Managing Financial Information - Case Study Example

Managing Financial Information Table of Contents Introduction 3 History & Profile 3 Competitors 5 Recent Developments 5 Industry Trends regarding Markets 6 Products, Competitors and their Growth 7 Competitors Analysis 8 Discussion: According to the data available for 2008, if the companies are arranged in descending order in terms of number of employee then, Tesco has largest number of employees marked with 440000. The second highest in this order is Safeway which has 197000 employees. The third highest in order is Sainsbury marked with 148500 employees and at the last position is ASDA marked with 143126 employees. 11 References 12 Bibliography 14 Introduction Management of financial information is becoming one of the toughest and most challenging tasks in the ever changing business environment. Finance is considered as the lifeline of a business entity and is a major factor that determines the fate of the business in the long run. It is very much required by a business organisation to clearly analyse its financial situation and then act accordingly. Correct understanding of the finance will help the company in initiating major decisions that will result in growth of the company and its stakeholders. On the other hand, an incorrect analysis can result in liquidation of the company. J Sainsbury, Plc is one such company which has a long history of sound financial growth and is considered as one of the most elite concerns in United Kingdom. History & Profile J Sainsbury, Plc was established in the year of 1869 by John James Sainsbury and his wife Mary Ann in the locality of London. They were primarily into the retail business of fresh foods and then ventured into other related businesses such as packed groceries. They had an elegant feel in their stores and even in their operations. Most of the products sold in the stores were under their own brand. Their motto from the inception of the business was to provide good quality products at cheap price. It was in the year 1922 that it was incorporated as a private company. It slowly became the UK’s largest grocery group both in terms of volume and market share. It is one such store which had the most varied range of products under a single roof. By the time of the death of James Sainsbury in the year 1928, there were 128 stores operating all around UK. John Benjamin Sainsbury took over the responsibility of the business and further developed the legacy Over a hundred years of existence in the market, J Sainsbury is now UK’s third largest supermarket chain. With time, it has also diversified its business into properties and banking. From one store, the brand now has 872 stores which include 537 supermarkets and 335 convenience stores. More than 19 million customers are catered in a week and the market share of J Sainsbury is over 16%. The organization is listed in the London Stock Exchange and is also a constituent of FTSE 100, which comprises of those companies that are having high capitalization rate and are part of the London Stock Exchange. The Qatar Investment Company is the majority shareholder of the company and even the Sainsbury family have an equitable share holdings too. The present chairman of the company is David Tyler and the Chief Executive Officer is Justin King. The employee strength of the company is about 150,000. The company over its existence has witnessed various ups and downs but has stood strong in difficult situations (J Sainsbury PLC, n.d.). Competitors Even few years back, Sainsbury was the leading company in grocery retailing but with time it has faced severe competitions from other companies which have withered its position. The major competitor of Sainsbury is Tesco, the number one grocery retailer at the present time in United Kingdom. Even it receives fierce competition from ASDA (Associated Dairies & Farm Stores Limited), Safeway, Morrisons, Somerfield and Marks & Spencer. Among all these brands, the clear winner in terms of popularity and sales is Tesco but the others do have their own popularity and core competencies. For example, ASDA is popular for its quality goods and Sainsbury have with it the name and the history behind it which appeals a lot to its customers and builds loyalty. Thus, the competition is tough and each company is finding ways and means to increase its market share (Whitwell, 2006). Recent Developments The store support center would be shifted to King Cross in the year 2011 as cost savings and energy efficiency are aimed at. Greater emphasis would be provided to the construction to get things right. Recently, Sainsbury has increased its operations in Northern Ireland by purchasing two stores of Curley’s. It has also included petrol pump and off shops. Even it has decided to buy as many as twenty four stores from the Co-Operative in the following years. It has also bought major stores in those regions such as Northern UK and Scotland where the market share is very low. Sainsbury has centralised its HR department to make decisions faster and conveniently. It is even the main sponsor of the London 2012 Paralympics. It has the sole right to sale Paralympics merchandise and even to participate in all major event related with it (Li, 2008). Industry Trends regarding Markets Being a necessity, the trends show an accelerating growth in the figures. It was estimated that the total market size of the groceries in UK for the year 2009 was as large as £146.3 Billion. The industry grew at the rate of 4.8% from the previous year. It has also been estimated that 52p in every £1 is used for foods and groceries. There are approximately 93,000 grocery stores in UK which can be categorised under convenience stores, traditional retails, supermarkets and online retails. It has been studied that the convenience stores are the more popular and 21p out of every £1 which is used for purchasing foods and groceries, are from these stores (Verdict, 2009). Products, Competitors and their Growth From the analysis, it can be said that all the competing companies that include Tesco, ASDA, Sainsbury or Safeway operate in the same environment and with similar category of products. Each and every competitor strikes out strategies to increase their sales. For example, Tesco have enlarged its business by spreading into territories of Europe and Asia. On the other hand ASDA has become a part of Wal-Mart stores. Morrisons have segmented their food division under many categories according to the needs of the buyers. Sainsbury shifted their base from groceries to home furnishings with growing competition in the market. Thus, each and every organisation operates with similar products under different brands. It is actually the strategies that make them different and is the barometer of their future success (Garcia, 2007). Competitors Analysis The major competitors of Sainsbury are TESCO, ASDA and Safeway. Financial Information for last 4 years: Sales Revenue of Sainsbury Employee data on 2008: 148500 Chart Discussion: From the year 2006 the company has shown consistent growth in its sales revenue. Sales Revenue of TESCO 2009 (£m) 2008 (£m) 2007 (£m) 2006 (£m) 53,898.0 47,298.0 42,641.0 39,454.0 Employee data on 2008: 440000 Chart Discussion: From the year 2006 the company has shown consistent growth in its sales revenue. Sales Revenue of Safeway 2009 (£m) 2008 (£m) 2007 (£m) 2006 (£m) 40,850.7 44,104.0 42,286.0 40,185.0 Employee data on 2008: 197000 Chart Discussion: From the year 2006 to 2008 the company has shown consistent growth in its sales revenue. But the sales show a decrease in figure as compared to the previous years in 2009. Sales Revenue of ASDA 2009 (£m) 2008 (£m) 2007 (£m) 2006 (£m) 40,821 35,392 28,892 19,899 [N.B. Sales for 2006 reported at $312.4billion converted to £m taking value $1=£0.637] Employee data on 2008: 143126 Discussion: From the year 2006 the company has shown consistent growth in its sales revenue. Overall it can be said that as compared to Sainsbury, the other three of its competitors are performing better which is reflected in their sales figure in the years 2006, 2007, 2008 and 2009. Representing employee data of Sainsbury and its competitor for the year 2008 through Chart: Sainsbury Tesco Safeway ASDA 148500 440000 197000 143126 Discussion: According to the data available for 2008, if the companies are arranged in descending order in terms of number of employee then, Tesco has largest number of employees marked with 440000. The second highest in this order is Safeway which has 197000 employees. The third highest in order is Sainsbury marked with 148500 employees and at the last position is ASDA marked with 143126 employees. References Garcia, M., 2007. Market Trends and Retailers’ Strategies in Fresh Produce. Kent Business School. [Online] Available at: http://www.google.co.in/url?sa=t&source=web&cd=6&ved=0CDYQFjAF&url=http%3A%2F%2Faic.ucdavis.edu%2Fresearch1%2FMarian%2520Garcia_final.ppt&rct=j&q=market%20share%20of%20grocery%20retailing%20in%20UK%20site%3Aedu&ei=7YSyTJO2BIOrcc-xmZEB&usg=AFQjCNHMTW0iUK69upvY3YOl07znkhNH2Q [Accessed October 11, 2010]. J Sainsbury plc, 2010. 5 year Summary. About Us. [Online] Available at: http://www.j-sainsbury.co.uk/index.asp?pageid=200 [Accessed October 11, 2010]. J Sainsbury PLC, No Date. Company Overview. About Us. [Online] Available at: http://www.j-sainsbury.co.uk/index.asp?pageid=12 [Accessed October 11, 2010]. J Sainsbury PLC, No Date. History. About Us. [Online] Available at: http://www.j-sainsbury.co.uk/index.asp?pageid=483 [Accessed October 11, 2010]. Li, E., 2008. Supermarket Chains and Grocery Market in the UK. China Europe International Business School. [Online] Available at: http://www.ceibs.edu/bmt/images/20100319/23714.pdf [Accessed October 11, 2010]. MSN Money, 2010. Safeway Inc: Financial Statement. Investing. [Online] Available at: http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=swy [Accessed October 11, 2010]. Morelli, C., No Date. Britains Most Dynamic Sector? Competitive Advantage in Multiple Food Retailing. University of Dundee. [Online] Available at: http://langinnovate.msu.edu/~business/bhcweb/publications/BEHprint/v026n2/p0770-p0781.pdf [Accessed October 11, 2010]. Redmayne-Bentley LLP, 2010. Tesco. Financials. [Online] Available at: http://www.redmayne.co.uk/research/securitydetails/financials.htm?tkr=TSCO [Accessed October 11, 2010]. Verdict, 2009. European Grocery Retailing 2009. Data Monitor. [Online] Available at: http://www.globalbusinessinsights.com/content/dmvt0483t.pdf [Accessed October 11, 2010]. Whitwell, S., 2006. Stretch Potential: the Supermarket Brands. Intangible Business. [Online] Available at: http://www.intangiblebusiness.com/Brand-Services/Marketing-services/News/Stretch-potential-the-supermarket-brands~390.html [Accessed October 11, 2010]. Bibliography Botten, N. & Mc Manus, J. 1999. Competitive strategies for service organizations. Purdue University Press. Corsten, D., 2004. Sainsbury. Tuck School of Business. [Online] Available at: http://mba.tuck.dartmouth.edu/digital/Programs/CorporateEvents/SupplyChainThoughtLeaders/session5Slides.pdf [Accessed October 11, 2010]. Fernie, J. & Et. Al., 2003. Principles of Retailing. Butterworth-Heinemann. Reynolds, J. & Et. Al., 2004. Retail Strategy: the View from the Bridge. Butterworth-Heinemann. Rosemary, D. & Et. Al., 1993. Retail Change: Contemporary Issues. Routledge. Read More