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Strategy for Business

University: University Of Westminster

  • Unit No: 32
  • Level: High school
  • Pages: 19 / Words 4699
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 215
Question :

This sample will let you know about:

  • What is macro environment?
  • Discuss Economical factor.
Answer :
Organization Selected : Sainsbury

INTRODUCTION

Business strategy is understood as course of action along with set of objectives which have proper assistance by entrepreneurs to have achievement of specific business objectives. It is considered as master plan which is implemented by company to have securing of competitive position in market by carrying effective level of market operations towards desired end of customer demand. This is considered as integrated level of framework which equips top management to discover and analyses benefits of business opportunities (Vargas-Hernández and Garcia, 2019).

Sainsbury is one of UK largest retailer present in different level of towns along with cities and retail operates across UK. In this report, there will clear discussion on impact of macro environment of strategy formulation and decision-making of company. On other hand, there will be critical level of analysis of internal environment over structure and skill set of company which helps company to have appropriates strategies to improve competitive edge of Sainsbury. At last there will be production of strategic management plan which have implementation of tactical strategic priorities to been objective of Sainsbury. Need Assignment Examples?Talk to our Experts!

The application of macro environment to analyze and influence impacts of strategy formulation of company.

Company profile

Sainsbury is leading supermarket retailer, company have recently overtaken ASDA in order to become UK second the largest supermarket in sales at Walmart in order to gain more level of competitive advantages over it major rivals. Company is majorly focusing as strange and balanced business to be focus on long term strategy to have building of sustainable business over up comping years.

Vision

Sainsbury wants to be more trusted retailer where people will love to shop.

The company is a more way to have harnessed existing level of talents along with development of creativity and diversity in order to have assurance of customers to have receiving great services every time they shop.

Mission

The mission of Sainsbury is to be consumer first ever choice in terms of food along worth delivery outstanding quality along with great services atcompetitive cost through working at faster pace, simpler and all to other to have further level of developmental.

Objective

  • To provide amazing customer experience to all the buyers of company
  • To satisfy needs of consumers by offering them high quality goods and services
  • To increase competencies profitability by implementation competitive strategy in business development.

Pestle analysis

The company have analysis macro environment is playing an important role in strategic formulation in development of company. There is general layer which is consisting of braid level of environmental factor's which is operating business of Sainsbury.

Political factor

The company is majorly effected bydecision-making of Brexit which have unsurprisingly had sparked off cascade level of effects which have major inclusion of inflation devaluation of pound value along with coupled up effects of wage growth depression (Manly, 2016). This has resulted in sluggish economy in consumer expenditure declines. This turned out to have negativism impacts of Sainsbury which is turning to be both political and economic of upheavals in uncertainty for short term UK ecosystem. Inflation affects investment strategy of business and by this way return of business unit get minimized which affect its revenues to great extent.

Economical factor

Due to Brexit value of pound sterling has turned at its lowermost against dollar which is been identified as financial turmoil. Due to these effects Sainsbury have expansion of business by takings over Argos turned to be financial headache in coping up be currency hedges. At the end Argos dollar prices import have hiked up prices upon catalogs. On other hand, rise in inflation have resulted in change in buying behavior of consumers, by altering their shopping habit (Kapiszewski and Karcher, 2019). This has results in decline of growing stage rate of Sainsbury. Company have implemented strategy of price penetrating by benefiting consumer which is squeezing margin and profits of Sainsbury. By this way import and export activities of business get affected to great extent and operational strategies of Sainsbury has affected. By this way it has to make changes in its pricing strategies so that kit can sustain in market for longer duration.

Social factor

There is direct level of economic factor which is causing dramatic changes in shopping habit of people which is driving retail sector. This has resulted as abounding big weekly shopping of big weekly food. There is having preferences of spending money to tours and traveling through discounters and internet shopping. company have advantages in developing online shopping along with operation of 900 convenience stores which have impact in increased sales of 6% as compared to another super market.

Environment factor

Sainsbury have raised major level of corner over rise in ethical and environment consciousness among consumers such as paper packaging along with using of recycled materials. Increasing demand of zero wastage has affected the firm. This is turning out to be major challenges in for food retail industry. As enterprise has taken step to resolve the wastage problems, this has affected operational strategy of firm because it has decreased operational cost. Now recycling is being used so that wastage material are reused again that enhance productivity of firm greatly.

Legal factor

New sugar is being introduced by UK government in order to control over uses of sugar in drink which have impacted Sainsbury in different aspects. UK government have also implemented new rules for banning advertising high sale, sugar and fats to children who are below 16 to have restriction in marketing and promotional efforts. This law has affected the manufacturing strategy and entity now has to ensure to use minimum sugar so that it can conduct operations legally.

Technological factor

Now Sainsbury has started using advance technologies such as POS system, online payment services etc (FATRICIA, 2016). This has resulted as 80% increase in order along with 20% increase in customer to have proper level of coping in changing customer behavior. This has impact on operational strategy of firm because this has improved the working efficiency and has reduced workload of employees as well.

SWOT

Strength

Diversified business with having strong market share.

The existence of strong balance sheet with having consistent profitability.

 

Weakness

Emphase more on single market

The food business have low level of business margins and higher risk.

Threat

The company have negative impacts of Brexit of business developmental.

There is increase in intense competitions in grocery along with retail segment.

 

Opportunities.

The company is grasping online collaboration with global market expansion.

There is existing of diversification and growth of Sainsbury banks.

Development of online groceries long with convenience store as channel of further growth.

Technological personalities in helping consumer insights.

Internal factors to analyse and influence impacts of strategy formulation of company.

Porter's value chain analysis

It is chasing of activities of series in industry in order to have organizations to have conveyed to importance of products (Bentham, 2018).

Inbound logistics

There is inclusion of various approaches by Sainsbury as logistic loom which have aim to connects current stores of geographically in order to have reduction in miles. Company have introduced double Decker lorries in order to carry more loads at single cost. Company have proper level of developing proper training, so that drives can have more proficiency in driving. Order assignment help from our experts! 

Operations

The company is trying to have reduction in CO2 discharges as primary operations in order to unfilled trackless along with collection among drivers with delivering services back to store. On other hand, secondary operation has major focus of way of transportation s which have led major lee of improvement of around 1.5 %.

Outbound logistics.

The company rising over various sources of delivery for options in non goods such as click and collect, delivery on Saturday and standard delivery and so on. time of being customer of 3 PL providers, company have established network of more than 20 centers. Though competitor firm such as Asda and Tesco is also had developments of third party logistics.

Marketing and Sales as company is trying to have development of 20*20 level of sustainable plan which is beings announce to have promotions of brand as well as better servicing to customers and employees. This is developmental as worker benefits which is majorly contributing in success.

Services is such as company long strategy to have Providences of broad shopping services. Firm is paying contribution of finances in order to have improvements to bring commercial advantages in division of logistics.

Mickeys 7's

Shared value is stated as major level of objectives along with behalf about company values. The main objective of Sainsbury is to provide maximum satisfactions to customers which quality products as well as increase in share of market with profit. Sainsbury ensures that it gives respect to all its workers so that people feel happy. It maintains dignity of workers so that behavior of workers remain positive.

Strategy is concerned with method which is adopted to have achievement of specific goals and objectives. Sainsbury is adopting various strategy such as online outlets to have increase in sales such as reduction in co 2 discharges as primary operations introduced double Decker lorries in order to carry more loads at single cost. Sainsbury focuses more on long term strategy so that it can sustain in market for longer duration. That is the reason that Sainsbury is able to deal with complex situations effectively.

Structures as company have development of better structure in order to bring out best outcome for production and operation. Sainsbury has flat structure where people have rights to share their feeling without any barriers, communication is done in systematic manner. This structure supports business in running operations significantly.

System as termed Sainsbury to perform daily activities in very efficient and effective manners in order to have stratification in customer. Mangers involve people whenever any changes are implemented in the company, managers of Sainsbury ensure that all employees give their concern for change. This help in getting acceptance of them and minimizing conflicts and negative behavior at workplace.

Staff is concerned there are more than 301000 employees in Sainsbury in UK along with 50000 for overall in remaining 12 countries. Staff are being trained time to time and they get incentives which encourage them to be loyal and perform well in the firm.

Style is about reflection of cultures as Sainsbury is operating in unique cultures to have operation of business in more effective and efficient manner. Leaders and mangers have democrative style of leading employees, managers of Sainsbury involve employees and empower them so that they support management.

Skill is concerned Sainsbury is providence full on job training to employee to increase level of knowledge to provide better delivering of services and maximize contribution in profitability. Entity ensures to give task to all workers according to their skills and capabilities.

Viro analysis

The VRIO Analysis of Sainsbury s will look at each of its internal resources one by one to assess whether these provide sustained competitive advantage (Murcott, 2018)). The Sainsbury s VRIO Analysis also mentions at each stage whether these resources could be improved to provide a greater competitive advantage.

 

Valuable

Rare

Imitable

Organization

Financial resources

Yes

No

No

Yes

Diverse food products

Yes

No

No

No

Pricing strategy

yes

No

Yes

Yes

Distribution network

Yes

yes

No

No

Organization structure

Yes

No

Yes

No

Human resource

Yes

No

No

No

Technology and IT investments

Yes

No

No

Yes

Inventory management

yes

Yes

Yes

yes

Evaluation of the competitive marketing with use of Porter's five forces model.

Porter five forces termed out as tool that aids to understanding competitiveness of business environment and this also allows to investigate strategy that has potential profitability (Sari, Afifah and Sueb, 2019). It is useful in understanding strength of the enterprise and also determines current competitive position. This is analysis that uses five industry forces that determines intensity of competition and also helps to enhance profitability levels of enterprise.

Therefore, the Porter's five forces outlined in below context as-:

The threat from new entrants- The economies of scale is typical to achieve within industry in which Sainsbury operates. This makes easier for enterprise that produce large capacities to have cost advancement (Bocken, Smeke Morales and Lehner, 2020). Due to this, threat of new entrants becomes a weaker force. Thus, differentiation within commodities is also strong within this enterprise and they use to sell different commodities rather than use of standardised commodities. In addition to this, legal policies within industry needs strict licensing and legal requirements in order to get fulfilled all the necessity before company starts selling. It is typical for new entrants to join industry and makes threat of new entrant weaker force. Thus, Sainsbury can tackle this issue with taking advancement of economies of scale has within industry. This can be improved with putting focus on innovation that aids to differentiate commodities from that of new entrants.

Bargaining power of suppliers- The number of suppliers within industry under which Sainsbury operates is high as compared to buyers. Therefore, this means that suppliers has less control over price and it makes the weaker force to suppliers power of bargaining. Henceforth, commodities that supplies offer are less differentiated, fairly standardised and also have low cost to commodities (Panda, 2019). In addition to this, industry in which Sainsbury operates can be important customer’s for their suppliers. It defines as industry profiles are closely tied to suppliers. This issue can be tackle if chosen entity purchase the raw material from suppliers at lower cost. It is one of the effective way that can aids to ensure efficiency within its supply chain.

Bargaining power of buyers- The number of suppliers to industry is high than number of enterprise product commodities. It means that buyer has few enterprise to choose from and they also do not have effective control over the prices(Sulich and GrudziÅ„ski, 2019). This is term that makes bargaining power of buyer’s weaker force within the enterprise. Also, differentiation within commodity is high and this means that entity can able to find out substitute of a particular commodity. Thus, the quality of products plays crucial role and this attracts buyers and make frequent purchases. Henceforth, there is no any significant threat to buyers that combine backwards. It can be tackle if chosen enterprise focus on innovation and this differentiate products to attract the more buyers. Thus, power of buyers is moderate.

Threat of substitute product and services- There are very few alternatives that are avail for commodities and this needs to be produced within industry in which working of enterprise operates. Thus, substitute that are avail are produced with low profit earning industries. Henceforth, few substitute are avail that is of the high quality but this more expensive and this means that buyers are the less likely to switch shift to substitute commodities. On the other hand, chosen firm needs to put consideration on to providing greater quality within its commodities and this also provides greater quality at lower price as compare to alternative products that offer advanced quality at high price (Huang, Lumbanraja, Dalimunthe and Hasibuan, 2019). In addition to this, this can be stated that retail market is seeking to meet and absorb invention in relation to nutrient merchandises in term to do shopping to have the highly enjoyable experience.

Rivalries among existing firms- The number of competitors that operates within industry is very low. This means that enterprise in industry not makes moves without being unnoticed (Song, Mu and Wu, 2019). Also, there are very less competitors who has large market share. It means enterprise needs to get engage in competitive actions that helps to gain strong position and allows to become market leaders. It is term that aids to make rivalry among existing firm a stringer force within enterprise. In addition to this, product produced within this entity is highly differentiated and this is also difficult for enterprise to have customers of each other because each firm has some effective level of uniqueness within their commodities. Also, strategy of this enterprise can be termed out as diverse because each one is following some unique advancement of plan of action that aids to gain competitive advancement (Alam and Wulandari, 2019). Therefore, it makes rivalry among existing enterprise strong force within industry. In order to tackle issue as rivalries among the existing firms chosen entity needs to conduct effective market research in order to understand situation as supply and demand within market and this also aids to prevent overproduction.

Henceforth, this can be stated that with use of information within quoted enterprise strategic planning to firm can able to understand that how different components affects profitability of enterprise. Thus, strong workforce has high and advance level of profitability.

Therefore, firm can focus on following competitive strategies as-

  • Cost leadership- If the quoted firm focus on effective capacity utilisation, high technical advancement, high innovation can able to accomplish cost leadership.
  • Differentiation leadership- With help of adoption on the unique features the entity can able to creates the differentiation strategy. Therefore, consistent promotional activities build brand advancement.
  • Cost focus- For the specifics market segment as poor people the entity needs trio keep the product price low.
  • Differentiation focus- By using organic and healthy ingredient in commodities the entity can able to reach health conscious customers. It aids to meet out the demand of customers.

Description on use of theories, concepts and models to produce strategic management plan.

Strategic management plan to enterprise termed our as the document that mainly used to communicate within enterprise. Therefore, enterprise needs to put the core focus on organisation goals, put major focus over energy, setting of priorities and strengthen firm operational performance (Strategy – Ansoff’s Matrix, 2017). Strategic plan to firms are key that assist firm to accomplish goals and also define effective values to enterprise. Henceforth, this has been outlined in following manner as are-:

Vision

The vision of Sainsbury is to be organised within the market as the most trusted and reputed retailer, where people wants to work and shop (Bocken, Smeke Morales and Lehner, 2020). It aids to harnessing creativity, diversity and talent of colleagues that helps to ensures customers to get great service.

Mission

The mission statement of the Sainsbury is to be first choice to consumers for food and to deliver commodities that has outstanding quality and great service at competitive cost.

Core values

Sainsbury core value us to bringing up effective level of innovation that has strong sense of social, environmental and economic responsibility that helps to enhance success to organisation.

Objectives

The objectives of Sainsbury termed out in following manner as are-:

To offer high quality services to customers and to maximize the effective financial return to stakeholders.

To exceed the level of customer’s satisfaction for healthy, safe, fresh and tasty food to make lives of customer free and easier.

To take initiatives that can aids to expand business activities to global level and helps to enhance profitability by 20%.

To enhance base of customer up to 25%.

Strategies

Porter five forces-

Power of buyers- Sainsbury customers has relatively high bargaining power due to availability of other supermarket such as are Tesco, Asda, Aldi etc. It makes product switching cost very lower and also gives power to customer to select between rival offers within same price range.

Power of suppliers- The super market suppliers has low bargaining power due to existence of many suppliers within the retail firm (Sari, Afifah and Sueb, 2019). This gives supermarket power to get commodities from suppliers at lowest prices in terms to improve profit margins.

Threats of substitute- The threat of substitute within grocery market is high and this enterprise has market that can offer food and drink to the high consumer but they also offer non food commodities such as electronics, clothing and furniture etc.

Competitive rivalries- The chosen enterprise faces intense competition from supermarket such as Tesco, Asda and Morrison etc. To cope up with it, entity must offer discount on the commodities so that they can allow to survive with cut-throat competition within United Kingdom retailing industry.

Barrier to entry- It taken as low threat by quoted enterprise due to retail market culture at where lump sum 70% of grocery market share controlled by the biog four supermarkets. There is intense competition has been existed among other small supermarkets as Also, Lidi etc. Therefore, the intensity of competition has made the UK food retailing firm unattractive.

Ansoff matrix

There are number of option that enterprise needs to adopt. It gives the model strategic growth that is highly based on enterprise position.

Market development- It is term that is mainly based on to search for new market for existing product and services. This is inclusive of undertaking identification for new customer’s for existing commodities.

Diversification- It can be termed out as risky chance of growth. Therefore, diversification can be done in both product and services. It can be one of effective strategy as this leads to enhance the profitability.

Market penetration- This is term that inclusive of enhancing market share. It can be accomplished with number of selling points, to find out customer’s within existing market and to sell commodities to established customers. Such plan of action needs high marketing and huge capital. With use of promotional tools such as media advertisement and online can be effective way to get reach to customers in effective cost.

Product development- In order to have effective level of advancement the chosen firm can use organic ingredient that can aids to meet target of the current market. Thus, new product development needs to have high change of business growth and development. By developing the commodities with use organic ingredient can assist to bring product development and attract customers.

Tactics (use of marketing mix)

Sainsbury offers wide range of the commodities to customer at the lower cost and they focus on product and price elements of market mix as product, process, promotion and place etc.

Marketing mix

Product- This enterprise is taking initiatives to offer organic commodities that is good for health.

Place- It is enterprise that is using diversification strategies to diversify the product and services to have business expansion in new market.

Promotion- This enterprise can market their commodities with use of social media, TV, newspaper etc.

Price- This is firm that is using price skimming strategy as this calls for setting the high price for new product.

Implementation of the plan of action

The resource allocation and measuring to have effective control needs to be taken as this define that how resources within enterprise is needs to be allocated and adopted in terms to have effective utilisation of resources.

Evaluation

After, new product development within the enterprise and by taking the sets to create innovation in existing commodities entity needs to undergo to process of evaluation to identify gaps between existing and planned performance of firm.

CONCLUSION

From above report the above report it can be summarized that business strategy termed out as course of actions that assists entrepreneurs to achieve business objectives. Therefore, business strategy is planning of an enterprise that aids to accomplish vision, prioritising objectives and optimize financial performance with use of business model.

The present study has covered business activities of Sainsbury, it is second largest chain of retail sector that deals in groceries and clothings to electricals, home-wares etc. Furthermore, assignment has covered activities as application of frameworks that influence the macro environment, study has covered internal environment and capabilities of enterprise of using appropriate frameworks. Thus, SWOT analysis aids to firm to get successful development within future course of action. In addition to this, Porter's five forces model is very effective to Sainsbury in order to get strategic analysis. Lastly, the number of theories and concept has been applied to interpret strategic planning for organisation.

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