Analysis of Sainsbury's Global Business Operations in the Egypt Market

This report provides a comprehensive analysis of Sainsbury's global business operations, with a specific focus on their attempted entry into the Egyptian market. It begins with an introduction to global business, defining its key features and benefits, and then delves into the challenges organizations face when operating internationally, categorized into managerial and operational barriers. The report then examines Sainsbury's vision, mission, and strategic objectives, followed by a SWOT analysis to assess their strengths, weaknesses, opportunities, and threats in the Egyptian market. A key element of the report is the discussion of Sainsbury's entry strategy, highlighting their past direct entry approach and their current preference for a joint venture strategy to mitigate risks and leverage local market expertise. The report concludes by summarizing the key findings and emphasizing the importance of thorough market research and strategic planning for success in global business ventures.

Global Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Explanation of Global business and its features.....................................................................3
Challenges faced by organisations while operating internationally.......................................4
Entry plan for Sainsbury's for entering Egypt market............................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global business which is also known as international business, is basically a commercial
transaction that involves two or more countries and their businesses. This transaction can take
place between two or more private entities as well as in government agencies (Argimon and et.
al., 2019). One of the main feature of cross border business is it operates on large scale and many
jurisdictions are involved in it. Companies planning to operate internationally, faces many
challenges and make plans and strategies accordingly for profit maximisation along with
performing efficiently. This report is based on Sainsbury's and failure of its operations in Egypt
market. Sainsbury's is one of the largest supermarket chain of UK which has its operations in
several locations and serving many customers on daily basis. Sainsbury's was founded in 1869
by John James Sainsbury's and headquartered in Holborn, London, UK. The company operates
in retail industry offering several products under on roof as supermarket. Sainsbury's is a public
limited company listed on London Stock Exchange and Financial Times Stock Exchange.
MAIN BODY
Explanation of Global business and its features
Global Business
This is a form of business practice in which organisations operates internationally,
headquartered in one or two countries but having operations around the world. Global business is
denoted by different names like international business, cross border transactions (Bouri and et.
al., 2019). The companies who are indulged in cross borders business transaction are known as
multinationals. Global business is a commercial relationship amongst two or more businesses
operating in different countries. Cross border business provides various benefits to organisations
but one main advantage is huge customer base and increased sales.
Features of international business:1. New Opportunities- International business is all about adaptation, companies learns to
adapt in different market condition. Due to dynamic market conditions it is required by
entities to work accordingly grabbing new opportunities to develop.
2. Advanced technology- Technology is very important part of today's world and this is one
of the characteristic of international business. It enables companies to adapt advances
technology of the country they are expanding.

Advantages of global business:1. Higher profits- One benefit entities has from entering into international market is they
gets an opportunities to earn higher profits, because of increased customer base and
larger market for operating.
2. Optimum utilization of resources- The resources are the key for every organisation to
work and through cross border transactions companies explore more natural and human
resources of different countries. This provides huge benefits to organisation as they get
more resources and better chances to enhance their performances (Brenkert, 2019).
Challenges faced by organisations while operating internationally
In above sections, few characteristics and advantages of global business is highlighted,
now in this segment challenges which entities faces while entering and operating in international
business. These barriers are broadly classified into two categories managerial and operational.
Few challenges are briefly explained below in context of Sainsbury's:
Managerial challenges:
1. Unfamiliar culture- Most common barrier managers face while managing international
business is due to different cultures. Sainsbury's managers has to learn and understand the
culture of the country and market they are planning to expand into. This is a huge
challenge which will hinder Sainsbury's operations, stopping them in assimilate with the
personnels and customers accordance with their behaviour (Franklin, 2019).
2. Organisational communication- As cultures are different, languages of regions in which
people communicate with each other are also not similar. Next barrier is of
communication, people handling and engaged in global business will be communicating
and reporting in their language. Managers of Sainsbury's have to implement an effective
system by which company and its members follow one common language.
3. Human resource- Most essential resources for every entity is their manpower, same is
the case when company is expanding. People working for it and performing operations
holds huge importance. Also, it is a challenges for organisation to find exact expertise,
who fulfil all the required performance levels. Sainsbury's leaders will accommodate
some experts to international locations for establishing their business, but then they have
to search skilled personnels for the roles they will leave vacant (Kasemsap, 2019).
Operational challenges:

1. Legal landscape- As business moves from one boundary to another, company will
expose to new laws and regulations which are unique from one another. Organisations
have to balance their operations according to these laws and make compliance with them.
Sainsbury's also have to learn about laws of Egypt and work in relations with them, if
entity do not work in compliance with the laws then they can face huge penalties which
will hinder their actions.
2. Sustainable business strategy- Strategy is basically action plans of company by which it
works, in other words it elaborative guide for organisation and its members. Sainsbury's
managers will have to first study Egypt's market thoroughly and then make their
strategies for entering and expanding. They have to collect lot of market information and
several data and then accordingly make their strategies.
3. Lack of financial control- Another challenge global company face is maintaining
balance on spendings and controlling finances. Lack of processes makes it difficult for
organisations to manage their funds. Sainsbury's operations also faced this barrier while
they were operating in Egypt and the result of it was losses they had to bear (Kotabe and
Helsen, 2020).
Entry plan for Sainsbury's for entering Egypt market
Vision
The vision of Sainsbury's is to become most trusted retailer for their staff and customers.
They want to maintain great workplace for employees where staff loves to work and enjoy
learning new things. Company also focus on the communities they serves, through their activities
they reflects that their community comes first.
Mission
Sainsbury's mission is to be first choice of all consumers they are serving to and wants to
serve in future. They concentrate on the quality of goods and services they are providing to their
customers and also at competitive costs along with delivering utmost satisfaction to end users.
Entity provide regular trainings to their staff for development of better skills which are updated
and encouraging them to work efficiently (Morozova, Popkova and Litvinova, 2019).
Strategic Objectives
Sainsbury's is retail supermarket store which is operating in UK and third largest of its
kind. Company aims to serve best to its customers and also to expand its operational boundaries

for which it is targeting Egypt's market. Sainsbury's wants to re-enter in Egypt again but with
better strategies and operative plans. This time company wants to go slow and steady, as now it
wants to put strong foot ahead. Objective of Sainsbury's now is to acquiring market more
effectively so that all wrong image of it can be cleared. Initial goals of entity is survival, then
growth and then gradually aims towards acquiring the whole market. Sainsbury's wants to
become the first choice of everyone whom they are serving and for that organisation is now
conducting thorough market research for acquiring best results (Nguyen, Pham and Ermasova,
2019).
SWOT analysis
Strengths Weaknesses
Sainsbury's when first entered the market,
people of Egypt was accepting the company, as
organisation was providing them ease and
comfort. Now also, if organisation enter the
market with its full potential it can acquire the
market and trust of people.
Most influencing weakness right-now for
Sainsbury's is the perceptions of local people
of Egypt about the organisation. The rumours
which was spread earlier changes the mind set
of people and that can be a weakening point for
it now also.
Opportunities Threat
The only chance Sainsbury's has now is to
explore new ways and methods of
globalisation and expansion for developing its
foot in Egypt's market.
Small retailers of Egypt are against the entity
as Sainsbury's can be their potential competitor
and in sometime can swipe them out of market.
Strategy
Earlier, Sainsbury's entered Egypt economy directly on its own in hurry and speedily.
Company initially opened 100 stores in all over Egypt and acquired 80% share of local retailers
of Egyptian Distribution Group and incurred losses as market was struggling. Now, Sainsbury's
wants to enter slowly with motive of survival and for that company is exploring some
globalisation techniques. It has tries acquisition before so now company is using Joint venture to
as its strategy.

Joint venture is a tool of internationalisation in which tow or more organisations come
together with same aims and objectives. They setup their operations in global location according
to their plans and aims. All the parties make strategies together and set common goals in order to
fulfil them effectively. Sainsbury's will also indulge in joint venture with the company already
existing in Egypt. By doing so they can attain several benefits and one of them is that the other
entity will be having clarity about the market (Petrie and et. al., 2019). This can prove to be
advantageous for Sainsbury's as they can make their operations in accordance with the needs of
people, fulfilling all of their wants and desires.
CONCLUSION
The above report is based on global business and it can be summarised from it that
companies needs to perform proper market research before entering a global market.
International business takes place between two or more entities which are operating in different
regions. Many challenges are faced by organisation in managing and operating their actions in
foreign market. These can be effectively managed is proper research is done, plans or strategies
which are made are in accordance with the market they are expanding.

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