IMAT5211 ECOMMERCE Assessment 2: Sainsbury's E-Business Strategy

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IMAT5211
ECOMMERCE
Assessment 2
Management report
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Contents
Introduction......................................................................................................................................2
Background......................................................................................................................................2
Sainsbury’s E-Business Strategy; Analysis and Evaluation............................................................3
E-Business Strategy.....................................................................................................................3
Analyzing Sainsbury’s E-Business Strategy...............................................................................3
E-Commerce Strategic Operations..................................................................................................5
Sainsbury’s Online Delivery System...........................................................................................5
Sainsbury’s Manufacturing Process............................................................................................6
Sainsbury’s Consumer Engrossed Procedure..............................................................................6
Sainsbury’s Nectar Card..................................................................................................................6
Key Benefits to Contractors, Purchasers, And Regulars.................................................................7
Challenges Faced by Organizations.................................................................................................9
Practical hitches...........................................................................................................................9
Communal hitches.......................................................................................................................9
Recommendations............................................................................................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
List of Figures
Figure 1: Logo of Sainsbury Business.............................................................................................2
Figure 2: Concrete Structure of Sainsbury’s E-Commerce Strategy...............................................3
Figure 3: E-commerce integration advantages in B2B businesses..................................................5
Figure 4: Components of E-strategy................................................................................................5
Figure 5: Nectar Card of Sainsbury.................................................................................................6
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Figure 6: Strategic Activities of Sainsbury......................................................................................7
Introduction
Different studies have proven that e-commerce leaves a very efficient impact on overall business
performance like it reduces the overhead charges and most of the revenue for companies and
enhance a better image rating. The e-business is adopted for retail businesses because it enhances
and improves the cash flow of business. This report is aimed to evaluate and analyze the e-
business strategy for one of the largest retailers in the UK i.e. Sainsbury. We will analyze how e-
commerce strategies of Sainsbury would impact its performance. We will look in this report that
Sainsbury had increased customer satisfaction after the compliance of proper e-business
strategies.
Background
Sainsbury is one of the largest food retailer chains in the United Kingdom and in fact, 3rd largest
in terms of net revenue. History of Sainsbury's expanded on 147 long years. Sainsbury is
registered with LSE and stock market because it is a limited company. The start of the company
was very humble because they started with a single store in the street and now have expanded up
to 1200 stores throughout the United Kingdom. They opened their first store in 1869 and by now,
they have acquired 16.3% of the total market shares.
Figure 1: Logo of Sainsbury Business
According to the guardian founders of Sainsbury were Mary Ann Sainsbury and John James. By
now, the popularity of Sainsbury is in the domain of offering quality products at very reasonable
prices. Intercourse Sainsbury has been the largest retailer of UK market but now it is lagging at 3
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after Walmart and Tesco. Currently, the company has a waste human resource consist of 153
thousand people about 16 million customers.
Sainsbury’s E-Business Strategy; Analysis and Evaluation
E-Business Strategy
Sainsbury shapes its business strategy to transmit information about all the products over online
as-well-as offline platforms. This helps them track and understand what they shop with them and
what are their entire needs to be fulfilled. Hence, this e-strategy augment the frequency of
communication between Sainsbury’s suppliers and consumers. Sainsbury utilized cloud mailing
services to direct thirty-five million emails towards their nectar-card owners as per their
shopping preferences. Sainsbury was the first food store who computerize its food delivery to
multiple stores at the same time. It also has expanded product variety from food to non-food
products and made an e-business strategy for ordering, purchasing, and communicate products.
The major advantage they got from this is the rationalize flow of tracking down process and
unconventional automation of exchange processes between worldwide business centers. In this
way their sell and purchase procedures get rectified from minor mistakes. Initial deployment of
e-business pilot strategies was done in 1998. Many companies boost up their sales revenue from
this. Sainsbury’s suppliers and producers also welcomed the benefits of pilot system and hence
started working more closely with the company’s team in return (Peiris, 2018). Here is the
concrete structure of Sainsbury’s e-business strategy shown;
Figure 2: Concrete Structure of Sainsbury’s E-Commerce Strategy
Analyzing Sainsbury’s E-Business Strategy
E-business strategies are largely beneficial for individual businesses but also depend upon the
requirements of their primary and secondary consumers, namely the investors and senior
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supervision. The main decision makers of any company or firm are investors and supervision as
they provide a roadmap to follow, and which is being exercised through invention and delivery
of corporate strategies, e-policies, vision statements, and regular SWOT analysis of organization
or business. Sainsbury arrived retail market of UK along with the Tesco as a small departmental
store but later on, it outpaced other retailers of its type expanding its immense selling chains all
across UK. Apart from hypermarkets, Sainsbury implemented internet-centred business-strategy
to deliver their products door-to-door while managing payment system online. This section aims
to analyze the different e-business strategies formulated and exercised by Sainsbury to overcome
thrilling market competition.
Integration of E-strategies largely impacts the per year sales and profit revenue of Sainsbury.
Supervision authorities of Sainsbury use the reporting and systematization activities to retain and
spectacle their progress and product’s statuses online. Electronic interfaces help engage
customer-retailer communication better and also helps to embrace new expertise to improve their
business amenities and mockups in a distinctive way. There are multiple advantages that
Sainsbury have achieved from the integration of e-business strategies in their strategic planning;
 It eases business deal and functioning cost.
 Upsurges conspicuousness.
 Expand purchaser provision.
 Empowers arcade growth.
Effective integration of e-business strategies in Sainsbury’s business made them the world’s
supreme leading retailers’ organization. Here are some B2B e-commerce integration advantages
which are gained over other businesses by Sainsbury.
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Figure 3: E-commerce integration advantages in B2B businesses
While the major components of e-commerce strategy can be seen as shown below;
Figure 4: Components of E-strategy
this e-commerce strategic platform helps to establish direct acquaintances among consumers
through new online services (Ghezzi, 2012). This type of decent relationship sinks functioning
cost, ripens trustworthiness, and delivers appreciated reliable info about manufactured goods to
regulars. Magnusson states that Sainsbury allows its customers to view goods and enjoy their full
information in an excellent graphical interface in the form of an online portable website. So the
emergence of computer interfaces in information management systems of Sainsbury brings
constructive impacts in manufacturing procuring and it uplifts economy in a way no other
business strategy could do. Moreover, e-facilities help locate products which are best match with
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customers’ requirements, easily on web-interfaces on targeted company and other ones. These
products can also be located within secure flagship range.
E-Commerce Strategic Operations
Three e-commerce strategic operations of Sainsbury include:
Sainsbury’s Online Delivery System
Their food delivery system supports 100,000 orders per week being available to ninety-per cent
of UK’s household area (Anon., 1869). This system includes following modules;
 Online order placement.
 Online transactions.
 Order transfer to the respective area’s Sainsbury food store.
 Order delivery with-in time and with the best quality.
Sainsbury’s Manufacturing Process
This includes tracking down and logistics maneuver, renewal and collation of food, transaction
dispensation system and main control. The business retailers use desktop-network application to
create e-business which is able to let flow of foodstuffs from organization to execute further
maneuvers. Data-warehouse systems are being in use to gather all the financial data of customers
in order to confirm by-time delivery of products.
Sainsbury’s Consumer Engrossed Procedure
This includes e-marketing and publicizing actions taken to communicate foodstuff over internet.
Sainsbury also promotes its branded products over social media tools which attract social circle
audience towards their products. The man force present in the google analytics office is
responsible for analyzing and attracting “right” customer’s traffic towards their company. In this
way, both consumers and administrative needs can be assessed.
Sainsbury’s Nectar Card
Nectar card holders are given multiple benefits from the company’s advisory board. They can
purchase on a “single-click” and can get “promotional codes” for further purchasing of goods.
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They are also given with “purchase score points” to be able to facilitate them with the gift
hampers for being their regulars. Here is the nectar card is shown;
Figure 5: Nectar Card of Sainsbury
Meeting requirements, this organization developed a prognostic business model with the
incorporation of storeroom technology and logistics scheme. this prognostic model allows store
organizers to have access to sales elevating conjecture. Sainsbury provides 1 dollar point for
every purchase to the consumers who use nectar card and this feature uplifts their economy to the
point of leading in competition.
Key Benefits to Contractors, Purchasers, And Regulars
Strategic Associates: businesses at social, regional, national, and international level. Contractors
associations for sustainable development. Indigenous cooperative-ventures.
Strategic Activities:
Figure 6: Strategic Activities of Sainsbury
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Resources:
 Web-platform.
 Digital stocks.
 Digital assortment points.
 Mini territories.
 Nectar card.
 Information technology set-up.
 Logistics plus warehouse schemes.
Expense Scheme:
 24hours shopping practice.
 Secure e-shopping.
 On-time home delivery.
 Nectar holders can shop personally.
Client Dealings:
 Nectar card provides consumer’s devotion.
 Attract more consumers by improved eminence of foodstuffs and facilities.
Price tag Edifice:
 Accounting Staff for handling transactions.
 IT infrastructure to automate financial disputes while avoiding maximum errors.
 Investment outflow.
Revenue Streams:
 Sales and home delivery system.
Analysis Evaluation
This analysis gives us an insight of what are the impacts e-commerce strategy have on the
Sainsbury’s business and found out the most significant impact as the profit margins
enhancement while benefiting the customers, contractors, and retailers at the same time.
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Real-time status of products and services can be accessed by the key suppliers who help business
meets requirements (Hannak, 2014). Benchmarking schemes and economic contrast research
findings suggest the similar products of other brands and their marketing status to help to bargain
their foodstuffs. Suppliers mainly access that info and provide it to their key-buyers to help them
get relaxed while shopping with them.
We have also analyzed that the e-commerce platform of Sainsbury is flexible, portable and
reliable which provides its consumers with a view of product varieties, features and price range
for each variety.
Quantity customization e-business strategy of Sainsbury provides opportunities to its consumers
regarding specific products for each customer according to their requirements. In addition to that,
consumers are provided with a variety of options for each product so that they can choose what
they want and, in this way, all these technological advancements attract new entrants to the
business.
Challenges Faced by Organizations
The hurdles offered to Sainsbury in executing E-business are outlined as follows
Practical hitches
Keeping up with security standards is a key function in E-business. Lack of proper security
measures will make the database prune to theft /hacking and may let the leak of sensitive and
confidential information such as credit card or debit card numbers of clients and of organization
posing a liability to company’s repute. Applications such as firewall will provide one with
encryption methods and will eradicate bugging. SQL bears its own way of attacking the
unauthorized users by inserting a virus to its system thus protecting from theft. It will also keep
authorized users from accessing the services of company along with hackers.
Communal hitches
Technology framework is not at all subtle or low maintenance to implement. Implying IT
infrastructure costs big bucks to a company. Hi-tech software’s required to run E-commerce will
increase the overall functional and business cost. Along with this, highly trained and talented
personals are required to look after IT work up which will in turn pose the risks of customer’s
issues improperly handled by the company, thus causing credibility loses.
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Recommendations
Sainsbury is doing financially very well, so to make any recommendations about Sainsbury we
may not think about Sainsbury shutting down any of the business engagements to purpose/start
new ones. We may need to figure new, creative engagements or activities from Sainsbury that
may please clients as well as stakeholders of the company.
Sainsbury produces quality electronic products along with reasonable services but in comparison
to its rivals as Dell and PC world Sainsbury’s prices are high. Sainsbury does not bear a
competitive advantage in terms of affordability; it needs to produce quality laptops with a
reasonable price range.
To combat this Sainsbury first need to realize its target market. Considering middle-class
customers for an instant suggests that they may buy pricey and high-quality products. So,
Sainsbury may aim factory workers or lower middle class to sell quality products with affordable
pricing. Figuring this out will lead the company towards a narrow down range of specifications
required for the target market and Sainsbury will have to ensure the availability of these specs
bearing products in market. Sainsbury should understand that a community just asks for quality
product instead of brand boasted high priced products.
Before incorporating any changes, Sainsbury may need to take a quick view of objective
dependent on sales, cost and productivity etc. Sainsbury should expect to generate maximized
sales launching new and improved stock in market and should identify that it may be practised
on a local store or countrywide level.
What’s good about making recommendations of business activities is you can observe the
success rate of business engagement on a small scale by buying stocks in small quantities and in
case it does not work out the stocks could be cleared up subtly or you can purchase in bulk at a
competitive price and earn reasonable profits. Another plus is that it could enhance the sales and
the invested capital could be recovered fast.
One problem with cost-cutting technique is that it will put the company in direct rivalry with
Dell or even eBay and they may adopt the same strategy and reduce prices. This will soon make
the competition ruthless.
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Sainsbury can cope with this scenario by hitting on impulsive shoppers and a put a tag line to
charm clients as “Limited time offer” making this exclusive and will earn huge profits in a short
span not letting the competition grow. Before the competitors may have thought through this
Sainsbury will be packed up with the offer and will have started thinking about further strategies.
Sainsbury is a supermarket and its core activity is to sell groceries and in order to give a boost to
its core activities, a business may adopt to be divergent and make it more diverse or be
convergent and focus on their USPs these are the two key recommendations to Sainsbury.
Conclusion
This report analyzes the e-commerce strategies related to Sainsbury organization. It can be said
that e-commerce strategies implementation within business applications enhance significant
growth rate both property as well as product wise. Portable, steadfast, and user-friendly web-
interface with the integration of logistics and tracking process, helps improve overall profit
margins and quality provision all over the world. The graphical interfaces of website with orange
slogan colour also link dairy foodstuffs variety with the cool colour and hence attracts customers.
Nectar card facility is also provided, which is analyzed as the best to retain customer’s traffic
towards one’s business so as Sainsbury. On the other hand, while integrating e-facilities inside
applications, business professionals have faced a lot of problems like security issues, MITM
attacks, workforce poor understanding, decision-making problems which also impacts the growth
of e-strategies inside Sainsbury. And most probably this is the reason why other organizations
are now taking over the Sainsbury’s business. Therefore, this is the need of an hour to refresh
Sainsbury’s e-business strategies with better team management and leadership abilities.
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