Sainsbury Performance, Strategies and Governance - Research Paper Example

Analysis of Sainsbury College Executive Summary This report seeks to analyze the Sainsbury performance, strategies and governance according to the literature review that was conducted for this study. The chain’s approach to overall business centers on the provision of quality service so as to make it great as well as to retain and foster much stronger with customers, distributors and suppliers. We can say this plan seems to have succeeded if one would look at its previous year’s sales figures. These figures have increased by a significant rate and looking at the overall market share, it leads in terms of sales even outperforming its closest competitor which is Tesco. The SWOT analysis of this company together with its corporate governance have been looked at to show why Sainsbury has the potential to outgrow Tesco supermarkets and have a much more consistent consumer base than it has at the moment. Sainsbury’s financial reports have been studied as well as its marketing approaches. Recommendations that will help it achieve improved sales as well as better profits have also been given in consideration with the company’s objectives and mission as well. Table of Contents Executive Summary……………………………………………………………………...………..2 1.0 Introduction…………………………………………………………………………..……….4 2.0 Sainsbury’s Mission and Objectives………………………………………………….……….4 2.1 Its Mission and Objectives.............................................................................................5 2.2 Core Values……………………………………………………………………………5 3.0 Critical Methodology………………………………………………………………….………6 3.1 Direct Contact…………………………………………………………………………6 3.2 Internal Research………………………………….…………………………………..6 3.3 Customer Feedback………………………………...…………………………………6 4.0 Secondary Techniques………………………………………………………………………...7 4.1 Analysis of the Market……………………………...…………………………………7 4.2 E-Business…………………………………………………………………………….7 5.0 Data Analysis…………………………………………………………………………………8 5.1 Qualitative Data Research…………………………….……………………………..9 5.2 Evaluation of the Methodology………………………………………………………9 6.0 Conclusion…………………………………………………………………………………..10 1.0 Introduction This report is written based on Sainsbury’s objectives, and careful analysis of these objectives’ impact on the company’s overall performance. The main issues focused on in this study are the roles of business ethics and social responsibilities, cultural objectives and differences, planning within organizational culture as well as the role of environmental factors in strategic planning. In order to understand the position of a company in its location as compared to other companies, a SWOT analysis this is the analysis of its strengths, weaknesses, opportunities and competitive threats to its business model (Dandy 1996: 16-22). This kind of analysis helps us in planning of the future of the business and if possible, suggestions of alternative and better strategies that will enable the business achieve its set objectives. 2.0 Sainsbury’s Mission and Objectives This chain of supermarkets is one of the major food retailing chain in Britain. In any given one of its chain stores, one can have a huge variety of products of up to 30,000. They also have the practice of offering a variety of their own brands with fresh produce comprising up to half of the products on offer. As well as groceries, the supermarket chain also has on offer meat, fish and bakery counters, non-food goods such as home electronics and clothing, coffee shops, pharmacies, restaurants and petrol stations as well. Sainsbury’s was established in the year 1869 by Mary Ann Sainsbury and John James Sainsbury meaning that it is the longest standing and major food retailing chain in Britain. The main values and principles that were dear to these founders were mainly targeted at being the customer’s first choice for shopping while the store does its level best to provide value for money, high-quality products, attention to detail and more importantly excellent service to its customers (Hughes and Merton 1996: 4-8). Sainsbury has a workforce of well over 153,000 people. This is comprised of 32% being fulltime employees while the remaining 68% are part-time workers. In keeping with gender equality at the work place, more than half of these are women actually 60%. The chain of supermarkets serves well over 14million customers in one week. They also offer home delivery services that cover almost 80% of the United Kingdom at the moment (Fernie 1996: 48-59). 2.1 Its Mission and Objectives To deliver a quality and ever-improving shopping experience with quality products that are fairly priced. To exceed customer expectations for healthy, fresh, safe and tasty food to help in making their lives easier daily. (j-sainsbury.co.uk) 2.2 Core Values Getting better every day- the retail chain store aims at constantly improving its services. Great Service drives sales-In order to achieve high sales volumes; the company hopes to get there by constantly providing better services. Keep it simple- This will improve efficiency. Respect for the Individual- Respect is accorded to each and every employee within the company. Treat every pound as yours- Employees should keep in mind that improved company revenue will lead to improvement of the company. 3.0 Critical Methodology I divided my techniques to two broad categories; Primary and Secondary techniques. Under the primary technique, I employed the use of;- 3.1 Direct Contact I went ahead and decided to meet as many people as possible that are connected in one way or the other to Sainsbury plc. This helped me to better know the organization and the intimate goings on in the business as a whole. I was quite lucky to meet one of the supermarket’s senior managers. This gave me the opportunity to enquire from him what they do so as to maintain quality customer relation which is one of their core values and objectives. I was given a quick over view of how this is achieved and also how the human resources section achieves its goal of making every employee feel equal and appreciated within the supermarket chain (Rowley 2000: 390-398). He even went further to explain their quality assurance procedures that seek to ensure they produce only high quality products at a fair price that goes a long way in customer satisfaction. 3.2 Internal Research I got a part time job for a short period of time at one of the many supermarket chain stores dealing with customer enquiries which put me in a strategic position to be able to experience firsthand how they deal with customer requests and complaints in a way that satisfies the customer and also solves the problem at hand at the same time. 3.3 Customer Feedback This is very important for any organization that seeks to know the current quality of the company services and if they require any major changes in order to improve the customer experience at the organization as compared to its competitors in the market (Rafiq M and Fulford, 2005: 444-460). This is no different in Sainsbury where there is a department that deals with this called Customer Relation Management. This is the department tasked with conducting monthly surveys on the customer experience so as to get to know if there is any particular thing that the customers don’t seem too happy about. In case of a problem being detected, top management gets notified and they institute changes that aim to eliminate the specific changes like the firing of a rude employee that keeps getting negative reviews from customers. 4.0 Secondary Techniques 4.1 Analysis of the Market This is important for this research since it helps in reviewing the organizations development plan in regards to issues like market penetration, the market’s overall thoughts of the organization and whether the organization has fulfilled most of its goals that touch on these. If not, this will provide a critical opportunity for the top management to review their policies so as to achieve these targets. 4.2 E-Business E-business has been widely embraced by most modern companies since it helps them to increase their market penetration. This is a cheap option since the organization does not require physical presence in a certain area to serve that particular market. All it requires is a functioning website and a reliable means of payments. Sainsbury also employs this mode of conducting business which enables them to cover as much as 80% of the United Kingdom (Dandy 1996: 16-22). 5.0 Data Analysis This is the process of summarizing given set of data with the aim of deducing useful information that will help one to derive conclusions from the same. Most corporations try to make use of the data they receive daily due to daily transaction. This is done so as to try and better the way of doing business. In chain supermarkets such as Sainsbury, customer behavior is greatly analyzed to know their preferences and shopping characteristics in an attempt to increases their sales and hence raise their annual revenue stream. The focus is not only on revenue expansion but also ways to cut costs and increases efficiency in their operations. This is mainly done through the periodic analysis of operations data in an attempt to detect areas of wastage and redundant processes that can be done away with completely (Rowley 2000: 390-398). Of the United Kingdom’s £110bn grocery market, Sainsbury’s share stands at about sixteen percent. Sainsbury has been gradually its market share to Asda as well as Tesco chain of supermarkets. Infact Asda replaced Sainsbury in the second position by the turn of 2003. The retail chain decided to analyze its customers’ purchases. This helped them single out the most frequently purchased product category. The top management then decided to develop a coupon for this category of goods and send them to some of its loyal customers together with other products’ coupons hopping to improve the sales figures of the other products as well by encouraging them to purchase other products as well when they visit the store. The retail chain is also hoping to increase the awareness of local recipes amongst the younger generations in the United Kingdom. This is achieved through the program christened Active Kids Get Cooking Scheme. The involvement is very encouraging with the participation of close to 8,000 schools. This is a clever way of increasing sales since this category of the population comprises of the future market and the ability to associate grocery shopping for these recipes with the Sainsbury retail chain will ensure a growing future market for its produce. 5.1 Qualitative Data Research The company has extensive criteria that one must satisfy in order to qualify as the chain’s supplier since low quality supplies will lead to poor quality products for its customers. In order to be confident about the quality of produce, they have gone to the extent of producing their own goods of the desired quality. Better quality goods will increase customer satisfaction and drive up sales. The customer is always expecting better services from the company as a condition for his return and subsequent loyalty. Sainsbury tends to always provide this experience by trying their best to solve customer problems as well as providing information required about goods and experience. Sainsbury invests heavily on Customer Relationship Management to always be quick to spot problems before they balloon into a crisis. They conduct frequent surveys in their various departments that deal directly with customers in a bid to ensure that the chain’s high standards so as to have an edge over its main competitors such as Tesco and Asda (Wrigley 1997: 412-426). 5.2 Evaluation of the Methodology CRM is a program implemented by most companies in order to help increasing an organization profitability and sales through increasing customer retention. Effective Customer Relationship Management uses crucial information that is derived from various data sources in an enterprise as well as outside so as to come up with a uniform and effective view of every customer in real time. This will equip employees who deal with customers directly like customer support, sales and marketing with the appropriate skills and information that will enable them employ highly effective strategies in marketing the company’s goods or services thus leading to improved sales and hence revenue. For the CRM program to be effective, the processes of information gathering at the points of contact with customers have to be accurate and reflect the true scenario on the ground (Wrigley 2000: 891-919). The information should be distributed to all the employees and not remain with the advertising or marketing department for it to be employed in the day to day dealing with customers. Highly effective CRM programs make use of information gathered to attract new customers, improve quality of service and come up with customized and personalized products. 6.0 Conclusion Sainsbury chain of retail stores has an intranet site that is called connect. This platform is essential when communicating company policies and changes in certain procedures to improve efficiency. The organization acknowledges the need for there to be collective action more specifically at the investor, processor and retailer view so as for there to be beneficial change in the retail sector. Research methods in Management have to be improved in the organization in order to enable it achieve their customer satisfaction goal which is the main driver for increased revenue. Bibliography Dandy J 1996, “Jonathan Dandy interviews Terry Wells, director of Customer Service, J. Sainsbury plc” Managing Service Quality, Volume 6, Number 3, pp. 16-22(7) Fernie J and Pierrel F.R.A 1996, “Own branding in UK and French grocery markets “Journal of Product and Brand Management, Volume 5,Number 3, pp.48-59(12) Hughes D and Merton I 1996, “‘Partnership in produce’: the J Sainsbury approach to managing the fresh produce supply chain” Supply Chain Management: An International Journal, Volume 1,Number 2, pp. 4-6(3) Kay J 1996, “Can There Be a Science of Business?” The Business of Economics, pp. 26-33(8) Rafiq M and Fulford, H 2005, “Loyalty transfer from offline to online stores in the UK grocery industry” International Journal of Retail & Distribution Management, Volume 33,Number 6, pp. 444-460(17) Rowley J 2000, “Loyalty kiosks: making loyalty cards work” British Food Journal, Volume 102, Number 56, pp. 390-398(9) Wrigley N 2000, “Strategic market behavior in the internationalization of food retailing Interpreting the third wave of Sainsbury’s US diversification” European Journal of Marketing, Volume 34,Number 8, pp. 891-919(29) Wrigley N 1997, “British food retail capital in the USA - Part 1: Sainsbury and the Shaw’s experience” British Food Journal, Volume 99,Number 11, pp. 412-426(15) “Developing the weakest link in the Sainsbury’s chain” Development and Learning in Organizations: An International Journal, Volume 16, Number 4, April 2002, pp. 4-6(3) Read More