The Factors affecting Sainsburys objectives
Sainsburys are a private sector organisation whose main interest is in gaining financial reward, such as profit and shareholder value. Sainsburys are a particular public limited company whose securities are traded on a stock exchange and can be bought by anyone. (Business dictionary 2008). So the strategic plan would therefore be particularly concentrated on generating profit although this can be balanced against the needs of the stakeholders. There are many factors, firstly there is the age of the business, since Sainsburys was founded in 1869, it has established itself as a leading retailer in the UK. This can be an advantage as new businesses opening would struggle to gain sales and would only be hoping to break-even to survive in the market. But Sainsbury’s has the brand reputation and large customer base to not be worried about any sales or profits targets it may set. Sainsbury’s has a massive 1000+ store network (Sainsburys.co.uk), so any costs it may need to cover such as extra promotional offers or marketing costs, Sainsbury’s should be able to cover this because of its large network of stores it can absorb the costs through its massive capacity of stores. Whereas this can prove difficult for new firms entering the market since they do not have the financial capacity to cover the costs. This can be of benefit to sainsburys has it can act as a barrier to entry as there are huge sunk costs to incur, for new businesses to get to Sainsbury’s level of business. Since Sainsburys has developed into a massive retailer which diversifying into new markets as produced greater sales and made it much harder for existing competition and new entrants to compete with the standard of Sainsbury’s. Another factor is the situation of the economy can affect the objectives set by Sainsbury’s, since the strategies set by Sainsbury’s would have planned at least 6 months ago and it may currently be a deterioration in the economy, the...
References: Telegraph (May 2009) Sainsburys enjoys profit growth as it proves recession winner – Amy Wilson
J Sainsbury’s PLC (2012)- http://www.j-sainsbury.co.uk/
Business Dictionary (2012)- http://www.businessdictionary.com/
Revision Express Business studies AS & A2 (2008) - Barry Brindley, Martin Buckley
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