Sainsbury's Strategic Report: Macro Environment, Capabilities & Future

This report provides a detailed analysis of Sainsbury's organisational strategy, examining both external and internal factors that influence its operations. It begins with a PESTLE analysis to assess macro-environmental factors like political and economic changes, including the impact of Brexit. The report then evaluates Sainsbury's industry position using Porter's Five Forces, considering the threat of new entrants, substitutes, buyer power, supplier power, and competitive rivalry. An internal analysis using the SWOT model identifies the company's strengths, weaknesses, opportunities, and threats. Furthermore, the report explores individual and collaborative future options for Sainsbury's, considering potential partnerships and strategic alliances to enhance its market position. The analysis aims to provide insights into how Sainsbury's can achieve its goals and maintain a competitive advantage in the dynamic supermarket industry. Desklib provides this report and many other solved assignments for students.

ORGANISATIONAL
STRATEGY

EXECUTIVE SUMMARY
Organizational strategy of business formed for establishing goals and objectives of
company. The business strategy must be formed for achieving those goals and Misson being set
by the company for growing business. There are various external and internal factors affecting
companies operations. By analysing these factors helps in making strategies effectively which
aids in achieving competitive positions for surviving business in long run.

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Analysing Macro-environment factors .......................................................................................4
Assessing Industry position.........................................................................................................6
Analysing companies Internal capabilities and stakeholder perspectives 700............................8
Individual future options............................................................................................................10
Assessing various Collaborative future options linking with other business ...........................12
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14
INTRODUCTION

Organizational strategy of business is being designed for meeting the goals and mission
of company. The strategy of company is being defined as a plan which helps in allocating all the
resources of company. Maintaining strong organizational strategy is important as for achieving
companies vision and mission by setting clear goals for gaining competitive advantage over the
competitors. Sainsbury operating as the biggest supermarket retailer chain selling food, clothing
and other products to consumers. This report Will provide details about macro environmental
factor affecting company. Also, specifies industry position and internal capability of company
and stakeholder perspectives. Further, specify about the individual future options and
collaborative future options for linking with other business.
MAIN BODY
Analysing Macro-environment factors
Sainsbury operating as second largest chain of supermarket in the UK. Selling various
products to consumer as established as the retailer in the country. There are various external
factors affecting companies operations. By doing pestle analysis of Sainsbury aids in specifying
all the external factors affecting companies operation. Macro environmental analysis include
various factors such as interest rates, various countries rules, growth rate, unemployment concern
are all the factors which will be impacting companies operations and internal processes.
Political factors: These are those factors affecting companies operation as , the Brexit
has significant impact on Sainsbury; as of importing various food items for the stores o be sold to
consumers will be impacted by Brexit. As Brexit has reduced the food shipments as of fresh fish,
diary and meat products have substantially reduced the number of imports of company. Due to
Brexit the companies profits making capacity has been reduced and it has created uncertainty
level for operating business (PESTLE Analysis of Sainsbury’s, 2022) As the sales performance of
company was reduced . Also the countries rules and regulations, tariffs, pricing rules and
taxation policies being implemented by the country impacts Sainsbury internal operations.
Economical factors: Various economy factors impacting Sainsbury as, fur to Brexit the
country GDP has ben declined and has impacted various supermarket including Sainsbury. Other
factors including rising in the cost of fuels will impose high transportation cost for importing and
transportation of products from one place to another. Also, rise in salary expectation of various
employees for sticking and maintaining the products properly in stores will reduce profits

margins as by increase in expenses of company for paying more salary to employees for working
also with the rise in competition in dynamic market will minimize the ability to gain high profit.
Social factors: Various social factors concerning, large consumers are shifting to healthy
and health conscious diet. For this the copay must adopt and provide all the organic food
products to consumer for staying the consumers latest preferences and taste. Also, supplying and
selling fresh vegetables from farms with no chemical generated food outcomes. further, rise in
prices on the freshly grown vegetables. Moreover, as the consumers are more conscious for the
food they eat as the fair trade movement will affect products such as coffee and chocolates for
guaranteeing fair prices products are given to consumers by the company.
Source:(What is PESTLE Analysis,2022)
Technological factors: Technical factors impacting companies operations are in large
amount as of introducing variolous technical updates. As the latest, methods used for offering
various products to consumers also the technical development being introduced for minimizing
queuing line. Also, various new analytics being introduced as of artificial intelligence principles,
data analytics . These technical analytical helps in improving profitably and also prevents extra
wastages being used in packaging of products in selling other products of company, as the mode
of online shopping has impacted companies in store sales as most of the companies has adopted
e-commerce platform for selling various items of groceries with growing technology has
impacted the sales and profits margins of Sainsbury products. for this the company has shifted
with making online websites for selling products to consumer and started home delivery as of
working in pandemic.
Illustration 1: Pestle Analysis

Legal factors: Various legal factors including the legal laws after the impose of Brexit
will impact Sainsbury. As the company involves various decision-making procedures and it
needs various approval form the regulatory. The delay in approval on the decision-making
procedures will impacting company as this will lead in loss of market share of Sainsbury. Also
with the new launch of sugar tax, for this company products must comply with this law and must
do less production of the high fatty items and sugary fat products below the age of 16.
Environmental factors: There are various environmental concern which must be
reviewed by the company and must produce products and adopt packaging for protecting the
environment. As the company must produce products which ensures reducing carbon emission,
also less operating waste and recycling packing must be there of various products which are sold
to consumers. Furthermore, producing products with the latest changes in climatic concerns.
Also Sainsbury must introduce products which are less environmental strain, also by introducing
various plans as of giving benefits to consumers who bring their own containers and bags while
purchasing products from stores.
Assessing Industry position
Industry position of company is being defined as the formulating various strategies for
positioning company at higher level in the market. As Sainsbury is publicly owned company an
established as leading food retailer as supermarket. operating as retailer company the company is
mainly known for serving best and quality products to all the consumers arriving supermarket
stores. As supermarkets operating in UK is very competitive and serves as industry position in
market (Rohwer and Topić, 2019). By doing Porter Five Force Analysis aids in positioning the
company in market and determines long term profitably of the company and attains competitive
advantage.
Threat of new entrants: There is low threat of new entrant in the competitive
environment as of operating the business in UK. As due to high competitions being operating as
a supermarket store in UK the new entrants need to establish position as that of established
companies which are operating as supermarkets in UK. So the competition from smaller
companies of supermarkets does not allow large number of new entrant into the market as to
operate as successful supermarkets. So the company want to operate and enter as a super market
store must produce high quality of food product in market also serving low cost products to
survive in long run in high competitive market.

Threat of substitute: Sainsbury has established strong position in market for providing
quality products to large number of consumers. But due to high level of competitors operating as
supermarkets in are using similar online streamlining techniques for establishing position. So
there is low level of substitute are available for the company (Khurram, Hassan and Khurram,
2020). As many players are arriving for serving food and non-food items which provides
substitutes for shifting consumers as they will be offering low cost products at low quality will
influence consumers for shifting on the other brand but the threat of substitutes is low for
Sainsbury because it has established prominent position in the country as of serving groceries to
various consumers with quality and fair prices.
Power of buyers: Sainsbury as operating with the chain of supermarkets and selling
various groceries to consumers. The power of buyers in company is very high, as for maintaining
consumers for the company the prices for offering various products to consumers must be
decided according to needs of consumers by increasing cos with very less amount of products.
with high bargaining power of consumers will implies more switching power to consumers. As
for instance if Sainsbury is offering product at high prices will intent to shift the consumer to
other retailer supermarket who supplies the same product at low prices.
Power of suppliers: Suppliers bargaining power are very low for supplying raw
materials to companies. This implies the company can change supplier for obtaining raw
materials and products which are need to be supplied at the supermarkets if the existing suppliers
are not providing the products at proper cost and quality (BRITISH RETAILER SAINSBURY’S
PORTER, SWOT AND PESTEL ANALYSIS, 2022). Sainsbury can also purchase from those who
influence for bargaining the products at low prices and obtain good at lower prices from various
suppliers.
Competitive rivalry: There is high level of competitor in the market as for serving large
consumers. The main competitors of the company is TESCO and ASDA as operating as
supermarket store in country. These companies are mainly focusing on pricing strategy for
serving consumer which has improved their value addition and aids in backing the market
position of companies. With the increased competition products of Sainsbury products will be
impacted drastically and have negatively impacted company sales and growth also the profit
margins of company. But with the increased competition will induce the company to come up
with various innovative and creative offering to maintain the loyal consumers in market as by

offering budget friendly services, selling products at affordable cost will helps in retaining
market position for Sainsbury.
Thus by doing the porter analysis of company aids in defining about the companies
position in markets. As Sainsbury has maintained the prominent position in the market for
serving large consumer with groceries product also non-food items, the low threat of entrants,
high competition, low power of suppliers, high bargaining power of buyers, moderate level of
substitutes serving same products in market tend to establish good positioning of the company in
dynamic markets (Pontes and Pontes, 2021). The companies strategies must be formed after
analysing market position as this will help in attaining the proper goals for business.
Analysing companies Internal capabilities and stakeholder perspectives 700
The internal analysis of company aids in defining about the companies strength,
weakness, opportunities and threats being faced by the company while operating in dynamic
environment. By using SWOT model helps in analysing better about the internal capabilities of
business.
Strengths
 As the company is listed in London
board of stock exchange establishes
prominent position in market.
 Company uses right expansion strategy
for expanding its market globally
(Extensive SWOT Analysis Of
Sainsbury’s – UK’s Top Supermarket,
2022).
 Various innovative promotional
strategies are used by company for
retaining loyal consumers and reduce
the competition by pitching the brand
for attracting more consumers.
 Company maintains healthy contact
with consumers as by frequently
Weakness
 As the company is operating with the
lower margins, due to increased in the
competition lowering prices attract
consumers but it will reduce the
profitability of the company.
 The company is not operating with the
financial stability, this has resulted with
reducing the annual revenues and
profits for the company.
 Due to various uncertainty due to
pandemic has caused the company to
increase the process of goods being
produced to all the consumer in the
market due to increase in costing the
sales of various products has drastically

obtaining feedback by consumers this
helps in establishing strong brand
image of company.
dropped to great extent.
 Opportunities
 Various new opportunities are being
opening for expanding the market share
of the company by adapting new
technology will open new markets for
the company
 Various new trends and various online
consumers will meet up the demand
and aids in diversifying new trends
which will increase revenues for
company.
 With more and more preferences has
shifted company preferences for
serving companies products.
 Threats
 Various competitors and Covid
pandemic has resulted the threat for
company which reduce the market
share.
 Rules and various regulations for
operating business into other countries
will impact production process also set
of rules to be applied in company by
government creates thereat for
company.
 Brexit has impacted the companies
import and affordable importing of
various fresh meats and other goods in
company.
With the perspective of shareholder there are mainly internal as well as external
shareholder for the firm mainly the internal shareholders includes ;
Owners: These are those which are owing the company and ads in receiving profits of
the company. These shareholders invest money in the company mainly for expanding business
by purchasing various shares in order to receive good return. The return for gaining profits by the
company mainly in form two perspective of share prices rises , or increase in grater level of sales
volume by the company. So the organizational strategy must be designed in such as way which
aims at increasing the profits of by expanding more stores globally for increasing the prices of
shares in market.
Employees: Employees of company are very important stakeholders as these are serving
company as it is paying optimum pay level and job security to employees for working in

company. The organizational strategy formulation must be done by keeping all safety and
satisfying employees for working effectively in company.
External shareholders includes
Customers : These are very influential stakeholders which contributes in generating
income of the company. The company must formulates strategy for producing innovative
products and serves consumers with following latest trends for effectively meeting demand of
consumers.
Suppliers: Suppliers are the producers of various raw materials and products around the
world for the company. Quality of products being sold to all the consumers at reasonable prices
will help in increasing consumer satisfaction.
Government: Government is also important stakeholders, the company must formulates
all the strategies while reviewing the rules and regulations of the government being imposed in
particular country (Kovvali, 2021). legislations such as health and safety equality data
protections must be kept while formulating strategy for growth.
Individual future options
The future options for Sainsbury can be determined with the help of the Ansoff Matrix.
This matrix is useful for the examination of how this organization will be able to implemented
for the growth of the business for its future. This matrix includes the following strategies,
Marketing Penetration :
This is the strategy of the organization which is considered to be the factor that influences
the selling of the existing products into the existing markets. The management of Sainsbury has
been able to expand its business well since its inception (Zanjani and et.al., 2020). The aim of
this strategy is to help the organization increase its market share with the help of its products by
existing customers. Competitive pricing strategy can be considered to be the factor which helps
the business in the implementation of the market penetration strategies. For increasing the sales
of the company it some times have to decrease its prices thus squeeze its pricing. This company
in this strategy can come up with special offers on many products which will help in increase its
sales.
Market development :
This is the strategy for Sainsbury which is known as marketing development strategy in
which selling existing products into the new products for new markets. The expansion of this

organization will be very successful with the help of this practice as it will allow the company to
introduce its operation to other countries (Kukartsev and et.al., 2019). In this strategy the
business focuses on launching its existing products and services into a new market. Sainsbury
can focus on entering countries like US, China, South Korea and Japan.
Product development :
Sainsbury has also been able to develop over the year which is considered to be very
effective for the management of the label products of selling and also existing in the market. This
organization in this strategy needs to focus on how to bring growth in the organization through
bring new products in the existing market. This will be an innovative strategy for the business
and will be considering the features which are examined in the existing market to develop the
product accordingly so that it can perform the most effectively. It is the which is strategy is most
effective when the business has a strong marketing practice which is helpful for the management
of the organizational operations.
Diversification strategies :
This is the strategy in which the business introduces a completely new product into a
completely new market which is essential for the business growth of their business. This type of
strategy is considered to be very risky for the organization as it is new for the organization.
Sainsbury will have to face all the challenges which a new business has to face during the
implementation of this strategy. This is the reason why this strategy has the most risk and makes
the organization most vulnerable in the market full of competition. For the business the
management of the diversification strategy is considered to be the most difficult way of planning
growth.

Source : (Ansoff Matrix in Tesco How Tesco used Ansoff matrix, 2021)
Assessing various Collaborative future options linking with other business
Collaborative business strategies are those which is being adopted by various corporate
businesses in order to achieve common goals and objectives. Collaboration of various business
are essential as of enhancing the products and services being products by business for
maximizing profits. Various collaboration techniques adopted by business for future as of linking
with other business includes incudes :
Partnering: Partnering with other business as a form of collaborating helps in boosting
revenues and expanding the customer base for serving in dynamic market. Partnering with other
business as for promoting and increasing sales and large market of loyal consumers. Partnering
with the marketing company will help in promoting and marketing products and services being
sold in Sainsbury (Ordonez-Ponce, Clarke and Colbert, 2021). As of teaming up with the local
business as of marketing agencies for digital marketing and promoting the business as on e-
commerce platform for increasing sales and revenues.
Alliances : It is a type of business collaboration, it can be formed with two or more
businesses for working together with sharing knowledge and various available resources with
business for meeting the goals and objectives to be achieved by businesses. Alliance for the
company can be formed for increasing the products ranges or obtain the products for the
company fir serving more audience in the market (Wilson, 2019.). Sainsbury company is
planning to form alliance with the SARA Weller for obtaining financial services also fast moving
of good from one place to another can be done by forming alliance in the future. Forming