Strategic Management Plan for Sainsbury's Supermarket (BUS501)

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Business Strategy
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Table of Contents
Introduction......................................................................................................................................4
LO 1.................................................................................................................................................5
P1. Apply appropriate frameworks to analyse the macro environment for a given organisation. .5
M1. Critically analyse the macro environment to determine and inform strategic management
decisions..........................................................................................................................................7
LO 2.................................................................................................................................................8
P2. Using appropriate frameworks analyse the internal environment and capabilities of a given
organization.....................................................................................................................................8
M2. Critically analyse the internal environment to asses strengths and weaknesses of an
organization’s internal capabilities structure and skill set.............................................................10
Strengths:.......................................................................................................................................10
Weaknesses:...................................................................................................................................11
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D1. Critique and interpret information and data, applying environmental and competitive
analysis to produce a set of valid strategic directions objectives and tactical actions...................11
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a given market
sector for an organization..............................................................................................................12
M3: Devise appropriate strategies to improve competitive edge and market position based on the
outcomes........................................................................................................................................14
LO 4...............................................................................................................................................16
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for a
given organization.........................................................................................................................16
M4: Produce strategic management plan that has tangible and tactical strategic priorities and
objectives.......................................................................................................................................18
Conclusion.....................................................................................................................................20
References:....................................................................................................................................21
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Introduction
The complete assignment is about the analysis of environmental factors that may have a strong &
unfavorable impact on the chosen organization and may influence the organizational activities in
a negative manner. For controlling both the internal & external factors of environment, the
strategic plans are to be formed & implemented in the organization for the organizational growth
& its effective management, and also to achieve the overall common goals of the enterprise and
enhancing its further expansion. The chosen organization is “Sainsbury’s” which is the second
largest enterprise of supermarkets in U.K. established by “John James Sainsbury” in 1869.
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LO 1
P1. Apply appropriate frameworks to analyse the macro environment for a
given organisation
The analysis of “Macro Environment” is also called the "external" or "PESTLE" analysis. It is
the most important part of it can be said that it is the first step of "Strategic Analysis" which
eliminates the concept of the traditional cycle. "Macro Environment" consists of all the external
factors of the environment which cannot be controlled by the organization. All the positive
opportunities & negative threats can be identified & examined with the help of "Macro
Environment Analysis", which is the main aim or the purpose of this analysis. These factors may
have a great impact on the overall organization of Sainsbury's. Having the strong network with
the political parties, reading the financial reports & documents and reading the magazines or
papers or articles of management, all these things can improve & strengthen the deep
understanding of macro environment (Birnleitner, 2013).
Before conducting the environmental analysis, the “Sainsbury’s” need to research & identify the
factors that are included in the macro analysis:-
 Political: The political relations of U.K. with Qatar greatly impact the “Sainsbury’s”.
Any kind of conflicts & tensions with Qatar can affect the overall operations of the
management department of Sainsbury’s.
 Economical: Because of the increasing unemployment & a higher increase in food
prices, the Sainsbury's demand will be reduced and therefore the increased production
will result in decreased production for food commodities.
 Social: The sustainable practices of business enhance the customers’ support &
satisfaction level, and also the demand for organic food products of Sainsbury’s gets
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increased. The strategy “Cook and Save” of Sainsbury’s enables the customers to cook
the products easily and hence enhance the household’s budget (Yam, 2016).
 Technological: The online delivery of the food products by Sainsbury’s has expanded
the effective growth of the business. The effective advancement in the technologies has
impacted the business operations of Sainsbury’s in a positive manner.
 Legal: The long procedures for taking approvals to influence the decision-making
process and the potential growth of the business. Sometimes, the large amount of tax is to
be paid by the Sainsbury's on its produced foods with following up the complete long
legislative processes (Banahene and Mensah, 2016).
 Environmental: The strategic business plan of Sainsbury's includes the elimination of
wastage and ensuring the recycling, reducing the utilizing of carbon emissions. Hence,
enhancing sustainable strategic plans. The Sainsbury’s uses the approach of “Reduce,
Reuse and Recycle” to manage the packaging & recycling.
All the external factors which cannot be controlled by Sainsbury’s must be identified promptly
and the effective measures must be taken to handle those factors & enabling the smooth running
in the organization. The managers of Sainsbury's are required to grab the most favorable
opportunities and acquiring the essential benefits from them. The changing policies, nature and
the structure of the Government must be evaluated in an effective manner. All the evolved trends
must be identified, the reason behind their evolution, their changing consequences, and impacts
on the employees or the operations of the organization. The effective tools & techniques are to
be analyzed in a strategic manner so that the Sainsbury's business can not only be enhanced
properly but also to enhance the wide expansion of the business. Besides all these advantages,
the deep analysis of external factors will help the complete organization of Sainsbury's to remain
ahead of the high competition and enhancing the leading way (Indris and Primiana, 2015).
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M1. Critically analyse the macro environment to determine and inform
strategic management decisions.
The PESTLE analysis is the most appropriate framework to analyze the external environmental
factors for the organization, and greatly influence the strategic decisions which are to be
implemented in the company. Sainsbury’s has the ability to access the changes & variations of its
external environment, with the help of which it can respond very promptly and effectively for its
future competition. The PESTLE analysis is a very effective concept for the department of
strategic management, Human Resource, marketing, and many other departments. In order to
take the appropriate decisions for achieving the goals & for taking the decisions for further and
future planning, Sainsbury's is required to deeply understand the prevailing factors of a macro
environment so that it can operate in a proper way. All the factors must be analyzed properly
through the “PESTLE Analysis”, political, economic, social, technological, legal and
environmental. The analysis of PESTLE enables the Sainsbury’s to identify the changing
elements of external World, with the help of which the decisions can be taken efficiently for the
product & the organization development (Yam, 2016). All the changes can be controlled with the
positive favorable measures which can only be implemented by Sainsbury's when it has
identified the external factors. Sainsbury's is encouraged to develop the strategic thinking. The
threats for future trends can be accessed by Sainsbury's & appropriate action can be taken.
Sainsbury's can also identify the opportunities which can be exploited effectively.
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LO 2
P2. Using appropriate frameworks analyse the internal environment and
capabilities of a given organization
The Internal Environment comprises of the different elements which include the nature &
behavior of employees, the management department, culture of overall organization & that of
employees, and many more. The efficient training is given by the managers to their employees to
work with full dedication & to encourage them to take their own decisions. Below are the
internal factors which are being discussed in relation to Sainsbury’s:-
1. The system of Value: These are the “ethical beliefs” which are being followed up by
Sainsbury’s in order to achieve their objectives. Sainsbury’s can get to know about the
nature and behavior of all the employees, customers, and the large societies or
communities. Sainsbury’s has its own defined ethics on the basis of which all the policies
& procedures of the business are adapted & applied.
2. Goals and Objectives: Sainsbury's objectives are not only to earn the maximum profits
for the longer period of time & to ensure the high level of customers' satisfaction, but it
also wants to be the strong reason to exist in the competitive market with enhancing of
the sustainability, hence, it guides & directs the effective decisions &
activities/operations of the business. Directing the business operations towards
development, choosing & implementing the business strategies and ethical policies to
guide the overall structure of the company (Waruwu and Sitompu, 2016).
3. Structure of Organization: The complete structure of Sainsbury's includes the "board of
directors, independent directors, the procedure of shareholding & distribution and the
department of performance management". The nature of organizational structure must be
effective & positive as because it will influence the effective strategic decisions of the
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company. Sainsbury's has to ensure that all the operations of the business are
implemented effectively & smoothly as the structure of the organization must be strong
enough to make the prompt decisions. All the important decisions regarding policies for
the effective & potential growth of Sainsbury’s are taken by the “board of directors”.
4. Corporate Culture & Top Managers: They are important for identifying the internal
environment. The close corporate culture implies that all the decisions will be taken by
the managers at the top level & the managers of the middle, as well as lower level, has no
right to poke in between the decision-making process. Sainsbury's applies the open
corporate culture where the managers of lower level also have the right to participate in
taking the decisions (Gyepi-Garbrah and Binfor, 2013). High level of trust & confidence
is enhanced among the members of the company.
5. Human resource Quality: The skills, behavior, nature, abilities, dedication,
commitment, all these factors of the employees play a vital role in achieving the potential
growth & success of Sainsbury’s. All the employees are different in nature & possess
different values. The employees are divided or categorized among different groups
formed by the managers of the company. The managers of Sainsbury’s are required to
encourage & motivate the team cooperation among them in accordance with the interests
& goals of the organization (Gyepi-Garbrah and Binfor, 2013).
6. Labor Unions: The Union Labor bargains with the managers at the top level for
increasing their salaries, improving the working conditions for different category of
employees working in the organization. Effective communication & better relations can
be established between the managers & labor unions with the help of effective business
operations of Sainsbury’s. The bargaining of Union Labor can greatly influence the
internal environment of the organization.
7. Technology & Physical Resources: Sainsbury's technological tools and equipment are
the effective strength of the whole company in order to compete in the market for the
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longer time period. It is the effective internal factor through which Sainsbury's efficiency
& the cost of the production department can be identified & examined. The ability of
“Research & Development” must be operated effectively so that the unique innovation
can be introduced to enhance the employees’ productivity.
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M2. Critically analyse the internal environment to asses strengths and
weaknesses of an organization’s internal capabilities structure and skill set.
The internal factors of Sainsbury’s can be identified with the effective framework of “SWOT
Analysis” which includes all the strengths, weaknesses, opportunities & threats of the
organization. The SWOT analysis is also termed as the “SWOT Matrix” with the help of the
managers of Sainsbury’s can develop & identify the effective strategies for all these four
factors:-
Strengths:
 The maintained consistency in the quality of products has ensured the Sainsbury’s to
meet the increasing demands of the customers.
 Sainsbury's implements and establish a high level of policies, strategies & strong plans
for its products & services so that its sales can be increased.
 High level of satisfaction is being achieved by Sainsbury's of its customers by
establishing with them the dedicated & good relationships and hence enhancing the
"brand equity" among a large number of potential buyers & effective customers (Alshura
and Assuli, 2017).
 A huge amount of investment is being made by Sainsbury's in conducting the efficient
training programs & developing their employees, making them high skilled labor,
motivating & encouraging them to work with full dedication.
Weaknesses:
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 Besides investing the huge amount in the department of “Research & Development”,
Sainsbury’s is not able to compete with its high competitors in the market.
 The changing demand is not forecasted properly by Sainsbury's because of which
sometimes the high quantity of inventory is being stored in the company.
 Not all the challenges are being handled by Sainsbury’s which are raised with the entry of
new organizations. Therefore, the effective mechanism of internal feedback must be
maintained by Sainsbury’s.
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