Business and Markets

Demand influences are:

• Income of the business
• Population and size/structure of the business
• Prices of other goods]
• Seasonal factors such as autumn, summer, spring etc

Packaging and

Display.

Government influences

Rises of demand

Increases or supply

Decreases.

Supply influences are:

• Production costs
• Weather
• Technological changes
• Government influences

Task 2

A

Describe the relative competitive shares in the market in which your chosen business operates.

Sainsbury’s is a leading UK and US food retailer with the interests in financial services and property. The group comprises Sainsbury’s supermarkets and Sainsbury’s bank in the UK. The group’s turnover in 2007 was 17,151million-underlying profit before tax was 447million and underlying earning per shares of 19.2pences, which is basic, and 18.9 pence, which is diluted. Their profit for financial year is 324million.

As I have mentioning in task 1, Sainsbury’s is the highly competitive market of an oligopoly and a few big firms run this kind of markets the example are Tesco, ASDA etc. This market has a small group of firms dominate a market, which is all similar. The benefit is that these companies have all the resources to reduce the price of their products. This can sometimes lead to price wars such as in case of the big supermarkets. The more market share there is between them and the more influences they have on markets. Another benefit is that these companies do not always compete on price and sometimes try to attract customers into their store through:

• Advertisement-showing their level of services is better than their competitors.
• Celebrity endorsement-Jamie Oliver helps Sainsbury’s through special advertisement and exclusive products with his name on it.
• Nectar card- Sainsbury’s gives something back to the customer every time they shop at the store. For example £2 for 2 points.

However, Sainsbury’s is created as an Oligopoly and yet the disadvantage is the risk of all companies including Sainsbury’s within the Oligopoly forming a cartel which all offer anti-competitive prices. This means that the consumer will not have the advantages of ‘shopping around’ for the best offers because all of the prices will remand constant (same) and also give the consumer the less choice.

The percentages of the total output according to the statement of Sainsbury’s financial summary

In 2007, Sainsbury’s total sales including VAT went up 6.9% to £18,518 million, underlying profit before tax went up 42.3% at £380 million. Sainsbury’s make a profit of £477 million (before tax). Underlying basic earnings per share was 14.7pence, basic earrings per share rose to 19.2pence. Their proposed final dividend was 7.35pences per share and that is up to 25.6% making full year dividend of 9.75pence that is up to 21.8%.  They have a debt of 1.4 billion, underlying cash improvement of £162 million. They also have a freehold and long leasehold property, which was valued at £8.6 million, 65% above current net book value. Sainsbury’s reduced pension fund from £431 million to £55 million. Their retailing sales growth of over £1 billion including VAT, like-for like their sales excluding fuel went up to by 5.9% and underlying operating profit of £429 million that is up to 21.9%. Sainsbury’s bank, underlying operating profit if £2 million.

Figure 1

        

Figure 2

There has not being any recent changes in the market position for Sainsbury. Despite Sainsbury's sales growth of 6.6%, see Figure 2.

According to market research group TNS World panel, the UK's big four. Tesco, Asda, Sainsbury's and Morrison’s - now hold almost three-quarters (74.4%) of the grocery market. Sainsbury's Supermarkets is the number three UK supermarket with a market 15.9% share of UK supermarket sales in the 12 weeks, trailing just behind Tesco and Asda. (See: Figure1) shows the market share of Sainsbury and its competitors (TNS 2006)

Sainsbury has grown greatly and has increased its market; also the increase in customers has given Sainsbury a large amount of profit. A supermarket that offers a wide choice of leading brands at significantly low prices, cheaper than it's competitors in the in the United Kingdom, and globally, with quality reduced prices, and full customer satisfaction guarantied. Sainsbury is a very large British company, that is well known is the United Kingdom, and overseas, has a different way of approach to there customers, they makes there own products which leads to very low prices, cheaper then the market leading supermarkets such as M&S, Asda and Sainsbury's. However, this means that even people that are on lower incomes or from low class back-grounds, can afford to go shopping at Tesco were they can spend the same amount that they would in the other

Sainsbury’s main competitors are ASDA, William Morrison, Tesco and Waitrose. Although, Sainsbury’s is a market leader meaning that they are always trying to maintain their position and will do anything and everything in their power to stay at the top and also win their customers.

Sainsbury’s mission is ‘to be the consumer’s first choice for food, delivering products of outstanding quality and great service at a competitive cost through working ‘faster, simple and together’. This means that they are willing to get ahead of their competitors.

B

Explain in ways in which a new competitor might seek to enter this market.

Competition- they involve rivalry between two or more business organisations.

There are many reasons why the new competitors would be interested in the market, this may be takeovers, this may be that they the company may simply be very reasonably priced or the company may decide that in the long run, which end up making more money by purchasing this market.

The reason why I think a new competitors would be interested in the market of Oligopoly (Sainsbury’s) is because they have an effect on consumers by charging higher prices on a particular product, giving them less output and less choice. The reason is also that there is high in demand of the product and services they provide. They often collude to avoid competition that means this Market will do anything with their power to avoid or get ahead of their competition. Another reason why the new competitors would be interested in the market is because this market involves competitions between a few companies who may be dealing in homogeneous products like fuel, petrol, and oil. In this market there is tendency for one firm to set the general industry price, with other firms following suit. This is called PRICE LEADERSHIP. This firm may undercut each other and can lead them to price wars.

Definition of barrier to entry

Barriers to entry are anything that makes it difficult for a new entrant to break into a market. They make companies already in the market more valuable as they reduce the risk of new competition.

Examples of barrier to entry are;

•  - Large, experienced firms can generally produce goods at lower costs than small, inexperienced firms. Cost advantages can sometimes be quickly reversed by advances in technology. For example, the development of  has allowed small companies to make use of  and  technology which was once extremely expensive and only available to large corporations.
• - entry of global players into local market make entry of local players into the market difficult
•  - large incumbent firms may have existing customers loyal to established products. The presence of established strong Brands within a market can be a barrier to entry in this case.
•  - incumbent firms can seek to make it difficult for new competitors by spending heavily on advertising that new firms would find more difficult to afford.
•  - some products, such as , require a massive upfront investment in technology which will deter potential entrants.
•  - sunk costs cannot be recovered if a firm decides to leave a market; they therefore increase the  and deter entry.
•  - when a good or service has a value that depends on the number of existing customers, then competing players may have difficulties to enter a market where a strong player has already captured a significant user base.
• Restrictive practices, such as air transport agreements that make it difficult for new airlines to obtain landing slots at some .
• Distributor agreements, exclusive agreements with key distributors or  can make it difficult for other manufacturers to enter the industry.
• Supplier agreements, exclusive agreements with key links in the supply chain can make it difficult for other manufacturers to enter the industry.
• Inelastic demand, a strategy of selling at a lower price in order to penetrate markets is ineffective with price-insensitive consumers.
• Vertical integration, that is, a firm's coverage of more than one level of production, while pursuing practices which favor its own operations at each level, is often cited as an entry barrier
• Cost advantages independent of scale, proprietary technology, know-how, favorable access to raw materials, favorable geographic locations, and learning curve cost advantages.

My ideas on how to break the barriers to entry is a Government licensing which is a legal barriers to entry, most legal barriers usually limit the number of competitors, but they do not result in a single monopoly firm, for example in the UK, they requires hospital so that they can file a certificate of need to enable them to have a permission to expand into a new market. In the UK, governments require licenses for alcohol shops, barbershops, hairdresser and other establishments. Legal barriers to entry exist in these industries is because they exist to protect the public. Basically barriers to entry often serve businesses more than the public. Having the licenses, it reduces the number of competitors trying to get over the business and to increase the monopoly power of the firms within the industry. For the business to obtain a license various requirements must be met and the number of licenses is often restricted.

C

Analyse key competitive strategies applied in this market

Marketing strategy is a plan of action which is used by many businesses around the world, which helps the business meet its aims and objectives, it can also assist a business when launching a new product as it helps to identify which different strategies would be best to use. Marketing strategies can be split into two main categories, which are:

• Short-Term
•  Long-Term

Short-term strategies help a business to focus mainly on the four P’s product, price, place and promotion which are vital to all businesses, as these four features are the main things which help a business to achieve objectives if they are used correctly. On the other we have long-term strategies which are used to plan the future actions of a business, this can include producing tables such as a ansoff matrix which helps a business to decide on many things such as, whether to launch a new product or to improve previous products, overall making the right decisions on which type of strategy to use is vital, especially in the case of Sainsbury’s as it helps to decide how to launch a products, to ensure that they reach maximum sales.

Ansoff Matrix

An ansoff matrix can be used to identify and show various types of growth strategies, many firms such as Sainsbury’s could benefit from the use of an ansoff matrix as it helps to focus on the firm’s present and possible products as well as the markets. The main thing is that an ansoff matrix helps to identify its possible ways for a business to grow; this can include improving previous products or producing new products.

The diagram shows the different choices of growth available to many firms as well as Sainsbury’s itself:

Market Penetration – This is when a firm tries to achieve growth using existing products in there current market segment, to try and increase its market share.

Product Development – This is when a firm targets a new product at their current market segment.

Market Development – This is when a firm seeks growth by targeting their existing products at a new market.

Diversification – This is when a firm tries to diversify into new businesses by producing new products to aim at a new market.

The marketing mix

Marketing Mix:

The term marketing mix is used to describe the all the options available to the marketing manager in order to market a particular good or service. It is often referred to as the 4P’s (i.e. Product, Place, Promotion, and Place)

The Product: This aspect of the marketing mix deals with researching consumers’ product wants and designing a product with the desired characteristics. This is a very important element of the marketing mix because it directly involves creating products and services that satisfy consumers’ needs and wants.

The Place: To satisfy consumers (i.e. their needs and wants), products must be available at the right time and in a convenient location. In dealing with the place aspect, a marketing manager seeks to make products available in the quantities desired to as many consumers as possible.

The Promotion: This aspect relates to methods used to inform one or more groups of people about an organisation and its products. Promotion can be aimed at increasing public awareness of an organisation and of new or existing products. It can also be used to educate consumers about product features or to urge people to take an interest in that product.

The Price: This aspect of the marketing mix relates to the activities associated with establishing pricing policies and determining product prices. Price is a critical component of the marketing mix because consumers are concerned about the value obtained in an exchange.

The Ansoff matrix table helped Sainsbury’s in a way of choosing the right marketing strategy for their product, the strategy is marketing penetration strategy which helped the company by allowing them to look at their product and the market it is in.

Their product is an existing product in an existing market this is marketing penetration. If it were a new product in an old market it would be called product development. For the company to find the positions of their product in the Ansoff matrix table, when the business first looked at the product and found that it is an existing product and that it does have a market which means it is in an existing market. This shows the strategy, which should be best for their product. The marketing strategy picked was the right one showing that it is a reliable tool and that this marketing strategy for their product will helps to develop the company name, reputation and image.

For the business to use this marketing strategy, the business are given the opportunity to market a very successful product, so it would be true to say that the marketing mix and its manipulation are vital for the success of a business. However, their good or service may only be successful if the organisation provides products that satisfy consumers’ needs and wants through a co-ordinated set of activities that also allow the organisation to achieve its goals. Customer satisfaction should be the major aim of the marketing concept. But the process does not end here because the organisation should continue to alter, adapt and develop products to keep pace with customers’ changing desires and preferences. Organisations should be aware of the importance of customers and release that marketing activities begin and end with the customer.

Many businesses since the beginning have always competed against each other. On the basis of competition, different types of market exist because of their products and services they offer.

The market competes, when a firms compete against each others, by looking at the price of their rivals for example if ASDA sells bread for 45p, and Sainsbury’s sells bread for 35p. This can actually make ASDA and Sainsbury’s compete against each other according to the prices of a bread, not only that. An oligopoly’s can also act as a rational player when setting prices by using game theory to predict their rivals’ behaviour. In short, in an oligopolistic market, firms set prices according to the reactions and behaviour of the rival firms. The firms are interdependent, i.e. rely on each other when making such rational moves.

In perfect competition, there are many firms and they compete on prices. They use mark up pricing, which involves adding a profit mark-up. The size of this mark-up depends on the firm’s objectives, i.e. profit maximisation. Prices are closely related to costs of production, i.e. if the costs of production are high, a firm will increase the price in order to maximize the profit it earns. Costs can however, only be crudely estimated therefore the firm has to rely on the uncertainty of demand or the behaviour of its rival firms to set the mark up price.

Sainsbury’s also need to maintain their market share, because if they don’t do this, this will affect the business by losing their shares in term of a not accuracy market share.

Sainsbury’s compete for customers by trying to offer better value than their competitors do so that the customer will get use to Sainsbury’s products. In this situation, products will keep improving or even get cheaper so that its helps the business to attract more customer into their business. Also the customer will have variety of choices to be able to choose between different competitor’s products such as ASDA’s products or Tesco’s products.

D 

Assess the extent to which this market might considered contestable

A contestable market is when there are no costs for the businesses that are wishing to enter and exit their market. So in the oligopoly market that’s Sainsbury’s and their rivals businesses are in, they wouldn’t be considered “contestable” because it would cost many businesses wanting to enter the market a lot of money. A contestable market also requires barrier to entry to be low, and a perfectly contestable market requires a total absence of barriers to entry.

The market that Sainsbury’s and their rivals are in which is an Oligopoly, and is not a contestable market because at present, many businesses who want to enter the market would have to pay a substantial cost in order for their business to open and only that is also because a monopoly market is classified as contestable market whereas Sainsbury’s is a Oligopoly market.

Due to the small amount of businesses in the oligopoly market new entrants will have to work even harder in order for them to make their business known for customers. As for new businesses, the cost would be much higher now than before due to new technology and also due to the success of their current rivals.

In a contestable market there are no initial cost incurred upon entering the market in contrast to an oligopoly, where there are high costs that have to be paid. In summary an oligopoly is not contestable due to the different factors mentioned.

There are different aspect where I would say what a contestable market is like, and how it Sainsbury’s fit into that criteria

Homogenous goods- this is where goods whereby many of the retail companies produce have to be of the same sort.

Good knowledge-These companies have to have a decent knowledge of each other. What they are doing to attract customers buying from their store. Sainsbury’s has taken this into account by having a good knowledge of their competitors and also the business industry that’s why they are now market leader in their market that would be very hard for their competitors to compete against.  

Competing with their rivals- As for Sainsbury’s, their competitive strategy isn’t based on their prices; it’s really based on their promotion and products. As for now Sainsbury’s don’t really have to compete on their prices because they have made enough revenue and profit that they could ever think of so competitive pricing isn’t really important to them. I think advertising and having quality products is a way where Sainsbury’s would want to compete with their rivals, where they could attract customers in buying from their store.

Change as market leader- Not so long ago it was acknowledged that Tesco’s was the market leader at that time but because of Sainsbury’s competitive and long term strategies that’s why they have overtaken Tesco’s to a great extent that it would be difficult for any of their rivals in overtaking them as being market leader.

Freedom to entry- There is a freedom to entry in the market that Sainsbury’s are in but it would be very difficult for any new business in being in the same league as the rest of Sainsbury’s competitors simply because the other businesses are already recognised and as a result be difficult for them to expand their business.

Expenses in advertising their business- As for many businesses the advertising aspect of it is very important because depending on how you advertise your business that’s how customers would be attracted to the business. Sainsbury’s uses their “Try something new today” brand which many customers are now use to. So for many new businesses wishing to enter the market would have to advertise their business to the right standard that would attract more customers into their business.

Expanding oversees/new markets- Sainsbury’s now have become a major success now than ever before that they have now varied their product line. They have now gone from selling food products into selling “white goods” such as fridges, cookers, and microwaves, DVD’s, TV’s. They have gone into offering financial services (Sainsbury’s bank) also.

Sainsbury’s have expanded their business globally in order to gain a worldwide recognition from their customers and also in order for them to make profit, which is what they would want.

  These are other examples of contestable markets in the UK:

• Local bus and rail services

• Public services such as: electricity, gas and water supplies

• Telecommunications, particularly through the choice of network suppliers.

An oligopoly market is difficult, but not impossible, for example let say I own Laura’s grocery and if the company want to enter in an oligopoly market, it will be very difficult for this company to be successful, because to enter in this market, for example Wal Mart take over ASDA because Wal Mart agree to buy it, so for an oligopoly is very difficult because to enter into this kind of market, the business will need to have a capital or a license from the government to enter and it is also very expensive to enter into this kind of market.

Task 3

A

Identify and describe a case of significant stakeholder influence over your chosen business.

Definition of Stakeholder  

Individuals or groups who have some form of interest in the organisation and some power to influence, to a greater or lesser extent, the organisation’s decision making. These groups can be part of the organisation, and yet they are also part of the environment in which the organisation operates. Stakeholders are likely to influences in the way the organisation responds to the opportunities and threats in the environment. If the organisation does not respond in the ways required by powerful stakeholders, then these stakeholders may exert their power in ways that may threaten the organisation.  

 There are two different types of stakeholder, these are:

• External stakeholder such as bankers, customers, suppliers, shareholders, governments, community etc
• Internal stakeholder such as owners, employees, salaried managers.

I am going to mention 3 stakeholders that affect the most in my chosen business (Sainsbury’s)

Sainsbury’s main stakeholders are:

The customers are stakeholders in Sainsbury’s, because without customers, Sainsbury's wouldn't even be able to run their business. The customers can also affect the running of the business, because the customers have to be satisfied with the services that Sainsbury's provide, e.g. car parks, wide range of foods, quality of food and restaurants. If they are not happy they will shop elsewhere.

The employees are also stakeholders in the business. If they are doing their job correctly, the customers will be satisfied with Sainsbury's customer service. If they are not happy this will affect their work and the service that they provide. The employees would work at a poor standard, and if employees were very unhappy with their job they would not work as a team, which is very bad for a big company like Sainsbury's because this could give a bad image to the whole organisation.

Also employees who are not happy with the job can do strikes and take industrial action, which is time wasting and can damage Sainsbury's status.

If Sainsbury's were to shut down, all those employees will suffer by losing their jobs and they all will be unemployed.

The suppliers are also major stakeholders in the running of Sainsbury's. The suppliers supply the goods for J-Sainsbury's to sell to their customers. If J-Sainsbury's were to close down, the suppliers will lose their clients and will also lose profits, consequently may end up bankrupting.

Customers influence Sainsbury’s by making sure that they are satisfies with their products and services they offered. Sainsbury’s find out what are the customer’s want and needs in their store, so that their customer gets what they needed or wanted from the store. Meanwhile customer have a big influence within the business, so that mean Sainsbury’s have to keep their customer in their mind in whatever they do because if customer is upset about the products and services they provide, the customer will rather shop elsewhere.  Sainsbury’s provide their customer with good quality of products and will increase buying, that means the more Sainsbury’s provide good products and services, the more the customer will keep buying. Sainsbury’s sell their products and service cheap so that their customer will get the value of their money, which is basically one of the aims of the business. They also make sure that the products that they have in store are of a good quality of product. Sainsbury’s makes sure that they don’t take their customer for granted about their products or even give false information about the products they offered. From what I have seen, I think Sainsbury’s work really hard to please their customers, with all of the good quality of products and an exceptional services they offer, no mater what.

If Sainsbury’s don’t satisfy the customer with their products and services, the influence is that the customer will stop buying and that will also affect the company’s profits.

Sainsbury’s is known as Ethnical and Equal Opportunities Company. If the customer want to buy a products from Sainsbury’s there is always a trusts which takes place on the business, meaning that if they are buying from an Ethical and Equal Opportunities company like Sainsbury’s, it is likely that they might give false information on something that is not valuable, that they charge their customer at a higher price and this is again sting the consumer law and the business will face prosecution fro m the government or they will have to shut down the business.

Employees influence the business; because without the employees to work for the business, there is no way that the business will run on its day-to-day activities. Employees are the most important stakeholders as they are the one who are brining in more customers into the store by providing the higher quality of services to their customer. If employees are doing really well with the job that they are satisfied the customer, but the customer is not happy, this can have an effect on their work and the services they provide to the customer, the employees will then work at a poor standard. Not only that, if the employees are not satisfied with their job they would not want to work as part of Sainsbury’s team, which can lead them to have a bad name and reputation. As a big company like Sainsbury’s the employees will give the company a bad image. For example when employees was unemployed, because of what happened to the business and when the business is successful again.

The employees would do strikes saying that this business has a bad image and reputation. This can lead the business to shut down or even bankrupt. If the business is to shut, the employees will suffer by losing their job and find it difficult to get a new job.

Suppliers also influence the business, as they are the one supply the goods to the business, for Sainsbury have to sell it to its customer. If the supplier charged the company a higher price, it will have a very big effect on the company’s taxes, as they will pay higher taxes.

B

Analyse the impact on your chosen business of stakeholder influence.

Customer play a big role in all business as stakeholders and Sainsbury’s makes sure that customers are happy and identify the wants and the needs of the customer when shopping at the store as well as the websites.

Customer is the impact of Sainsbury’s because without customer coming into their store, Sainsbury’s would not even be able to run their business. Customer is the impact of Sainsbury’s because they have to be satisfied with what Sainsbury’s is offering, so that the business runs effectively. Customers are the one who runs the business effectively as they are the one who pay for the products or services that Sainsbury’s provide. If customers are not satisfied, this will have a big effect on the business, as the customer will stop shopping at the store, they will rather shop somewhere else. So it is really important for the business like Sainsbury’s to satisfy their customer with the goods and services that they offer. The more customers are satisfied with the products and services that Sainsbury’s provide the more customers keep shopping at the store. For example a disabled customer, Sainsbury’s satisfied them by making sure that their store is more accessible for their disabled customer so that they are very comfortable to shop in the store, as this make the company to show that they care for their customers whether disabled or non-disabled. In Sainsbury’s customer are interested in their value for money that means the customers are expecting a quality products and services so that they have the value of their money. Customer is also interested in the Environment of Sainsbury’s so that the customer feels secured when shopping at the store, for example, Sainsbury’s will need to check if there any hazards so that it avoid hurting the customer when they are shopping at the store.  

Employee also play a role in the business, and they are the stakeholder that affect Sainsbury’s, the reason for this, is because employee who do their jobs really well to satisfy customer, the customer will be happy to purchase the good, but if the employee does not do their job well this can affect the business because for example if the employees provide poor services to the customer, the customer will not be satisfied and the customer will shop else where and this can lead the business as bad reputation.

Employees also need to be satisfied with their job, because if the employee is not happy with their job, they will not work with Sainsbury’s team and they can do strike or take any action which can destroyed Sainsbury’s status. Meanwhile, without employees working for sainsbury’s it impossible that Sainsbury’s will run on its day to day activities or would not even be here as a successful company.

When employees work for Sainsbury’s, they are interested in good wages, as this will get more people who want to work for Sainsbury’s. They are also interested in better conditions of jobs, as this will make the customer feel secure and safe when working and also want to stay at the jobs because of the condition. When it comes to work for any company condition is always important.  

Suppliers also play a very important role in the business because they supply Sainsbury’s good so that they sell it to their customers. Suppliers affect this business because if they charged higher price for the goods then it will affect the business’s taxes. For example the government will charged higher price if the supplier charged higher price for the goods. Supplier is interested particular money such as prices for the products they produces and supply for Sainsbury’s to sell to its customer.

C

Evaluate the extent to which stakeholder influence may shape major decisions on the part of your chosen business

In this task I am going to list all the stakeholders of Sainsbury’s, these are the entire stakeholder that affect or have an impact in the business:

• Customers
• Employees
• Shareholders
• Government
• Supplier
• Manager
• Directors

Customers is one of the stakeholder in the business, the customer are only interested in the value of their money because the customer need to make sure that they get something value of their money for example higher quality of products or service. They are interested in the location of the business so that it is flexible for the customer to travel to the store. If the business is not located nears to their customer, this will make the customer fed up of travelling to the store and will rather shop in a store that is close to them.

They are also interested in a prices of a products and services, because if Sainsbury’s charged higher price of a particular products or services, this will make the customer want to shop elsewhere like Tesco, Wilkinson, or Morrisson, because these businesses sells good quality of products at the lower prices. Sainsbury’s will need to make sure that their products should be of a good quality and charged reasonable prices so that the customer will wants to buy it not because of the prices, but because of the higher quality of products or services that Sainsbury’s offering.

Employees are interested in having a well-paid job and secure place of work. The employees would like to see extra holidays and generous fringe benefits such as a Christmas bonus, birthday bonus, etc.

The only way they would change their expectations would be if there was either poor management in which they would complain to someone as high up the chain of command as they can, also if there was quiet an aggressive area and the customers were to start getting violent, the employee should expect some protection, e.g. security guard.

The employee do have conflicting views with other stakeholders but normally just the management or shareholders, they can sometimes disagree with the managers because the business may be generating much profit and they don’t receive anything extra but most of the time they will be kept happy as the management can rarely afford any strikes, revolts, etc.

Government is always interested in business because of the employment, they will also want full taxation and they want Sainsbury’s to meet the legislative requirements. The government also creates laws to stop Sainsbury’s for being unlawful in its competitiveness. The government cannot change its expectations of Sainsbury’s. The government may have to come to expect more taxes off Sainsbury’s due to the expansion.

Shareholder is interested in good return on investments, because they invest money into the business; they are also interested in maximum short-term profit and valuable long-term growth.

The shareholders expectations first off will be that the business does not lose their investment, if the business makes profit, they will expect good returns on their shares and they would most probably like to keep them and speed up the businesses growth so they could receive even larger returns or their investments.

The shareholders can only disagree with internal stakeholders usually managers or directors when they are not generating enough profit in which they could pull their investment out before it is worthless

Suppliers are very interested in the business because if the business grows, the supplier will have more units to supply, and if the business gets more customers, then the supplier will be complying larger orders so for as long as the business grows, the supplier will have a suitable demand. Sainsbury’s will be prompt payers because the business is successful. The supplier affects Sainsbury’s in a way that they deliver food and drink, so Sainsbury’s heavily relies on them to be prompt and on time, if they are not, this could cause disruption

Managers are interested mainly the pay, perks, power, prospects and good corporate image which suit the business. The managers could expect good fringe benefits and holidays. They may also expect a chance to invest into the business so they could receive good returns on the shares. If the managers were to ever change their expectations, this could alter the business quiet severely, e.g. if they were to become less strict on staff, they may start slacking and the business could go downhill.

The managers often conflict with other stakeholders fairly often, there is a reason to conflict with most other stakeholders normally, it could be any reason, such as: staff not working to full standard, owners/shareholders trying to draw out too much profit, suppliers charging too much for goods and even customers complaining about poor service and organisation.

The directors would be interested for the business just to survive so they can be sure that they don’t lose their investments. Now the business is running properly, they want to have good returns on their investments by decreasing costs and maximising profits.

The directors would like to see the business to expand and use their good investments to do so, with this backing, the business will be able to rely on the directors as a first option for a loan, etc. as they will receive good dividends if the business is successful.

The Directors expectations will be the business succeeding and giving good returns on their investments, but if the business ever starts to decline or lose sales, the Directors will lose interest and be less willing to invest more.

The directors rarely conflict with other stakeholders; this is because they normally are the business and so and internal stakeholders can’t really disagree, the shareholders are the only ones that could ever disagree but as in Sainsbury’s, the shareholders are the directors

The relationships that Sainsbury’s have with their customers, colleagues, suppliers and investors are at the heart of Sainsbury's and shape the way they do things.

Sainsbury’s reinforce these relationships by engaging with organisations that inform their thinking on the way they do their business. These include the Government, non-government organisations (NGOs), charities, trade unions and associations.

By engaging with such a wide range of interested parties Sainsbury’s are able to understand current issues, develop their business and manage risks. This measured approach means that they will always listen to views expressed enabling us to make informed decisions.

The breadth of organisations they meet and work with keeps us abreast of an ever-changing and developing agenda. These include Marine Stewardship Council, Carbon Trust, Soil Association, Fair Trade Foundation, Woodland Trust, British Nutrition Foundation, British Dietetic Associations and the Forest Stewardship Council.

Sainsbury’s are committed to working towards a sustainable future. To help them achieve this, Sainsbury's is proud to be entering its fourth year as the only retailer that is a Foundation Corporate Partner of Forum for the Future, the UK's leading sustainable development charity (www.forumforthefuture.org). Forum for the Future plays an important role in helping them to make sure that sustainability remains at the heart of their business. They also meet regularly with organisations such as the National Farmers Union, Greenpeace and others to share views and expertise and they have found those discussions helpful in alerting them to issues of concern to their customers. To ensure a fully rounded view of the industry and customer issues, they work with a number of cross-industry and multi-stakeholder organisations. For example, they are members of Ethical Trading Initiative, Business in the Community, the London Benchmarking Group and the Green Alliance.

Task 4

Sainsbury's operates an internet shopping service branded as "Sainsbury's Online". To use this service customers choose their grocery items online. Pickers then collect the required items which are delivered to customers from a local store by van. This is available to about 75% of the UK population. The service is run from larger stores which carry the full product range - over 100 stores operate an online service.

Prior to September 2007, and in common with other UK supermarkets with an online shopping and delivery service such as Tesco, Sainsbury's online delivery staff would carry items direct to customers' kitchens. However, from September 2007, delivery staffs have been instructed to hand over goods at the front door and to not enter customers' houses. This is reportedly due to Sainsbury's no longer having insurance which covers their staff when entering people's homes. However the delivery drivers regularly do deliver to kitchens due to customer incapacity and if they express a desire for them to do so. After looking at Sainsbury’s website, they offer foods, drinks, clothes and many more.

The benefits of an online presence in the business are:

Globally presence

The websites is available to customers from any location around the world. This can actually increase promotional and trading opportunities, especially for small businesses.

24-hour visibility

Every businesses website never close and is always available to the customer 24 hours a day, seven days a week, so information can be provided or orders received at any hour of the day of night and it automatically acknowledged.

Rapidity of response to customer interest

A web presence provides the opportunity to respond quickly to customers, but not all firms take advantages of this. A website can provide several opportunities for customer contact, such as “call me” buttons and email messages, but speed of response is vital. If the company response very late or, even worse, fails to respond altogether, then not only is a potential sale lost, but the image of the business is imperfect.

Secure payments

The increase of security enables the use of credit/debit card facilities. But the newspapers and magazine headlines about fraud and hackers quite obviously put people off. To be secured, all the online payments need to be private and confidential between the buyer and the seller, conveyed intact and without any changes during transmission and erased from the system after the process has been completed. The banks are increasing the security of the debit/credit cards of the user. To purchase an item online the user need to key in the password and the date of birth.

Achieving a responsive integrated supply chain

A supply chain contains every single business that is involved in the eventual supply of a product or service. But there are problems associated with the supply chain. If the chain is long the price to the customer may be high and the chain is usually slow to respond to a rapid change. To combat these problems businesses tried to change the supply chain to shorten it, this is done by cutting out or by passing as many intermediaries, and to integrate it, to speed the things by changing the information in one stage to another.

 Other benefit is the opportunity for buying the products online. Businesses can improve the product delivery and reduce the time between the order and supply. Customers can check stocks online. If an item is currently out of stock many businesses put a note on the site and email the customer when stocks are replenished.

Online order tracking is another benefit. It enables the customers to check every stage of their order from the supplier’s website. The system sends automatically email to customer informing about tracking order. In other systems customers can check at any time the progress of the order

Businesses can reduce overheads and labour costs. A business that has a short and an integrated supply chain has more possibilities to process the orders more cheaply. This is because there is likely to be fewer staff required to process paperwork relating to customer orders, fewer shops required if the business deals directly to the customer, fewer intermediaries required and fewer staff needed to deal with the customer.