Business Report: Sainsbury's Analysis of Australian Clothing Market

This report examines Sainsbury's strategy to enter the Australian clothing market. It begins with an executive summary outlining Sainsbury's background and its plan to expand its clothing business to Australia, focusing on clothing for children and women. The report includes a table of contents and covers industry background, market selection, internal and external analysis. The internal analysis assesses Sainsbury's strengths, weaknesses, opportunities, and threats within the Australian market, considering factors such as the strong economy, customer interest in fashion, and established business practices, as well as weaknesses like limited resources and the potential impact of changing customer preferences. The external analysis examines macroenvironmental factors like culture, lifestyle, and demographics, highlighting strengths like superior craftsmanship and a growing market for luxury clothes, while also acknowledging threats like intense competition and the rise of counterfeiting. The report concludes that Sainsbury's success depends on a thorough understanding of the Australian market, careful consideration of both internal and external factors, and the ability to leverage opportunities such as the availability of skilled workers from declining manufacturing sectors. The report also includes references to support the analysis.

Running head: BUSINESS
Business
Name of the student
Name of the university
Author note

1BUSINESS
Executive summary
Sainsbury’s is the leading supermarket chain from UK dealing with various products
like food items, electrical products, clothing, DVDs, music and toys. They are planning to
enter the Australian market with their clothing business. This report will state the details
background of Sainsbury’s, and the details of the potential market of Australia. The report
will also intend to focus on the external as well as internal analysis of the Australian market
for the clothing industry.

2BUSINESS
Table of Contents
Company name and details........................................................................................................3
Industry background...................................................................................................................3
Country and market selected......................................................................................................4
Internal analysis.........................................................................................................................4
External analysis........................................................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

3BUSINESS
Company name and details
Sainsbury is 2nd largest supermarket chain in United Kingdom with 16.9%
supermarket sector share in UK. It was established by John James Sainsbury in 1869. Their
values allow them to play the lead role in managing the challenges that are faced by their
customers regularly like wastages of household foods. They deal in various products through
Sainsbury’s groceries, Tu, Argos, Sainsbury’s bank, Sainsbury’s Home and Habitat. Their
success stories are depended upon the five strong pillars. Further, they know their customers
better than other; offer them exceptional services and products at minimum possible prices
(Sainsburys.co.uk, 2017).
Industry background
It is clearly evident that the supermarket industry of UK is highly competitive and
strongly dominated by the leading firms like ASDA, Tesco and Sainsbury. UK’s supermarket
industry is oligopolistic and pricing strategies of the supermarket is analysed through the
game theory approach (Child & Hsieh, 2014). It is further identified that various growers and
farmers are suffering due to the up-going monopsony power of leading supermarkets.

4BUSINESS
(Source: Economicsonline.co.uk)
However, unsurprisingly the increase of big supermarket chains has been coincided with
decrease in the independent high street retailer.
Country and market selected
Though they are best known for being the food retailer, various other non-food items
are there like electrical products, clothing, DVDs, music and toys. After their huge success in
supermarket sector of UK, they are planning now to enter in the Australian clothing sector
with the clothing for children and women (Venkatesh, Rathi & Patwa, 2015). To be
successful in the new market, everything shall be displayed appropriately, expectation of the
customers shall be met and their preferences shall be understood properly (Bruzzi & Gibson
(Eds.), (2013). Their retail experience will be bonus; however, the crucial part will be the
courteous and helpful attitude and the confidence for promoting their product in the
Australian market actively.

5BUSINESS
Internal analysis
The internal analysis provides the opportunities, threats, weaknesses and strengths of
the industry and this analysis is used to help the organization to assess the future direction of
the intended business.
STRENGTH WEAKNESSES
 Australia has strong economy and the
people are interested about new
clothing and fashion trends
 High margin of profit for clothing
items
 They have established practices for
commerce
 As their business language is English,
it will not create language problem
 Flexible for small scale as well as
large scale clothing businesses.
 Lost resources and skills
 Limited assistance for creative
business
 Availability of local clothing market
 Slow adoption for environmental and
ethical practices
 Lack if training facilities with regard
to the workplace.
 Lack of solutions for TCF techniques
under IT
OPPORTUNITIES THREATS
 Local and overseas niche market
 Development of the best practices for
manufacturing
 Full utilisation for the design
innovation
 Utilisation and implementation of
innovative and high-tech clothing
 Uncertainty regarding the support
from government
 Preference of the customer regarding
the clothing style mat change anytime
 Threat from the low production cost
nations (Kamal & Deegan, 2013).

6BUSINESS
External analysis
Macroenvironmental or external factors involve the norms, culture, lifestyle,
population and demographic changes. These factors have great impact on the clothing
industry of Australia in various ways. Business owners do not have much control on the
external factors and the effect in altering them is minimal. For instance, the clothing
organizations do not prefer to create large scale clothing that does not fall under the society’s
norms. On the contrary, they will create the style that will appeal to various cultures.
STRENGTH WEAKNESSES
 Superior craftsmanship
 Strong presence under the leading
commercial centres
 Rich culture and history
 Largest variety with exclusivity
 Limited number of customer for
premium priced clothes
 Preference of the customers can be
changed without any prior sign
OPPORTUNITIES THREATS
 Revamps of new image
 Growing market for the luxury
clothes in Australia
 Continuous support and innovation
 Intense level of competition
 Increasing the advocacy against usage
of animal skin
 Production of the counterfeiting
exposes biggest challenges (Azizul
Islam & Jain, 2013).

7BUSINESS
Conclusion
From the above analysis, it is concluded that Sainsburys is one of the most successful
among the supermarket chain of UK. However, to enter into Australian market with their
clothing business they 1st analyse the external as well as internal analysis of the Australian
clothing industry to be successful on the long run. However, the decline of various pars
manufacturing sectors from Australia is biggest opportunity for retaining the displaced
workers as the skilled craftsmen to manufacture best quality garments as per the preference of
Australian people.