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S.W.O.T. Analysis, P.E.S.T.L.E Analysis, Product life cycle and Porters Competitors Analysis for Sainsburys.

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Introduction

M2 Analytical Techniques For this assignment I will compare the analytical techniques used in supporting marketing decisions. To show a better understanding of this assignment I will be linking the analytical techniques to 'Sainsbury's' and discussing how each technique could be useful or useless to what the company is trying to achieve. The analytical techniques that I'll be discussing are S.W.O.T. Analysis, P.E.S.T.L.E Analysis, Product life cycle and Porter's Competitors Analysis. Sainsbury is a leading UK food retailer. The company has many different divisions such as Sainsbury's Supermarkets, Sainsbury's Local, Bells Stores, Jacksons Stores, Sainsbury's Online and Sainsbury's Bank. The company's objective is to make the company reach its full potential and therefore provide shareholders with good, sustainable financial returns. They aim to ensure all colleagues have opportunities to develop their abilities and are rewarded for their contribution to the success of the business. Sainsbury's sells �6bn of British food every year. The company works closely with small suppliers to expand the range of local produce wherever possible, and has a network of over 3,500 local suppliers. SWOT Analysis Strengths � In recent years Sainsbury's has been able to increase their turn over and boost profits, this means that the companies new tactics are working even though the company's primary reputation was based on quality products and the country is facing a harsh recession. � Sainsbury's seems to be very well placed on green and environmental issues due to its recent initiatives, like buying fair-trade bananas. The company is favored by casual consumers as well as green activists. � Sainsbury has been using celebrities to indorse specific products and ingredients. ...read more.

Middle

� The credit crunch can have a two way impact on Sainsbury's as it also runs a financial services company. The credit crunch might decrease the purchasing power of consumers and though they will still buy the essentials they may be more cautious. They may also spend less on luxury items, something that has a greater profit margin for Sainsbury's. As far the Sainsbury bank is concerned, the credit crunch directly affects its ability to provide credit especially as it is not an established name in the financial services industry. Social Factor � Strong competition within every part of the retail sector has lead to retailers giving a lot of incentives to the consumers. This will affect Sainsbury's as the prices have to be driven down most of the time. � Nowadays there seems to be more emphasis on fresh, easy style cooking. This serves an opportunity for Sainsbury's to encourage new recipes and unfussy eating. Technological � There has been a huge emphasis by the government to promote healthy eating, this is due to the increasing level of obesity within the UK. This has lead to many consumers to shift towards healthier food. This presents an opportunity to Sainsbury's to stock up with more healthy food or create healthier foods at a cheaper price than other manufacturers so as to benefit from this new trend. � The Internet trend seems to be growing within western countries. The Internet accounts for 8% of global advertising spend and is growing rapidly (The Economist, 2007). Competitors like Tesco use their own online delivery model successfully. ...read more.

Conclusion

Analyzing supplier power is another important aspect for a company such as Sainsbury's. Large suppliers can have a major impact on the company's finances, delivering goods on time is essential in maintaining customer loyalty. Threat of substitutes does not only apply to products but also companies themselves. A company which provides the same or similar products and/or services is a substitute to the current company. Therefore by identifying the threat the company could form a plan which will differentiate the products/service provided which then eliminates the threat of substitutes. Disadvantages The model is best relevant for analysis of simple market structures. A comprehensive description and analysis of all five forces gets very difficult in complex industries with multiple internal topics such as, product groups, by-products and segments. A focus on particular segments in such industries might mean that the company misses out on other important information for other segments. Porter's five forces can be seen as an outdated tactic. Technological breakthroughs and dynamic market entrants from start-ups or other industries may completely change business models, entry barriers and relationships along the supply chain within short times. The Five Forces model may have some use for later analysis of the new situation; but it will hardly provide much meaningful advice for defensive actions. Conclusion Through this piece it can be seen through the various analyses; Porters 5 Forces, PESTEL and SWOT, that Sainsbury has become well established and well recognized by consumers. The suffered financially at times but managed to raise profits and continue operating. However, it is not protected to many outside risks like recession and rising material costs as highlighted in the PESTEL analysis. ...read more.

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