Applied Corporate Strategy: Sainsbury's Report, Module Name

This report provides a comprehensive analysis of Sainsbury's corporate strategy. It begins with an introduction to corporate strategy, highlighting its importance in decision-making and organizational success. The report then focuses on Sainsbury's, including its merger with ASDA, and proceeds with an external analysis using PESTLE to understand the political, economic, social, technological, legal, and environmental factors influencing the company. Porter's Five Forces are applied to assess the competitive landscape. Internal analysis explores Sainsbury's resources, capabilities, and competitive advantages, including its joint venture with ASDA, diverse product range, and differentiated food proposition. The report concludes with an evaluation of Sainsbury's strategies, assessing their suitability, acceptability, and feasibility.

Corporate strategy

INTRODUCTION
Corporate strategy is wholly related to the organisation under which decisions are taken
within an organisation and all the expansion and operational strategies are framed so as to safeguard
the business in such a way that all the decision must be in the favour of organisational success.
Corporate strategy help the business in deciding their vision, allocating procured resources in efficient
manner, and prioritising their business decision as on the basis of business risk. The company taken in
this report is Sainsbury’s which is merged with ASDA (Alreemy and et. al., 2016), this merger is
giving them higher market capture and ease to serve larger audience. So this report includes PESTLE
analysis so as to understand external market opportunities which helps Sainsbury’s in their operations
and expansions. Further Porter five forces are methods to understand external competencies so as to
recognise market challenges and growth options. At last strategy analysis help them to evaluate their
applied strategy so as to get to know about correct method and strategy which is the most beneficial
for the business.
Coursework Report Review: Worksheet.
Organisation
(case):
Sainsbury’s
Q1. Strategic Issues (external analysis)
Industry
(definition)
Industry is defined as business activities which are running at large scale
whether it is manufacturing or trade. Industry includes large companies of the
same type and they are called sectors. As in context of Sainsbury’s, it is
related to retail industry and they covers 43.1% market in their industry and
they are the market leader in their industry which gives them extra benefit
over becoming market leader so as far.
Far
environment
(PESTLE)
In order to analyse far environment which is external environment PESTLE
analysis is performed so as to understand the prevailing market opportunities
as far.
PESTLE Analysis: this analysis is concerned with extrinsic business
environment so as to understand their opportunities and market growth.
PESTLE analysis for Sainsbury’s is shown as under:
Political factors: These factors are associated with political stability of the
country which is UK in the case of Sainsbury’s. This factor includes
government control over the industry, tax policy so to anticipate future growth
of the company. As in context of Sainsbury, political condition of UK is
uncertain due to Brexit. This is a contract which is made between EU and
England which states that England will not be part any more of EU. This
factor is having serious impact on retail industry as after acceptance of Brexit,
so these companies will have to import their good from other countries which

may be costly for them. On the other hand this is giving opportunity so as to
grow and to push their customer in order to enhancing their customer base and
earn profits. (Aluko and Knight, 2017)
Economic factors: These factors are associated with inflation rate, GDP
rate, economic growth, foreign currency exchange rate, purchasing power of
customer. As in UK inflation is rising due to Brexit so it is negatively
impacting the population. Further Sainsbury’s is totally dependent on their
transport system which is road transport, as they supply goods and receive
goods from their supplier with the help of road transport. Due to increase in
petrol and diesel pricing they are occurring high overall cost which is
decreasing their profits. On the other hand Sainsbury’s is an employee centric
company so they pay high salaries to their employees even for the simple task
such as store up keeping and maintenance. Due to this they are having low
profits as compared to their rivals like Tesco and ALDI. Further their joint
venture with ASDA has benefitted them so as to open up new stores and to
capture larger audience. (Bailenson, 2018)
Social factors: These factors include taste and preferences of customer,
social trends, demographic situations, age distribution, attitude towards career,
population growth of the country. As in context of Sainsbury’s, the consumers
are prone to get inclined towards healthy habits. Sainsbury’s is a supermarket
store which is having mostly packaged food in their shelves so this is a threat
and opportunity for the company. In order to deal with this threat the company
is required to manufacture some natural and healthy product so as to tackle
consumer behaviour. Their joint venture with ASDA has come up with
immense benefit as they can bifurcate their production of healthy and other
items in different sections. On the other hand Sainsbury’s is initiating fair
trade agreement so as to provide assistance to their buyers and to supply them
products as per their requirements and demands.
Technological factors: These factors are associated with all those
innovations and technological advancements which is related to research and
development, technological awareness and automations in technologies so as
to get new and advanced technologies in the business operations. In the
context of Sainsbury’s, they have introduces their ecommerce services so as to
deliver their products to ultimate customer in an efficient manner. The
populations are tech friendly now so this online experience is giving them
ease to shop and maximise their customer base so as to enhance their
profitability. Further they are using modern analytical systems so as to
recognise demographic need due to which they can serve to more customers
with their joint venture of ASDA. On the other hand use of AI is providing
them distinct market edge so as to establish themselves as renowned brand in
their industry and marketplace.

Legal factors: These factors are associated with legal analysis and legal
laws which are existed in a country and required to be followed by every
business entity so as to remain ethically operated and to remain up to date
with legality. As in context of Sainsbury’s, their new merger is made up of
mixing various laws that means during this process they were required to
enforce various laws and guidelines which are given by government. So as for
applying those guidelines this may face them to have various cost and
expenditure which can diminish their profitability (Brooks, Chen and Zeng,
2018). Further every business operation need to have approval from the
government, if any delay is seen in the approval it may result the company in
loosing market base and share. On the other hand Sainsbury’s is required to
follow some food and safety rule under which various rule are included which
are related to the food packaging and food ingredient. Due to adherence of
these rules, this is giving advantage to Sainsbury’s so as to grab trust of the
audience and maintain transparency.
Environmental factors: These factors includes environmental
surroundings, change in atmosphere conditions, pollution level, scarcity of
natural resources and environmental laws which may influence the operations
of the business. In the background of Sainsbury’s, they are having high
consumption of plastic in their carry bags and packaging so they are required
to minimise this use so as to get market position and to obey CSR policies.
Further as due to changes in climate conditions, the preferences and needs of
customers also get changed so this is an opportunity for Sainsbury’s so as to
manufacture products as according to the demands of their customer so as to
get market capture and high competitive edge with high profits. On the other
hand due to this factor Sainsbury’s is having opportunity to compete with
their rivals by supply new and innovative products which are environmental
friendly that means their packets are recyclable so as to come over their rivals
and to become market leader. (David-West, 2016)
Near
environment
(5 Forces)
In order to get to know about near environment which is affecting the industry
in gaining competitive edge and market sustainability, Porters five forces are
taken. This force is helpful in recognising outer force within an industry
which is helpful for the business so as to understand market trends and taking
out benefits from those trends. These forces are explained as under:
1) Threat of substitute: This threat includes the threat which is
pertaining in the market by existing substitute in the industry. In the
case of Sainsbury’s the company is having high threat of substitute as
they are having so many substitutes such as Tesco, M&S, and
Burberry etc.

2) Threat of new entry: This threat is associated with new entry in the
existing industry so as to enhance the level of competition and to
decrease the profits of existing companies. As in background of
Sainsbury’s this force is low in this case as the company are required
to have heavy investment and so many promotional events and
strategies are to be implemented by them in order to position
themselves in the market. Further due to joint venture of Sainsbury’s
with ASDA diminished this threat as they captured larger market by
this step.(Dodgson, 2018)
3) Bargaining power of buyer: This aspect is associated with the power
hold by the buyer in a particular industry so this regulates the prices of
the products. In the background of Sainsbury’s this threat is very high
due to presence of so many substitute in the market. Because of
presence of huge substitute, buyers are price maker in this case as they
are very price sensitive and do not bear high prices charged by
Sainsbury’s.
4) Bargaining power of suppliers: This aspect is related to the distinct
feature which is hold by suppliers of the company and how costly it is
for the company to switch their suppliers. As in context of
Sainsbury’s, this power is low in their industry as they have so many
suppliers so by one supplier it doesn’t affect them.
5) Inside rivalry: This force is determined by intensity of rivals inside
the industry. As in context of Sainsbury’s this force is having high
power. Sainsbury is having so many rivals such as ASDA, Tesco etc.
But after merger with ASDA this force has decreased; now they have
more capture over the market. (Jones and Comfort, 2019)
Q2. Internal analysis (Strategic Capability &
Advantage)
CSFs? These are the factors which are helpful in tracking the success of the business
and by tracking the level of strategic goals achievement. As in context of
Sainsbury’s, within the process of goal attainment they are supposed to aware
about each and every success factor so that to utilize them in the way of success
and to control them in order to receive maximum advantage over those factors.

Unique
Resources
(what do they
have?)
Sainsbury’s is having so many unique resources which differentiates them from
other competitors so as to receive maximum benefit over competitive edge and
to get higher sustainability. Their unique resources are explained as under:
1) Joint venture with ASDA: Sainsbury’s have merged into ASDA, this
gave them maximum benefit over market and gave them power to
capture more customer in their industry.
2) Diversified product range: Sainsbury’s is having diversified range of
products in their store which has made them to make distinct identity
over the market.
3) Differentiated food proposition: Sainsbury’s is having differentiated
food proposition in their food quality which is the major unique
resource for them.
4) Employee diversity: Due to presence in so many countries they have
diversified working culture which ensures efficient working in their
organisation. With the help of diversified employee they are able to
boost morale of their employee and motivate them due to which they
perform in extraordinary manner.
Unique
Capabilities
(what can
they do?)
Sainsbury’s is having distinct capabilities through which they try to attain their
targets and get customer satisfaction. Some of the major capabilities are
explained as under:
1) Superior position: Sainsbury’s is a market leader; it occupies an
extensive share in grocery or supermarket industry. So as to maintain
this position they continuously try to renovate their products and
rendered services in such a manner that they get higher customer
satisfaction as compared to their rivals.
2) CSR policies: Sainsbury’s is having CSR policies within their
organisation due to which they work for societal benefits. As in CSR
practices they adopted the method in which they minimises their
wastages and try to use environmental techniques so as to safeguard the
environment and get maximum out of that.
3) High profits: Sainsbury’s is earning high profits due to which they are
able to satisfy their customer need with the help of investing money in
research and development activities. By earning profit they organises
welfare activities for their customer and employees so as to provide
them high quality services and to get their trust and satisfaction.
4) Online selling: Sainsbury’s has started selling their products online, in
which they are providing fast delivery to the customer for perishable
products. This is the most beneficial feature of Sainsbury’s which could

be used by them so as to attract more customer as it is not easy for other
competitor to imitate their this feature because the delivery needs to be
very less in time which could be possible only after investing a lot in
training and technology. (Perera, 2017)
Links to
Advantage.
(map to
CSFs?)
With the help of above mentioned capabilities and unique resources,
Sainsbury’s is able to meet their target and to satisfy their customer in
considerable manner. With the help of their merger, it is helpful for Sainsbury’s
so as to acquire more market size and to compete with their rivals in an
effective manner. Further these capabilities are beneficial for the company is
having significant competitive edge in the marketplace so as to grab the
prevailing market opportunities and to have high growth thereon.
Q3. Evaluation
What strategy
will be evaluated?
The strategy adopted by Sainsbury’s in order to expand in the market is
to have joint venture with ASDA. This succession strategy gave them
high benefit over the market as they merged with one of their rival. This
strategy is helpful in order to get distinct market position which can
provide them additional customer base as compared to their rivals.
Evaluation –
Suitable?
(to the
environment)
The strategy of joint venture is suitable for the environment as both the
companies i.e. ASDA and Sainsbury’s is having environmental policies
in their organisation so as to safeguard the eco system and atmosphere.
These policies are adopted in the business so as to provide benefit to the
society and to get distinct position in the marketplace. (Rohwer and
Topić, 2019)
Evaluation – This strategy is acceptable so as to provide benefits to the stakeholders.

Acceptable?
(to key
stakeholders)
For Sainsbury’s their stakeholders are their suppliers, their shareholders,
their customer, their employees and the government of the country. For
their customer, Sainsbury’s is providing them the best and standardised
products so as to satisfy their needs and to render them quality products.
This will help them to meet demand of their customer so as to get
competitive edge in the industry’s marketplace.
Evaluation –
Feasible?
(is it possible?)
The strategy of joint venture is the most feasible strategy for
Sainsbury’s so as to get market edge in their industry. With the help of
joint venture with ASDA, Sainsbury’s is having larger market capture
which is helping them to get high customer base and high market
coverage. Further this strategy assists them to compete with their rivals
which may give them long time holding in the market. On the other
hand this strategy is benefitting them so as to generate larger profits and
to maintain their stability over performance of their operations and
employees.(Subramanian and et. al., Oracle International Corp, 2017
CONCLUSION
From the above report it can be summarised that corporate strategy is helpful for the
businesses so as to gather information as about all the factors which are existing in the
business. With the help of these factors the business are able to recognise their inimitable
resources so that to use their capabilities in the operation and to get growth and market
sustainability. Further this assists the organisation in utilising their optimum capacity so as to
provide the best of their services or products to their customer. Corporate strategy is helpful
in identifying those factor which could be helpful for the business in targeting that customer
or sector which are not catered yet. So by making strategies for those sectors and customer
the business can flourish and earn high profits in short range. (Watson, 2017)

REFERENCES
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