Kensington College HND Business: Strategic Management Plan Report

This report presents a strategic management plan for J Sainsbury's Plc, a multinational grocery firm. It begins with an introduction outlining the company's background and subsidiaries. Part A analyzes the macro environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors. It then conducts a SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. Porter's five forces model is also employed to evaluate competitive forces. Part B focuses on strategic planning, outlining strategic objectives, strategies, and tactics for Sainsbury's. The report concludes with a summary of findings and a list of references. The analysis considers factors such as Brexit, consumer behavior, technological advancements, and competitive pressures, providing a comprehensive overview of the company's strategic position and future direction.

Strategic Management
Plan

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
Appropriate framework to analyse the influence of macro environment....................................3
SWOT analysis of organization...................................................................................................6
Porter’s five forces model to evaluate competitive forces...........................................................8
PART B.........................................................................................................................................10
Strategic management plan with objectives, strategies and tactics...........................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Strategic management refers to the process of developing objectives, evaluating the
competitive environment, analysing internal environment of the business, evaluating the
strategies and ensure that the management of the business rolls out the strategies across the
organization. The Report is based on J Sainsbury's Plc. It is a type of multinational groceries firm
that belongs to Retail industry. It was founded in year 1869 by John James Sainsbury.
Headquarter of the firm is located in London, United Kingdom. It offers a wide range of products
through chain of superstores, convenience stores, forecourt shops etc. It owns various
subsidiaries like Sainsbury's Bank, Argos, Habitat, Sainsbury's Supermarkets, Nectar etc.
The Report will outline the impact of macro environment on organization with the help of
PESTLE analysis, analysis of internal environment by using SWOT analysis. It will also
describe competitive forces through Porter's five forces model, use of models for developing
strategic planning for the organization.
PART A
Appropriate framework to analyse the influence of macro environment.
Macro environment means the general framework that influence the operations of all the
businesses. These factors cannot be fully controlled by the firm. To analyse the impact of macro
environment on the firm and its business strategies, Sainsbury will use PESTLE analysis
(SHTAL, and et.al, 2018).
Political-
It involves factors such as Brexit uncertainties, political stability in the country, rules and
regulations of the government etc. In year 2016, UK has leave European Union. This decision
has adverse impact on the working of supermarket chains like Sainsbury. Due to this company
have to face difficulties in importing goods from another countries. Due to this Sainsbury is
required to make efforts to ensure that customers will continue to spend money as much as
possible in order to increase the profits of firm.
Economical-
There are various economic factors that may affect the operations of business. It involves
cost of labour, rising fuel cost, purchasing power of consumers etc. The purchasing power of
people living in UK has increased by 0.7 % from year 2017 to year 2018. It means that more

people will buy the products of the company. This will help to improve current level of
profitability of the firm (Perera, 2017).
Social-
It includes factors such as attitude, behaviour, beliefs of consumers towards the company
and its products. Nowadays, junk food items is no longer in fashion and the consumers are
becoming very conscious towards healthy food items like salads, organic food items etc. It is
very important for Sainsbury to focus on these trends as it is imperative for increasing long term
growth and success of the company.
Technological-
It involves factors like change in the technology for producing and distributing products
to customers. Technological advancements like artificial intelligence, Big data etc. are allowing
firms to learn more regarding their operations. Sainsbury should use analytics to develop
accurate models that will explain how much a given product is expected to sell. The development
and implementation of these tools will improve profitability of the firm.
Legal-
It involves legal rules and regulations that company is required to comply. Example-
Government has levied sugar tax that aims to minimize content of sugar in drinks by 20 % till
2020. This will affect the products own by Sainsbury.
Environmental-
It includes the regulations that are formed by Government to reduce negative impact of
activities on environment. Sainsbury should focus on the ways to handle plastic waste such as
providing incentives to clients who purchase foodstuffs loose and bring own bags and containers.
Critical analysis of macro environment-
The factors existing in macro environment affects the business strategies in positive as
well as negative manner. Political factor like Britain leave European Union has created negative
impact on the business of companies operating in retail sector including high inflation etc. that
has resulted in reduction in consumer spending that has negatively influenced sales of
supermarkets. Economic factor such as rate of inflation has positively influenced the operations
of Sainsbury (Zhao and Dou, 2019). Example- The rate of inflation in July 2019 was 2 %
whereas, it has declined and come down to 1.7 % in August 2019. This has positively affected
cost of operations of Sainsbury. Further, technological factors has positively influence the

performance of organization. Firm has implemented digital services like click and collect
services, online food shopping so that consumers can easily place their orders. This has increased
the retail sales of Sainsbury by 80 %.
Porter’s generic model-
Cost leadership-
Porter’s generic strategies is the best way of gaining competitive benefits, it helps to
develop edge that obtains business sale and raise it higher more than competitors within
marketplace (Auka, 2014). Cost leadership strategy help to become leader in market, according
to this strategy when company keep their products costs lower, they can retain consumers for
longer and gain competitive advantages. In order to achieve long term success and growth firm
can follow two ways of this strategy that help to achieve better results as increase profitability.
Along with this, Sainsbury can gain competitive benefits when they increase market share by
charging low process.
Differentiation-
This strategy includes producing business services or products different from competitors
within market, the goods look more attractive than other companies in similar sector which is
quite beneficial for attracting people towards purchasing. It depends on industry how they to do
this in which Sainsbury operate their large business since for so long (Kinyuira, 2014). To make
achievement of this strategy company will conduct good market research, focus on innovation
and development procedure that also work effectively and helps to increase profit margin rather
than before. When company make exclusive goods, they can attract its target market who have
high demand.
Cost focus-
According to this strategy, organization select to target a clear niche market, through
understanding the needs of potential consumers and dynamic of market, company can assure that
cost remain low. By using cost focus strategy organization will concentrate on specific niche
markets, and they can develop uniquely specified products and low cost for their target market.
With the help of this strategy organization serve its customers the best products with affordable
prices that build strong brand image amongst their target consumers effectively. It is quite
difficult to choose and decide which strategy is best for company. It depends on structure and
nature as well as flexibility of retail industry.

Differentiation focus-
It defined that company can competitive advantages but with the help of selecting the
best strategic approach. Accordant to this strategy, when Sainsbury adopt differentiation focus
strategy, they will totally focus on offering products or services that is perceived by people to be
superior and unique to that of competitors even their prices is higher (Wicker and et.al., 2015).
This approach includes strong brand loyalty among target market, it very essential for company
to assure that their goods remains unique because it helps to stay ahead of higher competition.
SWOT analysis of organization
Strength-
Sainsbury is one of the best retail brands based out of UK with interests in retail banking
and grocery retailing. Along with this, to retail stores that deal in food, grocery and other
business organization is able to operate their business in domains such as property investments
and financial services. The strength of company is defined as what they do best in their number
of operations which give them upper hand over than competitors (FATRICIA, 2016). Starting
from small grocery stores Sainsbury is capable to expand their business, they now operating
supermarkets that deals with number of products or stock categories that provided to consumers
according to their needs.
Weaknesses-
Sainsbury’s like other retail brands faces a lot of challenges and risks from brand
switching, in spite of string promotions and loyalty programs. The prices of company products
and services is higher than those provided for similar goods by many of their competitors. Due to
high prices they cannot be able to retain its consumers which is not suitable for organization
profitability. It decreases business productivity within retail sector and give opportunity to its
business rival to lead in market. Company is not good at products demand forecasting; they lead
to high rate of missed opportunities as compare to their competitors.
Opportunities-
New trends in customer behaviour is one of the best opportunities for Sainsbury as it
opens up new market for company, it helps through providing great chance for business to build
their diversify into new goods categories too (Misbah and Mahboob, 2017). Government free
trade agreement and adoption of advanced technology has also provided company an opportunity
to enter into new emerging economic market where they can gain consumer attentions and

increase profitability rather than before. They can invest into online platform in order to reach at
target market effectively, in recent time people spend their time on social media sites where they
gather all information according to preferences. By investing into these sites, they can enhance
sales and serve their services or products to people accordant to needs and demands.
Threat-
Just like the other supermarket chains in nation, Sainsbury’s also faces same threat that is
high competition. TESCO, Morrison’s, Aldi, ASDA etc. are number of big players in UK retail
sector that give tough competition to Sainsbury. Lidl and Aldi are the main competitor of
company, they change the rules of game, offering consumers with quality goods at low price,
which is certainly the biggest threat for organization.
VRIO model-
It is analytical technique brilliant for examination of organization resources and
competitive advantages. It is an acronym for 4 query frameworks of value, rarity, imitability and
organization.
Valuable-
Financial resource of company is highly valuable as it helps in spending into external
chances that arise within retail market. Food products, employees, consumers preferences,
patents, distribution network and all the stakeholders are valuable for Sainsbury’s.
Rare-
Strong financial resource is only controlled by few organizations in retail or any others
sector for longer. The financial resources of company are found to be rare that they possess
effectively.
Imitability-
The patents of organization are imitable as it is very difficult to imitate by other, this is
because patent is not legally allowed to take. Getting a patent and similar resources to be
produced for business is costly procedure.
Organization-
Financial resource is well organized to capture values, these assets will use strategically
to invest in correct places, by making use of chances and fighting threats.
Porter’s five forces model to evaluate competitive forces
Bargaining power of consumer-

Customers often demanding lot, they can put pressure on Sainsbury for reducing the cost
of products available within market. Buyer wants to purchase the best offers accessible by
paying minimum prices as possible. The bargaining power of consumers is high in retail industry
due to presence of number of competitors producing the same goods (Kung’u, 2017). When the
power of customer is high, they can switch cost of goods easily which is not appropriate for
business, it directly impact on company profitability and financial budget the most. The powerful
and smaller consumer base of organization is higher bargaining power of people and higher their
capability to seek maximizing offers and discounts. In order to retain target consumer with
business Sainsbury can provide good quality products with affordable cost that help to increase
consumers base and reduce power of clients for switching prices.
Bargaining power of suppliers-
The degree of this force is low, because number of suppliers and distributors is available
in retail industry in which Sainsbury operates business. It means that power of suppliers for
controlling the prices is low that affect positively on growth and success of company. Goods that
suppliers of firm provided is totally standardised and less differentiated that low power of
switching costs. It makes easier for consumers to switch suppliers which means that bargaining
power of distributors is weaker. Suppliers cannot be able to offer credible risk for forward
addition into retail sector in which company operates that also makes power of suppliers weaker
rather than other forces. When the power of suppliers is low, they will not be capable to switch
or drive costs according to them, which is one of the best things for company while operating
wider business in many nations effectively.
Threat of substitute services and products-
The threat of substitute products within retail industry is low because people view it as
essential, especially in developed world in emerging markets. Sainsbury always try to assimilate
and converge new innovations with respect to alternative business and food products to make
purchasing as well as shopping highly pleasurable for their consumers (Metzger, 2014). The
chances of substitute products within this sector is low, that do not make any threat for
organization to lose their consumers. It helps to retain people with business effectively, it does
not allow consumer to switch to another products in market. Few substitutes available for goods
that produced in retail sector. Due to high costs most of the people avoid purchasing very few
substitutes that is quite beneficial for Sainsbury because they offer low cost products with high

quality, they do not make any compromise of quality. As compare to substitutes goods, company
produce the best products for its consumers which means that threat of this force is weak.
Threat of new entrances-
Entrants of new companies in retail sector bring innovation and ways of doing things that
can put high pressure on company. Through reducing costs, low pricing strategy and offering
new value propositions to potential consumers new entrances can grab the attention of people
which is not suitable for company. The threat of new entrance is high in retail industry.
Organization has to build effective obstacles to safeguard their competitive advantages and
manage all challenges effectively. The economies of scale are very difficult to achieve within
sector in which firm operates. It makes production costly for new organizations, and makes
threats for them as weaker force. The requirement of capital in sector is high, therefore it make it
difficult for other companies to set up their business as high expenditures has to be incurred.
When the threat is low, it does not make any negative impact on company and they can easily
retain its consumers for longer without any issues.
Competition among existing firms-
The competition in retail sector between existing companies is higher because all firms
giving tough competition to each other by producing the best products accordant needs and
demand of consumers. Rivalry among existing organization in retail industry is intense or high it
will decrease the overall productivity as well as profitability of Sainsbury and drive down prices
of goods. In order to gain competitive benefits and increase profit margin, company can build
their sustainable differentiation. Organization can take another option; they will collaborate with
competitors to increase current market size more than just competing for small market. This
competition between firms does not impact on company profitability for long time which is
good.
Ansoff matrix-
Market penetration-
This strategy is centring on increasing sales of services and existing products to existing
market. In this strategy, Sainsbury can use their products in market to increase profitability, they
can decrease prices, increase distribution efforts and promotion and obtained competitor in same
market that help to attract new consumer as well as retain the existing ones for longer (Hammad,
2015). It refers to successful marketing of goods in particular market. It can easily define as

organization keeps on providing same goods into existing market. Company can make some
changes in their existing goods and then introduced in market that grab the attention of
consumer.
Product development-
It requires development of new competencies and needed company to develop modified
goods which appeal to current markets (Germain and et.al., 2015). By using this strategy,
organization can develop new products to provide their existing consumers, in hope that business
will gain more customers as well as market share.
Market development-
It means that Sainsbury can expand their products in different nations and markets in
order to increase profitability. For this company expand their business with maximizing in
services and products. Organization can establish their different pricing policies to attract varied
consumers, with the help of this strategy they can create new market segmentation. When
company seek new market for existing products, they can use this strategy.
Diversification-
It means new goods in new market, according to this stage risk is getting higher because
company will move into new market which is very risky for them to gain competitive advantage
and increase their profitability. When Sainsbury adopt this strategy, they will have clear concept
about what it exerts to achieve from approach and honest assessment of risks.
PART B
Strategic management plan with objectives, strategies and tactics
Executive summary Sainsbury is one of the leading supermarkets
chain the world, they have good brand image
in market. In order to increase profit margin
and market share they plan to enter into new
market.
Mission Sainsbury mission is to deliver outstanding
products to their consumers with great quality
at competitive cost through performing faster
and together.
Vision The vision of company is to become most

trusted retailer in industry, where consumer
love to shop.
Objectives  To cater high quality services to people.
 To increase productivity and provide
good financial return to their
stakeholders.
 To exceed consumer’s expectations for
safe, tasty, healthy and fresh food to
make people lives easier every single
day.
 To enter into new market for strengthen
brand image.
PESTLE analysis Political factor- Government make changes in
their taxation decisions and policies after
Brexit, that directly impact on Sainsbury
business objective that is entering into new
market place. Increasing charges on trade
procedure do not allow company to enter in
new place for expanding business.
Economic factor- Unemployment rate is one
of the economic factors that impact on
Sainsbury employment strategies.
Social factor- New trends of online shopping
of grocery products is very common in every
nation (Jenkins and Williamson, 2015). It
effects on company selling procedure which is
not good for setting brand image in market.
Technological factor- new technologies for
delivering products in all over the world
enhancing level of consumer experience.
Legal factor- Health and Safety Act 1974 is

under legal factor that impact on company
production procedure and system, in which
they will focus on producing goods.
Environmental factor- concern of
government towards sustainable environment
pressure on company to contribute in CSR.
SWOT Strength- organization is able to provide the
best products to its existing and new consumer.
Weakness- high prices stay away customers
for purchasing Sainsbury grocery products.
Opportunity- By reducing cost company can
attract new people towards them, it is one of
the best opportunities for business when they
enter into new market.
Threat- The strong brand image of existing
companies’ posses’ threat for Sainsbury.
7Ps Product- organization give a unique look to its
products and their packaging, they centring on
quality of goods.
Price- they will use premium pricing strategy
for consumers in new market (Agyei and
Kilika, 2014).
People- company have the talented and trained
experts in workplace that serve its products to
consumers.
Procedure- organization opening their new
store formats into new market to address
changing demands of consumers.
Place- company chose the best place in order
to sell their products that is online platform.
Promotion- they can choose traditional as well