MSc Management Assignment Sample
Executive Summary
The report is focused on discussing the primary issues that Sainsbury is facing in today’s retail market. The first store opened by Sainsbury is in 1869 at Holborn and now operates more than 800 stores worldwide. There are some statistics included in the report that justifies the statement made. They have expanded their market adequately and now operate in clothing, grocery, electronic wares, and other markets. The report has covered issues including technological innovations, consumer changing behaviour while buying, fierce market competition, and ethical issues. For describing them in broad terms, various strategic management tools were used. The impact of the entire research on stakeholders including internal and external stakeholders is described in brief.
Their grocery sales were increased rapidly in the pandemic era but the clothing sales decline as the consumer purchasing behaviour was affected by non-essential items. Looking at this, it can be observed that their sales and revenue were being affected during the pandemic and they are recovering effectively. The company must improve its innovations to work on its sales and revenue.
Figure 1: Issues covered in the report in context with Sainsbury.
(Source: Self-made)
Furthermore, using PESTEL analysis, it has been found that Sainsbury has faced various technological and social challenges affecting its sales and revenue. Concerning this, there can be seen an enormous shift in consumer purchasing behaviour from offline to online. Sainsbury is operating an online website but increased technological innovation is pressurising them to adopt technologies to secure a competitive edge. On the other hand, various brands and companies are available in the UK market that increases the switching and bargaining power of consumers. In this context, they also face fierce competition in the retail market and their competitors include Tesco, Morrisons, ASDA, and many other retailers. For analysing market competition, the market share of their competitors is compared with Sainsbury using a graph.
Along with that, it has been depicted in the report that environmental concerns are increasing that impose pressure on the organisation to adopt sustainable business practices. Sainsbury is implementing sustainable business practices even though; there is a requirement to implement more. The use of single-use plastic packaging, stock management, energy consumption, and many more are responsible for contributing to environmental pollution. It can be observed through Carroll’s CSR pyramid that various unethical practices are there in the organisations that are affecting the livelihood of farmers and communities.
From the entire critical analysis, various recommendations have been made that need to be adopted by the organisation to resolve the issues adequately. It has been recommended that company must adopt technologies like Data analytics for improvising personalisation, sending reminders and notifications for new launches on their online websites. Other than that, they must focus on investing in R&D so they can bring product innovations as per market demands. Utilising AI they can collect customer reviews and queries through chatbots on online websites. They must organise surveys with the consumer to identify the market demands and customer satisfaction from their products and services. At last, they must use renewable energy sources for decreasing energy consumption, utilise e-vehicles for delivering nearby online orders, use sustainable packaging materials, and must source raw materials ethically that are beneficial for the company as well as communities.
Introduction
Project is known as the series of the task which is related to the need that is to be completed for reaching the specific outcome. Business project is termed as the project which is mainly performed by the business at the time of defining the objective of the organisation that is linked with the business strategy. They are also referred to with a different type of names are functional projects, internal projects and administrative projects. The business project within the organisation is managed by the higher authority and has different ranges that start from simple and ends to complex. The present assignment will give a discussion about the business project in which the chosen firm is Sainsbury. It is a supermarket chain that offers different types of the things like clothing, groceries, homewards and electrical. The organisation was introduced in the year 1869 by John James Sainsbury and his wife Mary Ann in London. At the starting phase, the organisation was started as a retailer of fresh food and after they have expanded the business through packed groceries like sugar and tea. The assignment will discuss the different types of issues that are faced by the organisation because of Covid-19. It will also give an explanation regarding the problems and challenges that are faced by the client. In regard to this, it will also discuss the impact of research on stakeholders. Along with Evaluation and analysis of secondary data is also be done by using Pestle analysis, Porter five force and Carroll’s CSR Pyramid. The report will also describe the issues regarding various strategic management tools for identifying the impact of the challenges. Additionally, at the end of the report, it will also give recommendations that will further help the organisation to improvise their sales and growth.
Challenges/problems the client is facing
Sainsbury was established in 1869 at Holborn and now operates worldwide. The company has started selling retailers of fresh foods and with their expansion; they are currently selling grocery, clothing, electrical equipment, and many more. The company has more than 600 stores in the world and has 800+ convenience stores. The vision of the company is to offer a better quality of food at competitive prices as their priority is to serve customers with tasty food (About Us- Sainsbury, 2021). Their primary focus is on convenient shopping and the great value of food in both online and physical stores. Their brands include Argos, Tu, Nectar, Habitat, and Sainsbury’s Bank. Various issues were identified that Sainsbury has faced in the past years. It becomes essential for the organisation to resolve the issues so they can operate in today’s competitive environment.
The pandemic was responsible for affecting many companies because of supply chain disruptions (Aday and Aday, 2020). Sainsbury was also affected as they have faced supply issues and the customer demands were not met. They have faced issues in the supply of beers, salads, and soft drinks due to a shortage of lorry drivers, and many of the staff were forced to self-isolate due to the Covid-19 guidelines. Supplies of various non-food items was been decreased during the pandemic that was due to shortages of interruptions, shipping containers, and labour shortages in the factories.
Furthermore, the grocery sales during the pandemic have seen steep increments but the sales decline in non-essential food items like clothing has left a huge impact on the organisation’s revenue. The pandemic along with market competitiveness was responsible for affecting the sales. It is because various comparative brands are selling similar products and services increasing performance pressure on the organisation (Pantano et. al. 2020). On the other hand, in the pandemic environment demand for online and home delivery is increasing which has affected their business operations as it is challenging to cope with today’s business activities so quickly and rapidly. They observed that there is an essential need for creating an environment that supports innovation, agility, and flexibility as per the unpredictable market environment.
Moving ahead, the demands of consumers are changing rapidly, and adapting to these changes has become essential for increasing sales and revenue. Meeting the demands of the consumer is very crucial as it increases their brand switching power and it is difficult for the company to retain its loyal consumers. Technological changes are increasing rapidly which makes it essential for the organisation to adopt these technologies (Begley et. al. 2020). Their competitive companies including Asda, Lidl, Tesco, and Aldi are also offering technological competition in the market. Further, the company has to focus on adopting sustainable business operations so they can satisfy their consumers and other stakeholders effectively (Hart et. al. 2020). Some of these challenges are impactful and can affect the organisation’s growth and success. These challenges will be examined in broad terms utilising various strategic management tools in a further section of the report.
Purpose of the report
The primary purpose of the report is to examine the issues that Sainsbury is facing due to the impact of external and internal factors. Various factors can impact the organisational performance that can decrease their sales and revenue. In this report, the issue being faced by Sainsbury will be described in-depth to observe its impact and identify solutions. Various issues being faced by the organisation including technological competition, market competitiveness, consumer switching power, and many more will be discussed in the report. The report will describe the issues in-depth utilising various strategic management tools for identifying the impact of the challenges (Velikorossov et. al. 2020). It will help propose recommendations that will further help the organisation to improvise their sales and growth.
Impact of research on stakeholders
Stakeholder is known as the party that are interested with the organisation that can result in affecting or getting affected through the organisation (Martinez and Komendantova, 2020). It has been analysed that Sainsbury has to face a high impact of doing the research on stakeholders because they are both supportive along with less supportive or indeed critical. At the time when the organizer was doing the research related to the issues that are faced by them which are related to supply issues and other customer demands. They were also facing a shortage of lorry drivers, supply of beers, salads due to COVID-19 guidelines. It becomes essential for the organisation to resolve the issues so they can operate in today’s competitive environment. The supplier change of non-food items of Sainsbury has also been decreased because of pandemic and the shortage of interruptions, labour shortages and shipping containers in the factories. For identifying all the information about the Internet of the research on this stakeholder the organization is using stakeholder analysis which helps them at the time determine different facts.
The facts are mainly related to identifying the interests of the stakeholder that they have within the project and what are the ways that can be used at the time of influencing the stakeholder in the best manner (Postal et. al. 2020). Through the stakeholder analysis, Sainsbury can try different types of initiatives that will help them at the time of solving the problems. Further, they can also take different types of initiatives at the time of identifying who has a high interest in the work that is by prioritizing and categorizing stakeholders so that they can invest more time. If the stakeholders have resulted in investing more time in different types of things which are related to identifying the issues that are faced within the organization. In regard to this, stakeholder analysis will also help the organization at the time of creating a good relationship with their stakeholders. Mainly, organisation is facing the issues that are regarding the supply of beers, salads, and soft drinks due to a shortage of lorry drivers, and many of the staff were forced to self-isolate due to the Covid-19 guidelines (Ozanne et. al. 2017).
Sometimes, the organization can also face a good impact at the time of gathering and reviving all the requirements with the stakeholders as they can give by in which will result in increasing project success. At the time of doing the research, it is very important for the organization to meet all the needs and requirements of their stakeholder in the proper manner. The other issues are faced by the organisation including technological competition, market competitiveness, and consumer switching power. If they are unable to meet the needs of their stakeholder then they have to face high conflicts regarding priorities and needs in the project lifecycle. The key stakeholders better seen at the time of doing the research in Sainsbury is the research and development director digital team director, marketing director, customer service director and sales director. Stakeholder analysis also has different types of purpose which are related to identifying project stakeholders assessing the influence of stakeholders on the project end managing and communicating all the things were different types of stakeholders.
With the help of this, the company can easily analyse who are the people which will help them at the time of succeeding project which is related to solving the issues that are faced by Sainsbury. Through stakeholder analysis, the company can easily communicate with the stakeholder in the proper manner regarding the outcomes of the project. They can also take key decisions and resources which are related to the implementation of a successful project. With the help of the stakeholders, they can influence the level and interest so that they can easily manage and prioritize objectives by engaging with them. At the time of making the project, the involvement of stakeholders is very important for identifying the necessary resources for stakeholder engagement, objective framework or model of research and recognizing the role of stakeholders (Boaz et. al. 2018). Along with this the research also has a direct impact upon the stakeholder because they have to invest more of their time at the time of doing research.
Evaluation and analysis of secondary data
The utilisation of data and various strategic management tools will help in identifying the issues more deeply to propose recommendations at the end. Sainsbury is facing several issues as examined in the above section that needs to be addressed so the sales and revenue won’t be impacted. Some of the challenges that are being faced by the company currently are described utilising various frameworks:
PESTEL analysis
Political: Various political factors are there that can affect the business operations of the organisation. As per the current challenges identified, it can be observed that the guidelines implemented by the government have impacted the company’s supply and demand elements. Due to the pandemic, there can be observed supply chain disruptions due to shortage of supply labours, heavy vehicles, and many more. Concerning this, the demand for salads, beers, and soft drinks was increased rapidly but because of supply shortage, Sainsbury was unable to meet the demands adequately (Fengyi, 2021). On the other hand, Brexit has also imposed various uncertainties on the organisation. It would be difficult for the organisation to import and export products at an affordable cost in foreign countries. The increase in the cost of foreign products will also impact the price of products that can affect the consumer purchasing behaviour as well.
Economic: The market situation is facing an economic crisis due to pandemics and Brexit. This crisis has affected the shopping patterns of the consumer on non-essential items. The rising fuel costs have also been an impactful factor for the organisation because the increase in transportation cost will affect the cost of end-product. It has been estimated that these fuel prices will increase significantly that can affect the transportation cost. Further, the increased tax rate on importing due to Brexit has also affected the product’s end price. These have impacted the potential spending of Sainsbury along with impacting the overall profit of the organisation (Henry, 2021). In this, they have to innovate their strategies and products to attract more consumers and secure a competitive edge in the market.
Social: The UK’s population has increased their concerns related to adopting healthy-eating habits which would impact the sales of the company. It has been also found that consumer eating habit has seen an enormous shift to salads and the company has faced supply chain disruptions during the pandemic. This has seen a decline in their supply of salads that allowed the consumer to shift to another supermarket (Coibion et. al. 2020). The fair-trade movement in the UK has increased consumers’ interest in knowing where their food is coming from. In this way, they have to assure that farmers and suppliers are getting a fairer price on the product they supply. Other than that, due to fierce market competition, the consumer switching power is increasing constantly and that is responsible for decreasing their market share and sales as well.
Figure 2: Sales decline at Sainsbury FY 2019-2020.
(Source: Blazquea, 2021)
Technological: In today’s technological era, technologies are increasing rapidly that is responsible for increasing market competition. During the pandemic, consumers have shifted their shopping patterns to online due to Covid-19 guidelines. The consumers feared the effects of Covid-19 and because of social distancing; they started to place online orders. Sainsbury is adopting technologies wisely to satisfy consumer demands and they also operated an online website allowing consumers to order their groceries online and deliver them to their doorsteps. But the growing technologies pressurise the company to adopt technologies rapidly in e-commerce so they can secure a competitive position in the market (Williams et. al. 2020). The advertising and promotion of brands have increased among companies that allow the consumer to find new launches in the market. In this case, Sainsbury needs to adopt technologies.
Environmental: The environmental concerns are increasing and supermarkets are responsible for a huge carbon footprint. It can be from transporting goods and stocking of products are responsible for increased carbon release. Sainsbury is trying to decrease their carbon release along with adopting more environment-friendly approaches (Tsimpoukis et. al. 2021). Other than that, increase plastic waste is also affecting the environment, and utilising single-use plastic can affect the environment to a great extent as they are thrown in landfills. It is the responsibility of the organisation to look into new ways for packaging for decreasing their environmental footprint. In supermarkets, if the stock is not sold then it would be thrown into landfills if they expire. It will develop sustainable issues for the company in the long run.
Legal: Various legal rules and regulations are implemented that can affect the company’s business operations. The employment law and environmental law need to be followed adequately so no violations are made.
Porter’s five forces
Bargaining power of suppliers: The demand of products and services are increasing in the market and that also increase the demand of suppliers. In context with Sainsbury, the company poses healthy relationship with suppliers and try to offer fairer prices of products to them (Adelakun, 2020). It helps company in keeping connected with the suppliers and get product at effective prices. Hence, it imposes low to moderate force on the organisation.
Bargaining power of buyers: It imposes a high force on the organisation as various supermarkets are operating in the UK market that allows consumers to switch from one brand to another. Other than that, the demand of consumers is also increasing and if the demands are not met adequately they will start buying from other companies (Slack and Singh, 2020). Concerning this, it is the responsibility of Sainsbury to develop a loyal consumer base and take reviews so they can meet their requirements and decrease their power.
Threat of new entrants: In the retail and grocery market, many of the new entrants are entering the market that can impact the sales of Sainsbury to a low extent. It is because the market position and share of the company are high and it requires huge investment to reach that level. Shifting some consumers to new retailers can impact sales. Therefore, it imposes low to moderate force on the organisation.
The threat of substitutes: Various product substitutes and brands are available in the market other than Sainsbury. Availability of products in the market allows the consumer to switch their shopping patterns. Other than that, every retailer is launching new products and services frequently that can meet the consumer needs differently than the profitability of the company can suffer (Sproul and Harms, 2020). It imposes a strong force on the organisation as it offers unique services to consumers allowing them to switch more frequently.
Figure 3: Market share of the UK supermarket.
(Source: Market share of the UK supermarket, 2020)
Market rivalry: The competitiveness in the market is increasing continuously that can impact Sainsbury sales to great extent. Sainsbury operates in a tough competitive market and it is pressurising for them to secure a competitive market position. Other supermarkets like Tesco, ASDA, Aldi, Morrisons, and many more offer tough competition (Amountzias, 2020). In this way, market rivalry imposes a strong force on the organisation and the company must innovate its services so it can survive in the market.
Carroll’s CSR Pyramid
It is the framework that helps organisations in taking social responsibility more ethically. The pyramid states that organisations must not only focus on earning profit but they must fulfil the demands of stakeholders. It has been divided into four segments including economic, legal, ethical, and philanthropic responsibilities.
Economic responsibilities: It focuses on producing products and services as per market demands to increase profitability. It is essential to earn profits to make other investments and meet the shareholder’s demand as per their investments (Štreimikienė and Ahmed, 2021). Sainsbury focuses on generating profits appropriately by meeting the market demands but the fierce market competition has increased pressure on its survival. It is because the switching power of consumers has increased that allows them to buy products from other organisations if they are not meeting their demands.
Legal responsibility: It includes all the rules and regulations set by the government that needs to be followed effectively. Organisations are expected that they must follow the rules so no violations can be made (Dragotis, 2021). Various environmental and employment rules need to be followed by the organisation. They are continuously trying to become more sustainable but they have to increase their sustainable practices as per legal compliances.
Figure 4: Carroll’s CSR Pyramid.
(Source: Thacker, 2019)
Ethical responsibility: There are various ethical responsibilities related to the sourcing and procuring of raw materials that an organisation must follow (Talonen et. al. 2021). It has been found that Sainsbury was embroiled in a £3m bribes investigation. The most senior buyers of the supermarket have been arrested for accepting backhanders from a potato company. They were receiving illegal payments from Greenvale that even supplies half of the potatoes to the organisation. On the other hand, the company was also threatened for supplying cheap bananas as it is affecting the well-being and livelihood of banana growers. They have been suffering as they are not paying fairer prices to the farmers. These incidents indicate that Sainsbury is not meeting their ethical responsibility and needs more attention.
Philanthropic responsibility: It includes activities that are adopted by the organisation by offering gifts, volunteer work, donations, community development, and other contributions for the better contribution to society (Sughra, 2020). Sainsbury focuses on doing local charities and supporting communities for a better society. They run a local charity of the year scheme to support the local communities.
Critical analysis of the challenges
Based on the above external and internal market analysis of the organisation, it can be observed that various issues are being faced by Sainsbury. Out of which, some of the issues are described below:
Technological shift in consumers: It can be seen from the PESTEL analysis, that the consumers are shifting their shopping patterns to online buying. It is because the pandemic has implemented different guidelines that allow the consumer to shift their shopping patterns. The technological shift has been seen and it becomes essential for companies to manage their online website adequately (Buklemishev, 2020). Sainsbury operates an online website adequately that allows consumers to buy groceries and products online but the technological changes are increasing rapidly that pressurise organisations to adopt technologies. Other than that, managing online customers, looking at their activities, advertising and promotion and many more also play a crucial role in the retail market. Further, it is the responsibility of Sainsbury to innovate its online services adequately.
Increased market competition: From the above analysis, it can be observed that retail market competition is increasing rapidly that is imposing a strong force on the organisation. Tesco, ASDA, Morrisons, and other small retailers are competing with Sainsbury. The switching power of consumers is also increasing as various substitutes are available in the market allowing consumers to choose other brands over Sainsbury (Crick and Crick, 2020). The company needs to secure a competitive edge in the market so it can compete against various retailers. Further, all other retailers are constantly developing and innovating new products and services in the market to meet consumer demands that attract consumers to other products and services.
Sustainability issues: Supermarkets’ are also described as a huge contributor to environmental pollution by increasing carbon release and waste disposal. In case of Sainsbury uses refrigerators for stocking their products that release a huge amount of CFCs contributing to environmental global warming and ozone depletion. It increases legal pressure on the company, even though; they are practicing regularly to decrease their carbon releases but they have to focus on it more (Sattlegger, 2021). Other than that, they utilise various plastic packaging that can be harmful to the environment as well. Sainsbury needs to work for utilising other packaging materials.
Ethical issues: Sainsbury has been accused for £3m bribes in investigation in their potato supplies from Greenvale. Other than that, they have been also violated for sourcing cheap bananas affecting the livelihood and well-being of banana growers. It declares that there is requirement of work on their ethical responsibility as per Carroll’s CSR pyramid.
Recommendations and conclusions
Recommendations
Based on the challenges some recommendations are proposed that could benefit the organisation in today’s competitive market.
Adopt adequate technologies: As per the market analysis of Sainsbury, it has been recommended that Sainsbury needs to bring technological innovation to their online website. The company must implement personalisation in their online website as it helps the company in suggesting more customer-centric products (Cavdar Aksoy et. al. 2021). It will utilise consumers’ search history, and purchasing history to suggest the products and services. It would also help the organisation in improvising the customer-centric approach and make them feel that their search and purchase are valued. Concerning this, Sainsbury can also focus on sending reminders to consumers based on their frequent purchases as it will help consumers to remember their purchasing. It is also beneficial to improvise customer experience. Following that, it is suggested that Sainsbury needs to update consumers as they launch new products and services based on their frequent purchases so they can try new products and services. It can all be achieved if the company has an effective implementation of Data analytics as personalisation, sending reminders and notifications is based on the consumer’s data.
Improve R&D to develop products as per market demands: It can be observed from the PESTEL analysis that the UK’s population has become more health-conscious and adopting healthy eating patterns. It imposes a force on the company to hold its loyal consumer base. Based on that, the organisation needs to invest in its R&D to bring product innovations as per market demands. It would be beneficial for the organisation in launching new products and services that are healthy for consumer consumption. Other than that, for this, they can also communicate with consumers and take their reviews about product innovation they are looking from the company’s side.
Adopt technologies for collecting consumer reviews: In the market environment of fierce competition, it is the responsibility of the company to hold a potential consumer base so they can achieve growth and success. Various technologies have developed in the digital marketing era that helps the companies in collecting customer reviews and bring improvement adequately (Adam et. al. 2021). With the use of AI, they can enable chatbots on their online website as it allows the consumer to ask for queries 24/7 and gets quick responses as well. Further, they can implement an on-screen feedback collector in their physical stores to collect consumer reviews. Based on the feedback and queries of consumers they can analyse the issues and demands of consumers adequately. It is not only beneficial for bringing improvements in their services but also supports the R&D department to select the focus area that needs to be prioritised before bringing innovation. They can survey consumers to identify the changes they want in the company’s products and services. Improvising the facilities as per customer opinions is the best option to bring changes and improvements adequately. These changes will help in attracting consumers as well.
Sustainability: Based on Carroll’s pyramid and the CSR responsibility of the organisation, it is must that Sainsbury implement various sustainable business operations to address the increased environmental concern. In this context, they must focus on adopting sustainable packaging material to meet the packaging demands. For instance, they can utilise paper bags, cloth bags, or reusable plastic to meet the packaging demands. On the other hand, various materials are developed in the market to meet sustainable packaging demands. Further, they can use renewable energy sources to reduce their energy consumption in various stores to support sustainability (Razmjoo et. al. 2021). They can also use e-vehicles to deliver online orders to consumers to decrease their transportation costs along with contribute to sustainable business practices. The company must focus on sourcing and procuring raw materials ethically that is not only beneficial for the company’s profit earning but also supports the growth of communities.
Conclusion
It has been concluded from the report that every organisation after the pandemic is going through various challenges that need to be addressed adequately. The case of Sainsbury and its issues have been identified in deeper terms for proposing recommendations further. Some of the primary issues covered in the report include technological innovations, consumer shifts in their purchasing pattern, sustainability issues, and ethical issues. Various strategic management tools have been used for analysing the challenges in depth through critical analysis. As per the PESTEL analysis, it has been found that technological changes can be observed after the pandemic that has also forced the consumer to shop online more as compared to their purchasing from a physical store. The supermarket chain must operate an online website. Sainsbury has an online website but it needs various innovations to operate in a competitive environment.
Furthermore, it has been found that consumers’ demands are increasing along with their switching power that imposes a strong force on the company to innovate and secure a competitive edge in the market. Other than that, Sainsbury has some unethical practices that can affect its brand image in the market. The market competitiveness is also increasing which puts increased pressure on the company. Some recommendations have been made in the report that includes the adoption of technologies to make their online website more personalised and they must send reminders or notifications to their consumers using data analytics. They can also use AI for collecting customer reviews through chatbots. It has been recommended that they must implement more sustainable business practices.
References
Books and Journals
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Online
About Us- Sainsbury. (2021). [Online]. Accessed through: <https://www.about.sainsburys.co.uk/about-us>
Blazquea. A. (2021). Annual retail sales of Sainsbury’s in the United Kingdom (UK) from financial year 2008/09 to 2020/21. [Online]. Accessed through: <https://www.statista.com/statistics/386342/sainsburys-retail-sales-united-kingdom-uk/>
Market share of the UK supermarket. (2020). [Online]. Accessed through: <https://extraessay.com/?key_wpg=6e330aece0d36b6a1d8c2e2042792828&sub_id=3e414qo15815h>
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