Example Of About Sainsbury’s Term Paper
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In this era of globalization, tough competition and rapidly changing consumer preferences, every organization has to ensure that it invests in unique business strategies in order to achieve long term profitability and sustainable competitive advantage (Johnson and Scholes, 2002). Similarly, is the case of retail industry which totally revolves around the consumer’s. It’s the customers in this industry that can either break or make a firm. Considering the nature of increased competition in the retail sector, this particular report attempts to explore the case of one of the highly renowned retail brand i.e. Sainsbury’s and explore the business environment of the group.
Sainsbury’s was established in the year 1869 and at present operates more than 1,106 supermarkets as well as convenience outlets (Sainsbury’s, 2015). The company offers employment prospects to more than 150, 000 individuals. The strong culture and values of the company are fraction of its identity and are highly important for its success. Sainsbury’s has a comprehensible, long-term approach to deliver its vision of being regarded as a faithful retailer where individuals are keen of working and shopping (Sainsbury’s, 2015).
Sainsbury Plc, along with its several subsidiaries, focus upon grocery and associated retailing practices within several nations. The corporation functions through three key sectors i.e. retailing, property investments and financial services. It operates several store formats, taking in supermarkets and convenience stores that make available a huge range of food and non-food services and products to the consumers (Sainsbury’s, 2015). The organisation also operates online grocery store along with common merchandise operations. Sainsbury’s even makes available insurance, savings, credit cards and loans; energy effectiveness suggestion for its consumers’ homes; and a range of music, movies, books, games along with other entertainment services (Sainsbury’s, 2015). Sainsbury’s is today regarded as one of the country’s oldest retailers established within the London City. Moving ahead, the company now intends to expand its operations in nations like India and China where there is high growth potential.
Sainsbury’s aims to target the whole market than just targeting a particular segment of the society. The company intends to attract the customers by promising them good quality products at reasonable prices.
The main goal of Sainsbury's is to stand as the leader when it comes to customers selecting their food products. The company wants to offer products and services of exceptional quality and superior service at a reasonable cost by way of working simpler, faster and together. Moreover, for that their products need to be given high priority and just quality products would do for that reason. Moreover, Sainsbury’s also considers the environmental friendliness while deciding on the service or product.
Sainsbury’s makes use of several pricing policy such as discounts and cost based pricing. The pricing is based on a practical evaluation of all the costs and considers what the market would bear and the image the company is trying to build.
The company has a large number of stores in and around the UK as well as in close proximity of its consumers. Sainsbury's presently operates more than 1016 supermarkets and convenience stores.
Sainsbury’s makes use of several promotional techniques with the view to communicate with its consumers and put forward the benefits and features of the products and services to the potential buyers. Promotional techniques include advertising, public relations, personal selling, web-based marketing, networking and campaigns. Sainsbury’s has even developed its image as being an excellent retailer with respect to its product quality, services and environmental friendliness.
The continuing sections analyze the internal environment of Sainsbury’s by throwing light on strengths and weaknesses.
There are several strengths associated with Sainsbury’s. Firstly, Sainsbury’s holds diversified individual business units, which are not interlinked. This makes possible for the company to trim down the associated risks in case if any one of its business units suffers loss or any event which might threaten expected outcome of the company. Nevertheless, diversification alone is not sufficient for minimising the risks but the choice of superior investments, which are directed through informed and insightful marketplace analysis, play a significant role. Secondly, Sainsbury’s completely understands the significance of reaching a huge market by way of wide and affordable platforms of internet. Additionally, the convenience stores have enabled Sainsbury’s to generate revenues of over £1 billion, making the company being regarded as Convenience Retailer of the Year by the Retail Award Industry. Thirdly, in the year 2011, Sainsbury’s incremented its supermarket space by around 15.9 percent after starting around 21 new outlets, added 24 extensions and an additional 47 outlets. This made possible for the company to get in contact with its consumers fast within several regions, thus perking up marketplace share.
Fourth, Sainsbury’s very well understands the significance of Human Resource Management (HRM) and invests greatly towards quality training of its employees. Quality staff offers excellent services to the consumers, therefore, incrementing overall level of consumer satisfaction. The leadership team of Sainsbury’s is highly experienced. Further, one of the important strengths of the company is that it is well positioned on issues that are associated with environment and recycling. This has resulted in a good standing of Sainsbury’s amongst its consumers. It is highly acknowledged by consumers and green activists. Lastly, the online services offered by the company cover around 90% of households within the United Kingdom.
In addition to strengths, there are also several weaknesses associated with Sainsbury’s. Firstly, Sainsbury’s being one amongst the oldest supermarkets chains, having started procedures ahead of rivals such as ASDA and Tesco but it has not fully exploited the opportunity to grow and maintain a leading position within the marketplace share. Moreover, it took long prior to making modifications to promising and new strategies. The corporation even had problems with the inventory management as well as supply chain management, which affected its services and products during the year 2004. However, Sainsbury’s modified the management subsequent to suffering loss during the same year. Secondly, the overcautious Sainsbury’s hasn’t taken much initiatives towards investing internationally, chiefly China, perhaps since it failed to understand completely the operating environment and trends compared to the home rivals.
There are also several opportunities associated with Sainsbury’s. Firstly, the company has established outlets in China, which is today regarded as a fast developing economy and holds high population. Moreover, Beijing, where Sainsbury’s opened its store comprises of large working population so as to offer market for the firm’s huge array of products. Secondly, food prices, which have high affect on inflation are reasonably stable, varying from 4% to 6%, an indication which signifies performance of economy along with the affordability of the food products. The UK and China are second and sixth biggest economies, which translate to high buying power of consumers within these particular nations.
There are several threats associated with Sainsbury’s. Firstly, fierce competition from leading corporations within the business world like Tesco on price might affect the profitability and marketplace share of the corporation. Secondly, the cyber-attacks, which recently resulted in considerable losses in its online approach, are too regarded as being potential threats to the corporation that has invested huge amount of resources in the infrastructure for reaching a huge customer base.
It can be clearly stated that Sainsbury’s has shown high progress in terms of productivity and profitability ever since the time of their establishment. As per the above discussion, the company has several strengths, weaknesses, opportunities and threats with a significant impact on their business operations. The company needs to effectively capitalize on the strengths and opportunities and effectively deal with weaknesses and threats. Further, consider the present situation of the company it can be stated that it is in sound position for global expansion.
This report has clearly depicted that the Sainsbury’s has been performing significantly well till now. It has attained several achievements and tags such as cheapest retail store, favourite retail outlet. However, in order to ensure that it continues and maintains the same in future, the airline may strategically explore other market segments and plan to expand using its low fare mantra. Besides this, the group needs to be continuously aware of all the technological advancements and updates.
Johnson, G. and Scholes, K. Exploring Corporate Strategy (6th Ed.). Prentice Hill: London, 2002. Print.
Sainsbury’s Annual Report and Financial Statement, 2015. Web. 09 February 2015. <http://www.j-sainsbury.co.uk/media/649393/j_sainsbury_ara_2012.pdf>
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