Sainsbury's Market Entry Strategy in Germany: A Management Report

This report analyzes Sainsbury's market entry strategy in Germany with a focus on PESTLE analysis, effective market entry options, market segmentation, and Porter's generic strategy. The report suggests that a strategic alliance is the best option for Sainsbury to enter the German market and gain a competitive advantage through cost leadership strategy.

Individual Management
Report

EXECUTIVE SUMMARY
This is the report which is all about the individual management report or strategy marketing.
This report focusing on the Sainsbury organisation that wants to enter into the Germany
country with their new clothing outlets and from the below mentioned discussion it has been
analysed that there are different kind of problems facing by the Company regarding the
external as well as internal factors. This report is also focusing on the Pestle analysis so that
they can analyse the external as well as internal factors that create impact on the organisation.
Apart from this this report also focusing on the different kind of marketing entry strategy
After research it has been analysed that strategic alliance is very beneficial for the Company
in order to enter into the Newmarket place. After that marketing segmentation strategy helps
them to gain competitive advantages by adapting different kind of generic strategy and as
from the below mentioned discussion it has been analyse that the company is focusing on the
cost leadership strategy so that they can gain more competitive advantages.

Table of Contents
EXECUTIVE SUMMARY........................................................................................................3
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Product and Country to Enter.................................................................................................3
PESTLE ANALYSIS.............................................................................................................4
Analysing effective market entry options..............................................................................5
Analysing market segmentation.............................................................................................7
Analysing porter's generic strategy........................................................................................7
CONCLUSION..........................................................................................................................9
REFRENCES...........................................................................................................................10
Books and Journal................................................................................................................10

INTRODUCTION
Individual management refers to an ability of an individual in order to manage various
functions of business in order to gain success in effective manner (Dibb, Simkin, and Pride,
2021). This report is focusing on the Sainsbury organisation which is second largest chain of
supermarket in the United Kingdom. The organisation is providing variety of the grocery
products in the marketplace in London United Kingdom. The organisation wants to enter into
a suitable country with new product or services so that they can enhance their productivity as
well as efficiency. In order to enter into the new market this report will going to illustrate on
the pistol analysis so that the company can get possible opportunities as well as overcome the
threats that are facing by the company. Apart from this this report also going to focusing on
the marketing entry strategies and concept of market segmentation so that the company can
evaluate the potential target market of the client. Furthermore, the report also going to
focusing on that photo is generally strategy in order to gain competitive advantages by
adopting Generic strategies in the recommended market..
Product and Country to Enter
Sainsbury’s the organisation which is the second largest chain of supermarket in the
United Kingdom with the 16.0% share of the market sector. The organisation provides
groceries services in the United Kingdom. As the organisation wants to enter into the new
marketplace with the new country the organisation will going to introduce their brand image
in the clothing sector and going to open some clothing outlets in order to entering into the
new market so that they can develop new type of consumers and grow their business and
enhance customer base in net profit. The chosen country for the organisation is Germany.
The economy of the Germany is very double out and it has the largest national economy in
the Europe.The Germany has a fourth largest by nominal GDP in the globe that is very
growing fast and that has good opportunities for the organisation as compare to the other
countries. It also helps the organisation to increase their market share and expand your
business into the new marketplace. Apart from this it also helps the organisation to increase
their customer and attract more potential customer towards the company so that the company
become capable to achieve their goals and objectives.
PESTLE ANALYSIS
The macro-environment means that the external elements that have an effect on
organisational and represent from outside the firm's competence. This can have ramifications

for businesses in domains such as competitiveness and many others. Before coming to the
country, a PESTLE analysis is required, according to Sainsbury. PESTLE analysis is a
business concept or concept which is considered as a tool to monitor the environment in order
to launch a product or service, among other things.
Political: This refers to how the government influences the economic and business climate,
such as through taxation policy, fiscal and monetary policy, and trade tariffs, among other
things. Sainsbury's is the United Country's second-largest chain store. Because Sainsbury's
works mostly in the United Kingdom, it will be unaffected by the global economic recession.
However, Sainsbury's company will be impacted by the United Kingdom's exit from the
European Union. Following the United Kingdom's leave, inflation rates skyrocketed, and the
Britain Pounds reached an all-time low, significantly reducing client spending. As a firm
enters the German market, it must first evaluate the policies and taxes in Germany to
determine how they will affect the business, for example, Germany's tax rate is around 30%
to 33%. If the tax rate rises, it will represent a threat to the corporation, which will lose
moneyand create negative impact on the company
Economy: Rates of interest, inflation, and currency exchange rates are examples of economic
factors. With a strong GDP, Germany's economy expanded at the faster rate in Europe and
ranked sixth in world economy in 2017 (worldwide economic growth in, 2017). Due to the
general high demand, customer base, and profit potential, this might be extremely profitable
to the organisation. However, if somehow the rate of inflation rises, it will have an impact on
how corporations value their goods. Investing in nations with excellent economic freedom
could be a good alternative for Sainsbury's, as countries with more economic freedom have
been shown to have more growth opportunities.
Social: Today's client prefers to purchase at a mega market like Sainsbury's rather than local
retail businesses because big markets house all of their goods in one location. In addition,
supermarkets frequently introduce special plans that reward customers with discounts. As a
result, the buyer receives a sense of satisfaction from saving a few dollars. this is reflected in
societal influences, demography, population statistics, and so on. In Germany, the number of
the people that are lives in each area, market divisions, and consumer trends are all the area
that Sainsbury can use to target the goods. However, if there is a large need for their clothing
sector in these markets, it may be appropriate for the job.

Technological: this has an impact on how a company operates in terms of creativity and
innovation. The more innovative technology a business has, the more efficient and productive
the procedure will be, as it will be speedier and more beneficial. Technologies in Germany is
equivalent to that in the UK, but it is more expensive, thus the corporation must set a
particular budget for how much they will invest in technology.
Legal: There are so many laws that influence a government's workplace environment and
policies, such as consumer regulations, safety standards, labour rules, and so on. As a result,
legal considerations in Germany must be focused on consumer laws, employee rights, and
other relevant legislation in order to reflect the implications.
Environmental: This category includes anything related to the environment, including
temperature, precipitation, geographic region, global climate change, environmental
offsetting, pollution, and so on. It is critical for Sainsbury to conduct climate work in
Germany in order to identify locations, levels of pollution, recycling, and environmentally
beneficial practises.
Analysing effective market entry options
There are many methods exist which helps companies to trade their product and services in
international market in effective manner. This will make company to analyse their cost
effective and profitable method in order to market their product or service in international
market in effective manner (Feldman, Franck and Schauerte, 2018.) In associated with
entering markets such as Germany, corporations utilise many models to determine which
strategy would work best for business. In this scenario, this report will going to consider three
different ways to enter the market and decide which one is best for Sainsbury. Market
entrances can have a variety of effects on businesses, therefore it's critical to gather
information on the amount of threat, marketplace growth, strong competition, distribution
system availability, regulatory and barrier difficulties, and so on.
Strategic Alliance: Strategic alliances are formed when multiple parties make an agreement
together on a set of goals while remaining autonomous. It is an another method to enter in a
international market in which contractual agreement is made in between two or more
companies for certain way and certain time in order to achieve common goals in effective
manner (Kropp, Parsley and Burnett III, 2018). It is important for the company to determine
the value of its partner in order to bring them to the venture for the aspect of tangible and
intangible in effective manner. This may be appropriate if organisations choose to collaborate

in the formation of alliances in various initiatives and markets. However, in the instance of
Ashanti Solutions, strategic partnerships may be used to arrange for contracts with the other
organizations in the very same business in the German market. Due to the obvious industry
they are approaching, this model will not be appropriate for the product as they have designed
it.
Merger and Acquisition: It refers to a transaction in which a company gains a control of
another company by purchasing its stock, exchanging the stock for its own as well as in the
case of private company, paying the owner a purchase price. In today's world, acquisition in
cross borders is increasing effectively. This will help company to get quick access in order to
establish in foreign market in effective manner. Mergers and acquisitions are tactics for
transferring control of a company, merging it with another company, or collaborating on
operations and initiatives. A merger will occur if one corporation decides to acquire another.
If they opt for acquisitions, they will collaborate with other companies on certain projects or
operations. This can be advantageous since it can improve market share and cost savings
through economies of scale, especially if the merged enterprises are administratively
centralised and rationalised.
Joint ventures are a sort of cooperation that can be used as a strategic strategy to enter new
markets. Management partnerships, franchising, licencing, and sub - contracting partnerships
must be used in overseas markets. This is depends on the magnitude of the market and the
degree of the company's partnership.
Overall, it is better for Sainsbury to establish as a strategic alliance in order to save
money and avoid risk in entering into the market. For a more secure market position, it can be
accomplished through franchising, licencing, or contract work. This method may enables the
firm to join the German market, enhance their market share, and increase their brand
awareness via customer recognition before moving further with additional choices.
Analysing market segmentation
STP analysis refers to a method of marketing which consist three steps that are Segmentation,
Targeting and positioning that helps companies to examine their products and service as well
as methods to communicate their advantages to specific customers in effective manner
(Sajadi, and Jalali Farahani, 2018).
Segmentation - It refers to the first step of marketing a product in effective manner.
The main focus of this step is to create different customer segments based on specific traits

and criteria. Customers' income, earnings, demographic categorization, gender, and other
factors are all considered in different demographics. (Kotler, Armstrong,
Cunningham, 2019). Sainsbury's should take advantage of its local geographical positioning
to improve market viability. The objective is to keep using a geographic segmentation
method, focusing on geographically specialised agreements based on buyer concentration.
This would enable the company to create a custom formula for developing a segmentation
plan that would boost the company's market position. Geographic, demographic,
psychographic, and behavioural factors can all be used to segment markets. Sainsbury's has
divided its market using practically all of the characteristics based on the research.
Sainsbury's was also able to divide their markets based on psychographic characteristics.
Targreting is a second step of marketing in which company look at the all above
segments as well as determine those segments that help them to interact with them in
effective manner. The ideal segment help company to actively grow, gain high profitability as
well as low cost of acquisition in effective manner. Customers are split into different
locations and regions, including such regional, rural, national, and so on, in terms of
geographic segmentation. Sainsbury's must create targeted tiers that are tied to its items. The
major goal here would be to create a target audience that is price sensitive as well as quality
sensitive. The main focus of the company, with a s new product linked and better positioning,
should be on the creation of a broad intended audience specifically linked to the range of
products offered by the company.
Positioning- It is a last step of marketing that allows company to set their product
and service apart from their competitors in the minds of their target customers in effective
manner. Behavioural segmentation refers to how consumers perceive in the marketplace in
terms of price, offerings, promotions, and other factors. has established itself within the
industry's middle tier and wishes to enter the new marketplace. Based on the audit, the plan is
to introduce products that can compete on price with the lower end of the market. This would
enable the company to establish a market presence and move into the reduced market
segment.
Analysing porter's generic strategy
Porter's generic competitive strategies are used to determine the firm's relative position in its
industry whether its firm's profitability it above or below the industry average cost. It is
mainly used to determine the direction or strategy of an organisation (Tandon, Kumari and
Singh, 2021). Michael Porter gives 4 strategies that a company can choose from them in

order to gain its competitive advantage in effective manner. According to its belief, a
company should choose effective strategy in order to beat their competition in effective
manner. In account of Sainsbury, different type of porter’s generic strategies is described
below:
Cost Leadership strategy- It is an effective method that help company to gain competitive
strategy by reducing costs or charging industry average prices in order to increase profit in
effective manner (Suskauer and Houtrow, 2018). It also help companies to increase their
market share by charging lower prices as well as still make reasonable profit on their sale
after reducing their cost in effective manner. Its main focus is to make a company a leader in
terms of cost in their industry or market in effective manner. In respect of Sainsbury if its
owner uses cost leadership strategy in order to sell services in Germany, it helps them to
access the capital that is needed to invest in technology in order to bring the cost down, very
efficient logistics and a low cost base that help in cutting the cost below from their
competitors in effective manner.
The differentiation strategy- This strategy makes company to make their product or
service different and attractive from their competitors. This will help companies to gain
competitive advantage in effective manner. In esteem of Sainsbury, this helps them to make
their product more unique and effective in order to attract more customers as well as make
effective position in confectionery industry in effective manner (Tan and Ch'ng, 2020). It will
take good research, innovation and development to make their new services in context of
marketing tools and that are much different from their competitors in the market of
Germany in effective manner. This strategy provides the ability to deliver the high quality
products in effective manner. This will need effective marketing and sales strategy that helps
in understanding the benefits offered by the different products in effective manner.
The focus strategy- This strategy help company to understand the dynamics of the
market as well as unique needs of customers within it. It makes their focus to develop
uniquely low-cost or well specified products for their customers (Tam and Oliveira, 2019).
This will help company to serve their customers within market in unique manner for building
their strong brand loyalty among their customers in effective manner. In aspect of Sainsbury,
using this strategy its owner can achieve either a cost advantage or differentiation. This will
help them to enjoys a high degree of customers loyalty as well as gain competitive advantage
in effective manner.
Thus, from the above strategies, owner of Sainsbury should choose cost leadership
strategy because it increases the customer’s loyalty that helps in discourage potential entrants.

It is the services which are provide by the Sainsbury that helps them to attract more and more
customers as well as make their strong position in Germany n effective manner. It provides
less powers to bargain because no or less substitute of its services which is available in the
market. This will helps them to engage their customers for long term because no close
substitute is present in the market. Apart from this developing different kind of solutions in
order to overcome the threat is the main approach in the decision-making procedure and to
overcome the problems. It is also very important for the organisation to collect the data and
grab the information from the market and evaluate their information from the different kind
of aspect by conducting different so that they can become capable to analyse that internal as
well as external factors which create impact on the organisation. Therefore from the above-
mentioned report it has been analysed that the organisation are required to apply are useful
marketing strategy in order to become more capable.

In the market place the competitors will always try to gain a competitive advantages
so it has become very important for the Sainsbury to adapt more technologies as well as
marketing toward so that they can achieve their goals and objectives and gain more
competitive advantages among the suppliers. If in the marketplace there are so many
providers and trades among the competition then it is very important for the organisation to
improve their capabilities to reach out to more potential consumers. This kind of a strategy
support them to gain a more competitive advantages in Germany because of buyers demands
and the fact that there are different kind of places that have a distinct business so it is very
important for the company to work on their capabilities in order to improve their capacity and
achieve their goals and objectives.
CONCLUSION
From the above mentioned report, it is concluded that individual management report
are used by an entrepreneur in order to operate their business and manage their different
functions in effective manner. PESTLE analysis assists the respective companies to analyse
their external factors that may provide opportunities or threats to them in order to operate
their business in effective manner. Exporting, strategic alliances and acquisition are different
type methods that are used by the companies for entering in international market in effective
manner. STP analysis is used to analyse target customers for the product and service of the
company and strategy to market them by dividing the market in different segments. Cost
leadership strategy, differentiation strategy and focus strategy are different strategy of porter's
generic strategies that helps company to gain competitive advantage in effective manner.

REFRENCES
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Davies, S. (2021) ‘What is Strategic Marketing in the Digital Age?’
URL: https://blog.daviesbdm.com/what-is-strategic-marketing date accessed:
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