Strategic marketing is the process of planning, developing as well as implementing manoeuvrers that is adopted by an organisation to obtain a competitive edge in the market (Proctor, 2014). The strategic marketing plan is considered as a creative process. In order to achieve desired goals and objectives, it is very important for a firm to prepare a strategic blueprint of these objectives. The assignment below is based on Sainsbury's which was was founded in 1869 by John James Sainsbury. It is the second largest retail company in United Kingdom. The firm aims to expand its business operations in India. Along with its other diversified operations, the company is launching ethnic wear clothing for the people of the country. The report covers detailed PESTLE analysis of India, various market entry modes, market segmentation and targeting and Porter's Generic Strategy. All these measures are necessary for this firm to successfully expand its business operations in India.
Sainsbury's is one of the largest retail firms in the United Kingdom. It deals in general merchandise, food and clothing retailing. Moreover, the firm also provides financial and property investment services in the country. The firm operates different store formats like supermarkets and convenience stores. The company is currently focusing on expanding its online marketing operations which include online grocery delivery and merchandise operations. Sainsbury's plan to expand its business operations in India by establishing an exclusive ethnic product line. To achieve this successfully, analysis using various tools and techniques has been effectively made.
PESTLE Analysis is one the best tool that is used to track the external factors that affects the companies entire operations and function (Kimball, 2017). Sainbury's is going to expand its business in India. Thus, there are various factors that affects both positivity and negatively to the company in India. With the help of Pestle Analysis tool, the firm can identify various external factors which would influence the expansion of company. There are six factors in PESTLE Analysis tool which are Political, Economic, Social, Technological, Environmental and Legal. Success of Sainsbury's in expanding its business operations in India heavily depends on these factors.
Political factor include all the taxes, policies and stability of the government that influence a company (Brito and Harkiolakis, 2017). Political scenario of the country is stable and sound. The system of service, income and sales tax are well-developed in India and are imposed by the Union government. One of the biggest opportunities for Sainsbury's in India is that the government is emphasising on strengthening its political relationships with other countries. This would help in gathering support of the government to set up its business in the country. However, there are many regional political parties who are against the foreign intervention in the country. This might reduce the customers of the firm in those areas. The firm must focus on using raw materials from India itself to contribute in initiatives like 'Make in India'. Such practices might change the perspective of these political parties which can be beneficial for the ethnic product line of the firm. It would help to increase the number of customers in regional areas as well.
The economic performance of the country is included in this factor and it directly impacts on the performance and growth of company. Rate of inflation, interest, foreign exchange, pattern of economic growth are included in the economic factor. India is a developing country but it is seventh largest economy in the world by GDP. In 2018, the country was subjected to rise in GDP by 8.2% (India GDP Annual Growth Rate,2018). The country has witnessed a decline in cost of land recently. This can be an opportunity for Sainsbury's as it would reduce the expenditure of land acquisition for business operations. The country, however, has been subjected to demonetisation in November, 2016. This resulted in a massive decline in cash flow in the market. This can be a major threat for Sainsbury's as it would be difficult to conduct its daily business operations related to its ethnic product line. To overcome this, the firm could arrange funding from foreign countries as 100% FDI is allowed for retail industries. This would provide ease for the firm's operations in the country.
This factor constitutes all the social factors of the country affecting the business. India is a diversified country with 29 states and a population of more than 1.3 billion (India Population 2018,2018). Such diversified population can be a beneficial factor for the company to develop innovative clothing. General population is quite religious and is reinforcing the cultural values. There has been an ongoing demand for ethnic wear in India. This can be an opportunity for the firm and its ethnic clothing line. But the population of the country is divided in different cultural societies. Each of them has its own colour and pattern preferences. It can be a major threat for the firm in case it opts to launch a general clothing line for men and women. The firm, in order to eradicate this threat can invest in research and produce diversified ethnic wear that does not violate the cultural sentiments of the people.
This factor consists of all the technological aspects of the country. India is a developing nation which is inclining towards implementing latest technological methods in their production as well as in general use. With the government taking initiatives like “Digital India”, it surely can be a contributing factor in firm's successful expansion in the country. The firm can implement new and cost-effective technologies for production of its product and could hire skilled employees who are trained well in using these technologies. But there is a rise in the country's cyber crime. India is quite vulnerable to cyber espionage. This can be threatening for the firm's online operations as well as increases the risk of infringements in designs of company's products. This is a potential threat for the company and would hamper the creativity of the firm. To protect the innovative designs of ethnic wears, company must associate itself with a competent IT firm that could provide it with effective cyber security.
All the legal rules and regulations that affect a business are considered in this factor. The legal structure of India is very effective. With various regulations about age, discrimination and employment, it would help the firm to develop a proper framework to conduct its business practices ethically and as per law (Czinkota and Skuba, 2014). Such ethical practices would be beneficial for the firm's new product line as people tend to favour companies that follow the legal structure properly. It would contribute in enhancing the brand image of the firm in India. As mentioned above, cost of land is down. However, the legal procedure and paper work for acquiring land is very complex. Such complexity would delay in the process of production of the firm and would add to unnecessary cost. Sainsbury's must hire an efficient legal team to handle such complex issues so that it could smoothly expand its business