Strategic Management Analysis of Sainsbury's in the UK Retail Market

sTRATEGIC MANAGEMENT
SAINSBURY

Table of Contents
INTRODUCTION............................................................................................................................. 2
2.0 UK EXTERNAL BUSINESS ENVIRONMENT OF THE SAINSBURY.................................................3
2.1 PESTEL ANALYSIS.............................................................................................................3
2.2 PORTER’S FIVE-FORCE MODEL APPLICATION...................................................................5
2.2.1 THREATS POSED BY NEW ENTRANTS............................................................................5
3.0 INTERNAL ENVIRONMENT ANALYSIS.......................................................................................7
3.1 Value Chain Analysis............................................................................................................7
3.1.1 Primary activities...........................................................................................................7
3.1.2 Support offering activities.............................................................................................8
4.0 ANALYSIS OF THE SWOT POSITION........................................................................................10
4.1 Strength............................................................................................................................. 10
4.2 Weaknesses....................................................................................................................... 10
4.3 Opportunities.....................................................................................................................11
4.4 Threats............................................................................................................................... 11
5.0 MAIN ISSUES FACED BY ORGANIZATION................................................................................12
6.0 ANALYSIS THE BUSINESS UNIT OF THE ORGANISATION WITH THE STRATEGY WHICH THE
ORGANIZATION CAN ADOPT........................................................................................................13
Bowman strategy Clock........................................................................................................... 13
7.0 CONCLUSION......................................................................................................................... 15
8.0 RECOMMENDATIONS............................................................................................................ 16
9.0 REFERENCES...........................................................................................................................18

INTRODUCTION
Sainsbury ranks third in the list of the largest supermarket chain in the UK. The aspects and
factors that majorly influence the working of the company is the external business environment
(Sivalingam, 2015). PESTLE analysis should be taken into consideration for the analysis of the
situations prevailing in the market which affects the Sainsbury functioning mostly. Porter’s Five-
Forces Model has also been applied in this report. Internal Environment analysis and SWOT
position have also been showcased in this report.

2.0 UK EXTERNAL BUSINESS ENVIRONMENT OF THE SAINSBURY
Sainsbury was established in 1869 and which is operating in 1106 and above supermarkets.
Sainsbury is providing food which is best for health. Sainsbury is also in a retail market which is
developing smart strategies and achieving its goals through gaining competitive advantages.
There are the external factors which have different situations and their impact on the
functioning and operation of the business. Sainsbury has also put many efforts for facing the
competition in the market. Sainsbury have guided value framework which affects the 20-20
business policy strategy with the help of the developing the strategies (Collins, et al. 2016).
2.1 PESTEL ANALYSIS
Political situation: The government of UK has imposed various policies for the reduction of the
corporation taxes. So, Sainsbury can save a lot of amount. Sainsbury is facing the situation of
lower profits as the stores sales slowed to .6 pc in the three months compared to the first
quarter of the year 2017. So it can be covered by amount left which is being utilized in paying
the large amount of taxes. Also the company is bearing the high wages cost which is also can
reduce by paying small amount of taxes due to imposing new tax policies by the government.
Also the Sainsbury can increase its sales by entering into new markets as European Union has
expanded which will includes the more European countries which give Sainsbury a chance to
enter newer markets. This all in keeping with the business strategy of the Sainsbury (Sainsbury,
2015).
Economic situation: The business strategy of the Sainsbury is also get affected by the foreign
exchange rates, changing interest rates, wide indicators of the economy like inflation, GDP, job
market, the stock market and unemployment. The strategy and policies of the Sainsbury are
also get affected by the rapid increment in the global crisis in food which has increased the food
prices and increases the purchasing cost for Sainsbury's (Hammad, 2015).
Social situation: The main challenge for the Sainsbury’s is meeting the set expectations of the
customers. The long-term vision of the Sainsbury making it a retail venture a viable cab be
strategized with the help of 20-20 plan (Sivalingam, 2015). For this, the company is engaged in
many CSR activities like support equal opportunity, charities and raising funds. The decision of