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 - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, 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 -
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.
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.
Effective Research and Development (R&D)
– Sainsbury's Sainsbury has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study J Sainsbury Plc, Road to Recovery - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Strong track record of project management
– Sainsbury's Sainsbury is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Successful track record of launching new products
– Sainsbury's Sainsbury has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sainsbury's Sainsbury has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Strategy & Execution field
– Sainsbury's Sainsbury is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Sainsbury's Sainsbury in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– J Sainsbury Plc, Road to Recovery firm has clearly differentiated products in the market place. This has enabled Sainsbury's Sainsbury to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Sainsbury's Sainsbury to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Sainsbury's Sainsbury is present in almost all the verticals within the industry. This has provided firm in J Sainsbury Plc, Road to Recovery case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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 -
Low market penetration in new markets
– Outside its home market of Sainsbury's Sainsbury, firm in the HBR case study J Sainsbury Plc, Road to Recovery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Sainsbury's Sainsbury needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the J Sainsbury Plc, Road to Recovery HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Sainsbury's Sainsbury has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Sainsbury's Sainsbury is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Sainsbury's Sainsbury needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sainsbury's Sainsbury to focus more on services rather than just following the product 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study J Sainsbury Plc, Road to Recovery, in the dynamic environment Sainsbury's Sainsbury has struggled to respond to the nimble upstart competition. Sainsbury's Sainsbury has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Interest costs
– Compare to the competition, Sainsbury's Sainsbury has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sainsbury's Sainsbury can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Sainsbury's Sainsbury can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Sainsbury's Sainsbury can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Sainsbury's Sainsbury can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sainsbury's Sainsbury can use these opportunities to build new business models that can help the communities that Sainsbury's Sainsbury operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Sainsbury's Sainsbury has opened avenues for new revenue streams for the organization in the industry. This can help Sainsbury's Sainsbury to build a more holistic ecosystem as suggested in the J Sainsbury Plc, Road to Recovery case study. Sainsbury's Sainsbury can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Leveraging digital technologies
– Sainsbury's Sainsbury can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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 -
High dependence on third party suppliers
– Sainsbury's Sainsbury high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sainsbury's Sainsbury in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Sainsbury's Sainsbury.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Sainsbury's Sainsbury
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Sainsbury's Sainsbury.
Shortening product life cycle
– it is one of the major threat that Sainsbury's Sainsbury is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
