• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
Page
  1. 1
    1
  2. 2
    2
  3. 3
    3
  4. 4
    4
  5. 5
    5
  6. 6
    6
  7. 7
    7
  8. 8
    8
  9. 9
    9
  10. 10
    10
  11. 11
    11
  12. 12
    12
  13. 13
    13
  14. 14
    14
  15. 15
    15
  16. 16
    16
  17. 17
    17
  18. 18
    18
  19. 19
    19
  20. 20
    20
  21. 21
    21
  22. 22
    22
  23. 23
    23

A Strategic Analysis of J Sainsbury PLC

Extracts from this document...

Introduction

A strategic Analysis of J Sainsbury PLC Report To Managing Director by Christopher Robinson 1. Organisational Structure * 1.1 Current structure * 1.2 Disadvantages of Sainsbury's current Organisation Structure * 1.3 Alternative Organisation Structures * 1.4 The Future of Sainsbury's Organisation Structure 2. Finances * 2.1 Analysis of data 3. Marketing * 3.1 Introduction * 3.2 Conclusion 4. Management * 4.1 Open Systems * 4.2 Human Relations * 4.3 Internal Process 5. References Appendix 1. Alternative Models of Business Structure 2. Analysis of Financial data 3.The Marketing Mix * 3.1 Porter's 5 Forces Model * 3.2.1. Threat of New Entrants * 3.2.2. The Power of Buyers * 3.2.3. The Power of Suppliers * 3.2.4. Threat of Substitutes * 3.2.5. Industry Competitors * 3.2.6. Boston Matrix * 3.3 Conclusion 4. Strategic analysis of Sainsbury PLC using Porter's 5-Force Model 5. The Boston Matrix 1. Organisational Structure 1.1 Current structure J Sainsbury PLC is a decentralised organisation with a divisional or 'group' approach as the basis of structure (fig 1). Fig 1 Whilst the main focus would appear to be on the UK supermarket chain there are several other businesses (operating units) in which the organisation holds interests. Theses include: * Shaw's Supermarkets Inc * Sainsbury's Bank * J Sainsbury Developments Ltd * Sainsbury's Property Company In divisional structure senior Directors ( who are on the Operating Board which is responsible for the day-to-day running of the company. The Chief Executive and the Finance Director are also part of this team. "http://www.j-sainsbury.co.uk/ar05/index.asp?pageid=50") give each unit the authority to design, produce and deliver the product or service, using resources under its control or bought from outside suppliers. Fig 2 A functional structure (represented in Fig 2) can be expected to operate within each division and hierarchies become more apparent. The Group Director of a division or business area will report to the Operating Board which then reports to the board of Directors who oversee all the divisions of the organisation. ...read more.

Middle

EPS serves as an indicator of a company's profitability. The rise in the earnings per share from £143 in 2001 to £188 in 2002 is a good sign clearly for shareholders, but it also shows an increase in the profitability of Sainsbury's. The Chief Executive and Chairman are happy with the improvement in these figures, however, declining share price is a continuing cause for concern as the table below shows; Appendix 3 The Marketing Mix Product Decisions are made about how to target the market and make the product appropriate to the market segment that the company is trying to sell to. Factors that need to be taken into account include; packaging design, materials used, value of the product, quality of the product, product branding, usefulness of the product, and quantity of the product provided. Sainsbury's product is based around a wide choice of branded products plus cheaper but still good quality own brand products. Part of the Product section of the mix is the ability to change or develop the product being provided in order to match the requirements of the customers that it is being aimed at. It is essential that a firm can change/alter their products to reflect any change in consumer needs. Sainsbury's is currently struggling to get the product differentiation required to attract a particular segment of the market (high quality, modest prices) as Marks and Spencer along with Waitrose occupy the high quality high prices segment and Tesco occupies the medium-high quality low price segment. Now more than ever Sainsbury's needs to realise that the products it provides are at the end of their maturity stage in the product life cycle. The methods for product revival are to; encourage consumer loyalty, distribute the product as widely as it is demanded by consumers, and cut selling prices. Price The price of the product, particularly the price compared to that of your competitors is a vital part of marketing. ...read more.

Conclusion

Power of Buyers * Threat of Substitutes * Threat of New Entry * Bargaining Power of Suppliers The critical issue is how Sainsbury's supermarkets can rebuild it's market share if not it's past dominance in a highly competitive environment. The UK company has struggled to compete recently with Tesco's advances, especially into the 'middle ground' of better-off, middle class customers, as they have combined higher reputation for quality with low prices. Whilst the US company has seen growth in it's convenience sector Sainsbury's other businesses do not enjoy significant market share and are principally seeking to create niche markets using the leverage of the brand reputation of the parent company. Sainsbury's bank in particular has encountered a challenging competitive environment with the growth of the on-line financial services sector. All in all Sainsbury's is operating in a challenging and developing strategic business environment and struggling to cope with intense competitive pressures; old glories are becoming increasingly hard to repeat. Appendix 5 The Boston Matrix This diagram below is a supplement to the marketing mix analysis and shows where I think each of the divisions under investigation in Sainsbury's are placed. The boston matrix is a means of analysing the product portfolio and informing decision making about possible market strategies. Analysis In recent years Sainsbury's supermarkets have been moving away from STAR status to a CASH COW. This is because; it has a high market share, low growth markets (maturity stage of product life cycle), high cash revenue and positive cash flows. Contrary to Sainsbury's supermarkets, Shaws is moving away from DOG status -where large sums of money are required for support and the products are in a low growth market - to a STAR status. It is becoming the best performing division in the organisation. Sainsbury's Bank and Developments Property have been hard to organise but I believe that whilst the bank hasn't performed particularly well there is scope for a successful division here if more of the organisations efforts are focused on it. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Innovation For Business Success. It is possible to be innovative in both large ...

    the breadth and thickness of the pipeline of innovation activities, between the input (resourcing) end and the performance outcomes. Innovation outputs can be in terms of direct outputs, such as patents, new products and services developed, or the ultimate business outcomes of these, such as the sales and profits from new offerings or the costs reduced by process innovations.

  2. Balfour Beatty. The purpose of this report is to identify and select a UK ...

    These companies are Belfour's main rivals when it comes to major projects. The current market is slowing down, therefore decreasing the threat of rivals, making the industry less competitive then it was a couple of years ago. 32 Appendix 8: Table 8: Ansoff Matrix Market Penetration seeks to achieve four

  1. Shouldice analysis

    Therefore, it can be concluded that the availability of beds in the hospital is the bottleneck in the whole process flow and the number of beds in the hospital has to be increased to fully utilize the already available capacity of other critical resources.

  2. General Management - organisation, leadership and theories.

    These values define the manner in how business will be conducted. Concepts define what products or services the organization will offer and the methods and processes for conducting business. These goals, values, and concepts make up the organization's "personality" or how the organization is observed by both outsiders and insiders.

  1. Strategic-Marketing-Management. This report is a study of principles of Strategic marketing management by considering ...

    Some of the key disadvantages of not following the marketing planning process are: * Faulty marketing decisions based on improperly analyzed data * Confusion and communications between the top management and the employees in absence of corporate objectives * Creation of unrealistic financial projections due to incorrect interpretation of data

  2. Using an extended example critically examine whether the sector matrix framework gives a better ...

    improving financial performances, it is also falling weak in car rental services, thus putting in stake its ownership in big car rental companies such as Hertz. Also,though the matrix framework has appeared to be successful for Ford, it can also be disappointing, and not very useful for another businesses.

  1. Strategic Business Plan of Nokia. This strategic report examines thoroughly Nokias current position ...

    base stations operate in line with international exposure guidelines and limits that are set by public health authorities. LEGAL FACTORS Key Issues Impact On Nokia * Patents/ * Licences Nokia is prone to infringe patent license agreements as it may not cover Nokia's future businesses, changes in corporate structure and

  2. Strategic Analysis of Burberry Ltd. In this report three models will be used: PEST ...

    Retailers need to address the segment of the large group to earn more money. It was observed (Sippo n.d.) that the age groups between 35 and 44 have the highest shares in the British population today with 7.7% (35-39) and 8.0% (40-44)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work