Sainsbury's Business Strategy: Analysis, Selection, and Justification

This presentation provides a comprehensive analysis of Sainsbury's business strategy, focusing on the evaluation of various growth strategies suitable for the company. It begins with an introduction to Sainsbury's, a leading UK supermarket chain, and highlights the presentation's objectives, which include analyzing alternative strategies and selecting the most appropriate one. The analysis covers substantive growth, limited growth, retrenchment, mergers and acquisitions, organic growth, franchising, strategic alliances, and Ansoff's growth strategies, including market penetration, product development, market development, and diversification. The presentation concludes that the market development strategy is the most suitable for Sainsbury's, given its advantages such as reduced risk, increased market share, and competitive advantage. The presentation draws upon various academic sources to support its analysis and recommendations.

BUSINESS STRATEGY
(TASK 3)

Introduction
 This presentation is based on Sainsbury which is a UK based second largest chain of
supermarkets.
 It highlight Analysis of possible alternative strategies available with the organization.
 In addition to this, the presentation also selection and justification of appropriate strategy for
Sainsbury.

Analysis of possible alternative strategies
Substantive growth: It is a kind of growth strategy through which Sainsbury can
look for getting success and competitive advantage over other supermarket
chains for long run.
Limiter growth- As per limited growth, businesses seeks for higher growth
opportunities. This strategy cannot be adopted by Sainsbury as threat of
customers and competitors is very high in UK
Retrenchment- In this, organizations seeks for enhancing their overall
productivity by cutting down its cost of operations.

Contd…
Merger and acquisitions- Sainsbury has the opportunity to merge with any of the successful
supermarket chain in UK. On the other side, Sainsbury also has option of acquiring, small
supermarkets which are operating independently in the country. Increasing rate of tax and interest
will create obstacles in carrying out mergers and acquisitions for Sainsbury.
Organic growth- It is kind of expansion strategy in which Sainsbury will be required to develop
new product or expand its customer base. This strategy can be adopted by brand and it can
develop new products on the basis of changing customer needs
Franchising- It is a growth strategy in which businesses aims at getting high market share.
Strategic alliance- It is a strategy in which Sainsbury will need to form alliance with another
company and share its resources in order to achieve some common objectives.

Ansoff growth strategies

Contd...
Market penetration- Sainsbury can achieve high rate of growth penetrating more effectively in its
existing market. After carrying out pestle analysis, SWOT and using porter’s five forces model, it
can be stated that company is not having adequate opportunities for growth in the UK market.
Product development- It is a kind of strategy in which Sainsbury will need to develop new
products which it is going to sell in existing markets.
Market development- According to the strategy of market development, Sainsbury will be
required to sell its existing products in markets.
Diversification- It is strategy in which Sainsbury will need to develop new products for
completely new markets.

Selection and justification of
appropriate strategy for Sainsbury
As per the nature and operations of Sainsbury, it can be stated that strategy of market
development will be more suitable for the brand.
The advantage of this strategy are;
Less risk
High market share
New customer base
Competitive advantage over other supermarket chain in the country

CONCLUSION
From the presentation, it can be concluded that every business is required to seek for
different strategies related to future growth and development. Furthermore, there are various
strategies available in front of Sainsbury such as Organic growth, Growth by merger/Acquisition,
Strategic alliances, Franchising, Ansoff, etc. Each of the above stated strategy has its own set of
characteristics and advantages. From the presentation, it can be concluded that market
development strategy is more suitable for Sainsbury as compared to other strategies.

REFERENCES
Hagel, J. and Brown, J.S., 2005. The only sustainable edge: Why business strategy depends on
productive friction and dynamic specialization. Harvard Business Press.
Peng, M.W., Wang, D.Y. and Jiang, Y., 2008. An institution-based view of international business
strategy: A focus on emerging economies. Journal of international business studies. 39(5).
pp.920-936.
Casadesus-Masanell, R. and Ricart, J.E., 2010. From strategy to business models and onto tactics.
Long range planning. 43(2). pp.195-215.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.
Hill, C., Jones, G. and Schilling, M., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning. 43(2).
pp.172-194.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge University
Press.
Online
Ansoff matrix. 2016. [Online]. Available through: <https://www.edrawsoft.com/ansoff-
matrix.php>. [Accessed on 1st April 2014].

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