Describe about the conclusion that Sainsbury is one of the best retail outlet and is loved by the consumers.
Sainsbury was established in the year 1869 it is the leading organization and has 502 chains of supermarkets and around 290 convenient stores. It is a leading food chain in UK. The objective of the company is to serve the customers well along with serving their shareholders with maximum returns. The aim of the company is to ensure that the employees of the company develop their abilities and are rewarded from time to time hence contributing to the success of the business. There are approximately 148,000 employees employed in Sainsbury. There are about 18 million customers catered by the company. Many small scale suppliers work closely with the company. (J Sainsbury’s plc corporate website (2009))The chain of the company was one of the best retailers in UK till 1995 when many companies like TESCO, Safeway plc joined the competition. The company has been successful despite of various economic issues like recession. The company’s online and Sainsbury bank have the aim to exceed the expectations of the customers for safe, fresh, healthy and tasty food. (website (2009))
PEST analysis is the tool which helps in analysing the external environment of the company. There are various competitors of the company like TESCO, and ASDA Plc.
Political factors:
The political factors have a huge influence on the performance of the company. The debts in United Kingdom are very high is it being consumer debts and government debts. Due to which the customer attitudes are affected and business often faces pressures. Government imposes various direct as well as indirect taxes on the company which reduces its profit margin. Another political factor is trade restrictions as the government imposes various entry barriers on the industries from time to time. For the success of an organisation it is important that the external as well as the internal environment of the organisation is carried out so that in case there is any kind of flaws that can be overcome on time. There can be a negative impact on Sainsbury of the ongoing price fixing among the various UK retailers.
The economic factors affect the demand and profitability of the industry. As the economy slows down it affects Sainsbury to a large extent because it leads to unemployment and inflation in the prices of the food products. Due to unemployment and increase in the price of products the products demand of the Sainsbury will decrease and hence the production of the products will decrease. There can be a negative impact of the credit crunch on Sainsbury as the company runs financial services with HBOS. (Kathy Sandler (2009)) Due to credit crunch the purchasing power of the consumers and due to which spending on the luxury items may decrease. The ability to provide credit may decrease. The company shall contemplate for expansion into new markets and due to which globalisation will help the company to manage risks. (Metzer (2014))
Social factors:
Various demographic factors affect the behaviour and attitudes of the customer. These days’ people prefer to have everything under one roof. Sainsbury has been benefited a lot by introducing non-food products. Due to which the demand of certain products of the company has been increasing day by day. It has introduced a new marketing theme known as Cook and Save which promoted the products that are easy to Cook due to which customers can stretch their household budgets. The prices of the fuels are increasing day by day which might affect the company. As the level of obesity is increasing day by day in UK the government is taking measures to promote healthy eating due to which the customers have started shifting to healthier food. (Johnson & Scholes (2009))
Due to technological advancements the business are affected positively. The online or web based business has grown significantly. Sainsbury is expanding its online food delivery service. According to the reports there has been improvement in the online services provided by the company. There has been a great advantage to the company due to importation of new technologies. The company is constantly upgrading its technology so that it can serve its customers very well and the customers are satisfied by its services. (Schlosser (2012))
Key business operations of Sainsbury: Sainsbury basically deals with the retail business. The first store of the company was a dairy store. The company has a passion for order , high quality products and cleanliness. The company has various convenience stores, supermarkets and extensions. In addition to its retail stores the company has various corporate offices across UK. It provides high quality customer service and excellent shopping experience with various products at a reasonable price. (Pettinger (2012))
Customer Service: Sainsbury believes that understanding the demands and wants of the customer is their prior job because customers are the heart of their business. The company remains in regular contact with the customers and tries to figure out the current demands of the customers and tries to fulfil their demands by offering the products they desire. The company offers great products which help them to deliver what the customers want which gives them a competitive advantage. (Michie (2003))The company spends good amount of time in interacting with their customers so that customers can be given a smoothing shopping experience. In the current business operations customer services is considered vital for every organisation. The success and failure of every business is much dependent on how it manages its customers. These days organisations try to build healthy relations with their customers so that they can gain competitive advantage. The company has skilled and talented staff for handling the grievances of the customers; it has proficient check out staff. Online availability of the products is considered easy for the customers today and hence it cannot be ignored by the companies. The Sainsbury has made good efforts to satisfy its customers by making its products easily available online so that the customers can easily purchase the products by sitting anywhere.
Improving Availability: Timely availability of the products is considered very important for the success of the organisation. In order to improve the availability of its products the company launched a project named Mercury. Under this project the main aim of the company is to ensure that the products are available on shelf as soon as possible instead of stocking them in stores. The deliverables under this project will go direct to the shelf instead of being kept in the stores for a long time. (Brown (2014))Sainsbury has decided to improve its customer Experience by taking different measures. Among the measures the company in order to improve the in-store experience of the customers company has decided to invest in training its staff along with new automated tool so that the availability of the products can be tracked. Further it added that it will continue to investment in the projects in which the customer values can be enhanced. It has a further five year deal with (Perry (2009)).IBM under which IBM will be introducing new systems that will help the suppliers and the company to manage the supply chain and will support the continuous growth of the business. Further technologies will be improved so that the status of the orders of the products can be monitored and the products availability can be managed. (Britain (2008))
Impact of Globalisation on Business: Globalisation is one of the factor which has become very important in the business. Globalisation effects business life, Economy, environment and society in various different ways. It creates various opportunities like import and export for the business; it creates competition for the companies and also helps in the growth of the company. Globalisation has created a challenge as well as opportunity for Sainsbury. The challenge is that it has to compete with various unknown forces and to bring best quality products for its customers from all over the world. (Kappor (2012))The company can enter the emerging markets through partnerships and joint ventures. As the global food crises are increasing the prices of the food are increasing which results in purchase costs for Sainsbury.
The various complex challenges are being transformed by the Human Resource Department. In the global environment the decision making has become intricate. The talent poll for marginal workers has been widened by the global world. The human resource can take advantage of data analytics and technology in order to build global human resource Information system. In the past only the cost centre and administrative overhead was the main function of the human resource they focussed on short term savings and gains but now the focus of the human resource is on long term objectives. Not only the internal human resource issues are being looked after but it now takes a broader and balanced approach.
Mergers and Acquisitions of Sainsbury
Mergers and Acquisitions results in transfer of business and can also be risky in order to achieve shareholder’s value. The results of mergers and Acquisitions will be big management challenges, Not seen cost, Finance will go in one or few countries. Sainsbury is a very big retail outlet in UK. The economy of UK is open as the involvement of the government is very less. The merger of Tesco and Sainsbury will have less government regulation and both can be benefited from the market made by each other. If there is merger of Sainsbury and Tesco they will have the most powerful position in the supermarket and could easily bargain with the suppliers and buyers of their products as the customers will have more choices among the products available at low costs.
Many factors have contributed to the HR functions of Sainsbury. The various challenges faced by Sainsbury are Globalization, Change management, Leadership development, E-Commerce, Learning, health and safety. Information system has an important role to play in management and planning of the human resources in Sainsbury. One of the main challenges for Sainsbury is the changing technology. The methods and ways of doing work have changed lot overtime. Now the trading activities are done online through ecommerce. Information technology can play an important role for the HR department. Sainsbury Uses 2.0 web so that the employees of the company can be involved more. This helps Sainsbury to reduce costs and also attaining better quality information. It uses teleconferencing ways to stay connected to its customers. Sainsbury has also built Human Resources Information System so that Human Resource processes can be automated.
Conclusion:
By carrying out the various analyses it can be concluded that Sainsbury is one of the best retail outlet and is loved by the consumers. But the outside risks like rising material costs and recession does not affect the company as it can be highlighted by the PEST analysis. Various new expansion strategies have been adopted by the company to sustain its leading position. One of the very useful techniques is the PESTLE analysis these type of techniques help the organisation to develop more.
Britain, G (2008), Implementing the Race to the Top: Lord Sainsbury’s Review.
Brown, E (2014), Business Reporter, viewed 21 March (2016), <https://business-reporter.co.uk/2014/11/12/sainsburys-to-improve-customer-experience-following-drop-in-sales/>.
J Sainsbury’s plc corporate website (2009), viewed 22 March (2016), <Sainsbury’s About us, https://www.j-sainsbury.co.uk/index.asp?pageid=12>.
Johnson, G & Scholes, R (2009), Exploring Corporate Strategy: Text & Cases, Financial Times Prentice Hall, 2009.
Kappor, B (2012), , viewed 21 March (2016), <https://www.jimsjournal.org/6%20Bhushan%20Kapoor.pdf>.
Kathy Sandler (2009), ‘The wall street journal’, Sainsbury’s to push into non food products, no. https://online.wsj.com/article/SB10001424052748704402404574528943322944258.html,.
Metzer, K (2014), Business Analysis of UK Supermarket Industry, Routledge.
Michie, J (2003), The Handbook of Globalisation – Page 424, Edward Elger.
Perry, J (2009), Retail Week, viewed 21 March (2016), <https://www.retail-week.com/sainsburys-to-improve-product-availability-with-new-supply-chain-systems/5001770.fullarticle>.
Pettinger, R (2012), Management: A Concise Introduction – Page 447, Palgrave Macmillian. 2012.
Schlosser, E (2012), Fast Food Nation: The Dark Side of the All-American Meal, Houghton Migflin, New York.
website, JSPC (2009), Sainsbury’s market share , viewed 22 March (2016), <https://www.j-sainsbury.co.uk/index.asp?pageid=451 >.
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