Sainsbury Case Study
Strategic Case Analysis
Sainsbury’s
By Rola Ramadan
Over the last few decades, the growing dominance of supermarkets has been a major point in people’s lives, seen in eating habits and shopping trends, mainly due to the fact that the vast range of goods and services those supermarkets provide, and the prices at which they supply them, have been terribly successful.
Sainsbury, one of the top leading supermarkets in the UK, has tried throughout the years, and facing the strong competition, to invest in both food and non-food products. However the company has failed to retain its top position in the market due to the challenges it was facing, its customer service and its low profit margin.
First of all being a family owned business, Sainsbury was run by members of the same family for more than 100 years meaning that the same culture same values same way of thinking was dominating while the market was going through a huge change. They are used to being grocers while the world is just one step ahead. They used the same actions that made them market leaders in the past in a world that had completely changed and needed something new, while in parallel new innovative strategies were born with their main competitors Tesco and Asda. The decline of Sainsbury's in the 1990s coincided with the rise of Tesco, which had outpaced its rival on price, range and innovation. While Tesco was innovating, Sainsbury, with its lack of vision and pioneering strategy, had the only choice to react, and thus follow.
Second of all, with the retirement of John Sainsbury, the brand’s long time CEO, the succession by his cousin David brought a big change in management style. David was more consensual and less hierarchical but not in strategy or in corporate beliefs about the company's place in the market. The indecision between whether to go for quality or for value, the lack of effort to maintaining good relationships with the suppliers, which led to suppliers to favor Tesco over
Sainsbury’s
By Rola Ramadan
Over the last few decades, the growing dominance of supermarkets has been a major point in people’s lives, seen in eating habits and shopping trends, mainly due to the fact that the vast range of goods and services those supermarkets provide, and the prices at which they supply them, have been terribly successful.
Sainsbury, one of the top leading supermarkets in the UK, has tried throughout the years, and facing the strong competition, to invest in both food and non-food products. However the company has failed to retain its top position in the market due to the challenges it was facing, its customer service and its low profit margin.
First of all being a family owned business, Sainsbury was run by members of the same family for more than 100 years meaning that the same culture same values same way of thinking was dominating while the market was going through a huge change. They are used to being grocers while the world is just one step ahead. They used the same actions that made them market leaders in the past in a world that had completely changed and needed something new, while in parallel new innovative strategies were born with their main competitors Tesco and Asda. The decline of Sainsbury's in the 1990s coincided with the rise of Tesco, which had outpaced its rival on price, range and innovation. While Tesco was innovating, Sainsbury, with its lack of vision and pioneering strategy, had the only choice to react, and thus follow.
Second of all, with the retirement of John Sainsbury, the brand’s long time CEO, the succession by his cousin David brought a big change in management style. David was more consensual and less hierarchical but not in strategy or in corporate beliefs about the company's place in the market. The indecision between whether to go for quality or for value, the lack of effort to maintaining good relationships with the suppliers, which led to suppliers to favor Tesco over