Business Report: Sainsbury's Planning for Future Growth Strategies

This report analyzes Sainsbury's growth strategies, focusing on key considerations such as PESTEL analysis to assess macro-environmental factors. It explores the Ansoff Matrix, including market penetration, product development, market development, and diversification strategies, with product development being highlighted. The report also examines various sources of funds, including retained earnings, bank loans, and debentures. Furthermore, it covers the importance of a comprehensive business plan and discusses exit options for the company. The report provides insights into Sainsbury's strategic planning for future growth and profitability, evaluating the different methods that the organization can use to attain its goals and objectives.

Planning for
Growth

Contents
INTRODUCTION...........................................................................................................................................3
TASK 1..........................................................................................................................................................3
P1: Key considerations for growth...........................................................................................................3
P2: Ansoff Matrix.....................................................................................................................................4
P3: Sources of funds................................................................................................................................5
TASK 2..........................................................................................................................................................7
P4: Business plan.....................................................................................................................................7
TASK 3..........................................................................................................................................................9
P5: Exit options........................................................................................................................................9
CONCLUSION.............................................................................................................................................11
REFERENCES..............................................................................................................................................12

INTRODUCTION
Planning for Growth refers to a strategic activity which is undertaken in order to ensure
that the short-term, medium-term and long-term goals and objectives can be attained in the future
(Cleave and Arku, 2020). Thus, it becomes quite essential that the organizations are able to make
the use of this strategic activity to be able to manage their plans so that they can attain a much-
required strategic and competitive edge over the competitors in the market. This can lead
towards an enhancement in their overall level of profitability. Thus, the management of the firms
is required to put its focus on ensuring that the attainment of higher-level of growth can be done
in the future. For this report, Sainsbury’s has been chosen. It is a British Company which
provides retail products to the customers in the market. In this assignment, a detailed and specific
focus will be made on the different types of ways which can be used by the organizations in
order to attain growth in the future so that they are able to attain their particular goals and
objectives in the future.
TASK 1
P1: Key considerations for growth
It is important for the organizations that they evaluate the different types of key
considerations so that they are able to attain a higher-level of growth in the future (Donoso-
Correa and Sarmiento, 2020). Therefore, Sainsbury’s is required to make sure that it makes the
use of PESTEL analysis for this particular purpose which will be thus helpful for it to be able to
assess the macro-environmental factors in a proper manner. The analysis can be used as follows-
PESTEL analysis-
Political factors- These are factors which create an impact on the organizations because
they have to consider the political situation of the country where they are operating. This is quite
important so that the companies are able to make sure that they make the use of the appropriate
methods and techniques to increase their overall sales revenues and thus attain their goals and
objectives. Sainsbury’s has to make sure that it considers the political situations of the country
where it is operating which will help it to be able to maximize its overall efficiency and
effectiveness and attain the goals and objectives.
Economic factors- These are the factors which can be considered as important because
the economic goals and objectives are required to be attained in the future and therefore it is
quite crucial that the consideration should e given to these factors which will thus help a lot in
ensuring that the companies are able to alter their strategies to attain a higher-level of
profitability in the future. Thus, Sainsbury’s is required to make sure that it provides a much-

required consideration to these factors which will be quite helpful in ensuring that the attainment
of the goals and objectives can be done in a proper manner.
Social factors- It is also important that the organizations are able to consider the
influence created by these factors because the society’s needs and requirements keep on
changing and therefore it becomes quite important that the adjustments are made in a proper
manner with these changing needs and requirements which can be quite helpful in the future. For
an organization like Sainsbury’s it is thus quite important that the social goals and objectives can
be attained by altering the strategies and meeting out the needs and requirements of the people in
the society.
Technological factors- It is crucial that the firms are able to make sure that they can
adjust themselves according to a change in the technology which can be quite crucial for them to
be able to make sure that they can attain the relevant technological goals and objectives in a
proper manner effectively and efficiently. This will be quite helpful in ensuring that the use of
technology is made so that the maximization of the profitability level can be done. Thus, it
becomes quite important for an organization like Sainsbury’s that it is able to adjust its products
according to the changing technology which will help it a lot in order to gain a competitive edge
over the competitors in the market.
Environmental factors- It is important for the organizations that they consider the
influence which is created by the environmental factors. This is so because this will be quite
helpful for them to ensure that their products and services comply with the environmental rules
and regulations of the Government. In an organization like Sainsbury’s, it is quite important to
ensure that the influence of these factors can be checked which will help a lot in ensuring that the
environmental goals and objectives can be attained effectively and efficiently in a proper
manner.
Legal factors- The organizations are required to ensure that they give an appropriate
consideration to the legal rules and regulations of the country where they are conducting their
business activities. It is quite important because this helps them to be able to sustain in the
market of that country and thus progress further. Therefore, for an organization like Sainsbury’s,
it is important that the legal rules and regulations are followed and thus a strategic and
competitive edge can be obtained over the competitors in the market.
P2: Ansoff Matrix
Ansoff Matrix is a strategic tool which is used by the organizations to be able to
determine the strategy which they can adopt in the future for the purpose of attainment of a
higher-level of growth in the future (Freire Trigo, 2020). Therefore, it is quite necessary that
Sainsbury’s makes its use which will help it to be able to identify the strategy which can adopt in
the future for the purpose of attainment of a higher-level of growth in the future. Therefore the
strategies according to this matrix are explained as follows-

Market penetration- This is a strategy in which the organizations put their focus on
ensuring that they are able to increase the sales of their current products and services in the
market and therefore make sure that they can have a higher market share. This is thus a useful
strategy which helps the organizations in ensuring that they are able to enhance the overall level
of revenues and profitability quite effectively and efficiently. Therefore, Sainsbury’s can make
sure that it uses this strategy to be able to ensure that it can target an increase in the market share
through focusing on increasing the sales of the existing products and services.
Product Development- This is a strategy in which the organizations put their focus on
ensuring that they are able to make the use of Creativity and Innovation and thus create new
products and services which can satisfy the diverse needs and requirements of the customers in a
proper manner. Therefore, Sainsbury’s can make sure that it makes the use of this strategy to be
able to ensure that it can bring in new products and services and can attain the goals and
objectives related with increase in the profitability in the future. In this way, a strategic and
competitive edge can be obtained over the competitors in the market without facing any kind of
problems and issues. Thus, it can be said that it is quite a useful strategy which can be used.
Market Development- In this strategy, the market in which the organizations can enter
in order to be able to attain a higher-level of strategic growth in the future can be identified and
thus this can be quite useful in ensuring that the market can progress in a right manner.
Organizations like Sainsbury’s are required to ensure that they make its use to be able to enter
into a market where a higher-level of strategic growth can be attained. Thus, it is required from
the managers of the organization that the identification of such a market is done and therefore the
implementation of plans related with entering such a market can be done.
Diversification- This strategy focuses on ensuring that the organizations are able to enter
into a new market with new products and services. Therefore, this gives them a good chance
through which higher-level of growth can be obtained in the future. In Sainsbury’s, it is quite
important that the use of this particular strategy can be made so that the company is able to
identify the market in which it can enter with new products and services so that higher-level of
profitability can be obtained by it.
Justification- The use of Product Development strategy can be made by Sainsbury’s so
that it is able to make sure that it can bring in new products in the market and is able to attract the
new customers through the innovation which it is bringing in these new products which will help
it a lot in attaining the goals and objectives in the future.
P3: Sources of funds
There are various types of sources of funds which are available for the organizations
which they can use so that they are able to maximize their growth potential and make use of the
available growth opportunities (Dykusova and Golovina, 2020). Sainsbury’s can make the use of
these sources of funds-

Retained Earnings-
This is a method through which the organizations are able to hold back a certain portion of their
overall profits so that it can be used in the future (Faraji, Hashemi-Dezaki and Ketabi, 2020).
Therefore, Sainsbury’s has an advantage in making the use of this method because this will help
it a lot to be able to attain the future goals and objectives quite properly.
Advantages-
 It is one of the cheapest sources of financing and thus in this way is able to make sure
that the organizations can get the appropriate funds at lower costs.
 It is a source which provides a much-required financial stability to the organizations and
thus is able to ensure that they can manage their funds in a proper manner effectively and
efficiently.
Disadvantages-
 Using this source can result in improper utilization of the funds and thus in this way can
create quite an impact on the organizations and can create a particular level of impact on
them.
 When the use of this source is made it leads towards lower rate of dividend for the
shareholders. Therefore, in this way this can affect a lot of people.
Bank Loan-
It is a method through which the funds can be obtained for Short-term, Medium-term and
Long-term needs and requirements from the Bank at a certain percentage of Interest
(Freire Trigo, 2020). Therefore, in this way it can be said that for an organization like
Sainsbury’s it is highly important that the use of this source can be made so that the
company is able to get the appropriate amount of funds which can help it to sustain in the
market and also target a higher-level of growth in the future quite effectively and
efficiently.
Advantages-
 There can be an easy procurement of the amount of loan when this method is used by the
organizations and therefore this therefore helps the Businesses a lot.
 The interest which is paid on the Bank Loan is tax deductible expenditure.
Disadvantages-
 Some of the Bank Loans have a prepayment penalty and therefore in this manner can
create a particular level of impact on the organizations.
 There can be a decrease in the Cash Flow in the organization when too much borrowing
is made from the Bank which can affect it a lot.

Debentures-
This is a method through which the funds can be raised from the General Public by
issuing them a Debt Instrument which is called as a Debenture (Hersperger, Grădinaru
and Siedentop, 2020). Therefore, Sainsbury’s can consider making the use of this method
so that it is able to ensure that it can attain its future goals and objectives in quite a proper
manner.
Advantages-
 It is often used to fulfill the long-term funding needs and requirements of the
organizations and therefore can help them in realizing their growth potential in quite an
effective manner.
 It is useful because it does not reduce the existing share of equity of the shareholders.
Therefore in this way it can create an advantage for the company.
Disadvantages-
 The use of this particular method leads towards a lack of flexibility for the organizations
and therefore creates a lot of impact on them. Therefore it can be said that this leads
towards a disadvantage for the companies.
 There is a reduction in the control on assets by the management of the organizations in
some cases. Thus in this way this leads towards the creation of a disadvantage.
Justification- The use of Bank Loan is recommended for Sainsbury’s so that it is able to
make the use of the available growth opportunities in the future. In this way, it will be
able to make sure that it can attain its future goals and objectives in a proper manner and
thus maximize the earning potential in a right manner.
TASK 2
P4: Business plan
Business plan refers to a document in which an organization is able to make sure that the
blueprint of a particular Business Idea or an Idea related with Innovation can be explained in
detail (Holdsworth, 2020). Therefore, Sainsbury’s is required to frame it to be able to ensure that
it can manage out its Business needs and requirements in a proper manner.
Scenario- Sainsbury’s is planning to bring new toy range for Children. The toys in this
toy range will be highly innovative and will be made using the new technology so that the
Children are attracted and the overall revenues and profitability can be enhanced.
Business Plan
Particulars Details
Executive
Summary
Sainsbury’s is planning to bring in a range of new toys for the Children. The toys
in this range will be able to satisfy the wide range of needs and requirements

which are related with the Children and thus will be able to meet out their needs
and requirements.
Vision To be the most trusted retailer where the people love to work and shop.
Mission To be the first choice of the consumers for food, delivering products of
outstanding quality and great service at a competitive cost through working
‘faster, simpler and together’.
Marketing
Mix
Product- Innovative Toys will be launched so that the Children are able to learn
and grow by playing with them and are able to enhance their abilities in
Childhood.
Price- Competitive Pricing will be used so that the company can attain a strategic
and competitive edge over the competitors in the market.
Place- The company will make sure that it targets customers all over UK through
these innovative products which will help it in enhancing its sales and profitability
level.
Promotion- The company will make sure that through making the use of the
promotional strategies and methods it is able to attain its particular goals and
objectives and can maximize its profitability level in a proper manner.
STP
framework
Segmentation- The targeted customers will be segregated in segments so that a
strategy can be made to target them in a proper manner.
Targeting- The targeting of potential customers has to be done so that the
maximization of sales revenues and profitability level can be carried out.
Positioning- The positioning of the goods has to be done by ensuring that they are
placed in such a manner so that they can maximize the earning potential for the
company in a proper manner.
Competito
r analysis
Tesco is the main competitor of Sainsbury’s. Therefore, it has to be ensured by the
company that it makes use of the appropriate methods and strategies so that it is
able to attain a strategic and competitive edge over Tesco which will be helpful for
it in attaining sustainable level of success in the future.
Budget Particulars Amount(In Pounds)
Admin Exp. 30000
Marketing Exp. 10000
Promotion Exp. 2000
Controlling and Monitoring Exp. 3000
Other Exp. 5000
Total 50000

TASK 3
P5: Exit options
There are different types of exit options in front of a Business which can be considered
by it so that it is able to wind up its operations (Kroen, 2020). The Businesses are required to
assess the exit options because they should select the exit option which offers them the best value
for their Business and therefore provides them with higher amount of money. Thus, it is
necessary that the Advantages and Disadvantages of all the options are considered by the
Businesses which will be helpful for them in performing a thorough assessment of all of these
options in a proper manner. Thus, it is the responsibility of the management of the Businesses
that it is able to assess these particular options which will help the Business a lot. The exit
options which can be considered are explained in the following manner-
Merger-
In this option, a Business merges with another one and therefore in this way closes down
its operations (Lang, Deng and Li, 2020). This is the best option which can be used for selling
the business. Therefore, this offers good value of investment made to the Business.
Advantages-
 More value for the assets can be offered to the Businesses in this particular option which
can therefore create a lot of benefit for them (Mehrotra, 2020).
 Big Companies often tend to use this option to purchase Small Companies and therefore
in this way this offers more value of the Business for the Small Companies.
Disadvantages-
 It is a complicated process and it involves the analysis of the different types of rules and
regulations which have been framed by the Government and therefore this can create an
impact on the Businesses.
 Sometimes there is a lower value of business which is offered when the merger is done
and therefore this can affect the Small Businesses.
Acquisition-
In this option, a Business is able to get the appropriate value of its assets by allowing it to
be acquired by another Business (Mobin and Hijawi, 2020). Therefore, it is an option
which can provide appropriate value to the Businesses quite effectively and efficiently.
Advantages-
 There are higher chances of getting a better value of the Business when this option is
used (Pan and et.al., 2020).
 In this option, the price at which the Business will be sold is decided by the Seller.
Therefore, in this way it is possible to get a better value of the Business.

Disadvantages-
 If a Business only wants to partially sell its stake, then this is not the right option for it
and therefore this can create a disadvantage for it.
 It is a complicated process which involves an analysis of the different types of legal rules
and regulations.
Liquidation-
In this option, a Liquidator is appointed who assesses the overall value of the Business
(Ravindra, 2020). Therefore, when the organizations make use of this particular option to
sell their business they have a chance of getting a higher value of their Business and
therefore this option can be adopted by them.
Advantages-
 With the use of this option, the Businesses can get a better value because in this option a
Liquidator is appointed to value the Business.
 This option is helpful as it is less complex as compared to the other options and therefore
can be used by the Small Businesses.
Disadvantages-
 It is a time-consuming option which can consume a lot of time and therefore in this way
can affect the Small Businesses a lot.
 It is an option in which requires the organizations to incur higher-level of expenses.
Therefore this can create a disadvantage for the Small Businesses and can create an
impact on them.
All the above options are useful for the Small Businesses and therefore it becomes quite
important for them that they are able to consider the impact of all these options before
finally selecting the best option which can be used by them to be able to exit from their
Business. Therefore, in this way it can be said that the Small Businesses are required to
assess each possible option before they are able to ensure that they can select a right
option which will help them a lot to get a better value of the Business highly effectively
and efficiently.

CONCLUSION
From the above report, it can be concluded that Planning for Growth is a strategic activity
which can be highly useful in ensuring that the overall strategic goals and objectives can be
attained by the Businesses in a proper manner. It is required from the organizations that they are
able to make sure that they can consider the impact of all the options so that they can identify the
best strategy to be adopted by them for the purpose of growing in the future and ensuring that the
attainment of a strategic and competitive edge over the various types of competitors can be done
quite effectively and efficiently which will help the Businesses a lot in ensuring that their overall
profitability level can be enhanced and thus the attainment of the future goals and objectives can
be done in a proper manner by them in the future in a proper way.

REFERENCES
Books and Journals: