Sainsbury Next Strategy Essay

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4.0 Three Options for Sainsbury’s Next Strategy
This section discusses three options available to Sainsbury’s in light of the cultural differences between the UK, its home country and Egypt is new target market.
4.1 Scale Down its Operations
Scaling down a business means reducing the business operations to manageable bits and pairing profit increase with increasing overhead to reduce losses (Bishop 2009, p. 148). According to McNall et al. (2011), when venturing into new territory, it is best for firms to scale down their business as a strategy to avoid risks, master the market dynamism and to ensure sustainability (p. 246). This is especially true if the new market is culturally different from the home county. If Sainsbury’s were to scale …show more content…

According to Keillor (2011), partnership entry strategy occurs when two or more firms join their operations be it marketing or management, while still maintaining their independence (p. 93). This form of entry strategy is considered good for companies that are venturing into countries that have a distinct culture from the one they are used to operating. When venturing into Egypt Sainsbury’s formed an alliance with The Edge, one of Egypt’s best supermarket with good management, an elaborate distribution network and strong links with the government (Sebora et al. 2014, p. 6). The result of this partnership has been that the supermarket has managed to flood its facility with consumers and some retail stores have been closed due to high competition (Sebora et al. 2014, p. …show more content…

Entering into a partnership would be beneficial to the supermarket in terms of lowering the risk of investment, the companies will be able to share their resources, assets and suppliers, share management, and enhance each other’s brand (Keillor 2011, p. 93). By applying the VRIO analysis, a concept used to measure a firm’s value, rarity, inimitability, and organization against competitors, Sainsbury’s is a good supermarket to partner with (Gaubinger et al. 2014, p. 73). Foremost, the supermarket is a huge brand and has got vast resources in terms of personnel, facilities and equipment, the company is modern and uses the latest technology a rare aspect in Egypt, the supermarket follows a ‘neighbourhood model’ that is hard to replicate for local supermarkets, and the supermarket is

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