MGT604 Strategic Management Research Report Sample

MGT604 Strategic Management Research Report Sample 2

Assessment Task

Individually, you are required to:

• Monitor news and online sources of opinion to identify three (3) separate strategic   influences that together impact on the outcomes of an organisation of your choice

• Discuss how the practice of strategy categorises these strategic influences and identify the implications for the organisation in question

• Identify a strategic course of action to address these circumstances

Please refer to the Task Instructions for details on how to complete this task.

Context

The assessment of this subject supports students in developing their skills and knowledge in the foundational management topics that include external environmental assessment, problem diagnosis, strategy development, and the consideration of cultural and ethical contexts. Effective strategic management is designed to proactively respond to changes in technology, external environment, and market tastes. A contemporary understanding of the dynamic forces shaping strategic choices is essential for the successful execution and delivery of strategy.

Instructions and Deliverables

1. Over the duration of the course, you are to monitor news and online sources of opinion to identify three (3) separate strategic influences that together impact on the outcomes of an organisation of your choice. These influential factors may be local, national, or international in nature, but they must represent a changing or evolving story. For example, advances in battery technology, stricter emission controls, and a general move towards sustainable energy has resulted in General Motors (and indeed almost all car manufacturers) actively marketing electric or hybrid models for release in coming years. Note this example is not to be used in your submission.

2. You are to discuss how the practice of strategy categorises these strategic influences and identify the implications for the organisation in question.

3. Drawing upon your understanding of theories, models and frameworks discussed in class, you are to identify a strategic course of action to address these circumstances (by either capitalising on positive influences or minimising the impact of negative influence) in a way that will result in long-term benefit to the organisation. This should include a statement of the firm’s revised goals as a result of this change in strategy.

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Solution

Introduction

Sainsbury's is among the leading supermarket chain in the UK. It has a bigger share in the market as could be seen from the study. As per the MBA Assignment Expert, Recently reported, Sainsbury's has agreed upon a strategic wholesale partnership with Coles which is one of the leading food and drink retailers in Australia, thereby it is ensuring its presence in other markets as well. Sainsbury's supplies its brand products which are of higher quality to Cole's supermarkets across Australia. The study will include discussions on the external environment, strategic factors, and strategic course of action of Sainsbury's and will focus on the UK market. Sainsbury’s has been found to have driven its sales, however, lately certain issues have been observed such as the recent late-night technical problem which has left the shoppers furious (Shufflebotham, 2022). The website went down around 9 pm displaying ‘essential maintenance is taking place which made the customers wait for a long. Besides, another issue of Sainsbury’s is price pressure and consumer electronics shortages. 

Aim

The aim of the report is identifying three strategic influences that are likely to impact Sainsbury's outcome. The three important inferences include environmental sustainability, competition, and technology. 

Company’s Overview

Sainsbury's is one of the largest and most well-known supermarket chains in the UK. However, it is doing great business in Australia as well. It moreover has a profound online presence in the UK market. The strategy of Sainsbury's is confined to five pillars which it maintains to the core (Sainsburys, 2022). The first is that Sainsbury's is always focuses on understanding its customers better. Secondly, it emphasises providing excellent services and products at fair prices. Thirdly, it always stays connected with the customers wherever or whenever. The main difference that has distinguished Sainsbury's from other similar retailers is its employees, values, and the way it perceives its customers.

Discussion

External Analysis of the organisation

Political Factors: The political factors include government regulation and policies of the retail industry in the UK. This factor impacts the profitability and revenue generation of the retail industry. With political stability in some areas, Sainsbury's can ensure better business, however, political disruptions may lead to disrupting the sales and supply chain (accc.gov.au, 2017). For example, if it is operating in Australia with Coles, Australian Federal Government's Consumer policy will impact Sainsbury's business operations.

Economic Factors: The governmental and economic factors overlap in a few areas such as taxation requirements and supply chain management (Commission, 2018). Any change regarding the stability of the economic environment will be advantageous for Sainsbury's, however, it can be detrimental as well. For example, change in base rate pay.

Social Factors: One of the major changes observed in the past few years is consumer awareness. There have been changes in modern lifestyle which has on the other hand developed several habits within the retail industry. Factors such as status are likely to affect the retail industry in the UK (Sainsbury et al., 2020). Moreover, Sainsbury's need to focus that the demand of today's customer as different from that of previous generations’ customers. Today's generation place more emphasis on health thereby Sainsbury's introduction of the product line of organic product can be advantageous.

Technological Factors: In the UK retail industry, technological factors are among the key drivers of change that play an important role in sales, customer service, customer retention and supply chain. With the advent and growing popularity of digital technology, the number of retailers has also increased. Customers moreover nowadays prefer to shop online and carry on the payment transaction online (Roy et al., 2018). This does not only save time but it is an easier process as well. Sainsbury's has observed exponential growth due to technology. It has pleased its customers by upgrading with technology such as self-service checkouts.

Legal Factors: Political and legal factors overlap with each other. There are UK laws that can either benefit or challenge the retail industry. The UK government has strict regulations to check the illegal trafficking of any retail product (Patil & Ramakrishna, 2020). This way several supply issues have been reduced along with reducing price fluctuations. However, for retailers adhering to labour laws can be expensive.

Environmental Factors: There is a need to remain environmentally and socially active in the retail industry. Renewable energy, waste reduction, packaging, and plastic bag debates are some of the concerns that any supermarket chains face.

PLETSUS model

The PLETSUS model refers to practices leading towards sustainability wherein any company who wants to ensure sustainability must focus on its people where in PLETSUS people refers to suppliers, employees, customers, management and community. Moreover, PLETSUS model allows companies like Sainsbury’s to focus on its products such as packaging, design, marketing and manufacturing. This furthermore includes place, process and profits that ensure sustainability of the company. 

Moreover, as a part of strategic influence, Sainsbury's is focusing on leading its practices towards sustainability which can be explained with the help of the model 

PLETSUS. This can include the following: 

People: Sainsbury's has employed around 189,000 employees from across the globe. It emphasises providing proper training to the employees and thereby has recorded to retain most of the employees and talented workforce as compared to other supermarket chains (Sillars, 2021). Moreover, as mentioned, Sainsbury's primary focus is customer service and it focuses on providing excellent quality products and services at a reasonable price, it has updated with modern technologies and thereby has given the customers enough reason to come back to Sainsbury's every time. The company moreover has a profound relationship with its stakeholders and suppliers which is tied to sustainability policies.

Product: Sainsbury's helps other brands to launch their new products and thereby enhance brand awareness in both emerging as well as developed markets (Sainsbury, 2021). It works in an innovative and collaborative manner. It keeps on updating with new approaches to its brand packaging. It works collaboratively in partnership with the product suppliers, assessed all packaging suppliers, and focuses on all facets of packaging procurement. This way, Sainsbury's can ensure consistent quality and the highest standards (Qureshi, 2020). It has moreover cut down the usage of plastic packaging and with proper packaging, it could deliver undamaged and fresh products.

Place: Sainsbury's has a good transportation system wherein it ensures that the products that are being transported remain intact and undamaged. Moreover, it focuses on providing an experience of convenient shopping to the customers. It has both a brick-and-mortar store and an online presence (Qureshi, 2020). Recently, the online presence of Sainsbury's has helped it to generate more revenues. 

Process: Sainsbury's sources many of its products from the UK to around 70 countries including Australia as per the supplier’s ability to meet the regulatory audited safety, quality as well as ethical standards.  

Profits: 

In the 2022 financial year ending, Sainsbury's has recorded a total profit of 854 million British pounds before tax and around 677 million British pounds after tax. This has indicated a significant improvement from 2021, while, reportedly, the company has experienced a loss (Sainsburys, 2022). Sainsbury's has invested in reducing carbon emissions and has generated good profit from it. 

Three Strategic Factors That Impact The Chosen Organisation

Technology: Sainsbury's came up with effective strategies in order to enhance its sales growth by providing its consumers with an excellent shopping experience. It has installed self-checkouts in all its stores which have made shopping easier for the customers. It has opted digital transformation strategy and gaining revenues from the online website. It has come up with a new technique of 'Scan and go' as well.

Competition: Sainsbury's is likely to confront a bigger dimension of rivalry from several supermarket chains such as Aldi, Tesco, and so on. There are probabilities of new entrants in the Australian market as well who may produce better strategies and technologies to attract more customers, destroying the leading supermarket in Australia (Bentham, 2018). This is why, while in Australia, Sainsbury's must keep on updating its strategies. Moreover, Amazon is likely to give tough competition to Sainsbury's as it has around 2500 grocery and food products available online (Qureshi, 2020).  To compete with this, Sainsbury's needs to pull down its prices. 

Environmental Sustainability: Sainsbury's has faced challenges and problems regarding completing the sustainability target. Sainsbury's has reduced its plastic use in the stores. Apart from that, it is also focusing on energy efficiency (Sainsbury's, 2022). In order to cut down the greenhouse gas emission, Sainsbury's has planned in installing LED lights in its stores to improvise its refrigeration efficiency by avoiding electricity usage much in the store.
The way the practice of strategy categorises the factors and identification of the strategic implications for the organisation

Strategic Implications of Sainsbury’s 

Sainsbury's must first establish clear strategic objectives and goals for the company in order to have a strong strategic practice. Additionally, the workers must be included in the implementation duties in order to assess the progress, ideally every quarter. Additionally, Sainsbury's emphasises the development of good communication using measurable and clearly defined KPIs. The company makes it a point to give staff members all the tools they will want for carrying out the strategy assignment.

Partnership with the supplier to enhance environmental sustainability: Sainsbury's has solid relationships with all of its suppliers in the UK, but it may expand its network of suppliers to lessen any one supplier's monopoly in the market (Patil & Ramakrishna, 2020). By partnering with ample suppliers in the UK market, Sainsbury's can get fresh food and raw materials and thereby can retain potential customers by cutting down existing supplier monopoly. The scorecard can help them to track their performance.

The supplier and a good supply chain can help Sainsbury’s to enhance its environmental sustainability. Sainsbury’s remains accountable to its suppliers and has connected the customers with the suppliers which have added to its sustainability as by doing so Sainsbury’s could get feedback from customers and engage only with those suppliers who are sustainable (Sainsburys, 2021). Sainsbury’s moreover is the principal supermarket partner of COP26 which is the United Nations Climate Change conference. 

Decrease the price to stay in competition: It has been determined that Sainsbury's has more advantages than disadvantages, particularly in the area of internal weakness (sainsburys, 2021). Furthermore, Sainsbury's has a solid consumer base that believes in the reputation of the company. However, in order to draw in more clients and stay firm in the competition, the competing businesses developed additional items at reduced pricing (sainsbury’s, 2022). As a result, Sainsbury's should concentrate on lowering the cost of a few of the models. 

Innovation in terms of technology: Innovation in terms of technology can go a long way and help Sainsbury’s to excel in business. Sainsbury's is opting for new methods to attract potential customers. It has come up with online shopping to retain customers having lesser time for shopping. Moreover, Sainsbury's has introduced a new innovative recycling system to a total of around 520 supermarkets (Wright, 2021). The rollout is likely to allow all the shoppers and customers to recycle all the flexible plastic packaging. This is however not always commonly accepted, specifically for kerbside collection by the authorities, specifically the local authorities. 

Identification of a Strategic Course of Action That Can Be Adopted By The Chosen Organisation

Sainsbury's needs more than just an understanding of external and internal issues to succeed in the retail sector. From this point forward, it is necessary to adopt both corporate and business strategies. The market's competitiveness, however, is likely to have an influence on the approach selections, so bear that in mind.

The strategic course of Action that Sainsbury's can adopt is as follows: 

Emphasise reducing cost: While the company's financial situation will be in a dire state, Sainsbury's can achieve a decrease in the overall cost by cutting down the complexity of the company, cutting down stock levels, streamlining processes, lowering accommodation expenses, postponing investments and so on (Sainsbury et al., 2020).

Emphasise core operations: Sainsbury's must invest solely in the operations of the company. It can similarly divest the non-core operations that can distract management. Sainsbury's instead can emphasise strengthening and improving the overall operations, thereby increasing its overall capacity to serve potential customers.

Downsize: Sainsbury's needs to downsize the business's loss-making and marginally profitable operations to increase its financial capacity. This can help Sainsbury's to develop more investment scopes in its core operations.

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Strategic Goals That The Firm Should Use and Their Implication for The Organisation

The strategic goals that Sainsbury's must use include the following: 

1. Contributing to the environment: Contributing to the environment will have significant implications for the organisation. Recently, Sainsbury's has cut down its use of plastic packaging to reduce the negative impact on the planet. It focuses on ensuring that all the operations are sustainable, thereby curbing plastic usage across the supply chain and operations. For example, it has introduced its own brand 'toilet rolls' to cut down plastics by 30% (Sainsbury's, 2022).

2. Sourcing with integrity: It has KPIs and commitments to the source with integrity (Sainsbury's, 2022). It has promised to source all raw materials in a sustainable manner.

3. Focus on introducing healthier options: The three strategic factors that can impact Sainsbury’s include technology, competition and environmental sustainability. If Sainsbury’s focuses on providing healthier options to its customers in terms of introducing new product lines of healthy food options it can stay ahead in competition. Moreover, providing a healthier packaging can be sustainable as well in terms of leaving behind a positive impact on society. Besides, customers, these days are more aware of environmental sustainability and opting for a healthier option that is light on the pocket as well, thereby choose those supermarkets that focus on the same.

Recommendations

Based on the discussions the following recommendations can be made:

1. Sainsbury's must use the latest strategies that can help it to attract new and potential customers. 

2. Moreover, it is recommended to Sainsbury's to introduce more technology as it can guide it to retain potential customers.

3. Sainsbury's is recommended to provide training to all the employees, both existing and new regarding handling the new technology, specifically for online shopping (Sainsbury, 2021). 

4.  Sainsbury's management is recommended to engage more suppliers which can help them to cut down the dominance.

Conclusion

Of late, Sainsbury's came up with new technologies and strategies to reduce negative impacts on the planet which it has previously struggled with. From the study, it can be found that the strategic influences and advent of new technologies can help the company attract and retain new customers. The reason behind this is that, customers nowadays prefer to invest less time while shopping and if supermarkets like Sainsbury's are emphasising on providing exclusive shopping experiences, it can not only retain its existing customers, but can also attract new ones. The study has moreover highlighted three strategic factors that are likely to impact Sainsbury's including technology, environmental sustainability, and competition. From the study, it could be found that if Sainsbury's focuses on these three aspects, it can build a strong relationship with the suppliers and customers in the UK market. 

References

Accc.gov.au. (2017). Consumer protection. Australian Competition and Consumer Commission. https://www.accc.gov.au/consumers/consumer-protection

Bentham. (2018). Business and Economics in the News – Sainsbury’s and Asda - the decade’s mega-merger - ProQuest. Www.proquest.com. https://www.proquest.com/openview/1491827e07f4203426acbffb3447a78c/1?pq-origsite=gscholar&cbl=33585

Commission, A. C. and C. (2018). Consumer rights & guarantees. Australian Competition and Consumer Commission. https://www.accc.gov.au/consumers/consumer-rights-guarantees#:~:text=The%20Australian%20Consumer%20Law%20sets

Patil, R. A., & Ramakrishna, S. (2020). A comprehensive analysis of e-waste legislation worldwide. Environmental Science and Pollution Research. https://doi.org/10.1007/s11356-020-07992-1

Qureshi, W. (2020, June 23). EXCLUSIVE: Sainsbury's announces a new approach to own-brand packaging. Packaging News. https://www.packagingnews.co.uk/top-story/exclusive-sainsburys-announces-new-approach-brand-packaging-23-06-2017

Roy, S. K., Balaji, M. S., Quazi, A., & Quaddus, M. (2018). Predictors of customer acceptance of and resistance to smart technologies in the retail sector. Journal of Retailing and Consumer Services, 42, 147–160. https://doi.org/10.1016/j.jretconser.2018.02.005

Sainsbury, E., Magnusson, R., Thow, A.-M., & Colagiuri, S. (2020). Explaining resistance to regulatory interventions to prevent obesity and improve nutrition: A case study of a sugar-sweetened beverages tax in Australia. Food Policy, 93, 101904. https://doi.org/10.1016/j.foodpol.2020.101904

Sainsbury. (2021). Sainsbury Design – Packaging & Design Company. https://www.sainsbury.co.za/

Sainsburys. (2021). Sustainability. Www.about.sainsburys.co.uk. https://www.about.sainsburys.co.uk/sustainability

Sainsbury's. (2022). Plastic. Www.about.sainsburys.co.uk. https://www.about.sainsburys.co.uk/sustainability/better-for-the-planet/plastic

Sainsbury's. (2022). Sainsbury's wholesale ambitions move ahead with the Australian deal. Www.about.sainsburys.co.uk. https://www.about.sainsburys.co.uk/news/latest-news/2019/11112019-sainsburys-wholesale-ambitions-move-ahead-with-australian-deal#:~:text=Sainsbury

Sainsbury's. (2022). Sourcing with integrity. https://www.about.sainsburys.co.uk/~/media/Files/S/Sainsburys/documents/making-a-difference/sainsburys-sourcing-with-integrity-kpis.pdf

Shufflebotham, B. (2022, June 2). Sainsbury’s shoppers fuming after tech problems affects Bank Holiday shop. Manchester Evening News. https://www.manchestereveningnews.co.uk/whats-on/whats-on-news/sainsburys-shoppers-fuming-after-tech-24128337

Sillars, J. (2021). Sainsbury’s warns of price pressures and consumer electronics shortages ahead of Christmas. Sky News. https://news.sky.com/story/sainsburys-shrugs-off-supply-woes-and-declares-it-is-in-a-good-position-for-xmas-12459455

Wright, G. (2021, June 24). Sainsbury's announces the largest rollout of innovative in-store recycling system - Retail Gazette. Www.retailgazette.co.uk. https://www.retailgazette.co.uk/blog/2021/06/sainsburys-announces-largest-rollout-of-innovative-in-store-recycling-system/

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