Business Strategy Report: Sainsbury's Market Position

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Business strategy

TABLE OF CONTENTS
Introduction......................................................................................................................................1
Task 1...............................................................................................................................................2
a) Define business strategy..........................................................................................................2
b) Analyse the impact PESTLE influence on the organisation...................................................3
c) Conduct stakeholder’s analysis for the organisation...............................................................5
Task 2...............................................................................................................................................7
a) Analysing the strategic capabilities using the VRIN/VRIO framework.................................7
b) Conducting a SWOT analysis for the organisation.................................................................8
Task 3.............................................................................................................................................10
a) Evaluate the competitive forces within the organisation’s sector using Porter’s Five Forces
model.........................................................................................................................................10
Task 4.............................................................................................................................................12
Suggest plausible strategic directions available to the organisation using Porter’s Generic
Strategy or Bowman’s strategic clock as a framework.............................................................12
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

LIST OF TABLES
Table 1: Stakeholder’s analysis of Sainsbury..................................................................................5

Introduction
Strategies are the set of action or direction that will support organisations to enhance their
current position in the market. This report will analyse business strategies in the context of
Sainsbury, which is the leading supermarket chain of the UK and attain high competitive
advantages. The report will analyse external and internal factors which influence the Sainsbury
business strategies. The report will also focus on the current competitive forces of Sainsbury,
which may hinder its strategies but the report will provide recommendations to overcome the
negative impact. A further report will also provide strategic plan through which Sainsbury can
improve its brand position in the market.
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Task 1
a) Define business strategy
Business strategy is considered as the set of directions or course of actions that assist the
managers and leaders for achieving the specific objectives of the business. Business strategy is
the master plan, which helps the organisation to manage the use of the resources for achieving
the competitive benefits in the market. The organisation designs business strategy for conducting
the proper and effective planning to achieve the business opportunities, overcome challenges and
threats, gaining market growth and mobilising the resources. Strategies for the business are based
on the structure, mission, vision and objective of the organisation so that proper direction
towards the final goal will be received (Anwar and Hasnu, 2016). Current section will discuss
the business strategy in the context of Sainsbury’s for which following is the mission, vision and
objectives of the organisation:
Mission and Vision of Sainsbury’s: Vision of Sainsbury’s is to get trusted retailers so that they
will hire people who love to serve its services. The mission of Sainsbury’s is to provide quality
of grocery products and services to customers for satisfying their needs and expectations.
The objective of Sainsbury’s: Sainsbury’s objective is to select the strategy which will support
its business functions and operations for achieving mission and vision of the business. The
organisation objective is to focus on its digital marketing and pricing strategies.
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b) Analyse the impact PESTLE influence on the organisation
Sainsbury’s introduction
The organisation is the multinational brand based in the UK and has 1415 supermarket stores in
many locations. The current market share of Sainsbury’s is 16.9% as the supermarket in the UK
and provides grocery and food items. It is estimated that Sainsbury’s revenue in 2018 is around
£28.456 billion. 186,900 employees are working with Sainsbury’s to provide their services all
around the world so that the customer base and market share will be increased (Sorrentino et al,
2018).
Mission, vision and objective of Sainsbury’s are discussed in the above section which helps the
organisation and its team to select the effective and appropriate business strategies. Addition to
this, external macro-environmental factors will sometimes influence the business strategies of
Sainsbury’s, so it is essential for the management team of Sainsbury’s to analyse these factor’s
impact on the organisation business strategy.
Political factors influence the trading strategies, tariff rate and import/export strategy of
Sainsbury’s, which create an impact on the current strategy of the business. Policies and
procedures framed by the UK government regarding currency rate, restriction on import or
export or barriers on trading will influence the managers and owners to change their decisions.
The economic factor is mainly influencing the current pricing strategies of the organisation
because they need to set prices of its product and services as per the financial condition of the
UK. Due to Brexit, the financial and economic condition of the UK get disturbed and that creates
pressure on the existing organisations to reduce the prices of its products (Sainsbury’s PESTEL,
2019). This will influence the profit margin of Sainsbury’s and create an impact on the pricing
strategies of the business.
Social factor focuses on the social aspect because it is essential for multinational organisations
like Sainsbury’s is to analyse the expectations of people from its products. As per the UK
government organisation need to conduct Corporate Social Responsibilities activities to meet the
social needs of society. This social factor also influences the internal strategies of the business so
that customers will get satisfied with its services.
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The technological factor is the most influencing factor currently because it becomes essential for
all the multinational organisations, including Sainsbury, to provide online services in the market.
The requirement of the e-commerce website for providing online shopping services to customers
is the key factor that influences the current strategy of Sainsbury as they need to move towards
new technological services apart from traditional services (Nandonde, 2019). Digital marketing
is also covered under this factor which will help Sainsbury to get connected with its targeted
audience easily.
Environmental laws and regulations are framed by the UK government for the leading brands so
that they can take actions for protecting the environment. Sainsbury need to reduce factory
wastage during production and take actions for reducing the industrial waste material to protect
the environment from the scarcity of the resources.
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c) Conduct stakeholder’s analysis for the organisation
Table 1: Stakeholder’s analysis of Sainsbury
Sainsbury’s
stakeholders
Key
requirements
within the
project
Impact Expectations of
organisation
from
stakeholders
Perceived
attitude or risk
Strategy for
stakeholder
management
Who is
responsible
HR manager Need to
communicate all
the business
aspects with them
Impact is
high
Create proper
project outline so
that positive
outcome must be
achieved.
Objective of
business is not
clear
Direct
communication,
meetings, group
discussions and
individual meetings
Project manager
Operations
manager
Understand the
key requirements
of the
organization and
improve
suitability
practices.
Impact is
high
Create proper
process and
collect accurate
and reliable data
to select business
strategy
Improper use of
tools or
techniques
Meetings and
interview
Data collector
Marketing
manager
Understand the
requirement of
promotional
activities and
arrange resources
Impact is
medium
Select the
effective social
networking site
for promoting the
Sainsbury’s
Lack of market
research and
customer
expectations
Email, meetings and
discussions
Researcher
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for advertising the
brand
products and
services in the
market (Ferretti,
2016)
Operations
manager
Prepare proper
working system to
execute the
objective of
business
Impact is
medium
prototype working
system is required
Improper market
knowledge and
experience
weekly reports,
meeting and direct
communication
Developer
Administration
Staff
Analyse the key
issues and risk in
the project
Impact is
low
Require to ensure
about the outcome
quality
Irresponsible
problems analysis
By reports Evaluator
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Task 2
a) Analysing the strategic capabilities using the VRIN/VRIO framework
The business strategy is influenced by the internal capabilities and availability of the resources in
the organization as this will support leaders and managers to take effective decisions. Internal
capabilities of the Sainsbury are based on the management style, internal culture and approaches
using by the team of an organisation to execute the business strategies in an effective manner.
Strategic capabilities of Sainsbury can be analysed by applying the VRIO model because this
model will focus on the valuable resources, rare resources, inimitable resources and organised
resources that are available in the business (Buttenberg, 2015). The availability of the resources
in the Sainsbury will show its internal capabilities, and that supports the business strategy
selection and execution.
Following is the application of the VRIO model or framework in the context of Sainsbury:
Sainsbury ensures its valuable resources that are present in the business so that they can achieve
highly competitive benefits. Valuable resources in Sainsbury are its employees so helped them
to execute the strategic plan as per the set vision, mission and objective to attain the competitive
benefits. Rare resources available within the organisation will offer a high level of power to
execute the plan effectively. Rare resources that are present in Sainsbury helped them to analyse
the gap between its actual mission and current status through which they will get the direction to
change strategies (Manly, 2016). With the availability of the rare resources support the Sainsbury
to optimise the production cost and increase product quality so that they can achieve more
benefits. Sainsbury can control market risk if they have valuable and rare resources, but to
achieve its target they require resources that are quite imitable as it supports team to face
competitive problems. Organizing the resources to manage the sustainability of the performance
also supports Sainsbury to maintain its market position with the proper management and
utilisation of the resources.
Effectiveness of the VRIO model for managing the strategic or internal capabilities of the
organisation
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Application of the VRIO model in the Sainsbury will support the leaders and managers to take
the quality of decisions regarding business strategies. The model will help the organisation and
its team to analyse the internal capabilities of the organisation and that influence the further
strategies of the business through which they can achieve high competitive benefits and other
advantages (Manly, 2016). Based on the VRIO analysis the availability of the Sainsbury’s
resources is identified after which leaders and managers can collect the resources and use them
for achieving the goals of the organisation.
b) Conducting a SWOT analysis for the organisation
SWOT analysis or model is also applied for analysing the internal strengths, weaknesses,
opportunities and threats that are related to Sainsbury’s. With the help of SWOT analysis, it
becomes easy for the managers to use their strengths to overcome weaknesses and threats and to
use opportunities for their further growth and development.
Following is the SWOT analysis of Sainsbury:
Strengths: Current strength of Sainsbury is its position in the UK as the supermarket because the
organisation is ranked as the 2nd largest supermarket chain. The HR team of the Sainsbury is
supportive as they provide training opportunities to its team members, which reduced employee
turnover ratio. Marketing strategies of Sainsbury is also attractive which helped the marketing
team to influence its customer’s choices. Print ads, TVCs, online campaigns and digital
marketing are used by the Sainsbury to attract the customers (Sainsbury’s SWOT analysis,
2019).
Weaknesses: Pricing strategy of Sainsbury’s is one of the weaknesses that are faced by them
because prices of the food items are rising. High product prices reduce the loyalty of customers
from Sainsbury. The internal structure of Sainsbury is also not so effective due to which internal
conflicts are raised among employees.
Opportunities: Using the joint venture and partnership strategy is one of the opportunities that
Sainsbury can use to cover a large area of other locations. Self-checkout machines can also be
installed by Sainsbury to grab the technology opportunities. Expansion in the countries of Asia
and Africa will also help Sainsbury to enhance customer base and market share.
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Threats: High competition in the retail sector becomes a threat to Sainsbury as there is a number
of supermarket chains that are also providing similar kind of products in the market. Walmart,
Aldi, Tesco etc. are the biggest competitors of Sainsbury (Sainsbury’s SWOT analysis, 2019).
The Sainsbury will face the threat of losing the customer's trust and loyalty due to other retail
stores.
The overall analysis of Sainsbury
The above analysis through SWOT has identified that Sainsbury can use its strengths to reduce
the weaknesses and use opportunities to avoid the threats in the market. Based on the above
analysis, Sainsbury can use marketing strategies by promoting its products and services on social
networking sites through which they can influence customers for buying its product. Quality of
products and services provided by the organisation will enhance the trust and loyalty level of the
customers on Sainsbury (Buttenberg, 2015).
Based on the analysis, globalisation opportunities can also be used by the Sainsbury to expand
their business in the market or they can get into partnership or joint venture agreement through
which they can spread brand awareness in the new locations or areas. For reducing the
competitive threats and internal weaknesses, Sainsbury can provide advance and IT training to its
existing workforce so that current skills and capabilities of staff will be improved through which
they can achieve competitive benefits and meet market requirements.
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