In this assignment I will compare the challenges the business will face in a time of recession and in a time of economic boom. Every business will try to overcome the challenges in different way that they think are the most effective. First of all, I would like to talk about the challenges, which Sainsbury’s face during this recession. People’s confidence in buying decreases and they tend to save money rather than spend. Because of that the business faces the challenge of how to stay profitable. Most of the business will increase the price for their goods while Sainsbury’s took a different approach, which allowed for the business to attract more customers and stay profitable. The company reduced their products’ prices to stay more competitive in the market and attracted more customers and advertised their own brand ‘Sainsbury’s Basic Value’. What’s more, they have done a lot of promotion, because during the recession customers tend to spend less and buy only necessary goods. So Sainsbury’s were promoting goods, which people don’t need, but when customers see a discount on them they tend to buy it even if it is unnecessary. Another challenge that the company faced was staff redundancy, which allowed for the company to save money. In my opinion, Sainsbury’s in the near future will be changing the contracts – offering sessional hours such as zero hour contracts. This would allow the company to reduce the employee number without breaching the law. Second of all, during the boom the consumer’s confidence grows and the demand for the goods increase, so the business is able to recover quickly if it realises what actions have to be taken. Sainsbury’s took a great approach during the recession, which allowed them to keep their customers, so during the boom the company were able to stay competitive without making a lot of changes. During the boom one of the challenges for Sainsbury’s was to promote ecological food, so the company invested a lot of money into healthy...
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