Background of Sainsbury’s

The analysis in the report is based on the marketing policies of an organization and the competitive advantage in the market. The organization that is taken into consideration is Sainsbury’s which is based in UK. Sainsbury’s is considered to be in the second position in chain of supermarkets in UK and it owns a market share of 16.9%. The organization was founded in the year 1869 by John James Sainsbury and the first shop of the company was set up in Drury Lane London (Belekoukias, Garza-Reyes and Kumar 2014). The company went on to become the largest grocery retailer in the year 1922 and also adopted the policy of self-service retailing. In the year 1995 Sainsbury’s was overtaken by Tesco and they further became the market leader in the retail sector. Sainsbury’s has fallen to the third place in the year 2003 and again regained the second position in 2014.

The holding organization of Sainsbury’s was J Sainsbury plc and they further divided their operations into three divisions mainly, Sainsbury’s Supermarket Ltd., Sainsbury’s Argos and Sainsbury’s bank. The organization started expanding its operations from the year 1979 and they merged their operations with a Belgian retailing organization. The organization again expanded its business in the year 1983 by purchasing 21% of the shares of Shaw’s Supermarkets, which was also considered to be the second largest group of grocery stores in the US (About.sainsburys.co.uk 2018).

Operations of an organization is mainly linked to the process where the set of raw materials or resources are transformed into goods and services. The resources related to input are the information and the customers. The resources are then transformed into services or goods with the help of the staff and the facilities of operations of the organization. A significant role is played by the operations management of an organization so that the different roles can be combined together which include, logistics, merchandising, cost control and coordination. The combination of all the activities help in successfully moving the products from the facilities of production to the customers (Naqvi et al. 2014). The heart of an organization is formed by the process of operations management as it plays an important role in the business operations.

Sainsbury’s holds the second position in the UK retail market and they have built their operations upon the heritage related to providing the customers with safe, healthy, tasty and fresh food and items related to food as well. The position of the chain of supermarket is like a process layout and the components that are physical in nature are grouped or arranged so that they can perform a particular function. The layout operates in such a manner which is mainly designed to guide the customers through the stores until they reach the cash counter (Wagner and Hollenbeck 2014). The first part of the customer layout is the initial enquiries and the first aisle of the stores contain food items that are fresh and are required on a daily basis. The breads and the dry goods are placed in the middle passage and the frozen food items are located near the checkout areas of the stores of Sainsbury’s. The lining of the essential items along the corners and the walls of the stores and appealing items available in the stores are main reasons for the popularity of the supermarket chain (Bharadwaj, Varadarajan and Fahy 2015).

Operational Processes of Sainsbury’s

The process flow of Sainsbury’s mainly depicts the different stages that are present between the stocking of the materials and the delivery of the products that are chosen by the customers for purchase. The materials and goods that are available in the stock are stored by the inventory in the initial stages. The stock is managed by an efficient solution named, “Wesupply” and it has been implemented in many stores of Sainsbury’s. The software helps in monitoring the status of the orders all across the network of Sainsbury’s. The supply of the items in the shelves are monitored by this software and the delivery system is coordinated in such a way so that the inventory is replenished within the stipulated time (Saeidi et al. 2015). The customers can successfully access the rates of prices and the different offers and schemes and then they are displayed in the aisles accordingly. Following this, the products are delivered to the customers and the billing is also done.

• The objective related to quality – The customers of Sainsbury’s give immense amount of importance to the passion of the company fir safe, healthy, tasty and fresh food. The organization has been able to stand by the objective related to quality in spite of the tough economic conditions of UK. The organization believes in providing good food for fair prices and they further provide a shopping experience to the customers that is satisfying in nature. Sainsbury’s tries to reach out to the customers by opening more and more stores at many more locations (Denrell and Powell 2016).
• The objective related to speed – Sainsbury’s always tries the best so that they can synchronize the demands and supply of the products. The organization tries to make the services and goods immediately available to the consumers. Sainsbury’s aims at appointing more staff in their line of the stores so that the speed of purchase can be increased.
• The objective of flexibility – The product range of Sainsbury’s is quite flexible with the availability of all types of products that are required by the consumers. The product offerings of the organization are flexible and changes according to the demands of the consumers (West, Ford and Ibrahim 2015).
• The objective of dependability – The organization provides all the relevant information to the customers including the timing of the stores, the posters, discounts and in the process makes the supermarket a reliable place. The availability of parking facilities and many other facilities for the disabled makes the store more reliable.
• The objective of cost – The costs that are incurred by the organization in relation to the maintenance of the inventory and thereby implementing different technologies, staff cost and facility cost. Sainsbury’s has always aimed to use the latest technologies for the purpose of decreasing the costs related to machinery (Albrecht et al. 2015).

• High volumes of products and goods are manufactured by the supermarkets like Sainsbury’s and the sales are also of high volumes. The process of sales and delivery of the products are standardized for all the customers of the stores and it is designed keeping in mind any individuals. The variety of operations and services in the supermarkets like Sainsbury’s are however quite low as there is a standard rule for the product delivery (Kaleka and Morgan 2017).
• The demands of the customers of Sainsbury’s are of high level and the organization has a changing capacity as well. The organization needs to keep track of the demands on a constant basis which can further lead high levels of unit cost. The different sections that are present in the supermarkets that range from household items to electronics have to be replenished on a regular basis.
• The operations of the organization are monitored by a solution namely, “Wesupply” that has been implemented in many stores of the organization. This helps in the amplification of the availability of the stocks that can be offered to the customers (Ahmad, Bosua and Scheepers 2014).

The major operational strategy of Sainsbury’s is related to move the functions related to HRM in the organization towards a centralised as well as paperless system. The HR managers will thereby be free from the duties related to the administration and invest their time on the coaching and training of the staff. The management of operations of an organization is important for managing the services and goods effectively and thereby distribute the same on a global basis (Pereira-Moliner et al. 2016).

The data related to the research of the operations management system of Sainsbury’s was collected with the help of interviews that were conducted on a group of 100 people. Questionnaires were also formed to test the different responses that were provided by the group of customers. The collected was then analysed to get the information related to the operations of Sainsbury’s and processes that are related to the operations.

Customers	Experience	Expectation
Speed	1	1
Quality	0	1
Variety	1	1
Reliability	1	1
Satisfaction	1	1
Friendliness	1	1
Fairness	0	1
Information	1	1
Alternatives	1	1
Control	0	1
Understanding	1	1

The operations of Sainsbury’s are closely related to the marketing related activities of the organization. The collaboration and coordination between the operations and marketing activities of an organization is important to ensure that the organizational aims are fulfilled. The roles of marketing activities and operations management of an organization contribute towards the strategy that is undertaken by the organization. The development of the different types of technologies affects the operations of an organization in a positive manner and thereby increases the productivity of the organization as well (Kumar and Pansari 2016). The strategy related to operations supports the marketing activities and helps in increasing the competitive advantage of the organization as well. The operations of Sainsbury’s and the implementation of the different strategies has thereby led to successful marketing activities related to the organization.

Use of Latest Technologies and Competitive Advantage

Sainsbury’s holds the second position in the retail market of UK with respect to sales and operations. The use of latest technologies in the operations and production facilities has helped the organization in gaining this position. The new technologies have been used by the organization to improve the experience of the consumers. The organization is known for offering products of high quality for fair prices. The availability of the products and the high quality services that are provided by Sainsbury’s also provides the competitive advantage to the organization. The speed of the supply chain of the organization is also increased with the help of new technologies (Wu et al. 2016). The queue times in the checkout of the stores is reduced which saves much of the time spent by the customers in the stores of the organization.

Sainsbury’s was reportedly the first retail store in Europe which has installed self-service checkouts in all the supermarkets and they also give the customers a choice regarding the way of checkout. The main source of competitive advantage for the organization has been the Nectar loyalty programme. This is the largest loyalty programme of UK and Sainsbury currently has more than 11.5 million active users. The latest initiative of Sainsbury that has been undertaken to enable the customers to scan their mobile devices is named “Mobile Scan & Go” (Hinterhuber and Liozu 2014). This new technology has helped in enhancing the experience of the consumers and they can also keep track of their own expenses and calculate their savings at the same time. The organization has also faced some challenges regarding the implementation of the new technologies as these sometimes cause disruptions in the shopping process of the consumers. The use of technology in the stores should enhance the experience of the consumers, without giving importance to the fact that whether they are using the technology or not (Marinagi, Trivellas and Sakas 2014). Technology needs to be implemented in such a way so that it does not cause any displeasure to the customers, as the dissatisfaction of the customers can lead to the changes in their relationship with the organization. Sainsbury has been able to gain immense competitive advantage with the implementation of latest technologies and adoption of the process of social retailing. Sainsbury’s has always given importance to the likes and the desires of the customers and the major use of technology is to enhance their experiences while shopping.

Marketing Strategies of Sainsbury’s

The life cycle of the products includes, five stages which are, introduction, growth, maturity, saturation and decline.

The introductory stage of the products of Sainsbury’s are related to the inception of the organization in the year 1869. The organization opened its first store in United Kingdom.

The growth stage of the products and the organization started from the year 1922 and they also adopted the self-service retailing option in the same year.

The maturity stage of the organization started in the year 1995. The organization had fallen one position in the market and then it was overtaken by Tesco. Sainsbury’s then earned the second position in the retail market of UK.

The organization is presently in the saturation stage with a market share of 16.9% in the UK supermarket sector. After the year 2003 Sainsbury’s was reinvented as a brand and the organization is now trying to regain its position.

The last stage of the product life cycle is the decline stage which has not occurred for Sainsbury’s.

Political factors – Sainsbury’s is based in the UK as well as Ireland and the performance of the organization is heavily affected by political situation of the country. The increase in globalization can pose a challenge and opportunity to the organization. This factor acts as a challenge if the organization needs to compete with the forces that are unknown and the companies need to find sources of products with quality and economical values. The increase in the rates of taxes has affected the operations of Sainsbury’s in the recent years (Westermann-Behaylo, Van Buren and Berman 2015).

Economic factors – The increasing costs of fuels have proved to one of most important economic factors that has affected the sales of Sainsbury’s. The increase in the cost affects the supply chain of the organization and this has further led to the rise in the prices of the products as well. Another important economic factor that has affected the sales of Sainsbury’s is mainly a credit crunch that has occurred due to the fall in the economy of UK. This factor had a huge impact on the global sales of the organization due to lack of buying power of the consumers. The consumers will tend to buy less of the luxury items and spend less on the different products that are planning to purchase.

Social factors – The social trend of the country where Sainsbury’s is operating will also affect the operations and profitability of the organization. The changing choice of the society regarding the consumption of healthier food items can affect the sales of the organization as this will lead to a change in the product range of the company. The competitors of the organization will tend to use the opportunity by stocking up more of the healthier food products and gaining competitive advantage in the market (Nazarpour et al. 2014).

PESTEL Analysis of Sainsbury’s

Technological factors – The changes in technologies in the retail sector and more usage of new technologies have helped in enhancing the experience of the consumers. Sainsbury’s has been using the latest technologies in such a way so that they can speed up the processes of sales and enhance customer experiences. The facilities provided by online shopping has been able to reach out to more and more consumers. The margin for errors has also decreased due to the usage of technologies (Ho 2014).

The processes related to development and training at Sainsbury’s plays a major part related to the contribution to the different activities that are conducted in the organization. The programs of development of training provides many opportunities to the staff of the organization so that they work in an efficient manner and also be effective in their jobs. The development and training program of Sainsbury’s is conducted by all the departments including, finance, marketing, supply chain. The quality management of the employees of the organization is performed in such a way so that the they can provide the best of services to the consumers who are the main focus of the organization (Thompson and McLarney 2017).

Conclusion

The report can be concluded by saying that the operations of the organizations are related to all the other departments. The successful management if operations of Sainsbury’s has been able to support the marketing of the organization. This has also helped the organization in acquiring customers and gain their loyalty towards the products and brands. The quality management related aspects of the organizations are also important to provide the best services to the customers and gain more customers as well. Sainsbury’s has been able to gain competitive advantage in the market with the usage of technologies and services provided to the customers as well.

References

About.sainsburys.co.uk (2018). Welcome to Sainsburys Home. [online] About.sainsburys.co.uk. Available at: https://about.sainsburys.co.uk/ [Accessed 5 Jan. 2018].

Ahmad, A., Bosua, R. and Scheepers, R., 2014. Protecting organizational competitive advantage: A knowledge leakage perspective. Computers & Security, 42, pp.27-39.

Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee engagement, human resource management practices and competitive advantage: An integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1), pp.7-35.

Belekoukias, I., Garza-Reyes, J.A. and Kumar, V., 2014. The impact of lean methods and tools on the operational performance of manufacturing organisations. International Journal of Production Research, 52(18), pp.5346-5366.

Bharadwaj, S.G., Varadarajan, P.R. and Fahy, J., 2015. Sustainable competitive advantage in service industries: a conceptual model and research propositions. In Proceedings of the 1992 Academy of Marketing Science (AMS) annual conference, Springer International Publishing (pp. 441-443).

Denrell, J. and Powell, T.C., 2016. Dynamic capability as a theory of competitive advantage: contributions and scope conditions.

Hinterhuber, A. and Liozu, S.M., 2014. Is innovation in pricing your next source of competitive advantage?. Business Horizons, 57(3), pp.413-423.

Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.

Kaleka, A. and Morgan, N.A., 2017. Which Competitive Advantage (s)? Competitive Advantage–Market Performance Relationships in International Markets. Journal of International Marketing, 25(4), pp.25-49.

Kumar, V. and Pansari, A., 2016. Competitive advantage through engagement. Journal of Marketing Research, 53(4), pp.497-514.

Marinagi, C., Trivellas, P. and Sakas, D.P., 2014. The impact of information technology on the development of supply chain competitive advantage. Procedia-Social and Behavioral Sciences, 147, pp.586-591.

Naqvi, S.T.H., Farooq, S., Johansen, J., Matthiesen, R.V. and Yang, C., 2014. The role of mechanization and integration of manufacturing processes in achieving operational performance. In 21st International EurOMA Conference on Operations Management in an Innovation Economy. EurOMA.

Nazarpour, A., Fischl, M., Sohrabpour, V. and Fynes, B., 2014. The impact of investments in innovation practices on competitive advantage.

Pereira-Moliner, J., Pereira-Moliner, J., Pertusa-Ortega, E.M., Pertusa-Ortega, E.M., Tarí, J.J., Tarí, J.J., López-Gamero, M.D., López-Gamero, M.D., Molina-Azorín, J.F. and Molina-Azorín, J.F., 2016. Organizational design, quality management and competitive advantage in hotels. International Journal of Contemporary Hospitality Management, 28(4), pp.762-784.

Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-350.

Thompson, J. and McLarney, C., 2017. What Effects will the Strategy Changes Undertaken by Next Plc Have on themselves and their Competition in the UK Clothing Retail Market?. Journal of Commerce and Management Thought, 8(2), p.234.

Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledge.

West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage. Oxford University Press, USA.

Westermann-Behaylo, M.K., Van Buren, H.J. and Berman, S., 2015, January. Stakeholder Capabilities Enhancement as a Path of Value Creation and Competitive Advantage. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 17223). Academy of Management.

Wu, K.J., Tseng, M.L., Chiu, A.S. and Lim, M.K., 2016. Achieving competitive advantage through supply chain agility under uncertainty: A novel multi-criteria decision-making structure. International Journal of Production Economics.