Case Study Description of J Sainsbury Plc, Road to Recovery
To maximize their effectiveness, color cases should be printed in color.In 2012, J Sainsbury Plc (Sainsbury's), the number three supermarket chain in the UK with A?22.3 billion in sales, appeared to have put the troubles of the past behind it. For over 70 years, Sainsbury's had been the UK's largest grocer, but Tesco had overtaken it in 1995 and then Asda knocked it into third position in 2003. When Justin King took over as CEO in 2004, UK sales were flat and UK profits languished at 40% below their 1999 levels. He cut prices and restored sales growth, and from 2007 onwards, Sainsbury's had outperformed Tesco on same-store sales growth. What did King need to do to sustain Sainsbury's revival?
Swot Analysis of "J Sainsbury Plc, Road to Recovery" written by John R. Wells, Galen Danskin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sainsbury's Sainsbury facing as an external strategic factors. Some of the topics covered in J Sainsbury Plc, Road to Recovery case study are - Strategic Management Strategies, Government, International business and Strategy & Execution.
Some of the macro environment factors that can be used to understand the J Sainsbury Plc, Road to Recovery casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of J Sainsbury Plc, Road to Recovery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in J Sainsbury Plc, Road to Recovery case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sainsbury's Sainsbury, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sainsbury's Sainsbury operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of J Sainsbury Plc, Road to Recovery can be done for the following purposes –
1. Strategic planning using facts provided in J Sainsbury Plc, Road to Recovery case study
2. Improving business portfolio management of Sainsbury's Sainsbury
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sainsbury's Sainsbury
Strengths J Sainsbury Plc, Road to Recovery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sainsbury's Sainsbury in J Sainsbury Plc, Road to Recovery Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Sainsbury's Sainsbury are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Sainsbury's Sainsbury is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by John R. Wells, Galen Danskin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Sainsbury's Sainsbury has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in J Sainsbury Plc, Road to Recovery HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Sainsbury's Sainsbury in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Sainsbury's Sainsbury is one of the leading recruiters in the industry. Managers in the J Sainsbury Plc, Road to Recovery are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the J Sainsbury Plc, Road to Recovery Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Sainsbury's Sainsbury in the sector have low bargaining power. J Sainsbury Plc, Road to Recovery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sainsbury's Sainsbury to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Sainsbury's Sainsbury has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in J Sainsbury Plc, Road to Recovery Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Sainsbury's Sainsbury is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Sainsbury's Sainsbury is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in J Sainsbury Plc, Road to Recovery Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Sainsbury's Sainsbury
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sainsbury's Sainsbury does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Sainsbury's Sainsbury is one of the most innovative firm in sector. Manager in J Sainsbury Plc, Road to Recovery Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Sainsbury's Sainsbury digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sainsbury's Sainsbury has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses J Sainsbury Plc, Road to Recovery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of J Sainsbury Plc, Road to Recovery are -
High cash cycle compare to competitors
Sainsbury's Sainsbury has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As J Sainsbury Plc, Road to Recovery HBR case study mentions - Sainsbury's Sainsbury takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Sainsbury's Sainsbury has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Sainsbury's Sainsbury supply chain. Even after few cautionary changes mentioned in the HBR case study - J Sainsbury Plc, Road to Recovery, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sainsbury's Sainsbury vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Sainsbury's Sainsbury has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Sainsbury's Sainsbury products
– To increase the profitability and margins on the products, Sainsbury's Sainsbury needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sainsbury's Sainsbury is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study J Sainsbury Plc, Road to Recovery can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study J Sainsbury Plc, Road to Recovery that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case J Sainsbury Plc, Road to Recovery can leverage the sales team experience to cultivate customer relationships as Sainsbury's Sainsbury is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study J Sainsbury Plc, Road to Recovery, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study J Sainsbury Plc, Road to Recovery, is just above the industry average. Sainsbury's Sainsbury needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study J Sainsbury Plc, Road to Recovery, it seems that the employees of Sainsbury's Sainsbury don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities J Sainsbury Plc, Road to Recovery | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study J Sainsbury Plc, Road to Recovery are -
Using analytics as competitive advantage
– Sainsbury's Sainsbury has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study J Sainsbury Plc, Road to Recovery - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sainsbury's Sainsbury to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Sainsbury's Sainsbury can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Sainsbury's Sainsbury to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sainsbury's Sainsbury in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sainsbury's Sainsbury is facing challenges because of the dominance of functional experts in the organization. J Sainsbury Plc, Road to Recovery case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sainsbury's Sainsbury to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Sainsbury's Sainsbury to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Sainsbury's Sainsbury has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sainsbury's Sainsbury can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Sainsbury's Sainsbury can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Buying journey improvements
– Sainsbury's Sainsbury can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. J Sainsbury Plc, Road to Recovery suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sainsbury's Sainsbury can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Sainsbury's Sainsbury to increase its market reach. Sainsbury's Sainsbury will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sainsbury's Sainsbury can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Sainsbury's Sainsbury to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats J Sainsbury Plc, Road to Recovery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study J Sainsbury Plc, Road to Recovery are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sainsbury's Sainsbury can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study J Sainsbury Plc, Road to Recovery .
Regulatory challenges
– Sainsbury's Sainsbury needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Sainsbury's Sainsbury has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Sainsbury's Sainsbury needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sainsbury's Sainsbury can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study J Sainsbury Plc, Road to Recovery, Sainsbury's Sainsbury may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sainsbury's Sainsbury with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Sainsbury's Sainsbury business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Sainsbury's Sainsbury in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Sainsbury's Sainsbury can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Environmental challenges
– Sainsbury's Sainsbury needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Sainsbury's Sainsbury can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Sainsbury's Sainsbury will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Sainsbury's Sainsbury needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Weighted SWOT Analysis of J Sainsbury Plc, Road to Recovery Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study J Sainsbury Plc, Road to Recovery needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study J Sainsbury Plc, Road to Recovery is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study J Sainsbury Plc, Road to Recovery is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of J Sainsbury Plc, Road to Recovery is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Sainsbury's Sainsbury needs to make to build a sustainable competitive advantage.