Managing Information and Technology

MAIN BODY

Introduction about the company

Sainsbury is most popular company in retail industry that have its headquarters located in London, UK. The vision of it is to become leading company which is most trusted by people to shop and work. It keeps its customers at heart of everything they performs and invest in the channels, stores as well as colleagues for offering best and effective experiences (Sainsbury, 2020). Moreover, its vision is to deliver healthy products that have outstanding quality along with great services in faster and simpler manner. Along with this, it also aims to be consumers' preferential choice to shop.  The company provide great food in market at fair prices and executes activities associated with suppliers and environment in fair manner. In the year 2019, total revenues of £ 29.007 billion was achieved by it. Moreover, it also gained operating income of £ 312 million and net income of £ 219 million in the same year. It has approx 116500 manpower working in its different premises at international destinations. Organisational managers source products from more than 70 nations as per the potentials of supplies for meeting safety, ethical together with quality standards. It is also focused towards catering huge value of financial services to wide customers across UK.

Background information and discussion related to products and services of the entity

Sainsbury is UK based retailer which was formed in 1869 as shop in Holborn, London. John James along with Mary Ann Sainsbury played important role in establishing the company. It was started with a shop that offered fresh food and as time changes, the shop expanded to provide packaged groceries that included tea and sugar. “Quality perfect and prices lower” was trading philosophy of the company for the first shop. In 1922, it was incorporated as private organisation and became largest retailer of UK for groceries. Its products comprises of convenience shops, superstores, forecourt shops and supermarket in which different departments are set for commodities like dairy, cooked meats, groceries, bacon and hams, fresh meats, poultry and game. In present era,  There are approx 1420 shops of the entity in UK and among these around 820 are convenience stores (Sainsbury stores. 2020). The rest number are of super-marketers. In relevance with convenience shops, it is small shop which stocks wide variety of daily products including confectionery, groceries, newspapers, coffee, magazines and many more. These shops also offers services related to money order addition to wire transfer services. Superstores of Sainsbury are big box stores that have physical establishments and sells dry goods. Its supermarket are self service shops that provides diverse variants of household products, food and beverage items that are organised into sections. These also offers wide services that are mobile phone services, banking services, insurance services and restaurant facilities. With passage of time, the business concern continued its practices for refining commodity offerings along with maintaining leadership in context to convenience, cleanliness as well as shop designs.  

Analysing competitive environment of business through applying Porter's five force model along with justification of analysis.

            Competitive environment is impulsive and driving extrinsic system wherein a company competes and function for attaining objectives. When businesses sells more number of similar commodities then compete against others in more competitive business (Barak, 2017). In relevance with Sainsbury, managers can apply Porter's five Force Model for analysing competitive environment within retail sector where it operates and functions. Explanation and application of the model is underneath.

Porter's Five Force Analysis

The framework which is majorly opted for analysing organisational competitive environment. It assists in determining weaknesses and strengths of particular industry. Moreover, it is used for analysing industrial structure so that all the corporate strategies are determined on time and in effective modes (Basu and Wright, 2016). By applying the model, Sainsbury managers analyses competitive environment as it provides insights about competitive rivalry, suppliers bargaining powers, threat of substitutes, customer's bargaining power and threat of entrants. By considering all, effective strategies are set that aids in sustaining brand position and generating potential profits. Along with this, it is also applied by company for addressing issues related to external forces that have capability to influence financial performance and other performances in real world. The forces are as analysed:

Competitive rivalry: The first force that involves competitors number along with ability for undercutting an entity. When larger number of competitors offers equivalent  products and services than it creates high competitive rivalry. However, low competitive rivalry involves limited companies with few products. In case with Sainsbury, Competitive rivalry is high and this is because large number of entities performed and functions in the retail industry by providing similar and wide variants of commodities that creates huge competition. Some of business concerns that prevails retail industry are Morrisons, Tesco, Amazon, Walmart, Boots, Asda and Debenhams that have gained huge market shares and development levels. All these companies offers wide products that have similar characteristics and relative low price that makes the competitive rivalry high for the company.

Threat of new entrant: The another force that affects organisational powers through threat of new entrant in the industry (Bladergroen and Chigona, 2019). In retail industry, flexible regulations and policies that are governed by political authorities has resulted in enhancement of new entrant existence. Moreover, digitalisation is also another element that increases new companies entrance in the sector. Moreover, to enter and make strong position, new companies are required to make diverse investments and significant capital also. In case with Sainsbury, new entrant threat is extremely low as organising and managing a business against the institution is very challenging and required investments as well as significant brand development that takes years to get establish. Moreover, the industry provides little scope to new businesses for their establishment and because of this new entrant threat is low for Sainsbury.

Bargaining power of buyers: The force generally represents number of purchasers in industry, their order size and transition costs (Chen, 2017). Buyers are the one who makes purchase decisions for organisational commodities. Various companies sells similar commodities in retail industry at relative low prices that provides buyers huge bargaining powers. In context to Sainsbury, it has large customer base that make purchasing in large volume. Along with this, it also offers specialised and differentiated products with higher quality on time that provides aspects of low bargaining powers to customers. Moreover, the company provides variants of commodities at reasonable prices that they set after analysing perceptions of the customers for some particular offering and this is the main reason for low bargaining power of customers. A part from it, high switching costs, less price sensitivity, purchase of specialised products along with fewer substitute commodities also indicates that customers have low bargaining powers in the market.

Bargaining power of suppliers: The force which describes about bargaining power that suppliers have with the company. In the competing business environment, it is very difficult to understand suppliers and categorise them (England, Pelissero and Morgan, 2016). Suppliers are the one that provides sources or materials to produce commodities and also render services among companies to fulfil requirements. When there are situations related to unavailability of substitutes, high switching costs of purchasers, small suppliers against buyers and low dependence on sale to specific customer then in these situations suppliers have high bargaining power. In contrary, the reasons for low supplier powers to bargain includes large suppliers than buyers, limited dependence of purchasers of suppliers, low buyer switching cost and many more. In association to Sainsbury, it is analysed that the company performs operations in retail industry where there are small suppliers against buyers and posses low switching cost that results in low bargaining powers to suppliers. Moreover, the company makes contractual relationships with various suppliers and when one of them increases the prices then the company reduces activities or transactions with that one. Presently, the company has strong image and market shares and all suppliers wants to remain in their contact list. Because of it, Sainsbury have low bargaining powers of suppliers.

Threat of substitutes: The last force that depicts about the substitute threat a company has in competitive business environment (Epstein, 2018). When products that offers similar benefits to customers are available in market then there will be high threat of substitutes for company. However, when no company produces the products which offers benefits to consumer then it results in low threat of substitutes. Commodities which is provided by another company and have similar benefits and usage as the product offered by the entity are said to substitute products. In relevance with Sainsbury, it is analysed that it has high threat of substitutes for grocery addition to non grocery items because of potential food substitutes which are offered by other retailers and have same taste and utilisation criteria. The retailers time to time offers food substitutes along with other substitutes of products that have same usage as like those Sainsbury and it leads to high substitute threats.

The above analysis justifies that different forces have distinct aspects that helps in analysing competing environment. There are different reasons for the high and low levels of forces which are analysed by applying Porter's Five Force Model in context to Sainsbury. The analysis drives forces which helps in identifying intensity of competition in particular sector. With the analysis, managers of the company have also gain understandings for barriers of entrants, rivalry competition, powers that suppliers and buyers and substitute threats. So , it is said that the model is one of effective framework through which suitable information are gained related to business competitive environment.

Analysis of inbound, operations along with outbound logistics

Primary activities are those activities that are related with buying materials, converting them into valuable commodities and selling merchandise (Kannan, 2016). These are majorly involved in aspects related to production and selling organisational valuables to targetted population. They covers physical product creation, sales and transferring ownerships to potential buyers. The major primary activities that are performed at Sainsbury are analysed as the followings:

Inbound logistics: The activity that comprises of transportation, storage addition to delivery of items that are coming inside premises of company. Moreover, it is about purchasing outputs including raw materials and many more. Sainsbury do not produces its own products and in this case, Inbound logistics involves activities related to material handling, inventory controlling, scheduling transportation, warehousing along with returns to supplies.

Operations: The activities to convert inputs or raw materials in desired commodity are said to operations. As Sainsbury do not execute production procedures and because of this the company have different activities related to operations from those of its rivals. Activities in its operations includes machining, equipment maintenance, printing, packaging, assembly and facility opeartions.

Outbound logistics: It is mentioned to the process related to storing, transporting addition to distributing commodities in market (Letcher, 2018). It begins with orders of customer sales, moving towards warehouse packaging and ends at delivery of product to ultimate users. Few of outbound logistics activities in consideration to Sainsbury involves finished product warehousing, delivery operations, scheduling of work, processing of order and handling of tangible items.

Analysis of two support activities within Porter's Value Chain of company.

Porter's value chain is a framework that combines organisational systems for making money. It is made of diverse subsystems that are utilised for creating products addition to services. The model was described by Michael Porter as strategic management tool to analyse value chain of company. It involves various types of internal activities in which a business is engaged to transfer inputs into desired outputs. Primary activity and supporting activity are two of main activities that are involved within value chain of a business. Two support activities of Sainsbury are as analysed:

Firm infrastructure: The activity which serves organisational needs together with ties various parts together are said to firm infrastructure (Martin, 2017). Moreover, it covers support systems along with functions which allows companies to maintaining all the operations effectively. In association with Sainsbury, firm infrastructure activity includes strategic management, accounting, quality management, finance and political affairs. With these activities, the retailing entity enjoys competitive advantages and manages entire operations.

Human resource management: Activity that involves managing human elements through recruitment, selection, orientation, training, compensations and laying off are mentioned as human resource management. Hiring, motivating and retaining human resources helps in designing, manufacturing, promoting, selling and delivering valuables of the company for executing business strategies to achieve objectives. Few activities of Sainsbury that are part of the supporting activity are recruitment, selection, performance management, compensation, rewarding and training and development. All institutions rely on this activity as it provides talented people in different department who executes operations as determined.

Identification of key value adding activities along with justification

Value adding activities are those activities which increases benefits of products to customers and organisation to huge level (Mayzlin, 2016). These activities generally adds values for company. Certain key value adding activities of Sainsbury are as identified with justification:

Marketing: It is an activity that builds exchange relationships to satisfy customers by exchanging values. In context to Sainsbury, marketing is one of key value adding activity that adds values for organisational commodities through promoting them in competing market and provide information to wide distant customers. Moreover, marketing distinguishes the products that are offered by company and through this it develops brands with the help of messages along with imagery benefits. Hence, marketing results in creating awareness about brand that adds various valuables within the entity and its commodities.

Customer experience: The activity which adds values through interactions among customer and business within the duration of relationship is customer experience activity (Sapaty, 2017). Customer journey, brand touchpoints and environments are some elements of customer experience that assist to add values in products and company. When Sainsbury provides favourable experiences to customers by using the commodities then it satisfies the requirements of such people and with this diverse vales are enhanced on time. Moreover, it also ensures building brand loyalty, evangelising products and gaining positive reviews from customers that increases values of company in market.  

Building on understanding for “Porter's Five Force Model” as well as “Porter's value chain” analysis

Through Porter's Five force analysis of Sainsbury, it is understood that substitute threat is high because of large retailers selling similar food and other items which offers same advantages in market. Competitive rivalry with the company is also high and major competitors are Tesco, Morrisons and Debenhams. Bargaining powers with suppliers are low as the entity have wide number of suppliers to purchase required materials. Along with this, buyers have   low bargaining powers as all its prices are set as per their affordability. Moreover, New entrant threat is low as huge capital and investments are to be made by new companies to sustain in the competing market (Pearlson, Saunders and Galletta, 2019).

From the analysis of Porter's value chain, it is understood that primary activities of Sainsbury are inbound logistics, operations addition to outbound logistics through which it manages inventory and delivers products to customers. In addition to this, supportive activities of the firm are human resource management and firm infrastructure. Furthermore, the activities which adds values are marketing and customer services as they enhances valuables to great level.

Ways in which business can deploy information technology addition to using innovative ideas for improving business processes and enhancing competitive positioning.

Information technology is all about usage of computers for storing, retrieving, interpreting along with manipulating data addition to information of company (Rowley and Hartley, 2017). At Sainsbury, managers can deploy information technology through installing updates software in the computer systems that are used in warehousing, billing counters and many more. Along with this, introducing artificial intelligence as robots in work premises of the company can also lead in deploying information technology. These robots will guide employees and customers about the products and other aspects. By using innovative ideas in activities of company can result in improving processes of business along with enhancing competitive positions. Managers of Sainsbury uses various innovative ideas in form of marketing commodities that attracts wide customers and understanding their needs so that all are fulfilled effectively and timely. With this, all procedures are performed on time and in systematic manner and with proper monitoring managers analysis deviations and implement suitable solutions that improves processes of firm in large manner. Moreover, innovative ideas also assist in keeping customers loyal with brand and making unique position in market that is different from rivals (Tidd and Bessant, 2018). By grabbing large market share and fulfilling market choices then organisation gains success in increasing competitive positions in dynamic environment.

CONCLUSION

From above report it has been concluded that it is very crucial for business concerns to manage information together with technology for gaining competitive positions in market. With changes in time, a company makes wide changes from its establishment till the date within its products and services that they offers to customers. Porter's Five force analysis is majorly applied for gaining understanding about competitive environment of enterprise. Porter's Value chain analysis assist managers to create values to customers through various activities that are primary and secondary. Moreover, information technology is deployed in many ways in a company and innovative ideas are also used in many ways that leads to improve business processes together with enhancing competitive positions.

UPTO56%

Avail The Benefit Today!

To View this & another 50000+ free

Enter Email

Submit