Business Strategy Analysis Report: Sainsbury's Capabilities and Models

This report provides a detailed analysis of Sainsbury's business strategy, encompassing various analytical frameworks and models. Part A begins by examining Sainsbury's capabilities through PESTLE and SWOT analyses, evaluating its strengths, weaknesses, opportunities, and threats within the competitive retail landscape. It then applies Porter's five forces model to assess the competitive dynamics affecting the organization. The report further delves into Sainsbury's internal environment and capabilities, comparing them with key competitors like Tesco and Asda. It highlights aspects such as market share, customer positioning, operational activities, and the 4 Vs of Operations Management. The analysis incorporates political, economic, social, technological, legal, and environmental factors to provide a comprehensive understanding of the firm's strategic position and potential for growth. Finally, the report concludes with a strategic plan, integrating various theories and concepts to propose recommendations for Sainsbury's future development and success in the dynamic retail market.

Business strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Part A...............................................................................................................................................1
P1 Analysing the capabilities of Sainsbury organisation by applying PEST/LE and SWOT
frameworks on the organization.............................................................................................1
P2. To analyse the internal environment and capabilities of Sainsbury.................................4
P3 Porter's five force models for organizations-....................................................................6
P4 Theories and models required to interpret and devise a
strategic plan for organization-..............................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The term business strategy itself says the strategy or plan to reach high level of business
aims. Strategy is a success when its executed and it gives business profits,growth, etc. Strategy
must be changed if it does not give any profits to business. It is basically an organisation's work
for achieving certain goals of company for its vision,competition and performance (Dahlberg,
Hokkanen and Newman, 2016).It is a plan to see how a firm works to meet the goals of the
organisation. Here the organisation is Sainsbury which is a grocery store. This report states the
growth of company by analysing the capabilities of Sainsbury organisation by applying pestle
and swot analysis and Porter's five forces model . Also the analysis of internal environment and
capabilities of the firm with respect to other companies is shown. And lastly a strategic plan is
made applying theories, concepts and models of the organisation.
PART A
P1 Analysing the capabilities of Sainsbury organisation by applying PEST/LE and SWOT
frameworks on the organization
Sainsbury is the third largest food retailer in the United Kingdom. The retail sector is
going through a rapid change, as customer shopping habits continue to increase. This led in
increasing competition across grocery, general products and clothing, as customers see more
value, options and convenience. Sainsbury and Asda together will result in a more competitive
business that will be able to invest in price, quality, range and the technology to create easier
ways for customers to shop. It has the products and services available at one call and at fair
price. The employees in the firm make a great difference in the performance sector. They are
available 24*7 for the customers (Scholes, 2015). The morales of the organisation makes the
organisation different from other.The employees build strong relation with the colleagues to
build trust, reduce operating costs, and attract more people in a crowded marketplace.
SWOT Analysis of Sainsbury-
The swot analysis is conducted to increase the profits and gain objectives of the
company. This includes strength, Weakness, opportunity and threats.
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 Strength: It is one of the largest supermarket chains in the UK. It has the large number of
loyal customer base. It is famous for its fair price and quality of products. It has the large
number of trained employees who focus on customers and attend every customer with
dignity. It provides various famous and good brands products and promotes the products
as well in a very attractive way. The company focus on investing more in developing
infrastructure and additional features for the benefit of the firm to attract more customers.
Different facilities are provided in the firm for customer's usage ,satisfaction and east
access to store.
 Weakness: There is continuous competition in the market for retail stores so it affects
the firm a lot. There is more problem in getting trained and skilled employees .It is
restricted to UK only. It totally depends on the local market (Johnson, 2016).The
communication skills of the employees is limited and sometimes it becomes difficult for
customers to get desired products easily.
 Opportunities: As the market is expanding, so it brings more opportunities for the
organisation to expand the business at national or international level. It can also grow or
start its chain in other emerging countries. Some countries also offer low labour cost. The
company can increase some features and some new products for the business growth.
Opportunities to grow online is also there as customers love to shop online so it is the
best way to increase productivity.
 Threats: There are various competition in market in the same business and those are the
biggest threat to the organisation. Also, some natural disaster that occurs sudden are a
danger to the organisation. Company tries to achieve a targeted margin every year and
that is difficult to achieve so that becomes a problem for the company.
PESTLE analysis of sainsbury-
It contains political, economical, social, technological, legal and environmental factors
that are included in this analysis which done for the development of the organisation.
 Political factors: This factor relates to political issues that occur in organisation for the
business development and that need to be sorted. The trade agreements between the other
countries gives a new scope for market growth (Leonidou, Fotiadis, andet.al., 2015). The
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increasing globalisation challenge for the sainsbury organisation to increase its growth
with growing market value.
 Economical factors: The factors that economically affect the firm is the employment
rate which is very high so it costs much to hire skilled and qualified staff. As the highly
trained staff will lead to high standard market which is likely popular in all supermarket.
So the monetary value increases as the fuels price is also increasing. The revenues totally
depends on consumer's buying power. So net income must be sufficient to spread and
renovate stores.
 Social Factors: These are the factors that are related to society. Managing social
relations or can say friendly relations with the customer develops a trust in customer's
mind for the employee. If the customer find easier service and employee is helpful then
the customer would come to same store every time when required so maintaining social
factors is very important. Sainsbury participates in charities, develops finances for
various causes, This shows the company is involves in many social affairs which is good
the positive image of the firm.
 Technological factors: The use technology in the organisation in a right way is very
important and necessary for the organisation's growth. For large amount of products , the
details cannot be filled manually like making bills, stock list, update stocks,etc. These
things need a proper technology that is automatic and just needs a skilled employee who
knows to use it and can fill all the details appropriately (Bull, obstvogt and et.al., 2016).
The online shopping that is another feature available at Sainsbury is a part of this
factor .This is a great advantage to company for increasing customer base and to
customer for easy access in the store by installing right technology in the right place.
 Environmental factors: These factors are very important as it is related to consumer's
health. This is a policy of government to keep the environment and country clean. So
dustbins are kept everywhere outside and inside the stores and also to manage waste new
policies are adopted: “Reduce, Reuse, Recycle”. Also, the poly bags are banned to reduce
pollution. All major steps are taken to improve the environmental factors that harm the
people.
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 Legal factors: These are the factors the related to government rules, laws, policies that
are needed to be followed by the organisation do that no issues can hinder the growth of
organisation later. So all laws must be followed and policies of company must be made
according to government rules and has to be followed by everyone in the firm.
From the Swot and Pestle analysis, it can be said that company must make itself that
strong to not get affected by the weaknesses and the competition around. Many new ideas must
be created to add new products in the firm that are unique and liked by the customers. After the
pestle analysis is done it can be said that the company can use all the factors and gain the profits
by keeping in mind about the threats that can destroy the business and to grab the opportunities
that come in the way of the firm (Gumusluoglu and Acur, 2016).
P2. To analyse the internal environment and capabilities of Sainsbury
Sainsbury is the second largest retail stores in UK. It has 17.5% share of the sector in the
market. It is basically a retail industry which deals lifestyle and household chores. It provides the
customer with different attractive offers like shop and save which focus on promotions, switch
and save which aims at quality and value and cook and save which helps customer manage their
household budget. It focusses more on STP that is Segment, Target and positioning. It basically
states the segment up to which the organisation has spread itself. Sainsbury's customer can shop
online or offline. Both the facilities are available. The main target of Sainsbury is Households.
They sell products that are necessary for living so customer gets attracted to buy the necessary
product that result in increasing the productivity and popularity of the organisation.The next is
positioning that means providing the products necessary for households to customers at very fair
price or can say affordable price which gives a positive impact on the stores growth. The
competitors of Sainsbury are Tesco , Asda Waldemar,etc.
Tesco is the market leader and holds 29% of market share. Asda Waldemar holds 17%
shares. Sainsbury has placed itself as a reliable markets who give the best quality products at
right process. Sainsbury is not involved in any of the issues like poor prices-poor quality
products. Sainsbury was declared as the free from adulteration of food. This attracts more
customers to sainsbury than other stores (Parnell, 2016). Also Tesco has found involved in
adulteration of food in horse meat scandal. So Sainsbury has the positive image in the eyes of
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customer. Also, the employees are helpful and friendly so it comforts the customer which attracts
them to come again to the store. The environment of the store is also good and clean.
Operations on Primary Activities:
Certain activities are related to production department in the organisation. This can be
divides into various departments in the organisation. Eg :information counter, Cashier,etc. In
Sainsbury. The major role of operation management is
Supporting the company's strategies:
This management is the essential part of a organisation. The strategies are made by board
of directors that must be supported by operation management. It is the duty of the management
to arrange the essential resources that are beneficial for company's strategies. The management
has the duty to ensure sustainability of production which gives maximum profit for the company.
 Product Postioning:
It is the duty of operation management to make sure that the product that is launched in
the market is a better option in the market than the other. Also positioning includes the
presentation of product (Malerba, Caloghirou and et.al., 2015). The way in which it is shown to
customer matters. Eg: both Sainsbury and Tesco sells the same product their way of presenting
it must be some different to attract customers. This can increase benefits and profits and creates
large no. of companies.
 Interdepartmental integration:
It is possible for the organisation to integrate various departments and this is done by
operational management staff. The manager gives the work to certain departments separately and
inform them where they have to integrate with other to obtain company's goals. Without this
operation it is impossible for managing the work accurately.This is essential for avoiding
conflicts and also it saves time in the process of production.
 Product differentiation:
The main aim of the organisation is to increase customer's base by satisfying them so
satisfaction of customer is must. So the business focus on customer's demand. Sainsbury is large
store containing large categories of products and also large no. of different categories of
customers (Schaltegger, Hansen and Lüdeke-Freund, 2016). So the company focus on all
consumers effectively.This is a way to enhance quality of product.
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4 Vs of Operations Management- Volume which includes Sainsbury providing more food for
less money.Variety which includes the firm providing different types of products. Variation
which include services can be online and delivery services are also available. Visibility which
includes product labelling and shelf positioning that makes it possible for buyers to find what
they need.
The organisation must ensure the management is accurate because the way work is
managed is the way it served to the customer.It is the aim of the organisation make sure that
customer gets quality services and quality products both every time they visit the store in order to
retain the customers again and again. Also, the organisation should use certain strategies to grow
in the market and enhance their productivity and manage to make more profits. Sainsbury also
developed banking services as to maintain position in the market (Kellermanns, Dibrell and
Cruz, 2014.) . This facility helped the organisation a lot to gain popularity, increase customer
base, enhance profits.
PART B
P3 Porter's five force models for organizations-
Porters five forces model defines the tools for understand the business competition and
business strategic planes who increasing the growth of business. This model also determines the
intensity of competition in industry and its profit level. This model five forces are determines the
company affecting and industry. Is also determine the structure of the level of the business. This
recognizes that organizations keep close and watch their rivals, its examine the what other
factors impact on the business environment. In the Sains-burry they adopt five forces model
strategy to implements in its own business. Sains-burry is a large enterprise who selling their
products to the customers in retail price. This model helps to define the Sains-burry
organizations problem and their solution. This model helps to organizations to determines the
impacts of external environments (Scholes,2015). Sains-burry is retail organization their business
affects by the external environmental factors. In this five force model defines the starting
business new threats the power of suppliers, threats of substitutes and the rivalry among existing
competitors. Those five model mainly identifying the business strategy how to business start and
their starting point of the business Their following five porters model which is identifying the
business environmental factors and their working skills-
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 Threat of new entrants- This model defines the organisation faced the threats of new
entrants. Now days many organisation small and large they all are established their
business into the market (Leonidou and et.al., 2015). So old enterprise faced threats of
new entrants because they present new techniques and new technologies products and
service for the customers and they have advanced procedures for the marketing of the
products. In Sains-burry they faced a threat for the new entrants because in the UK
market many enterprise starts their business as s retails and they present same products
with low price and it is the biggest threats for the organization.
 Bargaining power of suppliers- Strong bargaining power helps to suppliers to sell low
quality products to the higher price. They have power to supplier to supply low quality
materials sell higher price for the customers. But Sains-burry organisations mainly sell
the low to higher price products and quality conscious products. They mainly sell their
product in retails price. Sainburry have few supplier but they have many buyers to
purchase their products.
 Bargaining power of buyers- Mainly the buyer have power to purchase higher quality
products low price. Lower price means lower revenues for the products. Sains-burry
mainly sales their customers to lower price products with higher quality products. Buyer
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exert strong bargaining power when (Akter and et.al., 2016). Buyer purchase their
products in large quantities or control many access points to the final customers.
 Threats of substitutes- This is force when threatening buyer can easily find substitutes
products with an attractive prices and quality products. Sains-burry attract their customers
to gives lower price and higher quality products. Buyer can switch form one product and
service to another with little cost. Example – Sains-burry offer their customers to eat
limited quality product and attractive customers.
 Rivalry among existing competitors- This force determines the profitability an industry.
This helps to determine the Sains-burry rivalry to the competitors. Organization has many
competitors they define the competition between one organization to another
organizations. All the competitors are equal size (Spender, 2014). And they give low
cost quality products to their competitors. This force also determines the organizations
products quality match with the organisation and defines the growth of the business.
Porters five force defines the environments of the business affects to the organization and
helps to determine the growth of the business.
Strategies to improve competitive edge and market
positions based on the outcomes-
Main challenges face the business is to find the competitive advantages in business. The
competitive edge defines the competition from the competitors in the business. Is also highlights
the benefits form the business it could be on the service, products, reputation or location. In the
Sains-burry have many competitors that shows the advance products and service of the
organizations form that Sains-burry present more quality products into the market with lower
price so customers attract with their product and services.
Identify the competitive advantage-
 The main techniques to identifying the competitors advantages to examine the
competitors where buying products (Welford, 2018.).
 To examine why customer buying there products form the competitors.
 To identify why potential customers not buying their products and services.
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 To analyse what needs help to being successful in the future
For these questions answer market research helps to identifying and examine all the questions
and how to improve business as compare to competitors. Good market researcher identifying the
all competitors strategies and new development planes in the market it helps to determine the
challenges form the organizations and helps to understand the needs of the business.
Customers buy benefits- When customers purchase organizations products they having
benefits to give it them. Because they know what service they give the customer and what profit
they earn form the customers. In other hand customer is not always need on products they
change their needs according to trends and generations (Malerba and et.al eds., 2015). They also
need the quality products from the organizations. To think about the benefits in the organizations
customers help to identifying the competitive advantages. Different kinds of customer's see
different benefits.
Set of valid strategic directions, objective and tactical actions-
As a marketing manager at sain-burry set direction of the company to achieve goals in the
business. And vision helps to determine the challenges faced in the business how to face them. It
also determines objective defines the performance of the company and their working skills.
Every company has different vision and different goals that help to understand the management
performance and their working. Those capability helps to set direction of the company. And
business start with those kinds of the directions. Vision is mainly acquired the customers mind in
order to understand what the company provide.
P4 Theories and models required to interpret and devise a
strategic plan for organization-
The strategy model define the organization's strategy to maintain business, growth of the
business, products and service implements, innovation a planing for the business. In strategic
plan defines the organizations strategic planes to increasing company popularity and customers
satisfaction. Strategic plan mainly worked on the company products developments company
products innovation they examine the company problems and their solutions. Strategic planes the
defines the company vision, goals and their mission. It also determines the company marketing
programs and objectives. Those marketing objectives define the over-whole company growth.
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Strategic plan helps sains-burry to understand their customers needs market reputation. In the
sains-burry organisation.
Strategic planing model- strategic model helps to improve the designed process of the
company. The development of such model requires identifying the key goals of and organization,
strategy models are varying degrees of the complexity (Bentley-Goode and et.al., 2017). In the
small industry model helps to understand the business growth. And large business growth to
identifying the potential customer's. There are following business strategic models-
1. Balanced scorecard- Balanced scored model is the strategic planing model the system
connects the dots between big picture strategy elements such as mission, vision, core
value, elements of the objects, measures, targets etc.
 Objectives- That determines the high-level organisational goals.
 Measures- This helps to understand the accomplishing objectives strategies.
 Initiatives- This are the key programs that helps to achieve objectives.
2. Strategy map- This strategic model helps to design and achieve high-level business
goals. The strategy many offers many benefits to the organisation. Following benefits
are-
 In the Sain-sburry organisation they provide a clean, simple, visual representation
that is simple refers to back to.
 Organizations performs to unify goals a single strategy (Moseley III, 2017).
 Organizations gives their employees or clear goals to measure a task.
 It helps to identifying key goals.
 It also helps to understand elements of strategy need work.
 It also helps to better understand objectives affect others goals.
3. Boston Consulting group matrix-
 Star- This strategy depends on high growth business products that competing the market
where they have competitive advantage a compare to the competitor. Heavily invest
required to exist the market.
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 Cash cows- Cash cows or sains-burry defines the heavy relative market share. Only the
little investment required to retain in the market. As a market manager leadership
required the growth is in the area of matrix (Hart and et.al., 2016)
 Question mark- In the sains-burry organisation business or product have low market
share but exist in the high growth market. Management have to make some growth
strategies that have done in the growth position.
 Dogs- In the Sains-burry business or products have low marketing to share their
unattractive market. Business mainly fall in this area into generate their products and
come break-even point.
4. Ansoff matrix- This model defines the essential strategic marketing plaining and it can
be applied to opportunities for the business and developing new products and services or
tapping into new markets. Is also called as products market matrix. This model focus on
the growth of the business. It helps to understand the Sains-burry marketing and they help
to increasing their marketing strategic planes. Uses of Ansoff matrix-
 Market penetration- it defines how increase sell more product and service to existing
customers. Sains-burry defines to increase the methods of products and service to
existing customers.
 Market development- Sains-burry define the strategy to enter market. And finding new
customer's. For the development organization perform the new product's technology and
new techniques for the development.
 Product and development- It defines how to development existing products or service.
Sains-burry defines the development of the products they trying new technological
products and they also developing the new techniques of the organizations.
 Diversification- This defines new markets with new products or services, and also
increase sales with existing customer's base as well as acquisition. Sains-burry maintain
their products to increase sales and also maintain their products quality service.
5. Value chain model- The value chain model defines to help model to analyse specific
activities through and can create value a competitive advantage. This model define
the chain is set of activities that company sales their deliver valuable products to the
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customers. This is important because each of products activities gain some value.
These products help to increase organisation services and their customer's demands
new products and technological change (Welford, 2016).
◦ This identifying the activities that contribute to the delivering of products or
service.
◦ It also defines the customers value moist each aspect of your customer's products
how to improve those products.
◦ In organization Sains-burry make plan to carry out and deliver the changes
required to enhance product further.
CONCLUSION
In this above report it concluded the business strategies make business growth and
increasing the plan of business it also identifying the goals of organisation. In this above report
conclude the capabilities of organisation and their frameworks. It also includes the SWOT and
pestle analysis to determines the organisation external and internal environmental activities and
model defines the working of business. Business strategy determines the set of goals in business
and also determines the strategic decisions of the business (Ghemawat, 2016.). This above report
include the porters five model that the business supplying and buying method and bargaining
power of supplier and buyers. That determines the business plans of organization.
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