Report on Strategic Management and Leadership at Sainsbury's (Unit 1)

This report offers an in-depth analysis of Sainsbury's, a leading supermarket chain, focusing on strategic management and leadership. It examines the importance of personal leadership development for strategic managers, including the development of interpersonal skills, strategic thinking, and analytical abilities. The report details a personal development plan (PDP) for a Sainsbury's manager, aligning individual goals with organizational objectives. It highlights Sainsbury's vision, strategic goals, and objectives, and how a PDP supports these goals. Furthermore, the report discusses the impact of PDP on individual and organizational growth, the strategies used to monitor PDP, and the crucial role of data, including financial, sales, and human resource data, in strategic decision-making. The report provides a comprehensive overview of how Sainsbury's utilizes these elements to enhance its market position and achieve its goals. This report is a valuable resource for students studying strategic management and leadership.

UNIT TITLE: INTRODUCTION TO
STRATEGIC MANAGEMENT AND
LEADERSHIP
1

The present report outlines the research conducted on Sainsbury’s supermarket limited. It
is the second largest chain of supermarkets holding the share of 16.9%. With the aim to provide
their customers value products and best services, Sainsbury’s manages a diverse range of
products such as grocery market, Food and beverages, wide product line of home collections and
stationary. The report will create an in-depth analysis of various measures and strategies that an
organization demands to develop effective personal leadership.
INTRODUCTION:
Personal leadership development is an important requisite for the strategic manager.
Strategic management refers to the analysis of organization, monitoring and assessment of the
current situation and accordingly formulate the strategies to achieve predetermined goals and
targets. Strategic manager is endowed with the number of duties and responsibilities. Therefore,
personal leadership qualities play vital role in fulfilling the duties and responsibilities of strategic
manager (Hart and Waisman, 2005).
TASK 1:
A.C-1.1:
Personal development plan is one of the most crucial requirements of an individual to
enhance the growth prospects in this competitive environment. Personal development planning is
the process of attaining success by effectively analyzing the aims and objectives by the person
for future growth in the market. It is a structured means of thinking about life and ambition and
developing ones skills and attributes for sustaining competition and enhancing the prospects for
growth and development (Alkhafaji and Nelson, 2013). As a manager of Sainsbury plc I have to
develop effective leadership skills to gain wide success and growth within the market. Strategic
thinking and management skills will help in creating an effective impact on present working
measures of the organization and helps the company to grow to fight the core competition within
the market.
Tenure Target Strategies Evidence Time
frame
Short term Develop my - Will take effective measures to - Enhance trust and 3
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interpersonal skills
highly to enhance
communication and
trust within my
employees
develop informal communication
measures within an organization
(Cannon, 2011).
- Will also regularly take meeting
with employees and understand their
needs and requirements and be
empathetic to their needs.
motivation within employees
- Enhanced measures of
conflict handling
months
Medium
term
Refine leadership
attributes to develop
my skills for making
strategic decisions in
favor of the company
- Will take expert advice and
understand industrial standards to
develop my competencies for the
industry (Komives and et.al., 2011).
- Will keep a regular check on
development measures to enhance my
growth and development measures
Increased confidence,
innovative practices and risk
taking attitude
6-8
months
Long term
Enhance my analytical
skills to take effective
decision and create a
problem solving
attitude for making
right choices
- Will regularly analyze the strategies
implemented by various business
units and within the market and
understand the key factors which
helped in organizational growth
(Ghosh, Haynes and Kram, 2013).
- Will learn new skills to create
effective growth measures within the
market and maintain my current skills
- Refined decision making
measures
- Positive attitude and
increased problem solving
skills
12-15
months
Table 1: Personal development plan
A.C-1.2:
Sainsbury is one of the leading retail units operating successfully in the competitive
market. Aim of the company is to create high measures of growth and development within the
global economy. The vision and objectives of the organization effectively defines the growth
measures for the unit. They are defines as follows:
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 Vision: To become the prime choice step destination retailer for shopping and to serve.
Sainsbury’s aim is to maintain and retain the pride in all the sectors they are offering
products and services. It offers great service to the customers and creates optimum work
culture for the employees (Benedetto and Walter, 2013). Strategic goal: Keeping customers at the first place, company always intend to know
their choices and preferences along with offering a range of products at fair prices in
order to satisfy their needs.
 Objective goals:
 To provide a wide range of products in food and other sectors as well as become a
favorite stop for shopping.
 With the most efficient team of employees, company is focused to offer the best
service addressing their customer's requirement in a prompt way.
 To become an optimum place to work.
The managers of organization focuses on developing organizational culture so as to attain
the organizational needs and objectives. The personal development plan must incorporate the
organizational strategies as managers have the responsibility to help the organization in
developing the company for growth and development in future (Bolea and Atwater, 2015).
The PDP of manager of Sainsbury helps in attaining the stated objectives of the firm because: Empowering human resources: Leader of Sainsbury is focused on understanding the
importance of their employees in building the brand goodwill and establishing its prime
position in the market (Allen and Kusy, 2011). Making warm relation with employees by
listening and addressing their grievances is also necessary. Developing interpersonal
skills helps the manager in attaining this objective thus creating a wide impact on
developing employee relations (Allen and Kusy, 2011). Along with this, manager is
focused on providing on the job training, organizing various programs and rendering
apprenticeships in order to strengthen the skills of employees. Lack of proper
communication or relation may result in ineffective results thus development of managers
results in attaining organizational objectives. Managing complexity and ambiguity proactively: Managing the work of employees in a
proactive manner is one of the crucial qualities of Sainsbury's leaders. Ineffective
leadership skills regarding influencing employees, empathetic attitude, motivating team
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etc. helps in attaining the set organizational objectives. Moreover developing effective
consumer relations also helps in attaining company objectives (McDermott, Kidney and
Flood, 2011). Managers thus regularly develop the interpersonal and leadership skills to
create positive environment within the company.
 Promoting creativity, learning and innovation: To make better position in the market,
leader brings refreshing product line with innovation, creativity and learning. Leader
promotes the research and development team to come up with a wider range of products
in order to satisfy the needs of customers in all the sectors it is operating (Lawson, 2008).
Analytical skills helps a manager in creating an effective impact on organizational
growth and development by making correct decisions and infusing changes and
advancements in working culture as and when required.
A.C-1.3:
PDP has effective impact on the development of individual which helps the company in
enhancing growth and development measures. A leader is a person who has the capability to
influence employee’s actions towards organizational growth and development. PDP is an
effective tool to evaluate the gap between current organizational performance and future needs of
the company (Meager and McLachlan, 2014). This measure helps the company in adopting the
individualistic approach to analyze the needs of a person and develop plan to enhance his/her
skills within the company to getting better results.
Sainsbury developed this measure in order to create a valuable impact on the employees
of the company. The approach helped the firm in developing specific and structured plan for the
employees to enhance their growth within the market. This helped the organization in developing
a positive and valuable culture within the company. Employees shared the vision of the company
in order to attain the business objectives. Leader of the Sainsbury's has a clear vision to serve the
customers and make their life easier by providing them an optimum level of products and
services (Mostovicz, Kakabadse and Kakabadse, 2009). This vision is shared among the
employees as well and they are trained to give the best services. Thus PDP helped the business in
developing effective measures to attain organizational goals and objectives.
The strategies implemented by the organization to monitor PDP were:
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 One to one meeting: This is one of the most effective and crucial measure for analyzing
the individual needs and requirement within the economy. This helps the managers in
providing a compete feedback of the individual's performance and what is needed by the
firm to gain better and influential results (Vencato and et.al. 2014). This discussion helps
both the employees in understanding what went well and what did not improve in the
employees. This measure is effective but time consuming hence is opted for managers
and leaders only.
 360 degree feedback: This measure helps in developing a complete assessment for every
individual by subordinates and superiors as well. 360 degree assessment helps the
managers in analyzing the performance and attitude of the employees by each and every
individual. The organization creates a complete analysis of where the company wants to
be and where it is going.
Sainsbury has adopted 360 degree assessment measure to attain the actual, unbiassed and
effective result of the individual performance.
TASK 2:
A.C-2.1:
Strategic development refers to effective planning, monitoring and controlling of
organizational activities in order to attain effective growth in the competitive environment. The
manager and leaders of the company need to have proper and effective access to information in
order to make effective decisions for the growth and development of business unit. Data and
information are two identical terms used by the businesses which creates wide confusion for the
business (Terrell and Rosenbusch, 2013). Data consists of facts and figures which are gathered
and presented by sources. The effective analysis of data helps in attaining information or the
organization. Sainsbury uses the data for developing clear and effective information about the
organizational performance, growth prospects and market positioning measures. Strategic
managers needs wide access to proper data in order to derive the required information. The major
and most crucial data for profitable strategic decisions are: Financial data: This data majorly consist of the overall financial positions and decisions
of the company. This data is effectively represented in the simplified and structured form
to develop a clear and effective understanding about the firm's market position. This data
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is majorly quantitative and represented in statistical form in order to develop a clear and
effective understanding for the management (Komives and Wagner, 2012). The major
sources of financial data for Sainsbury are internal reports of the company and annual
reports as well. Managers use this data to derive information regarding organizational
current market position, total revenue, sales figure, profitability, tax amount etc. The
validity and reliability of data is assured by the company if the sources of data are
authentic and reliable. Sales data: The sales data of the company is another crucial measure which helps the
company in developing wide impact on overall growth and development within the
business unit. The sales data comprises of the figures and information regarding the
profitable market for the organizational revenues. The sales figures of the company help
the company in creating wide impact on strategic development of the company (Ghosh,
Haynes and Kram, 2013). Sainsbury is a leading retail unit. The retail sector has wide
impact of sales on the organizational development as the competitive market sets the
growth measures through volume sales within the market. Sales data of the Sainsbury
quantitative and highly complicated. Thus the data is refines, simplified and structured in
order to create effective impact on organizational growth and development. Human resource data: This data deals with the information related to employees and
their needs and requirements. The above data deals with the human needs and behaviors
as well. This may be both qualitative (if deals with employee behaviors and needs) of
quantitative if deals with numbers and figures (McDermott, Kidney and Flood, 2011).
The HRM data is generally qualitative and needs in-depth analysis to evaluate employee
needs and requirements. Sainsbury use the employee data in order to analyze the
motivational factors within the company. This data also helps the business in dealing with
information regarding employee’s performance and potential. Human resource is the
asset of the firm thus this data plays crucial role in growth and development of the
company.
 Market analysis data: The market analysis data is a complicated data which provides the
firm complex information regarding organizational position within the market, its
performance within the economy and development measures as well (Palm, 2013). This
data helps Sainsbury in analyzing the competitive position within the market to create a
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wide and considerable impact on organizational growth within the retail industry. This
information is both in qualitative form (consumer perception records, employees
behavior and culture reports) quantitative (Sales figures, profitability measures etc) this
helped the business in creating an effective impact on analyzing where the company is
and where it wants to be.
A.C-2.2:
Ratios 2015 2014
Profitability ratios
Gross profit 1343.4 1240.1
Operating profit 812.1 722.8
Net profit (Before tax) 794.8 695.2
Net profit (After tax) 634.9 553.2
Current Liabilities 886.6 834
Total Assets 2282.3 2144.6
Net Sales 3999.8 3740
Gross Profit Ratio 33.59 33.16
Operating Profit Ratio 20.30 19.33
Net Profit Ratio (After tax) 15.87 14.79
Net Profit Ratio (Before tax) 19.87 18.59
Return on Capital employed 58.19 55.15
Liquidity ratios
Current Assets 1616 1468.1
Current Liabilities 886.6 834
Closing Stock 416.8 385.6
Current Ratio 1.82 1.76
Quick Ratio 1.35 1.30
Efficiency Ratios
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Net Sales 3999.8 3740
Total Assets 2282.3 2144.6
Total Assets Turnover Ratio 1.75 1.74
Receivables collection period 63.63 62.62
Payables payment period 28.83 28.03
Fixed Asset
Fixed Asset turnover ratio
Cost of goods sold 22026 21083
Inventory 416.8 385.6
Inventory Turnover ratio 52.85 54.68
Gearing ratios
Net income Before interest tax 812.1 722.8
Annual Interest Expense 30.7 28.3
Times Interest Ratio 26.45 25.54
Investment Ratios
Market value per share 71.5 62.8
EPS 4.18 3.56
Price earnings Ratio - Adjusted
17.105263157
9 17.6404494382
Dividend per share 1.43 1.22
Price per share 0.8 1.28
Dividend Yield 178.75% 95.31%
Table 2: Key ratios of Sainsbury
On the basis of the given information Sainsbury has developed the business operations
significant the years. The company's profitability ratios represent effective growth measures and
indicate positive growth for the year. This has helped the company in creating a valid impact on
the growth and development of the company. The liquidity ratios of the company show that the
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current and quick ratios of the organization are managed and maintained in the desirable range.
This reflects that the operations of the company have positive impact on the organizational
performance as well. In addition to the investment rations of Sainsbury has increased and has
resulted in effective growth in the year 2015.all the given information thus represents that the
company has effective and wide prospects for growth and development within the market. The
ratios represents and effective performance of the company in the current competitive market.
Particulars 2014-03 2015-03
Revenue GBP Mil 23,949 23,775
Gross Margin % 5.8 5.1
Operating Income
GBP Mil 1,009 81
Operating Margin % 4.2 0.3
Net Income GBP Mil 716 -166
Earnings Per Share
GBP 0.37 -0.09
Dividends GBP 0.17 0.17
Table 3: Financial analysis of Sainsbury
The above data of Sainsbury represents the key financial data of the company in terms of
revenue and income for the organization. The data represents the figures related to the revenue of
the company for one quarter of the year 2014 and 2015. This part of data provides a comparative
analysis of extract of crucial financial data of the company. According to data, the revenue of the
company reduced significantly in the year 2015 from 23949 GBP to 23775 GBP. This resulted in
lowering the gross margin p of company from 5.8% to 5.1% in the year 2015.
The operating income of the company reflects a considerable change in one year's time
frame. Sainsbury's operating income in the year 2014 was 1009 GBP which fell down to 81 GBP
in the year 2015, this resulted the operating margin of the company which reflects a shift from
4.2% to 0.3% in the consecutive years of 2014 and 2015. This information represents that
Sainsbury reduced the operating income significantly. This may be due to low access to liquid
cash for the company. A manager can assume that the reason for low operating margin could be
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effective growth in investment rate or some capital asset of the company. However the further
information represents that the net income of the company significantly fell and turned into loss
for the unit. This triggers a crucial loss for the quarter.
A.C-2.3:
On the basis of the attained information in the above analysis Sainsbury has reduced the
operating income of the company significantly in the year. This triggers the need for effective
measures to develop the organizational operations to enhance the growth and development of the
company in increasing competitive market (Dalakoura, 2010). The sales of the company have
reflected a downfall which represents that the consumers of the organization are shifting form the
company.
 The organization thus needs to develop effective measures to enhance sales within the
market while fighting out the tough market competition.
 Moreover, company must also take some effective measures to develop cost leadership in
the market which will help the firm in creating a competitive edge in the market. In order
to attain the above mentioned objectives,
 Sainsbury must effectively adopt proper communication measures for the business.
Communicating SMART objectives to employees through small video clippings will help
the employees in associating themselves with vision and mission of company.
 In addition to this, developing team spirits and motivational measures by the team leaders
will help company in developing effectual communication measures and proper work
management.
 The combined team efforts, well structured communication and proper means of
motivation through successful guidance and leadership will help the employees in
attaining the set targets of business. Thus, most helpful means of recommending the team
will be through formal and informal communication measures.
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TASK 3:
A.C-3.1:
The marketing management concepts are crucial for the growth and development of the
company and gain effective growth within the market. These help the organizational units in
creating an effective impact on overall development of the organizational unit. The core
marketing concepts which have evolved in due course of time are: Production concept: This concept focused on the production of goods and services
within the market without considering the needs and demands of the consumers. The
organization adopting this concept believed that wide availability of products enhances
sales of the company (Cacioppe, 2008). Product concept: This concept represented that developing product and producing quality
products helps the organization in generating high and effective demand within the
market. However this concept leads to increase in cost of production while ignoring the
consumers’ needs as well. Selling concept: This concept determines that effective and aggressive sales promotion
helps the company in creating wide and effective impact on the overall sales of the
company. The company believed and in dumping products on consumers to generate high
sales. Insurance companies are the common examples for the same (Allen and Kusy,
2011).
 Marketing concept: This is the overall concept which focuses on consumers’ needs and
demands and produces goods and services as per organizational need. The organization
effectively considers consumers demands for the growth and development of the
company.
On the basis of the given information it is evident that the organizations need to consider
the stated concepts within the business operations to generate effective organizational results.
Moreover these concepts help in making strategic organizational decisions for the unit. Manager
of Sainsbury has implemented the strategies to gain high competitive edge within the market.
The selling concept and marketing concepts are the relevant concepts adopted by the Sainsbury
in order to gain high market sales within the economy.
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TASK 4:
A.C-4.1:
HRM planning is an effective measure which helps the company in creating effective
impact on the overall growth and development of the firm. These measures help the company in
meeting the needs of staff and delivering the organization with a team of talented and skilled
employees (Zheng and Muir, 2015). The strategic manager of Sainsbury analyses the needs and
requirements of the company by meeting staffing needs of the company. The most effective
measures implemented by the company for meeting staffing needs of the organization are: Delphi technique: Sainsbury uses this measure for recruiting the skilled and talented
employees for the organization. Here the company invites a panel of experts who perform
few rounds of questions for the managers in order to analyze the needs and requirement
of the company. The panel of experts then analyses the needs and provide effective
suggestion for staffing. This method is well-accepted practice by Sainsbury to balance the
demand and supply needs of Sainsbury.
 Demand forecasting: This is the internal process of the company where Sainsbury
forecast the human resource requirement for the organization in advance using some
standard tools and techniques within the organization. This measure helps in determining
the organizational needs and creating effective supply for the organization.
A.C-5.1:
For evaluating the performance of employees, Sainsbury can implement different
methods and techniques. These methods further state that which employee is more productive
who helps in achieving the goals and objectives of organization. Some of them have been
explained as below:
 Performance Evaluation: Performance evaluation method focuses on:-
◦ Measuring actual performance of employees against expected performance
◦ Gives opportunity to both employee and manager to discuss the job performance
◦ Determines skills and capabilities which help in the purpose of promotion and
transfer (Hart and Waisman, 2005).
◦ Moreover, if it is evaluated successfully then it will lead towards following result:
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◦ Improvement in individuals motivational level, commitment and as well as on their
productivity.
◦ Identification of different individual goals and objectives
◦ Identification of workers development opportunities
 Performance Appraisals: Performance appraisal is considered as systematic evaluation
of individual’s performance within business organization. These appraisals are decided
according to the working and discipline which employee has maintained throughout the
year (Myatt, 2012). These appraisals further helps in determining the compensation
packages, different salaries structure, strength and weakness of employees, etc. If
individual has done successfully then he will be awarded with promotions, compensation
and bonuses.
 360 degree appraisal: It is a type of performance appraisal in which subordinate,
coworkers and manager will rate the performance of employees (Ritson, 2011). Further,
this information will be updated to that employee's performance review.
CONCLUSION:
From the above study, it can be concluded that managers play a very crucial role in the
success of the company. They act as the pillars and are capable of handling all the issues in
effective manner. In that case an appropriate leadership style is required to be adopted so that
employees can be motivated to contribute their maximum. It is believed that only through
motivated workforce, company can reach to its goals.
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