Strategic Analysis of Sainsbury Essay Example | Topics and Well Written Essays - 1500 words

Strategic Analysis of Sainsbury - Essay Example In spite of the prevailing issues, the UK market has been able to acquire a stable and reasonable growth rate (Li, 2008, p.1). There are about 92,796 grocery stores in UK which is further divided into four sections, Convenience store; super markets, hypermarkets and superstores; Traditional retails and online channels (IGD, 2011). The biggest retail grocery chain in UK comprises of Tesco, Sainsbury, Morrison and ASDA, accounts for 67.9% of the total grocery market of UK (Li, 2008, p.2). Strategic Analysis Strategy is defined as the scope and direction of an organisation for long term, which is set to achieve advantage for the organisation by way of configuring its resources within a changing environment and to fulfil the demands of the stakeholders (Paul, et.al, 2010, p.36). SWOT Analysis Strength: Sainsbury ranks third in the supermarket chain of UK with about 14.30% of market share. This company has a strong market position in UK and was a pioneered in self service relating and in the development of private label goods. Sainsbury initiatives have kept the company at the number 3 position. Sainsbury strength lies on its strap line which states to try something new each day (Li, 2008, p. 4). The Business Model of Sainsbury, which comprises of five headings, great food offered at fair price, accelerating the growth of non food items, reaching customers by way of traditional means of channels, expanding supermarket space and property management is one of the important strengths of Sainsbury. Major strength of Sainsbury, is that the brand believes in providing the customers with sage, healthy, tasty and fresh food. The company emphasise more on fresh food and continues to innovate products according to the requirements of its customers. The company currently transact 21 million customers per week and have captured a market share of 16% which further adds to the strength of the company. The company offers about 30,000 products and also offers a wide range of non fo od products and services. The internet based home delivery service also adds to the advantage of the company (J Sainsbury Plc, 2011, p.3). Weakness: A major weakness of Sainsbury is that the company deals only in two types of store formats, the traditional supermarket and the convenience stores. As compared to other grocery retail outlet, Sainsbury has the least number of types of stores. Tesco has six different store formats which have greatly contributed to the success of Tesco. Another weakness for Sainsbury would be recession. It has been reported that the company has shown signs of poor sales figure with the warnings of recession. Sainsbury has recorded the slowest sales growth ever since 2005 and its share price dip to 327.7p which was analysed that the company was lagging behind its competitors. The company has the weakest operating margin in the food retail sector as compared to its competitors such as Tesco (Finch, 2010).Thus the company must overcome the weakness by using its strength. Opportunities: A huge opportunity lies with Sainsbury to grow as the UK retail market is growing at a steady rate, it provides ample opportunity for the company to utilise its resources and capabilities and grow and achieve a decent market share. With its five main areas of growth, this includes great food at great price, increasing the number of complimentary food, reaching customers by home deliver, and by active property manageme