Sainsbury Plc: A Strategic Management Analysis of UK Business

This report provides a strategic management analysis of Sainsbury Plc, a major UK grocery retailer. It begins with an overview of the company's background and its external business environment, emphasizing Corporate Social Responsibility and competitive pressures. The report includes a PESTEL analysis, examining political, economic, social, technological, environmental, and legal factors affecting Sainsbury's. Porter's Five Forces model is applied to assess industry rivalry and competitive dynamics. An internal environment analysis is conducted using a SWOT framework, identifying strengths, weaknesses, opportunities, and threats. Key issues faced by the organization are highlighted, followed by a discussion of potential business strategies. The report concludes with recommendations for Sainsbury's to enhance its strategic position and overall performance. Desklib is a platform where students can find similar solved assignments and study resources.

Strategic Management
1

Table of Contents
1) Introduction.........................................................................................................................3
2) UK External Business Environment Of the chosen organisation.......................................4
2.1 PESTEL Analysis (not the factors but analysis the situation).............................................6
2.2 Porter’s Five-Force Model Application...............................................................................8
3.0 Internal Environment Analysis..........................................................................................10
4.0 Analysis of the SWOT Position.........................................................................................12
5.0 Main Issues Faced by organisation....................................................................................14
6.0 Analysis the business unit of the organisation with any name of the strategy which the
organisation can adopt..............................................................................................................16
7. Conclusion............................................................................................................................17
8. Recommendation.................................................................................................................18
References................................................................................................................................19
2

1) Introduction
In this report strategy management is discussed with the analysis of Sainsbury Plc. PESTEL
and SWOT analysis of this company is mentioned in this report to analyse the internal and
external environment of the company. Background details and issues faced by the company
are mentioned in this report. Porter’s five force model is discussed in this report to understand
the rivals and its functioning. All analysis of the company regarding internal and external is
mentioned in this report.
3

2) UK External Business Environment Of the chosen organisation
Sainsbury is the third largest retail company of groceries in UK. It serving the nation since
1869 and founded by John James in London. It is self service retailing company since very
long. Company performance is examining by the company external environment. External
environment depicts its marketing lieu of the company among its rivals. There are several
factors that presented in the external environment of the Sainsbury UK, which are discussed
below.
Figure 1 Sainsbury Company (Source- The telegraph)
 Company uses CSR approach in order to serve its services and products. Corporate
Social Responsibility is the biggest responsibility in marinating external environment
of the company, otherwise company lose its position in the market standard.
 Competitors in the market of Sainsbury making it to work above its capacity which
continuously increases its performance. To maintain the lieu among the rivals
company putting all its efforts in order to remain at the top (Karim, et. al, 2012).
 External business environment of this company is judged by its door services
provided to the UK customers, because now a day’s life of buy schedule blocking the
ways to go into the shop. Door to door services helps the company in retaining their
customers.
4

 All manufacturing of its product, company is not harming the environment that means
all its waste and recycling process done at saving the environment.
 Marketing of its products and services plays important role in enhancing the company
performance. Not only has this globalisation market also come in the external
business environment. That means company working at international level (Akter,
2012).
Hence it can be said that external environment of the company is very different from internal
business environment. Stakeholder’s role and investor’s role all comes in external business
environment. Macro environment analysis the pestle and swot analysis of the company. Its
retail chain and service chain can be examined by this analysis.
5

2.1 PESTEL Analysis (not the factors but analysis the situation).
PESTLE analysis is the important tool for every company especially like Sainsbury Plc
which is working since very long. It helps them to examine all the important factors that may
leads its growth or helps in avoiding the mistakes that blocking its path to become the top.
Pestle focuses on all the concerning areas of the company form which company runs. Below
is mentioned the Pestle analysis of the Sainsbury Company which determine it political,
economical, social, technological, environmental and legal factors (Metzger, 2014).
Political factors
Political factors are the political issues like government policies, political unrest, and
government decisions. Foe example if it is election time then it is obvious that company is
affected because political factors passes many orders and introduce many policies which
affected the company perforce.
Economical Factors
Economical factors like inflation, deflation, taxation policies, interest rates, economic growth
and development all comes in this factor. All national and global economic change affected
the company and its working. Economic factors affected the company in increasing and
decreasing the rates of their products. Economical factors are the most influencing factor
among all.
Social and Cultural Factors
It is very necessary for every company to maintain the cultural change and work according to
the social impact over the company. Changes on trends, taste and habit of the socially
environment, company can see to world according to that. Likes and dislikes, custom and
tradition all factors follows by the company Sainsbury.
Technological Factors
Introduction of new technology followed by the company helps in fast development of the
company. Various technologies come in contact to the company and company must follow
the all, otherwise company can lose its position according to the market standard. Information
communication technology is the latest and advanced technology on which every company is
relying. Technology both helps the company and customers to maintain their relation
(Ndungu, 2012).
Environmental Factors
6

Sainsbury is grocery company, so it is important to maintain the environment and do not
harm it for the company benefits. This company follows the corporate social responsibility in
which company uses and perform all its method in order to save the environment. Climate
change and weather condition affected the company in many ways. Corporate social
responsibility or CSR is the main role in any company and company like Sainsbury which is
marinating the hierarchy since long becomes quite important.
Legal Factors
Legal factors like any introduction of new laws in the business industry, laws for taxation
policies, laws for start-up and laws for running the industry affected the company
performance. Introduction of new laws makes the company to perform their functions
according to the new laws. Various laws like discrimination law, age and sex law should
followed by the company, otherwise legal action can be taken (Karim, 2012).
Hence it can be said that PESTEL analysis is very vital for every company in analysing its
external factors. After analysing the entire factor it can be said that this analysis helps the
company to understanding the working concept and work accordance to that.
7

2.2 Porter’s Five-Force Model Application.
Porter’s Five Force Model is used to identify and examine the rivals in the market. This
model is very helpful in indentified the areas where company need to work. Now a day’s
many of the companies are entering into the food and grocery market which is become point
of concern for Sainsbury. Now to remain firm among the competitive rivals Porter’s Five
Force Model is very effective. Now below the discussion is done over the Porter’s Five Force
Model.
 Tesco and Morrison’s are the other two big supermarkets of grocery in United
Kingdom. But Sainsbury convenience store and due to its large retail chain it never loses its
spark and always remains in its position among the tough and parallel competitors. Among its
rivals Sainsbury performing well and making its customer satisfied.
 Competitors are always high in the market especially for the supermarkets where
company need to concern over many factors. Current trends, current culture and current
marketing strategy to sell and buy the product should be sought by the company if company
wants to beat its competitive rivals (Harris, et.al, 2014).
 threats to substitutes is major issue for supermarket as consumers wants to buy their
product happily but substitution of supermarket means shifting of market to one place to
another disturbs the customer in buying the product especially common customers and old
customers faces more problem. So market should be nearby all the prone areas where there is
maximum number of customers.
 Sainsbury buyer power is high due to its loyalty and functioning. This company sells
their; product with green mark and at low cost than the competitive rivals. This enhances the
company performance and helps the company to increase its buyer lower.
 Supplying power is biggest of Sainsbury Company among all because its retail chain
is large among all. Supplying of the products in supermarket increase the volume of the
products in the supermarket. Low pace supply may decrease the volume of the product. This
affected the buying power of the usual customers. Supermarket is very much dependent on
supplying power. Like due to some economical and political factors supplying power gets
slow down (Houlihan, 2014).
Hence it can be said Porter’s Five Force Model is very useful and effective in measuring the
competition and avoiding the problems that comes in the path of company growth and
8

customer’s satisfaction. Porter’s Five Force Model is used to determine the rivals and ways to
maintain the stiffness among the rivals or competitors.
9

3.0 Internal Environment Analysis.
Internal analysis of the Sainsbury Company exhibited its strength, weakness, threats and
opportunities. All issues that affect the company function and performance reflected the
internal environment of the company’s earlier external analysis is done by using pestle
model, now in this internal analysis is done by using swot analysis. It is based on reality and
strategically approach of the company. It is analysed all the issues that may lower down the
Sainsbury performance. Strength and weakness can be easily identified from the internal
strength of the company. Threats enables to company to stay away from the prone areas
which slows the company and its performance. Opportunities enable it to work according to
the market standard (Karim, 2012).
All such factors and swot analysis exhibited the internal environment of the company.
Sainsbury has very effective internal strength. Its culture and working environment is very
good. Staff members are very by the company and outside world and market is also satisfied
from the company products and services. Company uses strategic approach for maintaining
all issues in their working culture like disputes and conflicts occurs among the workforce is
solve by the traditional approach, training and development is done though strategically
approach. New product development and all model uses strategically approach. Marketing of
the product uses strategically approach. Corporate social responsibility is also comes under
its internal environment because it act as its biggest strengths among the competitors.
Integrity of the development plan and integrity of informative source is also comes under the
internal environment of the company.
This can be analyse from the internal environment of the company is that apart from pestle
analysis all areas and factors come under the internal strength of the company. Internal
environment of the company exhibited the healthy and working environment of the Sainsbury
Company. There are several issues that come in contact like senior management role,
intellectual property to work, to increase stakeholders and ventures, selection and
recruitment, building strong relation to human resources of the company and their
management is analysis form the company internal environment (Davies, et.al, 2017).
Use of ICT and its function makes the company more flexible and reliable because it
enhances the company performance and also makes the company more effective in short time
period. Various strategically models are used by the company to enhance the working of the
10

company and to increase the internal environment. Hence there are several factors that is
analysed from internal environment of the company and helps in performing strategic
planning to analyse the internal environment.
11

4.0 Analysis of the SWOT Position.
Strengths Weakness
o Company Sainsbury maintain its
name and loyalty since long.
o Company relied on research and
development process which is most
accurate model among all.
o Staff of Sainsbury is very good,
manorial and workaholic. They give
their best performance for the
company sake and its growth.
o Business and management is very
effective in this company because it
uses the strategically approach for
processing the company functioning.
o Sainsbury has it chain at various
places which enables the customers to
buy its product.
o Company work according to the
current market standard (Bonn, 2012).
o Its premises need to be relocated
because older location is exiting till
yet.
o Its sales and marketing is not up to
the standard because company still
relying on old traditional method.
o Its board of directors are very narrow
because old senior managers are still
working on their post which makes
the seniors mangers in less number.
o New introduction of technology
disturbs the working of the company.
o Cash resources of company are
dependent over the borrowing of the
company.
Threats Opportunity
 Many new emerging markets enter
into the supermarket; threat of
competitors is getting high for the
company.
 Due to market standard some
products becomes price sensitive and
it increases the threat of lower down
 Opportunity for this company is its
export market segmentation.
 Its distribution channel is very vast
which enables the company to deal
with maximum number o customers.
 Vast market segmentation helps this
company for rapid growth and
12