Sainsbury's Market Analysis: A Comprehensive Report

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Market Analysis of Sainsbury’s
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Executive Summary
The market analysis is a crucial part for any company as it provides substantial information
regarding the company positioning and sustainability in the vast market sphere. The basis for any
market analysis provides the qualitative and quantitative evaluation of any company and this
analysis also takes into consideration the various factors like consumer force, economic
environment and sustainable strategy of the concerned company. This report takes into
consideration the multinational retail company Sainsbury's and the market analysis of the
company in order to gain proper knowledge about the company positioning in the vast market
sphere. The report has been discussed in two different parts. The first part refers to the report
where the market analysis of Sainsbury's has been demonstrated and the second part refers to the
reflective part based on the experience of the communication, numeracy, ICT, problem-solving
capacity and the experience of working with others.
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Table of Contents
Part 1................................................................................................................................................4
Introduction..................................................................................................................................4
Company Background..................................................................................................................4
Analysis of the business, customers and competitors of the organization...................................4
PESTLE analysis of the organization..........................................................................................5
Porter’s five forces.......................................................................................................................7
Key Issues Faced by the Organization.........................................................................................9
Conclusion...................................................................................................................................9
Part 2..............................................................................................................................................10
Introduction................................................................................................................................10
Reflection...................................................................................................................................10
Communication skill..................................................................................................................10
Numeracy Skills.........................................................................................................................10
ICT.............................................................................................................................................11
Problem Solving.........................................................................................................................11
Working with others...................................................................................................................11
Conclusion.................................................................................................................................12
Reference.......................................................................................................................................13
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Part 1
Introduction
Sainsbury is an important supermarket of UK Created in the year 1869. This organization was
created by John James Sainsbury and it has more than 1400 shops across the Globe. This study
focuses on analysis of the internal and external business environments of the organization by
conducting SWOT and PESTLE analysis. Analysis of the strengths and weaknesses in the
business process of this organization is done in this study by focusing on the resources of this
organization as well as organizational issues. In this study the analysis of different operational
issues faced by the Mangers of this organization is done for analysis of the external business
environment.
Company Background
Sainsbury's has earned the second position in terms of the supermarket chain in the United
Kingdom. It has been seen to occupy a share in the supermarket sector by 15.3%. The
multinational chain of the supermarket was founded by John James Sainsbury in the year of
1869. Initially, it started as a shop in Drury Lane, which is in London, which later on occupied a
privileged position in the retail sector of groceries in the United Kingdom. J Sainsbury plc has
now split into three divisions, which are Sainsbury's Bank, Sainsbury's Argos as well as
Sainsbury's Supermarkets Ltd. The company has it's headquartered at Holborn, London, which is
in the United Kingdom. The company is known to have operations in 1,415 shops and has
revenue of 28.456 million pounds. Besides, the number of employees working within the
company amounts to 186,900 (sainsburys.co.uk. 2018). Lastly, the company is known to have an
operating income as well as net income of 518 million pounds and 309 million pounds
respectively.
Analysis of the business, customers and competitors of the organization
Sainsbury is an important market chain of UK and it has business revenue of about 28 billion
pounds. The important customers of this organization are Resco and Alda as they offer similar
services at a comparatively lower price. The number of Suppliers of this organization is about
2000 and the company focuses to improve its relationship with the customers and suppliers.
Thi8s organization focuses to provide quality services to the clients by focusing on improving
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the quality of the brand. This organization faces many challenges namely high competition in the
retail market as well as the risks associated with brand switching. According to Simpson et al.
(2017), another important challenge that the Sainsbury organization faces is the high
procurement costs of the products. This organization focuses on improving the relationship with
the suppliers and creates a strategy for getting competitive advantage in the business process.
This organization focuses on implementing proper Leadership Skills to improve its business
operations. Effective promotional strategy is an important strength of this organization as this
organization provides advertisements in both Traditional Medias as well as Social Medias. This
organization focuses on the processes of wholesale banking for improving the business
operations and it helps to improve its business operations.
PESTLE analysis of the organization
Political factor Economical factor
UK provides a range of political factor that
plays one of the most important roles towards
the projection of business growth in the UK.
The emergence of Brexit has led the country to
run under the norm of UK government taxation
policy.
The UK has presented the existing corporation
tax through which organizations, such as
Sainsbury will gain beneficial results via 19%
of corporation tax.
It has been estimated that the UK's
government has formed the government tax
to present the rate of budget, which will be
in effect by 2020. In such a context,
Sainsbury will be obtaining market price
profit by 17% (Pan et al., 2018).
Due to the presence of Brexit, Sainsbury has
the chance to implement further development
In this regard, the UK comes up with the
revelation based on the projection of the UK's
economic territory.
This country is considered as one the largest
zone in terms of economical factor that
receives help form nominal GDP. Moreover,
this has been perceived that the occurrence of
the recession that took place in 2008 due to
which the country's economy fluctuates and
inversely has affected the productivity in
Sainsbury.
The country has come up with the reflection
based on minimum wage policy that focuses on
£7.50 per hour, which inversely affect the
Sainsbury’s employee salary base.
The presence of Brexit comes up with the
reflection based on the fluctuation of economic
scale that deviates from 0.25% to 0.5%
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and gain expansion in the international market. (Graham, 2018).
This inversely affects the performance in
Sainsbury due to the presence of GDP.
Social factor Technological factor
The social factor can be organized through the
help of the rate of the population that is present
in the UK. It has been estimated by the help of
the UK's National Statistics, the country is
presented with 65.6 million of population.
The country has been subjected to a number of
death rates, which is expected to reach the
level of 74 million in the next few years. This
inversely will affect the level of productivity in
the selected organization, Sainsbury.
Through the help of 18% who ages above 65
years are considered as the old generation
that put an impact on the functional
structure of Sainsbury (Widya et al., 2018).
Social factors in Sainsbury can be obtained
through the help of various practices that will
help the business to gain sustainable in the
international market.
The technological factor can be illustrated
through the technological consumption of
advancing technologies (Rodriguez et al.,
2019).
The UK is quite advanced in terms of using
technologies and this has helped Sainsbury to
develop the working atmosphere through the
implication of advanced technologies.
Due to the presence of advanced technologies,
Sainsbury has received better collaboration via
analytics.
Environmental factor Legal factor
Environmental factor plays an efficient role in
the collaboration of activities in Sainsbury in
the UK.
The UK has been subjected to the various
types of weather issues that affect the
employee of Sainsbury and inversely affect
the level of productivity (Imathiu et al.,
2016).
Legal Factor is considered as the last factor of
the PESTEL analysis, which refers to the legal
landscape. In terms of PESTEL analysis of the
United Kingdom, the legal landscape has been
considered. Sainsbury’s in order to enhance its
business in the United Kingdom prosperously
needs to take legal factors into account.
By legal factors, the laws as well as
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Additionally, the environmental factor of the
UK has led to the projection of a reduction in
waste material by Sainsbury.
regulations, which have been legislated by the
government of the United Kingdom.
Several laws, as well as regulations, have been
passed by the government of the United
Kingdom in terms of employment.
For instance- the Employment Act 1996 has
been passed by the UK government in order to
ensure the safety of the workers who are
working within organizations (Masood et al.,
2015).
In reference to this act, it can be said that it is
highly imperative of Sainsbury’s to form
effective strategies for the employees in
accordance with them. Hence, Sainsbury's need
to formulate the rules and regulations of its
employees in accordance with the Employment
Act 1996 in order to sustain in the UK market.
Besides, employees play a pivotal role in an
organization, which is why it is highly
essential for looking after employment law.
Moreover, the organization needs to grant
maternity as well as paternity leaves. Besides,
employees need to be provided with minimum
wage, sick pay as well as other rights.
Furthermore, in accordance with the Equality
Act 2010, Sainsbury should not be engaged in
any kind of discriminatory action against
employees.
Porter’s five forces
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Porter’s five forces models can be described as the strategic management tool, which assists the
company to gain competitive advantages in today’s competitive world. In addition, it can be
revealed that Sainsbury needs to be prioritized on the forces and its impacts on the Sainsbury
(Asiedu, 2015). This can be considered as very advantageous for the company to develop its
business. This part of the report will be analyzed the industry of Sainsbury with the assistance of
the porters five forces model.
 The threat of New Entrants
The economies of scale can be considered as very hard to obtain in the retail industry. This
makes the ways for Sainsbury to increases their capacities along with to have the cost advantages
(Asiedu, 2015). The capital requirements in the retail industry are very high and are difficult for
the new entrants to operate their business. Sainsbury can obtain the benefits for economies of
scale and they need to prioritize more innovation and new ideas to make their products different.
This is a weak force.
 Bargaining Power of the Suppliers
The control of suppliers over prices is very less compared to the buyers and this is the prime
reason that makes the bargaining power of suppliers a weak force. Sainsbury Plc can buy their
raw materials from its suppliers at a low price and if the costs are not suitable for Sainsbury, then
this can switch suppliers. Low switching cost is the reason for it.
 Bargaining Power of the Buyers
Sainsbury can prioritize on their innovation and they need to differentiate their products and
services also for attracting more consumers (Goethals, 2018). As the bargaining power of the
buyers is very weak, it can be beneficial for them to make a large consumer base.
 The threat of the substitute Products or Services
Sainsbury has to prioritize on their product quality along with the quality of the services as well.
In addition, differentiate their products can be beneficial for them also.
 Rivalry among the existing competitors
Competitions among the retail companies are increasing every day and this creates difficulties
for Sainsbury (Goethals, 2018). In addition, this can be overcome with the help of innovation. A
few key competitors for Sainsbury are Tesco, Aldi.
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Key Issues Faced by the Organization
The main challenges faced by the multinational retail company Sainsbury’s have faced several
problems in areas of technology and economic balance in the market sphere along with the
problem of management in the company (Rohwer and Topić, 2019). The market of Sainsbury’s
has provided a brief analysis of the issues that are faced by the multinational retail company. The
primary issue faced by the company is the problem of management that has included the
company CEO into a matter of legal issue due to the improper management in the company. The
retail company has been undergoing a deep problematic area in the management sector of the
company (Aluko and Knight, 2017). The market of Sainsbury's has been thriving in the business
sphere of the retail market for a long period of time. However, there are issues related to the
market growth and expansion of Sainsbury’s as the company has been able to gain a substantial
market profit and competitive advantage. The market analysis of Sainsbury’s also provide am
excess of technological expenditure in the company that does not provide the company proper
economy for balancing its other requirements like training and employee recruitment. The
economic expenditure, therefore, needs to be balanced properly by Sainsbury’s in order to thrive
in the UK market and sustain the company (Beech et al., 2017). Another issue related to
Sainsbury’s is the improper relationship with the investors that can harm the company
economically and can threat the company sustainability in the market. The investors form a
crucial part of the company and therefore need to form a harmonious relationship with the
company management and CEO, without which the company cannot thrive well in the UK
market in terms of economy and development.
Conclusion
Thus on the conclusion, it can be said that analysis of the business environment of the Sainsbury
Company helps to improve its business operations. A PESTLE analysis has been done in this
study for analysis of the impact of the external business factors. Moreover, in this study, various
key issues faced by the organization have been analyzed. This organization shall focus on the
threats in its business process to improve its relationship with the customers and suppliers.
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Part 2
Introduction
From the course related to academic skills in BREO I have leant about different skills that help
the employees to improve their performance in the organization. I have leant from the course that
effective communication plays an important role as an employability skill.
Reflection
Communication skill
From the course in BREO I have learnt about different academic skills related to key
employability Skills. I have also learnt about the process of presentation and report writing and it
has helped me to improve my communication skills. As per the opinion of Suleman (2016),
effective communication including verbal and written communication is very essential for the
employees of an organization. Proper communication skills help the employees to share the
problems that they are facing in the work place and provide suggestion for implementing
innovative processes in the business of the organization. From the course I have learnt about
different theories and models of Team development like Tuckman and Jensen model, team
development model of Kolb and Belbin. From the Tuckmans model I have found out that there
are essentially four stages in the process of formation of an effective team namely forming,
Storming, Norming and performing. From the course related to academic skills in BREO I have
leant that effective communication plays an important role in the application of each of the
models on the organizational process.
Numeracy Skills
I have also learnt about different Numeracy methods and from this I have understood that
knowledge of numeracy method plays an important role in improving the skills of the
employees. From the learning experience in the BREO I have learnt that analysis of data and
statistics plays an important role in improving the business processes of an organization.
According to Collet et al. (2015), numerical analysis plays an important role in understanding the
business environment of an organization. I have undergone though different courses and seminar
activities related to the use of Data and Statistics. Numeracy is an important employability skill
and it helps to improve the mathematical confidence of the employees of an organization.
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Numeracy skill is closely associated with the critical thinking skills of the employees of an
organization.
ICT
While pursuing ICT course, I gained in-depth knowledge about it. The Information and
Communication Course has enabled me to know about self-paced learning. Besides, the course
has assisted me in gaining access to a wider range of updates learning materials (Keane et al.,
2106). Moreover, I have gained proficiency in learning through audio, video, text, images as well
as animation combination. I have also gained proficiency in learning through collaboration and
interaction. This will help me in my future when I will be employed in an organization.
However, I faced several hurdles during the course since I was not able to understand several
programs. Nevertheless, I successfully completed the course through the assistance of my
classmates and my respected teachers.
Problem Solving
The whole unit has helped me to gather proper information regarding the issue of problem-
solving through critical thinking and group discussion (Nurdyansyah et al., 2017). The proper
analysis of the issues and problems that I have faced while making the report has however
provided me a greater insight into understanding the basis of these problems and solve them
systematically through proper understanding of the actual issue. I have gathered authentic
information regarding the purpose of making this report and have been able to solve the
problems and challenges that I have faced while understanding the issue of making the market
analysis report of Sainsbury’s (Curtis, 2019). The problems that I have faced while constructing
the whole assignment were mainly related to the market analysis issues and challenges that
needed proper insight on my part along with a clear conception of these challenges (Tippmann et
al., 2017). In order to detect the areas of problems in the report of market analysis of Sainsbury's,
I have gone through the information and authentic sources that have helped me to successfully
solve the problems and submit my assignment within the given deadline.
Working with others
The project has helped me to gain relevant knowledge about the subject of the study. However,
at first I have gone through different issues related to the completion of the project but later, my
teammates helped me to execute this project. Through the help of effective communication
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ability, I have managed to convince others and as per my request, they have helped to execute
this work via implication of valuable points. It can be adjusted through the help of better
collaboration of communication and the presence of relevancy in the subject. The work has been
divided into all team members.
Conclusion
In conclusion, it can be said that from the course in BREO I have learned about different
academic skills related to key employability Skills. I have also learned about the process of
presentation and report writing and it has helped me to improve my communication skills. I have
also learned about different Numeracy methods and from this, I have understood that knowledge
of numeracy method plays an important role in improving the skills of the employees. Moreover,
the whole unit has helped me to gather proper information regarding the issue of problem-
solving through critical thinking and group discussion.
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