Sainsbury's: Information Technology and Business Strategy Report

This report provides an in-depth analysis of Sainsbury's, a major UK supermarket chain, focusing on its information technology (IT) management and business strategy. It begins with an introduction to the company, its history, current business strategies, and the products and services it offers, including its expansion into vegan products and cosmetics. The report then examines the competitive environment using Porter's Five Forces model, assessing the threats of new entrants, the bargaining power of suppliers and buyers, the threat of substitute products, and the rivalry among existing players. Furthermore, the report delves into Sainsbury's primary and support activities within Porter's value chain, including inbound logistics, production, outbound logistics, marketing and sales, and customer service, highlighting how IT and innovative ideas can be deployed to improve business processes and gain a competitive advantage. The report concludes with a summary of the key findings and insights.

Managing
info & technology

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Introduction of organisation with current business strategy and products & services................3
Analyse competitive environment...............................................................................................5
Primary and support activities in Porter's value chain................................................................7
Deploy IT and use innovative ideas to improve business process............................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Information technology refers to use of computers, storage, networking and other
physical devices in order to create, process, store, secure as well as exchange overall forms of
electronic data. Managing information & technology include process of overseeing overall
aspects related to IT operations and resources. However, it is necessary for an organisation to
develop skills and capabilities on work force to mange IT in respect of achieving desired
outcomes from the same (Laudon and Laudon, 2015). The present report is based on Sainsburry
that is known as second largest chain of supermarkets in United Kingdom. It was founded by
John James Siansburry in the year around 1869, almost 150 years ago. This assignment will
focus on current business strategy and products or services of given company. It will also include
analysis of competitive environment by using Porter's Five Force Model. The strength &
weaknesses of selected business and analysis of primary & supportive activities are given below.

TASK
Introduction of organisation with current business strategy and products & services
The Sainsburry company was primarily established by John James and Mary Ann
Sainsburry in the year 1869 which has been grow rapidly in order to become largest grocery
retailer. It was also considered as first self- service retailing in UK along with having most
successful time during 1980s. It is evaluated that founders of company has some effective
principles and values which become guide for workers currently in order to provide high quality
products, value for money and excellent service. In addition to this, the given organisation has
several colleague values such as getting better everyday, great service drive sales, individual
responsibility for team outcomes, keep it simple, respect of a person and treat every £ as your
own. At the other hand, this business concern consist certain company values like best for food
& health, sourcing with integrity, respect for atmosphere, making a positive difference to our
community and a great place to work.
The size of Sainsburry include a chain of around 872 stores comprising in which 537
supermarkets and 335 convenience stores i.e. Sainsburry Bank. In present scenario, the selected
organisation has almost serve 19 million clients in duration of single week and large store of the
company provide approximately 30000 products in which 40% of them can be considered as of
own brand of Sainsburry. In context of staff members, it has been determine that around 15000
colleagues are employed in which 70% working on part time whereas rest of 30% perform full
time job. This company focus on to fulfil actual needs of customers for which they implement
moire effective strategies respectively. However, Sainsburry is divided into different clients-led
format which provide support to delivering great service and quality at a competitive cost.
Business strategy of Sainsburry
The mission statement of Siansburry is to render product with high quality to clients and
provide good financial return to stakeholders. Moreover, it also an aim of exceeding expectations
of consumers for safe, fresh, healthy and tasty food in respect of making their lives easier
everyday. However, the given organisation is using various strategies and techniques in proper to
provide better products or services to satisfy actual requirements of clients (Brownet, 2012).
Initially, they have change technology and prefer to use computerised retailers to supply goods to
its stores and took over punched card system for distribution. The company turnover was 50% of
its profit in single products in their Sainsburry own brand lines accounted. Secondly, they prefer

a strategy of product expansion for connecting all existing cities in particular geographical area
by providing goods like non- food products. It has an aim to develop new produce frequency
including bakeries,m fresh fish counter, coffee shops, restaurants etc. which facilitate to grab
more customer and increase profitability of business. In addition to this, they have an effective
strategy improve store formats and expand them in different areas besides of London and south-
east England which helps them to gain national reach. Moreover, they have strategic planning
including great food at fair prices, reaching more customers, growing supermarket space and
active property management.
Products and services of Sainsburry
The given organisation provide various kinds of products in order to fulfil needs and
wants of people accordingly. It include vegan products in which few of options were added
recently like James Hamilton, Meat Free & Ready Meals Buyer and it is observed that interest of
clients is increasing for plant based food items. However, they give an option of Love Your Veg
Range with several goods like shroomballs with jackfruit, Jackfruit quarter pounders,
'shroompups' vegan cocktail sausages, vegan chorizo- style shroomdogs and Plain Falafels.
Moreoiver, they also give variety with frozen vegan food Sophie's Kitchen fish alternatives
(£3.50), and Lazy Vegan options - Mexicana Meal, Provencale Meal, Pulled Peaz Chunks in
Natural and Mediterranean (£2.25). Sainsburry render 119 types of cosmetics like foundations,
primers, hydrating lip gloss etc.
Analyse competitive environment
The competitive environment can be described as a dynamic external system in which a
business concerns is required to compete with its different competitive firms along with
conducting their own functions properly (Galliersand Leidner, 2014). It will provide support to
grab more profit share in market by taking competitive advantage for particular company like
Sainsburry. However, it include the criteria of analysing strategies of competitors to attract more
customer in market and then prepare more appropriate technique to retain own clients along with
attracting new ones to attain better outcomes. In context of Sainsburry, the analysis of
competitive environment can be done through using Porter's 5 Force model which is given below
–

(Source: Sainsbury (J) Plc Porter Five Forces Analysis, 2018)
Threat of new entrants – This consist new firms entered in market with their own
innovative and effective ideas which grab some percentage of profit and increase competition for
Sainsburry. These fresh enterprises put pressure on given company by low pricing strategy,
reducing cost and providing new value propositions to clients. However, it is necessary to
manage overall these problems in order to maintain effective brand value in market and gain
competitive advantage. Initially, Sainsburry can tackle issue of new entrant by innovating new
products which attracts fresh consumers along with retaining present ones in respect of
increasing profitability. Meanwhile, they can build economies of scale in terms of reducing fixed
cost per unit which facilitate to boost up profitability of business. Moreover, they can develop
capabilities and putting money for research & development in order to maintain goodwill of
brand and attain competitive advantage.
Bargaining power of Suppliers – Every organisation required to purchase raw material
from number of suppliers for facilitating production of goods in proper way. It involve the fact
that suppliers in dominant position can reduce margins but few of powerful suppliers in
consumer service sector prefer to utilise negotiating power in respect of extracting high prices
from companies in retailing industry (Schwalbe, 2015). However, if purchasing cost will
increase due to high bargaining power of suppliers then Sainsburry will face its reduced
Illustration 1: Sainsbury (J) Plc Porter Five Forces Analysis

profitability in business. At the other hand, the given organisation can establish effective supply
chain with multiple suppliers then they can solve problem of bargaining power of suppliers and
they can maintain their desired profitability respectively. Moreover, they can prefer to conduct
experiments with product with the help of using new & different materials which facilitate
company to shift to another while prices of raw material start increasing. Furthermore,
Sainsburry is required to develop dedicated suppliers whose business depends upon the firm
which is supportive to avoid bargaining power of suppliers and gain competitive advantage.
Bargaining power of Buyers – This include buyers having different types of neds, wants
and demands which may changed according to market trends. It consist the desires of customers
that they demands a lot and want to purchase best offerings by spending minimum price which
is responsible for creating pressure on Sainsburry in context of their profitability for a long run.
However, the bargaining power of buyers is directly proportional to size of consumer power
which is required to be tackle in proper manner (Bilbao-Osorio, Dutta and Lanvin, 2013).
Meanwhile, it is necessary to build large customer base because it is helpful to reduce bargaining
power of buyers and give an opportunity to streamline sales & production of company.
Additionally, they should rapid innovate new products for customer which is helpful to limit the
bargaining power of buyers of Sainsburry. Furthermore, fresh goods will also reduce the
defection of existing customers of Sainsburry to their competitive firms respectively.
Threat of substitute products – The substitute products are responsible for completing
same needs and wants of people in different ways which impacts negatively on profitability of
particular company. It can considered an example, like Dropbox and Google Drive are substitute
to storage hardware drives. However, it has been analysed that threat of substitute product is high
if it offers a value proposition that is uniquely different from present offerings on an industry.
Basically, Sainsburry is required to remain service oriented besides of product oriented and put
efforts to understand core need of clients rather than whatever consumer is buying. In addition to
this, the given company can get rid off threat of substitute product through increasing switching
cost for clients accordingly (Christiansen and et. al., 2014).
Rivalry among the existing players – This can be described as rivalry among existing
players in specific industry which facilitate to drive low prices and reduce overall profitability. It
consist different types of competitive firms running in market which create tough competition by
making new strategies. However, it is necessary for Sainsburry to analyse competitive

environment in order to apply desired techniques or innovative ideas to maintain strong position
in market to grab more profits share. Meanwhile, the selected company is required to build
sustainable differentiation and through developing scale so that it can compete better with
various competitive firms. Furthermore, they can collaborate with competitors in respect of
increase the market share as well as reducing competition in marketplace rather than just
competing for small market.
Primary and support activities in Porter's value chain
The Porter's value chain refers to an effective approach which focus on systems &
activities with customers as central principles besides of departments and another expenses.
However, value chain analysis is very important concept of management which include number
of activities in respect of gaining competitive advantage (Amies and et. al., 2012). Moreover, it
will facilitate the added value that creates a higher profitability for an organisation respectively.
In context of Sainsburry, they can use Porter's value chain in order to attain better competitive
advantage. This model include primary and supportive activities which is given below –
Primary activities Inbound logistics – This include that raw material should be brought from the sources of
the company as the value chain can be expanded by improving quality of the production
material. It is also important for Sainsburry to optimise cost of inbound logistics for
enhancing the value chain respectively. Production or operations – The production can be described as a process of converting
raw material into a finished good. It can be considered as an important step of Sainsburry
in which customer value is increased by conducting operations and maintaining quality
standards in correct way. Outbound logistics – This include to distributing finished goods from manufacturing area
to distributors and retails of Sainsburry. However, if distribution of products should done
done on desired time and deliver to clients with proper quality then value chain receives a
boost (Huang and Lee, 2014). Marketing and sales – The marketing is helpful to promote brand or product which
facilitate to increase sales and profits of Sainsburry. However marketing should be done
appropriately for building brand equity without any fake commitments to clients which
add value to end product and brand.

 Service – This consist various activities which are helpful to maintain value of products
or services to customer of Sainsburry.
(Source:Porter’s Value Chain – Value Chain of Porter, 2019)
Supportive activities Firm infrastructure – This consist a kind of support activity which can be considered as
an infrastructure of Sainsburry that is helpful to conduct operational procedure properly.
It include line management, administrative handling, financial management, human
resource and IT. Human resource management – The human resources management refers to managing
people in Sainsburry as per desired positions of different departments to conduct
respective tasks. It include activities like staffing, training, coaching and recruitment
(Adogla and Collins, 2014).
 Technology development – This include to adopt advanced technology like technological
innovations and IT systems which helps to improve manufacturing and other operational
activities in Sainsburry.
Strength and weakness of business
Strength
 Automation of activities facilitate consistency of quality to products of Sainsburry which
is helpful to scale up and scale down as per demand of market condition.
Illustration 2: Porter’s Value Chain – Value Chain of Porter

 Successful track records of integrating complimentary firms by method of mergers and
acquisition along with building reliable chain.
 Highly effective market strategies regarding their product which facilitate to increase
sales and profits of Sainsburry properly.
 Strong dealer community and high level of customers satisfaction which is helpful to
maintain appropriate position among competitors to grab profits share.
 High skilled employees due to effective training programs, strong free cash flow and
strong brand portfolio (Mostert, 2016).
Weaknesses
 Investment in research & development is below than the fastest growing players in
industry which hinders innovation.
 High attrition rate between staff members which increase cost hiring which impacts
negatively on profitability of Sainsburry.
 Poor forecasting of product demand which leads to skip higher rates of opportunities as
compared to other competitive firms.
 It consist limited success outside core business and need more investment in new
technologies for improving productivity as well as profitability.
 It has been analysed that profitability ratio and net contribution % of Sainsburry are
below the industry average.
Deploy IT and use innovative ideas to improve business process
The information technology is helpful to store and process required data in more effective
as well as efficient manner. It consist various types of technical systems and software which can
be adopted by different business concerns according to their suitability in order to gain better
outcomes respectively (Marshall, Sivasubramanian and Richardson, 2014). However, by
analysing over primary and supportive activities of Porter's value chain, it has been analysed that
these can be conducted through implementing technological machines or systems which improve
productivity. Moreover, there are various technological advancements which are favourable to
reduce time and efforts which facilitate to produce optimum outcomes respectively. It has been
summarised that it is necessary to conduct analysis of competitive environment and evaluate
current infrastructure of Siansburry which helps to make correct decision for adoption of fresh

technology. It include to determine tasks carrying out in different department of organisation
such as marketing, operations, finance, human resource and research & development.
Considering overall above discussion, I have analysed that innovative technological
equipments, applications and systems are required to be adopted by Sainsburry to processes
business procedures. It include to implement advancement in operational and support activities
which increase overall efficiency of organisation which facilitate to boost up productivity as well
as profitability on regular basis. However, I will suggest to apply several effective actions to
deploy It in business which helps to improve operations and enhance competitive position in
market through attaining better profits share. Meanwhile, it is necessary to sell the value of
business process management tools and provide appropriate training to staff members to gain
optimum utilisation of new applied technology in Sainsburry. According to me, it is essential to
remain mindful at the time of selecting more accurate technological systems or application which
is favourable for business. Moreover, it is essential to conduct desired learning program to clear
doubts of employees and make them capable to use technology for boosting up their regular
productivity along with perfection (Richardson And et. al., 2016). I have analyse that effective
utilisation of technology will provide support to improve quality of product and gain satisfaction
of customers that facilitate to enhance position of brand in market.
I have determine that every particular process & activity related with operations or
administration is required to be improved at initial level which reflects in increased profits and
good will of Sainsburry in competitive environment. It include to apply technical innovations
into overall operational procedures which impacts positively on quality and features of product
which helps to gain loyalty of customers that ensure long term profits for Sainsburry. Moreover,
I have analyse that technological systems should be adopted with innovative ideas which provide
help to improve business processes as well as improving competitive position in market.
CONCLUSION
From the above report, it has been analysed that information technology can be described
as the utilisation of computer and networking in order to store and process desired information in
an organisation. It include different technological machines, equipments, applications, software
and systems which can be adopted by given organisation according to their own business nature.
However, Business strategy of selected company consist several practices such as change
technology, product expansion, improve store formats and strategic planning which are used in

present time. Moreover, external environment can be analysed through porter's five forces with
several factors like threat of new entrants, bargaining power of suppliers, bargaining power of
buyers, threat of substitute products and rivalry among the existing players. In addition to this,
the porter value chain is used including certain primary & support activities including inbound
logistics, production or operations, outbound logistics, marketing & sales, service, firm
infrastructure, human resource management and technology development.

REFERENCES
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Online
Sainsbury (J) Plc Porter Five Forces Analysis. 2018. [Online]. Available through:
<http://fernfortuniversity.com/term-papers/porter5/lse/477-sainsbury--j--plc.php>
Porter’s Value Chain – Value Chain of Porter. 2019. [Online]. Available through:
<https://www.marketing91.com/value-chain-porter/>