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Inquiry Based Learing Retail Sector Analysis

Introduction

Over the past few years, the retail industry is growing at a rapid rate across the international country and as per the findings; it is the major contributing industry in country’s GDP for high volume of production and distributing in the market (Sadler and Evans, 2016). This inquiry based project is effective where the analysis related to retail industry provides a scope to evaluate the recent trend of the market across the globe. The study also provides a scope to analyse organisational activities in running their business and on this particular study, the organisational analysis of Sainsbury’s will be conducted for identify the tactics of the firm in operating in the retail industry. The study also provides a scope to recommend some suitable suggestions for the business activities of Sainsbury’s in order to fulfil their objectives and secure future sustainable development.

Retail industry analysis

Retail industry analysis is effective to collect authentic data and information about the retail industry internationally. Through PESTLE analysis, it is possible to conduct the industry analysis which is such as,

Table 1: PESTLE analysis of retail industry

PESTLE analysis of retail industry Created by Author

The customers prefer ecommerce activities and online shopping, due to this recent pandemic era of COVID 19. There is increasing sales volume and profitability of the firm in the recent years where the customers place their orders through online website and ecommerce services (Forbes, 2020). As there is downturn in the economic condition, the consumers prefer to get high quality products at affordable price and hence it is mandatory for the retailers to review their price ranges for the basket of goods and services. In order to create values for the customers, the buyers choose the baskets of goods and services with high quality and lower price (Sadler and Evans, 2016). Shifting towards customer’s expectation is also another trend, where all the retail firms try to create values for the customers by delivering quality products as per their personal needs and preferences. This is another effective strategy of the retailers to retain the customers for long run (KPMG, 2020). Rethinking the cost of doing business is another trend, where the cost cutting principle is not enough for the retailers to maintain margins to the business. The retailers think that they must choose cost leadership strategy in order to set affordable prices for their products (Forbes, 2020). Environmental sustainability management is another recent trend in the global retail sectors, where there is high environmental sustainability concern among the individuals the retailers also focus on developing green supply chain management in order to reduce the green house gas emissions and using electric cars for distributing the products efficiently (KPMG, 2020). The demand towards organic products is another recent trend, where the customers prefer to make effective purchase decision for the organic basket of goods and services for example, organic clothing and accessories as well as organic vegetables, fresh food items etc., further influencing organic farming (Deloitte, 2020). The business model of the retailer is also changing over the period of time, where they try to expand their business operations internationally to gain high competitive advantage. Through the online activities and direct expert strategy, the retailers try to expand their business across the globe and gain high market share (KPMG, 2020). Influential marketing strategy through offline and online activities is also another crucial retail trend where the organisations try to invest in marketing activities for expanding their business and attract new and old customers for the quality products and services (Deloitte, 2020).

Organisational strategic analysis

Sainsbury’s is the second largest supermarket chain in the UK, which has been established in the year of 1869. The organisation serves the customers across the UK and Ireland. The total numbers of shops of the organisation are 1428. Total revenue of the company in the last year was £29.007 billion and net income was £219 million (Sainsbury’s, 2020a).

Figure: Organisational logo
Sainsbury’s, 2020a Total numbers of employees are more than 116400, where the employees are efficient to manage their activities and serve the customers efficiently. Through SWOT analysis, it is possible to analyse firm’s capability to sustain in the retail industry (Sainsbury’s, 2020b).
Table 2: SWOT analysis of Sainsbury’s
Created by Author

As per the SWOT analysis, the major strengths of the company are financial stability, strong employee base as well as product portfolio management, brand reputation and strong market share in the UK retail industry (Sainsbury’s, 2020b). However there are some weakens which are lack of marketing planning and low emphasise of market expansion for branding in the international markets. The purpose of the business is to help our customers live well for less. The major strategy of the company is to provide high quality products to the customers at affordable price son that the consumers can make effective purchase decision as per their personal needs and preferences and maximise their satisfaction (Sainsbury’s, 2020c). Additionally, as per the Ansoff matrix, it is possible to analyse the strategic planning of the company.

Figure: Ansoff matrix
Ansoff matrix

Quality products and affordable price are the major tactics of the company to secure future sustainable development by strengthening their customer’s base. The product range of the company includes food, health and beauty, home ware products, general merchandise, clothing and financial services. Hence, product diversification is another major strategy of the company through which Sainsbury’s tries to satisfy their clients and provide diverse products as per their choices and preferences (Sainsbury’s, 2020c). Product development and diversification provide a scope to Sainsbury’s to expand their business across the UK market and satisfy he customers with innovation basket of goods and services. The values of the company are such as choice, quality, low prices, convenience and great service (Sainsbury’s, 2020d). They try to connect with their customers and create values for them. Trust and internal bonding further helps the customers to choose the products and services of Sainsbury have and help the organisation to boost their profitability. These are the major strategic planning of Sainsbury’s through which the organisation focuses on running their operations in the UK and gain high market share in near future (Sainsbury’s, 2020d). The company also focuses on providing high return on the investment of the stakeholders so that they can handle the people, who are engaged with the business. The stakeholders are such as suppliers, distributors, employees and managers, customers, government and social communities as whole (Sainsbury’s, 2020c). The organisation tries to maximise their profitability and provide high return to the stakeholders to satisfy them and retain them for long run. The origination is efficient to expand the business through increasing the numbers of physical store, where the customers can select the right basket of goods and services. The strong supply chain management and distribution network are also helpful through which Sainsbury’s is efficient to fulfil the customers demand and gain high competitive advantage over other retail competitive firms in the UK industry (Sainsbury’s, 2020d).

Recommendations

The organisation Sainsbury’s must focus on more research and development program for running the operations efficiently in the market. Sainsbury’s also needs to strategise their business for market expansion. Market penetration is one of the major strategies that would be helpful for the organisation to gain high competitive advantage and represent the firm internationally. Sainsbury’s must expand the business in the emerging market economies such as Asian countries in order to offer their quality products to the diverse customers. Licensing and direct exporting are the major strategy through which Sainsbury’s would be able to expand their business internationally and penetrate the emerging markets for running the business profitably. Sainsbury’s is an efficient brand which has the capability to invest in the marketing planning and in this regard social media advertisement is crucial for the organisation to expand the business strategically. Through creating simple and concise content and attractive pictures about the brand and product range, the organisation would be able to develop Facebook post, which is one of the renowned online platforms for business growth and further promotion. Through social media advertisement, Sainsbury’s must share all the necessary information about products, prices and other organisational operations in order to attract the audiences and retain the old and new consumers efficiently. The organisation Sainsbury’s must focus on launching mobile application in order to enhance technological advancement and creativity to run the business. The new mobile application is suitable for the brand to promote the organisational products and services through the apps where the clients can install them in their smart phones and place their orders as per their personal needs and preferences. This further provides a scope to retain the customers and manage them by providing 24*7 services. Two way communication further helps to develop trust and bonding among the customers and organisational representatives. For strengthening the supply chain and distribution network, it is mandatory for the company to invest in electric cars to distribute the products by maintaining environmental sustainability. It is effective tactic through which Sainsbury’s is able to satisfy their clients. Retaining more efficient suppliers and hiring experienced distributors are also necessary to manage international supply chain and meet the organisational objectives.

Conclusion

Sainsbury’s is efficient and reputed brand and the company is successful to operate in the retail industry. The organisation mainly focuses on product diversification and tries to provide the quality products at affordable price. It would be beneficial for the organisation to utilise their resources and invest in marketing planning and market expansion strategy. International licensing and direct exporting are important strategy through which Sainsbury’s can expand their business in the international market. The company also needs to launch mobile application to attract the customers and make the order placement and payment method easy for the clients so that they can place their orders successfully though smart phones. The organisation also needs to strengthen international supply chain and enhance online sales activities through social media promotional campaign for gaining high competitive advantage in future.

Reference List

  • Deloitte, 2020. 2020 retail industry outlook. [online] Available at: https://www2.deloitte.com/us/en/pages/consumer-business/articles/retail-distribution-industry-outlook.html [Accessed on 17 December 2020].
  • Forbes, 2020. The 5 Biggest Retail Trends In 2021. [online] Available at: https://www.forbes.com/sites/bernardmarr/2020/11/16/the-5-biggest-retail-trends-in-2021/?sh=7dd1168926af [Accessed on 17 December 2020].
  • Kasemsap, K., 2016. Retail marketing strategies and brand management: A global retail industry perspective. International Journal of Social and Organizational Dynamics in IT (IJSODIT), 5(2), pp.66-78.
  • KPMG, 2020. Global retail trend 2020. [online] Available at: https://home.kpmg/xx/en/home/insights/2020/05/global-retail-trends-2020-preparing-for-new-reality.html [Accessed on 17 December 2020].
  • Malar, M.S., 2019. Industry 4.0 Transforming Global Retail Industry. Indian Journal of Computer Science, 4(1), pp.19-25.
  • Sadler, R. and Evans, R.D., 2016, August. Social Media Strategies in the Retail Sector: Analysis and Recommendations for Three Multi-National Retailers. In Proceedings of the The 3rd Multidisciplinary International Social Networks Conference on SocialInformatics 2016, Data Science 2016 (pp. 1-6).
  • Sainsbury’s, 2020a. Our purpose. [online] Available at: https://www.about.sainsburys.co.uk/about-us/our-purpose [Accessed on 17 December 2020].
  • Sainsbury’s, 2020b. Live well for less. [online] Available at: https://www.about.sainsburys.co.uk/about-us/live-well-for-less [Accessed on 17 December 2020].
  • Sainsbury’s, 2020c. Our business strategy. [online] Available at: https://www.about.sainsburys.co.uk/about-us/our-business-strategy [Accessed on 17 December 2020].
  • Sainsbury’s, 2020d. Corporate governance. [online] Available at: https://www.about.sainsburys.co.uk/about-us/corporate-governance [Accessed on 17 December 2020].

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