Analysis of Sainsbury's Business Performance and Strategic Management

This report provides a comprehensive analysis of Sainsbury's business performance within the UK retail industry. It examines the company's market share, competitive landscape, and operational strategies. The report identifies key areas for improvement, proposing the implementation of Electronic Customer Relationship Management (ECRM) practices, enhanced training and development programs, and a customer feedback system. It utilizes the Net Present Value (NPV) method to evaluate the financial feasibility of these proposed changes. The report highlights the benefits and limitations of the NPV method, and ultimately recommends ECRM implementation as the most suitable strategy for Sainsbury's. The report also touches upon the importance of adapting to market changes and the need for continuous improvement to maintain a competitive edge.

Improving Business
Performance and
Management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................2
TASK 3 ...........................................................................................................................................3
TASK 4 ........................................................................................................................................5
TASK 5............................................................................................................................................7
TASK 6............................................................................................................................................9
TASK 7............................................................................................................................................9
........................................................................................................................................................12
........................................................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
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INTRODUCTION
Business performance management is a set of activities that are performed by the
organizations. Through this management process the firm will be able to achieve its all
objectives and goals. It is a ongoing process that monitor the performance of all employees and
provide them feedback so that they can improve their performance. This approach is more
dynamic in nature (Yang, Hong and Modi, 2011). There are some elements that are related to the
management of performance such as feedback, appraisal, positive reinforcement and so on. The
present is based on Sainsbury which perform its operations in UK. The retail industry is focuses
on their management and for they made some strategies so that they can achieve the success in
the market. The below mentioned report is focuses on the products and services of the firm that
they provide to their customers. Along with this, they also evaluate the operations that company
performed in the market and how changes can be made in order to increase the market share as
compare to other industries. Further, it also explains the risks that firm is facing and on the basis
of that plan should be implemented (Trkman, 2010).
TASK 1
Sainsbury is a supermarket in United Kingdom that provides grocery products to their
customers. They have 16.9% market share in the retail industry as compare to other competitors.
They have many competitors such as Tesco, Asda, Mark and Spenser and so on. These all
industries are market leader in the country. The enterprise is get established in 1869 in London
and now they have employees approx 145,000 who are providing services to their customers.
They also offer approx 23,000 products and services to the people of the country. Sainsbury have
40% products of their store brand and through their branded products they can attract more
customers. They offer wide range of food and grocery products to their end users. Along with
this they also offer mobile phone and tablets to their consumers so that they can earn more
profits than any other industry (Rosemann and vom Brocke, 2015). They offer their services
throughout the world and they serves approx 11 million customers in a week. They opened their
retail outlets in approx 1312 locations in different countries.
Sainsbury have well developed data based system and they also offer their services
through their online store. The firm offer quality product to their customers at flexible prices.
They also conduct a survey in the market so that they will be able to identify the needs and
demands of the people (Measuring performance. 2014). They use the concept of modern
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technology in order to provide innovative products to their end users. Through this, they will be
able to create a strong base of customers than their competitors. Along with this, they also offer
health related products, store brands and so on. They also uses many promotional activities like
through online media, advertisements and so on (Trkman and et.al., 2010). They also follow
some of the principles such as respect the environment, best quality services should be given to
their customers, a great place to work and so on. On the basis of these principles they will be
able to improve the image of company in the market as compare to other market players.
TASK 2
In the modern era, changes have become very essential for the growth and success of any
business enterprise. Furthermore, changes at regular intervals help an organization to deal with
intense competition (Taticchi Tonelli and Cagnazzo, 2010). The present research report is based
on Sainsbury which is a United Kingdom and it offers wide range of products and services to all
customers. The brand is considered as second largest chain of supermarket in the country and has
a market share of 16.9%. In the past few years, the competition among retail supermarket
industry of UK has become so intense that it is no longer easy to attain higher sales and profits.
It can be expressed that in order to sustain in the marketplace, the selected business enterprise is
required to carry out certain changes in its overall operations and business practices.
This paper proposes three different changes to overcome Sainsbury’s current problem:
1. Sainsbury can to implement Electronic Customer Relationship Management (ECRM)
practices in order to deal with its key customers in more effective manner. At present the
selected business organization is facing issues related to poor communication and
information management system. The use of Electronic customer management system
will have direct impact on the overall performance of the business enterprise. The brand
can carry out certain changes in its information management system by adopting ECRM
practices. This will also help the selected business enterprise to enhance the overall
process of communication adopted and carry out smooth flow of all operations. Apart
from this, the use of ECRM will also support the brand in improving the overall degree of
services which has been provided to people in the market (Kristal, Huang and Roth,
2010).
2. It can be expressed that Sainsbury is also facing issues related to ineffective and unskilled
workforce (Improving your business performance using standards. 2017). This has
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resulted in creating obstacles in overall growth and success of Sainsbury. The brand can
carry out changes in the way it deliver training and development sessions. In order to
sustain in long run, the organization can start laying more emphasis on training and
development sessions. It can be asserted that these sessions will help in enhancing the
overall skills set and knowledge base of workers. Along with this, it will assist in
developing a strong bond and coordination among all the staff members (Teece, 2010).
3. The last change which can be carried out within Sainsbury is related to implementation of
the feedback system. The brand has started facing wide range of issues linked with
customer complaints and queries. This has created sense of dissatisfaction among
customers and also affected volume of sales in negative sense. The selected business
enterprise can implement customer complaint and feedback system which can support in
getting aware of the key issues faced by customers. However, it can be argued that the
company will need to focus on responding to feedback of customers in effective manner
in order to create sense of satisfaction among them. Along with this, it will be required to
ensure that customers are satisfied with the way their complains, queries are addressed
and managed by the organization.
TASK 3
There are many employees who are working in the firm so that they can provide the
quality services to their customers. According to the Sharabati, Naji Jawad and Bontis (2010)
that training and development programs should be conducted in the firm so that all workers will
be able to enhance their knowledge, experience and so on. There are many factors that play
important role when any plan is implemented by the firm. These factors can be like high rate of
return, recover from the initial investments and high profits. When any plan is implemented then
they have to consider these elements so that overall objectives of that plan can be achieved.
When training is conducted then the manager of the firm have to made budget of that program
like how much he have to invest in the plan and how much he will get in return and so on. If
skills, experience and knowledge of workers are get improved than they will perform well than
any other employees otherwise Sainsbury will not be able to achieve its goals. These programs
are important for new and existing employees. New workers will be able to know about their
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work in the firm and existing staff members can attend this program in order to update their core
competencies.
Sainsbury can use one analysis method such as net present value. This method can be
explain in the terms of cash inflows and cash outflows or it is the difference between present
value of cash inflow and present value of cash outflow (Flynn, Huo and Zhao, 2010). This is
used by the organizations in order to identify the profitability of the project. For example, if the
retail industry wants to conduct training and development program in the firm then they have to
forecast the benefits of that activity. Along with this, they can made changes so that overall
performance can be improved (Dumas and et.al., 2013). There are some advantages and
disadvantages are also attached with the implemented projects of Sainsbury. The biggest benefit
of this method is that it shows the return on the initial investment and it also gives importance to
the time value of money. Along with this, they can increase the value of the firm and risks can
also be identified. There are some limitations that are faced by Sainsbury that this method it
difficult to use and sometimes it is also difficult to measure the discount rate. These methods will
not be able to take correct decisions for long term projects.
So, it has been critically evaluated by the Testa and Iraldo (2010) that training and
development programs can be implemented by following such method like net present value.
Through this the firm will be able to identify the outcome because this is a short term project.
Net present value of Training and development
Year Project X P.V factor at10% P.V of cash flow
1 2000 0.909 1818
2 2800 0.826 2312.8
3 3200 0.751 2403.2
4 1200 0.683 819.6
5 800 0.621 496.8
6 500 0.564 282
Salvage value 40000 0.564 22560
Total PV of cash flow 30692.4
Initial investment 8000
Net present value 22692.4
Net present value of ECRM system
Project Y PV @ 10% Present value
Initial investment 60000
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1 10000 0.909 9090
2 20000 0.826 16520
3 30000 0.751 22530
4 30000 0.683 20490
5 30000 0.621 18630
6 10000 0.564 5640
Residual value 2000 0.564 1128
Total 94028
NPV 34028
Net present value of Feedback and customer complain system
Project Z PV @ 10% Present value
Initial investment 80000
1 30000 0.909 27270
2 30000 0.826 24780
3 20000 0.751 15020
4 25000 0.683 17075
5 20000 0.621 12420
6 10000 0.564 5640
Residual value 5000 0.564 2820
Total 105025
NPV 25025
Net present value is regarded as determination of the present value of the a particular
project in the future course of time. This is by the means of discounting it. The plan that has
higher net present can be selected by the business as it has ability to yield maximum return in the
future span of time. Along with this it has been gained that the plan with least NPV needs to be
rejected. It can be interpreted from the analysis of the above tables that Net present value of E
CRM is suitable of Sainsbury as such this has increased the overall productivity of the firm to a
greater extent (Mithas, Ramasubbu and Sambamurthy, 2011). This has maximized the return of
the firm to a greater extent. The selection of ECRM is done as it has ability to yield greater return
in future course of time.
There are some of the methods that can be used by Sainsbury in order to assess the feasibility
and suitability of the methods. These are:
Feasibility table
STRATEGIC
OPTION
FINANCIAL
FEASIBILITY
FEASIBILITY OF
PEOPLE/SKILLS
INTEGRATING
RESOURCES
IS IT
FEASIBLE
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Training and
development
Yes Yes No 2
ECRM Yes Yes Yes 3
Feedback and
customers
complaint system
No No No 0
Safe Criteria table
SUITABILITY ACCEPTABILITY FEASIBILITY RANK
Training and
development
Yes Yes No 2
ECRM Yes Yes Yes 3
Feedback and
customers
complaint system
Yes NO No 1
Suitability table
STRATEGIC
OPTION
LOCATION VOLUME QUALITY COST RANK
Training and
development
Yes No Yes Yes 2
ECRM Yes Yes Yes Yes 4
Feedback and
customers
complaint
system
Yes No No No 1
From the above carried out analysis it can be concluded that (Project A) ECRM technique
is more feasible, safe and suitable for Sainsbury. Through this method, the overall performance
and growth of the organization can be improved in an efficient manner.
TASK 4
In today's era, every organization wants to reduced their cost but with that they also
focuses on the improvement of the organization (Lai and Wong, 2012). Radical changes are
related to the reduction in cost and another continuous improvement is related to the performance
of the firm. Effective management should be there in the retail industry so that they can make
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such changes. These changes can be made by using the technological advancements and on the
basis of this factor they will be able to reduce the cost of their services. When managers take any
decisions than at that time they have to think about their future profits and their position in the
market as compare to other competitors. They have to involve the employees in the decision
making process so that effective decisions can be made. Continuous improvement of Sainsbury
is related to the involvement of employees in the process. Manager can use communication
strategy in order to improve the overall performance of the firm and its employees.
Communication gap should not be their between all employees and between employees and their
superiors. If this get improve then they can build a trust with each and will be able to achieve its
overall objectives (Reimann, Schilke and Thomas, 2010).
When Sainsbury is going to implement the changes within their business environment
then they have to consider these methods. Here, when Sainsbury is going to implement the
training and development program in their business operations then they have use the continuous
improvement method (The Best Way to Improve Business Performance. 2017). Through this
method, they will be able to monitor the performance of their workers in a continuous period so
that overall growth can be achieved of the firm. By using this method, manger will also be able
to identify the need of their employees. On the basis of their demand he can conduct the training
program for their staff members so that they can enhance their knowledge. This is the best
method that is used by retail industry.
Sainsbury can use this method in order to evaluate the performance of the training and
development program. Employees will be able to know that their performance is related to the
objectives of the firm. They have to perform well in the firm because their performance will be
evaluated by the manager of the organization (Tseng, 2010). Manager will give the review to the
employees so that they will be able to know about their performance from time to time.
There are some benefits and limitations that are attached with this method. Some
advantages are like:
 They can acknowledge their problems by performing the continuous improvement and
can improve their products better than they already are. They will be able to identify the
opportunities that can improve their performance and growth.
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 Through this they can increase the confidence among all the workers (Sadikoglu and
Zehir, 2010). The work that is performed by the staff members of Sainsbury is important
for the firm so that they can improve overall performance and achieve all objectives.
 Continuous improvement can lead the organization towards success and through this they
will be able to improve their brand image in the market as compare to other competitors.
 Feedback should be given to all the employees of the enterprise so that their performance
can be improved from time to time. Negative and positive both kind of reviews should be
given to the staff members so that effective management can be achieved.
Some disadvantages are:
 When continuous improvement method is used by Sainsbury than it will take some time
to improve the performance.
 This method is not cost effective and through this expense can be increased of the firm.
 This can be a tedious task for all employees who newly joined the organization. So, they
will not be motivated from the performance of all employees.
Is it Radical/Continous change?
Based on the literature review we can conclude that the proposed change of
implementing ECRM is a continuous change because: a) it is a small scale change b) Further it is
needed to be carried on regular basis. Along with this it has importance on routine basis. As such
it assist in keeping the records in an effective manner.
TASK 5
Factors considered when constructing Project plan
There is presence of several factors that needs to be taken into account when making
construction of project plan (McAfee and et.al., 2012). It is comprised of Budget, human
resources as well as time duration. It is significant for the project manager to take into account
the time duration that is being possessed by the firm in order to execute the project. In
accordance with such the plan is devised so that it can be accomplished within set time period. It
is important for the firm like Sainsbury to consider the budget that can be allocated in conducting
the project plan. With the assistance of considering such factor funds can be utilized in optimum
manner. Further the role of human resources is significant in carrying out the project plan in an
effective manner. This is because they are the one who are going to execute the plan. It is
essential that plan is developed in accordance with the skills and abilities of human resources or
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for developed plan skilled personnel can be hired so that execution of plan can be done in an
effective manner. Such ensures success through the project plan that is being developed by the
organization.
Draft project plan
ID Task
Mode
Task Name Duration Start Finish PredecessorsResource
Names
Cost1
1 CRMImplementation 277 days Mon2/22/16Tue 3/14/17 £0.00
2 Initiation 27 days Mon2/22/16Tue 3/29/16 £250.00
10 Planningregardinghuman
resources
25 days Wed
3/30/16
Tue 5/3/16 Cameron £300.00
20 Creationof vision 18 days Wed4/27/16Fri 5/20/16 Rtaai £350.00
30 Communicationof the vision 20 days Mon5/23/16Fri 6/17/16 bruce £350.00
37 Hire leaders 24 days Mon6/20/16Thu7/21/16 Almight £350.00
44 Creationof short termwins 30 days Fri 7/22/16 Thu9/1/16 43 beetel £440.00
50 Buildonthe Change that is
E-CRMsystem
65 days Fri 9/2/16 Thu12/1/16 49,45 Trin £200.00
58 Anchor the E-CRMsystemin
Corporate Culture
27 days Tue 9/20/16 Wed
10/26/16
KIM £150.00
66 Planning 26 days Thu10/27/16Thu12/1/16 Nikson £100.00
80 Reportingthe final specifications9days Fri 12/2/16 Wed12/14/16 RD £500.00
87 Optimumallocationof resources14 days Tue 12/13/16Fri 12/30/16 Amaze £600.00
94 Implementation 14 days Mon1/2/17 Thu1/19/17 scroll £0.00
98 Inspection 20 days Fri 1/20/17 Thu2/16/17 Nikson £600.00
103 Project closure 15 days Fri 2/17/17 Thu3/9/17 Troy £500.00
109 Closure report 3days Fri 3/10/17 Tue 3/14/17 108 Huge £500.00 Huge
Qtr 3 Qtr 1 Qtr 3 Qtr 1 Qtr 3
1st Half 1st Half 1st Half
The major phase of the project plan that is ECRM has been stated in the table above. This
is comprised of Initiation, planning, implementation, monitoring and review as well as project
closer (Wang, Chen and Chen, 2012). The ECRM project plan would require 147 days. The plan
is being devised for the purpose of keeping the record of the customers. Further it has effective in
maintaining sound relationship with the customers as well. It is significant that each initial phase
needs to possess certain sub activities so that plan can be carried out in an effective manner.
Along with this in order to execute the plan resources as well as budget is needed. This acts as an
aid in carrying the planned activities in an effective manner. The expenses of the firm because of
implementation of the plan have been decided in advance so that allocation of the funds can be
done in an effective manner. The cost that is involved in carrying out the plan is comprised of
software cost, Hardware cost, network cost as well as other expenses.
The cost can be taken out from MS Project.
TASK COST OVERVIEW
Categories Cost in £
Software costs
Application 1500
Software 2500
Additional 3rd party software 600
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Database software 180
Hardware costs
Application server 800
Others items 1000
Network costs
Cabling 500
Racks 400
Routers 450
Switching devices 800
Employee compensation
Salary 100,000
Bonus and commissions 6000
Employee incentives 5000
Other expenses 30,000
Total 149730
TASK 6
Sainsbury perform many business operations in UK in order to get the success and
increase the market share as compared to other competitors (Dezsö and Ross, 2012). When any
business organization gets success than they have to face many problems that can decline their
performance. When the retail industry develop any plan than there are some risks are also
attached. These risks can be managed by the management in order to achieve all objectives so
that they can increase their revenues.
Some risks are:
Failure of system, technical risk, financial risk and risk associated with lack of resources.
1) Risk avoiding: The risk can be avoided by the means of hiring technical professionals
every time so that they can control the situation whenever required.
2) Risk mitigation: the risk can be mitigated by means of attainment of back up support
system so that target can be attained.
3) Risk over allocated of resources: The resource allocation would be made in an
appropriate manner so that risk might not take place in future course of time.
1. What action you have taken to mitigate the risk.
To resolve regular project meeting would be carried so that such situations can be dealt with.
Because of action Final Project will change.
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