Market Share
Table to Show Market Share
Sainsbury’s are currently in second in the market share leagues. Sainsbury’s only having a market share of 17.3%, whereas the leader of the market Tesco has a market share of 25.2% over a quarter of the market. Asda another big firm in the market is very close to Sainsbury’s in market share with 15.5%.
Sainsbury’s are working very had to meet its environmental objectives with the introduction of a penny back for every bag re-used by the customer.
Sainsbury’s are also working very hard to meet their employee objectives with the introduction of staff training and NVQ qualifications becoming available for the staff.
Business Functions
Marketing Function
Sainsbury’s have a marketing function, which involves different aspects of the marketing mix and market research. The product helps because it describes the features and functions of the product. The place and method of distribution is mainly through its depots. Price is very much dependant on competitors and the demand for the product. Sainsbury’s have always been a little more expensive than their competitors because they are trying to sell a quality image. Promotion is done by Sainsbury’s in two main methods mainly though they are above the line with TV advertising and with the naked chef Jamie Oliver. The above the line promotion is paid for whereas another method used by Sainsbury’s is below the line promotion which is no paid for by Sainsbury’s this is like vehicle delivery (having their logo on the sides of their vans). This also includes sales promotions and competitions (e.g. buy 1 get 1 free). By doing this Sainsbury’s market share increases because the company has increased sales by methods of promotion and increasing awareness of the store in the local area. This increases sales and the increase in sales usually leads to an increase in profits, this enables Sainsbury’s to meet it objective to achieve growth in sales. The product for example is priced at a competitive rate, but if Sainsbury’s were the only supermarket chain to have a certain product they would be able to increase their price because the competitors don’t have the product. The marketing mix also describes different methods of distribution and how to promote the product through competitions and special offers on buy one get free.
Production
Sainsbury’s also have a production function which involves the obtaining of raw materials and making of a product. Sainsbury’s make very few of there own products in stores the main ones been in the bakery. The main activities involved in production are a quality product and the product should be made available at all times. The availability is also dependant on the management of the raw materials. This enables Sainsbury’s to meet its objectives in meeting customer requirements and satisfying the customers needs. If Sainsbury’s are not satisfying they will need to run a survey to see what the customers want. If the customers are satisfied with a product they will buy the product and Sainsbury’s will make a profit. The more satisfied customers Sainsbury’s have the more profit Sainsbury’s will make in the production department, so a good well produced product will bring plenty of rewards for Sainsbury’s.
Human Resources
Sainsbury’s has a dedicated human resources (personnel) department. This looks at the staff management. The staff management involves the training of the staff, and satisfying any of the demands the staff may require. The main reason for having a human resource department is for the recruitment of new employees and having the stores well-staffed al year round. The department also handles the development of the employees and the nationally recognised NVQ qualification. The main part is this department helps Sainsbury’s meet its aims by improving the company performance and the customer service. This enables Sainsbury’s to meet its staff objectives and increasing the company’s performance through the staff and the staff being well trained. The department also works on the motivating of staff and a happy member of staff will work harder than a sad member of staff so Sainsbury’s look to met most of their staff’s wishes within reason.
Administration
The administration department of Sainsbury’s handles all the paperwork. It supports all the other departments within the company it involves database, spreadsheets and clerical duties. It also has to monitor financial transactions e.g. invoices and order forms. It can also do the reordering of stock if not already under automation. The Administration department helps achieve its objectives of been competitive and keeping the costs down whilst trying to help increase profits. The administration department ensures the smooth running of the company. The department helps the Sainsbury’s achieve its objectives in meeting costs and profits.
Finance
Sainsbury’s at the head office deals with the finance department. It involves the raising income and revenue. It controls the costs of the company and sets each store targets on sales and profits with the main effect hopefully leading to an increase in market share. It controls the pricing of the products and tries to put each store in a competitive position with the stores around it. This department ensures that the stores meet their targets. The targets include profit and sales as well as providing enough profit to offer expansion within stores if required. By doing this the finance department helps Sainsbury’s achieve its objective that it is to increase profits by reducing the expenditure.
Organisational Structures, Culture and Management Style
An organisational structure is the way in which a company is laid out. It shows the levels from Directors to shop floor level. The way in which a company is set out shows:
- The routes by which communication passes through the business.
- Where the authority lies in a company.
- The titles and roles of individuals within Sainsbury’s.
- The people who the employees are accountable to. It also shows whom the supervisors are accountable for.
Flat Structure
Sainsbury’s stores are structured in a flat structure,
Store Manager
Assistant Store Manager
Store Supervisor
Staff
The diagram above shows a flat structure. It shows how the control is spread out from top to bottom. It also shows who has power. The person who is above you in the diagram you are accountable to. The person or persons below you in the diagram you have power over and they are accountable to you. This is what would most likely be running in a Sainsbury’s store. The structure shows the span of control of the Store Manager who is accountable for the Assistant Manager. The flat structure works well because it has few levels. This means that information can travel quickly between the shop-floor workers and senior management, whereas if there were a lot of levels the information would take longer to travel up through the system.
Advantages
The advantages of this type of structure are that the information can travel quickly form shop-floor level to the management providing a quicker service for the customers. This means if a customer had a problem the management would be able to deal with the problem, quickly and efficiently, this meeting the objective of good customer service. The cost of a flat structure is also a lot less compared to a tall structure, as there are fewer mangers required. The managers and team leaders also have more power so the employees can be told and motivated more easily. The information collected at shop floor can also be very useful in making the store better and increasing the shoppers experience. The staff will also have increased responsibility and this added responsibility should increase productivity and performance.
Disadvantages
The disadvantages of this type of structure are that some companies currently using a tall structure abuse this and use it as an excuse to make redundancies. The added responsibility to some workers may reduce performance as they have more work to carry out. The employees may feel insecure as they do not know whether they will be staying or going in the new structure. The insecurity may be because the employees have had fellow colleagues in the same area as there own dismissed in the new flat structure. Motivation may be an issue as the employees are not sure whether they are staying. The managers left in the new structure may find it difficult to adapt to the added workload of having to control more people beneath them.
Matrix Structures
Sainsbury’s development teams are structured in a matrix structure, a matrix structure looks like this:
PRODUCTION MARKETING HUMAN FINANCE
RESOURCES
PROJECT
A PRODUCTION MARKETING H.R. FINANCE
STAFF STAFF STAFF STAFF
NEW PRODUCT DEVELOPMENT
PRODUCTION MARKETING HUMAN FINANCE
RESOURCES
PROJECT
B PRODUCTION MARKETING H.R. FINANCE
STAFF STAFF STAFF STAFF
STORE OPENING TEAM
A matrix structure is used at Head Office of Sainsbury’s. The teams are set out as above and each team manager will control a specialist group of people. The manager will be able to pick specialists to help complete the project and to help with different aspects of the research to come up with a quality final product. The specialist areas that the manager will be able to choose from are as follows:
- Production Staff
- Marketing Staff
- Human Resources Staff
- Finance Staff
Each area helps the company in new product development and anything else the company wishes to try. The marketing department staffs help market the product and carry out research of the market. The finance department staffs help raise the funds and how much the production costs will be how much the staffing costs will be. Production makes sure everything will get produced on time and will build a prototype and test it. Human Resources will make sure there is enough staff and other human resources needed to build the product are available.
Advantages
The advantages of this type of this structure are that Sainsbury’s could break the barriers between departments and the final product will be of a high quality as the best people from each department have been used. The individuals from each department can use their skills in a variety of different ways to help the company build the best product. It means that the project manager can receive input from everybody working for him and the ideas can make the product better. It reduces costs because several departmental meetings do not have to be made in each department.
Disadvantages
The disadvantages of this type of structure are that if Sainsbury’s is developing two different items the person or persons working in each team will have divided loyalties and the work may suffer, as the person has to fulfil two roles. The accountability of the staff may not be clear as the matrix system is very complex and the teams may get confused.
Centralisation and Decentralisation
Decision-making at Sainsbury’s is both centralised and decentralised. Some decisions are made at head office these are centralised. The store manager makes decentralised decisions at store level.
Management Style
The management styles of different people vary depending on the needs and the situation, good managers will be able to vary their management style. The management within Sainsbury’s will have to be able to vary their style of leadership. These are three types of leadership they are as follows:
- Autocratic
- Paternalistic
- Democratic
Autocratic
This when the senior members of management make decisions with little or no involvement of junior employees under them. This style allows the manager to set objectives and allocate tasks with little consideration of those who will have to carry out the tasks. The manager retains control throughout. The staff under an autocratic soon will become dependent on this style of management on being told what to do and will not be able to make there own working decisions. This style of leadership is ideal for when quick decisions need to be made. This would be used in Sainsbury’s when the management are ordering something to be done. It would also be used when the Sainsbury’s rules are been told.
Paternalistic
This is when the management make decisions and then explained to the staff. The decisions are supposed to be made in the best interests of the employees. Most paternalistic managers ensure that the employee’s social and leisure needs are met. The decisions are made by the manager and then explained. The communication is mostly down through the company but sometimes feedback is received. Most paternalistic managers appear democratic but this is just a guise for what is really an autocratic style of leadership. Sainsbury’s would use this at store level for meetings with staff and other board members.
Democratic
This is when the management make decisions after first consulting the staff and discussing the possible options. This method of leadership is often used in team meetings so if the employees have any questions they would like to ask they could do so. If the employees have any needs they feel are not being met they can bring the subject up. The employees can bring up suggestions and any ideas on how to make the store better and increase sales and profits in these types of democratic meetings. The quality issues within departments can be brought to the surface and the management can help meet the needs of the employees and the needs of the customers. The employees can discuss working practices with the management and team leaders freely. Sainsbury’s would most likely use this type of leadership within matrix teams to encourage the ideas of the employees to be known so the products can be made better. The matrix teams tend to be at Sainsbury’s Head Office. This type of leadership would also be used at Sainsbury’s annual AGM and board meetings so the directors and shareholders and display their views on the way the company is being run and any questions can be answered.
Culture
The culture of Sainsbury’s is both customer driven and positive culture. Culture is the unwritten rules but the rules that everyone knows. Culture in a company is like etiquette in sport. Culture means the way in which the company runs and how it meets its objectives. Sainsbury’s aims of customer comes first, means it has a customer driven culture because before all else Sainsbury’s aim to meet its customers aims and needs. Sainsbury’s want to give their customers quality products along with quality service. Sainsbury’s aim to give their customers the widest variety and choice in range of products. Positive culture means its staff is all-positive and co-operate with each other to get things done on time. All the staff are willing to contribute and acknowledge each others efforts and contributions.
Organisation structure, management style, culture and the effects on performance and objectives.
Organisation Structures
The flat structure can enable Sainsbury’s to meet its company objectives and improve in a number of ways. The flat structure has fewer levels and therefore has fewer staff in high positions and this means the company saves money and increases profits as less money is going to wages and salaries. The flat structures fewer levels enable information and data to flow quicker from shop floor to management so the objective of increasing sales can be met as the customer needs can be met quickly. The flat structure can also increase employee development, as the employees are well motivated. They are well motivated as they have a wider span of control and therefore feel as though they have more responsibility and a greater job to do.
The matrix structure can enable Sainsbury’s to meet its objectives and improve performance in the following ways. The complexity of the matrix structure ensures each project can have the best members of staff from each specialist department on their team. This means that the matrix structure can carry out and fulfil the objectives of new product development with the best teams. The matrix structure can also fulfil the objective of growth and expansion through their other teams each team will contain the correct number of specialist employees from each of the following departments: production department, marketing department, finance department and human resources department. The matrix structure can also ensure the company reaches its objective of increasing market share by developing new stores and expanding old stores, this expansion and growth means the stores will appeal to customers and the more customers they get the bigger the increase in sales and profits leading to an increase in market share.
Centralised and decentralised structures can help Sainsbury’s meet its objectives and improve performance in the following areas. The centralised running of the company means that Sainsbury’s must enforce some form of environmental objectives at all stores, but the decentralised running at store levels for Sainsbury’s means the environmental issues can be tailored for the surroundings of the store. This means the company can run effectively. The employee objectives are mainly centralised and the training of employees at store level is decentralised but together the training of the employees can lead to an increase in productivity as the staff can do what is needed of them quickly and effectively and the number of customers leaving the store satisfied and happy with the service they are getting can lead to an increase in profits and sales. This in turn can lead to an increase in market share.
Management Style
A good leader of the company will be able to change his/her management style to suit the purpose of the job.
If the manager was talking to a group of employees on the rules and regulations associated with Sainsbury’s an autocratic style should be used as the management should not have to explain the rules and the rules should just be told as they are.
If the manager was talking to a group of employees about how to increase profits and sales, a paternalistic style may be used where; they may choose to explain some of the points so the employees can get a better understanding of what they need to do to reach this objective.
If the manager was talking to employees and wanted discussion on what the customers want and the manager wants to get information a democratic style of management may be best as the employees are asked what they think and what could make the store better.
Culture
A customer driven Sainsbury’s can meet its objective of increasing sales because the staff are all motivated to giving the customers what they want, so having staff willing to help customers who can not find a product will increase sales. The staff will be all friendly and inviting, which should allow the customer to spend more of their money and increase sales. A customer driven Sainsbury’s will also meet its staff objectives as well as the staff will be motivated and willing to work to help customers. The increase in sales should lead to an increase profit and an increase in market share.
A positive cultured Sainsbury’s means its staff are all co-operative so a good amount of work should be done in the shift. This means the stock on the shelves will be stacked and that customers will have a good choice of products and will in turn increase sales. This increase in sales should lead to an increase in profits and as the staff all work hard, should mean less staff are required so the profits should increase as well. If all the staff are pulling in the right direction the quality and the service offered to the customers will also increase. This increase in service and quality should lead to an increase in sales and that in turn to an increase in profits.
Communication and ICT
Communication is the sending and receiving of information. Business and companies need to have a good communication link with many of their suppliers and customers. This is done in one of two ways. These are the two types of communication; there is an internal and an external method.
Internal Communication – This type of communication is done within the business. The main methods of internal communication are through meetings with the suppliers and other managers and departmental managers. These meetings ensure a smooth running of the business. The main types of internal communication are as follows:
-
Meetings - These are good because the company bosses can sit down together and discuss the problems or whatever may be going on and if there are any questions they can be asked and answered then and there. This means that the same question won’t be asked two or three times. If the boss wants to talk to all the employees it is easier to hold a meeting before or after a shift and talk to them all at the same time.
-
E-Mail - This is a good way to communicate when you want to send a large amount of data or want to type a short message. E-Mail is an instant method of sending messages and can save a company large amounts of money as the cost to use the Internet is the price of a local rate phone call and most companies now have a dedicated internet line with always on connection.
-
Memos – This is a method I would personally choose to communicate within a business, as the message is likely to be read rather than E-Mail.
-
Notice Board – This is also a good method of communication within a business as the notes can be pulled off the board when you have a message there. This means the sender knows a message has been received.
-
Letter – This is a more formal way of communicating with employees and/or suppliers it can be in as much detail as the writer wishes to put and is usually sent from a boss to an employee.
-
Telephone – This is possibly the best method of communication as the caller can speak to the person whether they are in an office or out of the office with the use of mobile phones.
External Communication – This type of communication is done outside the company or business it is done with the suppliers and customers. The main types of external communication are as follows:
-
AGM – Annual General Meetings these are done between the shareholders and the company directors. This is a formal meeting where new directors are voted in for the next trading year.
-
Fax – This is a method used to send data through the telephone line it is good for sending order forms and invoices.
-
TV Advertising – This is good for communicating with the customers, as the special offers will usually bring the customers in to the store to buy. The customer also gets to see the product that they want to buy.
What is ICT?
ICT is Information Communication Technology. What it means is that it is the use of information technology to communicate. The main methods of the ICT in business today are the use of e-mail, database, spreadsheets, word processors, Internet and Intranet, fax, mobile telephone, mail merge and accounting software.
The Key Benefits of ICT for Sainsbury’s
The main benefit of ICT is that once it is installed in the work place it is quick, cheap and very reliable. The only errors to come out of a computer are those that the human user enters in to it incorrectly.
The computers can store large amounts of data in one place and back up copies can be made easily to keep all the data safe. The computers can save a company a large amount of money because it can do many jobs at any one time. This means it can replace the current staff. The computers also do the jobs of manual workers (e.g. stock checks can be done by the computers, whereas before computers a member of the staff would have to check).
Computers make communicating with people who are in the office quick and convenient with the use of e-mail. The use of computers makes communicating with people around the world instant. This together with the new generation of mobile phones means data can be obtained anywhere in the world.
Main methods of ICT used by Sainsbury’s
The main methods of ICT used by Sainsbury’s are as follows:
Electronic mail - this is a good cheap means of communication it is very effective for the employees to interact with each other, it is not a very effective means for the company bosses to talk with the employees as there are spam mails that can be wrongly prioritised by the employees and the important email may not be read. The problem with this though is that the recipient of the e-mail may not read it as it may get prioritised incorrectly and discarded as spam. The E-Mails can have attachments with them such as text documents, images, pictures, graphs and tables. Sainsbury’s could use this to e-mail their Internet shoppers with special offers.
Word processing – this is done within the company by the bosses it is application software and is ideal for typing letters to cancel or amend an order as the details can be written as clearly as you wish to make out, records of letters sent can be kept on the computer for reference purposes or if a complication arises. Sainsbury’s could use this to write letters to other employees, so a record of the can be kept.
Spreadsheets – these are ideal for displaying the accounts and showing graphs to show the growth of a product. Spreadsheets are mainly used for handling numerical data; from the graphs produced budgets and forecasts can be predicted. Sainsbury’s could use to keep statistical data and numerical data of the accounts.
Database – This is ideal for storing customer and supplier data you can store data from the addresses of the customer to the email address and or what you are supplied from the supplier. Many different databases can be created for the employees, and for suppliers. The employee database can hold information on anything, mainly the salary and if the employee is due for promotion. Database can store customer details so each time the customer uses their loyalty card it is stored in the customer database.
DTP (Desktop Publishing) – this is used for drawing or designing a product is the use of drawing and illustrating of products. The pictures, images and graphs can help make posters or just to display the financial reports.
Enhanced Telephone Systems – this is a telephone system which directs calls to different areas of the office. The operator handles all the incoming calls. The telephone system has from 10 -15 or more phone lines and can handle both incoming and outgoing calls.
Mobile Telephones – these are telephones which allow people to be connected whether in the home or on the road. The portable phones allow the user to make and receive calls. The mobile telephones even work overseas which means people can be connected at all times.
Fax Messages – this is ideal when you want to send an order to a supplier or want information. It uses the telephone line to send papers and documents to the recipient. The same machine can also receive fax messages. Sainsbury’s could use this to fax orders and receive invoices from the suppliers.
EPOS – (Electronic Point OF Sale) Used in supermarkets mainly it can control stock levels and reorder new stock items when required and even control the number of transactions going through the till. The introduction of EPOS means customers are getting served quicker because the barcodes on each item have just to be scanned. Each transaction is recorded on the hard drive all the data can be analysed and the best selling products can be distinguished.
Internet and Intranet – A means of interacting with the customers over the Internet. It uses the telephone line to connect to the Internet. The employees will use the Intranet that will display their personal e-mails and any news about the company. The customers can log on to the Internet at home and order their shopping over the Internet and have it delivered. The Intranet is only available to the staff. The Sainsbury’s website offers costumers the option of ordering online, and other services offered by Sainsbury’s. These services include the Sainsbury’ wine club and the Sainsbury’s bank.
Electronic Data Interchange (EDI) – this uses the telephone line for computers to send and receive data.
Video Conferencing – these allow meetings to take place when people are in different rooms or in different countries. It uses the telephone line to send a video of the person so the person on the other end of the phone line can see and hear the person making the call.
Paging Devices – These are small devices that enable people to be contacted when telephones aren’t readily available. The pagers beep and a message can be read. The person receiving the message can then call the person.
Management Information System (MIS) – This enables managers to get a mass of information which in turn enable them to make better decisions. The system gives managers information on the best selling days, best selling products, best selling department and best selling shifts.
The Impact of Technology on Communications at Sainsbury’s
Technology can have both a positive and a negative impact on communications.
The benefits of ICT on a company such as Sainsbury’s are as follows:
Once the system is installed it is very quick. The system can control things such as stock management which can again save a lot of time compared to manually stock checking. The ICT can make it easier to stay in touch with people, with the use of mobile phones and pagers. The computer systems can make it easier to access information for both management and staff. ICT is a convenient way to stay in touch with people and keep on top of work. Computers can store masses of information in one place. This means Sainsbury’s would have more time to give better customer service rather than doing the manual stock taking as fewer staff are needed to stock take and order the new stock.
ICT can create new jobs within a company the jobs can range from installation and checking the equipment to Internet website development and maintenance. The ICT within a company can be very efficient because the computers can multi task and the overall quality of work from a computer is better than that of a human.
ICT enables a Sainsbury’s to reach a wider audience of people ranging from the shareholders to the customers and any one else wanting to visit the website. ICT gives a competitive advantage over its rival company’s like Tesco’s and Asda. ICT works continuously 24hrs a day. Human staff need to rest whereas the computers work throughout the night and do not stop.
The drawbacks of ICT on a company such as Sainsbury’s are as follows:
The systems could cause job losses, as the computer systems will replace some of the staff, as fewer people will be required. The computer systems are expensive to install, and once the systems get installed the staff may require training.
The systems may require regular maintenance and if the computer system breaks down it can cause huge financial loses for the company as most of the functions in the supermarket are carried out by computers. It is expensive to keep up to date with the rapid change in technology.
The security of Sainsbury’s would come into question as there are lots of people out there who are willing to hack into the company’s computer systems just to obtain financial details of a certain store how much employees are getting paid and other details stored on a computer. The Internet can also cause problems when it comes to the staff accessing e-mail attachments and maybe opening an email with an attached virus which could cause the company to lose all its information stored on the computer systems. The internet is unsafe in the workplace as the staff could get tempted to access chat rooms during working hours and the e-mail system could be unsafe as obscene and offensive messages can be sent. Some of the computers may be incompatible with a new system.
There could be staff resistance to the new systems if they are unhappy with having to get their hours cut or if they lose their job. The system could have teething problems. The new system may be difficult to introduce and the old system may have to run alongside the new system until the new system is fully functional.
The computers could easily have an information overload as the employees send too many emails too each other the computers may receive too much information from the terminals.
How the organisational structure, culture and management style interrelate in the business and evaluate their impact and that of ICT on the performance of the business.
Many of the internal styles and choices of management interlink with one another. The strategy Sainsbury’s chooses in each is essential to the overall profit and general running of the Sainsbury’s system. Without the other aspects the other one would not function as well.
Sainsbury’s, use a Matrix system. This structure helps Sainsbury’s meet its objectives because it motivates and develops employees as well as giving then a sense of purpose and security. It also encourages the company to be more flexible which helps in the ever-changing business world. It also helps to focus on tasks necessary for business success. It interlinks with the management style Sainsbury’s use. Since Sainsbury’s use three different management styles which means they can adapt to consumer, employee and company needs, they need a management structure that allows them to back this up. This also interlinks with Sainsbury’s positive and relaxed culture which is aimed to make the customers feel they have been invited and it will make them spend more, as they tend to have a paternalistic in store management style where the employees are involved with having meetings with staff and also managers ensure that the employee needs are met, which keeps them pleased and relaxed.
As Sainsbury’s is modernising ICT becomes increasingly a bigger and bigger part of Sainsbury’s. It is not just the points above that interlink; there is also ICT, which interlinks with all three. An example of ICT in management:
Chief executive Manager can sit in his/her office in front of his computer and receive reports, files and other documents from for example the secretary. Then he may then wish to send the documents to his non-executive managing directors in other parts of the world (or locally) using e-mail software. They then could read the report and a video conference (video visual meeting) could be set-up. It also has links with product suppliers - Possibly the biggest impact ICT has had was in the field of effective trade communications. It enables Sainsbury’s to sell more goods through online shopping.
ICT is also used in all areas of the organisation, from the till to the managers who use ICT for reports, memos and a variety of other things. It eases pressure and makes life generally easier for many aspects of Sainsbury’s. Another example of how ICT is used is in stock control.
ICT enables memos, emails and generally all information to be sent around the company/companies of Sainsbury’s. It interlinks with now nearly every aspect of Sainsbury’s life. ICT definitely has a positive affect of how Sainsbury’s achieves its objectives.
Production and Quality
Production Process
Sainsbury’s uses the production process shown below for producing its products. Sainsbury’s is more of a service industry and the vast majority of the products found in a Sainsbury’s store will not be manufactured by Sainsbury’s.
A few of the products that Sainsbury’s manufacture and sell are fish fingers, shampoo, conditioner and bread. The production process used is shown below.
Raw Materials
Production Staff / Machinery
Packaging
Storage and Distribution
Selling
There are two types of production that Sainsbury’s can use to produce their products. The different types of production are dependant on which type of product is being made.
The two types of production are as follows:
- Batch production this would be used by Sainsbury’s to make their bread. Batch production is when products are made in groups. The whole batch must complete each stage of the cycle together.
- Flow production this is where all the products are being continuously made. This means all products being made are identical. A lot of automation is used here and Sainsbury’s would use flow production in the making of biscuits.
Added Value
This is a term used that allows a company to increase its price on a product by saying the product comes with something extra, normally this is just very good service. Sainsbury’s can add value on its products by giving very good service. This added value makes the product appeal to both the customers that have already previously bought the product and the buyers that haven’t bought the product before but want a similar product. Sainsbury’s can offer after-sales service which also adds value to a product.
Quality at Sainsbury’s
Quality is the suitability of a good. If a good is of a high quality it is manufactured to the highest standard and is fit to meet the needs of the customer at a high standard. If a product is made to a poor quality it will meet the consumers needs but to a lower level of performance. A high quality product must meet all the consumer’s needs no matter if it is £1 or £100. Sainsbury’s manufacture their goods to a high quality and the consumer should receive all the satisfaction and have all their expectations met.
Quality control and quality assurance are two ways that Sainsbury’s meet all their customers’ needs. Quality control aims to meet the customer’s needs by finding all the faults and errors in a product by inspecting the product, the higher the level of inspection the better the product will be, as the products made that do not meet the high level of inspection are discarded. Quality assurance is carried out through all stages of the manufacture. This ensures Sainsbury’s will have a high quality product at the end of manufacture. A high quality product at the end of manufacture means the customers will be satisfied.
The Sainsbury’s mission statement states that they aim to be the consumer’s first choice first choice in food. One of the aims of Sainsbury’s is to deliver great service it can only do this through providing a quality product for the staff to sell and give the quality service. Another aim of Sainsbury’s is to provide quality food it can do this through the quality assurance and quality control checks. A third aim is to increase sales and performance this can only be done if the consumer feels they are getting a quality product that’s serves all their needs at a reasonable price, the quality of the product will help here.
Quality at Sainsbury’s is a major part of their production process this is why they have stringent quality checks and strict guidelines on how the product is made. I will give an example on the production of bread and the quality checks associated with this product. The ingredients are all monitored and checked before being cleaned and prepared for being baked. The bread is then produced in a batch process. Once the bread has been produced it is then subject to a random sample where one of the bread loafs is taken and the quality of the bread assessed. If the quality is not accepted it is discarded. All the bread loafs of bread go through a quality check where they are looked at for any irregularities in shape and are weighed as this is law.
Staff Training and Development
A well-trained staff will be skilled and able to provide a quality service to the consumer’s. A quality staff will lead to a quality product and quality service. This is why Sainsbury’s train their staff and offer them the chance to get NVQ’s. The quality of product will increase if the staff is well trained. A well-trained staff will also improve service to customers and improve the performance in after sales service.
Alternative Approaches to Quality
TQM (Total Quality Management)
This is an approach that ensures quality through every stage of production. It ensures quality through every stage of production from raw materials to after sale service because it is carried out by all the employees and not just those producing the goods. Every stage of the products life cycle is accounted for, as the consumer will view Sainsbury’s on how it does all the work and not just on the product they produce.
Benefits and Drawbacks
The benefits of TQM are that the consumer will know that they are going to receive a quality service from Sainsbury’s throughout every stage of them buying the product to them needing some after sales service. The consumer will then be able to arrange a suitable time to see Sainsbury’s and due to the quality of the after care sales staff they will be able to be seen and be guaranteed the time they deserve over the matter. The drawbacks of TQM is that extra money is required to train all the staff and this could lead to an increase in the price of the product as Sainsbury’s will still have to balance the books.
Effects on Sainsbury’s
TQM will require all the staff to be trained and punctual to provide a quality service to the consumer. The additional training will mean the human resource management teams will have to get specialists in to train the staff.
Effects on Sainsbury’s performance
The quality of service from Sainsbury’s will mean it is able to meet its mission statement of providing a fast simple quality service to the customers and meet its mission objectives as well. The increase in quality will lead to an increase in sales as the consumer will be happy with the product they purchased from Sainsbury’s which will lead to an increase in profits and which will increase the market share of the company. The happier the consumer is with the product and service means the more they will use the Sainsbury’s store leading o an increase in market share leading to an increase in the companies competitiveness in the market, all this from selling a high quality product.
Benchmarking
This is an approach where Sainsbury’s would monitor their performance against their competitors. The man aim for benchmarking is to learn from the competitors the best way to improve. Sainsbury’s could use benchmarking to assess the time it takes to produce a product and the time it takes from production of the product t distribution to stores.
Benefits and Drawbacks
The benefits of benchmarking are that Sainsbury’s will be able to assess the quality of their product compared to their competitors and improve the product. The customers will be more satisfied, and also the number of products discarded due to quality reasons will be reduced leading to more profits. Drawbacks of benchmarking are that most of the competitors will be unwilling to share their information with Sainsbury’s.
Effects of Benchmarking on Sainsbury’s
Benchmarking will give a product of high quality to the consumers. The product Sainsbury’s will be offering will be of the same standard if not higher compared to its competitors. This means the consumers will be happy; this will lead to an increase in sales and profits.
Effects of Benchmarking on Sainsbury’s performance
Benchmarking will give the consumers an increase in quality of the product they are going to buy. This will mean the consumers will be spending their money in a Sainsbury’s store leading to an increase in sales which in turn leads to an increase in profits. The benchmarking process should reduce the number of products being discarded due to improved methods of production leading to a decrease in raw materials wasted. This decrease in wasted good should lead to an increase in profits.
Conclusion
What I have found out from my report is that Sainsbury’s is the second in market share; it is behind Tesco which is in the number one spot, Sainsbury’s are working very hard to increase their market share by Sainsbury’s is a very popular company in the UK many millions of people shop at Sainsbury’s every single day, one the reasons that people shop at Sainsbury’s is that one of its main objective is that to please the customer, by concentrating on the customer’s needs and wants people decide to come back to Sainsbury’s and spend their money.
Bibliography
The Texts that I used,
Annual Report 2002
Obtained from, http://www.j-sainsbury.co.uk/investors/annualreports.cfm
AVCE Business Student Book
Authors:
Rob Dransfield
David Needham
The websites that I used,
