Sainsbury

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Analyse’ and ‘evaluate’ the business strategy that J Sainsbury Ltd. has pursued using either Bowman’s strategic clock or Porter’s Generic Strategies framework.

Submission Date : 28th April 2012

Word Count : 1841

Introduction

Strategy is defined as how an organization and individual achieves its goals. The marketing strategies are altered as well as renewed in companies in the effort to survive and also prosper in an increasing demanding and complex business environment (Grant, 2010, p.270). The strategic imperatives have shifted towards a priority emphasis in order to develop a superior capacity to reinvest the business model (Cravens, 2010, p.20). Sainsbury mission and goal is to become the first choice of its customers in terms of food, deliver products which are of outstanding quality and service available at a competitive cost by means of working in a simpler, faster and together. Sainsbury have made fundamental changes which have transformed the business but in the course of action the company has stayed true to its heritage. Sainsbury passion towards food at fair prices and its ethical approach have remained central for their success (J Sainsbury Plc, 2012).

Figure 1: Business Strategy and Objectives

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(Source: J Sainsbury Plc-a, 2012)

Accessing Sainsbury’s strategy using Bowman Strategic Clock

The strategy clock which was coined by Cliff Bowman encouraged the mangers to consider competitive advantage with relation to cost advantage or differentiation (figure 1). It focuses on the price of the customers and their perceived value of the goods and services. It has been argued that Sainsbury pursue a differentiation strategy while others might argue that it has adopted the low cost strategy. It could be however said that the organisation has adopted both differentiation and low cost strategy and can be termed as “stuck in the middle” (Mantle, 2012).

Figure 1: Bowman’s Strategy Clock

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(Source: Johnson, 2008, p.243)

Theories and Analysis

SWOT Analysis has been performed in order to consider the internal and external factors of Sainsbury (See Appendix 3). J Sainsbury has been able to tackle the problem as it has been able to build the trust and can have faith on its customers at the worst condition. But the competition is also intense between the top four food retailers in UK and the hard discounters. It has been noted that Tesco and Asda are the top most retailers in UK and they have expanded in almost every part of the globe and this is where Sainsbury lacks and falls behind its current competitors (Mantle, 2012, p.7). Sainsbury can try to overcome its weakness by applying its strength and overcome its threat by applying the opportunity. As per the TOWS Matrix, (Appendix 6) Sainsbury has a huge opportunity to tap the emerging nations with its diversified portfolio and with its good corporate image .To tackle the external environment PEST analysis has been conducted. Sainsbury needs to consider the external environment in order to proceed successfully and take measures of the upcoming shortfalls with respect to the external environment (See Appendix 2). In order to tackle the problem, Sainsbury has adopted the policies of operating in EU and also other parts of the globe. It has joint hands with the British government to tackle the problem of obesity and have pledged to cut about 5 billion calories (Retail Detail, 2012).

Sainsbury has diversified its business ranging from food retail to non food retail outlets and has adopted the differentiation strategy. This adds on to the advantage of Sainsbury and helps to maintain competitive advantage and stay ahead of its competitors. But at the same time Sainsbury have many competitors who offer the same product (Appendix 5) which shows that the competition among the retail industry is quite high, but Sainsbury with its core competencies and diversified portfolio...
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