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 transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Sainsbury's Sainsbury has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Sainsbury's Sainsbury even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 .
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.
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 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 .
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.
