Strategic Management Report: Sainsbury's and Global Strategic Thinking

This report provides a comprehensive analysis of strategic management, focusing on the application of various concepts to Sainsbury's, a major UK-based retailer. The introduction defines strategic management and highlights Sainsbury's background, including its founding and market position. The main body delves into the origins and approaches of strategic management, including SWOT, competitive advantages, PESTLE analysis, and value chain analysis. It explores the complexity of the relationship between an organization and its environment, emphasizing the importance of PESTLE analysis for understanding political, economic, social, technological, legal, and environmental factors. The report also examines global strategic thinking and its application, with examples of Sainsbury's initiatives. The conclusion summarizes the key findings and offers recommendations for Sainsbury's strategic development, including the use of Top-Down and Bottom-Up planning methods. References are included to support the analysis.

SIM 336 Strategic
Management Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
K 1 Origin and various approaches to strategic management. ...................................................3
K 2 Complexity of relationship between organisation and environment....................................5
K 3 Understanding global strategic thinking..............................................................................7
K 4 understanding the applications of strategic ideas in practice...............................................8
CONCLUSION..............................................................................................................................10
Recommendation...........................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management is that term which is used to formulate the policies and implement
them for achieving the major goals of the company(Ansoff and et.al., 2018). The policies are
formulated by the top management authority taking into consideration the impact of internal and
external environment on the business. The chosen company for this report is sainsbury's
company which deals in retailing industry in UK. The organisation was founded in year 1869
and headquarter of the company are situated in 33 Holborn, London, EC1, United kingdom. The
firm operates second largest supermarket chain in UK. The Sainsbury mainly retails groceries
and the firm was first that adopted self-service retailing in UK. In this report the discussion will
be based on the origin of strategic managements and various approaches of strategic
management. Further the study will describe the complexity that is faced by the organisation in
relation with environment. The study will put light on global strategic thinking. Last but not least
the discussion will be based on the applications of strategic ideas which are in practice.
MAIN BODY
K 1 Origin and various approaches to strategic management.
Origin of strategic management was in 1950 and 1960. The contributors in developing
strategic management were Philip Selznick, Igor Ansoff, Peter Drucker and Bruce Henderson.
Thousands years back the term strategy was only used for wars and politics and not used for
business(Noe and et.al., 2017). During 1960s many companies used term strategic planning for
developing or building functions of strategic management that is to develop, execution,
formulation or implementation of processes.
Peter Drucker was author of many management books and had his career in the field of
strategic management since five decades. Peter raised fundamental question related to the
strategic management in his book 'The practice of management writing', the responsibility of
higher management is to ask question that 'what is the business is all about' as the answer which
he gave in the book was studied and carefully analysed that business is all about to serve the
customers. Peter recommended main eight areas which are innovation, market standing, public
responsibility, managers performance with development, profitability, financial and physical
resources, attitude of workers and performance and last is productivity.

Porter wrote in year 1980 , the companies can seek competitive advantages for making
choices and their scopes, that can be either to enter the market with lower cost product or
differentiated product and services. As porter revised the strategy in 1985, the performance,
activity and process of the company depends upon the value chain that is specific channel for
delivery of the product and services(Ginter, Duncan and Swayne,2018).
The key approaches of strategic management are SWOT analysis, competitive
advantages, corporate strategy and portfolio theory, generic competitive strategies, etc. all these
strategies are explained below
SWOT analysis: The concept of SWOT analysis used as matching the distinctive competency
level of the company. The internal competencies are strengths and weaknesses of the company
and the external competencies are opportunities and threats for the company. Sainsbury's
company used SWOT analysis to know it competency level in the market of retailing.
Competitive advantages: Porter defined competitive advantages for the company in two types
which will help the company to gain advantages over rivals. The two competitive advantages are
differentiated or lower cost with this advantages the company will be able to get competitive
advantages by establishing superior market position, resources or skills(Hitt and Duane Ireland,
2017).
Generic competitive strategies: In this strategies porter targets on cost leadership,
differentiation or focus as these are known as generic competitive strategies. The strategies can
be applied on any type of organisation or different size of organisation. In this strategies the
industry can targets multiple segments by the firms. The targeting of segments known as the
competitive scope and lower or differentiated product are known as competitive
advantages(Morden, 2016).
Value chain: In this strategy of the porters the description is based on the activities of the chain
that is process of collection which organisation operates to deliver the product or services in the
market. The strategy used by Sainsbury company helped to gain the competitive advantages in
the market from the rivals. As porter explained that when the value chain of the company will be
effective it will help the firm to grow towards the path of success.
PESTLE analysis: It is another approach of strategic management which assist company to
analyse and monitor the external environmental factors that may affect and impact on the
operations of the business. This strategy is use full for the company which are establishing new

business or entering in new market by crossing the boundaries of domestic markets. The analysis
is done for the political factor, economic factor, social factor, technological factor, legal factor
and environmental factor for new market. Sainsbury company used this strategy when the
company wants to expand its business in the foreign market. The company needed to analysis the
condition for survival in the foreign market by doing PESTLE analysis. This strategy help the
company to reduce the risk of uncertainty in foreign market and able increase the chances of
survival in foreign market(Frynas and Mellahi, 2015).
K 2 Complexity of relationship between organisation and environment.
Organisation exist in external environment and it acquire resources that are required for
performing various functions and also to deliver products and services to the customers. The
strategy of company regarding how it acquire the resources and supply products is shaped by
different factors and features of external environment. Sainsbury should develop number of
responses for managing environmental interfaces like developing special units to monitor
external environment etc. Firm require information from external environment that helps the
management in decision-making, planning and controlling etc.
Therefore, Sainsbury should conduct PESTLE analysis that will assist the firm to collect
information regarding market conditions, demographic factors, socio-political changes,
technological developments etc. Further, it will also support the management in handling
problem of uncertainty and complex situations of the environment.
PESTLE analysis: It is a tool that organisation uses to understand the complexity of business
environment. The framework will help the management of Sainsbury to evaluate the impact of
factors existing in external environment on the operations of company (Perera, 2017).
Political-
It involves various political factors like rules and regulations of government that may
affect working of the firm in positive or negative way. Such as legislation, rate of
unemployment, duty on import of items etc. These factors can affect profitability of Sainsbury .
Economical-
Economic environment involves factors such as cost of labour such as minimum wage
rate fixed by the Government of the country in which organization is operating. This will affect
price, cost and profit of Sainsbury. Firm should also consider cost of borrowing funds.
Social-

Social environment consist of factors like trend in shopping of customers, beliefs and
opinion of buyers towards company and its products has ability to impact sales and revenue of
firm in positive or negative way. For Example- Nowadays customers are preferring one stop
shopping, flexible return policy for goods etc. All these factors may affect cost and profitability
of Sainsbury in long term. Further, buyers are now become more aware regarding their health.
Technological-
Technological factors are one of the important factor that may impact operations of
company. It includes factors like changes in technology for developing and distributing products
to customers, technology for marketing of products etc. Sainsbury should make efforts for
implementing advanced technology in various stores that will help to provide better shopping
experience to buyers (Nandonde, 2019).
Legal-
Legal environment is also one of the complex environment that can create positive or
negative impact on the performance and profitability of the firm. It includes legal laws and
regulations of the Government such as laws related with health and safety of buyers, data
protection, intellectual property rights, labour law, rules related with advertising of products has
been introduced by the Government etc.
Environmental-
Nowadays, there are many firms that are facing pressure from Government for complying
rules related with environment protection. Sainsbury should focus on these regulations because
now customers are also demanding firms to adopt environment friendly practises for producing
goods .
Firm should adopt such a pricing strategy so that, there will be no negative impact of
political factors like tax rate on profitability of firm. PESTLE analysis helps to understand
complex relationship between company and economic environment. On the basis of this,
Sainsbury should develop effective recruitment strategy for hiring workers from other countries.
So that, cost of labour will not affect revenue of the firm (Perera, 2017).
Sainsbury should analyse these factors any should develop organic products. This will
help to attract more customers. Moreover, on the basis of analysis of social environment firm
should also develop effective marketing strategy for attracting and retaining buyers. Other than

this, the tool also help to analyse complexity of relationship between technological environment
and firm. Sainsbury should develop and implement digital services in supermarkets like click and
collect services that will provide convenience in purchasing goods of the firm. It will also assist
the organisation to increase sale of products. Sainsbury should recruit expert personnels having
expert knowledge of rules and regulations. This will help firm to comply all the laws. Further,
company will also not require to pay any fine for non-compliance of any rules or regulations. On
the basis of understanding of impact of environmental factors on the company, Sainsbury should
develop strategy for developing apps that will help to collect waste items. So that, it can be
recycled again. This will help to create positive image of the company in the minds of clients
(Crocker-Buque and Mounier-Jack, 2016).
K 3 Understanding global strategic thinking.
Strategic thinking refers to the process that defines the way in which people assess, think
about and develop future for others and also for themselves. It is very effective tool that can be
applied by the management to arrive at the decision that can be related to personal life or work.
Global strategic thinking or planning can be defined as the the process that company that are
operating at international level adopts to develop an effective global strategy. It means that, it is a
procedure that helps organisation to evaluate external as well as internal environment so that,
firm can take decision regarding how to attain short term and long term objectives (Rugman and
Verbeke, 2017).
Organisation may adopt different approaches of international strategic planning such as
Top-Down or Bottom-Up planning methods. Sainsbury should focus on external environment
because it is operating the business at global level. It should also consider intensity of
competition otherwise it will be hard for the company to survive in international market.
Example – Sainsbury has develop strategy for removing plastic tampon applicators that helps to
reduce plastic from stores that are located at international level. The aim of firm is to reduce
plastic by 50% till year 2025. Firm may choose the following approaches of global strategic
planning.
Top Down -
It refers to the process of global strategic planning in which firm focuses on keeping the
process of decision making at top level. Sainsbury may adopt Top -Down approach in which
goals will be established at highest level of the firm. Under this method, personnels that are

working at top level are not willing to take any advice from lower level employees (Bryson,
2018).
Bottom-Planning -
Bottom planning can also be referred as tactics. In this planning the company need to
focus more deeply in the projects because large numbers employees are involved in the project
and each employees has expertise in their own fields. The team members put their efforts in each
and every stage of process. As the formulation planning is done at lowest level which is then
passed on to the higher authority. The higher authority then approve the plan when it need not
require any corrections. In Sainsbury company the employee used to plan to take personal stock
in the process of planning (Morschett, Schramm-Klein and Zentes, 2015) . The employees in the
company are more motivated and their morale automatically gets boost up. The employees in the
company feels valued by the leader which impacts on the employees to increases their working
efficiency and effectiveness.
K 4 understanding the applications of strategic ideas in practice.
Applicability of strategic idea depends upon company to adopt the idea in dynamic
environment. The idea is suitable for the company only when the consumers are accepting the
idea and company is able to get competitive advantages in the markets. For example adoption of
highly advance technology by the company enable it to increases the production at low cost
investment in production process (Ansoff and et.al., 2018).
Application of strategy refers to the execution of plans and strategies in order to accomplish long
term and short term goals of the organization. In order to implement a strategy, Sainsbury's must
follow all the steps which are essential to execute the strategy in the most effective manner, for
achieving the desired objectives form the implementation of strategy. Steps which are to be
followed by the company are discussed as follows:
Step 1: Defining strategy's framework
A framework of the strategy is to be developed by Sainsbury's strategic management
team, this must introduces a strategy lexicon which can be understood by everyone and gets
behind. When the framework is being created, it must be communicated with everyone and each
individual person must aware of the strategy which is being implemented in order to improve

inefficiencies of the business. This framework must be in a Cascade model which includes vision
at the top, then value, focus area, objective, KPI and the project (Morden, 2016).
Step 2: Building plan
After the framework is being created, a plan is to be developed for the implementation of
strategy. The process of developing a plan includes, firstly, all the leaders including founders,
CEO, director, etc. are being gathered for making them agree on the vision of strategic change.
Lastly, this includes agreement of all the leaders, with this agreeableness, company can move
forward towards implementation of strategy.
Step 3: Defining Key performance indicators
KPI's are the oldest management tools in an organization, these helps in being honest
about the progress and mostly focused on outcomes of the strategic ideas. There are several
aspects which needs to be considered while implementing strategic ideas, these includes keeping
KPI's simple, choosing at-least 1 KPI for each of the strategic objectives, don't make them too
hard to measure quickly and lastly, don't make them all about money (Morschett, Schramm-
Klein and Zentes, 2015).
Step 4: Establishing strategy's rhythm
Sainsbury's must decide the upfront strategy rhythm in order to prevent strategies failure.
In establishing strategy's rhythm, first thing arise is time intervals for discussing the progress,
this must be minimum on a quarterly basis, but if it is being done monthly, it would be more
effective. Secondly, it consists of who all will be meeting, the members involved in leadership
must meet at-least, but Sainsbury's must think about how to involve the rest of the organization
in these strategies catch-ups too. Further this includes time period of the meetings which must be
at-least one hour and lastly it comprises the structure of the meeting. These all strategy's rhythms
are to be established in order to execute the strategic ideas in a more effective manner (Frynas
and Mellahi, 2015).
Step 5: Implementation of consistent and simple strategy reports
In this step, reporting of the strategy implementation is being done. The main objectives
of the report includes consistency, simplicity, accountability and insightful. Consistency involves
to let everyone know what to expect and what they need to update prior to the meetings.
Simplicity includes, the glance view of how the strategy is being progressing. Accountability
consists of ensuring that the report include the name of the owners of each goal (Hitt and Duane

Ireland, 2017). Insightful includes how the strategy is being progressing over the time. These all
aspects must be included in the report.
CONCLUSION
From the above report it can be concluded that strategic management is
formulation and implementation of policies. In Sainsbury company strategic
management is done on each and every stage of the business operation. The origin
of strategic management was during 1950 and 1960s. The key approaches used in
strategic management are SWOT analysis which is mostly used by the company to
assess the competitive advantages in the markets. For expansion of the firm in new
or foreign market the best strategy that can be used by the company is PESTLE
analysis which will help the company to reduce its risk and increases the growth
rate and survival in the foreign market. On global basis for understanding strategic
management the company can use bottom-planning as it will help the company to
increases its productivity and implementation of policies will help to increases the
morale of the employee. As motivated employees in the company gives their full
effort in work which helps the company to increases its revenue generation. Lastly
the report studied about the strategic idea that Sainsbury company can use to
increases its productivity and channel of distribution is technological advancement.
With the help of technological advancement the company is able to increase its
production and the resources are being used with optimum utilisation.
Recommendation
It is recommended to the firm that it should use Bottom Planning and
combination planning as the approach to manage the working culture of the firm is
using blend of both top management planning and bottom management planning.
By using the combination of both strategic planning the skills and abilities of top
management will help to increase the efficiency and effectiveness of the lower

authority employee in the firm. As with help of combination the Sainsbury
company will improve its productivity and the firm will be able to utilise its
employee talents efficiently. With the increases in productivity the company will
able to expand its area in other fields that will increases the image and reputation
of the firm in retail market (Hitt and Duane Ireland, 2017).

REFERENCES
Books and Journal
Ansoff, H.I. and et.al., 2018. Implanting strategic management. Springer.
Bryson, J.M., 2018. Strategic planning for public and nonprofit organizations: A guide to
strengthening and sustaining organizational achievement. John Wiley & Sons.
Crocker-Buque, T. and Mounier-Jack, S., 2016. Better health for everyone». Bulletin of the
World Health Organization, 94, pp.687-693.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship.pp.45-63.
Morden, T., 2016. Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management (pp.
978-3658078836). Springer.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
Noe, R.A. and et.al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Rugman, A.M. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Online
Top and bottom management strategy. 2019.[online].available
through<https://www.brighthubpm.com/project-planning/8542-top-down-vs-bottom-up-
planning/>.