Strategic Analysis of Sainsbury's: Business Strategies for Sustainable Competitive Advantage

Running head: MANAGEMENT
Management
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Executive Summary
This strategic analysis report had evaluated one of the most successful retail companies in the
United Kingdom named Sainsbury’s to critically examine its business strategies. The report
has evaluated the external and internal environment of the organization to identify threats and
opportunities. The strategic position analysis of the organization showed that the organization
had been using differentiation strategy to cater to different market segments. On the other
hand, it has also been seen that the organization needs to use cost leadership strategy to deal
with the economic instability and decrease in disposable income of the consumers.

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Table of Contents
Introduction................................................................................................................................3
Rationale....................................................................................................................................3
Background of Sainsbury's.........................................................................................................3
Macro environment analysis......................................................................................................4
PESTLE analysis....................................................................................................................4
Micro Environmental analysis...................................................................................................6
Porter’s Five Forces...............................................................................................................6
Resource based view and Strategic capabilities.........................................................................7
VRIO......................................................................................................................................7
Strategic position........................................................................................................................9
Porter’s Generic Model..........................................................................................................9
Strategy Clock......................................................................................................................10
Strategic fit...............................................................................................................................11
Warfare perspective.................................................................................................................15
Recommendation......................................................................................................................15
Conclusion................................................................................................................................15
References................................................................................................................................17

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Organization: Sainsbury's
Introduction
This is a strategic analysis report which has evaluated one of the most successful retail
companies in the United Kingdom. Strategic analysis has been used to recommend suitable
business strategies for developing sustainable competitive advantage. In this report,
Sainsbury’s has been chosen as the organization of choice. The report has provided a rational
for choosing Sainsbury’s and the background of the company has been described in detail.
The report has used various tools, theories and concepts to evaluate and explain the business
strategy implemented by Sainsbury’s. The report has conducted macro and micro
environment analysis to evaluate the external and internal environment of the organization.
VRIO model has been used to analyse the resource based capabilities of the organization. The
strategic position of the company has been evaluated using the porter’s generic model and
strategy clock. The strategic fit of the opportunities and threats have also been evaluated.
The warfare perspective has been provided to understand the nature of the business strategy
implemented by the organization. The report has provided suitable recommendations for the
future sustainability and competitive advantage of the organization.
Rationale
Sainsbury’s has been chosen as the organization of choice in this report as the
company is one of the market leaders in the industry in United Kingdom and the different
tools can be effectively used to portray the different business strategies needed by companies
to sustain in highly competitive market segment. The retail industry in United Kingdom is
highly saturated in nature and the evaluation of strategies used by Sainsbury’s will provide a
better knowledge about the global retail industry, the level of challenges and mitigation
strategies.
Background of Sainsbury's
Sainsbury’s is one of the largest supermarket chain in the United Kingdom and
second only to Tesco Plc. In terms of the market share, the organization has 16.9% share in
the market. The company had been the largest retail in United Kingdom since 1922 and were
the early adopters of the self-service retailing (Sainsburys.co.uk 2019). However, the
organization lost its dominance in the market to Tesco Plc. in the year of 1995 while Asda
become the second largest retailer in the industry. Sainsbury’s was able to move up a spot in