Strategic Management Assignment

This assignment provides a comprehensive overview of strategic management concepts and cases. It covers key topics such as implanting strategic management, strategic management in tourism, and the intersection of entrepreneurship and strategic management research. The assignment also discusses Porter's generic strategy and its application in business. Students will gain insights into strategic management and how it can be applied to real-world scenarios.

Strategic Management

TABLE OF CONTENTS
1.0 INTRODUCTION.....................................................................................................................1
2.0 COMPANY BACKGROUND..................................................................................................1
3.0 AN INTERNAL ANALYSIS- SWOT ANALYSIS.................................................................1
3.1 Strength..................................................................................................................................1
3.2 Weakness...............................................................................................................................1
3.3 Opportunity............................................................................................................................2
3.4 Threats...................................................................................................................................2
4.0 AN EXTERNAL ANALYSIS- PESTLE ANALYSIS.............................................................2
4.1 Political..................................................................................................................................2
4.2 Economic...............................................................................................................................3
4.3 Social.....................................................................................................................................3
4.4 Technological........................................................................................................................4
4.5 Environmental........................................................................................................................4
4.6 Legislative factors..................................................................................................................5
5.0 PORTER’S FIVE FORCE ANALYSIS....................................................................................5
5.1 Threats to new Entrants.........................................................................................................6
5.2 Bargaining the power of suppliers.........................................................................................6
5.3 Bargaining power of buyers...................................................................................................7
5.4 Threat from substitute products.............................................................................................7
5.5 Revelry among the existing players.......................................................................................7
6.0 PORTER'S GENERIC STRATEGIES ANALYSIS.................................................................8
6.1 Cost Leadership.....................................................................................................................8
6.2 Differentiation........................................................................................................................9
6.3 Focus......................................................................................................................................9
7.0 CONCLUSION........................................................................................................................10
8.0 RECOMMENDATION...........................................................................................................10
9.0 REFERENCES........................................................................................................................11

1.0 INTRODUCTION
Strategic management can be defined as the continues planning, monitoring and
assessment of all such things which are necessary for the organization to meet its goals and
objectives. This report will be based on the strategic management within the Sainsbury’s
company. This company is a British multinational company which deals with the groceries and
general merchandised retailing products. Moreover, this report will help in developing a
complete understanding about the impact of external environment which influence the business.
Various different types of external factors are explored that impact the main objectives of the
business.
In addition to this Porters five forces analysis will be described in order to understand the
highly competitive industries in the market. This report will also provide the porter's generic
strategies analysis in order to understand threat to the rivalry and substitute products. It will help
in providing impact of the factors on the strategic management of the company.
2.0 COMPANY BACKGROUND
Sainsbury’s is one of the largest chain of supermarket which is operating into UK with
about share of 16.9% into the supermarket sector. The company was founded in year 1869 by
John James Sainsbury. In year 1922 it become market leader by adopting self-service retailing
within UK and then Tesco took over company after this Tesco became market leader. In April
2018 there was proposal of merger between ASDA and Sainsbury’s which would result into
them both becoming market leader with share of 30%.
3.0 AN INTERNAL ANALYSIS- SWOT ANALYSIS
3.1 Strength
This is the oldest super market chain of UK which is operating since 1869 it is been 150
year old. Sainsbury is very much famous of its quality of products which it is delivering to its
customers with core operations into groceries and food. The company is also expanding its
operations into finance, energy and clothing with taking over ARGOS.
3.2 Weakness
It could be analysed that the price of majority of its products is higher than its
competitors however the company argued that they are offering better quality products to their
customers. The annual profit of Sainsbury declined to 8.2% in 2017 which was mainly due to
Brexit and its uncertainties.
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3.3 Opportunity
There are both opportunities for national and international markets which company is
having so they could be thinking of these expansions by moving to India, Russia or any other
country.
3.4 Threats
There is intense competition which Sainsbury is facing in UK supermarket sector like
having rivalry with TESCO, ALDI and others. Both LIDL and ALDI are now providing
customers with quality of products at low price which is regarded to as threat for Sainsbury’s
4.0 AN EXTERNAL ANALYSIS- PESTLE ANALYSIS
Sainsbury’s is a multinational food retailing company which has its outlet in almost 12
countries across the world. The headquarters of the UK are situated at UK. This company is
considered as the second largest profit maker company which generates higher revenues.
Sainsbury’s sells variety of food and non-food products (Ansoff And et.al., 2018). This company
also now deals with the finance, insurance, mobile, hardware services etc. In order to achieve the
higher profitability and sustainable growth of the firm, the company have to timely monitor the
impact of the external environment which influences the main performance of the business.
Sainsbury’s utilises its resources in order to gain the competitive advantage and for sustaining
and surviving the business for the long term in the market. PESTLE analysis is used to determine
the long term societal trends and external factors described below and also help in identifying the
dynamic and unpredictable environment in which Sainsbury’s operates the business.
4.1 Political
These external factors are concerned with the political matters in which government
encourage the retailers to provide various job opportunities (Moutinho and Vargas-Sanchez eds.,
2018). So the political factors which affects the overall business performance as the retailing
company operates worldwide. These include the unstable taxes by the government which may
effects the actual cost of the products. Also this factor includes instability in prices of the goods
due to the highly paid and centrally located jobs which allows the company to increase the wages
of labour.
Also for employment legislations, the government encourages retailers to provide the mix
of job opportunities in terms of skilled labour and flexible and lower paid jobs. Certain Political
factors can potentially have negative implications on the Sainsbury’s bottom line (David and
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David, 2016). For example, in 2014 the government of UK change the power of taxes for large
super market and therefore this has impacted on the prices of the products within the UK
retailing supermarket. Some of the factors which are included in the Political factors are
legislation, political instability, unemployment rate and various economic conditions of the
country where the firm is operating.
4.2 Economic
These factors include the labour cost so this is the main point of concern for the Retailing
Sainsbury’s supermarket. Therefore the company need to consider the economic factors as these
factors directly impact on the buying behaviour of the customers. Although, in 2008 when the
UK economy was facing a recession period which leads to the governments substantial reduction
in the interest rates. This has resulted in the spending power of consumer as now people are more
aware and confident about the current financial situations. However, the positive aspect of the
recession is that the customers generally eat out less and eat more at home which provides the
opportunities for the grocery retailers like Sainsbury’s which allows them to increase the
productivity (Wheelen And et.al., 2017). Sainsbury’s is one of the most successful organization
which has expanded its business in international market and this company has also diversified its
business up-to the great extent. Furthermore, due to the declining in the level of disposable and
household income, Sainsbury’s has largely concentrated towards the advertising of the brand via
introduction of more luxurious items.
4.3 Social
These factors are concerned with the social changes which indicate new trend within the
UK market. Due to the modernising world, the customers tastes, preferences and social status is
constantly changing. Therefore it leads to the changed demands of the customers. So the
Sainsbury’s company have to monitor such changes in order to identify the needs and demands
of the customers. So Social factor has a great impact on the performance and productivity of the
organization as customers are one of the major strategic solution for the company. Also in order
to consider the social environmental factors of the company, Sainsbury’s has also increased the
number of non-food items offered for the sale (Hitt and Duane Ireland, 2018). This company
operates at global scale, so the people living at different places have varied beliefs and attitude
which in turn are influenced by the social conditions.
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In addition the customers are now becoming more conscious about the health issues so
they continuously change their approach towards the consumption of food and non-food items.
So this leads towards the changed perceptions and the organization is also accommodating the
changes according to the demands of the consumers. Hence proper monitoring the social aspects
of the company allows the Sainsbury’s to produce the goods and services according to the beliefs
of the people. This factors also includes the demographics and social culture which is very
important for the Sainsbury’s company as it helps in increasing the customer approach and hence
helps in increased sales and profitability of the firm.
4.4 Technological
Technology is one of the fast in disrupting various industries across the board. Earlier the
production was limited and the company’s profit margins were also incurred according to that,
but now the advancement of the technology has made it all effective and efficient which allows
the company to reach the business at the great heights and success (Hill, 2017). So as the
company cannot update the technology within the business then it may be harder for the
Sainsbury’s to match the competitive industries in the market who are always trying to bring
more innovations in the market. This factor directly impacts on the performance of the business.
Automated delivery, superfast delivery of the goods and services and various social media
applications have enhanced the sales of the goods in the market. So technological advancement
has brought new opportunities for the Sainsbury’s in order to regain the trust of the customers.
Also, recently Sainsbury’s have introduced a RFID technology which allows the company to
increase the in store experience of the customer. Advanced technology also allows the customers
to shop and tag products which help in saving time and labour as well.
4.5 Environmental
Nowadays, many companies are facing the immense pressure from government agencies
in order to address the environmental issues (Lasserre, 2017). Environmental factors are
concerned with the adopt ways to of operations which would help to benefit the society. So In
order to address such environmental issues, Sainsbury’s is clearly committed to reducing its
carbon footprint by 50% by 2020. Also, Sainsbury’s have concentrated towards the minimizing
the waste products and this resulted in increasing the social conscience in the customers.
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4.6 Legislative factors
This is an integrated system of external lows, regulations, judicial status and civic
awareness of the law. As the company has developed its outlet in various different types of
countries so the each country has different laws to protect their own industries. In a business
legal environment, legal factors are concerned with the legal actions in the form of governmental
policies and legislation rights which directly impact on the overall performance of the
Sainsbury’s. For example, in 2004 the Food retailing commission suggested a code of practice in
which the prices are altered without noticing on demand power from suppliers (Meyer, Neck and
Meeks, 2017). So in order to facilitate such policies Sainsbury’s provides its customers price
reduction.
5.0 PORTER’S FIVE FORCE ANALYSIS
This can be considered as a strategic management tool that allows the firm to analyse
industry and understand various approaches that helps in maximising the profitability within the
firm. This Model allows the Sainsbury’s managers to understand the five competitive forces
which influences the profitability within the company.
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Illustration 1: Market share of UK

Porter's five forces is a strategic framework which helps the manager in taking the
strategic decisions which helps the managers in taking the strategic decisions according to the
present competition market. Also it allows them to enhance the overall business performance by
enhancing the strategy for acquiring the competitive advantages and long term retention and
sustainability of the firm (Morden, 2016). Five forces helps the business in shaping the strategy
in which Michael porter observed five forces which leads to the great impact on the profitability
of the firm. Porter's five forces are described below:
5.1 Threats to new Entrants
In this highly competitive world, it is very important for the Sainsbury’s Plc. to bring
timely improvements within the company. As the increasing pace of technology have provided
various ideas to the people in order to enter into the new market and these new companies are
aimed at bringing new concepts and Innovative products. So new ways of doing things and
attracting large number of people put the immense pressure on Sainsbury’s Plc. The new entrants
are adopting various strategies in order to sustain and develop the new business in the market.
This could be in the form of bringing new innovative products and services. These new entrants
not only brings new products but also brings new customers to the fold but also gives old
customer a reason to buy Sainsbury’s Plc.’s product (Morschett, Schramm-Klein and Zentes,
2015). This helps in building economies of scale so that it can lower the fixed cost per unit. New
entrants are less likely to enter a dynamic industry which allows the Sainsbury’s in Defining the
standard regularly.
5.2 Bargaining the power of suppliers
This can be considered as all such raw material which is purchased from the suppliers.
Powerful suppliers in consumer services uses their negotiating power which allows them to
increase the prices of the raw material used by the Sainsbury’s in order to produce the finished
products for the final consumption. As per the increased prices of the raw material from the
suppliers leads to the overall impact on the bargaining power which actually lowers all the
profitability derived within the Sainsbury’s Retailing company (Michael, Storeyand Thomas,
2017) . It impacts on the various things such as:
 It can be overcome by building the efficient supply chain.
 By designing the new products on the frequent basis.
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 Developing the dedicated suppliers who share a loyal relationship with the Sainsbury’s
Plc.
5.3 Bargaining power of buyers
This is one of the important aspect which needs to be considered by the firm in order to
determine the target audience. Buyers are often demanding a lot and also the buyers of this
modernised and technology based world are focused towards buying the best offerings available
in the market by paying minimum possible prices. As the Sainsbury’s is able to develop a strong
and powerful customer base which helps in attracting large number of buyers towards the
consumption of such products. This allows the customers to seek the increasing discount offers
offered by the company. Bargaining power of buyers can be overcome by the following ways:
By building the large customer base which helps in reducing the bargaining power of buyers and
it will also offers various opportunities for the firm to streamline its operations and sales (Steiss,
2019). Also Sainsbury’s need to seek the discounts and offerings which allows the Sainsbury’s in
coming up with the new products which limits the bargaining power of the buyers.
5.4 Threat from substitute products
In order to meet the demands of the customers, it is important for the organization to
offer a variety of substitutes. So in this highly competitive market substitute products provided
by different competitor companies easily influences their choices which leads to satisfying of
their needs via substitute product available at the store. This can be overcome by various
following ways: By being service oriented rather than just service oriented and also it allows the
company to establish variety of products. By understanding the core needs of the customers, the
threat to the substitution can be overcomes (Renz, 2016). Along with this switching cost of
customers also ensures them to change the perception and needs and demands gets fulfilled
according to this.
5.5 Revelry among the existing players
It can be considered as the increased competition within the market. Is the rivalry among
the existing players is intensive then it will surely leads to the minimised prices of the product
within the market. As the Sainsbury’s operates in an international market so the UK possess the
strong competition in the retailing market. This may influence the overall long term profitability
of the Sainsbury’s. Rivalry can be overcome by various ways such as by building a sustainable
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differentiation (Engert, Rauter and Baumgartner, 2016). By building scalable business operations
which helps in surviving in the competitive market.
6.0 PORTER'S GENERIC STRATEGIES ANALYSIS
According to porter's Generic Strategies model, there are three basic strategies options
available for the organization for gaining the competitive advantages. If the primary determinant
of the firm's increased profitability is attractiveness and efficiency within the industry in which it
operates then one of the important secondary determinant is holding the position. So Sainsbury’s
position can be helpful in leveraging its strengths. So applications of these strengths within the
business help in determining the firm’s relative position. These are Cost leadership,
differentiation and focus. These generic strategies can be used to determine the direction of the
organization. These generic strategies are helpful in creating and sustaining superior performance
of the Sainsbury’s (Hanson and et.al., 2016). This leads to achieving the above generic strategies
for achieving the above average performance within the industry.
6.1 Cost Leadership
Within a Cost leadership, a firm sets out to become the low cost producer in the
Sainsbury’s. So this generic strategy calls for being the low cost producer in an industry for a
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Illustration 2: Porter's generic strategy
(Source: Porter's Generic strategy, 2016)

given level of quality. This allows the Sainsbury’s industry to sell its products either at average
industry prices in order to achieve the higher profits than that of rivalry firms. So in order to
determine the Cost leadership strategy various cost advantages are determined which allows the
Sainsbury’s employees in improving the work efficiency. Sainsbury’s can be successful in cost
leadership generic strategy by following various internal strengths (Porter's generic strategy,
2017).
 Capital requirement to make the significant investment in production assets. It can be
considered as the barrier to entry of the firm.
 Developing the skills for efficient manufacturing.
 Achieving the high level of expertise in manufacturing process.
 Efficient distribution channel helps in accomplishing the leadership strategy.
6.2 Differentiation
A differentiation strategy calls for the development of product or service which helps in
offering a unique attributes that are mainly valued by the customers. Also it may be referred as
the providing the better and a unique product then other competitive firms. This strategy is is
appropriate where the target customer segment is not price sensitive, the market is competitive or
saturated as the customers have very specific needs (Engert, Rauter and Baumgartner, 2016).
Sainsbury’s company has the unique resources and capabilities which enables the business to
satisfy these needs in various ways which are very difficult to copy.
However, the differentiation strategy is not suitable for small companies. The Risk
associated with a differentiation strategy includes imitation by the competitors and changes in
the tastes of the customer. Although, pursuing this strategy allows the Sainsbury’s company in
able to achieve great differentiation in the market segment.
6.3 Focus
This Strategy mainly focussed towards narrow market segment and this helps the
Sainsbury’s in achieving the higher profits. Also adopting this types of strategy allows them to
achieve the higher customer loyalty. The generic strategy of Focus on the choice of the narrow
competition scope within an industry helps in focussing towards the cost which seeks to achieve
the differentiation within the market (Engert, Rauter and Baumgartner, 2016). This strategy can
be categorised different types of variants such as:
 In cost focus helps in focusing towards the low cost of the products.
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 Differentiation focus helps in possessing the unique place of the product in this highly
competitive market full of substitution.
In order to choose the right kind of strategy for the Sainsbury’s, it is very important to be aware
of the competencies and strengths of the company.
7.0 CONCLUSION
From the above study, it can be concluded that PESTLE analysis helps the organization
in finding various external factors which impacts on the overall business performance. This study
has developed a complete understanding about the strategic management within the Sainsbury’s
company which gets impacted directly by various factors such as legislation, social, political,
environmental etc. The report has provided the PESTLE analysis of the Sainsbury’s company
which helped the Organization in determining the strengths and weakness of competitive
industries by adopting the Porter's five forces.
Furthermore this study has also helped in analysing the Generic strategies analysis has
been performed via Porter's five forces. So in order to strengthen the company, this study has
provided various different kinds of strategies that helped in acquiring the customer satisfaction.
8.0 RECOMMENDATION
For the future improvement of Sainsbury's Company, following recommendations can be
recommended to the company -
For the improvement in performance of the company, Management team can use
performance appraisal tools and techniques in order to analysis the performance of employees
and give them feedback regrading their performance so that employees can apply those
feedbacks in their performance and improve the efficiency of the performance.
For the future improvement, Company can use flexible policy and flexible working hours
in which employees can come to the organization anytime but must complete their working
hours per day. This can lead employees and management to focus on their work with peacefully
mind which will improve the efficiency of organization and enhance the profitability.
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9.0 REFERENCES
Books and journals
Ansoff, H.I. And et.al., 2018. Implanting strategic management. Springer.
David, F.R. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, pp.2833-2850.
Hanson, D. and et.al., 2016. Strategic management: Competitiveness and globalisation. Cengage
AU.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Macmillan International Higher Education.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Michael, S., Storey, D. and Thomas, H., 2017. Discovery and coordination in strategic
management and entrepreneurship. Strategic entrepreneurship: Creating a new mindset,
pp.45-65.
Steiss, A.W., 2019. Strategic management for public and nonprofit organizations. Routledge.
Renz, D.O., 2016. The Jossey-Bass handbook of nonprofit leadership and management. John
Wiley & Sons.
Morden, T., 2016. Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management (pp.
978-3658078836). Springer.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Wheelen, T.L. And et.al., 2017. Strategic management and business policy (p. 55). Boston:
pearson.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Online
Porter's generic strategy. 2017. [Online]. Available
through:<https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-
strategies/>
Porter's Generic strategy. 2016. [Online]. Available
through:<http://www.quickmba.com/strategy/generic.shtml>
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