In such competitive era, it is essential for firm to introduce effective strategies so that performance of firm could be improved. Thus, through identifying the issues it helps in improving the performance of firm and overcome the issues so that set targets could be attained. With the help of identifying the problem it is essential for firm to assess that declining in sales of Sainsbury is one of the main issue which impacts upon the profitability of firm. It can be evaluated that there are different reasons sue to which business operations gets affected (Van Boeckel and et. al., 2014). Thus, here major issue being discussed is that decline in sales which affects the profitability of firm in market. Therefore, it is considered as one of the main problem that impacts upon the business operations which helps in overcoming the issues faced by firm so that desired outcomes could be attained. Sainsbury has been selected which is a second largest chain of supermarket and thus provided wide range of products or services to influence consumers. It is the largets grocery retailer and adopt self service relating in UK. Company faces several issues which impacts upon the business operations so that successful outcomes could be attained. Thus, carrying out significant approach results in identifying the main reasons of decrease in sales and its impact upon profitability of business (Mani, Kesavan and Swaminathan, 2015).
There are several reasons such as dissatisfaction among customers, low quality products, high price as compared to rivals etc. Thus, all such issue helps in identifying the significant impact upon business operations as they are considered as the main reasons due to which sales of Sainsbury is facing serious decline. From the last several years, Sainsbury is facing serious decline in sales and thus influence the business performance so that profitability could be attained. It could be evaluated that through adopting effective strategies it becomes significant for firm to overcome the issues faced by business and thus improve the performance of firm in market (Hainmueller, Hiscox and Sequeira, 2015). Decline in sales of Sainbury is considered as one of the major problem and thus it is being identified as the main issue so that profitability of firm could get affected. Through identifying the issue it becomes easy for firm to overcome them and thus improve the performance of firm in market.
It is significant for enterprise to assess their main issues and thus identify that decline in sales is considered as the main problem and therefore, it needs to be avoided so that sales could be increased. Declining in sales could be affected and therefore, it is the main issue which is being faced by businesses in relation to enhance the sales and profitability aspect of firm. There are various competitors of firm i.e. Asda, Tesco that are offering high quality products or services at minimum prices so that it gives tough competition to rivals. Thus, overcome such issue and results in improving the business performance and enhancing their sales and profitability aspect so that set targets could be attained (Cao and Li, 2015). Decline in sales is considered as one of the main issue that results in affecting the business functions and therefore adopting effective strategy helps in improving the business performance so that customers could be attracted towards firm.
The Issue Or Need
The main issue identified here is decline in sales of firm and thus it provides opportunity for business to improve its business performance. Decline in sales is the major problem being faced by firm and therefore, it is essential for business to identify the issues so that appropriate outcomes could be attained in terms of improving profitability. However, in regard to evaluate the results, it is essential for firm to overcome the issue and thus bring positive outcomes so that brand image of firm could be raised (Gallino and Moreno, 2014). Such issue need to be discussed in regard to bring change in the environment, people and top management so that problem could be avoided. Thus, such problem is considered as the main issue and therefore it needs to be identified so that it needs to be solved and thus goals could be attained.
The identified issue is essential for firm to bring in notice so that decline in sales could be evaluated and thus develop objectives so that sales could be improved. Top management of firm requires to assess the prevailing issue faced by firm and thus bring positive outcomes so that appropriate outcomes need to be evaluated so that best performance could be attained. Thus, identifying the issue results in implementing effective strategies and thus attain set targets. Management initiates in regard to stand by the problem and tackle the same with appropriate decisions so that issues could be avoided (Hong and Li, 2017). Decline in sales is one of the major issue that results in assessing that it is one of the main problem so that appropriate outcomes could be attained. Management need to adopt effective strategy so that sales could be overcome and attain appropriate results. Dissatisfaction among customers, low quality of products and high prices are considered as the major issue and thus it affects the brand image and popularity of firm in market (Edwards and Jenkins, 2015).
Aims And Objectives
While, preparing the aim of business it is essential for scholar to identify the issues found so that it could be researched in terms of evaluating the outcomes. Following is the aims and objectives that is being discussed underneath-
Aim- To analyse the reasons of decline in sales of Sainsbury on the profitability of firm.
- To identify the main reasons of decline in sales of firm.
- To assess the impact of declining in sales of Sainsbury on the profitability of firm.
- To recommend the strategies through which declining in sales could be overcome.
The main reasons of decline in sales of firm
According to the view of Kirilenko, Kyle and Tuzun, (2017)it is stated that there are various reason of declined in sales which lead to impact the profitability of an organization. Sales of product can be declined because it not fulfils the needs and demand of customer. If company fail in making product and services as per taste and preference of consumer, then it directly impacts sale. In modern era, needs and demand of people change with change in time. They look out for new things instead of going on with existing product. Needs and demand of people increases time to time and it makes difficult for an organization to fulfil the needs and wants of time. This decrease the satisfaction level of customer and they switch to other brand product in respect to fulfil their needs and wants. Further, there are many competitors in retail industry who make similar type of products for customer and sale them at lower pricer. Increase in competition level also impact the sale of specific organization. Moreover, to survive in competitive market firm need to lower the price of its product and services which impact the profit of an organization. Therefore, increase in competition level also decline sale which directly impact profit of a company. Pouliot and Babcock, (2016) explained that if an organization not use effective marketing strategy then it also decreases the sale. Company make different type of product and services for its customer, but it need to ensure that customer know about its product and services or not. Moreover, if company not make its customer aware about product and services which they are selling then people will not prefer to buy them. As, it can be stated that people prefer to buy popular brand product. So ineffective marketing strategy also impact the sale of organization which directly impact the profitability. Furthermore, if company not make good quality of product and services then customer may not wish to buy particular firm product and services. It is important for an organization to focus on quality of product as customer mainly prefer to quality at the time of buying product and services.
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The impact of declining in sales of Sainsbury on the profitability of firm.
According to the view of Feletto, Burton and Egger, (2017) decline in sale lead to impact the profitability of an organization. If sale is declined then it impacts profit because company make product for its customer and if they not buy product and services then it impact sale. Some time company invest huge fund in making high quality product and services and attractive packaging. Further if people not like to but those products then company cannot recover its making charges and unable to make profit. Along with this organization also invest huge expenses in marketing its product and services but due to high price of product customer avoid buying those expensive product may decrease the profit of an organization. Increase in level of competition also diver the mind of customer in buying particular company product and services.
There are more choice available for shopper and different company provide discount offer to its customer which grab the attention of large number of customers. This impact sale as well as profit of other organization. Furthermore, if sale is not increase then company cannot make profit to pay salary and wages to its employees. Therefore, it can be stated that sale is very important for an organization in order to make huge profit.
Strategies through which declining in sales could be overcome.
Guo and Xiong, (2016) explained that there are different strategies which company can adopt in order to increase sale and make huge profit. One of the effective strategy which an organization can used is effective marketing techniques. Through this company can easily enhance the sale of its product and services. Further it supports in making aware people about the product and services. Company can use modern marketing techniques such as social networking site. Through the help of this company can easily target large number of customer in less time. Company can provide detail information of its product on social networking site for grabbing the attention of large number of customer. Furthermore, there are many advance technology which can be used for making innovative product and services for its customer. If company used new technology and make product which were different from its competitor, then it can easily increase sale. Further, if products are different from its competitor then company can easily keep high price of its product because then it has less competitor. This assist organization in making huge profit. As pre view of Mohammadtalebi, Nasr and Mohammadtalebi, (2016) a company can make product and services focus on fulfilling the needs and demand of its customer in order to overcome decline of sale. For this purpose, firm can conduct marker research for identifying the needs and demand of its customer and focus on making product according to the taste and preference of customer. With the changes in time needs and demand of people also changes, through the help of market research company can easily in identify the needs of people and fulfils it. Further if firm get product as per their needs and want then they will not switch to other brand. Apart from this Company need to ensure that product and services which they are making is of good quality and grab the attention of people. This overall increase sale as well as profit of an organization.
Research methodology is an important part of study which enable to present the finding, in an appropriate manner. Furthermore, one of the significant aspect is data collection which taken into consideration by researcher. There are two methods for collecting data that is primary and secondary. Primary information is that information which is fresh and new while secondary information is that information which was already published by different author in books and journals (Patino, Au and Vollmer, 2016). In the present report both primary as well as secondary research is conducted in order to deep understating of research aim and objectives. In primary research researcher used interview method for collecting information. In interview question were asked from different department leader of saisnbury organization. After the collection of data it is important to properly analysis the collected data. On the other hand secondary information is gathered with the support of books, and journals. All the primary and secondary information is presented in systematic manner in order to reach aim and objectives of research. Furthermore, interview is conducted for primary research under which 4 leaders has been selected as sample size.
Presentation of Research and Evidence
The research study basically aims to emphasize on the factors that leads to decline the ratio of sales in Sainsbury; hence according to the research aim, researcher has used various primary and secondary sources (Wirtz, 2012). Herein, this section provides detailed analysis about the information collected from primary and secondary both the sources. Since, books, journals and articles are being accessed in the research work; therefore on that basis, several factors are being explored that has a direct link with company’s sales prospect. While carrying out the study, attention has been given towards the factors that have a direct impact on declining the sales and profitability aspects of the business. Moreover, in this regard it can be said that due to increasing level of competition, company’s profitability aspect is reducing (Stahlberg and Maila, 2013).
On the basis of secondary research, it is also ascertained that employees are required to focus on enhancing the service provision dimension so that it can have a direct impact on company’s profitability and success facets. This can be supported with an example which states that customers always prefer to purchase products from those business entities which are highly focused on quality dimension (Siu, 2012). However, currently the sales ratio of Sainsbury also seems to reduce because somewhere Sainsbury is not meeting all the quality dimensions. Apart from this, the use of primary source also depicts that Sainsbury is losing its market share because the business has been focusing on multiple services which not only impacts the sales; but also disturbs other operations.
Analysing company’s sales and success ratio, it is ascertained that brand image of Sainsbury is getting reduced because other rivalries are enhancing the value of service provision. Moreover, in this area it can also be said that prior conducting the research work, researcher knew that the study is going to be too broad because it includes all those reasons that have a direct impact on sales and profitability facets (Silver and et.al., 2012). However, researcher had the availability of other topics as well to be researched upon like as the impact of reduced sales on company’s performance and etc. This area of concern has been selected as the main area of focus. Additionally, primary research is also being conducted and in the interview session, several questions were asked from the leaders of Sainsbury.
On the basis of analysis, it can be said that marketing strategies of Sainsbury does not include all such aspects that meets the changing needs of customers (Shankar and et.al., 2016). Since, needs and preferences of customers keep on changing; therefore it is essential for the business entity to adopt different ways to satisfy the end users. In the context of marketing strategies, it can be said that Sainsbury needs to focus on better marketing strategies that can meet all the requirements of customers. It is highly essential for the business entity to ensure that company’s services are matching the requirements of customers. Thus, focus should be laid on marketing concept and framework of Sainsbury (Reynoso, 2013).
It can also be recommended to Sainsbury that marketing strategies needs more efforts so that business can retain all the customers and can add value to the business. It is also ascertained that marketing strategies has a direct connection with company’s profitability aspects; thus focus on such thing could increase the level of profitability and sales (Stahlberg and Maila, 2013). At the same time, it is also vital for Sainsbury to emphasize on quality concerns so that customer retention aspects can be increased. This is essential in terms of acquiring long term benefits and success. Henceforth, company’s chances of surviving in the competitive market place can be enhanced.
The business entity needs to accentuate on its market position; hence to retain that position, it is essential to deal with all business values. Since, competition has been increasing; therefore it is vital for Sainsbury to look upon this factor as well to retain its position in market place. Along with market research, it is also vital for Sainsbury to bring competitive products in the market place which can match up with the needs of customers (Mishulin and et.al., 2016). This is the prominent method through which customer satisfaction can be enhanced. At the same time, it is also imperative for Sainsbury to retain the customers so that they can enhance profitability aspects of the business. Better customer relationship strategies needs to be adopted so that Sainsbury can retain all its potential end users for longer time span.
It is also recommended to Sainsbury to make the customers feel valued so that they can promote the services to other end users as well (Holmlund, Kowalkowski and Biggemann, 2016). This is highly effective in terms of enhancing brand image of the company. According to the analysis, chief issues are arising in Sainsbury because the strategies of competitors are imposing greater competition on the business. The value of business can be strengthened through focusing on better customer services and also through adopting the provision of convenient services (Hermann, 2009).
Through conducting interviews from the leaders of different departments of Sainsbury it could be identified that there are different factors which are considered as the main issues being faced by business such as high competition in retail industry, wide range of substitutes available in market. Thus, such factors results in affecting the business goals. Therefore, it is essential for firm to identify the main factors could impact upon the business and creates problem for them. While obtaining the data it results in evaluating that decline in sales is considered as the main issue and thus it needs to be overcome and for that suitable strategies could be identified (Malinova and Park, 2015). It can be evaluated that there are various factors that has been considered that high competition within retail industry and availability of wide number of substitute products results in providing appropriate knowledge so that issues could be avoided. Through analysing the responses it has been evaluated that Sainsbury faces tough competition in market and thus results in decreasing the sales as consumers do not prefer to purchase products from organization.
Also, it has been evaluated that through evaluating proper responses decline in sales issue is considered as the main problem being faced by Sainsbury through which it needs to be avoided by implementing effective strategies and thus improve the performance of firm in market. Sainsbury faces issues related to decline in sales as there are varied competitors available in market produces similar goods which are offering high quality products or services at lower prices (Aye and et. al., 2015). Therefore, such issue needs to be avoided and therefore, it is significant for firm to introduce significant changes so that set results could be attained. Also, it is essential for business to provide additional offers and discounts to consumers so that they could get attracted and therefore, it is significant for firm to bring improvements within organization and thus results in avoiding decreasing in sales issue and raise the performance of firm in market. Through overcoming such issue it helps Sainsbury to introduce innovative changes and thus introduce high quality products at affordable prices so that decrease in sales issue could be avoided (Pouliot and Babcock, 2016).
This, while interviewing the respondents i.e. leaders of every department within Sainsbury could identify that in regard to evaluate the issues it could be found that there are different issues being discussed within firm. All such issues could be evaluated and thus overcome the sales problems so that profitability could be enhanced. There are varied respondents that identifies that Sainsbury is facing serious decline in sales and thus it results in affecting its desired goals (Mani, Kesavan and Swaminathan, 2015). There are different offers and discounts being provided by Sainsbury after noticing its serious decline in sales so that profit margin could be enhanced. Thus, measuring such responses it helps in identifying that supermarket need to assess competitive strategy that is being developed by firm and thus bring appropriate outcomes so that set results could be attained.
Top management of Sainsbury also evaluates that continuous fall in prices results in serious issue and thus it is essential for firm to develop strong investment opportunities so that growth and success could be attained. They need to evaluate the performance of firm and then to improve its services or product quality so that sales could be gradually increased. In regard to this, business adopt effective marketing strategy and inform customers about the innovative products or services being offered by consumers in regard to enhance the sales and profitability in market (Hainmueller, Hiscox and Sequeira, 2015).
In the present research, the interview has been conducted in accordance to reach the aim of research that is to analyse the reasons of decline in sales of Sainsbury on the profitability of a firm. For this 4 leader were selected for asking question in the interview. Here below are given question which was asked in the interview.
- What is the reason of decline in sale of Sainsbury organization?
- Does decline in sale impact profitability of Sainsbury?
- Which marketing technique is effective for Sainsbury in respect to increase sale and profit?
- What is the strategies Sainsbury should adopt to overcome the decline in sale?
1.) Reason of decline in sale of Sainsbury organization
Finding: from the interview it is analyses that there are 3 respondent who state that ineffective marketing techniques is the main reason for decline in sale of Sainsburys. On the other hand, there is 1 participant who state that poor quality product and services lead to decline in sale of an organization. Hence, it show that majority of respondent agree that Sainsbury company need to improve focus on marketing strategy in order to make aware people about its product and services. Further it brands is not make aware people about its product and not provide then detail information then it cannot increase sale of its product and services. There are different modern marketing technique which company can adopt for making people aware and for grabbing attention of large number of customers.
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2.) Decline in sale impact profitability of Sainsbury
Finding: From the above result it can be stated that there are 3 respondent who state that decline in sale impact the profitability of Sainsbury. On the other there is one respondent who state that decline in sale not impact profitability of an organization. Hence, it shows that Sainsbury company need to take some step in order to increase profit. It can focus on making innovative product for increasing sale which lead to enhance the profit of an organization.
3.) Modern marketing technique is effective for Sainsbury in respect to increase sale and profit
Finding: From the above result it has been find out that there are 3 respondents who state that modern marketing technique is effective in order to increase sale of Sainsbury. On the other hand there is 1 participant who state that traditional marketing technique is effective to enhance the sale of an organization. Hence it show that firm need to use modern marketing techniques under which it can promote its product and services on social networking sites which charge less cost. It supports in targeting large number of people in less time which is very effective for Sainsbury.
4.) Strategy Sainsbury should adopt to overcome the decline in sale
Finding: From the conducted interview it has been find out that, 2 respondent suggested effective marketing techniques to overcome the decline in sale of Sainsbury. On the other hand, 2 participant state that, high quality product and services is best strategy for increasing the sale. Hence, it show that both strategy is very effective which Sainsbury can used in order to increase the sale and profitability of business.
Concluding the entire research study, it can be said that sales ratio of Sainsbury have declined in past years and because of that market feasibility of the business is also changing. The research study was conducted with the aim of analysing the reasons that leads to decline in sales; hence according to the aim, researcher has analysed all such reasons that led declination in sales of Sainsbury. Competition has been increasing in retail market place and this is also amending the ratio of substitute products (Handlechner, 2008). Currently, people living in UK have many options to purchase retail products; hence this is one of the basic reasons that led declination in Sainsbury’s sales. This has a direct impact on company’s profitability and success aspects. Another identified reason is changes in service provision which does not satisfy end users.
Articulating the same aspect, it is also identified that sales of the company is reducing because customers are not satisfied with the existing service provision of the business (Reynoso, 2013). Along with this, it is also ascertained that customer switch over ratio has been increasing because of the availability of differentiated services by other industry players. Thus, marketing strategies of Sainsbury needs to be more effectual and valuable so that it can grab the attention of maximum number of customers (Dibb and Simkin, 2013). In this domain, it can also be said that because of competent and effective marketing strategies, Sainsbury has acquired greater market share in past many years. However, the policies are changing and customers are not getting suitable services in the same area of concern.
Declined sales have a direct impact on profitability of the business and this not only hampers the existing business practices; but also changes the interest of customers. At present market share of Sainsbury is declining and that is also affecting the interest of stakeholders. The company needs to adopt some ways and strategies so that it can underpin the ratio of sales. This is also crucial in terms of enhancing sales and profitability of business aspects (Brady, 2014). There are several factors prevail in external market place that impacts the business; hence Sainsbury is also getting impacted because of economic and social factors. In this way, it is also identified that changes in economic aspects transforms success and profitability level of business and this also impacts demand (Hermann, 2009).
Due to economic instability, customers are losing their purchase decision and this is affecting company’s success and growth facets. Thus, completing the entire research work, factors that changes company’s profitability aspects are evident. Moreover, in this area it is also clear that frequent changes in Sainsbury’s service provision have also affected the interest of customers and as a result, they are switching to other business entities (Wirtz, 2012). Thus, according to the discussion it is clear that there are varied facets that leads to impact the sales value of the business. Henceforth, long term declination in sales can affect sustainability of the business and it may lose the entire market share.
As mentioned in the above section, various things have been accomplished in the project and the project was basically conducted for the purpose of ascertaining the reasons that led to decline in sales and profitability of Sainsbury. At the time of conducting this study, I have undergone with various sources that also aid me to learn many things about the factors that declines the ratio of sales in Sainsbury (Siu, 2012). In order to conduct the research study, I have carried out interview session in which I have asked several questions from the leaders of Sainsbury. Thus, during that time period, I came to realize that there are various reasons exist in the business and because of that the ratio of sales has been describing (Mishulin and et.al., 2016).
Further, the leaders also mentioned several other reasons as well which reduces the sales of the company on greater extent. Thus, on the basis of entire analysis, I can say that sales sometimes decline because of faults in internal processing. Thus, on the basis of entire solution, it is evident that sales of the company keeps on changing from many years; however the basic reason that leads to declining in sales is huge availability of substitute products (Silver and et.al., 2012). I have also observed that there is fierce competition in UK retail market place and this not only creates competition; but also it leads to bring high customer switching to other brands.
Moving on to my experience about the research work, I can say that I have accessed various research materials and on that basis I came to grab materials about the subject matter. Working on the research study seems to be highly impactful for me as I have obtained in-depth and thorough analysis about each and every aspect (Wirtz, 2012). However, I have experienced several issues as well while conducting the subject matter; still somehow I managed to complete the entire research work in effectual manner.
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