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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing commodity prices, cloud computing is disrupting traditional business models, geopolitical disruptions,
increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
High brand equity
– Sainsbury's Sainsbury has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sainsbury's Sainsbury to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Sainsbury's Sainsbury has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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 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.
Capital Spending Reduction
– Even during the low interest decade, Sainsbury's Sainsbury has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, John R. Wells, Galen Danskin suggests that, Sainsbury's Sainsbury is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Products dominated business model
– Even though Sainsbury's Sainsbury has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - J Sainsbury Plc, Road to Recovery should strive to include more intangible value offerings along with its core products and services.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study J Sainsbury Plc, Road to Recovery has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sainsbury's Sainsbury 's lucrative customers.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 .
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.
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.
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.
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.
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.
Consumer confidence and its impact on Sainsbury's Sainsbury demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
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.
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.
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.
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.