Strategic Management in Sainsbury: Analysis and Evaluation

This report analyzes the strategic management practices of Sainsbury, the second largest supermarket chain in the UK. It examines the company's use of the M.E. Porter value chain model and evaluates its business philosophy and policies. The report also discusses the strategies adopted by Sainsbury to navigate the competitive retail sector and the impact of external factors such as Brexit. It concludes with an evaluation of the company's business policies and their alignment with legal requirements.

STRATEGIC MANAGEMENT

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
Main Analysis..................................................................................................................................3
M. E. Porter value chain force.....................................................................................................3
Business philosophy....................................................................................................................5
Evaluation of business policies....................................................................................................8
CONCLUSION................................................................................................................................9
Recommendation.............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic management is a process that is used to manage several strategies that are made
by company to achieve its objectives and retained its market share in competitive environment. It
includes various components such as action of competitors, internal structure and current
strategies that is used to attract more customers and enhance sells of firm. Company by
managing its strategy can effective adapt to external changes and meet expectancy of customers
in best possible way. This report is about Sainsbury that is one of the second largest chains of
supermarket in United Kingdom with approximately 16.0% market share. It have been founded
in 1869,151 year ago that have shops in more than 1428 locations with overall employees 116,
400 in 2018. Sainsbury in 2017 have been registered as annual turnover of 29.1 billion pound
approximately. There are 15 private label products that it sold through its conveniences stores
that is around 770 so that customers can easily make purchased of products for their satisfaction.
This report has used various model and theories to understand strategies that are used by
Sainsbury to gained competitive advantages in retail sector.
Main Analysis
M. E. Porter value chain force
Michael has defined importance of value chain in strategic management and
achievements of company goals. Value chain is system or procedure used by company to earn
more profit margin and market share in industry by delivering services to customers in best
possible manner. Therefore, porter value chain model can be used to analysis and evaluates the
way Sainsbury have manage its policies, procedure and strategies in order to attained competitive
advantages (Pazouki, Jozi and Ziari, 2017). It is divided into two activities that is primary and
secondary activities such as:
Inbound logistic: It includes process that contributed in receiving or storing raw material within
organisation so that finished products can be manufactured to fulfil customer’s requirements.
There are various suppliers in retail sectors so company have opportunity to effectively bargain
for price of products and services in order to get raw material at lower prices for delivering
maximum value to customers. Top management have planned strategies to maintained good
relationship with various suppliers in order to get products at low prices within limited time
frame for better satisfaction of requirements of end users (Ansoff and et.al., 2019). Strong brand

image, reputation and timely payment have helped company in gaining credit purchase of
products for smooth operation of business.
Operation: There are various activities or process which needed to be followed by employees
in order to convert raw material into finished good so that end user can consumer it for
satisfaction of its requirement. Manager of Sainsbury have organise training and development
programs to enhance employee’s skills and capabilities so that they can produce products with
minimum wastage of resources and efforts for rendering maximum value to end users.
Outbound logistics: Sainsbury have maintained strong distribution channel and networks,
warehouse at different places which have contributed in delivering of services or products in
limited time frame. It has various stores in different location of countries which provides ease to
customers to purchase products by coming at stores. At the same time Argo is one of the digital
channel and distribution services have helped in creating value of company in minds of
customers (Stead and Stead, 2016). Company by providing home delivery services and mobile
payments is able to grow and expand its business and attained competitive strategic positioning
in retail sectors of UK.
Marketing and sales: There are various strategies that are used by Sainsbury to attract or
influenced target customers in order to enhance sales volume of firm. Such as advertisement in
newspaper, radio, TV or social media so that awareness can be generate among large number of
individuals. Marketing manager has also emphasis on public relationship, promotion offers and
personal sales to retained customers satisfaction and loyalty for long term growth of firm.
Services: Sainsbury provide 24 hours customers care services to people across world which has
contributed in adding value to reputation of firm. Customers can easily share their feedback,
grievance or problem through official sites so that it can be resolved within limited time frame
for better experienced and satisfaction (Voinea and Van Kranenburg, 2017). Company have
always made use of innovative and unique method to deliver services to customers so that they
are motivated to select Sainsbury as compared to other competitors in market. Therefore,
Sainsbury marketing manager by improving its various services is able to cater needs of
individual and expand profitability of firm.
Secondary activities or support
Infrastructure: It can be stated that good infrastructure, well equipped resources within stores
have contributed in effective completion of task and attainment of objectives. Employees are

provided with new and innovation technologies, resources where they can easily procedure their
work and contribute in growth and success of firm.
Human resource management: It is another supportive activity that helps in enhancing
satisfaction level of customers by improving actual performance of employees. Manager has
determined actual task need to be performed by each employees within organisation so that no
confusion can be created in future circumstances. It have make use of innovative methods to
recruit, select right candidate at right post so that qualitative services can be delivered to
customers.
Technology: Sainsbury have always make use of innovative technologies to deliver services to
customers as it helps in reducing cost and maximising their satisfaction level (Georgiev, 2017).
Company by timely changing its technology as per external environment is able to grow and
succeed for longer term.
Business philosophy
Company has strong business philosophy that is to help customers live a better live style
so it has followed low cost strategy for all its products and services. Thus, it is able to influence
all income group people to make purchased from Sainsbury in order to fulfil their day to day
needs. Company have position its brand image as second supermarket chain that contributed in
adding more and more customers to firm (Venkateswaran and Ojha, 2017). Company wants to
enhance lifestyle of people by delivering the branded and qualitative products thus it helped in
adding value to products and image of firm. It have innovative its products or launch new
products as per market trends that have helped in retaining its market positioning.
Evaluation of strategies related to business philosophy
Sainsbury have adapted its strategies as per external environment to earn maximum profit
margin and sales volume and abide to its philosophy to retained customers satisfaction level.
Strategies that are used by company to survive in highly competitive market condition, high
power of customers and threat of new entrance can be discussed below:
1. It can be stated that policies and procedure of United Kingdom are uncertain or political
condition is unstable due to impact of Brexit. Instability of policies has adversely
impacted on business performance, sales volume and profit margin of firm that operates
in each sector. At the same time exist of UK from EU has resulted in increase prices of
imported products of brand thus large number of customers may be lost. So, Top

management of Sainsbury has reduces its cost of products in order to retain its customers
share and profit margin (Berisha Qehaja, Kutllovci and Shiroka Pula, 2017).
2. Free trade regulation policies initiated by government have provided opportunity to
Sainsbury to expand its business operation in several countries to earn more profit and
sales volume. Company while entering into different market have adapted to policies of
government of each country in order to grow and survive for longer time frame.
3. Sainsbury have to pay extra price to purchase raw materials thus customers are not ready
to make purchased at rise prices because of less income. So, senior manager of Sainsbury
have formulated strategies to bring economic of scale within enterprise so that qualitative
products can be available at lower cost (Kavusan, Noorderhaven and Duysters, 2017).
4. Customers taste and preferences keeps on changing so companies in order to sustain its
business operation have to adapt to such changes. Sainsbury manager continuously
conduct market survey in order to find unsatisfied needs and wants of customers that has
helped company to survive in market for longer term and develop strong brand image in
mind and hearts of customers. Such as company have planned strategies to increase its
presence in online or have its own website so that customers can easily get information
about existing products and services of firm. Thus customers can easily make purchase
of wide varieties of products and services while staying safe and secure at home
(Pederzini, 2016). So, home delivery services, mobile payment have saved lot of time,
efforts and money of customers and motivate them to make purchase form Sainsbury
rather than other competitors in market. Company have also introduced organic food
products range to attract individuals that are highly concerned about their health, safety
and well-being. So, strategy to introduce organic food has contributed in increasing sales
volume and profitability of firm in retail sector.
5. There are quick developments, innovation and changes in technologies at the same time
many companies are adapting to innovative techniques in order to attract customers and
gained maximum market share. Sainsbury in its strategies and business policies have
state about standard technologies, method which need to be used by employees to
delivered qualitative services to end customers. Company have make use of innovative
technologies that helped in reducing overall cost and delivering products or services in
best way to customers (Lawton, 2017). Manager of Sainsbury have also make use of

information technology, key performance indicators to keep eye on actual performance in
order to planned better strategies to increase market share and profitability of firm. Thus,
it can be stated that Technological advancement within Sainsbury has contributed in
enhancing customer’s satisfaction level and profitability of firm.
6. It can be illustrated that there are limited resources in environment so people and
government of UK are becoming more concerned about use of resources for various
purpose. Government are making policies, rules and regulation to encourage firms to
undertaken social corporate responsibilities in order to grow and sustain its business in
market. Sainsbury have invested and take steps in CSR activities at the same time make
optimum utilisation of resources so that people are motivated to be part of organisation.
Managers have ensured that no harm can be caused to environment or health and safety
of individuals that have lead in establishment of strong reputation in retail sector.
7. Like all other companies in supermarket Sainsbury is also facing challenges or threat of
increasing competition level which directly impact on growth and survival of firm for
longer time frame. Morrison, ASDA, ADLI and Lidi are some huge market players that
have make use of different strategies to attract customers and earned more profit margin
(Karlik and et.al., 2017). The two main competitors such as ASDA and ADLI have
changed game in retail sectors by providing attractive discount to customers that leads to
threats of effective operation of business in industry.
8. Red and Blue Ocean strategies are two other strategy which have be used by Sainsbury
while operating its business in retail sector. Company in order to attract its existing
customers have provided differentiate, unique and qualitative products so that they can be
ready to pay higher price. Top management have emphasis on building strong brand
image in market so that new customers can be attracted to select products of Sainsbury as
compared to other competitors (Adegbile, Sarpong and Meissner, 2017). Therefore,
senior executive of firm has always think about new and creative way to approach
customers such as recently it have make use of social platform that is facebook,
instragram and twitter to create awareness among people about existing products and
services. It also adds new products ranges or addition features in its products so that they
can be easily differentiated from other competitors and customers are ready to choose its
products and services (Edwards, 2018). So, it can be stated that blue and red ocean

strategies have contributed in enhancing sales volume and profitability of enterprise in
industry.
Evaluation of business policies
There are several legal law, rules or regulation made by government to encourage peace
and healthy environment within society. Sainsbury management while forming different
strategies have incorporated legal laws such as Health and safety, good working environment,
discrimination and equality policy, employment law, trade and tariff, leave, equal wages to
employees for their hard work and determination (Veselovsky and et.al., 2019). Company by
abiding to all legal laws have inspired employees to put their best or delivered better services to
large number of customers that reside in UK and other parts of world. Several business policies
of Sainsbury can be illustrated as follows:
Recruitment policies: HR management of Sainsbury have make various policies and procedure
regarding the way employees will be recruited, selected in the organisation. Thus, it helped HR
manager in selecting or scrutinising best talented, high experienced and qualified employees
within organisation. At the same time saving lot of time, efforts and energy of HR manager is
choosing best individual for growth and expansion of firm.
Health and safety policy: Company have also specified about various safety measure that have
been taken by it to ensure better health and well-being of employees within firm. So, it can be
stated that Health and safety policy have contributed in motivating employees to improve their
performance and productivity so that company can gained first position in retail sectors to earn
maximum profit.
Anti discriminative policy: It is another business policy of Sainsbury which have been followed
by enterprise in order to provide safe, secure working environment to employees. HR manager
have ensured that employees are not discriminated on basis of caste, religion and gender at time
of recruitment, selection and appraisal or payment of wages. So follow of all such ethical value,
moral principle have contributed in adding value and more customers satisfaction.
Internet and mobile policy: There are certain policies that are made by HR manager of
Sainsbury to avoid misuse of internet or mobile phones to leak crucial information of
organisation in outside world. Employees are not allowed to use mobile phones or any personal
assets before prior permission of senior management for safety and sustainability of crucial data
and information of firm.

Leave policy: There are various leave an individual wants to enjoy, have fun and entertainment
in personal life so manager have make leave policy which illustrated about number of leave an
individual can use such as family leave, paid, sick and many others. All these helped in
enhancing moral level of employees thus better delivering of products to customers and
development of strong brand image.
CONCLUSION
It can be concluded from above report that Top management have to devote more time,
efforts in order to take correct decision regarding operation of enterprise. Manager of Sainsbury
by effective conducting market survey and research is able to find unsatisfied wants to customers
and adapted to changes in best possible manner. The above report also illustrated that company
have effectively cope up with several issue and challenges through making changes in their
strategies that have contributed in gaining second position in retail sectors. At last it can be
concluded that top management have to abide to future external changes such as more use of
innovative technologies that is internet and CSR activities.
Recommendation
From the above discussion and analysis it can be suggested that top management of
Sainsbury need to think of best, unique and innovative idea that can helps in better satisfaction of
customer’s requirements. There are key areas in which Sainsbury needs to improve in order to
grow and sustain in retail sectors for many years. Therefore, some of the recommendation as per
above analysis are explained below:
 Firstly, top management have to think of the way through which price of products can be
reduced so that people of UK are motivated to be with organisation for more years.
Company import products from EU countries so after Brexit cost of raw material have
increased so it needs to find alternative option to cater material in order to reduce cost
and gained customers satisfaction level (Edwards, 2018). At the same time find
alternative techniques and technology that can reduce amount of wastage of resource,
errors and mistake so that better quality products and services can be delivered to
customers.
 Secondly, numbers of competitors in retail sectors with best strategies are increasing at
rapid stage so Sainsbury top management and senior executives needs to plan

differentiate strategies or products which can influenced customers to choose it as
compared to other competitors.
 Company should make more investment in research and development department and
innovation technologies so that customers can render services in efficient manner. It
should make use of social media in marketing and expansion of firm in international
market as most of the younger generation wants to make shopping through online as it is
much easier and time saver.
 Recently most of the consumer wants to be part of such a organisation that takes crucial
steps in protection of environment and natural resources for health and safety of various
individuals. Sainsbury in order to enhance its brand image, reputation in minds and
hearts of people have to take appropriate measure to reduce pollution, wastage of
resources and healthy working environment for employees (Tonelli and Cristoni, 2018).
Therefore, it by spending more in CSR activities could easily increase its sales volume,
customer’s satisfaction and profit margin.
 Sainsbury needs to revise and review its business policy and procedure as per changes in
order to grow in market on continuous basis. HR manager should enhance its knowledge
related to existing laws and regulation that it need to considered while operating its
function in retail segment.

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