An Analysis of Sainsbury’s Supermarkets Ltd and the Effect of the Credit Crunch on Its Performance

Dissertation Proposal An compendium of Sainsburys supermarkets Ltd and the effect of the cite crunch on its carrying out Year 1 Course codeMN5251 Assignment No 1 Programme Title MSc International Management Candidate No 0901143 TABLE OF CONTENTS design 3BACKGROUND OF THE STUDY 3 AIMS OF THE RESEARCH PROJECT.. 4 LITERATURE REVEIW.. 5 methodological abbreviation 6 PROPOSED CHAPTER HEADINGS 7 REFERECES 8 APPENDIX 9 1. existenceThis sermon seeks to project Sainsburys supermarkets plc (Sainsburys) as a company and how they elicit use their established brand to branch out and gain dominance growth in the attention, and to explore how they be coping with the late deferred payment crunch. Sainsburys has come a long way from being the market needer to dropping to the third berth which it is struggling to maintain. This can be attri simplyed to a series of wrong decisions and lack of foresight leading to their current struggles. They suffered from poor solicitude i n the past and this has reflected on their effort to catch up with the manufacturing leaders. In addition, because of the recent credit crunch, banks vex cut back on lending to both individuals and firms thereby swaying consumers to contend cheaper products and curb their expenditures.A question springs to mind prior to the crisis, supermarkets have passed on rising food prices to consumers but now to a greater extent than ever prices be low, so why the sudden change in tactics? Small businesses ar going to a lower place due to lack of finance which hinders them from competing and offering low prices but this loss to confederation becomes a gain to the big supermarkets. Does this mean that the supermarket industry has less risk than other industries or has the supermarket industry adjusted strategically to cope with the global downturn? 2. Background of the study Sainsburys supermarket, a supplemental of J Sainsbury plc was first opened in 1869 and is one of UKs most reputa ble stores.They own 509 supermarkets and 276 stratagem stores around the UK according to their website and are best known for their quality products that are priced fairly. It operates as an oligopoly where only some firms in the industry have volume of the market shares. Historically they have had the advantage of been in the industry a lot longer than its competitors who have now taken over in both performance and market share. Over a consecutive three month period ending in June 2008, Sainsburys reported 3. 4% growth in like-for-like gross revenue which exclude fuel. They have recently boosted their basics cultivate in order to meet the growing take on and attract modern customers.They have promoted their brand with the aid of celebrity chef Jamie Oliver In the current economic climate, the supermarket industry seems not to be affected financially by the lack of global credit but they have had to change their operations strategically to meet the demand of customers in the recent economic downturn. The food industry runs a low risk trade because majority of its products are necessities unlike other industries such as the banking sector who have suffered greatly from the credit crunch e. g. Lehman brothers. Across the continent and the UK, supermarkets have not been adversely affected by the economic crisis. Contrary to the recent events, the supermarket industry has in general employed more staff globally than any other sector. E. g. Asda has assure to employ 7000 new workers in 2009 (BBC), Tesco also plans to take up 10,000 new workers (Sky News).Some of the supermarkets are fashioning plans to expand and open new stores in the current economic climate impaired with lack of credit. Companies have had to improve efficiency in order to minimise their cost and to increase profitability. 3. The Aims of the research communicate are to Provide an assessment and summary of Sainsburys supermarkets plc -using financial, operational and business performan ce abridgment to compare them against their competitors. break up its position in the industry before and during the credit crunch they are currently experiencing increased sales during a recession. Investigate the reasons why Sainsburys is not the market leader they were the pioneers of the industry and now they are struggling to maintain third position ranking. Put together recommendations for Sainsburys on opportunities available to them that could lead to potential growth and increase customer loyalty suggest possible solutions and strategies that could help rebrand and reposition them in the industry. Personal aims include Gaining more knowledge and skills in performing research through various techniques. substitute a compulsory component to secure an MSc degree in International Management. The objectives of the research project are to Evaluate the supermarket industry. Examine the role of Sainsburys in the industry. Establish if there are salve market growth opp ortunities. Accessing the impact of the credit crunch on the industry. Reason behind the recent increase in sales during the credit crunch. The effectiveness of their marketing strategy and its impact on their sales. The role and contributions of operations to Sainsburys. 4. Literature Review and limitations of the study Sainsburys has recently been losing customers to discount stores like Aldi and Lidl who offer lower place products at cheap prices and since then the company has rebranded and improved on its financial and operational performance but has still not caught up with the market leader. Their own brand basics is a core forcefulness to the business but they seen to be losing the battle of drawing consumers to purchase upscale and premium products from them.Sainsburys grew quickly after its first store was opened but suffered great losses after the Second humans War when turnover fell drastically but the company evolved and grew once again till they experient a chan ge in management style in 1992. David Sainsbury and his successors made great decision mistakes under their administration including the rejection of branching into non-food retailing amongst others. During this downturn, their competitors grew rapidly. An opportunity that needs s to be explored is the increase in demand for organic products while striving to minimise the threat of their lack of international market exposure. It is important to promontory out that porters 5 forces has some weakness of been static, lacks guidance on how to define an industry and not prior looking.With these flaws, it is also considered to be a useful tool in divulgeing threats to profitability, strategic planning to outperform rivals and helps to identify less competitive segments. A limitation to the report will be the sample size utilise which will be small compared to the total population and maybe income, age and taste sensitive. The result from the analyse will be biased because it will be focused in the south west land of the UK and only few stores will be used. 5. Methodology and methods The research aims will be achieved with a faction of primary and secondary research 5. 1 Literature review The research method will be reviewing the literature on the supermarket industry with its focus being on Sainsburys.This will be achieved from the use of secondary data tranquil from textbooks and journals through Royal Holloway university library and other relevant resources including the use of commercial databases and earnings search engines. The dissertation will adopt a case study method. 5. 2 selective information solicitation and sample This report will use qualitative and quantitative data as sources of primary research. An analysis of original documents will be utilised including carrying out a small sample survey of 30 individuals each for Sainsburys and its competitors. This will entail the use of questionnaires with closed questions imputed into Statistical Pac kage for the Social Sciences (SPSS). telecommunicate and face-to-face interviewing techniques will also be used based on having good and reliable contacts within the companies.Data will also be self- ingested from electronic sources, books, journal articles news achieves and interviews to. 5. 3 Data analysis A categorisation approach will be adopted where all data collected are grouped according the topic area best suited for its analysis. This report will examine the financial and operational performance of Sainsburys in comparison with its competitors. The use of financial information gathered from secondary research, Sainsburys and its competitors (such as audited reports) which are less biased will be used to amount of money the performance of the business. The financial performance will be quantifyd using the following Ratio analysis, Competitor analysis and Financial statements.The operational performance will be analysed by studying the following Distribution networks, harvesting quality, Pricing strategies, Promotion strategies and Store location. The report will use the 4-stage model theory to rate the position of Sainsburys operation. This will determine where they fit into the model and how to further develop other aspects of their processes which could act as a support to gaining competitive advantage. Strategic analysis theory will be used to evaluate the strategic position of Sainsburys in the supermarket industry. These theories will include Swot analysis, Pest analysis, Porters five forces and Risk analysis. The SourcesSainsburys website, Tesco, Asda and Morrisons website, Textbooks, Journals, The World Wide Web, Databases, Royal Holloway University, News achieves and MINTEL. 6. Proposed chapter headings Chapter 1 Introduction Chapter 2 Background Chapter 3 Literature review Chapter 4 Methodology Chapter 5 Research results and analysis Chapter 6 Conclusion and recommendations References and appendices References Collin Fisher 2007. Resear ching and Writing a Dissertation A Guidebook for Business Students. scholar Hall BBC online Asda creating 7,000 new UK jobs http//news. bbc. co. uk/1/hi/business/7855482. stm Accessed 28/01/2009 Datamonitor, August 2008. Company set off Sainsburys http//web. ebscohost. com/ehost/pdf? id=22&hid=16&sid=fc656bea-c31c-4043-bbc3-82640ca0cf52%40sessionmgr7 www. sainsburys. co. uk Wheelwright, S. and Hayes, R. (1985) Competing through manufacturing in Harvard Business Review, (Jan-Feb), pp. 99-109. Sky News Tesco to create 10,000 new jobs http//news. sky. com/skynews/Home/Business/Tesco-To-Create-10000-Jobs-But-Posts-Poor-Christmas-Sales-Figures/Article/200901215202210. Accessed 20/01/2009 Appendix Timetable of dissertation 30th of January, 2009 proposal deadline February 2009 hebdomad 1-2 collect literature papers work week 3-4 review research methods literature and research strategy March 2009 week 1-2 design questionnaires forms week 3-4 examine literature review April 2009 week 1 -4 contact company to make assigning schedules week 3-4 revise the questions of questionnaires May 2009 week 2-3 formal proceeding with questionnaires week 4 final assemblage of questionnaire and analyse of primary data from the case company June 2009 week 1-4 start writing dissertation week 1-4 keep refining dissertation writing and start to finalise dissertation write up July 2009 week 4 start proofreading, finalise dissertation write up week 4 buffer for adventure and start up the plan of dissertation binding August 2009 week 1 finalise dissertation binding week 2 preparation for submission deadline