MG624: Strategic Marketing Report on Sainsbury's Expansion

This report provides a strategic marketing analysis for Sainsbury's potential entry into the Indian market. It begins with an introduction outlining the aims, objectives, and background of the report, followed by an examination of key issues. The main body of the report includes a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors influencing Sainsbury's operations in India. A SWOT analysis is conducted to identify the company's strengths, weaknesses, opportunities, and threats, followed by a mapping of SWOT with PESTLE. The report explores various market entry options, including strategic alliances, mergers and acquisitions, and foreign direct investment (FDI), along with their advantages and disadvantages. Market segmentation and Porter's generic strategy are also discussed. The conclusion summarizes the findings and offers reasoned recommendations for improvements, aimed at supporting Sainsbury's successful expansion into India. The report is based on a UK based company Sainsbury which is one of the leading international supermarket company established in the United Kingdom in 1869 and became the largest retailer of groceries in 1922. Currently, Sainsbury do not have any outlet or store in India and therefore they are planning to establish their business in India as well with their retailing business.

Strategic Marketing

Table of contents

INTRODUCTION...........................................................................................................................1
Aims.......................................................................................................................................1
Objectives...............................................................................................................................1
Background.............................................................................................................................1
Examination of Issues.............................................................................................................1
Importance of issues examination..........................................................................................1
Important definitions..............................................................................................................2
Covered in the report..............................................................................................................2
Expected conclusions.............................................................................................................2
MAIN BODY...................................................................................................................................3
Overview................................................................................................................................3
PESTLE Analysis...................................................................................................................3
SWOT Analysis......................................................................................................................4
Mapping SWOT with PESTLE..............................................................................................5
Solutions to threats.................................................................................................................5
Market Entry options..............................................................................................................5
Market Segmentation..............................................................................................................8
Porter’s Generic Strategy.......................................................................................................9
CONCLUSION AND RECOMMENDATIONS..........................................................................10
Findings................................................................................................................................10
Reasoned and practical recommendations for improvements..............................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Aims
The aim of this report is to consider the strategic marketing in a real-time organisation in
order to functioning and working of the company in an effective and efficient manner with a
view of expansion in a new country with their own products and services so that the better image
and reputation can be maintained in the marketplace.
Objectives
The objective of this report is to introduce the company of its own products and services to
the new country by conducting the market research which includes the external and internal
environment analysis in order to carry out the operations in the country according to its products
and services trends.
Background
Background of this report is to choose a company which wants to enter a new country with
its own products and services in order to increase its product portfolio in terms of customers and
market also. Therefore, the whole market research is being conducted in this report for the
company to support while entering into a new country with its new product and services
(Chernev, 2018).
Examination of Issues
Issues are that the company don't know that how to examine the external environment of
the country in which the company wants to set up their business and operate and therefore pestle
analysis and SWOT analysis along with the market entry options and market segmentations
along with the porter's generic strategy are to be analysed.
Importance of issues examination
Importance of examining these issues is that the company would be better to analyse their
strengths and weaknesses and know about the target customers and also about the opportunities
and threats to operate in the new country with the external environment and how they can
succeed.
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Important definitions
Strategic marketing can be defined as the process which permits the organisation in order
to concentrate in its limited resources and utilise these resources in a maximum manner for the
greatest opportunities in order to increase its sales and revenue generation and also to accomplish
the sustainable competitive advantage (Sahaf, 2019).
Covered in the report
The following discussion is based on the overview of the company and the pestle analysis
along with the swot analysis which includes the mappings of SWOT analysis and pestle analysis
with the solution to threats. Moreover, discussion is also made on the market entry options and
the market segmentation along with the porter's generic strategy with proper findings and
conclusion.
Expected conclusions
Expected conclusion drawn such that it is predicted that the determination of the external
and internal environment of the company is done in a proper way so that the better results can
come out for proper operations in the organisation in the chosen country along with the better
recommendations and justifications. Therefore, this can support the company in better expansion
and growth of its business as per the needs, requirements and meeting the expectations of the
company in the new country.
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MAIN BODY
Overview
The chosen UK based company is the Sainsbury which is one of the leading international
supermarket company established in the United Kingdom in 1869 and became the largest retailer
of groceries in 1922. Currently, Sainsbury do not have any outlet or store in India and therefore
they are planning to establish their business in India as well with their retailing business.
PESTLE Analysis
Political factor
Political tractors have the threat in terms of Sainsbury in India because there are
fluctuations in the tax rates upon sales because if tax rate increases prices of lenses also increase
which lowers the demand and moreover it restricts the foreign investors to invest in the country
which creates problems in operations (Hollensen, 2018). Moreover, in the context of Sainsbury
UK, Brexit has the essential implications for businesses which impacts the political relations
with Qatar that affect Sainsbury.
Economical factor
Economic factors have the opportunities in terms of Sainsbury in India because there is a
government to appreciate the business activities and it helps business to grow because it results
in the growth in increment of the Gross domestic product, national income and employment in
the country which reduces the poverty rate in the country (Thrassou, Vrontis and Bresciani,
2018). Moreover, in the context of Sainsbury UK, there is a steep decline in GBP after brexit
impact on earnings.
Social factor
Social factors have the opportunities in terms of Sainsbury in India because social trends
are developing in terms of shopping habits because the people in India buy the products and
services in bulk in the retail domain and are used to visiting a place where they can find all the
stuff they are looking for (Yaneva, 2021). Moreover, in the context of Sainsbury UK, there is a
sustainable business practices by the company in order to garner customer support and rising
demand for organic food.
Technological factor
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Technological factors have the opportunities in terms of Sainsbury in India because India
supports block chain Technology along with the hardware and software technology and big data
management which helps the company inefficient operations and management of the business in
a time and energy saving manner (THIS, 2020). Moreover, in the context of Sainsbury UK, there
is a use of data driven analytics in order to derive detailed consumer insights.
Legal factor
Legal factors threaten Sainsbury in India because there are different strict laws imposed
on the supermarket industry in the usage of some products and services which are not sustainable
in nature and therefore the business has to follow those rules and regulations in order to operate
in the market in a legal manner (Ben Youssef, Leicht and Marongiu, 2019). Moreover, in the
context of Sainsbury UK, there are regulatory approvals which delays in decision making and
business growth.
Environmental factor
Environmental factors have threats in terms of Sainsbury in India because there are
restrictions in the usage of carbon emission but it is important for the business to operate in an
efficient manner and therefore they are restricted in the using of these products in order to be
environment friendly and to maintain stability of the environment in the country (Harbar,
Selezneva, Gonchar and Kaptalan, 2020). Moreover, in the context of Sainsbury UK, there is a
reduction of operational waste and recycling along with the carbon emissions and strategic
sustainability plan.
SWOT Analysis
Strengths
Sainsbury is a diversified business with strong market share and balance sheet with good
profitability. It has a differentiated food position with great quality and moreover it is a great
place to work with good employee diversity.
Weaknesses
Sainsbury has only a single operating market along with the low margin food business
which are the greatest weakness of the company.
Opportunities
Sainsbury can expand its business in a global market with the help of online
collaborations. It can also diversify and grow Sainsbury’s bank. It can introduce online groceries
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and convenience store channels of future growth along with the technology analytics in order to
support the customer insights.
Threats
Sainsbury has a threat because of Brexit which influences the prices and creates intense
competition in the grocery and retail segment.
Mapping SWOT with PESTLE
There are different factors which are providing opportunities to Sainsbury and also
providing threats to the company. Such as political factors, environmental factors and legal
factors are giving threats to the company. Economic factors, social factors and technological
factors are giving opportunities to the company.
Solutions to threats
Solutions to the threats are that the company must focus on its product portfolio and
competitive advantages in terms of pricing and promotions by following the political rules and
regulations along with the following environmental factors in terms of sustainability and
following the laws and legislation is in terms of legal factors in an opportunistic manner so that
the people can attract towards the brand by observing all these activities by the company.
Market Entry options
Strategic Alliances
Overview
Strategic alliance can be defined as the agreement among two or more companies and
parties in order to perform the mutual objective agreed required but while remaining an
independent organisation. multiple companies decide to share their resources in order to
undertake the specific and mutually beneficial project to work towards the common and mutual
goals (Shtal, Buriak, Ukubassova and Tlegen, 2018).
Advantages
Strategic alliance permits companies to reach their goals faster in order to expand their
customer base so that it can give access to greater levels of innovation and positive brand
awareness which involves financial assistance and allows the company to control imports and
exports along with the networking opportunities.
Disadvantages
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Strategic alliance encourages good employees to cross over which creates conflicts in
ownership claims and also it sticks to one company with a maturity of expenses which can lead
to discrepancies of interpretation that results in the clash of cultures which may cause delays in
implementation.
Benefits to the company
Strategic alliance can benefit the company in operating the business in India because it
helps the organisation in expanding its product portfolio with the sharing of expenses and
moreover sharing of resources as well and therefore it can bring less investment with more
return.
Mergers and Acquisitions
Overview
Mergers and acquisitions can be defined as the transactions in which the companies have
the ownership of other business organisations in order to operate different units which are
transferred and consolidated with other entities (Rabbani, 2019).
Advantages
Merger and acquisition is considered as the less time consuming and quick to execute
which has proven the less risky that supports in the immediate grab of market share by reducing
the competition by taking over rivals. Moreover, the investor can bank on the existing Goodwill
of the acquired business.
Disadvantages
Merger and acquisition has the disadvantages such as the acquiring form in a foreign
country has complicated objectives which involves the bankers and lawyer’s regulations.
restrictions of the host countries on acquisition of local companies by the foreign companies is
also the demerit along with the label problem of the host country companies are also transferred
to the acquired company.
Benefits to the company
Benefits of merger and acquisition the Sainsbury in India can be that although the
Sainsbury did the market research about India but if the Sainsbury merges with another
supermarket in India can get a good support and help in terms of labor and resources which can
assist the company in operations and Management on a global basis.
Foreign Direct Investment
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Overview
Foreign direct investment can be defined as the type of controlling ownership in a
company in one country which is based on the another country. It is distinguished from the
foreign portfolio investment in terms of direct control. It is the type of investment which is made
by the company in one country in terms of business interest which is located in another country.
It takes place when an investor formulates the foreign business operations for acquiring assets of
foreign business in a foreign company (Reed, 2018).
Advantages
Advantages of foreign direct investment are the economic growth of the nation and
human capital development along with the technology and increase in export which supports in
the exchange rate stability and improve capital flow which helps in creation of a competitive
market and adaptation according to the climate.
Disadvantages
Disadvantages of foreign direct investment are the hindrances of domestic investments
and the risk from political changes along with the negative exchange rates and higher cost which
results in the economic non viability and expropriation and moreover the modern-day economic
colonialism and poor performance.
Benefits to the company
Benefits of foreign direct investment to the Sainsbury in India is that the owner of the
company can completely control its operations and management under him and no more external
forces impact its business functioning and the decision making is totally in the control of owners
of the company and no more restrictions other than external factors.
Recommendation
It is recommended for the Sainsbury that after researching the external environment in
India, they must go for the foreign direct investment rather than strategic alliances and mergers
and acquisitions and this is because foreign direct investment will help more to the company if
the market research is done in an appropriate manner but the other two will have a strict
legislations and company must have to work with other companies and even under them also so
therefore Sainsbury can gain the whole control on the market by adopting the foreign direct
investment method in the form of market entry modes.
Relationship with PESTLE Analysis
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Foreign direct investment has a relationship with the pestle analysis in terms of Sainsbury
which can create opportunities and can provide solutions against the threats. This is because
pestle factors are in the favour of social, technological and economic factors which can create an
opportunity in foreign direct investment in India and also helps to fight against the threats.
Market Segmentation
Overview
Market segmentation can be defined as the process of distinguishing the wide variety of
customers and the business market consisting of the existing or potential customers in the form
of sub divisions of customer’s dependent on the type of characteristics they are sharing.
Targeting
Market targeting or target market can be defined as the group of consumers inside the
business available market in which the company targets the customers in terms of marketing
efforts and resources. Target market is considered as a subset of the total market in order to serve
the products and services to the customers. Basically it is a process of selecting the target market
from the entire market. Target market contains the group of customers to whom the company
wants to fulfill the needs and requirements of the customers in terms of the products they offer
and pricing along with the promotion and distribution networking.
Types of segmentation
Geographic
Geographic segmentation includes the customer location and region which contains urban
or rural classification. In the context of Sainsbury, they must establish their business in India.
The most crowded places for example Mumbai and Delhi show that the maximum number of
people can visit the stores (Finoti, Toaldo, Schwarzbach and Marchetti, 2020).
Demographic
Demographic segmentation includes the age and gender along with occupation and socio-
economic group. In the context of Sainsbury, they must target the age group of adults and mostly
the females who are the non-working because they have the responsibility of the house and its
accessories and because of the requirements they will visit the supermarket.
Behavioural
Behavioral segmentation includes the rate of usage and benefits sought along with the
loyalty status and readiness to purchase. In the context of Sainsbury, initially they must offer the
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