Strategic Analysis and Change Management for Sainsbury's

This report provides a comprehensive strategic analysis of Sainsbury's, a major UK supermarket chain. It begins with an executive summary and table of contents, followed by an introduction that emphasizes the importance of strategic planning in a competitive retail environment. The report then delves into the determination of external factors using PESTLE analysis, examining political, economic, social, and technological influences on Sainsbury's business. Internal factors are evaluated through SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The micro-environmental analysis assesses the company's competitive position. The report offers recommendations for strategic changes, including product differentiation, market development, and brand positioning. Finally, the report suggests the Lewin change model for implementing organizational changes and concludes with a summary of the key findings and references.

Running head: STRATEGIC MANAGEMENT AND CHANGE
Strategic management and change
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1STRATEGIC MANAGEMENT AND CHANGE
Executive summary
The aim of this report is to discuss about the relevant internal and external business factors
having influences on the business operation of Sainsbury’s. It is identified that they are facing a
number of positive as well as negative factors in their business operation. In addition, this report
also briefed about the company profile of Sainsbury’s. It is also identified that they are having
the urgent need for developing their foreign market operations in order to increase their sales
revenue. This report suggested a few steps including the Lewin change model for implementing
the change in the organization without having any challenges.

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Table of Contents
Introduction......................................................................................................................................3
Determination of the external factors..............................................................................................4
Determination of the internal factors...............................................................................................7
Evaluation of micro analysis...........................................................................................................9
Recommendations............................................................................................................................9
Recommended change management theory..................................................................................11
Unfreezing.................................................................................................................................11
Change process..........................................................................................................................12
Refreezing..................................................................................................................................12
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................14

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Introduction
Competitive strategies are becoming more relevant in the current business scenario due to
the reason that contemporary business organizations are facing more intensity of competition in
the market. This is also enhancing the importance of determining the external and internal
business factors for the organizations in order to operate in the market accordingly. In the
business scenario of the United Kingdom, retail sector is one of the most competitive sectors in
the recent time (Yee et al. 2013). Thus, gaining competitiveness is much important for the
brands operating in this sector. Sainsbury’s is one of the leading chains of supermarkets in the
United Kingdom. They are founded in 1869 and since they are considered as one of the topmost
retailers in the country (Sainsburys.co.uk 2018). According to number of reports, Sainsbury’s
can be termed as early adopters in initiating different marketing approaches such as adopting the
self service retailing and as early as in 1922. However, the current position cannot term them as
the market leader, which is taken by Tesco. On the other hand, Sainsbury’s is competing with
Asda for the second place.
Thus, it is identified the competitive scenario where Sainsbury’s is currently operating
and effective strategic planning can help them in regaining their lost position. This is due to the
reason that effective process of strategic planning will help them to determine the positive and
negative business factors and enable them to design their organizational approaches accordingly
(Dibrell, Craig and Neubaum 2014). Thus, their organizational strategies will be more aligned
with the business factors. On the other hand, it should also be noted that strategic planning
process will further help Sainsbury’s in meeting the customer demand effectively.

4STRATEGIC MANAGEMENT AND CHANGE
This report will discuss about the external and internal business environmental factors
and their impact on the business of Sainsbury’s. In accordance to the identified macro factors,
internal effectiveness of Sainsbury’s will be gauged in this report. A few recommended steps
will also be analyzed along with an appropriate change management theory.
Determination of the external factors
PESTLE analysis
Political factors  United Kingdom is having stable political environment in the
country.
 Taxation rate for the business organizations is also lower.
 However, the recent phenomenon of Brexit will have negative
impact on the business of Sainsbury’s by reducing their market
potentiality (Dhingra et al. 2016).
 Adverse political relation between Qatar and the United

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Kingdom will have negative impact on Sainsbury’s due to the
reason that Qatar Investment Authority is having 21.99 percent
shares in Sainsbury’s (Goodwin and Heath 2016).
Economical factors  Positive economic growth of the United Kingdom is having
favorable impact on the business of Sainsbury’s. This is due to
the reason that purchasing power of the customers will get
increased (Lee 2014).
 However, it is also projected that economy of the United
Kingdom will get dropped in the following years. Thus, their
business potentiality may get affected.
 Competition is high in the retail business scenario in the United
Kingdom and thus the profitability of Sainsbury’s is getting
affected (Yu, Ramanathan and Nath 2014).
 Global factors are also having much influence on the business
operation in the United Kingdom.
Social factors  Sainsbury’s is having huge diversity of products and this is
helping them in catering to diverse needs of the customers.
 However, customers are having higher bargaining power due to
the high level of competition in the market (Fabbri and Klapper
2016).
 Another major negative factor is the gaining of popularity of e-
commerce market among the customers. This is reducing the
potentiality for the offline retailers such as Sainsbury’s.

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 It is also identified that social preference for the discount stores
is increasing in the United Kingdom and this is further posing
challenges for the premium retailers such as Sainsbury’s (Ozer
and Zheng 2015).
Technological factors  Sainsbury’s is one of the early adopters of newer technologies
such as self retailing service.
 However, in the recent time, emergence of e-commerce changed
the existing scenario and affected the traditional retailers such as
Sainsbury’s (Huang and Benyoucef 2013).
 Thus, it is important for them to have their equal presence in
both the online and offline market.
 In the current time, it is also becoming important for Sainsbury’s
to change their technological approach according to the change
in the market and business scenario (Piotrowicz and Cuthbertson
2014).
Thus, from the above analysis of macro factors of Sainsbury’s, it is identified that there
are number of opportunities as well as challenges being faced by them. It is also to be noted that
determination of the external business factors is important in identifying the key influencing
elements for the business. In the current scenario, business organizations are facing the
challenges of coping up with rapidly changing market trend (Pantano 2014). These changes in
the market trend can be effectively determined with the help of the macro environment analysis.
Thus, in the case of the strategic planning process, macro environment analysis will help in
identifying the key external factors and design the organizational strategies accordingly.

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Determination of the internal factors
SWOT analysis
Strengths  Sainsbury’s is one of the oldest retailers in the United Kingdom and
thus they are enjoying the positive branding in the country.
 Higher degree of product diversity is also helping Sainsbury’s in
catering to larger customer segments (Bykadorov, Kokovin and
Zhelobod’ko 2014).
 They are also known for their extensive and innovative marketing
activities and this is helping them in penetrating in the existing market
and managing their brand recall value.
Weaknesses  Sainsbury’s is having presence only in the United Kingdom and thus,
the market potentiality is limited for them.
 Profitability of Sainsbury’s is reducing in competing with the discount
stores. This is affecting their long term business viability.

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 Brand differentiation of Sainsbury’s is lower with their competitors and
thus they are getting affected by means of brand switching of the
customers (Gupta, Czinkota and Melewar 2013).
Opportunities  There are opportunities for Sainsbury’s to grow in the tier II and III
cities of the United Kingdom. These regions are also witnessing steady
growth in demand for the branded products.
 There are number of countries where the retail market opportunities are
high. Entering in these countries will help Sainsbury’s to enhance their
business potentiality (Jin, Jeong and Yoon 2015).
 Average growth of the global economy will further help Sainsbury’s to
increase their business potentiality.
Threats  Emergence of economic recession will cause adverse impact on the
business of Sainsbury’s. This is due to the reason that purchasing
power of the customers will get hit by this (Cowling et al. 2015).
 Rapid change in the taste and preference pattern of the customers will
also pose threat for Sainsbury’s due to the reason that they are
operating in the fast moving consumer goods and this sector is
vulnerable to very fast change in the trend.
 Entry of new global competitors will further pose threat to Sainsbury’s
by affecting their market potentiality.
The above micro factor analysis identified that Sainsbury’s is having the capability in
tapping growing opportunities in both the national and international market. Determination of the

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micro environmental analysis will help in aligning the internal effectiveness with the external
factors. This is important due to the reason that organizations should have the capability to tap
the external opportunities and overcome the threats. Thus, determination of the internal business
factors will help in effectively aligning the business strategies. On the other hand, determination
of the internal business factors is important for the organizations due to the reason that it will
enable the upper level management to design the strategic intent of the organization accordingly.
Evaluation of micro analysis
The above micro analysis identified that one of the major strengths for Sainsbury’s is
their positive and extensive brand image in the United Kingdom (Zhang 2015). This is due to the
reason that they are operating in the market of the United Kingdom from more than last 100
years. Thus, it is easier for them to push the sales of new products in the market. In addition, it is
also identified that product diversity of Sainsbury’s is high and it is helping them in targeting
larger customer segments. In addition, larger product diversity will also help them to target the
foreign markets (Park and Han 2013). However, on the other hand, it is also identified that
Sainsbury’s is facing the issue of reduction of profitability in their business. Thus, it is important
for them to identify the new income sources to enhance their business viability. The above
analysis also identified that lack of differentiated approach is also hurting the business exposure
of Sainsbury’s in comparison to their competitors (Ray Gehani 2013). Thus they are having the
need for enhancing their differentiating factors in order to gain competitive advantages in the
market.
Recommendations

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It is recommended that Sainsbury’s should initiate the product differentiation strategy in
order to enhance their business potentiality. This strategy refers to the process of introducing
distinctive products and existing products with differentiating elements. This will help
Sainsbury’s in gain competitive advantage by offering different value proposition to the
customers over their competitors. It is also recommended that private label brands should be
given the major concentration due to the reason that Sainsbury’s cannot initiate differentiation by
reselling the end products. Thus, they can introduce more unique and distinctive private label
brands. This will help to enhance their value proposition to the customers. On the other hand, it
is also identified that Sainsbury’s is facing the issue of limited market potentiality. Thus, it is
recommended that they should initiate the market development strategy. This includes targeting
the tier II and III cities in the United Kingdom and a few potential countries. Sainsbury’s is
facing highly competitive scenario in the United Kingdom but entering in potential foreign
countries especially the developing countries will help them to have larger target market. In
addition, the developing countries are having higher economic growth compared to the United
Kingdom. This will enable Sainsbury’s to have larger target market area and global brand
exposure.
It is also recommended that Sainsbury’s should follow a particular approach of
positioning. This is due to the reason that they were being positioned as a premium brand in the
market, but reducing the price levels in competing with the discount stores is diluting their
premium image. Thus, it is recommended that Sainsbury’s should follow the positioning of
premium and quality brands. This will ensure that the average profitability per unit of sales will
be more for them. Moreover, this will also differentiate their brand from the emerging discount
stores. It is also recommended that within the next 5 years, Sainsbury’s should introduce a sub

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brand for catering to the mass market customers with having affordable products. This strategy
will help Sainsbury’s to target the extended customer segments along with their primary
segments of premium customers. Market adaptation strategy should also be followed by
Sainsbury’s in tapping the foreign market opportunities. This is due to the reason that in the
global market, customer preference pattern will be different in nature. This challenge can be
effectively overcome by adapting the trend and pattern of the target markets.
Recommended change management theory
Lewin change model
The above analysis identified a few determining factors in the business operation of
Sainsbury’s and a number of recommended steps are also being stated. Thus, it is important to
have an effective change management plan in place to manage the employees in the period of
strategic change. In this case, it is recommended that Lewin model of change management will
be the most effective for Sainsbury’s due to its conciseness and easy to implement steps.
Unfreezing