Analysis of Current Strategic Position of Sainsbury's Supermarkets

RUNNING HEAD: Strategic Management
Strategic Management

Strategic Management 1
Contents
Introduction......................................................................................................................................2
Current Strategic Position................................................................................................................2
PESTEL Analysis........................................................................................................................2
SWOT Analysis...........................................................................................................................4
Strategic Capabilities...................................................................................................................5
Porter’s Five Forces.....................................................................................................................6
Strategic Group Framework.........................................................................................................7
Evaluation and Conclusion..............................................................................................................7
References........................................................................................................................................9

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Introduction
Sainsbury’s supermarkets are named as one of the largest supermarkets in the United Kingdom
ad was established in the year 1869. The supermarket is engaged in selling a wide range of
quality grocery and food products along with other offers and services such as meat, bakery, fish
counters and non- food products such as homeware and clothing, coffee shops, pharmacies,
petrol stations and restaurants. Its vision is to become the most trusted retailer where people love
to shop and work. They put their customers at the heart of their business (Sainsbury’s, 2018).
This report focuses on the analysis of the current strategic position (internal and external
analysis) of Sainsbury’s along with discussing its implications to strategy formulation in the
organization.
Current Strategic Position
The term strategic positioning can be defined as the positioning of the company or an
organization while considering the systematic realization of that positioning and the dynamic
nature of the environment (Rothaermel, 2015). The current strategic position of Sainsbury’s has
been analyzed with the help of conducting its internal and external analysis.
PESTEL Analysis
Political- the performance of Sainsbury’s is affected by the political factors of United Kingdom.
Tax- The British government has reduced the corporate tax rate to 19% which is in the benefit of
big companies like Sainsbury’s which, in turn, will allow them to save significant sums of
money (Government UK, 2018). This appears to be a big opportunity for Sainsbury’s.
Licenses- The British Government is providing licenses for the establishment of the business to a
number of competitors thereby resulting in a threat for Sainsbury’s.
Economic-
Disposable household income- The supermarkets of UK are expected to have a positive impact
due to the increase in the disposable household income of the people in the year 2017 by 2.3%.
This is expected to increase the sales of Sainsbury’s as well.

Strategic Management 3
Inflation Rate- The inflation rate has reached 1.4% which is expected to bring an increase in the
prices offered by Sainsbury’s. UK is highly dependent upon imported food products and the food
imports are impacted by the plunge in value. The increased cost of imports is expected to result
in increased cost for the ultimate customer (Lim, Antony & Arshed, 2016).
Social-
Social Trends- The changes in social trends can affect the demand of products. These days,
people emphasize the use of fresh products and easy style cooking. This can be considered as an
opportunity for Sainsbury’s to encourage unfussy eating and new recipes.
Healthy Choices- Many people are shifting towards healthy food due to increasing level of
obesity faced by them. This trend appears to be a beneficial opportunity for Sainsbury’s to keep
more healthy food in stock at lower prices than its competitors (Barney & Hesterly, 2010).
Technological-
Saving Energy Costs through Technology- The emerging technologies have made it possible to
produce quality products with lowest possible costs. Sainsbury’s is making huge amount of
investments for the purpose of saving energy costs and reducing the overall carbon emission rate
in UK.
Electricity Generation through Technology- Sainsbury’s can use developed technology as an
opportunity by using waste for the generation of electricity instead of making the use of other
sources for the purpose of saving the electricity costs.
Environmental-
Pressure from the Government- The organizations are increasingly being pressurized for acting
in a socially responsible manner in order to safeguard the environment and to abide by the
requirements of Environmental Protection Act, 1990. There is both direct and indirect impact of
the activities of the organizations on the environment.
Pressure from the Competitors- The competitors are also acting in a socially responsible manner
and are ensuring that there activities does not have a bad impact on the environment. Similarly,
an initiative has been taken by Sainsbury’s by adopting the ‘Reduce, Reuse, Recycle’ approach