- In this strategy the Sainsbury organization seeks to achieve growth
in existing products with growth in market segment which further leads in increasing the
market share of firm (Cortimiglia, Ghezzi and Frank, 2015). In other aspect, the
management of Sainsbury can focus on activities that can improve market share into
current market. Organization focuses on promotional activities such as advertisement and
social media tools. It will create better brand image in the existing market and facilitates
in accomplishment of the market penetration objectives (Stahl and Hayes, Eds., 2013).
However, it can be critically evaluated that for achieving the growth of existing products,
the organization is require to make promotional activities which may lead to increase in
overall cost of the firm (Bao and et.al., 2015). Business firm can also consider effective
development of marketing strategy as a critical aspect because it will assist in
advancement of brand awareness. Improvement in brand awareness attracts more and
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more customers towards products and services and facilitates in gaining better market
share in the existing market along with current product line. Management of Sainsbury
can also focus on introduction of loyalty schemes so that better trust can be built in the
market. It impacts positively on the sales which is beneficial for advancement in market
share (Therivel and Paridario, 2013). Market penetration activities can also be through
providing offers on existing product line. It can be considered as promotional techniques
that reflects the objectives of market development in existing geographical aspects.
Moreover, use of Boston matrix is also beneficial for market share advancement because
it ensures that which product and services requires more investment.
2. Market Development – In this market strategy organization leads to growth by targeting
Sainsbury's existing products in new market segment. It is all about advancement in
market share by focusing on different market. In this respect management of sainsburry
can change its segmentation criteria because it allows business to improve market share
by operating business in different markets (Shepherd, McMullen and Ocasio, 2016). In
addition to this, the company targets different geographical area rather than its home
market. However, it can be critically analyzed that for developing the market the
company is required to make further research for segmenting the new market. Research
further involves cost and also is a time consuming process. In case of geographical
extension of market, firm is required to further research about the exchange rates etc. If it
does not research on these aspects then the organization might get fail in implementing
this market strategy (Bender, 2013). Moreover, as the firm has gone global for market
development it is sometimes negatively impacted by the exchange rate fluctuations.
Organization also needs to focus on Pest analysis because it provides an information
about different markets and helps management to take decisions in regard to targeting
and segmentation. Company can also understand opportunities through SWOT analysis
so that better strategies can be developed to increase market share in new market.
Moreover, business firm can also focus on different sales channels so that better
opportunities can be identified in new market (Bao and et.al., 2015). In regard to this,
company can sale its goods and services through different online mediums. Franchise
system can also be adopted to enhance market share in the new market so that business
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can meet objective of market development. But, but it may lead to risk often failure as the
idea might not work in other country which might lead to decrease in the market share of
the company. The person who takes the franchise may misuse the trademark of the
company and which may lead to bad impression for the organization (Therivel and
Paridario, 2013). Proper consideration of marketing mix is also essential for the
organization.
3. Product Development- In this marketing strategy sainsburry creates new products for its
existing market segments. For example, Sainsburry follows the economy lines in which it
targets the price conscious consumers (Gong and et.al., 2013). It provides mid range
healthy options such as Salisbury's for price conscious consumers. It is essential for
business organization to have effective development of product according to needs of
customers. Company must focus on expansion of its product line developing number of
products. For example, in juice products organization can introduce new flavors as per
expectations of customers (Bender, 2013). However, for this strategy the company is
required to carry out complete research about the needs and wants of the customers
before developing the new products. Moreover, as proper research is not carried out, the
new products do not fulfill the demand of customers as was the case with existing
products. Therefore, this situation further leads to customer dissatisfaction. Because of
this the firm sometimes suffers the loss of customer base as well as customer loyalty
(Stahl and Hayes, 2013). This becomes an obvious reason for the decrease in the revenue
of the chosen organization. But, repackaging of the existing product line is considered as
a product development activity by Sainsbury that can meet organizational objectives. It
also increases the market share and sales of company which is beneficial for better
competitive advantage in the market. Other than this, improvement in customer service is
also referred as a new product development opportunity so that goals can be
accomplished in desired form (Bocken, Bakker and de Pauw, 2015). Most of time
customer faces issues in regard to after sales so the advancement in customer service
attracts more and more customers (Shinkle, 2012). Effective development of product also
attracts more and more customers and helps business to expand its reach in the market.
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4. Diversification- In this marketing situation Sainsbury is diversifying its new range of
products to new market segments. In other aspect, it is all about bringing differentiation
in the product and services so that better values can be provided to customers. It is
essential for business firm to bring diversification in the products and services as per the
needs of market and current trends of the industry (Haag and Tilebein, 2013). In this
company can face critical issues that may impact the operational activities in diverse
manner. Diversification is one of most risky strategy and demands high level of expertise.
Differentiation in the products and services demand skilled workforce so that risk factor
can be reduced in order to meet objectives. In addition to this, way of selling goods and
services can also be transformed as per the consideration of diversification standards. It
will also attract more and more customers towards product and increase the sales ratio of
firm (Giannoulis and Zdravkovic, 2014). It is also beneficial for attaining better
competitive advantage in the market and lead business to impressive level of success.
CONCLUSION
This report is based on the identification and application of strategic model of sainsburry
organization. sainsburry is a supermarket chain of UK and is having various other subsidiaries
(About Sainsburry, 2016). Various strategic theories that can be applied by the sainsburry firm
such as value chain, stakeholder mapping, Bowman's Clock strategy etc. The chosen company
had used Ansoff's model which includes various strategic options such as market penetration,
market development etc.
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REFERENCES
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Online
About Sainsburry. 2016. [Online]. Available through: < <http://www.j-sainsbury.co.uk/about-
us/>. [Accessed on 9th Apr 2016].
Igor Ansoff: Strategic Management. 2014. [Online]. Available through:
<https://managementpocketbooks.wordpress.com/2014/10/14/igor-ansoff-strategic-
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