Sainsburys Swot Analysis

Contents page

1. Introduction

2. Analysis

3. Problems and solutions

3.1 Unclear Positioning

3.2 Diluted Brand Image

3.3. Slow in adapting to changes in customer needs

3.4 Slow in adapting to the competitive environment.

4. Conclusion

5. Appendix

5.1 SWOT analysis

1 Introduction

Sainsbury's started off as a family owned business in 1869 and remained within the family until the late 1990s. As a consequence, the company has a rich heritage, with strong traditions and brand values. Those traditions and values embrace quality, innovation and service. Strong relationships with its employees and suppliers were another unique part of Sainsbury's corporate culture. As a result, the business became the number one UK retailer in 1922. However, the Sainsbury family has insisted on age old customs and traditions for too long and also underestimated the threat of emerging competitors. The company not only lost its leading position in the market to Tesco and Asda but also the customers trust in the brand. Nevertheless, it is believed that with the help of this report's recommendations Sainsbury's can become the number two retailer in the UK within the next five years. In order to achieve this objective, Sainsbury's needs to go back to its true nature, back to what it is good at. With the help of the 'Back to Basics' approach Sainsbury's has the opportunity to achieve this objective, as it will help with future decision making and development of the brand. ‘Back to Basics' concentrates on the brand's core competencies: quality, innovation and service. Each of the suggested solutions and their various recommendations will concentrate on these three core values in order to regain customers trust and ultimately become number two in the market place.

2 Analysis

In order to identify Sainsbury's key problems, two analytical tools have been used. Appendix 5. 1 shows the SWOT analysis, which gives an overview of Sainsbury's strengths, weaknesses, opportunities and threats. The weaknesses have highlighted two core problems, namely the unclear positioning of the brand and a diluted brand image due to out of stock items. The second analytical tool, Porter's five forces model, looks at the threat of new entrants, threat of substitution, bargaining power of suppliers,