J Sainsbury Plc Case Study
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J Sainsbury plc is a leading UK food retailer with interests in financial services. It consists of Sainsburys Supermarkets, Sainsburys Local, Bells Stores, Jacksons Stores and JB Beaumont, Sainsburys Online and Sainsburys Bank. The decision to diversify into convenience stores is discussed further within a Porters 5 forces analysis. Their objective is “to serve customers well and thereby provide shareholders with good, sustainable financial returns. They aim to ensure all colleagues have opportunities to develop their abilities and are rewarded for their contribution to the success of the business. The companys policy is to work with all of our suppliers fairly, recognising the mutual benefit of satisfying customers needs; a concept which is considered in the Porters 5 forces analysis. They also aim to fulfill responsibilities to the communities and environments in which they operate” (Sainsburys, 2008) a point which is discussed within a PESTEL analysis.
Sainsburys serves 16 million customers each week in 455 supermarkets and 301 convenience stores across the country. The company employs 148,000 colleagues committed to delivering Great Food at Fair Prices. Yet more examples that can be included as a strengths in a SWOT analysis.
Sainsburys sells £6bn of British food every year, an obvious strength in a SWOT analysis. The company works closely with smaller-scale suppliers to expand local sourcing wherever possible, and has a network of over 3,500 local suppliers. In May 2006, Sainsburys launched Supply Something New, an innovative scheme to make it easier for small and medium-sized suppliers to gain access to Sainsburys and make locally produced food available to more customers (Annual Report 2007). This could be argued to be an important element in a PESTEL analysis.
PESTEL analysis
PESTEL analysis – Political Factors
* Increasing globalization, presents a challenge as well as an opportunity to Sainsburys. The challenge will be to compete against unknown forces and to source the best quality/financially viable products from world over. Sainsburys can enter the markets of emerging companies through joint ventures or partnerships to explore these new markets, although it does not have any plans on the horizon to do so.
* The ongoing investigation of price fixing amongst the big four retailers within the UK can have some negative impact to the industry in general and Sainsburys in particular, as it is at the forefront of this allegation(Rigby 2008). Although Sainsburys is very well established among consumers, these allegations can lead to a negative public image as the consumers might feel cheated.
* In the UK, the Government is to decrease the rate of corporation tax from 30%