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Business Environment of Sainsbury Company

University: Bloomsbury institute london

  • Unit No: N/A
  • Level: High school
  • Pages: 8 / Words 2061
  • Paper Type: Essay
  • Course Code: LSBM103
  • Downloads: 428
Question :

This assessment will cover the following questions:

  • Sainsbury is one of the largest supermarket chain in the United Kingdom and provide variety of grocery items. Examine the micro and macro environment forces that affects the performance of the organization.
  • What are the strategic tool used by the Sainsbury company to analyze their internal business environment.
  • How value chain model helps in understanding the internal business environment of Sainsbury company.
Answer :
Organization Selected : Sainsbury

INTRODUCTION

Value chain analysis is the procedure in which a company identifies its support and primary activities that adds value to their final products and further these activities are helpful in reducing cost or enhancing differentiation. It represents internal activities where a company engaged in when the inputs and outputs are being transformed.

J Sainsbury Plc trade as Sainsbury it is the third biggest chain of supermarket in whole United Kingdom. The company has market share of 15.3 % in supermarket share. The above report includes description of value chain model. The brief overview of company and report ends with the reflection on Value Chain Model.

Value Chain Model-

The value chain is also known as the Porter's Value Chain Analysis is the business management concept which was formulated by Michael Porter. It is the model which helps for analyzing specific activity by that company can develop competitive advantage and value for them. It is the strategic tool that is used for analyzing companies internal activities. The main aim of company is to recognize that activities that are most valuable for company and which can be further improved for providing competitive advantage. The company which competes with differentiation advantage they will better perform the activities as compare to their competitors. Whereas if company competes by cost advantage, they will try to perform internal activities at low costing than their competitors (Hernández and Pedersen, 2017). It represents all internal activities company engaged for producing products and services. It is established by primary activities which add value to finish product and support activity directly which add value indirectly in it. Value is directly added by primary activities to production process, they are not much important than support activities. Competitive advantage is derived from innovation or improvement in technology in their business model or the process. Thus, this all support activities such as 'research & development', 'information system' and 'general management' which are usually most essential source of the differentiation advantages. The primary activity is source of the cost advantages, where each and every activity is identified and properly managed along with identification of cost for that as well. It is the formulation for breaking down business function sequence into strategic relevant activities by which utility is to be added to goods and services. The value chain analysis to be undertaken for understanding behavior of cost and differentiation source. For performing the value chain, company begin by recognizing each and every part or their production process. Identifying where step could be improved and eliminated. Further this improvement reflects improvement in their productive capacity and either saves costing (Vijayan and et.al., 2020). The consumer gets major benefits from the goods at the cheap price, which is also helpful for company to get success in their business for long term. Main objective of the value chain is for measuring value delivered and contributed profit by each linked chain. Many of the organization are engaged in the number of activities for converting the inputs into outputs.

Sainsbury-

Sainsbury was established by John James Sainsbury in 1869. It is the third largest supermarket chain in United Kingdom. The company had its headquarter in London, United Kingdom. Net income of company is £309 million. They employ over 186,900 employees in their stores. Sainsbury operates its business activities to around 21 million consumer's transaction every week. They had 2000 suppliers and it is spread-ed to the over all main cities of the UK. The company had also developed the positive effect on economy and environment. It was founded by John James Sainsbury in the 1869 (Zamora, 2016). Its business is operated in across 1,000 stores along with 440 convenience stores. It also jointly owned Sainsbury's Bank also with Lloyd Banking Group. They company has also done property joint venture with British Land Company PLC and Land Securities Group PLC. They had developed the strong brand reputation across marketplace. Fair trade is also introduced by company which is firstly developed by them in the marketplace. Sainsbury offers wide range of quality grocery and food products (Schumacher, Erol and Sihn, 2016). The subsidiaries of the company are Sainsbury's Bank, Argos, Habitat, Sainsbury's Supermarket Ltd., Nectar and Sainsbury's Local etc., company deals as the retailing industry and conducts its business activity in this sector. The sovereign wealth fund of Qatar which is the Investment Authority in Qatar, holds the largest shareholder that is 21.99% of company. It is listed in the London Stock Exchange and is also constituent of FTSE 100 Index. Company was also trying to merge with Asda but due to hike in consumer price the merger among the both companies have been not done. In which both companies have estimated 30% of share for UK grocery market the products of company are supermarket, forecourt shop, superstores/hypermarket and convenience shop. 

Internal Environment-

Value Chain is the activity that is used by Sainsbury for organizing and conveying essential product and service in the marketplace. It has been carried out for finding out series of activity that company perform. It can be described below-

Primary Activities:

Inbound Logistics-

Goods are not manufactured by company rather than get their products from several suppliers. So it reflects that they had a significant relationship with suppliers in their operation activities. Quality products are ordered from suppliers in which it is ensured that appropriate quality and amount of product is received by them at low price (Amara, Halilem and Traoré, 2016). Sainsbury's top management are to be certified as quality products are brought in bulk specially those who are highly demanded. Goods are distributed one's if there is any order received from their physical store.

Operations-

It is very essential for analyzing operational activities when raw material arrived, organization is ready to process raw material into finished good and further product is launched in marketplace. Some major operational activities are machining, product testing, packaging and assembling. Sainsbury can gain high productivity, maximize efficiencies and ensuring competitive success by maintenance and repairing of the products and machinery.

Outbound Logistics-

Outbound Logistic deal with various activities such as storing, collecting and distribution of output. Sainsbury had many choice of making its delivery could include standard delivery, collecting and Saturday delivery. Company has many store that supports them for proper administration of company (Thomas-Francois, von Massow and Joppe, 2017). Transport logistics are also used by company for minimizing cost and deliveries duration.

Marketing and Sales-

The products and services which are offered by them to their customers. They must ensure that better and qualitative product is to be offer by them to their consumers. If company renders huge quality product with differentiated features then also they could get up by their competitors for that they had to implement appropriate marketing strategies is very essential. This indicates that sales and marketing plays a major role in the growth and development of company. Some marketing activity are sale force, pricing, advertisement and promotional activities. Marketing funnel approach is to be used by Sainsbury for sales and marketing activities. Marketing strategy can be designed for pushing and pulling nature that is depended on objective, competitive dynamic, brand image and current market position of Sainsbury in the market place.

Secondary Activities:

Infrastructure-

The infrastructure plays a major role in supermarket industry. The supermarket of Sainsbury has several levels of the management, monitoring, departmental quality and evaluation so that it can be ensured that quality good and service could be rendered by them through the reputed protocol of the assurance of quality. Constantly governance issues can be addressed by the company's board of director and executive committee of the supermarket. Supermarket has operating income of £518 million (Camerinelli, 2016). The acquisition of Aldi and its infrastructure has indicative that Sainsbury has its advanced infrastructure.

Human Resource Management-

Human resource is most supportive and essential function which ensure organization's success. The department of Human Resource at company is accountable for selection, recruitment, motivation and training of employees. It is responsible for ensuring retention of employees for long term in organization. Sainsbury has more than 180,000 employees who work for rendering the satisfaction to their consumer and work towards the achievement of goal and objective of company. They include employee retention practice in their business operation sop that they can motivate their employees by providing them intrinsic and extrinsic reward. The proper and time to time training are rendered by the company to their employees so that their employees have scope or opportunities to work extraordinary.

Technology-

Nowadays most of the value chain analysis activities are depended on the technological innovation. The integration in technology is to be needed by Sainsbury as it is important for company to development technology in their marketing, distribution and human resource activities. Further it can be divided into process and product technology development activity (Ghawana and et.al., 2016). Various technologies are developed by the company so that they can easily perform their all activities and render high quality service and products to their consumers. Company is time to time up to date with various automated service so that consumer's time could be saved and they could have better shopping experience with company.

Reflection on the Value Chain Model-

The Value Chain analysis is very helpful for company to gain huge competitive success and advantage for them. The company can improve their relationship with consumers and suppliers so that they can deliver products to their consumer on time when its is demanded by them. Communication with customer should be enhanced so that they can render superior quality information to them and further they will be motivated to purchase goods from the stores. They must also emphasis on maintaining their brand reputation, brand awareness with the help of effective marketing and advertising of their stores and products. There should be coordination among research, product and marketing development. Wide sale force is to covered by them so that they can attract quantity of individual to their products (Sainsbury, 2019). Superior quality services are to given to the consumers at stores so that their time could be saved. They must render high quality technical assistance in which they can provide quick and reliable maintenance and repair services. The reducing product damage effective handling and good shipping should be used by company. Sainsbury must deliver product on time along with flexible capabilities of delivery so that there consumer can be satisfied by their services. For procuring the high quality input for offering high quality final product. They also have incoming input handling so that damage can be reduced by them in their product. Company has flexible manufacturing system and render wide range of products to their consumers. Product appearance can be improved so that it can attract more and more consumers to them. With the help of technical specification product performance can be improved (Ellis, Kwofie and Ngadi, 2019). Consumer satisfaction rate can be enhanced by low defect rate. They can implement the advance information systems so that they can get deep consumer insight. Attractive rewards and incentive can be rendered by them to their employees so that they can be encouraged and motivated for keeping their good work ahead and maximizing productivity of company.

CONCLUSION

From the above study it has been concluded that the Value Chain analysis is very important for growth and development of company. The further implementation and improvement in various strategies of company in their operational and functional activities is helpful for them in gaining huge competitive advantage. Company can render high quality good and service to their consumer so that more and more consumers had gain their interest for the company's product. The employees must be motivated and encouraged so that they can work for the betterment of company and thus company's goal and objective can be further achieved. And so company can gain huge success in the competitive marketplace.

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