Strategic Solutions for Sainsbury's Market Challenges

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RAMAN - ASSESSMENT TASK 4
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Contents
Background of the problem.............................................................................................................3
Problem definition...........................................................................................................................3
Solution generation..........................................................................................................................3
Evaluation of solution......................................................................................................................3
Implementation and action plan.......................................................................................................4
SWOT ANALYSIS:....................................................................................................................5
PEST ANALYSIS FOR SAINSBURY.......................................................................................6
Mintzberg’s 5P’s strategy................................................................................................................7
References........................................................................................................................................9
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Background of the problem
Sainsbury is the biggest chain of supermarkets in the United Kingdom. The problem has been
taken from Sainsbury. The case is depicting the decrease in sales of the company form the last
two years. This is happening due to entrant and expansion of new German Brands like Aldi as
they are selling the products at discounted rates (Edgington, 2017). After this evaluation, the
company decided to form some strategies to overcome these issues and they established a
strategy where they decided to invest in the development of stores and cut the prices of everyday
products instead of doing promotions.
Problem definition
The problem which is defined in the case is about the decrease in sales of Sainsbury due to
entrant and expansion of new German brand Aldi in the United Kingdom (Cuthbertson et al.,
2015).
Solution generation
The solution to the problem will be generated by using 4 tools in the case study. These tools are
a SWOT analysis of the company, PESTLE analysis of the company, use of 5W and
Mintzberg’s 5P, and the assignment will include the evaluation and implementation of these
tools to the problems (Edgington, 2017).
Evaluation of the solution
The evaluation of the solution will be given with the help of using the tool of Mintzberg’s 5P
strategy. Mintzberg has developed the strategy of 5Ps in the year 1987 with five visions where
he depicted the plan, ploy, pattern, position and perspective (Cuthbertson et al., 2015).
Mintzberg has said that with the help of these five strategies a person at least can have different
aspects and approach the strategy with a different perspective. The 5P’s are
Plan
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According to Edgington (2017) plan is a strategy to deal with the situations. This is the first step
of the strategy which is made before the possible movements take place. The plan depicts what
next has to be done if followed consciously (Sugiono, 2018).
Ploy
The ploy is a strategic choice where the company does something unexpected to the competitor.
With this strategy, the company surprises the business environment with the implementation of
such a plan which has not been expected by anyone (Sugiono, 2018).
Pattern
Cuthbertson et al., (2015) stated that pattern is a strategy which has been executed before. These
strategies are implemented to accomplish their intended results (Gulbrandsen, 2015). There are
certain strategies whose results have been given but certain strategies that have been still worked
out for more details.
Position
Ortega-Altamirano et al., (2018) said that the position in Mintzberg's 5P'is about the position of
the company in the market in the context of internal as well as external interaction. This strategy
lets us know about how the organisation wants to position itself in the market (Gulbrandsen,
2015).
Perspective
This strategy is much more than the position of the company in the market but the in-built way
of perceiving the world (Gulbrandsen, 2015). The members of the organisation share about what
is a key important strategy with their intentions, actions or expression.
Implementation and action plan
The implementation and action plan process will start with the evaluation of four tools which are
as follows:
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SWOT ANALYSIS:
Swot analysis stands for strengths, weaknesses, opportunities and threats. Swot analysis of a
company is done to identify about the major strengths the company possess, weaknesses the
company is trying to overcome, to find more and more opportunities in the market and to reduce
the threats of the company.
Based on the case study, Sainsbury has done a swot analysis for the company after declining the
sales of the company and the SWOT is as follows:
Strengths Weaknesses
 One of the strengths the company has is
the ability to cater to every type of
customer.
 Company is expanding its stores to the
new and international market (Ortega-
Altamirano et al., 2018).
 With their innovative promotional
strategies, the people believed that the
company has well and good products at
their stores with a wide range.
 One of weakness behind the decline of
the company's sales is customer
retention by the company due to brand
switching.
 Company has higher prices of the
products than their competitors, due to
which the sale is decreasing.
Opportunities Threats
 The company has the opportunity to
expand its business in the European
Union and other emerging markets like
India, Russia, China etc (Level, Q.F.C).
 The company can increase the range of
the product line at a reasonable price.
 The first threat has arrived from the
expansion of German companies Aldi
and Lidl, which has increased the
competition and reduced the prices of
the products (Ortega-Altamirano et al.,
2018).
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PEST ANALYSIS FOR SAINSBURY
According to… Pest analysis of the company depicts the challenges and threats faced by the
Sainsbury in the external environment. This analysis identifies certain challenges which are
always available to the company in the external environment.
Political factors
Sainsbury’s performance has been greatly affected by the political factors of the company like
the effect of Brexit on the performance of Sainsbury (Nandonde, 2019). These factors affect the
company for a long period. Some political factors are government debts and globalisation has
challenged the outcome of the company by competing against the unknown forces.
In context with the case study, due to globalisation, the German companies were able to set and
expand their business in the United Kingdom and this has affected the growth and sales of the
company in the United Kingdom.
Economic factors
Gulbrandsen (2015) demonstrated that economic factors such as the cost of fuels and
transportation affect the price of the product, due to which the prices of products certainly
increase (Sugiono, 2018). Based on the problem the prices of the products of Sainsbury are
higher than Aldi, which is affecting the sales of Sainsbury or it is decreasing the sales of
Sainsbury.
Social factors
The social factors which can affect the company can be the trends of the customers and one-stop
shopping factor. Sainsbury has benefitted from this strategy by introducing the non-food
products in the market under one roof (Nandonde, 2019). The social factor in any sense does not
affect the sales of the company. In the context of the case study, there are no social factors
involved in the reduction of sales in Sainsbury in the market of United Kingdom.
Technological factors
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Technological factors or advancements impact the company positively if they are implemented
in the company or business operations. Sainsbury is a big brand in the United Kingdom, and to
maintain this company has to maintain some technical systems like inventory management
check-in and check out system.
To maintain the sales of the company, Sainsbury has to apply the system of inventory
management to manage the inventory into its every store (Nandonde, 2019). The company must
use the technological aspects like check-in and check-out the timing of the staff and keeping a
record of the discounted price and vouchers provided to the customers and the actual cost of the
product.
Mintzberg’s 5P’s strategy
Henry Mintzberg a Canadian management scientist has developed the 5P’s strategy in the year
1987. These 5P’s strategies stand for plan, position, pattern, ploy and perspective. With the
effective implementation of these strategies, a company can aim for future aspects and the long
period (Sugiono, 2018).
Figure 1 Mintzberg’s 5P’s strategy
(SOURCE: PATRICIA, 2016)
Plan
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With the background of the problem, Sainsbury should come with an excellent plan to increase
their sales in the United Kingdom market. One of the strategies the company is using to cut
down the prices of the products for the customers and trying to improve the stores of the
companies as well, which can result in positive way, but there has to be the strong plan which is
followed by every store of Sainsbury in market (Sugiono, 2018).
Ploy
Sugiono, (2018) Said that when the company has formed plans and strategies have been
composed by the company, this step is the execution of the strategy with a specific intention to
overcome and overtake the competition in the market with gained competitive advantages. To
overcome the problem Sainsbury has to execute the plan with effective implementation at the
correct time.
Pattern
In this strategy, the actual and total strategy comes up as a pattern with consideration of various
external as well as internal conditions instead of pre-planned. Sainsbury has to take care of the
patterns and internal and external conditions of the strategy and market (FATRICIA, 2016).
These conditions are not pre-planned and therefore the solutions of the same cannot be even pre-
planned.
Positions
The position in Mintzberg's 5P's is about the position of the company in the market in the
context of internal as well as external interaction. This strategy lets us know about how the
organisation wants to position itself in the market. Sainsbury has a strong market base with
several customers, the position of the company in the market is quite strong and it can advantage
of this for increasing the sales in the market.
Perspective
According to Nandonde (2019), the perspective strategy is formulated based on the business of
the company and the organisational structure and culture followed by the company (FATRICIA,
2016). Sainsbury should adopt the perspective which will be beneficial to the company, its
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stakeholders and the customers as well. The decisions have been taken based on the
shareholder, the board of directors and members of the company.
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References
Cuthbertson, R., Furseth, P.I. and Ezell, S.J., 2015. Tesco and Sainsbury’s: The Need to Turn
Ideas into Action. In Innovating in a Service-Driven Economy (pp. 159-165). Palgrave
Macmillan, London.
Edgington, D., 2017. Wright and Sainsbury on higher-order vagueness. In Vagueness (pp. 307-
314). Routledge.
PATRICIA, R.S., 2016. SWOT ANALYSIS OF SAINSBURY'S SUPERMARKET. Jurnal
Manajemen Terapan dan Keuangan, 5(1).
Gulbrandsen, I.T., 2015. Towards a typology: The 5 P’s of strategic.
Lambert, D.M. and Enz, M.G., 2017. Issues in supply chain management: Progress and
potential. Industrial Marketing Management, 62, pp.1-16.
Leite, E.D.A., Lima, M.B.R.M. and Lima, S.M.M., 2017. TRAJETÓRIA DO INSTITUTO
FEDERAL DE EDUCAÇÃO, CIÊNCIA E TECNOLOGIA DO AMAZONAS SOB A ÓTICA
DA CONFIGURAÇÃO DE MINTZBERG. IGAPÓ-Edições especiais, pp.67-74.
Level, Q.F.C., SWOT and PESTLE Analysis Assignment.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), pp.54-61.
Ortega-Altamirano, D.V., Rodríguez-Oliveros, G., González-Unzaga, M.A. and Reyes-Morales,
H., 2018. Perceptions of childcare staff for preventing overweight in Mexican preschool
children: A SWOT analysis. salud pública de méxico, 60, pp.166-174.
Sugiono, S., 2018. STRATEGIC PLANNING: SHAPING OR EMERGING FROM
ORGANISATIONS. AL-TANZIM: JURNAL MANAJEMEN PENDIDIKAN ISLAM, 2(2),
pp.177-184.
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