Business strategies play the very crucial role in development and growth of any business organisation. It is quite necessary that right kind of strategies is framed, so that dense growth can be achieved and the company can compete effectively in the market. There are always level submit these strategies which are saved by people sitting in different positions in an organisation, for example, CEO and managing directors are responsible for framing long-term strategies for the organisation, on the other hand, general manager is responsible for implementing those strategies in an effective manner. After these people the role of subordinates and employees will come. Sainsbury’s is a big company in the retail sector of UK (Champoux, Durgee and McGlynn, 2012). The company is having a diverse and big structure and therefore the strategies that needs to be framed plays a very crucial role in the success of the company in retail industry. The company is having around 17% market share in the retail industry. It is having locations in around 15 places and is committed to grow outside UK and in some of the parts of Asia. The compan operating income is around £400 million. Detailed discussion about the business strategy is followed by the company will be done in this report.
P1 Capabilities of Sainsbury’s and impact of various environments on company
Sainsbury’s is a big retail company in UK and it is at second spot after Sainsbury’s. The company is having diverse operations in various business segments and it contains in its supermarkets almost all the products of big as well as reputed brands of country and of the world. The company is growing fast and is expected to expand in various other countries as well, which will enable it to diversify its geographical portfolio and gain competitive advantage over its competitors in an effective as well as efficient way (Favaro, Rangan and Hirsh, 2012). There are various factors that affects the working as well as functioning of an organisation, the influence of these factors on organisation and its business are discussed as follows:
It is an analysis of macro environment of a company in which it operates. The macro environment consist of various factors like Political, social, legal, technology etc. What events take place in the external environment will directly impact the working of company through change in policies as well as strategies and thus it can be said that it is quite important to conduct a PESTLE Analysis by management of company from time to time. Every element of pestle analysis is described as follows:
There have been various political developments that has taken place in UK after Brexit, there is a shift in the policies of various countries within the Europe and this has impacted the overall growth as well as profitability of the company.
The most critical component of political variables of political gatherings and the parliaments of the country in which the organizations working. They are the person who is in charge of surrounding laws and also controls which will affect general working of the business by and large. Sainsbury’s is confronting different political turmoil because of the way that United Kingdom has chosen to exit from European Union (Grant, 2016). This has brought about different issues for the organization in light of the fact that the diverse unhindered commerce understandings that were sign the United Kingdom with European Union has reached an end and has affected the matter of the organization in a portion of the nations of Europe. Being a set up organization of UK it needs to roll out different improvements in its strategies and techniques keeping in mind the end goal to develop its business and manage its intensity. As a result of different other organized commerce understandings that can occur, the organization has chosen to put resources into different nations of Europe like hungry, Germany and a portion of the parts of France.
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A steep decline in the value of great Britain pound has been observed, and it is estimated that this is a negative for company and might affect it for a longer period of time. It is essential that company manages its geographical diversification strategies well in order to compact the adverse effects of Brexit on the company and its productivity as well as profitability.
Along these lines one might say that Sainsbury’s works in the part which is very vital from the perspective of customers (Ireland, Hoskisson and Hitt, 2012). The organization and its administration are surrounding fundamental methodologies with the end goal of powerful administration of the business. They ensure that any progressions inside the financial condition of the nation would not be antagonistically influencing the general business structure of the organization. Retail area is the division which is affected intensely by the sort of swelling that wins inside the economy. The level of expansion is high the utilization of clients will go down and along these lines at last effect the matter of Sainsbury’s unfavourably. The organization is surrounding important systems to defeat these issues.
There has been a constant demand of organic food from customers which is making it important for Sainsbury’s to fulfil the same in an effective manner. The company belives in sustainable business practices which has further gained the company precious customer loyalty in the market place.
In order to meet the ever growing demand for online shopping the company is making necessary arrangements to enter into online shopping sector by making heavy investments in its technological up gradation as well as R&D (Jensen and Berg, 2012).
It is quite important that all the rules and regulations of the land are properly abided by the company, for establish the business and its brand image for a longer period of time, and Sainsbury is committed to do the same by abiding the various laws and regulation affecting the retail sector.
The company is committed to reduce its carbon footprint to a great extend by 2020. It is also making necessary investments in order to make its process a bit more environment friendly and also consumer friendly.
It refers to the assessment of internal strength and weakness as well as opportunities and threats that are prevailing in the market, it is an analysis of the both in order to effectively strategize for the organisation.
Sainsbury’s is having a very good brand image and reputation in the retail market because of the high quality product offering at reasonable prices that the company provides to its consumers.
One of the important weakness that haunts company is that the retail market is a single operating market for the company and therefore, it does not able to enjoy the benefits of diversification. Also, The food business of company is operating at quite a low margin and it might end up in loss going forward.