Module name: Business Strategy for a Competitive advantage
Name and student number: George stevens 10071474
Submission date: 27th april
Table of contents
2. Analysis and evaluation of the business strategy that J Sainsbury Ltd has pursued using Bowman’s strategic clock 3 3. Identification and analysis of the unique resources and capabilities that underpin the value chain 4 4. Identification and justification of the two most critical challenges that J Sainsbury Ltd might face in an international expansion plan5 5. Conclusion7
The success of organisational strategies is usually depended on various factors; the characteristics of the market and the industry involved as well as the organisational capabilities are taken into consideration for evaluating the ability of each organisation to secure its market position in the long term. Current paper focuses on the operations of J Sainsbury Ltd, a major competitor in the grocery retail sector of UK. For the last 5 years the sales turnover of the organisation has been significantly increased, reaching in 2011 the £21,102m, compared to £17,151m in 2007; also, for the same period, the operating profit of the organisation has been increased to £851m in 2011 from £520m in 2007. At the same time, the firm’s cost of sales has been also increased, reaching the £19,942m in 2011 from £15,979m in 2007; on the other hand, the firm’s gross profit has remained at same levels from 2007 up to 2011, indicating the inability of the organisation to support its growth in the UK market. The analysis and the evaluation of the organisation’s strategies and capabilities will help to understand whether the firm’s position in the UK grocery retail sector would be improved and whether the expansion of the firm in the international market could support the organisation’s growth.
2. Analysis and evaluation of the business strategy that J Sainsbury Ltd has pursued using Bowman’s strategic clock Bowman’s strategic clock, as presented in Figure 1, Appendix is used for the identification of strategies that promote effectively the organisational goals (Rosenhauer 2008,p.11). One of the key challenges in regard to the use of the Bowman’s strategic clock is the following one: the identification of the appropriate strategy, among the strategies included in the above model, is often difficult, especially if the priorities of the organisations are not clear. According to Muller (2011) organisations can use the Bowman’s strategic clock for identifying strategies that are most feasible having in mind the resources available and each organisation’s internal and external environment. The Bowman’s strategic clock is based on the following principle: each organisation should choose strategies that most respond to the plans of the organisations in regard to the value and price of its products/ services (Needle 2010, p.281). Using the Bowman’s strategic clock, the strategic choices of Sainsbury’s could be analysed as follows: as noted in the case study, the firm is among the four key players in the British grocery retail sector (case study, p.1). The above fact can lead to the following assumption: the particular sector in Britain can be characterised as oligopolistic, allowing the growth of specific firms. From this point of view, the parts no 6, 7 and 8 of the Bowman’s strategic clock cannot be applied in Sainsbury’s, since the strategies incorporated in these parts are feasible in monopolistic industries (Figure 1, Appendix). The potential use of the other parts of the strategic clock would be further explored. Part 1 is characterised by both low price and added value. Such strategy would lead to the decrease of quality of the firm’s products towards...