Applied Corporate Strategy of Sainsbury: Strategic Analysis Report

This report provides a comprehensive strategic analysis of Sainsbury's, a major UK supermarket chain. It begins with an introduction to the company and its market position, followed by an examination of its opportunities, such as social media, technological developments, and population growth, as well as the threats it faces, including technological advancements by competitors and supplier power. The analysis employs Porter's Five Forces framework to assess the competitive rivalry, barriers to entry, threats of substitutes, buyer power, and supplier power within the industry. An internal analysis of Sainsbury's identifies its strengths, weaknesses, and core competencies, including its logistics, cost structure, and financial position. The report also utilizes the VRIO framework to evaluate Sainsbury's resources and capabilities, determining which provide a competitive advantage. Finally, the report evaluates a recent strategy implemented by Sainsbury using the SAFe criteria. This detailed analysis offers valuable insights into Sainsbury's strategic positioning and future prospects in the competitive UK supermarket industry.

APPLIED CORPORATE STRATEGY OF SAINSBURY
0
C T T T FAPPLIED ORPORA E S RA EGY O SAINSBURY
steSy m04121
3/5/2020

APPLIED CORPORATE STRATEGY OF SAINSBURY
1
Contents
Introduction................................................................................................................................2
Opportunities of Sainsbury........................................................................................................3
Threats of Sainsbury..................................................................................................................4
Porters five force of Sainsbury...................................................................................................4
Porter’s 5 forces analysis – Competitive rivalry....................................................................4
Porter’s 5 forces analysis – Barriers for entry........................................................................5
Porter’s 5 forces analysis – Threats of Substitutes.................................................................5
Porter’s 5 forces analysis – Buyer power...............................................................................5
Porter’s 5 forces analysis – Supplier power...........................................................................6
Internal analysis.........................................................................................................................6
Strengths.................................................................................................................................6
Weakness................................................................................................................................7
Capabilities.................................................................................................................................7
Core Competency of Sainsbury’s
Competitive advantage ..............................................................................................................8
VRIO Analysis...........................................................................................................................9
Valuable.................................................................................................................................9
Rare......................................................................................................................................10
Imitable................................................................................................................................11
Organisation.........................................................................................................................12
Strategy Evaluation (SAFe).....................................................................................................12

APPLIED CORPORATE STRATEGY OF SAINSBURY
2
Introduction
Sainsbury PLC is company which trades as Sainsbury which is the second principal restraint
of supermarket in UK which have 16.0 per cent share of the superstore subdivision which
was created in 1869 by John James Sainsbury with a workshop in Drury lane, London. The
business developed one of the principal vendors of foodstuffs in the year 1922. In the year
1995 the company Tesco took over the company Sainsbury in order to become one of the top
market frontrunner and Asda converted to the second largest by the year 2003, which shifted
the position of Sainsbury to the their period by January 2014
The holding business Sainsbury PLC, has three partitions, which were Sainsbury’s
supermarket, bank and Argos, the headquarter of the company is based in Holborn Circus, in
the city of London, in February 2018, the
The Qatar Investment Authority, which owns a business stake of 21.99%, is the main general
investor since February 2018. The fund is included on the London Bond and forms part of the
FTSE 100 Ranking (Smith, Smith, Haddon, Knuckle, Sainsbury, and Sloan, 2014).
In April 2018, Sainsbury and Asda discussed fusion. On 25 April 2019, the antitrust and
regulatory authority stated that the deal was unallowable owing to a growing food price[8].
Sainsbury and Asda could be required to sell more than 460 outlets before a proposed
transaction to satisfy their competition watchdog. In 463 places in the UK where the
catchment areas of the local supermarkets overlapped, "the Competition and Business
Authority (CMA) had established the realistic prospect for a significant reduction in
competition.

APPLIED CORPORATE STRATEGY OF SAINSBURY
3
Last week CMA announced its intention to buy Asda for a more comprehensive "step two"
review from Sainsbury, but a 21-page judgment released on Thursday provides the full detail
behind that decision. The report will discuss about strategy, internal and external analysis of
Sainsbury Company and what difference opportunity it will attain after its merger with Asda
Opportunities of Sainsbury
 Social Media: there is upsurge in the amount of Social media operators universal.
The three stages of social media are Facebook, twitter and instagram which have
exposed certain of the utmost number of upsurge in scheduled users, the company
Sainsbury can use social media to endorse the merchandises and to co-operate with
the clienteles also the business will be talented to take response from the clienteles
 Technological developments: Another opportunity for the company is technology
which comes with various kinds of benefits from various departments. The
operations can be automated and can also reduce the cost for the company.
Technology will enable better collection of data which would be composed on the
clienteles and recover the advertising labours (Butterworth and Stokes, 2010).
 Population: the population is growing continuously, in order to produce at a
optimistic degree for the future centuries, this would benefit the company Sainsbury
as there will be upsurge in the amount of the possible clienteles which the business
can board
 Inflation: the rate of inflation has stood low from some time and thus it is expects
to continue low in the next 2 years and this is a kind of chance for the company
Sainsbury as the cost of input of the company will continue low for the next
coming centuries which is a big chance for the company

APPLIED CORPORATE STRATEGY OF SAINSBURY
4
Threats of Sainsbury
 Technological developments by competitors: the new development of technology
by few customers have involved to the new knowledge that can be misplaced to the
contestants, which is lessening in the quantity of the dealers, this also incomes that
the price will be lost to the competitors which will decrease the overall market share
of the company
 Suppliers: the bargaining switch of the trader have increased after the historical few
centuries with the discount in the quantity of dealers, this incomes that the costs of
contribution can upsurge for the business Sainsbury (Rohwer and Topić, 2019)
Porters five force of Sainsbury
Porter’s 5 forces analysis – Competitive rivalry (high)
 With an extremely crowded industry, the supermarket market is extremely difficult.
Increasingly, corporations are now attempting to further strengthen their
competitiveness in non-food industries.
 Sainsbury's market share grew slowly in 2007, growing from its 2004 turnaround plan
(Annual Report 2007). This is a good trend, but it lies well behind Tesco, a
competitive industry market frontrunner, which validates that here is a lot to cover.
 The other three large supermarket outlets in the British retail sector include Tesco,
Asda, and Morrison. They all have a competitive benefit over their competitors. The
scope of Sainsbury at convenience stores allows it more available to consumers.
 Companies and construction companies deal with Sainsbury Group, but Sainsbury's is
not a core business (Eccles, Krzus,. and Ribot, 2015).

APPLIED CORPORATE STRATEGY OF SAINSBURY
5
Porter’s 5 forces analysis – Barriers for entry (high)
 Entry fences in the nourishment trade marketplace are tremendously high due to
several factors. Next, integrated retail is one of the UK's most innovative markets and
wants a lot of innovation and a important growth of the business, which takes years to
develop (Doyle 2002). Furthermore, retail business is also in a mature period in
Britain and most of the west, which means new competitors, has little time to relax.
 In the food retail sector local knowledge is extremely important, which is difficult to
replicate for foreign companies. The presence of few stores worldwide in the UK is
verified (Warkentin, Sugumaran, and Sainsbury, 2012).
Porter’s 5 forces analysis – Threats of Substitutes (low)
 Simply since clienteles reflect this as a essential in the emerging world, and in the
developing marketplaces slowly, the rivalry from replacements in the food-retail
manufacturing is weak.
 The retail market is always working together to make shopping an extremely
enjoyable activity, bringing new technologies into line of food products or innovative
companies (Sainsbury, Colagiuri, and Magnusson, 2017).
 The only major threat faced by a replacement is an internal threat to the sector by
which one retailer may lapse the company of the other supermarkets.
Porter’s 5 forces analysis – Buyer power (high)
 In this market, the buying force is strong mainly because so many of the rivals offer
the same goods. Prices and customer satisfaction are valued and green credentials are
widely recognized. In fact, for customers the cost of switching is small.

APPLIED CORPORATE STRATEGY OF SAINSBURY
6
 Consumer needs are likely to increase and rise significantly, as the country continues
to move towards a recession (O'Doherty 2008).
Porter’s 5 forces analysis – Supplier power (moderate )
 The control of the manufacturer is usually more complex because the categorization is
challenging. It's a healthy partnership to be considered reciprocally based since
manufacturers themselves are huge companies with huge brand recognition, such as
P&G, Unilever, and Cadbury etc. When retailers do not sell their products, customers
can shift allegiance and make vendors really strong. It can be argued. Nevertheless,
the sales volumes of large companies will be greatly affected if their goods do not hit
supermarkets. For example, with the successful ad campaign Gorilla (Wiggins and
Urry 2007), the partnership can shift, based upon the condition of the big brand
supply company (Hordyk, Ono, Sainsbury, Loneragan, and Prince, 2015).
 Smaller suppliers ' purchasing capacity will not be important due to their reliant sales
volumes on these supermarkets.
Internal analysis
Strengths
 Logistics and access: Sainsbury has many distributors in almost every region, backed
by a large logistics system that guarantees the timely delivery of its goods for a wide
number of customers.
 Cost structure: the low cost system of Sainsbury allows it, at a low cost, to produce
and sell its goods to its consumers at low prices, which makes them competitive.

APPLIED CORPORATE STRATEGY OF SAINSBURY
7
 Family of dealers: Sainsbury's partnership with its distributor not only offers services
but also supports the goods and preparation of the firm.
 Financial position: in the span of the last five years Sainsbury's strong financial state
includes cumulative earnings as well as sufficient income savings to fund future
investment (Anwaar, Nadeem, and Hassan, 2016).
Weakness
 Innovation and growth: while the company spends far more than the market-wide
average investigation and growth costs, it devotes far less than a few manufacturing
businesses who have greatly gained from their innovative products.
 Research and development: High-day inventory of sales: the period it will take to buy
and sell goods is progressive than the manufacturing regular and Sainsbury's
supermarkets adding unnecessary expenses to the company (Chen, 2013).
Capabilities
Sainsbury's ability: The provision of superior prices through local integrity,
safe and fresh foods is preserved by Sainsbury. The company's special
strengths are personalized rewards plans and unrestricted service given in
offline shops.

APPLIED CORPORATE STRATEGY OF SAINSBURY
8
Core Competency of Sainsbury’s
the accounting branch at Sainsbury is one of the most recent changes in the company profile.
The business can then evaluate its short-term and long-term leverage, with the latter
increasing its capacity to provide better infrastructure in both the online and offline markets
over the long term. The growing number of business networks add to the diversification of
the company's revenue base adds to its profitability and minimizes market threats
(Sainsbury's Plc, 2017).
It technique measures ability to give a comparative gain. This approach is
successful. The unrivalled quality of sales and promotions makes it difficult
for entrants to pursue Sainsbury's business strategy. Customer interest
prompt analysis and industry estimates provide market share knowledge
and potential opportunities.
Competitive
With the overtaking of Sainsbury, which controlled for many years food shopping, Tesco has
strengthened its supremacy in this sector. Tesco was the UK's third largest grocery seller ten
years ago, the UK's highest and the world’s third-largest. Tesco and ASDA are robust players
on this commercial and the competition between the two is expected to be stepping up with
the help of ASDA's US owner Wal-Mart. ASDA first replaced Sainsbury as the second retail
distributor in the world in July 2003 (Jones, Comfort, and Hillier, 2016)
Sainsbury has obviously lost money and damaged its competitive advantage in the market.
There was a general discussion about the oligopolistic position of food distributors in the
sector. Sustained and on-going growth of food retail is indicated and that while the home
market may be crowded, more people are clearly trying to bring their products and services
into the global market.

APPLIED CORPORATE STRATEGY OF SAINSBURY
9
VRIO Analysis
Valuable
 The VRIO Study of Sainsbury indicates Sainsbury's financial resources are extremely
important because they lead to investment in international opportunities. These also
help to combat external threats from Sainsbury.
 VRIO Review of Sainsbury s notes that its indigenous food items are a valuable
reserve since they are very varied. This gives customers strong perceived value. Due
to the difference in these goods, these are also appreciated more than rivalry by
consumers (Jupe, Bryan, and Cardle, 2013).
 The VRIO Review of Sainsbury has shown that the workers of Sainsbury are a valued
reserve for the commercial. A substantial part of the workforce is highly trained,
which ensures that the company has higher efficiency. The workforce is also
committed to the organisation and retention rates are high. All of this ensures that
Sainsbury goods are of superior worth to the end customers.
 According to the Sainsbury VRIO Report, the copyrights are a valued resource since
they permit the commercial to endorse its goods deprived of any interference in
rivalry. It clues to advanced incomes for Sainsbury s. Such certificates are also
obtainable by Sainsbury if these creations are decided to other suppliers.
 VRIO research of Sainsbury reveals that the delivery system of Sainsbury is a
valuable resource. It aims to attract increasing numbers of consumers. It helps
Sainsbury s with more sales. It also means the sales events are marketed because the
goods are easily accessible.

APPLIED CORPORATE STRATEGY OF SAINSBURY
10
 The cost structure of the VRIO Review at Sainsbury's is not a precious resource. The
explanation is that the production methods are more costly than the marketplace,
which decreases the business's overall revenue. The cost construction therefore
reproduces a modest difficulty that must be tackled (Chkanikova, and Mont, 2015).
 The VRIO Review of Sainsbury reveals that Sainsbury's research and development
are not an important reserve. This is since investigation and growth cost more than the
rewards that creativity offers. Very few ground-breaking technologies and innovative
products have been discovered in recent years. There is a competitive disadvantage
for Sainsbury's research and development.
Rare
 According to the Sainsbury VRIO Report, Sainsbury's financial resources are
considered to be limited. Only a few businesses in the sector have strong financial
capital.
 The VRIO study in Sainsbury has not been shown to be unusual for local food items.
Many rivals are readily available on the market. Competitors can therefore allow the
same use of those tools as Sainsbury to impede competitive advantages. It translates
to a fair balance in local food items with Sainsbury. Since it is a valuable resource,
Sainsbury is still free to use it (JOhNSON, Yip, and Hensmans, 2012).
 Sainsbury's workers are a special commodity as described in the Sainsbury's VRIO
Report. Such employees are well skilled and capable, which is not the case with
workforces in other governments. Good pay and employed circumstances mean that
these labours do not go to other trades.

APPLIED CORPORATE STRATEGY OF SAINSBURY
11
 Sainsbury's inventions are a novelty as found by VRIO Research in Sainsbury. These
licenses are not available easily and do not belong to rivals. This allows Sainsbury to
use them deprived of the marketplace interference.
 Sainsbury's distribution network is a remarkable tool defined by the Sainsbury's VRIO
Review. This is because rivals essential a lot of speculation and time to grow a better
system than Sainsbury's. Very few trades in the subdivision also own them.
Imitable
 Sainsbury's monetary capitals are expensive, as labelled in the VRIO Review of
Sainsbury. Over the years, the organization has accumulated this capital by long
earnings. For a long time, new entrants and rivals would have to invest such financial
resources in equal earnings (Lu, Kamoun, and Robatzek, 2012).
 It is not as costly to mimic local food items as found by the Sainsbury’s VRIO report.
These are also open to rivals if they spend significantly in research and development.
These also require no long-term knowledge of the year. Therefore, Sainsbury's local
food goods give a transient comparative gain which rivals can also obtain over time.
 Sainsbury's staffs are also not difficult to emulate as shown by the VRIO review of
Sainsbury. Many businesses can also train their staff and improve their skills. They
can also attract Sainsbury workers by providing better compensation packages,
working environment, health, growth opportunities, etc. This gives Sainsbury's staff a
tool with a temporary diffident advantage. This can be achieved in the future through
rivalry.
 Sainsbury's inventions are very hard to copy as the VRIO analyses of Sainsbury's
have been established. This is because a proprietary invention cannot be lawfully

APPLIED CORPORATE STRATEGY OF SAINSBURY
12
imitated. The creation of similar resources and the issuance of a patent is also an
expensive process.
 Sainsbury's distribution network is also extremely expensive to emulate by rivalry as
described in the VRIO Report. This was gradually established by Sainsbury s over the
years. Unless rivals were to implement a similar distribution network, they would
have to spend considerably.
Organisation
Sainsbury's backing tools are organized to exploit the curiosity as shown in the Sainsbury's
VRIO Report. Such tools are jumble-sale to devote in the right seats, to take benefit of
chances and to hostage risks. Such rewards also show the Sainsbury's sustained competitive
edge.
The distribution network of Sainsbury is structured within the structure of VRIO Sainsbury.
Sainsbury utilizes this network to attract customers to all of its shops through the delivery of
goods. Similar programs also demonstrate the competitive edge of Sainsbury (Caritte, Acha,
and Shah, 2015).
Strategy Evaluation (SAFe)
The strategy implemented by Sainsbury recently
Differentiation strategy is the approach introduced by Sainsbury. This approach relies on
expense control isolation. The competitive advantage of Sainsbury is that it uses the
commodity classification features that can even be seen in the products offered to the general
society. The business has a clear and distinct range of consistency, options and value for its
consumers. We have now completed our own brand quality investment program in 3,000
Sainsbury goods and will continue to improve our service where our customers are the most

APPLIED CORPORATE STRATEGY OF SAINSBURY
13
interested. We are updating 125 product categories over the course of the next year,
representing about 60% of our food sales. Customers also rate us ahead of our food quality
retail partners (Abdullah and Verner, 2012).
Suitability: The differentiation strategy Sainsbury is fair because it follows consumer order.
The group is divided according to the customer's preferences and habits. The buyers instead
look at the properties of the papers rather than at the expense. By focusing on strategy and
price, Sainsbury distinguishes itself with respect to the products. Normal initiatives, such as
supply and appreciation chains tracking, preparation, modification and coordination, to
increase the value of products at the lowest possible cost, are acceptable to consumers '
desires (Griffin, 2010). The company often adapts usable products to the requirements of the
distinctive pieces at various costs. The products range between small and medium and high.
Feasibility: the differentiation strategy is fair enough. The company has even become a
cantered corporation in this method. The theory of persuasiveness and interest is further used
in an organization to determine the suitability of the division method. Sainsbury relies on the
logistics system by raising the distribution structure. It also reflects on the quality and
bundling of the papers. The infrastructure connected with the separation cycle tracks chain
structures in tandem with adjustments and development. The approach of differentiation is
also usable from the fashioners ' perspective because items can be designed. There is no
intrusion from the company and the developers are always happy. We follow the current
trends in the retail industry (Lee, 2014).
Acceptability: The Sainsbury separating program is understood by a large portion of its
people; the individuals want one of the sort products daily. In order to meet this demand, they
look for products like Sainsbury. The consumers know the kind of behavioural trends they
have. In fact, people recognize the distinction owing to its individuality. The firm also

APPLIED CORPORATE STRATEGY OF SAINSBURY
14
provides a limited release of products to preserve the individuality between the massive
segments of the general population in reaction to fashionable desires of consumers (Lawton,
McGuire, and Rajwani, 2013).
CONCLUSION
Sainsbury PLC is company which trades as Sainsbury which is the extra main restraint of
supermarket in UK which have 16.0 per cent share of the supermarket sector which was
founded in 1869 by John James Sainsbury with a shop in Drury lane, London. Sainsbury's
ability: The provision of superior prices through local integrity, safe and fresh foods is
preserved by Sainsbury. The company's special strengths are personalized rewards plans and
unrestricted service given in offline shops. Differentiation strategy is the approach introduced
by Sainsbury. This approach relies on expense control isolation. The competitive advantage
of Sainsbury is that it uses the commodity classification features that can even be seen in the
products offered to the general society. The business has a clear and distinct range of
consistency, options and value for its consumers. We have now completed our own brand
quality investment program in 3,000 Sainsbury goods and will continue to improve our
service where our customers are the most interested. We are updating 125 product categories
over the course of the next year, representing about 60% of our food sales. Customers also
rate us ahead of our food quality retail partners.

APPLIED CORPORATE STRATEGY OF SAINSBURY
15
REFERENCES
Abdullah, L.M. and Verner, J.M., 2012. Analysis and application of an outsourcing risk
framework. Journal of Systems and Software, 85(8), pp.1930-1952.
Anwaar, S., Nadeem, A.B. and Hassan, M., 2016. Critical assessment of the impact of HR
strategies on employees’ performance. Cogent Business & Management, 3(1), p.1245939.
Butterworth, D.S., Bentley, N., De Oliveira, J.A., Donovan, G.P., Kell, L.T., Parma, A.M.,
Punt, A.E., Sainsbury, K.J., Smith, A.D. and Stokes, T.K., 2010. Purported flaws in
management strategy evaluation: basic problems or misinterpretations?. ICES Journal of
Marine Science, 67(3), pp.567-574.
Caritte, V., Acha, S. and Shah, N., 2015. Enhancing corporate environmental performance
through reporting and roadmaps. Business Strategy and the Environment, 24(5), pp.289-308.
Chen, G., 2013. Research on Cross-Culture Management Framework of Multinational Firms:
A Case Study. Communications in Information Science and Management Engineering, 3(3),
p.161.
Chkanikova, O. and Mont, O., 2015. Corporate supply chain responsibility: drivers and
barriers for sustainable food retailing. Corporate Social Responsibility and Environmental
Management, 22(2), pp.65-82.
Eccles, R.G., Krzus, M.P. and Ribot, S., 2015. Models of best practice in integrated reporting
2015. Journal of Applied Corporate Finance, 27(2), pp.103-115.
Hordyk, A., Ono, K., Sainsbury, K., Loneragan, N. and Prince, J., 2015. Some explorations
of the life history ratios to describe length composition, spawning-per-recruit, and the
spawning potential ratio. ICES Journal of Marine Science, 72(1), pp.204-216.

APPLIED CORPORATE STRATEGY OF SAINSBURY
16
JOhNSON, G., Yip, G.S. and Hensmans, M., 2012. Achieving successful strategic
transformation. MIT Sloan Management Review, 53(3), p.25.
Jones, P., Comfort, D. and Hillier, D., 2016. Materiality in corporate sustainability reporting
within UK retailing. Journal of Public Affairs, 16(1), pp.81-90.
Jupe, F., Witek, K., Verweij, W., Śliwka, J., Pritchard, L., Etherington, G.J., Maclean, D.,
Cock, P.J., Leggett, R.M., Bryan, G.J. and Cardle, L., 2013. Resistance gene enrichment
sequencing (R en S eq) enables reannotation of the NB‐LRR gene family from sequenced
plant genomes and rapid mapping of resistance loci in segregating populations. The Plant
Journal, 76(3), pp.530-544.
Lawton, T., McGuire, S. and Rajwani, T., 2013. Corporate political activity: A literature
review and research agenda. International Journal of Management Reviews, 15(1), pp.86-
105.
Lee, D.K., 2014. Building Integrated Vegetation Systems into the New Sainsbury’s Building
Based on BIM. Journal of KIBIM, 4(2), pp.25-32.
Lu, Y.J., Schornack, S., Spallek, T., Geldner, N., Chory, J., Schellmann, S., Schumacher, K.,
Kamoun, S. and Robatzek, S., 2012. Patterns of plant subcellular responses to successful
oomycete infections reveal differences in host cell reprogramming and endocytic
trafficking. Cellular microbiology, 14(5), pp.682-697.
Rohwer, L. and Topić, M., 2019. The communication of Corporate–NGO Partnerships:
analysis of Sainsbury’s collaboration with Comic Relief. Journal of Brand
Management, 26(1), pp.35-48.

APPLIED CORPORATE STRATEGY OF SAINSBURY
17
Sainsbury, E., Colagiuri, S. and Magnusson, R., 2017. An audit of food and beverage
advertising on the Sydney metropolitan train network: regulation and policy
implications. BMC Public Health, 17(1), p.490.
Smith, A.D., Smith, D.C., Haddon, M., Knuckey, I.A., Sainsbury, K.J. and Sloan, S.R., 2014.
Implementing harvest strategies in Australia: 5 years on. ICES Journal of Marine
Science, 71(2), pp.195-203.
Warkentin, M., Sugumaran, V. and Sainsbury, R., 2012. The role of intelligent agents and
data mining in electronic partnership management. Expert systems with applications, 39(18),
pp.13277-13288.