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ST 2797



Sainsbury plc is the parent company of Sainsbury's Supermarkets Ltd,

commonly known as Sainsbury's (also Sainsbury and JS); it is the third largest chain
of super market in the UK. In 1869 by john James Sainsbury and his wife Mary Ann
established Sainsbury, in London, and grew rapidly during the Victorian era. It grew
to become the largest grocery retailer in 1922, pioneered self-service retailing in the
UK, and its heyday was during the 1980s. As a result of being complacent during the
1990s, Tesco became the market leader in 1995, and ASDA became the second-
largest in 2003, demoting Sainsbury's into third place due to which they have to be in
competition with them.

J Sainsbury plc consists of a chain of 509 supermarkets and 276 convenience stores –
and Sainsbury's Bank

Business priorities

In May 2007 five areas of focus were identified to take Sainsbury's from recovery
to growth:

• Great food at fair prices: To build on and stretch the lead in food. By sharing
customers' passion for healthy, safe, fresh and tasty food, Sainsbury's will
continue to innovate and provide leadership in delivering quality products at
fair prices, sourced with integrity.

• Accelerating the growth of complementary non-food ranges: To continue to

develop and accelerate the development of non-food ranges following the
same principles of quality, value and innovation and to provide a broader
shopping experience for customers.

• Reaching more customers through additional channels: To extend the reach of

the Sainsbury's brand by opening new convenience stores, developing the
online home delivery operation and growing Sainsbury's Bank.

• Growing supermarket space: To expand the company's store estate, actively

seeking and developing a pipeline of new stores and extending the largely
underdeveloped store portfolio to provide an even better food offer while also
growing space for non-food ranges.
Active property management: The ownership of property assets provides operational
flexibility and the exploitation of potential development opportunities will maximize

 Situational Analysis of Sainsbury’s:

According to professor Malcom Mcdonalds situational analysis has

been a primary function of marketing planning process of the company. it involves the
environmental and SWOT analysis as well as the existing marketing plan and any
other information that can be gathered about the company and its brands. A review of
the company’s objectives matched with the strategic and performance metrics
completes the analysis.


• Save-As-You-Earn scheme for staff offers chance for company shares to be

bought at a 20% discount.
• Sainsbury's name has been used in developing the company's own-brand
products. This approach has been applied to other product lines, such as
economy goods and organic products.
• New management provides fresh ideas and a strengthened strategy.


• The company's share price stood at nearly 450p per share in 1999 but
yesterday closed at 289p - a sign of just how far the company has fallen.
• Declining Reputation
• Sales fell in the 12 weeks to the 1st January 2005 by 1.2% compared to a year
ago, the fall in sales slowed in the three weeks to Christmas, falling by only


• Staff on the shop floor are one thing, but all the staff behind the scenes are
essential - buyers, administrators, systems designers, finance workers and so
on all are part of the whole team that must work together to make things
operate smoothly and efficiently
• Further scope for the Internet to be used as a home shopping tool within the
next decade, whilst also the addition of interactive television could be


• The general perception that Sainsbury's is more expensive than its major rivals
Tesco and Asda.
• Tesco manage to seemingly continue to push sales and profits ever higher,
year upon year gaining market share.

Marketing audits, 6M includes Men, Material, Money, Market, Mack-up, and
Machinery. This technique I had used to make strategic marketing plan of Sainsbury.

 Man
 Money
 Market
 Machine

• Man: Sainsbury’s has fully trained and skilled workers to provide better
customer satisfaction. Sainsbury’s workers are work with the fully dress code
and with good cultural environment

• Money: Finance is not a problem for the Sainsbury’s. Sainsbury’s is

financially strong to face the market situation.

• Market: Mack-up means management structure of the company. In

Sainsbury’s management meeting lower level manager are also involve to take
decision about the structure of the company. It’s been noticed that managers in
Sainsbury are changing every now and then which is effects the organization.
Management should live for long time so that his ideas can reach at maturity
• Machinery: Sainsbury’s recently started the self check put machine for the
better customer service and also reduce the cost of the manpower, they also have
to upgrade the technology with the changing time

 Porter’s 5 forces model (1985)

Although this is an old model, it can still be applicable for the present time.

Michael Porter (1985) in his Harvard Business Review publication ‘How

competitive forces shape strategy’ 1990 , provides a framework that models an
industry as being influenced by five forces. For the strategic business manager at J
Sainsbury seeking to develop an edge over rival firms, this model can be used to
better understand the industry context in which they operate.


Sainsbury's aims to consumer's first choice for food, delivering products of

outstanding quality and great service at a competitive cost through working ‘faster,
simpler and together’. Sainsbury’s is looking for profit growth through a balance of
strong sales growth, further reductions in the cost base, and continuing margin
There are many techniques for achieve competitive advantages and long term growth.
These techniques are as under:




He has described a category scheme consisting of three general types of

strategies that are commonly used by businesses to achieve and maintain competitive
These three generic strategies are defined along two dimensions:
• Strategic scope - it is a demand-side dimension and looks at the size and
composition of the market you intend to target.
• Strategic strength. As a supply-side dimension and looks at the strength or
core competence of the firm. In particular he identified two competencies that
he felt were most important: product differentiation and product cost affiance.
He originally ranked each of the three dimensions (level of differentiation, relative
product cost, and scope of target market) as either low, medium, or high, and
juxtaposed them in a three dimensional matrix. That is, the category scheme was
displayed as a 3 by 3 by 3 cubes. But most of the 27 combinations were not viable.

Porter's Generic Strategies for Sainsbury -

In his 1980 classic Competitive Strategy: Techniques for Analyzing Industries and
Competitors, Porter simplifies the scheme by reducing it down to the three best
• They are
• cost leadership,
• differentiation,
• Market segmentation (or focus).
Market segmentation is narrow in scope while both cost leadership and
differentiation are relatively broad in market scope.


BCG Matrix was developed in the early 70’s by the Boston Consulting
Group. The BCG matrix can be used by J Sainsbury to determine what priorities
should be given in the product portfolio of their business unit. To ensure long-term
value creation, Sainsbury should have a portfolio of products that contain both high
growth products in need of cash inputs and low growth products that can generate a
lot of cash. There are two dimensions of the BCG, market share and market growth.
The BCG Matrix graphically portrays differences among divisions (stars, cash cow,
question marks and dogs) in terms of relative market share position and industry
growth rate.

• Stars – high growth high market.

• Cash cow – low growth, high market.
• Question mark – high growth, low share market.
• Dog – low growth, low share market.

 The Ansoff Matrix

The well known tool of Ansoff matrix was published first in the Harvard Business
Review (Ansoff, 1957). It was consequently published in Ansoff’s book on
‘Corporate Strategy’ in 1965 (Kippenberger, 1988).

Ansoff (1968) argued that marketing objectives can only ever be about products and
markets and that products and markets are either existing or new. This means that,
according to Ansoff, marketing objectives should always be expressed in terms of
existing or new products or markets, or a combination of all four factors. Ansoff’s
matrix offers strategic choices to achieve the objectives. . According to Macmillan et
al (2000), “choice and strategic choice refer to the process of selecting one option for
implementation.” The four main categories for selection is usually expressed
diagrammatically as follows:


Existing New

Market Penetration Product Development

Market Development Diversification


Market Penetration: In this section J Sainsbury can further market their existing
products to their existing customers. This will mean an increase in their revenue for
example, by promoting the product through promotional incentives, buy one get one
free offers, PR, advertising and repositioning the brand. In this phase the products are
not altered and they do not seek any new customers.

Market Development: Here they can market their existing product range in a new
market. This means that the product remains the same, but it is marketed to a new
audience. Exporting or marketing in an entirely new region can also be done.

Product Development: this will involve a new product or service marketed to their
existing customers. The goal is to develop and innovate new products offerings to
replace existing ones. For example by changing the packaging and introducing newer
flavours or taste. The updated products are then marketed to their existing customers.

Diversification: at this stage a completely new product is marketed to an entirely new

customer group .this could either be related or unrelated. For example J Sainsbury,
once only a food retail shop can diversify into providing financial services, like
banking, insurances, travel and the like to its customers. They can also shift to selling
non food products like clothing, computers TV’s and many more. Currently, The first
ever GPs surgery to be located in a supermarket is being piloted at Sainsbury's Heaton
Park, Manchester. The trial has been developed by the Heywood, Middleton &
Rochdale Primary Care Trust (HMRPCT) and is designed to give patients convenient
access to GP services in the evenings and at weekends. The HMRPCT will provide
the GP services and Sainsbury's will provide the convenient and easy to access
location. The trial will run for six months initially, after which an evaluation of its
success will be carried out.

Ansoff’s matrix is one of the frameworks which J Sainsbury can use for deciding
upon its strategies for growth.



 PESTLE Analysis

 The Marketing Mix Element

The Marketing mix is an imperative concept in modern marketing and academically it

is referred to as the set of controllable tools that the firm blends to produce the
response it wants in the target market, so it consists of everything the firm can do to
influence the demand for its product (Kotler and Armstrong, 2004)

The marketing mix element may be developed to contribute to enhance J

Sainsbury’s goals and values by taking into account the set of key interrelated
entities which have to be set in conjunction with one another. Which are Product,
Pricing, Place and Promotion . It is important to realise that marketing mix
strategy of any company can have one major function, that is, strategic
communication of the organisation with its customers (Proctor, 2000). It can
further be argued that the marketing mix provides multiple paths as such
communication can be achieved either in spoken form and written
communications (advertising, selling, etc.) or in more symbolic forms of
communication (the image conveyed in the quality of the product, its price and the
type of distribution outlet chosen.


To survive in such a competitive market place, J Sainsbury must continue to build a

strong brand in order to create a strong differentiation in the market, attract customers
with a credible value proposition and to constantly engage customers in ways that
would endear them to the brand and to the company. This can help improve their
market share especially during periods of recession when lower priced private brands
are sought by consumers. And thereby achieve competitive advantages and long-term
 Porter, M. E. (1985), Competitive Advantage, The Free
Press, New York.

 Kotler P, Armstrong G; Principles of Marketing, 10th

Edition, Pearson

Prentice Hall,2004

 Boston Consulting Group (BCG) 1970

 Ansoff, I. (1965) Corporate Strategy, McGraw-Hill,