Business Strategy Of Sainsbury And The Superstore Sector

Due to the fact that they are in an oligopoly market, Tesco 's decisions would be mainly

In the following report we will be going over our analysis and findings during the process of our study of Sainsbury’s internal and external environment.

Tesco's have different stakeholders who effect the business. One of their stakeholders are the customers, because these are the people who buy from Tesco

Sainsbury’s goal is to reflect they commitment to meeting customers’ needs; however, they want to shop food, clothing, general merchandise and services also they vision is to be trusted retailer where people love to work and shop. They strategy plan is to know they consumers better than anyone else, be there for them whenever they need them also offering great products and services at fair prices. They colleagues make the difference; they value makes them different.

Customers- Customers want the company to improve and give them better value for every product they buy. They want the company to produce high quality products for them. Customers are one of the main stakeholders of private sectors such as Sainsbury’s because without them Sainsbury’s wouldn’t achieve their aim.

The threat of entry of the supermarket industry in US is low, which base on the analysis of the three major sources that related to the entry barriers. The first barrier is the economies of scale of the existing large supermarkets. When these incumbents achieved larger volume sales, they can have lower unit costs than new entrants, and it will very difficult for those new entrants to compete with them (Johnson, Whittington, &Scholes 2011). For example, Wal-Mart had invested in innovative procurement, automated distribution centre and bar coding to increase its economies of scale, and these investments created a great barriers for new small retailers to enter into the supermarket industry (Porter 2008). The second barrier is the incumbency advantages, which mean the incumbents established their own strengths that cannot be used by competitors (Porter 2008). For example, the top ten supermarkets in US have accumulated extensive experiences on how to run their businesses more efficiently than new entrants (Johnson, Whittington, &Scholes 2011). The subtle differentiation between the products that sold in supermarkets is the third barrier for new entrants. Because most of the product assortment is same or similar between each supermarket,

Trader Joe's faces several threats to its business, as competitors try to invade the company’s niche and attempt to imitate the company’s core strategies. The supermarket industry itself faces a major threat, as larger chains such as grocery retailers Wal-Mart and Tesco have begun to open small-format stores that mimic the Trader Joe's approach. This invasion results in additional cost pressure for incumbents like Trader Joe’s, which had to let go employees in order to become more cost competitive.

The threat of substitutes in the food retail industry can be high among the ‘Big Four’ as switching costs are relatively low and products can be similar. However, most have their own private labels and also target slightly different markets, such as Sainsbury’s having more upmarket positioning and Tesco’s cost leadership. Waitrose offers unique and differentiated products, which are, in the eyes of the consumer, significantly superior. No other supermarket offers such premium quality products with great service and such a large range of organic products as Waitrose, so this makes them extremely difficult to substitute. (Euromonitor, 2008).

Bargaining Power of Customers: Tesco frequently consults their suppliers and discuss pricing arrangements. Tesco also ensures that all aspects of their supply chain benefit from their relations with Tesco.

In this assignment I will identify what competitive factors and changes Tesco faces in the retail sector and how it might respond to these under the following headings; retail environment using PESTEL, and competitive environment based on overcoming barriers to entry, pricing, new markets and mobile population. In this assignment I will be talking about how Porter’s five forces are being used by Tesco.

And the quick ratio3 indicates the company’s ability to repay immediate commitments using cash or near-cash assets4. From the trend analysis5, the short-term liquidity level as measured in current ratio of Sainsbury has decreased significantly amid the financial crisis, resulting 0.66(2008) and 0.54(2009) respectively. It may be because those current liabilities are rising faster than current assets, or the firms investing substantial amount of its liquid assets (e.g. cash) into long-term investment, resulting a decrease in the above two liquidity ratios continuously from 2008 to 2009. Moreover, adverse trading conditions in recession may cause inventory becoming obsolete or introduction of new models by competitors. Nevertheless, as the UK economy has dragged out from recession steadily from 2010, current ratio has improved, reaching at 0.66 and is closed to the industrial benchmark Tesco at 0.69. Present quick ratio of Sainsbury is 0.38, which has improved from

Sainsbury’s incentivises in making lives easier by delivering fair prices and quality services; location being key focus, seeing growth in both convenience and discount stores, enticing more consumers every day. J Sainsbury’s plc (2015) Strategic Report is divided in two sections; the non-financial KPIs are: Product Quality, Like-for-Like Transactions, Price perception, Sales growth, Service growth by Area/Channel, Availability and Customer Service that focuses on social responsibility as Fredrick (1960) and Friedman (1970) agrees in taking opportunities to fulfil the needs of stakeholders be it efficiency, that too ensuring the management follows governance, codes and compliance to minimise risks which enhances the socio-economic welfare

Porter (1980) identified some competitive forces that shapes and fosters competition in a market and determines the inherent long run attractiveness of a market. He also said that, this analytical tool could be effectively used to understand the industry level situation. However, the findings based on the Porter's model clarify that, the company has strong competitive situation now in the UK as ASDA has strong rivals like; Tesco, Sainsbury's, Morrisons etc.

As for The Co-operative, I consider that they barely have risk of entry by potential competitors. The most important reason is the price of products. Just I mentioned above, this grocery retailer tend to create strategy of low price in this industry. As we known, low price strategy will make most potential competitors give up, the key factor is low price will cause them cannot compete existing enterprises. After all, most of existing grocer y retailers have existing distribution and customers, thus they can control their price of products lower than new entrants. That is the main reason why they face lower risk of entry by potential competitors. At the same time, large economic scale results in them have power to bargain the price and control the cost, thus this retailer can get the fantastic price from the suppliers. Finally, most customers will be attracted by their low price products. This phenomenon shows that they are the higher bargaining power of buyers in this industry. In the most of case, lower price equal this retailer has larger bargaining power. Just like a theory of economy, if buyer want to buy many products and has large-scale economy, these factors will make them have very strong power to

The supermarket wars has been increasingly frustrating for consumers as sometimes consumers tend not to know where to get the best deals, as they all advertise the same price and brands, in the UK companies such as Tesco and Asda advertise and sell the same products but also claim to low on prices for the customer satisfaction, but in fact they charge more when it comes to their own brands, looking in the telecommunication sector is clear that with the privatization of the telecommunications industry, the mobile phone industry experiences transformations that enhance the dynamics of competition.