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Today's era is clearly referring to a contending state of market that in turn necessitates the organizations to undertake certain effective measures to strategically position themselves. It is with a leading consideration of combating the intensified state of competition prevailing all over the world. It is together referred to be an ineluctable clause of globalization that has duly postulated the business organizations to take a principle support of some prompt strategies that will in turn govern their undertaken activities ((Björklund, 2011). This is basically to proceed towards a successful future ahead where the present report has together elucidated a similar agenda of Sainsbury (About Us. 2017). It is known to be one of the renowned retail based enterprise of UK where it is also recognized to be at the second most position. With a foundation year of near about 148 years, it is currently operating with more than 1, 312 retail outlets at a worldwide level.
Porters model is analysis framework which is used to analyse the current competitive position, and the strength of a position you're considering moving into. Conventionally this tool is used to identify whether new products, services or businesses have the potential to produce profit to the organization. In simple terms it is used to determine the power of balance of the particular company.
Sainsbury's is the second largest chain of supermarkets in United Kingdom. Sainsbury's is retail company of grocery and can be word as a complex and is having no criteria for retail companies (Cohen and Kietzmann, 2014). The company fit into the wide variety of enterprises operational in soaps, daily food items, home decor and clothing fabric. The impact of porters five forces model on Sainsbury's retail company can be analyses as :
Sainsbury's suppliers have enough power to regulate the retail industry. Th e company is has the major role in supply chain of grocery. Sainsbury's suppliers has main roles in managerial operations and background of commerce. Suppliers power is exerted by the demand of suppliers for that retails company pay a certain price for their goods (Demil, Lecocq and Zott, 2015). If the organization don't pay the price they don't get the goods for selling. But large supermarket like Sainsbury's have an stupendous advantage over small stores and shops because they can identify the price they have to pay to the suppliers. The retail company will be left with much smaller market if the supplier of the company doest not reduce the price .
In grocery industry Sainsbury's the customers have the high power. During the current financial crisis consumers were very much attracted towards the low prices, in addition to this customers have compared and selected the prices and availability of product with the online retails shopping to get the best product at best price. Due to these buyers easily switched from one brand to another and get the more standardized product.
The retail company Sainsbury's retails section has always been in the middle of disputable subject which concerns international rivalry, price wars, modifications in the plan (Dess, McNamara and Eisner, 2016). Due to this it became difficult for the company to emerge as strong player in the market and to survive in that condition.
Sainsbury's offers a wide range of products and service offering which include bakeries, florist clothing, wine stores, books, pharmacies, electronic goods etc. Due to this assorted nature of business the company can't stop the customers to move from one brand to another but if the company offer extreme quality and excellence can stop the customer to switch.
Rivalry among the food and grocery market is extremely high (Drakulevski and Nakov, 2016). Competitors challenge is to come over the strategies which are currently used in market and to alter the tendencies in online transaction, customer behaviors etc. For company like Sainsbury's competition is really strong because of customer behaviors to move from one brand to another and they have been working on it for a long time -period.
Sainsbury's is a leading UK food retailer and is having interest in financial offering and services. It includes company supermarket, Sainsbury's local, Bells stores, Jacksons stores, Sainsbury's Online and Sainsbury's bank (Björklund, 2011). The decision to get assorted into convenient stores is discussed in the porters model. The company's objective is to provide customers with well services which are demanded by them and to provide stakeholders with good and maintain financial returns. The retail company ensures all its employees and colleagues to get rewarded when they contribute to the company's growth and bring the profit for the company. The company always tries its best to satisfy the communities and environments in which they conduct and run their business.
Sainsbury's serves 16 million customers each week in 455 supermarkets and 301 retail stores across UK. company sells and pound 6bn British food every year and obvious strength in SWOT analysis (Cohen and Kietzmann, 2014). Recently the company has launched new scheme which makes it easier for the small and medium sized suppliers to gain access to organization and make them produce food aviable tro the customers . This can be further get explained in the company's PESTLE analysis:
Sainsbury's has got the opportunity because of increasing globalization and challenge present in the market. With that they will need to compete against the anonymous stores and they will be able to produce the best quality products and make profits from around the world. Sainsbury's has joint ventured with many companies and soon they would be able to enter in the market of emerging companies (Demil Lecocq and Zott, 2015). The recent survey suggests that price fixing among the retailer gas some negative impact to the industry but Sainsbury's has a good image in its customers mind so this negative implications might nit affect the reputation of the company.
Sainsbury's cost of purchasing has increased because of continuously increasing global food crisis all over the world. It will impact on the edges of the company's and might lead them to pass over the consumers by increasing prices of all the products available in the supermarket. The recent credit crunch have impacted the purchasing power of consumers but they will still buy the essentials they may be more cautious (Dess, McNamara and Eisner, 2016). Rivalry competitions within every segment of the retail sector has lead the company retailers giving lot of encouragement to the consumers.
In recent time the consumers are emphasizing more on fresh, easy style of cooking. This makes an opportunity for the Sainsbury's to motivate and encourage new recipes and homey eating. The government is also paying more attention to promote healthy eating because the level of purchasing is increasing within UK (Drakulevski and Nakov, 2016). This has lead the consumers of UK to move towards the healthy eating habits. Due to this Sainsbury's has got the opportunity to stock their stores with healthier food at cheaper price so that customer can buy them easily.
Now a days internet usage is growing rapidly in the western countries. It is foretasted that by 2012 the Europe will have reached European, with British Shoppers accounting more than a third of all the profit. If Sainsbury's can make use of this internet culture to promote their business. They can put their business online to make purchasing of goods for customers more convenient (Ethiraj, Gambardella and Helfat, 2017). This will prove great for the consumers because they will not have to stay up in the queues in supermarkets. By using the technology the Sainsbury's can run their business 24 hours of day.
Western companies are giving more and more priority to reduce carbon footprint and increasing energy efficiencies. So Sainsbury's have to focus more on environmental issues and invest more on green issues (Gans and Ryall, 2017). The growing importance of ethical issues like sale of organic food and the ethical treatment of animals clearly effect Sainsbury's on different levels. This is serious issue and the company have to balance their public stand on environment without losing their consumers.
Laws are very strict on food and drinks in UK, so Sainsbury's will have to follow the regulations and labelling policies which will make financial burden to the company. Due to its interests in financial services, there is ever more legal inspections in the operations of Sainsbury's bank which means there is more responsibility regarding legal compliance and other risk measures.
SWOT analysis is tool used to analyse the strength, weakness, opportunities and threats of the company. Following are the SWOT analysis of Sainsbury's company:
Strengths of Sainsbury's:
Sainsbury's has had 13 straights quarters of growth expressing the real turnover in its business. Sainsbury's seems to be very well placed in dealing with environmental issues because its has started new initiatives like buying fair trade bananas (Hamilton and Webster, 2015). Sainsbury's is the supermarket which has a clear celebrity sanctioning products which are leading to increased sales.
Weakness of the company :
The takeover bid by Qataris private equity firm last year can have some implications because people are moving towards British companies and the prospect of Sainsbury's being governed by a foreign company can lead to consumers switching loyalties.
Opportunities of the company :
Sainsbury's have lot of alternative businesses which presents a great opportunity for further growth and development (Morden, 2016). Online sales are great opportunity for Sainsbury's since its online edging are higher investments are not large.
Threats for the company:
Sainsbury's operation are subject to wide range of spectrum of regulatory needs with respect to planning, relation, competition and environmental issue employment and law of tax in terms of regulation over the groups product and services (Pham, Segers, and Gijselaers, 2013). So the Sainsbury's needs to do heavy investments in ethical and environmental issues.
Sainsbury's is one of the leading retail company is UK. The company is expanding their business at international in which they are expanding their market share by introducing the new products in the market ((Björklund, 2011). For this the organization make Scan it external environment in which they make analysis on the different factors which make impacts of business and its activities.
The retail company is engaging in making different types of products in order to attract more customers in business. By making porter's five analysis, SWOT analysis and Pestle analysis company is able to identify the main force which impact on firm's activities. The main reasons of using SWOT and Pestle analysis is that with the help of this two frameworks company make its strategic planning (Cohen and Kietzmann, 2014). By using this Sainsbury's using these critical tools to assess opportunities and challenges. This theories work and make practices in organization which helps to them for making their strategic more effective and helps to company for targeting their customers. Following are working of these strategics in organization which are as follows.
By using the pestle and SWOT analysis the company can make reassessments of their work and make reassessment of their work. Sainsbury's can detect emerging strengths and opportunities as well as other external factors which might effects on company (Demil, Lecocq and Zott, 2015). The company was planned to open its new store is Middle East, but making SWOT analysis they identify that they need to make reassessment of their plan and open their new stores in the Asian countries which is more profitable for the Sainsbury's and it has created more expansion in its business. With the help of this analysis frameworks they can understand the economics condition and social shifts along with the technological changes. In the retail sector the braining power of buyers is very high so it is important that produce only cost effective products with wide range so it helpful in market expansions ( Dess, McNamara, and Eisner, 2016)
Identifying a target market, developing a business format and building sustainable competitive advantages are three major components of a thorough business strategy. By making proter's five analysis it helpful for the marketing team of Sainsbury's to make identification of their rivals level. These frameworks also helps or organization to make and explore the possible sustainable advantage in the business (Drakulevski and Nakov, 2016) Similarly, by monitoring trends in the environmental issues of PESTLE firm can take advantages of their trends and make involved with them. Alog with this the company is also considered all these benefits which helps to them for gathering more customers in its
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