Strategic Analysis and Planning for Sainsbury's Business

This report provides a comprehensive analysis of Sainsbury's business strategy, a UK-based supermarket chain. It begins with an introduction to business strategy and its importance, followed by an analysis of the macro environment using the PESTEL framework, considering political, economic, social, technological, legal, and environmental factors. The report then delves into Sainsbury's internal capabilities using SWOT analysis, evaluating its strengths, weaknesses, opportunities, and threats. Furthermore, it applies Porter's Five Forces model to assess the competitive landscape and strategic implications. Finally, the report outlines strategic planning, emphasizing the application of competitive analysis and environmental models to establish valid strategic objectives, directions, and tactical actions. The report concludes with a summary of key findings and recommendations for Sainsbury's strategic development.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analyse the impact of macro environment with some important frameworks............................3
Critical analysis of impact of macro environment in order to determine strategic management
decisions......................................................................................................................................5
TASK 2............................................................................................................................................5
Analyse some important capabilities and internal environment of organisation with a
framework....................................................................................................................................5
Critical evaluation of internal strength and weakness of organisation........................................7
TASK 3............................................................................................................................................7
Apply porter's five forces model in organisation for analysing the competition.........................7
Prepare important strategies in order to competitive edge in the market on the basis of
outcomes......................................................................................................................................9
TASK 4..........................................................................................................................................10
Apply theories, model and concept in order to make a strategic planning of organisation.......10
Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives...................................................................................................................................12
Critically interpret with the application of competitive analysis and environmental models in
order to set valid strategic objectives, directions and tactical actions.......................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
Books & Journals:......................................................................................................................14

INTRODUCTION
Business strategy is defined as a combination of actions and decisions that taken by
organisation in order to accomplish goals and objectives with securing of competitive position in
the market (Nishino, Takenaka and Takahashi, 2017). Day by day the complexity and
competitiveness of business environment get rises which becomes very difficult for every
organisation that how they can accomplish their goals and objectives. For that reason, business
strategy is one of the best ways in order to accomplish business goals. In this context, Sainsbury
is undertaken to show the importance of business strategy. Sainsbury is the UK based
organisation that has a supermarket chain. It is founded in 1869 by John James Sainsbury. This
report covers impact of macro environment because it influences organisational strategy with the
help of specific frameworks. It also covers determination of Internal capability and specific with
specific framework, application of porter's five forces model in order to analyse competition and
other theories and models which is very appropriate in order to take competitive advantage.
TASK 1
Analyse the impact of macro environment with some important frameworks
Business strategy is the backbone of business because it gives direction in the form of
roadmap which leads to desired goal of company. Sainsbury analysed that any fault in the road
map resulting in non accomplishment of company’s goals and objectives. Sainsbury is the
popular and famous companies that known by its strategy as people find out that the success and
growth of organisation is because of their strategy (Khan, Daddi and Iraldo, 2020). Sainsbury
also identified that for an effective strategy firstly they have to understand and analyse the macro
environmental factors because it gives impact on organisational strategies. Without considering
macro environmental factors company are unable to make a strategy which become possible to
apply. There are many factors that come from external environment which are not handling by
organisation. They all are uncontrolled in nature so that a company need to analyse factors that
come external environment in order to take precautions and make strategies which helps to
reduce the negative impact on organisation. This is very necessary for Sainsbury and that’s why
they choose a framework which helps to analyse the impact of external or macro environmental

factors. The framework that uses for external analysis by Sainsbury is PESTEL analysis model.
PESTEL is an appropriate model which helps to analyse the external environment factors that
can be impact on organisational strategies. It consists of five important factors that are mentioned
below:
Political factor
Political factors are concerned with on political issues which include stability, policies,
taxation policies, terrorism, etc. These all political factors give a great impact on a strategy of
organisation (Dobni and Sand, 2018). It is identified by the Sainsbury that they get affected by
Brexit because of separation of European Union and UK trade relations. It deals directly impact
on their strategy because now they have to make a strategy which can deal with the implications
of Brexit.
Economical factor
Economic factors include economic growth rate, policies related to the economy, etc. It is
very important for Sainsbury that they should know the position of their economic growth. It is
identified by Sainsbury that UK's economy is in recession period as it declines due to COVID-19
which becomes pandemic in the world. Due to this, Sainsbury change their strategy as now they
are focusing on more online business practices in order to stop the propagation of virus.
Social factor
Social factor includes customs, values and traditions which gives a great impact on
organisational strategy. Sainsbury make their strategy by understanding the culture of market.
For example, Sainsbury identified that the UK’s market culture is very dynamic and trendy.
That’s why Sainsbury adopted to do a market research for making a strategy.
Technological factor
Technological factor includes all latest technologies that become a trend for every
organisation as it helps in taking a competitive advantage and growing their business very well.
Sainsbury is now focusing on digitalisation of their business because it becomes trend
(Crabowski and Stawasz, 2017). For more information, Sainsbury always keep abreast so that
they can go with latest technologies.

Legal factor
There are many legal rules and regulations which every organisation need to follow such
as employment law, equality law, etc. In present days, Sainsbury identified that they are
following and complying all legal laws.
Environmental factor
Sainsbury make a strategy in order to achieve sustainable growth because they
understand the importance of environmental factors (Payne and et. al., 2020). Company also
identified it is related to the corporate social responsibility which need to be fulfil.
Critical analysis of impact of macro environment in order to determine strategic management
decisions
With the help of PESTEL analysis model, Sainsbury can easily identified and analyse the
impact of macro environment. Sainsbury also analyse that it does not only impact on
organisation operation and functions but also gives a great impact on company’s strategy. That's
why it is necessary for every organisation that they should focus on analysing the environmental
factors which can be impact on their strategies. For analysis purpose company use PESTEL
model which consists of 6 important environment factors that are political, social, economical,
legal, technological and environmental. Companies identified that every organisation is affected
by these factors and they are uncontrollable. Due to these factors, company take many strategic
management decisions in which they are focusing on how they make a strategy that is capable of
handling and overcoming with the challenges of external environment.
TASK 2
Analyse some important capabilities and internal environment of organisation with a framework
Sainsbury identified that the success depends on their internal capability which needs to
be analysed by organisation so that they know the real strengths and weaknesses. In this case,
company need to analyse the internal environment of organisation which is controllable by
taking corrective actions and decisions (Desfiandi and et. al., 2019). It is also find out by
Sainsbury that if they have high internal capability then they can definitely deal with the
challenges which come from outside environment. Internal capability is also necessary for

making a strategy because they have to and listed all the activities which they perform and if
they found any weaknesses then they try to improve them. The analysis of internal capability
Sainsbury is able to make a strategic planning that how they can improve their weaknesses with
appropriate actions and decisions. For internal environment analysis, Sainsbury uses SWOT
analysis tool which is very helpful in order to identify strength, opportunities, weaknesses and
threats. So below is the table that analyse internal capability of Sainsbury:
Strength Weaknesses
 It is identified the Sainsbury is one of
the largest supermarket chains that
provides a huge variety of production
services to consumers.
 They have approximate 150000
people as an employee which gives
their best performance in order to
achieve organisational objectives as
they get experience leaderships.
 Sainsbury has over 800 convenience
stores and 600 supermarkets across
UK (Carson and et. al., 2018). They
are selling with excellent advertising
and branding strategies. For that
purpose they use print ads, online
campaigns, TVCs, etc.
 Sainsbury analyse that there is a stiff
competition in every segment special
in retail sector.
 They also identified there is rising
food prices over the world which
gives a great impact on Sainsbury’s
selling.
Opportunities Threats
 Sainsbury has an opportunity to enter
into the market of emerging
companies with the help of
partnership or joint ventures.
 Sainsbury has an opportunity to
expand their business in growing
 Sainsbury identified that increasing in
globalisation presents a challenge for
company.
 There are many competitors present
in the market which provides quality
products and services in all over the

economies such as Asia, Africa, etc.
 Sainsbury can use self-checkout
machines in order to open their stores
for 24 hours which helps to boost their
sales.
world.
With the help of SWOT analysis, Sainsbury is able to analyse the internal environment
which becomes helpful for organisation in the process of strategic planning. If organisation
knows their strengths and weakness then they can take further actions in order to achieve their
goals and objectives (Bayer and et. al., 2017). Strategies only make after the analysis of internal
capability as a company can take decision regarding that what they have to be improved with the
analysis of their weaknesses.
Critical evaluation of internal strength and weakness of organisation
As per the analysis of internal strength and weakness of Sainsbury, it is analysed that the
company has more strength which becomes very helpful for taking a competitive advantage in
the market and grow their business. For the success and growth of company, company need to
analyse their internal strengths and weakness so that they can make action plan accordingly. In
other words, strategies can be making with the analysis of internal capability. Strategies can be
become more effective if organisation can use their strengths. With the help of strategies they
also improve their weaknesses that ultimately results to achievement of targets. SWOT analysis
gives direction to organisation that in which path they have to take steps.
TASK 3
Apply porter's five forces model in organisation for analysing the competition
It is very necessary for organisation that they have to know about competitive position in
the market. Competition is very important for organisational growth and success and that's why
they have to analyse the competition in the market conditions. Strategies of Sainsbury made after
the analysis of competition (Castellani and et. al., 2018). It is very important for the company
that they have to know about their competitors which are present in the market. Company

analysed that Porter’s five forces model is very beneficial in order to know the competitive
position of Sainsbury. Porter’s five forces model is one of the best models that focusing on
factors which influence competition and business strategy of Sainsbury. It consists of five
important forces that impact on business strategy which is mentioned below:
Bargaining power of suppliers
Sainsbury is supermarket which deals in retail industry and they are analysed that the
number of suppliers in this sector is so many as compared to number of buyers. Due to this, it
reduces the supplier’s bargaining power because organisation has many options to purchase their
raw materials from suppliers (Mazzei and Noble, 2019). It is also very helpful for Sainsbury as
they can make more profits with lower bargaining power of suppliers. Company can effectively
control on prices of their products because lower power of suppliers reduces the control on
prices. It gives a great impact on strategy of company as now they have to know the bargaining
power of suppliers is less so they can focusing on higher profits and revenues. This can be done
with the help of strategic planning in which they give focus on profitability of the company.
Bargaining power of buyers
It is identified by Sainsbury that the bargaining power of buyers is less because company
deals in the supermarket chain where buyers have in high number as compared to the available
firms. That's why it reduces the bargaining power of buyers because they are high in numbers
and have few firms from which they can purchase goods and services. Due to this reason,
Sainsbury is able to decide the prices of their product and take a competitive edge. It reduces the
control of buyers on the prices of products. This becomes very beneficial for Sainsbury as buyers
have to purchase products from their stores. Company can take advantages from this situation by
making an effective strategy for deciding the prices of their products. Sainsbury make a strategy
in which they are focusing on best quality of products with low prices so that it will increase the
customer base.
Threat of new entrants
Day by day the globalisation is increasing which becomes a problem for existing
organisation as it raises the threat of new entrants in the market. Sainsbury analyses that the
threat of new entrants in this sector is comparatively high to other industry (Sun and et. al.,

2020). Due to this, company has always a threat in order to reduce their competitive position in
the market. Sainsbury already know that new entrants needs experience which they have in order
to grow their business. Sainsbury is already having a good experience in order to analyse the
customer’s needs and wants. Due to this, they can make a best strategy which does not only try
to achieve organisational goals and objectives but also reduces the threat of new entrants.
Threat of substitute
Sainsbury is the supermarket chain which is very common for customers as they have
many options to switch to other organisations. There are many companies available in the market
which provides same quality of products with low prices. It is increasing the threat of substitute
for Sainsbury (Winterhalter and et. al., 2017). It is very important for Sainsbury that they need to
take action in order to control the threat of substitute. For example, Sainsbury provide consumer
goods which already provided by many other organisation in the same prices. So consumers have
an option to switch to other organisations if they get discounted products and services. That’s
why it becomes more difficult for Sainsbury that how they can deal with this situation. For that
purpose, company need to make a strategy that focuses on uniqueness and differentiate product
which cannot similar to the competitors. That’s why it is necessary for Sainsbury to make a
strategy which should focuses on innovativeness.
Competitive rivalry
It is one of the important forces of Porter’s five forces model in which Sainsbury analyse
the number of competitors exist in the market. Sainsbury analyse that competitors in the market
is increasing rapidly because of globalisation. This becomes very necessary for a company to
make better strategies in order to give a tough competition to their existing competitors.
Strategies should be competitive so that it will take a benefit from the market. Sainsbury also
identified that competitive rivalry is high by analysing competitive position in the market.
Prepare important strategies in order to competitive edge in the market on the basis of outcomes
From the above outcomes by discussing five forces of Porter’s model that in present
situation Sainsbury doing a very well job because of their strategies. But day by day the
competition is rising, so Sainsbury need to prepare important strategies which help to reduce the
competition and take a competitive position in the market. It becomes very necessary for

organisation to take competitive edge in the market if they want to survive for long term period.
For that purpose, Sainsbury need to make strategies which should be effective and efficient in
order to achieve goals and objectives. Strategy should be covered all important areas that
influenced companies operation and functions.
TASK 4
Apply theories, model and concept in order to make a strategic planning of organisation
Every organisation know the importance of strategic planning and they identified it is not
an easy process. This is due to many factors which affect business strategic planning such as
external environment factors, internal capability and competitive position of the market (Vargas
and Trez, 2017). So that's why Sainsbury need to cover all the areas in their strategic planning
which impact on organisation functions and operations. Sainsbury analyse that it becomes more
effective if the use theories and models as it gives directions or road map. With the help of
applying theories and model, company is able to perform a well strategic planning. So there are
some theories and model of strategic planning which are using by Sainsbury are as follows:
The classic 4 step approach of strategic planning
This approach was given by Price Waterhouse in 1980. It is a very useful structured approach for
change and strategic management planning. It is very simple structure which covers four steps
that are mentioned below:
STEP 1: Where are we now?
It is the first step in classic approach in which Sainsbury need to situation analysis that
where they stand in present situation (Fleckenstein, Fellows and Ferrante, 2018). It brings out
current reality of organisation with honest and realistic assessment. In the starting of plan, it is
very important for Sainsbury that they should know the real and current position of the company.
STEP 2: Where do we want to get to?
In this step, Sainsbury find out that where they want to go that means they set goals and
objectives in order to make a plan. Without goals and objectives there is no plan can be
successful as they get know direction.

STEP 3: How are we going to get there?
It is the third step of the classics approach of strategic planning in which Sainsbury
decide a path that how they achieved that position (Schwarz, 2020). It is a plan in which
organisation find out the ways that how they can go to that stage. In other words Sainsbury find
out a path to achieve their set objectives and targets.
STEP 4: How will we know when we have got there?
It is very important for Sainsbury that they should know about achievement of goals and
objectives. In simple words, it is the stage where Sainsbury analyse that they can achieve their
goals or not (Doh and et. al., 2017). This can be done with the help of comparison of actual
performance with standard performance. Sainsbury set standards and parameters for comparing
and identifying the position of company in order to achieve goals and objectives.
Blue Ocean strategy
It is one of the most important models which termed as Blue Ocean strategy. It is defined
as a design of Sainsbury products in the market where they have little or no competition. In the
research, company identified that chances of success and growth is increase where they have to

face low or little competition. For that reason, Sainsbury perform research in order to identify the
niche market where they can increase their profits. It is the place where there are very few
businesses which offers production services to the people. It is different from Red Ocean strategy
in which company identified that market is saturated and that’s why they have to face threat of
pricing pressure (Kiron and Schrage, 2019). In Blue Ocean strategy there is no price pressure to
organisation. It is focusing on those markets which are able to grow. In simple words, Sainsbury
looking forward to a new market where they can capture new demand either from their unique
products or because of low competition. This model is very helpful in a strategy planning if
organisation wants to increase the chances of success and growth.
Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives
From the above analysis, it is identified by organisation that there are many models in
theory is available which helps organisation to give directions in order to achieve goals and
objectives of company. According to the classic four step approach and Blue Ocean strategy
organisation can develop or produce a strategic management plan more effective and efficient
which gives priority to objectives of the company. It is identified by company that they need to
focus on all important areas where they can get success and growth. Companies identified that
they can achieve their set targets with the help of effective strategic management plan which
should considered tactical and tangible strategies. With the help of Blue Ocean strategy and
classic four step approach Sainsbury can achieve their goals and objectives.
Critically interpret with the application of competitive analysis and environmental models in
order to set valid strategic objectives, directions and tactical actions
After the discussion of factors which influence on organisational strategy, company can
conclude that it becomes very necessary for every organisation that they should apply some
important models or framework. In order to analyse environmental factors company can has
options to use PESTEL and SWOT analysis model. It is identified that PESTEL analysis model
is helpful in order to analyse the external environment factors which considered 6 important
factors that are political, legal, environmental, economical, technological and social factors. With
the help of external analysis organisation can set their goals and objectives in the strategy. It is
also identified and analysed that company should know about their internal capabilities and

strengths as it is very beneficial to overcome with the challenges of external environment. In
addition to this, company should also focus on competitive analysis with the use of Porter’s five
forces model. This model is very helpful in the position of analysing competition by a company.
With the analysis of all these factors, companies able to build a better strategy which definitely
achieves goals of organisation.
CONCLUSION
It can be concluded from the above discussion that business strategy is very important for
every organisation in the respect of achievement of organisational goals and objectives. There
are many organisation that known because of their strategy. In the present scenario of business
environment, organisation analyse that there are many external environmental factors which are
not controlled by company so they have to be analyse all the factors with the help of PESTEL
analysis model. In addition to this, organisations also need to analyse their internal capability
which becomes very helpful in order to make strategies. This report also covers Porter’s five
forces model that analyse the competitive position of organisations in the market. It also covers
theories and models for strategic planning of organisation.

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