Introduction of Unit 32 – Business Strategy, Strategic Management Plan Assignment
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Current study topics specifically include the strategic planning for the organizational management and enhancing the activity in an effective scenario. The present study paper specifically chose Sainsbury plc to include different types of value-added management in the business scenario for the global trading context. On the other hand, establishing a stakeholder activity and identification of different types of potential clarification of the business management is also included in this study paper. The following section of this paper also includes the new market entry related to different types of potential risk factors and advantages. It specifically clarifies the competitive market management with strategic decision-making related business components.
Part A: Internal and external analysis for strategic decision making
1. Evaluation of capabilities of Sainsbury PLC
? Currently, Sainsbury plc UK is the second largest supermarket and it also includes great economic management of the national income scenario (Sainsburys.co.uk, 2021).
? European Union related business existence from the UK has negative consequences on Sainsbury plc business; it is one of the prime causes of decline in customer expenditure (Mbaskool.com, 2021).
? As per Barbosa et al. (2020), the inflation rate in the business area is now getting high and it directly impacts the economic growth rate of UK related supermarket stores.
? Brexit and its impact on the UK's economy make a stagnant and this factor also creates a negative situation on the global economic growth of Sainsbury plc (Sainsburys.co.uk, 2021).
? Supermarket concept always provides an attractive and unexpected element in the business scenario and it also provides different goods under one roof (Mbaskool.com, 2021). This factor provides an important Customer Management scheme for Sainsbury plc with certain discount benefits related to satisfactory management.
? Innovative bucks about the customer demand and include some charmful behaviour of Sainsbury plc business activity in the particular area of the UK and it also takes a major step towards the global business scenario (Ginter et al. 2018).
? Sainsbury plc provides the latest technology for online shopping criteria and it also involves the latest vehicle management for its target customer (Chofreh et al. 2020).
? On time product delivery and collecting different types of low cost amount based products from the local stores and including some attractive technology to decrease the overall cost management is the greatest technology of the current business situation (Mbaskool.com, 2021).
? UK based “Sugar – tax” helps to modify the legal business prospect and it also helps Sainsbury plc to stop promoting the high fat and sugar product for below 16-year-olds children (Mbaskool.com, 2021).
? Equality Act 2010 (EA) and “Health and Safety at Work Act 1974 (HSWA)” are the most important legal activities for the UK based companies that need to maintain workers' health management and provide an equity factor during the working scenario (Vorobyov et al. 2019).
? “The Environment Act” and “Toxic Substances Control Act” are provided with the UK government better protection of the natural resources and also include the biodiversity and West reduction related ambitious factors for the business management (Sainsburys.co.uk, 2021).
? “Corporate Environmental Responsibility (CER)” is one of the most important responsibilities for the UK based business situations and it includes the clean air, clean water, and other natural resource related to important management for particularly business and trading purposes (Mbaskool.com, 2021).
Table 1: PESTEL analysis of Sainsbury plc
(Source: Influenced by Vorobyov et al. 2019)
Sainsbury plc and its multinational cooperative management with the largest supply chain scenario in the UK related supermarket situation are also greatly expanded in the global business context. As viewed by Ginter et al. (2018), through different types of political and economic management in the present time Sainsbury plc suffers due to the inflation rate and other economic conditions. Consequently, through some creative management in the business situation and important stakeholder opportunities in the business scenario help to expand, they are supply chain management in the global context and it also includes different types of internal management to enhance the business (Sainsburys.co.uk, 2021). Environment related important policy and their carbon footprint related to some important management also enhance their business in an effective pathway. “Sugar – tax” policy specifically enlarges their business context in a great situation and with the help of UK Government related eco-friendly management Sainsbury plc significantly enhances their business credibility with some understanding approaches to their external business factors (Mbaskool.com, 2021).
? Sainsbury plc is a listed company in FTSE 100 indexes. Great customer feedback about their unique business management and the high-quality product delivery is engaging a great customer satisfaction for Sainsbury plc (Iide. co, 2021).
? Different types of social media related promotional activity of Sainsbury plc enhance their marketing management in the global presence.
? Sainsbury plc's best brand acquisitions factor and powerful digital marketing toolkit enhance their global success for their supermarket industry and it also helps to climb the great reputation in the business marketing scenario (Sainsburys.co.uk, 2021).
? Recently the online competitive business management needs a great number of margins but Sainsbury plc they are product price lower for attracting customers and it includes a few or margins and it has major weaknesses (Sainsburys.co.uk, 2021).
? The uncertain economic disaster due to the pandemic issue created a shortage in the product supply management and it also included the sales price drop in the largest scenario for Sainsbury plc.
? Sainsbury plc and its financial stability for the last 2 years are decreasing the annual revenue and profit as compared to the year 2020 that creating a weak situation in the entire business management (Iide. co, 2021).
? Sainsbury plc takes a major step to reach towards the village area of their business market and each takes positive opportunities on their business management.
? Established a very large network in the global business market and diversified different types of new product related management make potential opportunities for Sainsbury plc related future business (Iide. co, 2021).
? Economical shift and different types of target customer related prevalence is help to engage a great servicing of Sainsbury plc related 24*7 business services (Trotsenko et al. 2018).
? Due to the COVID 19 pandemic and global wide lockdown scenario, Sainsbury plc has different types of stores across the UK and also in the global scenario (Sainsburys.co.uk, 2021).
? Annual revenue of Sainsbury plc dropped by 3.2% and their net income also decreased by 32.78% during this economic recession and pandemic situation (Iide. co, 2021).
? Concept of globalization in this technology improved business scenarios and different types of new market competitors and their need to make competition create some critical situations and threats for Sainsbury plc.
Table 2: SWOT analysis of Sainsbury plc
(Sources: Created by Researcher)
2. Porter's five forces model
Threats of new entrants
? Sainsbury plc includes innovative ideas about the new product and their business services that engage them with new customers and also take appropriate management of their old customers (Fernfortuniversity.com, 2020).
? An appropriate economical scale of Sainsbury plc and different types of building capacity include appropriate research and development about the new entrance that specifically enhance the dynamic industry establishment significantly reduce the extraordinary profit related to management in the business opportunity (Sainsburys.co.uk, 2021).
Bargaining Power of suppliers
? Developing efficient supply chain management with multiple suppliers and experimenting with the product design specifically dedicated to a practical lesson for Sainsbury plc (Fernfortuniversity.com, 2020).
? Third party manufacturing system in Sainsbury plc lays the bargaining power as compared to other supermarkets in the UK and it also includes a business slowly with creative marketing approaches (Fernfortuniversity.com, 2020).
Beginning power of buyers
? Large customer based and reduced bargaining power of buyers includes an appropriate streamlining of the production and sales process that specifically and rapidly includes innovative ideas in the business area (Sainsburys.co.uk, 2021).
? New product development is also reducing the defection of customer related management in Sainsbury plc and it keep up opportunity about the competitive market scenario that established the highest ability of customer satisfaction with reasonable price management (Kang and Hwang, 2018).
Threats of substitutes
? Substitute product management in the supermarket related business industry is specifically oriented by the service management rather than the product-oriented management of Sainsbury plc (Fernfortuniversity.com, 2020).
? Appropriate understanding of the core need of customers and also the cost switching management in the business area help to include the different types of important management about substitute product related thread factors in the business area of Sainsbury plc.
? Business segmentation sometimes suffers due to the rivalry among the existing business area and also needs some sustainable differentiation in the particular business area to enhance a competitive market related to appropriate management (Vorobyov et al. 2019).
? Alongside, collaborating with the business competitor also increases the market size and makes great management tackle the industry related competitors and their profitable business idea (Fernfortuniversity.com, 2020).
Table 3: Porter's five forces model
3. Competitive advantage analysis
3.1 Identification of the potential competitive advantage of
An appropriate definition of competitive advantages is to improve the ability to stay in the competitive market scenario and evaluate the business strain that weaknesses with the approachable management (SATO, 2020). A convenient approachability to the new innovative market strategy with value added service is the main and largest factor of Sainsbury plc. "Competition and Market Authority" include a spontaneous business strategy in the competitive market scenario that enhances the individual business management of Sainsbury plc (Sainsburys.co.uk, 2021). Frequently the direct and indirect investment with appropriate time span helps to engage; their potential activities that help to establish a long-term sustainable business management.
(Source: Stratechi.com, 2020)
Sainsbury plc's latest blend of loyalty and different types of priorities information help to manage a great network development across the UK related business scenario and it also helps to take a little step on the international business market (Stratechi.com, 2020). Innovative ideas about the business sale and the appropriate leadership quality with some effective business substitute engage a satisfied marketplace desire to engage their target customer in an appropriate pathway.
3.2 Justification of the organization’s existing
Appropriate market analysis and different types of network impact are now enhancing the value added business policy for both domestic and international business situations. As viewed by Ginter et al. (2018), Sainsbury plc related different types of social networking with the virtual platform and technology. Some innovative uniqueness also enhanced the business management in an approachable way. The appropriate justification for Sainsbury plc's largest existing supermarket in the UK based supermarket specifically includes the brand loyalty and innovative idea for the customer satisfaction with an appropriate supply management system (Sainsburys.co.uk, 2021). Lockup supply is another major supply management that includes the retail partnership and different types of a distributor to provide on time delivery.
(Source: Pngwing.com, 2021)
It is also involved in customer demands and also includes cost effective management in the business area (Sainsburys.co.uk, 2021). Globalization is now one of the important factors for the growth of business and expansion in the entire world related business area and it needs an appropriate economical shift. The explanation of the business management with a unique strategy always needs a promotional activity and some online presence related to effective business networking (Pngwing.com, 2021). Sainsbury plc includes a great business approach in the UK related market area and they also try to implicate some important shareholder management to enlarge their business in the global context.
4. Devise valid strategies and tactical objectives to achieve overall strategic objectives
Expand business through acquisition and collaboration
The overall objective of Sainsbury PLC is to provide great quality food to the potential consumer at an affordable price. Demand for Sainsbury PLC's food is high in the international marketplace. For this reason, expanding business through merging and acquisition is an effective strategic plan to fulfil the ultimate objective of Sainsbury PLC. As cited by Rohwer and Topi? (2019), acquisition is very common in current market scenarios and it is the most efficient way to adapt to an unknown marketplace. Merging and acquisition provide pre designed infrastructure to a company which increases competitive advantage in an international marketplace. Sainsbury PLC will be able to expand its business in mode regions through this strategic decision.
Develop supply chain management
Impact of covid 19 has been seen in the supply chain management of every company however it has created an opportunity for Sainsbury PLC to develop its supply chain management and gate a competitive advantage in the international marketplace. As opined by Baset et al. (2019), most companies are focused on designing a green supply chain for their business activities. In this way, Sainsbury PLC will be able to establish its brand in the global marketplace and maintain cost competitiveness with green supply chain management. Green supply chain management is the most effective strategic decision for Sainsbury PLC to achieve long term strategic objectives.
Control increasing cost of products
Different kinds of uncertainty have been seen in the global marketplace which has created uncertainty in global business. Increasing cost of raw materials for grocery products is a big threat for Sainsbury PLC; however, Sainsbury PLC needs to implement efficient workers who can operate technologically advanced devices to control increasing costs. Mission of Sainsbury PLC is to provide best quality products to the consumer at a low price and controlling cost is most necessary in current work. Sainsbury PLC is the second largest grocery supermarket in the United Kingdom and it has more than 1500 shops in different regions (sainsburys.co.uk, 2022). Increasing production units can help Sainsbury PLC to control the per unit cost of products.
Improve corporate social responsibility
Maintaining corporate social responsibility is the current trend in the global marketplace Sainsbury PLC can achieve its strategic objectives by improving its CSR activities. As cited by Li and Belal (2018), CSR activities help to increase awareness about a particular brand and provide a competitive advantage in the market. Sainsbury PLC is focused on creating innovative products for potential consumers that offer a different marketplace. Evaluating the competitiveness of Sainsbury PLC in the current market, it has found that it has a strong base that it must make decisions on expanding business in different regions. Corporate social responsibility will guide Sainsbury PLC to meet strategic objectives without any complications.
Part B: Strategic options for Sainsbury
1. Strategic directions available for Sainsbury
Mission of sense very is to become the first choice of grocery products among global consumers. Sainsbury PLC needs to improve its cost management strategy as well as take innovative initiatives to provide service in different cultural places. The tagline of Sainsbury PLC is"help everyone eat better" and it needs to expand its availability in the global marketplace (sainsburys.co.uk, 2022). Strategic direction is a plan which focuses on implementing progress strategies to fulfil the goals of the organization. Helping the consumer to get products with their minimum effort and maintain their quality at an affordable price will help to achieve its strategic objectives.
The vision of Sainsbury PLC is to become the most trusted retailer in the global marketplace as well as provide a healthy environment to the employees. Sainsbury PLC has decided to create an environment where people will love to work and shop (sainsburys.co.uk, 2022). Increasing the reward system for innovative ideas of employees is going to improve strategic options for Sainsbury PLC. Supplier environment and consumer behaviour are effective for Sainsbury PLC however increasing competition has created uncertainty for Sainsbury PLC. It is difficult to adapt to an ever changing environment and maintain a consistent cost of product in the global marketplace. Consulting with an expert and product development manager will help to create an effective vision that can sustain strategic direction for Sainsbury PLC.
A development plan is the most effective strategic option for an organization. Several types of strategies are undertaken by global organizations in order to expand their business that is acquisition, collaboration, venture capital investment and other relevant strategies. Considering this type of strategic option Sainsbury PLC will be able to expand its business in different regions which are going to create a lot of opportunities to develop its revenue. Financial condition of Sainsbury PLC is stable and it has executed approximately 29048 million GBP of revenue in the year 2021 however Sainsbury PLC has suffered to maintain its liquidity over a long period (wsj.com, 2022). Consideration of sustainable technology and an effective development plan is a strategic direction to become a global leader in the retail marketing industry.
Identifying uncertainty and potential outcome of an organization for a long period are difficult because setting up periodic goals is a strategic direction for Sainsbury PLC to establish short term plans and sustain profitability for a long period. As cited by Yaakob et al. (2019), short term plans are most effective to deal with uncertainty. This strategic option is going to be more beneficial to balancing strategic decisions and the organization's growth in a competitive marketplace. Sainsbury PLC is already established and holds number two positions in the grocery market in the UK however it needs to improve production lines as well as work on training programs for diverse team members to increase productivity.
2. Recommendations for growth strategy
Growth is dependent on market capture of a company that Sainsbury PLC needs to expand its business in different places and deal with diverse team members to operate a business. Business expansion is going to be a growth strategy for Sainsbury PLC because it has a good brand value in the international market. As cited by Lin et al. (2020), most organizations are expanding their business in different regions through digital marketing strategy because it is the most efficient way to expand a business. It is recommended to improve the activity of Sainsbury PLC in social media and enhance business expansion plans in the global marketplace.
Understand ever changing consumer behaviour
Demands of consumers and their moral values differ according to their cultural values and their region. Understanding the behaviour of consumers is essential to developing business plans and sustaining product development processes. As cited by Alessa et al. (2021), understanding consumer behaviour is a difficult process which needs a strategic plan to communicate with potential consumers and identify their psychology. There are different kinds of uncertainty and threats for Sainsbury PLC which have been evaluated in the part a while discussing the internal and external environment of Sainsbury PLC. By understanding consumer behaviour Sainsbury PLC will be able to improve its performance and enhance its existence in the global marketplace.
Maintain cost competitiveness strategy
Mission of Sainsbury PLC is to provide quality products at a low cost which is one of the major strategic options for Sainsbury PLC to attract potential consumers. The current ratio of Sainsbury PLC in the year 2021 is approximately 0.60 which represents the efficiency of Sainsbury PLC to maintain a balance of working capital (wsj.com, 2022). In this context, Sainsbury PLC needs to develop financial planning and reconstruct its budget to maintain cost competitiveness in the global market. A large number of funds are required in the business expansion plan and the cost competitiveness plan will contribute to maintaining the financial stability of Sainsbury PLC.
Innovative strategy and new product
Demand for food is changing day by day due to the change in food behaviour of the consumers. In this context introducing new products and foods for consumers that can provide a healthy diet is recommended for Sainsbury PLC to improve its competitiveness. Sainsbury PLC includes more than 15000 varieties of products in its retail and online store (sainsburys.co.uk, 2022). However, Sainsbury PLC has to improve its infrastructure and recruit diverse members to create new products for new consumers. Offering a wide range of foods creates brand value and sustains the existence of a business for a long period.
Develop production line
Development of the production line is essential for Sainsbury PLC in order to maintain cost competitiveness. Infrastructure of most of the stores of Sainsbury PLC is old and will change with time. Sainsbury PLC has to organize a running program for its employees in order to increase their efficiency and behaviour to deal with potential consumers. Production line and service quality improvement are recommended for Sainsbury PLC to achieve strategic objectives in the upcoming period.
3. Evaluate ways and means by which the chosen strategy
Digital marketing strategy is chosen that will help Sainsbury PLC to expand its business in the global marketplace without investing a large number of funds. Sainsbury PLC has to strengthen its online website to manage engagement of a large number of consumers and maintain safety and privacy of potential customers. As opined by Santoso (2020), digital marketing helps to provide statistical data through different diagrams that help in strategic decision making of a company. Sainsbury PLC will be able to become a market leader in the upcoming period through consideration of digital marketing strategy because after covid 19 most the consumers have preferred to purchase products from online stores instead of visiting physical stores which are time consuming and expensive.
Sainsbury PLC has provided consistent growth over a long period however a large number of funds are required to develop a cost competitiveness strategy in the current market. As cited by Akter et al. (2020), dealing with financial uncertainty and maintaining the cost of the product is difficult for digital financial analytic tools to improve the decision making ability of the manager. Accurate financial analysis is required to maintain working capital and satisfy employees with incentives and rewards for their excellent work.
Run a campaign to understand consumer behaviour
Understanding consumer behaviour is a difficult task for a company, however, organizing a campaign to our potential consumers about a particular product helps to interact with consumers directly. In this way employees of Sainsbury PLC are able to understand the behaviour of consumers for a particular product or service. A lot of organizations organize campaigns to increase social awareness of different topics. It increases the living standard of people and helps to develop society. Campaign plays a vital role in every organization to sustain its competitiveness in the global marketplace.
Innovative products are required within the organization to improve performance of Sainsbury PLC. As stated by Wang et al. (2019), expanding business in different regions is going to allow Sainsbury PLC to recruit diverse team members to the employee team. Collaboration of diverse team members helps to increase innovative strategies and develop cost competency in the global marketplace.
Implement advanced technology
Efficient supply chain and production line are recommended to sustain the growth of Sainsbury PLC. Implementation of advanced technology is the most effective strategy to develop infrastructure and production lines for the growth of Sainsbury PLC. Consideration of advanced technology is going to increase opportunities for Sainsbury PLC to deal with uncertainty and establish the number one choice of a consumer in this particular industry. aAdvanced technology is required to improve performance of production line as well as contribute in sustainable development of workers skill that they can provide more output for the company
In the first part of this study, the internal and external environment has been analyzed which has represented the infrastructure of Sainsbury PLC and its potential opportunity in the marketplace. Evaluating SWOT it can be said there are a lot of uncertainty and threads however Sainsbury PLC can take necessary initiatives to become a market leader in the upcoming period. This study has evaluated Porter's five forces to analyze market competitiveness which has helped to identify competitive advantage of Sainsbury PLC and justified its existence. However strategic options for sense have been discussed by identifying its mission and vision for the development plan. It has been found that Sainsbury PLC needs to expand its business in different regions and develop financial management through consideration of advanced technology to contribute to the consistent growth.
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