Sainsbury's Strategy Evaluation: Competitive Advantages and Analysis

This report provides a detailed strategy evaluation of Sainsbury's, a leading UK retail company. It begins by examining Sainsbury's purpose, vision, mission, and objectives, assessing their clarity and effectiveness. The report then delves into the company's competitive advantages, utilizing the VRIO framework to analyze its resources and capabilities. Following this, an analysis of external factors impacting the firm is conducted using the PESTEL framework. The report also applies Porter's Five Forces model to evaluate the competitive landscape within the retail sector. Finally, based on the analyses, the report reviews Sainsbury's overall strategy, discussing its effectiveness and offering recommendations for improvement. The report provides a comprehensive overview of Sainsbury's strategic positioning, identifying strengths, weaknesses, and potential areas for future development.

Strategy Evaluation

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Evaluating clear purpose, Vision, Mission and objectives of company-wide.............................1
Assessing the competitive advantages ........................................................................................2
Analysing external factors that impact the firm...........................................................................4
Determining the Porter Five model..............................................................................................5
Reviewing organisation's strategy ..............................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategy evaluation refers to the process of determining the effectiveness of strategy that
will help in achieving organisational objectives to take measurable action when requirement and
maintaining the strategy management process (Deroba and et.l., 2019). In this report the
company taken is Sainsbury which is top retail sector in UK and deals in many goods and
services and founded in 1869. The topic covered in this report are clear purpose, Vision, Mission
and objectives in strategic direction of organisation is being studied in this report and identifying
the competitive advantages of company. Apart from that to analyse the external framework of
company has done for that PESTLE is determine where all factors will be access. It is being
studied about Porters's Five Forces Model is apply to evaluating competitiveness of company,
market, industry is determined. At last on the basis of analysis it review the organisation's
strategy and discussed the effectiveness of them to improve the productivity.
MAIN BODY
Evaluating clear purpose, Vision, Mission and objectives of company-wide
In company there is important to set some goals and objectives to achieve that and obtain
in very specific form and that will lead to improve the effectiveness and efficiency (Goethel and
et.al., 2019). From different methods and ways they acknowledge the various forms of necessity
to achieve in better condition. This is important to analyse the purpose, Vision, Mission and
objectives of organisation to determine the overall strategies and policies that helps in deciding
the main rules and laws that will be implemented in the firm. This is important to bring the thing
into effective form that will be easy to maintain it in order to achieve the objective and goals. For
the company Sainsbury this is essential to analyse purpose, objectives, vision and mission to set
the standards and strategies for management. Following are the purpose of company are as
follow-
 The purpose of company to improve the business activities at every level and focused on
the efforts of enhancing the services.
 To increase the sales through great services to serve individual interest everyday and
encourage team works to meet required service standards. It also emphasise on
maintaining simplicity and efficiency to deliver the products.
1

Objectives are specific steps that achieve the desired objectives and after result is goal. They are
more general and that helps in reaching its goals and add value. For the company the following
objectives are as follows-
 The main objectives reaching all costumer needs and make them come back to the store
over and over again (Gupta and Muhuri, 2019). It want to satisfy all needs and
requirement of costumer and make them feel satisfied through delivering right and better
quality of goods and services.
 To increase the profit and generating new ideas that will differentiate from other
competitors as this is necessary to survive in the market with better reputation.
Vision refers to the ability to think about plan for future and using the intelligence for
long run. For the company Sainsbury the vision is “ Our vision to be most trusted retailer where
people love to work and shop”. It refers to redefining the talent, creativity and diversity of
employees and to make sure that they receive the great service and shop every time. It provide
training, development and multiple initiatives to feel enabled to offer best shopping experiences
to costumer (Haltuch and et.al., 2019). This gives best way to serve the high quality of goods and
services to them in order to achieve the goals.
Mission termed as overall goal that will exist the reason of organisation and identified the
short-term goals and that will serve the costumer or market. The mission of organisation
Sainsbury is “To be the costumer's first choice for food, delivering products of outstanding
quality and that will serve in competitive cost through working faster, simpler and together”.
This will help in providing best way to costumer and making it easy and will facilitates in best
service-based opportunities.
Assessing the competitive advantages
To identify the capabilities and resources that required to maximise the profit of
organisation. In other words, VRIO frameworks is tool that analyse the firms internal capabilities
and resources that helps in competitive advantages (Hasantabar, Tashakkorian and Golpour,
2019). It is perfect way to evaluate company's resources that will help in better understand
advantages and weaknesses and it is brilliant way to make better evaluation. This contain four
attributes that facilitates in accessing dimension of different resources. For the company
Sainsbury, this analysis will help in management to identifying the major capabilities,
2

weaknesses that need to be recognized. Following is the way through which Sainsbury identify
its VRIO analysis-
Resources Valuable Rare Inimitable Organised
Goods and
services
✓ ✘ ✘ ✘
Employees ✓ ✓ ✘ ✘
Distribution
networks
✓ ✓ ✓ ✓
Brand image ✓ ✓ ✘ ✓
Valuable- The first step is to analyse that resources are valuable and that improve the
efficiency and effectiveness of company and increase the chances of growth and success. In the
company Sainsbury, the analysis shows that local goods and services are valuable as they are
very different from any other store (Keinemans, Kanne and De Jonge, 2020). This makes
company high value to attract the costumer perspective and also facilitates in more valuable to
competitors. In the company the quality and skill-set of employees is valuable and that what
makes it best retail store organisation in UK. This gives an necessary output and result to the
management and allows the major competition in the market. According to the analysis
distribution network will lead to proper delivery of goods and services and makes it possible to
reach out the costumer and ensure greater efficiency. This also facilitates in promoting plans and
promotion. Brand image is valuable for the company and that will lead to recognition among
others about different brand images.
Rare- Some resources and capabilities are rare and only possessed by some company and
can avail it in order to maximise the profit. In the company goods and services are not rare as
they could be offers by any other stores as well. As, they delivering proper services of goods to
its costumer with best quality. Employees are rare for the company as they were selected with
proper evaluation and many process. They were chosen with great skills and experience and will
be different from other organisation (Medková, Husák and Drašar, 2017). Distribution network
is rare and it is main reason of the success of company as it able to deliver its supply chain across
the country and maintaining the effectiveness of company. In the analysis the brand image is rare
from all competitors in the market and it is developed from many efforts and time and it is quite
3

rare among others. Some important ways through which company has developed its own brand
with objectives, goals.
Inimitable- This refers that it can not be copy by any other organisation and does not
pursue relevant resources. In this analysis the goods and services are not inimitable and can be
copy by other organisation as they are very similar in nature and will lead to bigger competition
to other competitors. They are normally accessed by some other companies as well and lead to
problem for the firm. Employees are not inimitable as they are different and company use certain
methods to select their employees and chosen accordingly. Brand image is not able to copy as
this unique on its own way and can not be follow by any other organisation.
Organised- This refers that resources which are organized and their capabilities are
assemble and can not be exploit easily. In the company goods and service are not organized
properly and could be analysed more accurately in order to satisfy the costumer's expectation.
Employees are also need to trained in more better way and should provide the training more
effectively (Perez-Franco, 2018). Distribution network is organised and properly delivering the
goods and services to its costumer to satisfy their need and requirement. Brand image is properly
organized and that stands out from other competitors and leads to success in the firm and will
provide the better experience to its costumers.
Analysing external factors that impact the firm
PESTEL analysis- It is an analysis of the external factors that impacts the working of the
business and it is done for Sainsbury in an elaborated and detailed manner below-
 Political- In this political aspect of a country comes like the stability of the government
and since the firm that is Sainsbury which is located in the UK have to analyse these
things in an impactful manner so that it can add to the value of the company in the long
run (Ramos, 2017). The main factor that comes in it is the Brexit which is the systematic
leaving of the United Kingdom from the European Unions and it added to the cost of the
products as import duty is hiked since UK is no longer a part of the EU nations.
 Economic- It includes economic aspect of a country like its GDP, employment rate, rate
of foreign reserves and inflation, etc. Due to Brexit there is a steep downfall of the GDP
of the UK since it is excluded from the other countries and it is on its own after it. Also it
gave rise to unemployment in the nation and as a result Sainsbury's sales and profitability
also declined.
4

 Social- These includes different changes in fashion, taste, and preference of the citizens
that are living in the society. Since people are shifting towards leading a healthy lifestyle
due to which there is an increase in demand for organic food. Thus Sainsbury must try to
carter the needs and requirements of the individuals so that it can add market value to the
firm.
 Technological- It includes change in technology, its advancement and up gradation and
since Sainsbury is operating mostly in the grocery sector. Thus it must use appropriate
technology so that it can increase and improve its sales which can help the company to
sustain in the market for a much longer time period as compared with its competitors that
are prevailing in the similar market conditions.
 Environmental- In this factors that are related with environment prospects comes in it
like reducing carbon footprints, using sustainable and renewable sources of energy, etc.
Sainsbury has done commendable well in this regard and also uses convention al sources
of energy that reduces pollution and also caters the needs and demands of the consumers
and that too in an impactful manner (Saagi, 2017).
 Legal- It includes various aspects that are related with the laws and legal things that are
formulated for the smooth functioning of the companies that are operating in the present
time. A firm must abide by all the legal terms, rules and regulations that are made so that
it cannot become a hurdle in the activities of the company. Sainsbury employs a team of
experts in this regard that analyse and examines all the aspects in a detailed and
elaborated manner so that hassle free working can be done which can help it in increasing
and improving its positing in the market.
Determining the Porter Five model
Porters five model will help in providing ascertaining the different aspect of competitive
advantages and will lead to adopt best way to determine the objectives and consider the
effectiveness of firm. For the company Sainsbury, this will help in determining he market itself
to identify potential rivals and threats through that company able to devise its marketing
strategies. Porter's five model below for the Sainsbury-
 Rivalry among existing competition- The threat of competition in the market of retail
sector is quite high in the UK. As there are different ways through which company can
use the better resources to achieve the goals and objectives to perform effectively. For the
5

company Sainsbury there are two main competitors such as Tesco, Asda that will lead to
big competition for the organisation (Somarathna, 2020). So they has to carefully
identified the strategies to ensure better services to costumer. For the company there are
many competition rivals and that impact their profitability and sustainability.
 Threat of new entrants- Though, there are many ways through which many new small
enterprises are entering into business and that will create a threat for the company. There
are many ways in which they are operating their new ideas and gives tough competition
to organisation. For the Sainsbury, there is high force against the company. Maintaining
the proper way of goods and services will be very important to decide the proficiency in
the long run and gives the makes it fruitful in serving the main choices to costumer will
help in removing different threats in market. Giving the main advantages were
monitoring the new entrants strategies and studying their reason and efficiency in the
company. This is important to identify the main entrants and company has well reputation
and goog image in market will help in regaining the competitive advantages. Some
important steps need to be taken to monitor bes way to tackle competition among new
entrants.
 Threat of substitute- This will build challenging environment for the company where it
make it difficult to tackle the competition. When new products or services than demands
are increasing accordingly. For the company Sainsbury, there is need to focus on high
quality of goods and services as it is necessary to provide service oriented rather than on
product based. In the company this will give strategies that will help in improving the
business tactics and will render the best possible output to enjoy competitive advantages
and make it more important to deal with the situations (Nakatsuka, 2017). There is no
threat for substitute as it is quite easy to deliver the buyer and making it necessary to
make mandatory requirements.
 Bargaining power of buyers- Buyers are important part of every organisation that
decide the profitability. As for the company Sainsbury, consumers are smaller and
powerful customer base that is higher and will impact in long run. This put high pressure
on the firm that need to consider the various ways to attract them in order to sustain the
profitability. This is important to identify the bargaining power of different buyer and
6

gives satisfaction among costumer with the goods and services to them and need to
identify the requirement to build best service to be the first way to provide best products.
 Bargaining power of supplier- The most common suppliers of companies of retailer
plays important role in deciding the sustainability and efficiency. This is necessary to
identify major supplier and for the company Sainsbury, the bargaining power of supplier
is low and this will lower going to impact the working of company as it has good and
better relationship with many suppliers. As this is easy for the organisation to decide
some suppliers in order to achieve the main objectives and goals for company and
maintaining the effectiveness. This makes easy for company to attract new suppliers to
supply the raw material that will lead to better growth and success in the firm as this is
necessary to develop this relationship with them to achieve the main goal and objective
and gives major benefits.
Reviewing organisation's strategy
To review the strategies and policies of company it is necessary to make proper review of
different methods and polices to fulfil the clear objective and goals. The main method used in
different manner and will lead success in the management process as in Sainsbury, company the
purpose, objectives, goals and mission and vision has been studied. The purpose of the company
is to manage the costumer expectation and enhancing the sales and growth. To analyse
competitor advantages the need to make proper identification of different factors and for that
Porter's five model is determine (Thorpe and De Oliveira, 2019). To analyse the external
environment that will influence the working condition of organisation and need to be identified
and for that PESTLE frameworks has studies and discussed external factors. To examine the
capabilities of resources of company the need to discussed and evaluating their effectiveness and
efficiency and that will be useful for organisation. This is important to analyse different
strategies and frameworks to study the main policies and rules that will be useful for company.
The application that is taken to review more appropriately the balanced scorecard frameworks is
used.
Objectives Measure Target Initiatives
Financial To achieve the
better financial
Financial
Statement
Increase the
profitability by
Taking into
consideration of
7

targets and ned to
increase financial
performance.
20% every strategies
and identification
of all polices and
methods.
Costumer
perspective
To satisfy their
needs and
requirement and
provide them with
best goods and
services. To
retain them for
longer period.
Number of
costumer in stores
Enhancing
average numbers
of costumer in
stores by 25%
Providing more
better experience
of purchasing.
Internal process To strengthen the
business
procedures and
rules that
facilitates in
achieving better
decision.
Analysis of
costumer service
report
Churn rate To regulate the
performance of
employees at
regular basis.
Learning growth To come up with
new technology
and development.
Designing new
product line and
services.
3 product line To enable
delivery service
more simple and
flexible.
CONCLUSION
From the above report it is concluded that strategy evaluation refers to determine the
management process more accurately and taking effective steps to take action. In this report the
purpose, objectives, goals, vision and mission has been studied to analysed their process. Apart
from to study competitive advantages Porter's five model has been studied and to determine
8

external factors PESTLE has been discussed. To analyse the effectiveness of resources VRIO is
being examined.
9

REFERENCES
Books and Journal
Deroba, J. J. and et.l., 2019. The dream and the reality: meeting decision-making time frames
while incorporating ecosystem and economic models into management strategy
evaluation. Canadian Journal of Fisheries and Aquatic Sciences. 76(7). pp.1112-1133.
Goethel, D. R. and et.al., 2019. Closing the feedback loop: on stakeholder participation in
management strategy evaluation. Canadian Journal of Fisheries and Aquatic Sciences.
76(10). pp.1895-1913.
Gupta, P.K. and Muhuri, P.K., 2019. Computing with words for student strategy evaluation in an
examination. Granular Computing. 4(2). pp.167-184.
Haltuch, M. A. and et.al., 2019. Unraveling the recruitment problem: A review of
environmentally-informed forecasting and management strategy evaluation. Fisheries
Research. 217 pp.198-216.
Hasantabar, V., Tashakkorian, H. and Golpour, M., 2019. Fabrication of chitosan based
magnetic nanocomposite by click reaction strategy; evaluation of nanometric and
cytotoxic characteristics. Carbohydrate polymers. 224. p.115163.
Keinemans, S., Kanne, M. and De Jonge, E., 2020, January. In Search of a Research Strategy:
Evaluation of an Ethics Program for Social Professionals Using Elements of the Most
Significant Change Approach. In Forum Qualitative Sozialforschung/Forum:
Qualitative Social Research (Vol. 21, No. 1).
Medková, J., Husák, M. and Drašar, M., 2017, May. Network defence strategy evaluation:
Simulation vs. live network. In 2017 IFIP/IEEE Symposium on Integrated Network and
Service Management (IM) (pp. 81-88). IEEE.
Nakatsuka, S., 2017. Management strategy evaluation in regional fisheries management
organizations− How to promote robust fisheries management in international
settings. Fisheries Research. 187. pp.127-138.
Perez-Franco, R., 2018. A proposed set of criteria for supply chain strategy evaluation. Supply
Chain Management and Logistics in Latin America: A Multi-Country Perspective, p.9.
Ramos, A. M. B. M., 2017. Reproductive strategy evaluation of mussel Mytilus galloprovincialis
produced in longlines in two areas of Algarve coast (Doctoral dissertation).
Saagi, R., 2017. Benchmark Simulation Model for Integrated Urban Wastewater Systems: Model
Development and Control Strategy Evaluation (Doctoral dissertation, Lund University).
Somarathna, K. U. S., 2020. An agent-based approach for modeling and simulation of Human
Resource Management as a complex system: Management strategy
evaluation. Simulation Modelling Practice and Theory, p.102118.
Thorpe, R. B. and De Oliveira, J. A., 2019. Comparing conceptual frameworks for a fish
community MSY (FCMSY) using management strategy evaluation—an example from
the North Sea. ICES Journal of Marine Science. 76(4). pp.813-823.
10