Strategic Management : Assignment
Added on 2020-10-22
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Strategic Management
TABLE OF CONTENTS1.0 INTRODUCTION.....................................................................................................................12.0 COMPANY BACKGROUND..................................................................................................13.0 AN INTERNAL ANALYSIS- SWOT ANALYSIS.................................................................13.1 Strength..................................................................................................................................13.2 Weakness...............................................................................................................................13.3 Opportunity............................................................................................................................23.4 Threats...................................................................................................................................24.0 AN EXTERNAL ANALYSIS- PESTLE ANALYSIS.............................................................24.1 Political..................................................................................................................................24.2 Economic...............................................................................................................................34.3 Social.....................................................................................................................................34.4 Technological........................................................................................................................44.5 Environmental........................................................................................................................44.6 Legislative factors..................................................................................................................55.0 PORTER’S FIVE FORCE ANALYSIS....................................................................................55.1 Threats to new Entrants.........................................................................................................65.2 Bargaining the power of suppliers.........................................................................................65.3 Bargaining power of buyers...................................................................................................75.4 Threat from substitute products.............................................................................................75.5 Revelry among the existing players.......................................................................................76.0 PORTER'S GENERIC STRATEGIES ANALYSIS.................................................................86.1 Cost Leadership.....................................................................................................................86.2 Differentiation........................................................................................................................96.3 Focus......................................................................................................................................97.0 CONCLUSION........................................................................................................................108.0 RECOMMENDATION...........................................................................................................109.0 REFERENCES........................................................................................................................11
1.0 INTRODUCTIONStrategic management can be defined as the continues planning, monitoring andassessment of all such things which are necessary for the organization to meet its goals andobjectives. This report will be based on the strategic management within the Sainsbury’scompany. This company is a British multinational company which deals with the groceries andgeneral merchandised retailing products. Moreover, this report will help in developing acomplete 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 thebusiness.In addition to this Porters five forces analysis will be described in order to understand thehighly competitive industries in the market. This report will also provide the porter's genericstrategies analysis in order to understand threat to the rivalry and substitute products. It will helpin providing impact of the factors on the strategic management of the company. 2.0 COMPANY BACKGROUNDSainsbury’s is one of the largest chain of supermarket which is operating into UK withabout share of 16.9% into the supermarket sector. The company was founded in year 1869 byJohn James Sainsbury. In year 1922 it become market leader by adopting self-service retailingwithin UK and then Tesco took over company after this Tesco became market leader. In April2018 there was proposal of merger between ASDA and Sainsbury’s which would result intothem both becoming market leader with share of 30%.3.0 AN INTERNAL ANALYSIS- SWOT ANALYSIS3.1 StrengthThis is the oldest super market chain of UK which is operating since 1869 it is been 150year old. Sainsbury is very much famous of its quality of products which it is delivering to itscustomers with core operations into groceries and food. The company is also expanding itsoperations into finance, energy and clothing with taking over ARGOS. 3.2 WeaknessIt could be analysed that the price of majority of its products is higher than itscompetitors however the company argued that they are offering better quality products to theircustomers. The annual profit of Sainsbury declined to 8.2% in 2017 which was mainly due toBrexit and its uncertainties.1
3.3 OpportunityThere are both opportunities for national and international markets which company ishaving so they could be thinking of these expansions by moving to India, Russia or any othercountry.3.4 Threats There is intense competition which Sainsbury is facing in UK supermarket sector likehaving rivalry with TESCO, ALDI and others. Both LIDL and ALDI are now providingcustomers with quality of products at low price which is regarded to as threat for Sainsbury’s4.0 AN EXTERNAL ANALYSIS- PESTLE ANALYSISSainsbury’s is a multinational food retailing company which has its outlet in almost 12countries across the world. The headquarters of the UK are situated at UK. This company isconsidered 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 companyalso now deals with the finance, insurance, mobile, hardware services etc. In order to achieve thehigher profitability and sustainable growth of the firm, the company have to timely monitor theimpact 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 sustainingand surviving the business for the long term in the market. PESTLE analysis is used to determinethe long term societal trends and external factors described below and also help in identifying thedynamic and unpredictable environment in which Sainsbury’s operates the business. 4.1 Political These external factors are concerned with the political matters in which governmentencourage 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 retailingcompany operates worldwide. These include the unstable taxes by the government which mayeffects the actual cost of the products. Also this factor includes instability in prices of the goodsdue to the highly paid and centrally located jobs which allows the company to increase the wagesof labour.Also for employment legislations, the government encourages retailers to provide the mixof job opportunities in terms of skilled labour and flexible and lower paid jobs. Certain Politicalfactors can potentially have negative implications on the Sainsbury’s bottom line (David and2
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