Section 1. Introduction 

In recent times the globalisation process is one of the most important for every organisation. In this situation, Sainsbury is one of the most renowned retail companies present in the United Kingdom. This company is focused on creating strategies for adapting to the globalisation process and spreading its business in other subsidiary countries. The company began its journey in 1869 and continuously grew in the domestic market of the United Kingdom. However, there are several weaknesses and challenges faced by this company. In this research, the major challenges by Sainsbury and its impact on the shareholders and stakeholders of the organisation have been analysed properly.  Other than that the major strategies that can develop this situation for the company have been discussed and its capability to find out major strings has been focused.

Background of the organisation 

The retail industry is one of the largest industries in the United Kingdom and Sainsbury is the second largest organisation in the retail industry. There are more than 600 supermarkets and 800 convenience stores in Sainsbury are present in the United Kingdom. According to organisational Data more than 1,71,000 employees are working in this company. Based on financial information for 2023 the company has a revenue of more than 38.2 billion and has earned 250 million U.S. dollars in profit from last year which is more than 6%.  However, there are several challenges that are creating obstacles to the continuous growth of this organisation (Nelms et al. 2020). These challenges are mainly related to current affairs and the government’s understanding of the organisation.

Figure 1: Organisational performance of Sainsbury

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(Source: Bedford, 2022)

Other than that there are several competitors that come with advanced technology and methodological strategies for continuous development and creating obstacles for the organisation. The new entrance of the retail market in the United Kingdom is also creating several economic and legal challenges for the Company.  However, in the domestic market, the company has a high brand reputation that helps them to manage all the challenges and it is necessary for them to create strategies for management development, leadership enhancement, economic stability management, and others (Bedford, 2022). Sainsbury is also focusing on maintaining their inventory by creating different diverse products and including diversity in the inventory (Wake et al. 2019). However, it is mandatory that the organisation maintains a better online presence and captures different social media platforms for marketing which can effectively enhance their economic growth.

Section 2. Challenges the client is facing 

Globalisation

Nowadays globalisation is an important and inseparable part of the growth of any organisation. The world is moving towards very effective marketing with chain reactions based on different technological developments. Most retail organisations are expanding their market to create global effectiveness and understand diversity from a global perspective. There are several regulations and lots of different countries that are separate from one another and these processes of globalisation are a bigger challenge for the organisation as the domestic market is also captured by multinational companies (Beckmann et al. 2022). Therefore it is necessary for the company to overcome these challenges and participate in the globalisation process for development and continuous economic growth.

Controversies

Sainsbury is a company that has a very good presence in online marketing and it communicates with their consumers through different social media platforms. However, there are several controversies also being seen in different social media that are affecting the reputation and brand-building capability of the organisation. Maintaining this situation is one of the most important priorities for the organisation and it is necessary to maintain its reputation as well. Sainsbury has faced several controversies related to fixing dairy prices, avoiding organisational schemes and taxation fees,  avoiding sustainable development goals, and ethical issues.  Other than that there are several controversies related to discrimination and inequality have also been found in social media feedback (Ayenew, 2023). Therefore it is necessary for the company to create a better reputation in the market by maintaining inclusion diversity and equality. To overcome taxes and controversies the organisation needs to follow all requirements and government rules and maintain its reputation in the good book of government.

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Rules and Regulations

After Britain’s exit from the European Union the UK and the legal Penal Code of the UK have set different rules and regulations for the organisation present in the market. According to different information and journals, these legal standards and rules are major challenges to the development of Sainsbury.  According to different resources, these rules are the major setback for introducing different ideas and products for the company. Other than that there are several rules that have also been created for developing global businesses and exporting products into subsidiary companies or markets. There are several liability laws in different parts of the UK that are creating major threats to the stability of Sainsbury and political issues have also been found out (Wang and Yang, 2022). However, it is necessary for the company to maintain all the rules and government regulations to maintain its reputation and create a better perspective for the future.

Business Project

 

Figure 1: Challenges faced by Sainsbury

(Source: Self-developed)

Competitors

The retail market is mostly a very competitive market and to survive in this competitive genre the organisation needs to create different strategies for maintaining competitive advantage. However, nowadays Sainsbury is facing several challenges in the competitive aspect and cannot cope with new entrants that are coming into the market with several technologies. The major competitors of these organisations are Amazon Tesco Morrison John Lewis Asda and Co-op.  These companies are also globalising their business and strengthening their infrastructure in the UK (Neligan et al. 2021). Tesco is a threat to other retail companies as it is expanding its business and including other retail markets. Other than that, maintaining sustainability and ethical boundaries is creating a competitive advantage for other companies that is not a good sign for product development or company continuous growth.

Management issues

Due to human resource management challenges and other issues for maintaining ethical and social rules, environmental sustainability rules, and facing different controversies, the organisation is also facing management issues. These issues are mainly related to creating unique and new strategies for innovation and facilitating the R&D teams to create new ideas. Management is also facing issues in employee development and employee retention rates. Due to poor finances, the organisation is not capable of maintaining the employability of more than 15,000 employees.

Section 3. Purpose of the report 

In recent times Sainsbury is facing different challenges and therefore the management team is losing hope for the stability of the organisation. Though the company has a strong reputation in the domestic market it cannot capture or penetrate in other countries business due to several challenges. However, the organisation has strong financial support and can create different strategies for maintaining the globalisation perspective (Banerjee, 2019).  This report is mainly focusing on creating different strategies and finding out the challenges of this organisation. Other than that different secondary data have been collected and that allowed for finalising the recommendation that can help in organisational development. There are several strategies, principles, theories and models that are helpful for these drastic situations of the company. Competitive advantage gaining and mobilising the rules of the organisation for continuous development have also been discussed.

Section 4. Impact of research on stakeholders 

As one of the biggest retail companies in the United Kingdom Sainsbury has a large number of stakeholders and shareholders it is necessary to understand that the stakeholders of this company are the people that are dealing directly or indirectly related to the organisational process. The major stakeholders of these organisations are the fundraisers, shareholders, management team, suppliers, the local community, And its customers. However, the organisational challenges directly affect the relationships between different stakeholders. It is necessary to understand that these stakeholders have several problems and issues due to these organisational challenges.

Shareholders and fundraisers

Shareholders and fundraisers are those people who financially promote and support the organisation. During the COVID-19 pandemic, shareholders of this company have already suffered from heavy financial loss. However, after overcoming these pandemic situations the fundraisers and shareholders started to create different financial investments to support the company. Due to recent challenges they are facing a loss in economic stability and losing their faith in the organisational structure. However, they have the potential to help the organisation and make strategies with the help of R&D teams to penetrate the global market.

 Management team

The management team has different responsibilities. However, the major responsibilities of the management team are to carry out the vision and objectives of the company, to create financial development and continuous growth for the company, to innovate new ideas for continuous development, and to understand and divide the investment of the fundraisers. Other than that the organisational culture and environment are totally dependent on management teams as they work as the team leaders and control the employees in the work culture. In this situation, the organisation and employees are facing different challenges related to productivity marketing, and sales. Therefore it is a very painful situation for the management team and they are facing stressful situations for these challenges.

Suppliers

Sainsbury’s believes in “sourcing with integrity” and they have the motto to create their supply chain with sustainability and follow different rules for maintaining the suppliers. However, 2 deviates and controls more than 30,000 products in 600 supermarkets. The organisation collects their raw materials from a wide number of suppliers from Britain, Europe, and even from the whole world. In this situation, the suppliers are losing faith in economic stability and they are also losing belief that the organisation can expand their business in the global market. Therefore the suppliers started to turn down the company and invest or distribute the products to other new entrants.

 

Figure 1: Stakeholder assessment in the organization

(Source: Self-developed)

Customers

Customers are one of the most important stakeholders of any company. As a retail market or organisation since bury need to provide effective customer service for maintaining customer loyalty and acquiring new customers. However, due to the several challenges in the financial sector, the organisation has to raise the prices of several products. In a competitive market like the United Kingdom, a price rise is one of the most negative situations for any company. On the other hand, there are several other companies with similar products that can target the customer base of Sainsbury. Other than that the organisation cannot maintain or adopt the technical advancement for customer service which works as a drawback for the company.

 Employees

Due to several management challenges, inventory challenges and different issues with human resource management, it is obvious that the employees are facing several issues related to work, motivation, salary and productivity. On the other hand, there are several decisions made by the executive team that create depressing situations for employees. According to an organisational report, the organisation is closing more than 400 stores which is causing employment laws for more than 1,500 people. Other than that, the employees cannot maintain faith in the organisation as the fundraisers are not providing economic support and the company is already facing financial challenges related to stability.

Section 5. Evaluation and analysis of secondary data

This particular study has been seen to be developing effectively through the help of secondary data and the process through which the entire evaluation of the matter has been done is the secondary data analysis process. Different journals and articles along with the company websites have been used to evaluate the entire subject matter. In addition, the research has also used financial websites in order to extract annual reports in terms of statistical data for the evaluation.

Data sources such as Google Scholar, PubMed along with MDPI have been used to extract relevant yet convenient data for the evaluation of the research matter. All the journals have been taken from these databases and are from 2018 and onwards. No such previous data before 2018 has been used in this evaluation. In order to discuss the critical challenges that the company has been facing for a long time, this report has used different websites of the company and newspaper articles as well.

Management is considered to be the most crucial yet effective part of an organisation. Overall development of an organisation is fully dependent on the management. Apart from that, business fundamentals can also be developed as well through the help of effective management approaches. According to the statement of Wang et al. (2022), effective and efficient management can assist organisations to accommodate their anticipation towards business success. On the other hand, Banka et al. (2022) have mentioned that companies that have an efficient human resource management team in their business, are the ones to develop effective decisions for the business so that the business gets developed and explored as well. Hence, it can be said that management is a necessary and most needed factor for business development.

On the other hand, strategic human resource management is another effective aspect of business development. Identification of probable business risks and constantly providing a solution to the business can be managed effectively through the SHRM. It provides crucial strategies in business so that the business can achieve emerging business opportunities (Reim et al. 2022). The modern business field has emerged dramatically after globalisation, therefore, ensuring these particular aspects in the business market can successfully promote its business status.

The organisation has been seen to be lacking effectively in the management area and that has produced multiple calamities for the company and their reputation. During the absence of the pandemic, the company has started to lose their employees along with its customers. After the severe outbreak of the pandemic, this percentage has hiked massively. According to a report from the company, almost 200 employees have been seen to be revoking their individual job roles from the company whereas 17% of the existing customers have also lost. The possible reason that the employees have claimed was the inappropriate approach from the management and unethical behaviour (Sainsbury’s, 2018). A nasty organisational culture has proposed this scenario for the company. As a result, the company has not retained their profit margin and a loss of 121 million US dollars has been seen just after the pandemic (Sainsbury’s, 2018).

Therefore, Sainsbury needs to implement effective organisational leaders to maintain a healthy environment across the company. Transformational leaders will be the most appropriate ones that can help the company to counter these issues. Apart from that, the implementation of scientific management theory can also be an appropriate step. As per the view of Farida and Setiawan, (2022), an effective leadership approach can accelerate the business performance and also it can move forward the business outcome. Therefore, it can be said that there is a proper necessity of having these particular business theories in the business of Sainsbury so that it can assist in overcoming these particular issues in the business.

Evaluation of technological necessities

Technology has been emerging in the business field constantly and enterprises are getting effectively beneficial. Apart from that in the case of business expansion, technologies are assisting organisations effectively. In the case of business expansions, these technologies are helping organisations a lot.  The most crucial factor that technologies in this modern era have been offering to organisations is data security. Technologies such as IoT, and cloud computing are the most conventional technologies that are helping organisations to gain maximum customers in their business (Huang et al. 2022). The customer attrition rate is the most crucial factor that can be managed effectively through the help of securing the data of their customers.

Multiple organisations have been seen across the UK that are successfully running their business through the help of effective technologies in their business field.  As an example, Tesco after the implementation of IoT and machine learning in their business system, successfully managed to secure the big data. It has maintained the employee retention rate by 56% and offered an emerged economic profit of 2.78 billion US dollars. In contrast to that, Unilever has lacked in this area and unfortunately, they have lost 45% of their existing customers in the business (Tesco, 2023).

Apart from that, the speed of production and business performance can be managed effectively by implementing technologies in the business system. Therefore, in order to anticipate these changes in the business system, Sainsbury needs to think about putting these particular technological changes in their business. Management of the organisation is the ultimate source that can assist in implementing different technologies in the system of business. Contingency theory and implementation of AI  tools would be the most effective step to explore the business. Additionally, these technologies and theories can motivate the employees so that they can remain encouraged at the time of their performance. According to the given statement of Nayal et al. (2022), organisations can get a different dimension in their business system through the revolution of the technologies in the system of their business. An improved Organisational performance can offer an effective hike in the production rate of the organisation.

All these crucial attributes have been seen to be managed properly in this evaluation by using the secondary data. Discussing each method with the help of different journals and articles has successfully assisted the research in fulfilling all the crucial requirements in this report. Sainsbury needs to think about implementing these technologies along with the theories so that they can successfully improve their business system and secure their future position across both the global and domestic business markets.

Evaluation of business competitors

Competition in the business market is one of the most obvious factors and each of them tries their best to take competitive advantages.  There are different aspects to developing the business and gaining competitive advantages. Through signifying relevant journals into justification, the evaluation has been made in this stage. After globalisation, competition in the business market has explored a lot and it has pushed enterprises to think differently to make their business position stable and effective (van Loon et al. 2022). Encouraging organisations to implement different theories and frameworks along with different business strategies has helped the organisations to accommodate the business market.

In this stage of competition in the business market, there are some effective necessities for thinking differently in business. Apart from that, organisations need to think about implementing different types of management approaches such as strategic human resource management approaches. It has been seen that maintaining a strong relationship with the stakeholders along with thinking about mitigating their demands can attract stakeholders and investors to invest in the business which can further help the companies to accommodate new technological implementations in the business (Zhang et al. 2022).

Organisations such as Tesco and BP have been seen to be maintaining an effective business position across both the domestic and global markets. Implementing the most recent technologies in the business and at the same time, following different management approaches has made their business successful in the market. Organisational leaders are the most consistent yet crucial aspects of the organisation that has been leading the businesses of such organisations. Employee management along with decision-making and maintaining a healthy environment and motivation among the employees has successfully improved the production speed for the organisations (Tapaninaho and Heikkinen, 2022). The high amount of production has assisted companies to achieve more in the business market and thereby they have established a strong position in the business market. They have been providing strong competition to their competitors and at the same time, managed to retain their brand value. Brand loyalty for these companies has also gone to a higher stage as they have evaluated their customers properly (Melnyk et al. 2022). Using different methods of marketing such as social media marketing has also assisted companies like Tesco to reach the fullest people in the business market whether it is global or domestic.

Therefore Sainsbury needs to think about developing effective leadership approaches in their organisation so that they can successfully do more in the business. Apart from that, the employees of the organisation need to be valued and their individual demands need to be mitigated so that they can remain encouraged. Proper motivation in performance can assist organisations in developing their business performances and lead the business to gain competitive advantages (Charatsari et al. 2022). On the other hand, satisfying employees can be also an effective matter that can help the organisation to maintain a healthy working environment across the organisation.

To support these statements, journals from authentic databases have been used and this particular information has successfully developed the quality of data and its effectiveness so that future scholars can get an effective overview regarding the matter.

Despite all these critical aspects, there is also an effective area where the company Sainsbury needs to look forward. Social media engagement has become one of the most crucial things for businesses that can assist in an effective business expansion. It has been seen that multiple organisations have successfully managed to emerge in social media for marketing which has ultimately assisted them to improve their business position (Ayenew, 2023). Unlike other enterprises, the company Sainsbury needs to think about their social media engagements for the betterment of the business.

Section 6. Recommendations and Conclusion

Recommendation:
Recommendation 1: 

The famous retail organisation has been seen to be facing multiple issues regarding its management and business strategies. It has been seen that organisations that are not even following effective management practices in their organisations are the ones to face loss in their business effectively. Therefore, it can be recommended that the esteemed organisation Sainsbury need to focus on implementing effective business strategies such as “focused cost leadership” in their business system for the betterment of their business.

According to the mentioned view of Wang et al. (2022), focused cost leadership is considered to be the most crucial thing in a business that can assist in maximising the cost percentages and at the same time, reduce the production costs. As a famous retail organisation, Tesco has successfully implemented this particular business strategy in their business and was able to manage 132.98 million US dollars in terms of production cost. Apart from that, the waste management process has also saved 1.63 billion US dollars in the business (Tesco, 2023). Therefore, it can be recommended that Sainsbury also need to avail of this particular strategy of cost leadership in their business for the betterment of their primary financial area.

Recommendation 2:

Another loophole that has been seen for the mentioned organisation is the minimum implementation of the technologies in the business system. Therefore, it can be recommended that organisations use technologies such as IoT for their data security. On the other hand, machine learning can also be a matter that can assist in business expansion (Neligan et al. 2022). Technological implementation can assist in business growth, push in business expansion and provide tough competition to others. Unlike BP, Sainsbury can use these technologies for big data security and reach in the global market. Data security has been an issue for Sainsbury which has taken almost 28% of its customers (BP, 2023). Therefore, the company needs to avail this technology for the betterment of the business.

Recommendation 3:

It can be recommended that the company finetune its management and strategic human resource management aspects to avoid controversies and maintain a good reputation across the business market. The brand value of the company has gone down a lot as they have entertained multiple controversies in the business market. Bad reviews on social media have brought out customer attrition at a maximum level for Sainsbury. Hence, implementing the transformational leadership theory along with the SHRM in the business would be the most effective step for overcoming the issue. As per the view of Ayenew, (2023), transformational leadership theory assists enterprises in maintaining their brand value and gaining customer loyalty in the business as well.

Recommendation 4:

Inappropriate rules and regulations in the business system are the most significant issues that Sainsbury has been dealing with. It can be recommended that the company needs to focus on modifying their regulations. According to Melnyk et al. (2022), effective and ethical regulations in the business can assist in maintaining a healthy organisational culture and also assist in reducing the rate of employee attrition. Therefore, to make employees more valued and satisfied, the company needs to implement the “employee protection act” and the “act of employee well-being”. Along with that the company needs to transform them into sustainable so that these factors can assist them in overcoming the mentioned challenges.

Recommendation 5

According to different secondary data, it is possible that the organisation is facing several controversies related to price settlement of dairy products, marketing,  maintaining ethical and social responsibilities, and maintaining equality, diversity, and inclusion in the organisational process. In this situation, it is necessary for the company to come up with a strategic response that helps the organisation maintain its responsibility and reputation. Based on different studies it is confirmed that there are several steps that can be recommended as the solution to this unimaginable problem. At first, organisations need to assess the scandal or controversy and find out the visibility of allegations.  After that, the organisation needs to Spill over the facts and rebound these facts with true incidents. In this scenario, the organisation has to acknowledge the problem and share the view of the company in these allegations (Gunawan, 2022). After sharing the view the organisation needs to come up with different tactics that can help In creating a strategic response.

The organization needs to evaluate both the true and false factors of the allegation and create a report with full transparency for publishing those sectors and stop the rumour about any scandal or controversy. These stages have also been effective in creating strategies for parodic marketing which is one of the most creative and plausible marketing strategies in recent times (Zouari and Abdelhedi, 2021). On the other hand, following these strategic steps to overcome that challenge related to any controversy or scandal can maintain the reputation and also help in gaining the sympathy of the public which can increase the sales and financial stability of the organisation.

Conclusion

Sainsbury is one of the most renowned and large organisations in The United Kingdom. This organisation has been developing its financial growth for far more than 150 years.  However, due to several strict rules and regulations, the organisation cannot adopt modern technology that can elevate its resources and capability to grow in the global market. In recent times the organisation is facing several challenges from different aspects that are creating hurdles in continuous growth and economic development. This research mainly focuses on these challenges and understands the harmful effects of these challenges. Several issues related to human resource management finance sustainability, modern technology, price rise, and customer acquisition have been analysed in this report. The major challenges and issues have been analysed by critically evaluating secondary data in order to create reliable evidence and support for the report.  The secondary data evaluation is also necessary for understanding the depth of these harmful issues to the organisation and its chance of creating stable strategies for maintaining the accountability and feasibility of the products and the organisation. Other than that there are several recommendations that have been analysed for enhancing strategies and the quality of organisational structure that can create compatibility to the organisation.

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