BMP6002 Strategic Management: Sainsbury's Planning & Environment

This report provides a detailed analysis of strategic management principles, using Sainsbury's, a leading UK supermarket chain, as a case study. It defines strategic management and outlines the processes organizations use to determine their strategies, including mission statement definition, envir...Read More

Business Management
BMP6002 Strategic Management
Strategic Planning
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Contents
Introduction ...................................................................................................................3
Explanation of strategic management...................................................................................3
Discuss the process used by organisations to determine their strategy...............................4
Critically assess of the impact of internal and external environmental variation on
organizational strategy...........................................................................................................6
Conclusion..................................................................................................................................8
References ...............................................................................................................................10
Appendix: The Business Plan....................................................................................................11
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Introduction
Strategic management is defined as the essential process of the organization
to effectively plan, organize, control and evaluate all the important needs of the
business leading them to achieve their desired goals and objectives. It is also the
effective utilization of the business resources allowing them to gain competitive
advantage in the marketplace (Bhattacharyya, 2020). Proper implementation of
strategy helps the business organization to improve their overall performance and
enhance their productivity and profitability. For this report Sainsbury company is
taken as the base company. Sainsbury is the second largest chain of supermarkets
UK, covering around 16.0% share of the supermarket industry. It was founded in
1869 by John James Sainsbury becoming the biggest retailer of groceries in 1922.
This report covers the detailed analysis of the strategic management and process
used by the business to determine their strategy is also highlighted in this report. In
addition to this, the consequence of intrinsic and extrinsic environmental factors on
strategy is also highlighted in this report. Furthermore, on the basis of relation in
internal or external environments the organization's strategic plan is also highlighted
in this report.
Explanation of strategic management
Strategic management is defined as process of effectively utilising the
resources of the organization in order to achieve desired goals and objectives and
enhance their overall performance(Hutaibat, 2019). It involves setting objectives,
determining the competitive environment, analysing the internal business,
determining strategies and ensuring that business implement required strategy
throughout the organization. Any kind of change in the business environment needs
them to regularly determine their strategies for success. Strategic management is
classified into various schools of thoughts. A basic approach to strategic
management describes how strategies needed to be developed, whereas the
descriptive approach focuses on how the strategies needed to be put into practice. It
is also the process of effectively setting the desired goals and objectives enabling
the organization to perform better and become more competitive in the marketplace.
It is determined that the staff members and resources are deployed effectively to
achieve these goals (Agha and Dixon, 2021). Strategic management plays an
essential role behind the success of the organization as it enables business to
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determine the areas for operational improvement. Proper strategic planning helps
organization to smoothly carry out their activity and achieve desired goals and
objectives. Strategic management also helps in offering clear understanding of the
organization mission and vision as well as where organizations wants to be in the
future and values that will guide its actions. This overall process requires proper
strategic planning, it is an ability of an organization to set both long term and short
term objectives. Strategic planning is also defined as the planning of strategic
decisions, task and resource utilisation required for achieving desired goals. Having
proper process for managing the strategies will help the business to take relevant
decisions and create new goals. Thus, helping business to gain competitive
advantage in the marketplace. In case of Sainsbury, which is considered to to
second largest chain of supermarket in the UK offering quality services to their
customers. From the starting the company has introduced the self-service method to
shopping in the UK. Company's effective strategic implementation allows them to be
successful in the marketplace and achieve competitive advantage. Further assess of
their strategy and environmental factors will enable them to grow and achieve
desired goals (Evans, 2019).
Discuss the process used by organisations to determine their strategy
Strategic management process is refers to the organization’s strategy. It is
also the process which helps organization to make an effective choice of proper
strategies for the business enabling them to achieve better performance and achieve
desired goals and objectives. It allows the business organization to perform better
and achieve desired goals and objectives. Proper strategic process helps the
organization to have clarity of steps needed to be undertaken by the business in
order to get their desired results and perform better in the marketplace. In case of
Sainsbury, company follows a systematic process in order to determine their strategy
and achieve desired objectives as mentioned below:
Defining the mission statement: The first and foremost step in the strategic
management process is determining their position in context to the business present
mission and objectives. The mission statement of the company defines the business
value and objectives. Goals are the desired ends through actual operating process of
the company (Todorov and Akbar, 2018). These are describes as the short term
objectives of the company. In case of Sainsbury, in order to determine their strategy
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company clearly defines their mission or the short term goals and accordingly
proceed with their strategy. Understanding of their mission helps the organization to
determine the kind of strategy needed to implemented by them in order to be
successful and grow in the market.
Analyzing the environment: The another step in determining the strategy of
the company is analyzing the environment, it plays an essential role in effective
implementation of strategy. Environmental scanning plays an essential role in
collecting, offering information for strategic purpose and enables organization in
determining the internal and external factors influencing an business. Before
implementing the strategy the organization should clear scan their environment and
factors affecting their growth and accordingly corrective actions should be taken into
consideration. In context to Sainsbury, company use framework like SWOT and
PESTEL analysis in order to determine and evaluate their environment and factors
affecting their strategic decisions.
Organizational self-assessment: Another step is organizational self-
assessment, it includes analysis and evaluation of certain forces operating in an
organization to determine the nature and degrees of competition in the company and
outside the company as well. Also determining the position of the company in the
marketplace and availability of resources also helps in determining the strategy of
the company (Nathan, 2019). In context to Sainsbury, company uses framework like
porter five force model to determine the competitive level and vrio analysis to
determine the company's resources and capabilities, leading to take right strategy for
the company.
Establishing goals and objectives: After organizational goals comes the
establishing goals and objectives. Ones the internal and external factors of the
organization are analyzed then it has to set the goals and objectives. The goals and
objectives set needs to be specific, flexible and measurable due to the continuous
changing environment and influence of the external environment. In context to
Sainsbury, the organization should set specific goals and objectives in order to
determine their strategy and perform well in the marketplace.
Formulating strategy: The last step of strategic management process is the
formulation of strategy and determining its implementation. Finally the strategy
needs to be formulated and implemented by the selected organization in order to
achieve their desired goals and objectives and gain competitive advantage in the
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marketplace (Hiriyappa, 2018). There should be clarity of organizational policies and
roles and responsibilities among the employees in order to achieve desired results.
From the above it is analyzed that Sainsbury follows proper process in order
to determine their strategy and achieve their desired results.
Critically assess of the impact of internal and external environmental variation on
organizational strategy
Business environment is defined as the sum of all the factors present inside or
outside business organization such as employees, customers’ needs and wants and
so on directly influencing the functioning and profitability of the business. In case to
enhance and become successful it is important for the organisation to regularly
examine their business environment and take corrective actions (Al Wazzan, 2018).
In context to Sainsbury, to determine the internal factors of the organisation the
SWOT analysis is used and to determine external factors the PESTEL framework is
used as mentioned below:
SWOT Analysis: It is one of the essential strategic framework used by the business
organisation in order to analysis their strength and weakness as well as well as to
determine various opportunities and threat available to them that can also influence
the operations of the business. In case of Sainsbury, the SWOT analysis of the
organisation is mentioned below:
Strength Weakness
 Sainsbury is considered to be the
biggest supermarket retailer in UK
with employee strength of over
100,000 employees.
 Sainsbury also has more than
1000 retail stores across UK
having strong brand image in the
marketplace.
 The growing prices of food around
the globe has directly impacted
the company’s selling at higher
prices.
 Stiff competition in retail industry
has also impacted the company’s
growth
Opportunity Threat
 Expansion of business into new
and emerging market can be
opportunity for the company
 Use of new and advance
technology can also allow
company to gain competitive
advantage and boost sales also
 Change in taste and preference of
the customers can create threat
for the company.
 Also increasing competition in the
marketplace can also create threat
for the company.
 Change in the political and
economic factor can also create
treat for the company.
PESTEL Analysis:
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It refers to a tool or technique considered by the organization to determine or
monitor the macro environmental factors that directly influence the operations of the
organization (Yoder, 2019). It includes all the factors present outside the business
organization but has direct impact on the growth of the business. In case of
Sainsbury, the PESTEL analysis is mentioned below:
Political factor: It refers to the extent to which the government intervenes in
the functioning and profitability of the business. It includes factors like government
policies, political stability and instability in the oversea marketplace. Any kind of
political instability creates unfavorable environment for the organization and will
directly impact their growth. In case of Sainsbury, the company mainly operates in
the UK, so the current Brexit situation will create certain consequences of company's
business. After the UK exit the inflation rate has also gone up, hence reducing the
supermarket sale in UK. Any changes in political factor will direct impact the
functioning of the company.
Economic factor: Another factor is the economic factor, it includes changes
in the inflation rate interest rate, GDP rate, employment rate and so on. In case of
Sainsbury, which mainly operates in the UK market with inflation rate going higher
and income growth rate remaining same, the demand for the buying commodity will
be reduced. Also with the UK experiencing an economic stagnation can lead to be a
blessing for Sainsbury to invest in the developing market having strong and growing
economy. Growing in the well developed economy will enhance the profitability and
productivity of the company as well as enable them to gain competitive advantage in
the marketplace effectively (Oppio and Bottero, 2018).
Social factor: It refers to as attitude, behavior and culture of the customers
which directly influence functioning of the company. In order to continue to grow and
maintain their position in the marketplace it becomes essential for the business
organization to regularly assess the social needs of their customers and satisfy their
social needs accordingly. In context to Sainsbury, with growing trend of customers to
buy from the supermarket rather than any local retail because of the offers given to
them enables supermarkets like Sainsbury’s to satisfy their customers. Chosen
company continuously assess the changing needs of their customers and offers
them quality services to them.
Technology factor: It refers to change or advancement in technology that
directly influences the functioning and profitability of the company. For an
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organization to grow it is essential to continuously determine any kind of changes in
the technological factor and accordingly take corrective actions. In context to
Sainsbury, company is effectively using advance technology in order to satisfy the
needs of their customers such as company is actively using their online selling
options of collecting their purchases. It helps them to attract large number of
customers (Sawhney, Gupta and Kumar, 2019).
Environmental factor: It includes the contribution of business towards
welfare and sustainability of the environment. It is the responsibility of each and
every organization to contribute towards welfare of the environment leading them to
gain competitiveness in the marketplace. In case of Sainsbury, the organisation
supports the U.N sustainability objectives as well as reducing its carbon emissions in
their operations. The company is also reducing its waste in the beef and lamb supply
as well as acknowledging its customers to reduce food wastage.
Legal factor: The last factor is the legal factors which includes legal laws and
legislation implemented and needed to be followed by each and every organization
for their smooth functioning. In case of Sainsbury, the organization follows all the
needed legal laws in order to smoothly carry out their work and achieve their desired
goals. Following all the legal laws also help company to gain competitive advantage
in the marketplace and enhance their overall performance (Moutinho, 2018).
Conclusion
From the above report it has been concluded that strategic management
plays an essential role in the growth and success of the organization, it enable
business to plan their strategy for achieving their desired objectives. It helps
business organization to improve their overall competitiveness and enhance their
productivity and profitability. It also help the business organization to effectively
analyses and determine various factors which directly influence the growth and
profitability of the company. It is also analyzed the proper strategy helps the
business organization to gain competitive advantage in the marketplace. This report
helps in analyzing the detailed process used by the business to determine their
strategy along with the impact of internal and external environmental factors
impacting the strategy using SWOT and PESTEL analysis is also analyzed. And the
detailed strategic plan on the foundation of change in the either internal and outside
environment is also analyzed in this report.
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References
Book & Journals
Bhattacharyya, S.S., 2020. Integrated perspective for entrepreneurs: the dos and
don’ts in strategic management of new business ventures. Journal of
Operations and Strategic Planning, 3(2), pp.159-193.
Hutaibat, K., 2019. Accounting for strategic management, strategising and power
structures in the Jordanian higher education sector. Journal of Accounting &
Organizational Change.
Agha, N. and Dixon, J.C., 2021. The uniqueness of spectator sport from a strategic
management perspective: The case for spectatoritis. Journal of Global Sport
Management, 6(1), pp.7-29.
Evans, N., 2019. Strategic management for tourism, hospitality and events.
Routledge.
Todorov, K. and Akbar, Y.H., 2018. Strategic Management in Emerging Markets:
Aligning Business and Corporate Strategy. Emerald Group Publishing.
Nathan, M.L., 2019. Convergence, context, crossvergence: contending perspectives
on strategic management in Asia vs. the West. International Journal of
Economics and Business Research, 17(4), pp.361-387.
Hiriyappa, B., 2018. Strategic Management and Business Policy: For Managers and
Consultant. PublishDrive.
Al Wazzan, D.A., 2018. A Framework for the Strategic Management of Information
Technology. American Journal of Business and Management, 7(1), pp.14-
43.
Yoder, M.E., 2019. Better together: Complementarity between theory and practice in
strategic management education. Journal of Education for Business, 94(5),
pp.324-332.
Oppio, A. and Bottero, M., 2018. A strategic management based on multicriteria
decision analysis: an application for the Alpine regions. International Journal
of Multicriteria Decision Making, 7(3-4), pp.236-262.
Sawhney, S., Gupta, A. and Kumar, K., 2019. A simplified strategic management
model for higher education institutions in India. International Journal of
Higher Education and Sustainability, 2(3), pp.238-264.
Moutinho, L., 2018. Contemporary Issues in Strategic Management. Routledge.
Grindrod, P., 2020. Leading Within Digital Worlds: Strategic Management for Data
Science. Emerald Group Publishing.
Aboramadan, M., 2019. Strategic management: the case of Saudi nonprofits. Journal
for Global Business Advancement, 12(6), pp.791-819.
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Appendix: The Business Plan
A review of an organization’s strategic plans
Business plan is defined as the written document prepared by the business
organization describing the organization main activities, objectives as well as
detailed analysis of how the organization is planned to achieve its goals and
objectives. In context to Sainsbury, which has been majorly impacted due to the
current COVID 19 and Brexit is planning to introduce new technology in order to
increase their sale and attract large number of customers. In order to achieve this
objective the business plan of the company is mentioned below
Executive summary: Sainsbury which is one of the leading and second biggest
retail chain in UK is planning to increase their competitiveness in the marketplace.
With the availability of higher level of resources and capabilities company as well as
their strengths company will be able to accomplish their goals and achieve
competitiveness (Grindrod, 2020)
Background: Sainsbury is one of the well established and second largest retail
chain in UK offering quality services to their customers. It was founded in 1869 by
John James Sainsbury. Company has large number of loyal customer base and
employee base effectively committed towards satisfying the needs of their customer
and improve their overall performance.
Market analysis: It is refers to as determining the factors present in the market that
can influence the functioning of the company. It order to continue to grow and
achieve desired goals it is necessary for the organization to analyses their
marketplace effectively. In case of Sainsbury, in order to analyze the marketplace
the Ansoff matrix is used as mentioned below:
Ansoff matrix: It is refers to as essential strategy used by the organization in order
to determine the necessary strategy that can considered by the organization in order
to gain competitive advantage in the marketplace and continuously grow effectively.
It includes mainly four strategy that are in case of chosen organization are
mentioned below:
Market penetration: The first and foremost strategy that can be considered by the
organization to gain competitive advantage in the market and grow can be market
penetration. This strategy allows the business organization to focus on offering
existing products into the existing market this can be done through using advance
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promotional activity and advance research and development techniques. This will
enable business to increase their customer base in the existing market as well as
boost their sale (Aboramadan, 2019).
Product development: Another strategy that can be used by the business
organizations to grow in the marketplace can be product development. This strategy
focus on providing new and some innovative products into already extant
marketplace in order to gain their customer base. This can be done through
determining the needs of the customers and then offering the unique and value
added products to the customers as per their needs
Market development: This kind of strategy focus on offering existing product to the
new market. This strategy focus on tapping into new and emerging market effectively
leading to capture large market share. This can be done through expanding business
into new and emerging market using their strong capabilities and existing products.
This helps business to enhance their performance and market share.
Diversification: The last one is the diversification, this strategy focus on entering
new market with new and innovative product. Under this business focus on gaining
competitive advantage through entering new market with new product. It is a risky
process but with innovative and unique process company can gain competitive
advantage in the marketplace.
From the above it is analyzed that the chosen company can use market
development strategy to increase competitiveness in the market and increase their
effectiveness. This strategy will enable business organization to move into new
market with their already existing products. Company has strong brand image and
strong employees base this will help company to achieve their desired objectives
and improve their performance.
Objective: The main objective of the company is to enhance their product range and
become market leader. Also increase their sale by 20% in the next one year.
Monitoring and controlling: For effective and booming implementation of the
strategy it is necessary for the organization to endlessly monitor and control their
activity. Company should ensure that the progress is continuously monitored and
controlled as well as the employees has clarity of their roles and responsibilities to
achieve desired goals and objectives. In case of chosen company, the SAF model
will be used by the company in order to continuously monitored their process and
evaluate their strategic plan effectively
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