Sainsbury Report: Strategic Management and Competitive Advantage

This report provides an analysis of Sainsbury, a UK supermarket chain, focusing on its internal and external factors, competitive advantage, and strategic recommendations. It discusses the company's background, internal and external analysis using SWOT and PESTLE frameworks, and suggests a combination of cost leadership and focus strategies for sustainable competitive advantage.

SAINSBURY REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
BACKGROUND OF SAINSBURY...............................................................................................3
INTERNAL AND EXTERNAL ANALYSIS.................................................................................3
COMPANY SUSTAINABLE COMPETITIVE ADVANTAGE...................................................5
RECOMMENDATION...................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management is a referred to as tool which assist in ongoing planning and
monitoring of all requirement of business. this assist company in analysing the current changes
taking place in external environment and comply with it. This in turn assist in attaining goals of
the business. current report is based on company Sainsbury which is a supermarket chain in UK.
The current report will outline the internal and external analysis relating to quoted firm.
Furthermore, competitive advantage of company will also be analysed and highlighted within the
report. In the end after complete analysis some recommendation will be provided to company in
order to improve its working and strategic position.
BACKGROUND OF SAINSBURY
Sainsbury was founded in 1869 by John James Sainsbury and is headquartered in
London, England. The company is the second largest chain of supermarket in UK and provides
facility of supermarket, hypermarket, forecourt shop, convenience shops and many other type of
facilities. Company has divided its operation in three divisions and this involves Sainsbury
supermarket, Sainsbury Argos and Sainsbury bank (About Sainsbury, 2018). Purpose of
Sainsbury is to assist consumer live well by paying less. For this company is providing
affordable prices to access al product and services and enjoy their life. The intention behind
affordable prices is to attract more of consumer so that market share and profitability of company
can be increased. This in turn will result in increase in goodwill of company.
INTERNAL AND EXTERNAL ANALYSIS
Internal analysis- this is defined as analysing and evaluating the internal working of company
and finding out their positive and negative aspect. For analysing internal capability of Sainsbury
use of SWOT analysis is undertaken which is as follows-
 Strength- this involves the areas in which company is working good and need to be
maintained in same manner (Hitt and Duane Ireland, 2017). The strength of company is
that it is among one of the largest supermarket chain in UK. This is pertaining to the fact
that this result in greater market share and large number of consumers. Another strength
is that employees of company are around 150000 which is good. This reflects that
employee like to work in company and this results that workforce is happier with
operations of company.

 Weakness- these are the areas in which company is not operating well or good and result
in decrease in efficiency of overall organisation. Low margin is the major weakness of
company. This is pertaining to the fact that low margin results in decrease in profitability
and this affects overall working of company (Dvorský and et.al., 2020). Furthermore,
growing cost is also a weakness for company as they are unable to cope up with increase
in price and this result in decrease in profitability of company.
 Opportunities- this is the area with help of which company can improve its position and
go in direction of growth and development (Dzwigol, 2020). Using self- checkout
machine can be a good opportunity for company in attracting consumers. Along with this
expansion in growing economies like Africa, Asia and other can also be a good
opportunity.
 Threat- these are the factors which restrict company in growing and working in better
manner (Trigeorgis and Reuer, 2017). High competition is one of the major threat which
affects working of company to a great extent.
External analysis- this is an analysis which is undertaken in order to manage and implement
changes taking place in external environment within the company operations. For this Sainsbury
makes use of PESTLE analysis which is as follows-
 Political- this involves changes taking place in government bodies and their regulations
along with policies made by them. Currently because of BREXIT there is great impact of
UK trade relation with other members of EU (Durand, Grant and Madsen, 2017). This
will negatively impact business operations of Sainsbury with other member countries of
EU.
 Economic- this involves changes taking place in economy and other economic factor like
inflation, interest rate, purchasing power of consumer and many other. In present scenario
purchasing power of consumer is increasing and this can create positive impact over
operations of company (Teece, 2019). the reason pertaining to this fact is that as
purchasing power of consumer is increasing hence, they will shift to high quality product.
Simultaneously this will result in increase in sales of company.
 Social- this factor involves changes in attitude, trend or requirement of consumers and
other people living within society. in current parlance, consumer has a high attraction
towards consumption of organic and healthy food. Hence, if Sainsbury will comply with

this then it will result in positive impact. This is pertaining to the fact that when goods
will be provided in accordance with recent trends then this will motivate consumer to
come (Bindra, Parameswar and Dhir, 2019).
 Technological- this factor involves changes in use of technology and its impact over
working of company. with respect to current trend recording of consumer data is of
utmost priority and for this there are different data driven analytics which are used.
Hence, when Sainsbury will use them then it will create positive impact as all record of
consumer will be stored and can be accessed anytime (Pozdnyakova and et.al., 2017).
 Legal- this involves various rules, regulations and legislation which business has to
comply with in any situation. When Sainsbury will adhere to different laws like contract
act, employment, consumer protection, health and safety and other legislation then it will
create positive impact (Barbosa, Castañeda-Ayarza and Ferreira, 2020). This is pertaining
to the fact that this will increase trust of consumer within product and operations of
company as they are following all rules and regulations.
 Environmental- this involves taking care of surrounding environment and overall society
as well. This is essential as company operates in external environment and it is
responsibility of company to pay back to the society (Pfarrer and et.al., 2019). for this
Sainsbury is trying to reduce operational waste and focus on use of product which can be
reused or recycled.
COMPANY SUSTAINABLE COMPETITIVE ADVANTAGE
Company operates in global external environment and for sustaining in profitable manner
it is essential that they have a competitive advantage. Competitive advantage is defined as factors
which helps company standout distinct from these competitors (Altukhova and Semko, 2018).
For ensuring sustainable competitive advantage it is essential for Sainsbury to make use of Porter
generic strategy. Under this model there are three different types of strategies which are as
follows-
Cost leadership strategy- this is a strategy which assist company in managing the cost of
company and taking advantage with help of this. This strategy assist company in increasing
profits by way of reducing cost (Zhao and et.al., 2017). If cost of company will be low as
compared to other competitors, then it will create a distinct position of organization. This will

result in increase in market share as company charges low price and which attracts majority of
consumer to come and buy products.
The differentiation strategy- this strategy includes producing product and services which
are new and earlier they were not dealing with that product (Darling and et.al., 2019). Along with
this differentiation involves producing the product or service which is of totally new product line
and not produced earlier. This is a strategy which can provide a competitive advantage to
company as they will be having a distinct product or service which will help organization in
attracting large number of consumers.
Focus strategy- under this type of strategy company focuses over a specific target or
niche marketing. This is helpful for company as they can easily understand dynamics of market
and will assist business to identify needs of consumers. This will create a new and unique
business idea for company as they have a single focus on some specific group only (Misakov and
et.al., 2018). Hence, this assist company in managing and focusing on a single type of group of
consumer and their requirements only. This strategy also provides a competitive advantage to the
company as with help of this business can attract a specific group of consumer with minimal
efforts.
Out of all these three strategies for Sainsbury a combination of focus and cost leadership
will be suitable. The reason underlying this fact is that when company will have a focus on
particular group then this will motivate them to lay emphasis over that group only (Turner and
et.al., 2017). Hence, this will result in attainment and fulfilment of requirement of that group. In
addition to this it will also attract a large number of consumers. Moreover, when they will also
have a major focus on cost leadership then this will affect consumer to a great extent. This is
particularly because of the reason that with special focus company is also focusing on limiting
cost of company.
This in turn will reduce cost and as a result of this profitability of company will increase.
The reason pertaining to this fact is that when there will be low cost it means price of product
will be low and this will provide a competitive advantage to Sainsbury (Alborov and et.al.,
2017). Hence, it can be stated that when Sainsbury will focus on the focus and cost leadership
then it will assist company in gaining competitive position. This will help company in standing
out from other competitors and will improve market position and number of consumer within
company.

RECOMMENDATION
With assistance of above report it is clear that there is a requirement to company for
improving its operations and working in profitable manner. Hence, for this some of the
recommendation to Sainsbury to improve its management and operations are as follows-
 With respect to current pandemic consumer has decreased as they are not going much to
stores for buying the products. Hence, for this it is advisable to Sainsbury to involve the
contactless shopping as this will decrease personal interaction among people. This will
assist company in managing its operations and also the COVID 19 safety will also be
ensured. This is particularly because of the reason that when a person will have option of
contactless shopping where they can make their order and it will be delivered to
consumer. Then this will attract more of the consumer and they will like to shop with
Sainsbury more frequently.
 Along with this another advice to Sainsbury is that they must focus on digital marketing
and must include all the prevention measures with respect to current pandemic. This is
particularly because of the reason that when Sainsbury will include all preventive
measures relating to the current pandemic then this will assist in attracting consumers to a
great extent.
 Along with this another recommended strategy to Sainsbury is that they must
continuously research the market trends. This is pertaining to the reason that there are
many frequent changes taking place in the requirement and needs of consumers. Hence, if
Sainsbury will not involve these changes then it might be possible that product and
services of company are not liked by consumers. Thus, when Sainsbury will continuously
research in market then it will result in complying with all recent changes and adapting
them.
 In addition to this it is also advisable to company that they must continuously monitor the
technological changes taking place. This is pertaining to the fact that when company will
monitor recent changes then they will adapt to it and improve the working of company.
CONCLUSION
From the above study it is summarised that for business to be successful most essential
thing for company is to strategically manage the business. It is essential as this involves analysis
of whole business in critical way and involves making changes as per external and internal

analysis. With help of report it was evaluated that SWOT and PESTLE analysis is helpful for
company in analysing their internal and external values and assist in framing strategic direction
for growth of business. further it was evaluated that under Porter generic strategy a combination
of cost and focus is beneficial for Sainsbury. In the end some of recommendation were provided
to Sainsbury for improving their strategic management in direction of growth and development.

REFERENCES
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Online
About Sainsbury. 2018. [Online]. Available through: < https://www.about.sainsburys.co.uk/>