Strategic Analysis: Stakeholder Model Application for Sainsbury

This report provides a comprehensive stakeholder analysis of Sainsbury, a major UK supermarket chain. It begins with an executive summary highlighting the importance of stakeholder mapping in understanding relationships between the business and its various stakeholders. The report then details the application of a stakeholder model, focusing on identifying key stakeholders such as customers, employees, shareholders, suppliers, and local communities, and assessing their interests and power dynamics using a power and interest grid. The analysis explores the potential consequences of stakeholder dissatisfaction, such as reduced motivation, decreased sales, and loss of profitability. The report further examines the stakeholder theory as a framework for addressing ethical and moral values in management and developing effective relationships. It also presents a stakeholder mapping model for Sainsbury, analyzing the expectations of each stakeholder group, and providing recommendations for management strategies. The advantages and disadvantages of stakeholder mapping are also discussed, concluding with an overview of how understanding stakeholder needs and expectations can contribute to Sainsbury's strategic goals.

Application of
Strategic Model

EXECUTIVE SUMMARY
In the present study it has been assessed that stakeholder mapping is the crucial
element of stakeholder analysis so that relationship among individuals and business
can be assessed. However, Stakeholder model has been applied in regard to Sainsbury
in order to monitor the interests of stakeholders and thus assess their concerns so that
satisfaction can be attained. The list of stakeholder within Sainsbury involves
customers, employees, shareholders, suppliers and local communities etc. However,
power and interest grid has been implied in order to know their implications so that
individual stakeholder interests can be identified. Also, firm faces varied consequences
such as low motivation of workers, dissatisfaction among consumer’s affects them and
thus they leave the business which results in low sales and profitability.

Stakeholder theory can be stated as the framework that helps business to
addresses moral and ethical values in the management so that best decisions can be
taken. The main purpose of such model is to develop effectual relationship among
business and others in both internal and external environment. Stakeholder model is
useful for businesses in order to monitor the interests of stakeholders and thus assess
their concerns so that satisfaction can be attained. There are varied stakeholders that
involve customers, employees, shareholders, suppliers and local communities etc
(Shirey, 2012). Here, stakeholder model has been applied to Sainsbury in order to
analyze its market potential and power and interest of its stakeholder group within firm.
It can be stated that Sainsbury is the second largest chain of supermarkets in UK.
However, Tesco overtook Sainsbury in order to become the market leader and gain
high market share in terms of sales and profits. Also, business faces tough competition
from different retailers such as Asda etc. The stakeholder mapping model is required to
be implied within Sainsbury so that it assists in analyzing the power and interest of
stakeholders within enterprise and also influence them to attain desired targets. The list
of potential stakeholders at Sainsbury are customers, employees, government
agencies, media, local communities, financial institutions, environmental agencies,
shareholders, suppliers and competitors (Clifton and Amran, 2011).
It can be assessed that business is required to apply stakeholder mapping model
and analyze the expectations of individual stakeholders within enterprise. For instance,
consumers are a key player and possess high power and interest therefore business is
required to engage closely in business decision so that their needs can be satisfied.
While, employees has low power and high interest which states that Sainsbury
management need to inform its workers regarding business future plans so that they
can contribute their ideas to attain results (Kontogianni, Papageorgiou and Tourkolias,
2012). It is essential for firm to keep them informed so that they can be motivated to
carry out best outputs. Also, each and every stakeholder has certain expectations from
firm therefore, business should effectively fulfill it with the aim to satisfy their needs.
Following is the stakeholder mapping for Sainsbury and analyzing the interests
and power of different stakeholders so that their needs and expectations can be fulfilled.
It is as follows-
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 Customers- They possesses low power and high interest and therefore, it is
essential for Sainsbury to build close connection with them for creating impact on
stakeholders. Also, business should show little consideration regarding their
needs and expectations so that it helps in increasing the sales and profitability of
firm. Sainsbury needs to determine their needs and then provide them required
products and services so that satisfaction can be attained (Fooks and et. al.,
2013).
 Employees- They also lies at the same quadrant i.e. low power and high interest
and thus firm should engage its workers in decision making to develop future
plans. Through maintaining good relationship with employees Sainsbury provides
them required information with the aim to attain objectives. It is significant for firm
to satisfy employees so that they can enhance the productivity of firm in market
(Vance‐Borland and Holley, 2011). Organization provides effectual training and
development to its workers so that they can deliver the best quality services to
customers and fulfill their demand so that strikes and lockout conditions can be
avoided.
 Government agencies- Such authorities and regulations possess high power
but low interest therefore, it is essential for the management of Sainsbury to
inform them regarding the development attained within enterprise. Also, their
requirements should be satisfied through following regulatory policies for carrying
out business operations. Thus, business needs to operate effectively as per their
guidelines so that best outcomes can be attained (Johnson and et. al., 2013).
 Media- They possesses high power and interest and thus business is required to
inform them about the future planning so that they can attain the best possible
outcomes. Firm need to engage them within business innovative ideas and
launches so that potential consumers and shareholders can be attracted in order
to invest within firm. It helps Sainsbury to increase their relationship with clients
and other media agencies so that best information can be delivered to them
(Frynas and Mellahi, 2015). Also, enterprise is required to develop brand image
in market and achieve goals.
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 Financial institutions- They possess high power and interest as financial
institutions play a major role in providing funding to business so that it assists to
build future plans and thus enhance its operations. Sainsbury possess high
impact on such stakeholders and thus fulfill their needs so that desired targets
can be achieved effectively (Ruiz-Frau, Edwards-Jones and Kaiser, 2011).
 Local communities- Individual living in society or local people possesses low
power and interest and therefore, they incorporate minimum efforts for these
stakeholders as they do not directly contribute to the growth and development of
Sainsbury. However, business is required to develop good brand image of firm in
market and thus protect local people from getting affected (Chinyio and
Olomolaiye, 2010). Here, it is crucial for business to analyze the requirements of
individuals and then minimize its effects so that consumers can be satisfied.
 Environmental agencies- Such agencies play a critical part in business as they
possess high power and interest and thus affect firm to follow proper guidelines
formulated by government or regulatory bodies so that best operations can be
carried out. However, such agencies possess high power and interest and thus
business needs to provide the best products and services to consumers so that
their needs can be satisfied (Susanne Johansen and Ellerup Nielsen, 2011).
 Shareholders- They possesses high power and high interest as they are the
main players within enterprise. Also, firm should engage them within business
decision making so that possible solutions can be gained which helps business
to develop future plans and impacts such stakeholders (Bourne, 2012).
Sainsbury is required to make close relationship with their shareholders and
provide them detailed information regarding future plans. For instance,
shareholders possess high interest in the financial success of business and thus
develop new strategies so that results can be attained.
 Suppliers- Suppliers possess high power and high interest and thus firm should
engage them closely in business decision so that best results can be attained.
Also, firm needs to develop close communication with them in order to influence
suppliers. Sainsbury assesses that suppliers are the key players and thus
engage closely within firm so that needs can be fulfilled. However, it is essential
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for firm to maintain close relationship with suppliers and then satisfy their needs
so that desired results can be attained (Rastogi and et. al., 2010).
 Competitors- They lie in the group of high interest and low power therefore
Sainsbury is required ti assess the competitive strategy with the aim to attain
desired targets. It is crucial for firm to build effectual tactics so that competitive
advantage can be gained by firm in order to attract consumers towards firm.
Business should be informed regarding the competitive strategy adopted by firm
so that positive outcomes can be generated (Girard and Sobczak, 2012).
Illustration 1: Stakeholder mapping
(Source: Sheate and Partidário, 2010)
 Category 1 (Key players) - In this particular category it involves the stakeholder
who possess high power and interest within the enterprise. It involves
shareholders, top management, board of directors and suppliers etc. However, it
is essential for firm to analyze the stakeholder group as they have high impact on
business and play a crucial role in order to maintain a strong relationship with
them. Also, their requirements need to be identified by firm with the aim to
achieve satisfaction (Freeman, 2010).
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 Category 2 (Keep satisfied) - Here, it involves stakeholders who has high
power but low interest within the business operations. For instance, government
authorities and regulatory bodies are the main players of this category and thus it
impacts the operations of firm. However, it is essential for firm to keep them
satisfied so that business policies can be fulfilled (Gilmour, Beilin and Sysak,
2011).
 Category 3 (Keep informed) - It involves those stakeholders who possess high
interest but low power within firm. It involves competitors, workers and
consumers of the firm. However, it is essential for enterprise to significantly focus
on keeping them informed about the business operations and thus influence
clients to attain desired goals. Also, firm is required to provide them proper
training and development to their workers so that they can deliver the best
product to clients and thus satisfy their needs (Bourne and Weaver, 2010).
Further, firm is required to determine the needs of its workers in order to fulfill
their demand and do not cause strikes and lockouts within firm.
 Category 4 (Minimal efforts) - Here, it involves those stakeholders such as local
communities, administrative level workers and other organizations. All these
possess minimum interest and power within business functions. However, firm
contributes significantly for these stakeholders therefore they do not contribute
highly to the growth and development of firm (Aaltonen, 2011).
Stakeholders may change and leave the business and such results in affecting
the operations of Sainsbury. For instance, it can be assessed that consumers feel
dissatisfied from the products and services of firm and thus they shift to another retail
firm such as Asda etc. Thus, here stakeholder may leave the business and it ultimately
affects the functions of Sainsbury. Similarly, employees are also crucial part of business
and thus if firm is not able to determine their needs and expectations they will leave the
company and it will affect the operations of firm in market (Videira and et. al., 2012).
Thus, it is essential for Sainsbury to analyze the needs and desires of their stakeholders
so that best results can be attained. However, because of such changes business faces
various consequences such as it affects the sales and profitability of organization in
marketplace. Also, it reduces the productivity of business if their skilled employees
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leave the fir4m. Therefore, business is required to provide the best training and
development to their workers so that they can attain desired targets (Walker, 2008).
Advantages of stakeholder mapping Knowing the stakeholders better- It can be stated that through carrying out
stakeholder mapping it helps firm to know their stakeholders effectively. Also, it
assists them to determine their needs and desires so that best relationship can
be developed among them (Shirey, 2012). Developing managed relationship- However, firm is required to develop managed
relationship among individuals and business that helps them to attain the best
outcomes. Also, it assists enterprise to build managed relationship among each
other so that satisfaction can be attained (Vance‐Borland and Holley, 2011). Making better strategies and decision- Through effectual stakeholder mapping it
assists in developing better tactics and decisions within enterprise so that best
results can be attained. It also helps firm to implement effectual strategies so that
desired decisions can be made and satisfy the requirements of stakeholders
within enterprise (Kontogianni, Papageorgiou and Tourkolias, 2012).
Disadvantages of stakeholder mapping May be not all the stakeholders interest can be met- It is the main limitation that
is faced by applying stakeholder mapping. It states that through such type of
analysis it does not provide the best interest regarding fulfilling the needs of all
the stakeholders. However, if any individual needs are not fulfilled then it affects
the results of firm (Fooks and et. al., 2013).
 Focuses on crucial stakeholders- However, it is another disadvantage that states
that business focuses on crucial stakeholders only and thus it left behind varied
stakeholders so that their needs and expectations cannot be fulfilled effectively
(Frynas and Mellahi, 2015).
From the above study it can be conferred that stakeholder mapping is crucial as
it assists in developing the best relationship among business and individuals. However,
stakeholder analysis needs to be done within Sainsbury so that potential of
stakeholders regarding their power and interest can be assessed. Furthermore, all the
categories of stakeholder mapping has been studies which states that different
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stakeholders lies in different categories. For instance, consumer’s lies in category 3 i.e.
keep informed as business is required to provide information to their clients regarding
products of firm and thus assists in sales and profitability of firm in market. At the end,
when stakeholders leave the business it affects the firm in varied consequences such
as decreases the sales and profitability of firm as well as reduces the brand image of
firm in market.
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