Assignment Sample on MKT7045 Global Marketing Management
1. Introduction
The centre of attention of the study is to emphasize whether Sainsbury will be able to establish its business in the Indian market. The report states the different theories related to the company as well as the shareholders. PEST analysis is done in the report to get a clear view of the external environment of India and to find out whether it is possible to make business for Sainsbury. There is mention of different laws and orders that are to be followed by the company to establish itself. The joint venture is the market entry strategy that is found to be the most suitable for Sainsbury to make its position in the Indian retail market.
2. PEST Analysis
PEST analysis is used in the report to look after the external environment of Sainsbury to establish its new branch in India. The four factors of PEST are political, economic, social, and technical which are considered to be used to give tough competition in the market. Sainsbury, which was introduced in the UK and has its branch in different countries of the world and are planning to open its business in India.
Political
The stable political structure is counted to be the best for the retail industry like Sainsbury as it provides the most flexible facilities to run their business smoothly. FOOD SAFETY AND STANDARDS ACT, 2006 is the law that is to be maintained for the retail industry for making their business in India. The license is provided by the Food Safety and Standards Authority of India (FSSAI). Sainsbury will be able to establish themselves in the Indian market as they never compromise with any of the processes such as dispersal, production, storing, and delivering that are related to their food. The different political parties of India have made an obligation and restriction regarding FDI for which the higher authority of India had to stop FDI and may be proven as a problem for Sainsbury (Taxguru.in, 2020). At present in India, retailers from the international market are allowed to enter in retail business by signing franchising agreements.
Economical
The retail industries are found to be one of the economic incomes of the country India as it has a share of nearly 9.8% of GDP. The GDP of India is more than 2.86 lakh crore as the retail of the country grows more than any other country in the world. Some of the economic factors of Sainsbury that can get over-elaborated are the rise in fuels, increment in salaries of employees, and competitive market. Due to the rise in fuels, the transportation cost gets high which will create problems for Sainsbury to deliver their items in free delivery to long-distance locations. The salary of employees is to be paid according to the type of work they are provided if they demand more it will create chaos. Three types of taxes are needed to be paid by Sainsbury namely Income tax, goods and service tax, and professional tax. According to the survey of the retailers association of India (RAI), the retail industry has to face a loss of more than 12 % due to the pandemic period(Businesstoday. in, 2020). The Statistical overview of the country during Covid-19 claims that the GDP of the country has fallen to almost 24% which is unusual compared to other years(The wire. in, 2020 ).
Social
In India, due to the presence of 29 states, Sainsbury has to take permission from the State Labour Department and get shop and establishment registration. Trade license is needed to be issued by the municipality of the state which has a period of 1 year and is applicable for each portlet (Alava et al. 2018). There are more than 19 laws in India regarding working employees which are mandatory to be followed by Sainsbury. The labor laws are made to look after all the factors such as health, the salary of the employees who are working for Sainsbury. The people of India are more comfortable buying groceries from the supermarket as it provides them with fresh products at reasonable prices.
Technical
The technical factors that can influence Sainsbury in establishing its outlets in India are the usage of Artificial Intelligence, Machine Learning, Automation, Cloud Computing, and Big Data. The above-mentioned analysts are used by the competitors in the Indian market. Sainsbury can make use of such technological advancement to have a look at the company’s profit (VÁZQUEZ et al. 2018). Sainsbury can use the following smart technologies with the help of the implementation of the latest machinery for service development. Another latest trend that can be used as a technological improvement by Sainsbury’s opening Online Stores.
3. Market entry plan
3.1 Market entry strategies
Market entry strategies are needed for Sainsbury as they are going to indulge themselves in a new country and do not have any experience. According to Watson et al. (2018), joint ventures would be the best market entry strategy for them as they have no idea of running their business in India. Sainsbury’s can set up their business in a joint venture with a renowned company in the retail industry. The main objective of the joint venture is to help Sainsbury to make its business in India along with the help of local people. It will help to have a clear view of how to perform the different processes as there are specific strategies for different countries.
The venture will assist the company to establish its contact with the local shareholders that will be performing with Sainsbury in the future. As stated by Wu and Wang, (2021), the partnership will be performed where both the companies will have the equal rights to perform all the tasks along with equal share. The distribution channel is not well known to Sainsbury as they would be working for the first time in the Indian market. From the venture, they can get to learn about the working strategies that can be adapted by Sainsbury to develop their business in the country.
To make the joint venture successful steps are needed to be followed by both the companies. Recognition is the first step where there is a need to identify the different strategies to make the objective of the business successful. As per the view of Watson et al.(2018), the next step is to evaluate the product of both the companies as it will help Sainsbury to improve its quality of the product. The third stage is to develop a strong operating system so that it does not create an obstacle in the process of processing the food product. It is necessary to develop a standard economical structure for Sainsbury’s all departments such that there is no crisis. The proper contract is to be established between the two companies such that both of them can gain profit and can maintain a healthy relationship for a long time.
3.2 Resource-based theory
Resource-based theories are used by Sainsbury to have privilege in the competitive market as its resources are well available. The following theory is used to gain an advantage in the competitive environment and overcome all the threats. According to the view of Araya et al.(2019), in the theory, there is mention of two types of resources namely tangible and intangible resources. The tangible resources of Sainsbury are the food items, area of the outlets, and human resources. In contrast, the printable ones are images of the company in the Indian market. Resources are the main things that make Sainsbury’s different from other grocer shops. The employees are the human resources that are taken proper care of by training them properly. The resources are to be valuable such that it increases the efficiency of Sainsbury and improves its position in the retail market of India. The quality of the resources is to be different and infrequent from the other competitors to prove its uniqueness.
4. Benefit of expansion of the Sainsbury
Sainsbury will be able to gain a huge amount of profit if it is willing to have its branch in India as there is high scope. The main advantages that are to be faced by Sainsbury from opening its outlet in India are:
Economical advantage
In India, the company has a huge demand which will provide an opportunity for them to gain huge success in selling their products. As stated by Chang et al.(2017), compared to other biggest competitors such as pantaloons retail limited, big bazaar, and food Bazar the sales rate would be high due to the availability of unique food items. The packaging of the food items is better in comparison to other competitors which will provide them to be economically strong in the local Indian retail market. The company makes its economy stronger in the global market by establishing itself in the international country.
Betterment in servicing
The quality of the foods is undoubtedly one of the best and are never found to be compromising irrespective of any pandemic situations. It has been found that during the covid-19 period it gets its outlets open which will provide the customers the facilities to buy their necessary grocery items. As per the view of Czyzewska and Roper (2017), the products are levelled on the name of Sainsbury and are found to be not compromising with the standard of the food items as they care for their customers health. As mentioned by Dogru and Sirakaya (2017), the foods are sold in the name of Sainsbury which has never failed to lose the trust of the customers and their brands are liked by them. The supply chain management of Sainsbury is known to be performing well as they give equal respect to all the stakeholders.
Customers support due to saving energy
One of the most unique things that are used by Sainsbury is making the least consumption of electricity. In India, there is much need for such kinds of retailers who can make other companies well aware of saving electricity for the near future. According to Masadeh et al.(2019), the company has made the usage of electric bulbs that consume less electricity in their storerooms. According to the view of Jumli et al. (2018), India’s energy market overview among all the countries India needs to have control over its electricity consumption. It is one of the exceptional features that is adapted by Sainsbury that will provide it the benefit to improve its reputation in the international market. Customers are found to be more influenced and supportive as the initiatives are taken by Sainsbury are improving the poor situation of India and saving energy.
5. Academic theory to justify the analysis
5.1 3p’s
The main reason for using 3 p’s in sustainability is to deal with the environmental and social issues that the company will face during its establishment in India (Watson et al. 2018).
People
The people of Sainsbury are denoted as the customers, employees and other stakeholders are the main pillars of Sainsbury as they are present in all the departments. To improve the quality of the people in Sainsbury the initiatives have to be taken by the company to train and educate the local people according to the requirement (Osorio et al. 2017). Many people can get the chance to work in Sainsbury’s, which will provide help in society.
Planet
The foods that are to be delivered by Sainsbury needs to be hygienic, the sustainable planet was friendly. The company is working with local stakeholders to make the entire process of the business in the same place (Galant, 2017). The vehicles that are used for the delivery purpose are to emit a minimum amount of carbon to protect the planet from global warming.
Profit
One of the most important factors of 3 p’s is profit as they are counted to be the main assets of Sainsbury and are completely justified and valid according to the joint venture. In India, Sainsbury will be able to gain maximum profit as compared to other countries as there is a huge demand for their product (Han and Guangrui, 2018). The maintenance cost of Sainsbury will be low as compared to other countries as many people in India are farmers.
5.2 The stakeholder’s theory
The Stakeholders of an organization consists of distributors, employees, customers, capitalist and other bodies who are directly linked with the organizations. The new strategy is going to enhance the stakeholders of the company and provide them adequate benefits for organizational development and stakeholders’ performance improvement. Sainsbury must maintain a healthy relationship with all the shareholders such that they can make fair business with them. As per the view of Galant (2017), The firm has been able to make its recognition in different countries of the world just because of maintaining the following theory.
5.3 Expectancy-value theory
Expectancy value theory is relatable to the market entry strategy as an expectation is made in the time of preparation of the contacts and which is to be fulfilled during the venture. As mentioned by Ryan et al.(2020), the main formula of the theory is
Expectation *value= motivation
The expectation and the value of Sainsbury are multipliable because the expectation of success needs to be multiplied with the present value of the firm that will provide it the process to succeed. As soon as the success is tasted by Sainsbury it will be motivated that will help it to gain more success shortly. The effort that is provided is linked directly with the quality of performance along with the appropriate outcomes.
5.4 Maslow hierarchy of needs
The factors of Maslow’s hierarchy theory are physiological; safety, love, and belonging need esteem, and self-actualization. The following theory is used by Sainsbury for customer purpose, before making business plans the company has made surveys on the targeted customers to know about their basic, psychological, and self-fulfilment needs (Guo et al. 2017). The basic needs of the customers’ foods and safety for which the quality of food of Sainsbury is considered. The relationship and reward according to performance matter the next for which Sainsbury prioritizes its stakeholders. Finally comes the self-satisfaction where the company proves its potentiality in the global platform.
6. Conclusion
Based on the above discussion it can be concluded that India gives more priority to the retail industry than any others which can be much more profitable for Sainsbury to have their business. The main highlight [arts of the study is the mention of PEST analysis, Maslow hierarchy of need, Expectancy-value theory, the stakeholder’s theory, 3p’s of suitability, and joint venture a market entry strategy. The hierarchy theory there mentions six stages according to the needs of the customers. On the other hand, expectancy-value depicts the relationship between the value and expectation. The shareholder theory proposed the value of the shareholders and how to deal with them whereas 3 p’s are people related to Sainsbury, eco-friendly products, and profit added to Sainsbury’s account.
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