Sainsbury: Sainsbury’s is a leading United Kingdom grocery chain founded in 1869 by John James and Mary Ann Sainsbury’s. Its first store opened in Drury Lane’ London, with the promise of “highest quality at keenest prices”. In 1998, with around 400 stores in the U. K, Ireland and the United States, and total sales of i?? 11. 6 billion, Sainsbury’s is still providing the best products and high-quality service, value for money to an increasing number of consumers. Sainsbury’s Supermarket serves over 9.
5 million customers a week and as a large supermarket offers over 23,000 products, 40% of these are Sainsbury’s own brand, which are quoted to be that their “key brand attributes are great quality, value, service and choice” (Appendix 4). “We’ve simplified the company structure to ensure we get maximum benefit from our investments and we’re focusing on UK business growth and strengthening our market position” Almost all organisations want to grow and develop. It is clear to see that Sainsburys want to grow and develop as an organisation as the objective above shows that they want to “grow and strengthen their market position”.
Tesco are currently the market leaders in the supermarket grocery industry with 32%, Asda are in second place with 16. 9% and Sainsburys in third with 10. 5% (web addresses for these figures can be found in the bibliography). Sainsburys feel they must grow in order to profit from potential customers who are currently loyal to Tesco and other leading supermarkets such as Asda and Marks and Spencer (M & S). It is clear to see that Sainsburys desire to grow and develop however they’re corporate level strategic issue barriers.
Mission and strategic intent and ownership are two corporate level strategic issues that will be analysed in this report to determine how they effect the Sainsburys growth and development. Ownership (corporate level strategic issues) Sainsburys is a public limited company (PLC) therefore can potentially have the financial back up from investors to grow and develop. Reasons for Sainsburys having investor options are for example, capital share. Appendix 5 shows that there has been a high turnover for shareholders in 2004. This helps Sainsburys gain investors, seeking to make dividends, which will give Sainsburys the capital to grow and develop.
Sainsburys ownership also allows room for ideas and maturity as they have knowledge from more than one source. Although Sainsburys being a PLC assists them in growing and developing, there are many drawbacks that can affect the growth and development. For example, when such changes are to be chosen, being a PLC can create time restriction and therefore prove to be time consuming when deciding on company matters, which will increase Sainsburys expenditure. This can slow the process of growth and development making it more difficult to grow in the future as there is a high level of competitiveness.
A PLC seems as though it has a higher chance of becoming larger as the ownership is the largest kind possible, therefore if a business is to grow and develop, becoming a PLC should be considered. However, if Sainsburys are to change ownership, it is likely that they will find it more difficult to grow and develop. Implications of changing ownership can prove time consuming and costly organisation. Changing ownership can change businesses completely. Organisations may suffer from loss of business connection, loyalty of consumers, trust from other organisations, a loss o trust from employees etc.
These can all become issues if ownership is attempted to be change. Overall, it seems that Sainsburys being a PLC can prove solid enough to grow and develop as drawbacks can be overcome by the organisation using their recourses such as financial aid and industry knowledge to the fullest extent. Mission and Strategic intent (corporate level strategic issues) In order for organisations to develop and grow effectively and efficiently, companies must provide clear understanding of what their strategies are.
If and once the overall business aims and objectives are clear, managers at Sainsburys have a simpler task of directing staff towards the strategies of the organisation. If Sainsburys mission and strategic intent support growth and development, Sainsburys have a higher chance of growing in the market as the strategic intent of growth is clear to all members of staff and not jus management and corporate members of staff. Sainsburys currently state that their strategic intent is to become the worlds leading supermarket, overtaking Tesco.
This is shown by Sainsburys buying out the Jacksons group stores in the 4th quarter of 2004. In December 2005 Sainsburys was awarded nine Silver Q Awards and the popular Gold Award at the Quality Food and Drink Awards of 2005. It was the third year straight that Sainsburys won the overall Gold quality award. As the life styles of consumers are changing, Sainsburys are moving with the demand as they are leading the way in offering customers healthier choices through its healthy eating program such as ‘Be Good To Yourself ‘ and ‘ Freefrom’; reducing salt across key product areas.
The range in the “Be Good To Yourself” program comprises of nearly 500 products, including many ‘first to market’ initiatives such as white, wholemeal and brown bread which has higher fibre and lower salt. This clearly shows that Sainsburys have an unmistakable intent to grow and there for have a very positive affect on staff to help growth and development Sainsburys as a competitive organisation.