BA Business Studies: Sainsbury's Global Strategic Management Report

This report provides a comprehensive analysis of Sainsbury's global strategic management, examining both internal and external factors that influence the company's performance. It delves into Sainsbury's current strategies, including product differentiation, cost management, profit maximization, a...Read More

Global Strategic
Management

Table of Contents
INTRODUCTION ..........................................................................................................................2
TASK ..............................................................................................................................................3
Explain Internal and External Factor to implement current strategies........................................3
Internal analysis of Sainsbury.....................................................................................................5
SWOT Analysis...............................................................................................................................5
External analysis of Sainsbury....................................................................................................6
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Global marketing strategies is tool that a company can use to expand into a international
market. In simple words, a strategy that contributes in the success of an organisation. It is a
detailed plan that are formed to set short term and long term objectives to sustain organisational
goal. It is believed that business environment is uncertain and dynamic so in order to deal with
adverse situation, it is important for an organisation to make better plans and policies to ease the
mode of doing business. Global marketing strategy is a key to success of an organisation.
International trade and investment is growing rapidly due to which competition is increased in
the competitive market. These strategies contributes in coordinating the activities of an
organisation (Bell and et.al., 2018). It helps to utilise the available resources and avoid wastage
in order to minimise cost of production. The advancement of technology and innovative ideas
increase the efficiency of organisation and helps them to survive in the competitive market. The
organisation chosen for this report is Sainsbury, situated in United Kingdom. It is well reputed
supermarket chain that offers fresh food product and quality services to their consumers.
This report will analyse the existing strategy that contributes in success of an
organisation. Further, it will examine the internal and external factor that will improve the
current market position of an organisation . It will discuss about the contemporary strategic
issues and growth theories that contributes in success of an organisation.
TASK
Explain Internal and External Factor to implement current strategies.
There are various internal and external factors that play significant role to manage all
the crucial activities of an organisation. It analyse the performance and market situation that may
affect the growth of business. In relation to Sainsbury, they have adopted the current global
strategies that enable the company to diversify their business and attain sustainable growth.
External Strategy of Sainsbury
Here, current strategies has been discussed in detail are mentioned below:
Product Differentiation Strategy: It is a marketing strategy that are used to distinguish the
company's product and service from other companies. This strategy bring uniqueness and
novelty in the product in order to establish brand loyalty and value in the market. It is used to

target the large base of consumers. In context to Sainsbury, they are providing quality product
and services to gain competitive advantage and build brand awareness in the market (De
Roche2021.
Effective Operating cost: It is a cost incurs for running day to day operation of business. It
refers to essential business cost such as electricity cost, petty expenses, repairing cost etc. It is
important for an organisation to reduce their operating cost in order to increase short term profits.
In context to Sainsbury, they are using cost effective method to minimise the extra cost that may
affect the functioning of an organisation.
Flow of Income: It is very important strategy that are focused on inflow and outflow of cash of
organisation. In order to ensure proper flow of cash, the company is followed the effective
business plan to manage their funds. In context to Sainsbury, they strategies their profit by
accumulating their funds into small investments in order to avoid future uncertainties in the
business environment. It is an effective tool to deal with dynamic business culture. It increase the
asset of an organisation (Dogu and Albayrak 2018).
Maximise the profit: It is very important to use such strategies which will generate higher
revenue and profit of an organisation. The effective plan and polices contributes in achievement
of higher profit and growth in the global market. In context to Sainsbury, it is the largest
supermarket chain in UK and successfully running their business. The allocation of resources
and funds helps the company to sustain in the competitive market. The innovative approach as
used by the Sainsbury, helps to maximise their profit to survive in the market for a long run.
Technology: it is one of the crucial tool which increase the efficiency of an organisation. It
reduces the efforts of employees and increase the production level. Updated technology and
innovative technique helps the company to survive in the global market. If company fails to
adopt advanced technology , then it becomes very difficult for them to survive in the competitive
market. In context to Sainsbury, they are processed their food products by using innovative
technology to bring novelty and creativity in product (Fang and Fu2020).
Core Values: An organisation is running successfully due to its employees and management. It
is very important for the organisation to direct and guide the valuable employees who are
committed and dedicated for an organisational work. Human resource are the important asset for
an organisation as their contribution is the main reason for the growth of business. In context to
Sainsbury, the employees are highly valuable for diversification of their business. They have

highly skilled work force which applies their knowledge and abilities for the achievement of
desired goals (Helmold and Samara2019).
Internal analysis of Sainsbury
SWOT Analysis
It is an important analysation that examine the internal factor to pre determine the
opportunities to grow business in the competitive market. It also defines the weaknesses that
requires to overcome by using strategic plans and policies. In context to Sainsbury, the SWOT
analysis is done to identify the various aspect that will help an organisation to grow their
business in a global market.
Strengths Weaknesses
 Strong Branding: In context to
Sainsbury, they are largest retailing
store in the UK and diversified their
business in various international
market.
 Experienced leadership team: The
main reason for the success of
Sainsbury, is effective leadership style
that are used to encourage and direct
the team towards the achievement of
organisational goal. They employees
are highly motivated and skilled due to
which employees are highly motivated
(Jamolovna 2021).
 Rising in food prices: The rise in
prices of product affects the purchasing
power of consumer. Consumer are not
able to afford the product at higher
price and leads to negative impact on
growth of business.
 Stiff competition: There are many
other retail store that are increasing the
competition for the Sainsbury and due
to which growth rate is highly affected .
Opportunities Threats
 Joint Venture and Partnership: In
context to Sainsbury, it is a great
opportunity for them to use succession
 Globalization: It is a biggest challenge
for the Sainsbury as globalisation has
increased the stiff competition in

strategy in order to enhance their
production level by collaborating with
other companies through joint ventures
and partnership. Partnership will helps
them to increase the share of their
business and use the funds t raise
capital of an organisation.
 Upgradation of Technology:
Sainsbury must emphasis on use of
updated technology to increase the
production and sales of their business.
It is a great opportunity for them to
focus on innovative products to attract
the large base of consumer retain in
the competitive market for a long run
(Kasemsap2018).
global market. The dynamic business
culture creates barrier in expansion of
retail store.
 Government policies: The change in
various government rules and norms
increase the difficulties of Sainsbury.
The change in taxation polices, trade
tariff, export and import duty etc.
enhance the burden over the business.
External analysis of Sainsbury
PESTLE analysis
It is a tool which is developed to identify and evaluate the external factors of a business
organisation. It is a strategy which assist in acknowledging the functioning of a business that
how efficiently and effectively a business can perform considering the external factors. PESTLE
analysis of Sainsbury are discussed below:
Political : It covers government directives and framework or policies which regulates the
business conduct. For instance, taxation, octroi, tariffs , restrictions , commercial licence etc are
covered under this factors. Politics is a process by way of which government collectively decides
the rules of the society and it incudes businesses too. All the countries across world has their
own rules and regulation which regulates the trade. All the companies are covered under the
legal framework on business. Therefore it is essential to comply with the rules and regulation of

the nations and failing to comply may attract huge penalties on the company(Kumar and
Ramachandran2018).
Economical: Economy is the foundational base of an organisation. Strong financial base always
keep a company strong. The facets cover in economical factor is financial related matters such
as , rate of interest, tax rate, inflation, GDP, global trade, and other related matters which affects
organisational revenue flow. In the same way, Sainsbury needs to keep update about the
monitory and economic changes and alterations with the view to keep business safe from any
changes. Companies are often has an apprehension about the changes in tax policies and the
inflations which might affect the business negatively.
Social: this factor pertains to social order and behaviour of community at large and determines
the current trend prevailing in market. With the help of this tool a company can identify the
market gaps which are required to fulfil. By acknowledging the customer demands and tracking
the current trend , companies can take appropriate measures to meet the customer demands.
Market is dynamic and keeps changing due to flow of different products and competition. A
company can track the changes and take such changes as an opportunity to fulfil the gap in the
market(Williams2018).
Technological: This factor pertains to reform and development by adopting contemporary
measures including innovation and sustainable development in automation sector. Sainsbury, is
the leading supermarket of food products which provides delivery services to its customers . It
neds to adopt latest technology which helps in providing easy access to its customer. It can
develop its digital application which enable customers to make direct digital connection which
enables them to shop from their homes.
Legal: laws are essential for civilization, they must be imposed with resolute firmness. There
are various laws which are enforced to regularised business organisation and their conducts. All
organisations are covered and regularised under a mercantile laws which prevents giant
organisation from misconduct. In the same way, Sainsbury is not an exception, it also falls under
several laws and neds to comply with the laws (Roth,and et.al., 2018) .
Environment: There are various environmental laws which are strictly imposed with the object
to prevent and preserve the ecology of the nature. Sainsbury, needs to follow and implement
environmental law with care and cautions. They need to follow measures to reduce waste.
Pros and cons of exiting strategy of Sainsbury

PROS
Sainsbury is la leading and famous supermarket which has established its foot deeply in
major markets. They claim to provide top quality food products to their customers along with
delivery services. The price of their product is also reasonable and friendly to the customers
which attracts ,more customers to shop. They even provide different schemes, offers and
discounts on various occasions which influence customers to buy more. Overall, Sainsbury has
created its market value and presence strong which makes them trustable in comparison to other
supermarkets.
Cons
No company is absolute free from cons, there exist some factors which affects the
company reputation relating to their products or services. In the same way, Sainsbury too is no
exception in this case, there are instances when company is alleged for poor quality of products
and services. The management of Sainsbury sometimes show negligence and upset the customers
which affects the company negatively. Therefore, to curb and prevent this negligence , company
needs to employ active staff and mangers to manage the sells and check the quality of its product
and services.
Recommendations for improvement of exiting strategy
Following are recommendation and strategies for Sainsbury to improve its market presence:
 Competition in industry: Industries must attempts to bring new segment in the market
which is more sustainable and customer friendly with the help of innovation and
technology to built strong market presence. The network and marketing of a company
shroud be strong to maintain the buzz in the market.
 Threat of new entrant: Sainsbury is a strong entity and has strong market coverage and
stand parallel in line of other competitors. However, there are instances where new
competitor emerges and takes over the market with something new and destroys the
market of existing business . To avoid and compete with such competitors , Sainsbury
needs to invest more in innovation and marketing to keep the momentum going. It needs
to focus on customer preferences to meet their satisfaction. In this way Sainsbury can
survive the competition.
 Power of supplier: Suppliers are the agents of a company who creates network for
supplying the products to targeted market. Their role is significant to maintain the supply

and demand. In the same way,Sainsbury needs to make strong network with its suppliers
and create a chain which smoothly balance the outflow of products.
 Threat of Substitute product: Market is a place where activities of selling and buying
takes place. Its a constant practice , new products similar to other products of different
companies is the substitute product . The survivability of a substitute product depends on
its quality and its brand. In case of Sainsbury, it needs to keep its product fresh and
organic.
Different contemporary strategic issues
There are various contemporary business and management issues which affects the business
operations. To prevent this crisis some strategies and measures need to be adopted. They are as
follows:
 Technology: The world has set its foot in the technology driven era. Its a tool which
make all thing easy and fast. Technology is effective and nearly all the businesses across
the world has adopted technology to enhance their business. Technology helps in
innovation which enables companies to create something different and compelling. The
process of innovation begins from critical research and development which opens ways
to built new products. Sainsbury, needs to take use of technology and expand its business
by improving quality of its product and services with the aid of the technology.
 Environment: It includes natural ecology and surrounding in an environment.
Environment is vital and uncertain. Environmental uncertainties can majorly affect the
business. Therefore it is necessary to monitor the factors relating to environment such as
weather conditions, rain forecasting etc. in order to prevent the business from natural
disaster. Measures and strategies like emergency services, and skilled experts who can
combat with situation needs to be followed.
 Politics: Pertains to governance and authority in the form of laws, rule,regulations and
orders which are imposed on the land to govern internal affairs of a nations. There are
laws which regulate the business organisations to prevent misconduct. In the same way ,
Sainsbury falls under the business law and its entire business faculty covers under the
governance.
Porter's Five Force Model:

The forces of Porters model will help Sainsbury to evaluate the business structure in
growth and development in merchandising industry.
First, the expected threats in supermarket merchandising industry must be established to identify
the competition in the market. Such threats can be curbed soon after establishing the risk and
start taking necessary remedies such as , reducing the price of products. To maintain the compete
ion in market against new entrants. Sainsbury is the supermarket merchandise which has many
existing competitors , it needs to keep track on the operations of its prevailing competitor along
with new competitors as well to sustain in the market competition.
Second, in merchandise industries the bargaining capacity of supplier in food products plays
major role in controlling the revenue of Sainsbury. The suppliers if having a upper hand
bargaining capacity , they will eventually pull out decent amount from the Sainsbury. This will
benefits the company to achieve higher growth in merchandise industry.
Third, the threat which apprehends most companies is substitution of product in merchandise
supermarket industry. In case of Sainsbury, it needs to remain vigilant by making strong
network with its distributors, and track the market activities in respect of product and services.
Fourth, buyers are the lifeline of market , without buyers no market can survive. Buyers are
diverse and they tend to bargain at time of purchasing. Sainsbury will less likely to affect the
bargaining traits because it offers its product at fixed price. Sainsbury can avail different
schemes and discount to its customer to bring down the trend of bargaining.
Fifth, there is always business rivalry among the businesses of a same segment , the rivals always
tend to persuade to bring their market presence better than its rivals by offering range of schemes
and offers to counter the market of its rivals.. business competition always brings stress to the
owner because tough competition can bring down the sales and profits of a company. In the
same way, Sainsbury needs to offer the best market segment product to counter the its rival.
Sainsbury supermarket should strictly y follow and adopt the relevant measures suggested in the
Porters model to avoid the apprehensions of competition in the market and remain focused on its
goals and quality of product to counter risks (Woodward and Vea2019)).
Blue Ocean Model:
Its a model to enhance management and leadership which assist in developing new routs
and ideas for business expansion instead of focusing on competition . Blue ocean model suggest
to improve the existing deficiencies in the business and adopt effective measures to evade crisis

and issues which affect the business. Similarly, Sainsbury needs to improve its marketing
strategies and internal business environment to counter market competition. This model will
help Sainsbury to create its space and identity in the competitive market (Xiao and et.al., 2020. ).
CONCLUSION
From above extract, it is sufficient to conclude that contemporary business organisation
can evaluate and identify their performance and status in prevailing market. Further, businesses
can also create opportunities for expanding their business operations locally and globally. In
order to expand and track competition in market Sainsbury has adopted various strategies for
enhancing business operations and counter market competition. These measures and strategies
will help Sainsbury to critically examine and identify strengths and weaknesses. This report has
covered the implementation of strategies affecting external factor such as political,
economic,social,technological,legal and environmental. At last the Porter's five forces model
along with blue ocean model suggestions to assist in supermarket merchandise growth .

REFERENCES
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