Comparison of Theory and Practice in Strategic Management

STRATEGIC
MANAGEMENT
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Compare theory and practices with model of competition..........................................................3
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Strategic management involves in setting objective, analysing competitive environment,
internal organization, evaluation of strategies and ensuring management rolls out the strategic
across the organization. This is the ongoing process of planning, managing, controlling,
analysing and assessing all the necessary aspects for an organization in order to meet its goals
and objective. These changes are generally required in the business environment to constantly
assess their strategies for the success. In respect of that, present report is based on Sainsbury
which is the finest multinational supermarket company. Company deals in various products and
services for attracting their customers towards company for increasing sale and profit margin.
The main purpose of this business report is to analysis a business policy or strategic management
by comparing theory and practice of competition in the market. For that report will cover poster
five force model to analysis the competition in order to examine the success and failure.
MAIN BODY
Compare theory and practices with model of competition
Background of Sainsbury
The Sainsbury is the second largest chain of supermarket in the United Kingdom.
Company is offering various types of product and services to its customers. Company has
116400 numbers of employees in 1415 location across the globe. The product list of company is
hypermarket, supermarket, convenience shop and forecourt. Company have vision, mission and
objective which helps different stakeholder in understanding the market value with competition.
Vision: Is to be the most trusted retailer, at their people love to work and shop. This puts
customers at the heart of everything and investing in their stores for purchase product and
services with company in effective manner. On the other side, mission of Sainsbury is to be the
customers’ first choices for food delivering products with outstanding quality with great services
at the competitive cost through that working is faster, simple and together.
The presents value of company looks with the aim to help customers eat healthy and
improving quality of food by making small changes which make the effective changes. There
business strategy is shows the area which matters the most of us and the ways which making a
difference to customers lives every day. The strategy for the company is prepared on basis of
knowing the need of the consumers. In accordance with the need of the consumer company is
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able to provide better and great product and services at fair price. Sainsbury has various sections
in their store in it one best is Bargain brands serves high quality of products and services at the
relatively low price. Their competitive strategy is cost leadership as the company is providing
services at the lower price and cost at its each and every outlet.
The company Sainsbury is moving ahead with its online retailing for trying to reach in
sustainability agenda through making some smart strategies for the company. This help to make
an effective value chain management (Trigeorgis and Reuer, 2017). With the assistance of value
chain management company is in a position to formulate effective strategies for managing
business. Moving toward online business is helpful for making an effective and valuable
business management and resulting in growth. This result in more effective strategy formulation
and provides a competitive advantage to the company within the market.
Porter five force analysis
Porter five force model is widely used in the organization for analysing the business
environment. With the assistance of this model organization is able to analyse its actual position
at the market place. This analysis includes the overall working of the industry and help the
company in formulation of the strategy on the basis of working of industry (Ansoff and et.al.,
2018). Under this model the analysis of different factors like competitive rivalry, entry of new
entrants, threat of substitute and other thing assist the company in managing the working in
accordance to all these aspects. With the help of this model the company is in position of
managing its profit by thoroughly understanding the industry and then working in accordance to
it. These five forces include threat of substitute product and services, threat of new entrants,
bargaining power of customers, bargaining power of supplier and competitive rivalry. Therefore,
it can be said that the five force model is a framework which assist organization in analysing
profitability within the industry and the presence of different competitive forces affected to the
company performance. Porter five force analyses for Sainsbury are as follows:
Threat of new entrants:
Company Sainsbury deals into the retail industry which is highly profitable within the
market. It is essential for existing organization to create high barriers for enter to deter new
entrants. This includes some of the high threat from new entrants such as when amount of capital
is low, existing companies do little to retailers, existing firm do not pass patents, customers
switching cost, no government regulations, product are nearly identical and economies scale
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