Case Study Of Sainsbury's Business And The Business Environment

Sainsburys is currently the second largest chain of supermarkets within the UK, with a current supermarket sector share of 16.9%. Sainsbury’s was founded in 1869 and today operates in over 1,200 supermarket and convenience stores, and has over 161,000 employees. We will be looking at a number of areas internally and externally and see how they are effectively or not effectively performing.

The power of buyers in the industry varies at different levels depending on the field. For pharmaceutical drug companies, which have thousands of patients, customers have lower price sensitivity as they are rarely able to refuse the treatments they need and they have low bargaining leverage due to commonly lack of information as well as knowledge on the drugs. For biotech firms that distribute specialized products to the government and hospitals, their customers actually have more of a bargaining power due to being the sole consumer sources

S: The social factor that affects Lidl is the change in people’s lifestyles over the past few years. The change in customer’s lifestyle has come in they way that people are living a lot healthier over the last number of years; they are doing this by watching diets and looking after themselves. This will affect Lidl as it can increase sales in areas such as fruit and vegetables and all fresh products. This will also give Asda the opportunity to come up with an innovative idea to target customers to come in and shop at Lidl.’’ ‘’http://www.deloitte.com/view/en_BE/be/industries/consumer-‘business/9438452413144310VgnVCM3000001c56f00aRCRD.htm’’

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.

J Sainsbury plc (Sainsbury) is a retail chain based in the UK. Sainsbury is engaged in grocery retailing through its supermarkets and convenience stores principally in the UK. The company operates its business through three divisions, namely, Retailing, Financial Services and Property Investment. Sainsbury serves its customers through a chain of 537 supermarkets and 335 convenience stores under the brand Sainsburys, and financial services via Sainsburys Bank. Sainsbury offers around 30,000 food and non-food products and services. The company is headquartered in London, the UK J Sainsbury plc Key Recent Developments Mar 11, 2010: Sainsbury launches first bakery college in the UK Mar 08, 2010: Sainsbury to add

The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.

Trading fairly- these are the rules the businesses need to follow which include; the business needs to run in an open manner, competition can only happen in between companies that belong to equal parties and making sure their customers are satisfied and are feeling secured with the business’s products and the quality of the products. All businesses need to make sure that they are honest to their customers and are describing their products as it is to their customers so that they do not get angry by getting the wrong information. Sainsbury’s use many products that are organic and make many fair-trade products such as; fresh fruits. They need to make sure all their products are traded fairly and are paying their suppliers and employees fairly and make sure they are now paying them below the national minimum wage. They cannot cheat on their employee by providing them with the wrong information about the product or charge their customers extra for the product. All businesses need to follow all the rules and regulations in order to run ethically.

Social factors have on affect on the business. These factors include things such as, demographic changes, change in customer’s behaviours and attitudes of the customer. Tesco’s main product line is based around food. Therefore Tesco have to monitor how their customers feel about the food product range. Tesco recognised that many people wanted different products other than food; therefore Tesco opened up a clothing range and offered quality clothing to their customers. Customers are becoming more aware of health issues, this affects the way eat. One way in which Tesco is adapting to its product mix is by increasing demand for organic products.

there are a number of different buyers and sellers in the marketplace. This means that we have competition in the market, which allows price to change in response to changes in supply and demand. Furthermore, for almost every product there are substitutes, so if one product becomes too expensive, a buyer can choose a cheaper substitute instead. In a market with many buyers and sellers, both the consumer and the supplier have equal ability to influence price.

Sainsbury has developed different supply chain channels to manage the complexity faced due to different store formats such as country town, Sainsbury local. Sainsbury believes in continues improvement and aims to achieve it in many different ways. Sainsbury recognise the importance of its people who plays a major role in delivering excellent business. The logistic staffs of Sainsbury tend to work in flexible and well maintained environment. One of the collaboration of Sainsbury is to focus on the demands of the consumers and maintain a healthy relationship with the suppliers and other partners. Above all Sainsbury is committed in reducing the impact of its operation towards the environment (J. Sainsbury Plc-b, 2002).

Opportunity- If Sainsbury were been able to transfer their brand into Egypt market, it would be the biggest opportunity in conducting their business as Egypt is perceived as a market

Sainsbury’s have to ensure they make changes regarding customer needs as quickly as possible. This is important because if Sainsbury’s don’t act on customers’ needs they will possibly decline and lose their current market position because customers will go to its competitors such as Asda or Morrison’s etc. This shows that Sainsbury’s have to make decisions as soon as possible in order to maintain their position in the market and to be better than its competitors through improvement. This will also contribute to Sainsbury’s keeping a good reputation which will also help to attract new customers.

The risk of generic substitution is also increasing with especially China dominating the production market. Customers will substitute for a generic product if the disposable incomes of the customers reduce resulting in customers willing to trade down for a inferior but cheaper product.

Sainsbury’s customers give most credit to the company’s passion for healthy, safe, fresh and tasty food .Despite the present economic conditions the company stands by its quality related objectives. Good food at fair prices, providing a satisfying shopping experience, spreading and reaching out to customers by opening new stores at various locations. Hygiene anh heath and safety issues given utmost importance .