strategic management analysis Sainsbury Company

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
2

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:
3

 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).
4