Strategic Analysis of Sainsbury's: Corporate Strategy Report

This report offers a comprehensive strategic analysis of Sainsbury's, a major UK supermarket chain, focusing on its corporate strategy in the context of a merger with Asda. The analysis begins with an external assessment using PESTLE and Porter's Five Forces models to identify opportunities, threats, and industry dynamics. The report then delves into an internal analysis, employing TOWS and VRIO models to evaluate Sainsbury's strengths, weaknesses, and core competencies. Finally, the report assesses the merger strategy using the SAF criteria (Suitability, Acceptability, Feasibility). The report highlights the impact of political, economic, social, technological, legal, and environmental factors on Sainsbury's, along with its competitive position in the UK retail industry. It also evaluates the company's resources, capabilities, and the strategic implications of its decisions.

Applied Corporate
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
EXTERNAL ANALYSIS................................................................................................................1
PESTLE Analysis...................................................................................................................1
Porter's Five Forces Model.....................................................................................................3
INTERNAL ANALYSIS.................................................................................................................4
TOWS Analysis......................................................................................................................4
VRIO Analysis.......................................................................................................................5
SAF CRITERIA...............................................................................................................................7
Suitability...............................................................................................................................7
Acceptability...........................................................................................................................8
Feasibility...............................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journals...............................................................................................................10

INTRODUCTION
Corporate strategy is a term which reflects upon all the processes and procedures that are
associated with increasing and improving the value of an entity. Corporate strategy not only
offers the organisation improve the competitive advantage but also enable it to succeed within
the market place (Kozmal and El-Monem, 2018). Therefore the concept of corporate strategy
becomes very important and necessary for entity to analyse for fully understanding its
application and executing all plans effectively. The present report is based on Sainsbury a
supermarket chain of United Kingdom known as one of the biggest. The present report will be
emphasising discussion on the merger took place between Asda and Sainsbury. The between two
companies is a strong area to discuss in regards to corporate strategy. Hindi project effective
external environmental analysis of Sainsbury is conducted for identifying its opportunities and
strengths available in internal and external environment of the entity. Moreover internal analysis
is also conducted of the organisation with the help of VRIO model for identifying the capabilities
of the firm and its major competencies. Lastly, the SAF model or criteria is utilised to analyse
the merger strategy of the entity.
EXTERNAL ANALYSIS
PESTLE Analysis
Sainsbury is a leading brand in supermarket and Retail industry which makes it very essential
and important that the organisational external analysis should be conducted and performed for
understanding the external influence on organisational working and strategies.
 Political Factors: The political factor revolves around the notion where political stability
of the region and reforms that shape of the working of a company within the industry and
the country is involved. Sainsbury is a firm which huge market share United Kingdom
the company holds the responsibility to align its operations with the political
requirements and position. United Kingdom is known for its political stability but you
currently the country is suffering because of certain factors like brexit and coronavirus
pandemic.
 Economical Factors: The economic actor focuses on the economic performances of the
country and the elements involved are employment, population, inflation etc. Sainsbury is
organisation with the highest market share and United Kingdom in Retail industry.
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Automatically evidence the fact that country as stable economic environment and the
economic performance is the region are prominent. But in recent years the whole country
is facing economic downfall and and stability because of brexit which is a great influence
on Sainsbury.
 Social Factors: The social factors associated with the element are the current trends
flourishing in the market, preferences of people and the likelihood to make purchase
according to their needs and requirements. A key construct which have evidently placed
change in the Retail industry as per the social environment and concern is that increasing
digitalization and preferences of people in regards to digital products and services.
Customer are moral drawn towards digital services and products which leads the change
for seems very as well the company has to online Android several changes in operations
like online and electronic payments for fast delivery and many more (Jin and et. al.,
2018).
 Technological Factors: The technological factor is inclusive of all the digital
transformation and advancement taking place in technological industry which is also
affecting other respective industries. Revolutionary changes taking place in technological
sector and industry which is also be affecting the retail sector of UK. Technological
advancement and evolution introduced artificial intelligence, robotics and better customer
relationship management which results in supporting organisations like Sainsbury to
maintain their position in the industry.
 Legal Factors: This factors is somewhat related and similar to political factor. In legal
aspect all the regulations and policies that essential for entities to comply and comply
with the highlighted. Sainsbury is surrounded by the legal environment of United
Kingdom and it is becoming complicated for the company to comply with the policies
and regulations of the country. this is because the complications are increasing as brexit
took place and the policies of United Kingdom and EU have evolved. The country have
to be focused on both the legal requirements which is getting a little bit complicated and
chaotic.
 Environmental Factors: The environmental factors have been recently introduced in the
external analysis of organisations. The factor revolves around and considered as the
major impact placed by the operations and functions of the organisation on the society
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and natural environment of the country as well as the world. the government of United
Kingdom is highly dedicated towards protecting the environment reading awareness and
making strict efforts to do so. Therefore it is highly beneficial opportunity for Sainsbury
to effectively and efficiently align it operations with the environmental policies and
reduce carbon footprint by imposing sustainable plans with the focus of complying with
the demands of the industry and matching with the scissor objective.
Porter's Five Forces Model
Sainsbury's is perhaps the most grounded organization regarding maintainability, benefits and
client base. In any case, it is critical to dissect its modern allure to evaluate its present situation
inside the commercial centre. For this intention, Porter's Five Forces Analysis is being utilized,
which is a device to dissect a few powers inside the business and their effect on the organization.
 Suppliers' Bargaining Power: These are people or associations which give crude
materials to associations in setting of advancement of their contributions. There are
incalculable providers inside the retail business of the UK, Furthermore, associations like
Sainsbury's have different stock chains as they are needed to bargain in a huge assortment
of items. Subsequently, with so numerous in amount, the strength rests with the
providers. This makes their capacity high in setting with the organization (Godos-Díez,
Cabeza-García and Fernández-González, 2018). Nonetheless, with individual stock
organizations, the firm, after its consolidation with Asda, could viably appreciate control
over the provider network through sharing their restrictive organizations, which could
lessen this force in future.
 Customers' Bargaining Power: There is an immense amount of clients inside retail area,
every one of which are a lot of faithful to the organization they purchase their
contributions for. In any case, the exchanging cost is low for clients, alongside presence
of a few substitute items for retail things like staple and home stocks. This upgrades their
dealing intensity of the association. Notwithstanding, to manage this, selective reach
should be created by the organization alongside Asda, which would urge clients to
purchase quality items at moderate costs, that would let down their haggling power.
 Threat of New Entrants: Entering inside the retail area requires substantial speculation
and immense extra money to support in the market comprehensive of a few major
players, for example, Sainsbury's and Tesco. Moreover, because of the probability of
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occasions of Brexit, the simplicity of working together inside the UK has gotten more
terrible. Subsequently, this decreases the danger of new participants for Sainsbury's. In
future, its consolidation with Asda would be more worthwhile for the organization,
because of a selectiveness picked up by them that would bring down this danger much
further.
 Threat of Substitutes: Substitutes are the administrations and items that could be used
instead of a contribution of an organization. In setting with Sainsbury's, it manages a
scope of items, for example, home machines, food, clothes, and so on As far as
substitutes, there are a wide assortment of items and administrations accessible in return
of the food things inside retail industry, which expands this danger for the firm. Besides,
home apparatuses and stocks could be subbed too by various contributions which give
comparative advantages or administrations to people. Subsequently, this danger is
moderate for the organization. Consequently, to diminish the equivalent, there should be
selective scope of natural nourishments and an assorted scope of apparatuses and stocks,
which would decrease the tendency of clients towards the substitutes (Lawton, 2017).
 Competitive Rivalry: Rivalry inside the retail area is exceptionally high with firms like
Tesco, Lidl, Sainsbury's, etc receiving unmistakable procedures which are needed to pick
up a serious edge more than each other. Nonetheless, one angle which has upgraded this
danger as for the organization is that the online commercial center is blasting and
extending everywhere on the nation purchase associations like Amazon. This
organization took over Whole Foods Market, which was a US staple association to grow
its commercial center inside the UK. In this manner, the opposition inside the area gets
serious for Sainsbury's. To limit the danger, the association should utilize suitable
advertising strategies and extend its activities properly in online market, which would
help the firm in holding its clients and acquiring likely ones.
INTERNAL ANALYSIS
TOWS Analysis
There are a few assets and abilities related with an association that could be a fitting strength or
shortcoming of the organization. In any case, to properly examine the capacities of the firm, it is
basic to viably break down these abilities in setting with the chances and dangers that are
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controlled by the outside climate examination. Subsequently, TOWS investigation is applied
beneath to evaluate the association's assets and centre capacities: Strength / Opportunities: The prominent asset inside the association is its innovative
capacities as it utilizes robotics innovation in a few in-store measures. Hence, this could
help the firm in stopping openings later on related with headways on the mechanical
front. Besides, the firm has suitable labour force, which would help in setting up the way
of life of embracing new innovations at the same time. Strength / Threats: One noticeable danger present as for the association is identified
with Political flimsiness inside the UK. Notwithstanding, in spite of this factor, its image
picture would keep the association's dependable clients flawless regardless of changes in
a few approaches in the nation and would assist the firm in guaranteeing consistence with
its providers inside he EU countries too (Fernandes and et. al., 2017). Weaknesses / Opportunities: There are sure shortcomings related with the organization,
for example, expensive contributions. This could in all likelihood be changed over into
strength in future, as there is a clear measure of swelling inside the nation. This would
require the organization to sell its contributions at a lower cost and consequently upgrade
the extent of more income age.
 Weaknesses / Threats: As per threats, there has been a financial ruin inside the nation,
which requires the organizations to improve their activities in manners which they could
procure more income. Nonetheless, the firm has a high tendency towards its disconnected
activities, which requires the organization to move onto online internet business channels
as well, to guarantee viability and higher productivity later on. Moreover, the guidelines
inside the UK are definitely changing, requiring the organizations to be adaptable in
setting of arrangement of their items. Sainsbury's offers its items at an extremely
exorbitant cost, because of its image picture, which could be undermining for the
organization because of such changes in modern evaluating guidelines. Subsequently, the
firm should receive adaptable estimating for its contributions to upgrade the extent of
progress in this regard and to adapt well to the adjustments in guidelines.
VRIO Analysis
The VRIO model helps organisations and researchers to effectively identifying the resources and
capabilities associated with the company and perform an essential task of linking the resources
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towards assisting the company in context of gaining effective competitive advantage and
performing in the best manner possible. Therefore, VRIO model is applied below in regards to
Sainsbury (Gomez-Trujillo, Velez-Ocampo and Gonzalez-Perez, 2020).
CAPABILITIES VALUABLE
(V) RARE (R) INIMITABLE
(I)
ORGANISED
(O)
COMPETITIVE
ADVANTAGES
Brand Image Brand Image - - - Partially
Competitive
Diversity in
Product
Range
Diversity in
Product Range
Diversity in
Product Range - -
Temporary
Competitive
Advantage
Automation
Technology
Automation
Technology
Automation
Technology
Automation
Technology -
Temporary
Competitive
Advantage
Effective
Workforce
Effective
Workforce
Effective
Workforce
Effective
Workforce
Effective
Workforce
Sustainable
Competitive
Advantage
Valuable: Brand Image is valuable as it requires use amount of time patients and resources for an
organisation like Sainsbury to develop such an appropriate image within the market. Diversity in Product Range is a key factor which led Sainsbury towards success as it is
one of the basic element which help Organisation in enhancing its customer base with
diverse range of products and services. Thus, is a valuable resource for the organisation. Automation Technology is a valuable source too as it helps it in having access To
appropriate technologies and enable the organisation to conduct operations in effective
manner (Baumgartner and Rauter, 2017).
 Effective Workforce is a valuable source which is reflected by it the strong day-to-day
operations running in increasing performances of Sainsbury in the market.
Rare:
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 Diversity in Product Range is a rare resource as it is complex process for Sainsbury to
involve vast range of products and services in operations. Automation Technology is rare for Sainsbury as not March organisation have involved it
in their operations or have access to it.
 Effective Workforce Sainsbury holding exceptional skills and talents which is impossible
for others to copy or imitate brings rarity in the picture.
Inimitable: Automation Technology which is used by Sainsbury unique and inimitable as the
organisation make sure to patent its technological resources making it impossible for
others to copy.
 Effective Workforce as imitation of employees is quite a impossible task because a
separate mindsets, experiences and backgrounds of individuals (Whittle and Myrick,
2016).
Organised:
 Effective Workforce of sincerity is organised by providing staff members of rotary
training and development sessions to showcase them the respective manner in which they
need to perform and operate according to the company’s requirement.
SAF CRITERIA
Suitability
Every methodology of the company is needed to be viably assessed against its suitability, which
incorporates degree to which it could help the firm in picking up upper hand (Ganzarain and
Errasti, 2016). In this manner, consolidation of Sainsbury's with Asda is one such system which
would be assessed close by Strength/Opportunity quadrant from VRIO examination above.
Presently, digitalisation is overpowering the retail area, which requires the association to
embrace a few new advances and digitalisation sources all through their reality. Hence, the
consolidation between these association would give improved advantages in setting of sharing
their image picture, specialized and monetary assets, alongside aptitudes and gifts of workers.
This angle and sharing of assets makes it very viable for the organizations to get to the headways
in innovation and gain more extensive serious edge over the market and improve its efficiency
and benefit. Subsequently, this methodology is very reasonable for the organizations,.
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Acceptability
It is fundamental that agreeableness inside the association is investigated, which would permit in
dissecting that whether the necessary procedure is acknowledged by the partners or not. The
following is the Power/Interest Matrix which would help in evaluating the adequacy of the
merger (Sharabati, 2018).
LEVEL OF INTEREST
LEVEL OF
POWER
HIGH LOW
HIGH Shareholders, Workforce, Government
LOW Consumers Suppliers
 Workforce: A noticeable partner for Sainsbury's is its representatives or labour force.
They are the structure squares of an organization and purpose behind its supportability.
Consolidation of Sainsbury's with Asda would affect the labour force in a somewhat
negative manner as such a stage would be changing the hierarchical structure.
Subsequently, the agreeableness of the system among these partners may be trying for the
organization and consequently, requires the firm in conveying and convincing workers by
giving them data identified with future advantages to them by the merger (Litfin and et.
al., 2017). Consumers: These are the people for which the association exists. There are a few clients
with both Asda and Sainsbury's which require more viable help and items. Subsequently,
both the organizations consolidating would have better and successful acknowledgment
inside client bunches as they would appreciate advantages excellent help and items in
moderate value range.
 Shareholders: These are the people who put resources into the organization and
anticipate better yields. Consolidation of these associations would permit the investors to
gain more returns because of pay from their joint clients alongside obtaining of expected
purchasers. Consequently, the adequacy range is high among these partners.
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Feasibility
The last perspective related with the attainability of the procedure. This would be
performed inside three angles, monetary, human and mechanical asset (Kurpjuweit and Wagner,
2020). For blending, the firm would require extra cash, for which it could move toward banks for
advance or crowd funding choices, which would be possible in gaining higher assets. Further,
newcomers and extra staff are needed by the firm to converge with Asda, which should be
possible by embracing enlistments and determination techniques, for example, inclination tests
and individual meetings. Thirdly, alongside computerization, the firm could without much of a
stretch receive Artificial Intelligence also, which would need to deal with the tasks after the
consolidation in a serious way (Kanbach and Stubner, 2016).
CONCLUSION
From mission conducted in above section and the report it can be concluded that applied
corporate strategy is very much effective and necessary process for a company to understand.
India assignment external analysis is conducted which allows in answering understanding in
relation to the factors and components that are affecting the organisation from the outside.
Moving along, internal analysis of the organisation have also conducted which enables in
identifying to core values, resources and capabilities of entity that offered it its competitive edge
or position within the market. Lastly, Indian different strategies are required to be adopted by the
company for enhancing their scope to be acceptable, sustainable and feasible environment for
getting better results and outcomes.
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REFERENCES
Books and Journals
Kozmal, H. and El-Monem, A., 2018. Corporate Social Responsibility in Quick Service
Restaurants: An exploratory study of social responsibility activities applied in global
and local restaurant chains in Egypt. International Journal of Heritage, Tourism and
Hospitality, 12(3 (Special Issue)), pp.94-108.
Jin, D. and et. al., 2018. How Have Green Companies Fared in Transactions with Banks? A
Stakeholder‐Management Perspective. Journal of Applied Corporate Finance, 30(4),
pp.89-107.
Godos-Díez, J. L., Cabeza-García, L. and Fernández-González, C., 2018. Relationship between
corporate social responsibility (CSR) and internationalisation strategies: a descriptive
study in the Spanish context. Administrative Sciences, 8(4), p.57.
Lawton, T. C., 2017. Cleared for take-off: Structure and strategy in the low fare airline business.
Routledge.
Fernandes, K. and et. al., 2017, June. Transfer learning with partial observability applied to
cervical cancer screening. In Iberian conference on pattern recognition and image
analysis (pp. 243-250). Springer, Cham.
Baumgartner, R. J. and Rauter, R., 2017. Strategic perspectives of corporate sustainability
management to develop a sustainable organization. Journal of Cleaner Production, 140,
pp.81-92.
Whittle, R. and Myrick, C. B., 2016. Enterprise business architecture: The formal link between
strategy and results. CRC Press.
Litfin, T. and et. al., 2017. Corporate social responsibility reporting–a stakeholder’s perspective
approach. Business Systems Research Journal, 8(1), pp.30-42.
Kanbach, D. K. and Stubner, S., 2016. Corporate accelerators as recent form of startup
engagement: The what, the why, and the how. Journal of Applied Business Research
(JABR), 32(6), pp.1761-1776.
Kurpjuweit, S. and Wagner, S. M., 2020. Startup supplier programs: a new model for managing
corporate-startup partnerships. California Management Review, 62(3), pp.64-85.
Sharabati, A. A. A., 2018. Effect of corporate social responsibility on Jordan pharmaceutical
industry’s business performance. Social Responsibility Journal.
Ganzarain, J. and Errasti, N., 2016. Three stage maturity model in SME's toward industry
4.0. Journal of Industrial Engineering and Management (JIEM), 9(5), pp.1119-1128.
Gomez-Trujillo, A. M., Velez-Ocampo, J. and Gonzalez-Perez, M. A., 2020. A literature review
on the causality between sustainability and corporate reputation: What goes
first?. Management of Environmental Quality: An International Journal, 31(2), pp.406-
430.
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