business administrationag 1
TRANSCRIPT
-
7/30/2019 Business AdministrationAG 1
1/22
Created by Alex G
Communication Assignment
2012
Module Code: G10003
Date: 19/04/2013
Tutor: Gillian Gannon
Student: Alexandru Grecu
1
-
7/30/2019 Business AdministrationAG 1
2/22
Created by Alex G
2
-
7/30/2019 Business AdministrationAG 1
3/22
Created by Alex G
Table of Contents
Introduction
Aim Objectives and Methodology
History, Size, Type, and Ownership
Internal Structures/Organisational Chart
External Structures (PEST plus C Analysis)
SWOT Analysis
Impact of the Structures on the Performance of the
Organisation
Communication Process within an Organisation
Types of communication used Sainsbury
Recommended Changes
ConclusionBibliography
3
-
7/30/2019 Business AdministrationAG 1
4/22
Created by Alex G
Introduction
In choosing the company for my Communication assignment I wanted to
perform the analysis on an organisation that was involved in a highly
competitive environment. This would also help make the report more
interesting for readers. Then while reading an article in the Independent
with the heading Sainsbury's outpacing Tesco with sales growth i t
occurred to me that Sa insbury s is an idea l organ izat ion to
analyze that operates in a highly competitive industry-Food Retail.
Aim Objectives and Methodology
My first aim is to explore and analyse the internal factors of the
supermarket and to have a look into external factors positive and/or
negative that can affect the company. Also I want to make reader to
understand Sainsburys Business Strategy and the methods for
communication within company; and how it has facil itated
Sainsburys to achieve success.
Methodology
In gathering the information I mainly relied on the Internet to
formulate this report. The various search engines to collect the
information I needed for the report were:
S ai ns bu ry s w eb si te w as t he m os t i mp or ta nt s ou rc e o f
in fo rmat ion. The website also had an archive of compa ny news
which gave me a h inds ight o f the more immediate matters
faced by the company.
4
-
7/30/2019 Business AdministrationAG 1
5/22
Created by Alex G
Competitors websites.
Internet search engines (Google, and MSN) to gather information
related to Sainsburys and the UK retail industry.
History, Size, Type, and Ownership
J Sainsbury plc is a public limited company listed on the London stock
exchange. Sainsbury's was founded in 1869 by John James and
Mary Ann Sainsbury. They opened their f irst small dairy shopat one of London's poorest areas and the Sainsburys shop
quickly became popular for offering high-quality products at low pr ices. It
was so successful that further branches were opened in other
market streets.
(J Sainsburys Plc, Our History [online])
J Sainsbury plc is a leading UK food retailer with interests in financialservices. It serves 16 million customers each week in over 780 stores
across the country. The supermarket chain operates three main store
formats; regular Sainsbury's stores, Sa i ns b u r y ' s Loc a l
( c o n v e n i e n c e s t o r e s ) a n d S a i n s b u r y ' s C e n t r a l ( s m a l l e r
supermarkets in urban locations) stores. Sainsbury's also operates
an internet shopping service branded as "Sainsbury's Online". This
service is available to over75% of the UK population. The group a lso
has in terests in property and bank ing. I t prov ides f inanc ia l
services through the Sainsbury's Bank. This is joint venture between J
Sainsbury plc and Halifax Bank of Scotland (HBOS). The current
product range includes savings and loan products, credit cards and a
number of insurance products provide f inancia l services through the
Sainsbury's Bank. This is joint venture between J Sainsbury plc and
Halifax Bank of Scotland (HBOS). The current product range
5
-
7/30/2019 Business AdministrationAG 1
6/22
Created by Alex G
includes savings and loan products, credit cards and a number of
insurance products.
Internal Structures/Organisational Chart
The internal structure of Sainsbury consists mainly in:
Board of directors
Operating board
Committees
Board of Directors
6
-
7/30/2019 Business AdministrationAG 1
7/22
Created by Alex G
Operating Board
7
-
7/30/2019 Business AdministrationAG 1
8/22
Created by Alex G
External Structures (PEST plus C Analysis)
There are various forces in macro-environment that can affect the
decisions of the personal and the management of an organization. Trade
conflicts, new rules and regulations, Tax movements, changes of
demographic view and policy changing of government are all instance ofmacro change. To modify and analyse these forces can be categorise
using the PEST method. This method differentiates by some forces to the
organizations.
Sainsbury`s is a very large company and the PEST analysis is shown
below.
PEST forces of Sainsbury`s
Political forces: European Union extension, Euro Zone, Globalize business,
taxation rules and policies.
Economic forces: Changing rates of interest, exchange rates, national GDP
and Income, inflation, Job market and unemployment, Share Market.
Social forces: Population based on age, different view to work, income
classification and distributions Community works.
Technological forces: Invention, modern and new product innovation and
improvements, class of technological obsolescence.
Legal forces: Law for Competitors, monitoring health and safety,
employment based law.
Environmental forces: Global warming, environmental issues, green house
effect, animal welfare.
8
-
7/30/2019 Business AdministrationAG 1
9/22
Created by Alex G
Political forces
These forces refer to government policies such as the degree
of intervention in the economic scale. What product and services does the
mentioning country want to provide? What extent does it depend in
subsidising organizations? Sainsbury`s is forced by this factors.
Economic forces
These include the Changing rates of interest, exchange rates, national
GDP and Income, inflation, Job market and unemployment, Share Market.
Economic change can have a major impact on a firm's behaviour.
Sainsbury`s is automatically gripped by that forces.
Social forces
Sainsbury`s totally follows the responsibility for the society and its
surroundings. It is operating effective charities, sponsoring games,
arranging social activities, raising fund for Animal welfare, and many
more. For example, in the United Kingdom the population has been
ageing.
Environmental forces
Environmental forces include the changing of weather and climate.
Changes in temperature can impact on many industries including farming,
leisure and tourism and insurance as well. With major climate changes
occurring due to global warming and with better environmental awareness
this external forces is becoming an important issue for Sainsbury`s toconsider.
9
-
7/30/2019 Business AdministrationAG 1
10/22
Created by Alex G
Legal forces:
Sainsbury`s is in the boundaries of legal forces locally, nationally, globally.These are very close to the legal enforcements in which firms operate.
SWOT Analysis
STRENGHTS
STRONG BRAND EQUITY
S a i n sb u r y s h a s e n o rm o u s b r a n d e q u i ty a n d h a s b u i l tc u s t o m e r l o y a l t y b y p ro vi di ng t he m w it h Gr ea t qu al it y
food at fai r pri ces . The cor e U.K busi nes s covers the grocery
market and this means everything that is food related.
It has over the years successfully delivered to its customers
according to their needs r eg ar di ng t he q ua li ty , s ty le ,
conven ience , and price of dif fe rent product s and continues toprovide them with the best offers.
WIDE RANGE OF FOOD PRODUCTS
S ai ns bu ry s h as a im ed t o p ro vi de i ts c us to me rs w it h a
range of products to c h o os e f r o m. I t h a s a c c o rd i n g ly
s u b - b r a n d e d o w n l a b e l p r o d u c t s t o f i t t h e r eq ui re me nt s
of d i f ferent customers segments . I t i s cont inuous ly work ing
to introduce new ranges and improve existing ones in order to meet the
demands of its customers.
WEAKNESSES
SMALL STORE SIZES
Although Sainsburys have a large number of stores spread all over U.K,
most of the current stores have relat ively smaller s izes as
compared to its competitors. Due to thi s the re is les s roo m for
10
-
7/30/2019 Business AdministrationAG 1
11/22
Created by Alex G
good s othe r tha n groc eri es and cus tome rs cannot be provided
with a complete shopping experience
Sainsbury's property portfolio was built up during the 1980s, when
supermarkets averaged 20-30,000 square feet, compared with 40-50,000 square feet during the 1990s.
HIGH ADMINISTRATION COSTS
Sainsburys administration costs in recent years have been very
high due to its supply-chain and IT costs. Although its previous
supply-chain problems were s o l v e d a n d I T c o s t s h a v e
r e d u c e d i n 2 0 0 7 , t h e y a r e s t i l l h i g h e r t h a n i t s
competitors. Due to this it has lower operating and net profit
margins although gross profit margin is much higher.
OPPORTUNITIES
EXPAND INTO NON-FOOD RETAIL
Non Food products are very appeal ing to grocerysup erm ark ets as the y off er higher profit margins. The growth
potential for non-food products is also much more as compared to
the food-items. According to Verdict consulting (2006) the Sales of
electricals will grow by 71.1% from 2006 to 2011, whereas Food
and grocery will only grow by 16% in this period. Non-food accounts for
less than 10% of Sainsbury's total sales turnover whereas Tescos non-
food cont r ibu tes to 25% o f the to ta l tu rnover . Sa insbury sha s therefore planned to increase its store sizes, where possible,
and to open new larger stores in the near future to have more
space available for non-food items and increase their market
share in the non-food retail. However, it should also carryout
additional market research to ensure the success of the Non-food items.
HEATHY FOODS - MARKETING OPPORTUNITY
11
-
7/30/2019 Business AdministrationAG 1
12/22
Created by Alex G
A major advan tage tha t Sains bu ry s has ove r t he market
cost- leaders is the superior product quality. This can be made use of
and exploited by Sainsburys in its advertisements to increase consumer
awareness and their focus on Fresh and Healthy foods. This may helpstealing customers from the market cost-leaders and increase
Sainsburys market share.
THREATS
COMPETITOR PRICE WAR
The retail industry is a highly competitive industry. Sainsburys has over
the past few years invested heavily on price-cuts and promotions.
However if cost-leaders re ta l i a te t h i s ma y hav e s e r i ou s
c o n s e q u e n c e s a s t h e b u s i n e s s s t r a t e g y o f Sainsburys is
different to the cost-leaders, and it may not be able to compete
with them in this area. Also indulging in a price war would mean that the
quality of its products may have to be compromised, which is a one
of its key success factors.
Impact of the Structures on the Performance of the
Organisation
Five basic operations performance objectives are: quality, cost, speed,dependability and flexibility. These five characteristics are used to
measure the production efficiency of the company. On many different
levels Sainsbury maintain high quality of its services, for example by
keeping up high quality of its products-including fair trade products,
through well- kept rooms with an attractive appearance to a fast service
and a friendly-oriented staff. Sainsbury ensure that all suppliers have
been evaluated by the Quality Attribute System (QAS) in order to provide
constant quality of the products throughout the store. Sainsbury has
12
-
7/30/2019 Business AdministrationAG 1
13/22
Created by Alex G
different prices, which are suited to different kinds of customers. Through
the implementation of high quality products, Sainsbury have high prices,
however to adapt to the needs of less wealthy clients also offers a wide
selection of 'basic' products at low prices. Therefore I would describeSainsburys prices, as fair prices. Another key performance objective is
speed. I would describe the speed of Sainsbury's as a moderately-high.
Still we can come across queues, especially in the evenings, during the
peak time, but Sainsbury has undertaken major steps to solve this
problem. Sainsbury's team is trying to reduce queues through the recent
introduction of baskets tills, self checkouts as well as the introduction of
the newest Scan and Pack system. In order to improve the speed,
Sainsbury also offers home delivery which can be obtained for the very
next day. Dependability is about keeping the word to customers. This is
one of the main objectives of Sainsbury. They are providing customers
with quality products at fair prices; they go out to meet the expectations
of customers for a healthy, safe, fresh and tasty food. Sainsbury respects
environment by using environmentally friendly packaging. Goods are kept
in magazines in case of necessity of quick restocking. Queuing time is
reasonable and deliveries are on time. Online Shopping at Sainsbury's is
also a great advantage. All the above provide a high level of dependability
and are the reason why the Sainsbury's brand remains on the market for
141 years, and this makes the Sainsbury differs from its competitors.
Flexibility refers to the ability of a company to offer a wide variety of
products to its customers and this is what Sainsbury's is doing, since 141
years! During this time, there was a huge technological revolution-
Sainsbury had to adapt. On the market have appeared newer and newer
products-Sainsbury's had to adapt. Sainsbury also took into account the
recent change the behaviour of customers, who eat less at restaurants
and eat more at home. They launched a wide range of new products and
new sections to its stores such as electronics and household goods. They
also introduced many attractive promotions and also suggest to
customers interesting ideas for tasty and healthy meals in their cookery
13
-
7/30/2019 Business AdministrationAG 1
14/22
Created by Alex G
book-all in order to reach greater number of customers and to meet needs
of every one of them.
Communication Process within an Organisation
Communication is simply the act of transferring information from one
place to another.
Although this is a simple definition, when we think about how we may
communicate the subject becomes a lot more complex. There are various
categories of communication and more than one may occur at any time.
The different categories of communication are:
Spoken or Verbal Communication: face-to-face, telephone, radio or
television or other media.
Non-Verbal Communication: body language, gestures, how we dress or act
- even our scent.
Written Communication: letters, e-mails, books, magazines, the Internet
or via other media.
Visualizations: graphs, charts, maps, logos and other visualizations can
communicate messages.
Communication theory states that communication involves a sender and a
receiver (or receivers) conveying information through a communicationchannel.
The desired outcome or goal of any communication process is
understanding.
The process of interpersonal communication cannot be regarded as a
phenomena which simply 'happens', but should be seen as a process
14
http://www.skillsyouneed.com/ips/verbal-communication.htmlhttp://www.skillsyouneed.com/ips/nonverbal-communication.htmlhttp://www.skillsyouneed.com/writing-skills.htmlhttp://www.skillsyouneed.com/ips/verbal-communication.htmlhttp://www.skillsyouneed.com/ips/nonverbal-communication.htmlhttp://www.skillsyouneed.com/writing-skills.html -
7/30/2019 Business AdministrationAG 1
15/22
Created by Alex G
which involves participants negotiating their role in this process, whether
consciously or unconsciously.
Senders and receivers are of course vital in communication. In face-to-
face communication the roles of the sender and receiver are not distinct
as both parties communicate with each other, even if in very subtle ways
such as through eye-contact (or lack of) and general body language.
There are many other subtle ways that we communicate (perhaps even
unintentionally) with others, for example the tone of our voice can give
clues to our mood or emotional state, whilst hand signals or gestures can
add to a spoken message.
In written communication the sender and receiver are more distinct. Until
recent times, relatively few writers and publishers were very powerful
when it came to communicating the written word. Today we can all write
and publish our ideas on the Internet, which has led to an explosion of
information and communication possibilities.
A message or communication is sent by the sender through a
communication channel to a receiver, or to multiple receivers. The sender
must encode the message (the information being conveyed) into a form
that is appropriate to the communication channel, and the receiver(s)
then decodes the message to understand its meaning and significance.
Misunderstanding can occur at any stage of the communication process.
Effective communication involves minimising potential misunderstanding
and overcoming any barriers to communication at each stage in the
communication process.
An effective communicator understands their audience, chooses an
appropriate communication channel, hones their message to this channel
and encodes the message to reduce misunderstanding by the receiver(s).
They will also seek out feedback from the receiver(s) as to how the
message is understood and attempt to correct any misunderstanding orconfusion as soon as possible. Receivers can use Clarification and
15
http://www.skillsyouneed.com/ips/barriers-communication.htmlhttp://www.skillsyouneed.com/write/know-your-audience.htmlhttp://www.skillsyouneed.com/ips/clarification.htmlhttp://www.skillsyouneed.com/ips/barriers-communication.htmlhttp://www.skillsyouneed.com/write/know-your-audience.htmlhttp://www.skillsyouneed.com/ips/clarification.html -
7/30/2019 Business AdministrationAG 1
16/22
Created by Alex G
Reflection as effective ways to ensure that the message sent has been
understood correctly.
Types of communication used by Sainsbury
Communication methods used by Sainsbury can be categorized into
different types depending upon the level at which it takes place, the direction it
takes or by its very nature. Some of the commonly communication methods which
Sainsbury use are:
1 . P e r s o n a l C o m m u n i c a t i o n
2 . B u s i n e s s C o m m u n i c a t i o n3 . I n t e r n a l C o m m u n i c a t i o n
4 . E x t e r n a l C o m m u n i c a t i o n
5 . U p w a r d C o m m u n i c a t i o n
6 . D o w n w a r d C o m m u n i c a t i o n
7 . L a t e r a l C o m m u n i c a t i o n
8 . D i a g o n a l C o m m u n i c a t i o n
9 . F o r m a l C o m m u n i c a t i o n
10. Informal
Personal Communicat ion
Between two individuals, be it a family, or group or community or even an
organization.
Takes place in the individual capacity. There is an element of privacy in all such
communications.[e.g.] Personal Letters, Personal Telephone Calls, Conversations,
One-to-one Meetings/Talk or e-mail messages etc. It is private in nature and no
official about it.
Bus iness Communicat ion
Takes place between/among goal of a business. Takes place between/among
markets, market places, within the organizations and between/among
16
http://www.skillsyouneed.com/ips/reflecting.htmlhttp://www.skillsyouneed.com/ips/reflecting.html -
7/30/2019 Business AdministrationAG 1
17/22
Created by Alex G
groups of employees, owners, and employees, buyers and sellers, service
providers and customers, sales persons and prospective buyers and also
between/among people within the organisation. All the above communications
indeed impact the whole business activities. Communication is the vehicle onthe business moves. The ability of the communicator to communicate
effect ively verbally, non-verbally and in writing is a pre-requisite for
organizational and business related success.
Internal Communicat ion
Internal Communication takes place within the organization or group
among t h e p e op l e w i th i n , a m on g d i f f e re n t g r ou p s o f
e m p l o y e e s a n d b e t w e e n employers and employees. It could be
ora l , o r wr i t ten , v i sua l o r aud io -v i sua l , fo rma l o r in fo rma l
and upward and downward. Internal Communication serves to inform,
instruct, educate, develop, motivate, persuade, entertain, direct, control and
caution people in the organization. When a personal letter is written at an
official address besides writing the name of the addressee, the
env elo pe is sup ers cri bed as PR IVA TE or CONFIDENTIAL to
convey the nature of Communication.
Knowledge, Ski l ls , Goal Orientat ions, Sharing of Corporat ion
Concerns, Review and Monitoring, Performance Appraisal, Counselling
and Training are some of the issues concerning Internal Communication.
External Communicat ion:
External Communication flows outward, unlike Internal Communication. I t
a d d r e s s e s t h e p e o p l e o u t s i d e t h e o r g a n i z a t i o n
es pe c i a l ly th e p rospect ive cus tomers , competi tors , pub l i c,
press, media and the Government. Takes place in various ways through
different channels. They are :
Letters
17
-
7/30/2019 Business AdministrationAG 1
18/22
Created by Alex G
Notices
Brochures
Demonstrations
Telephonic Calls,
Business Meetings
Press Releases
Press Conferences
Audio-Visual Presentation
Publicity Films
Advertisements
Product Launch Events etc.
Upward Communicat ion
Large organizations such Sainsbury have different hierarchical level or tiers.
The process of communication to be effective and complete
should encompass all levels and tiers. Upward Communication moves
upward i.e. from Bottom to Top levels in the hierarchy.
A ny c om mu ni ca t i on t ha t m ov es f ro m e mp lo ye es t o
s u p e r v i s o r s , supervisors to managers, managers to top level
executives, Regional Managers to General Managers and so on
may be called as Upward Communication. Similarly, communication
from Branches to Regional Offices, Regional Offices to Zonal Offices and
Zonal Offices o Head Quarters [HQ] etc. are upward communication.
E m p l o y e e s S u g g e s t i o n s , M a r k e t R e p o r t s , P e r f o r m a n c e
R e p o r t s , Feedback on new Products, Requests for facilities etc.
are all Upward Communications in the organizational context.
Downward Communication
18
-
7/30/2019 Business AdministrationAG 1
19/22
Created by Alex G
This flows from Top to Downward, i.e. from CEO to Downwards. This communication
travels through-Senior Executives to Junior Level functionaries, from Controlling
Office to the Branch, from the Head of the Division to the Head of Unit, Corporate
Goals, Business Priorities, Motivational Letters, Work-related instructions,Newsletters, Letters from the CEO/General Managers Desk etc. are all typical
example of Downward Communication.
This type of communication is increasingly important, as business becomes larger,
complex and specialized. Even in small companies, Lateral Communication is
very much essential in order to co-ordinate various functions by encouraging
Team of Work among peers. Major setback to Lateral Communication
includes Departmental isolation, lack of time and communication opportunities.
Diagonal Communicat ion
D ia go na l c om mu n ic a t i on i n S a in sb ur y m a k es t h e
o r g a n i z a t i o n m o r e f l e x i b l e b y allowing faster communication ofinformation in both directions, from the lower levels of the company to the top,
and vice versa.
It takes away the rigid command structure that can bog down companies in "red
tape" (commonly known as procedures) and can aid in efficiency by employees
getting quick answers to questions that might otherwise take a week or
maybe even two.
It allows cross communication between departments which in
theory, helps disseminate information faster and helps people do
their jobs quicker and more efficiently.
The idea is that it empowers people more and allows them to have better c o n t r o l
o ve r t he i r j ob s a nd b re ak s d ow n b ar r i e r s b et we enu p p e r management and the lower echelons. Generally, diagonal
19
-
7/30/2019 Business AdministrationAG 1
20/22
Created by Alex G
communication is not liked higher level people, because, it works in
theory only.
Formal Communication
Formal Communication generally follows a well-defined hierarchical pattern andperiodicity. Memoranda, Circulars, Instructions, Guidelines, Clarifications,Agreements, and Reports are some of the Channels that facilitate theflow of Formal Communication in Sainsbury.
T h e m a i n a i m o f F o r m a l C o m m u n i c a t i o n i s
t o e n s u r e t h a t t h e communication takes place on an on-going
basis in an organization. S t a f f M e e t i n g s , U n i o n - M a n a g e m e n t
M e e t i n g s , B r a n c h M a n a g e r s Conferences, PeriodicalSales Review Meetings and Customer Meets are some of the examples
of Formal Communication.
Informal Communication
This type of communication takes place in an Unstructured
Manner and outside the Formal Pattern of Communication. There is an elementof spontaneity in this communication. Informal Communication works well in
smaller, loosely knitted organization.
It is used more often in situations where there are no rigid hierarchical tiers.
While Formal Communication is a must in large organizations, it is
the Informal Communication that helps sustain goal orientation in small units.
Infor mal Communica tion tak es p lac e thr ough Chats ,
Conversat ions, and Grapevines etc.
Recommended Changes
As a significant change I would suggest to a Sainsbury's to introduce someproducts which will give to a company a comparative advantage over their
20
-
7/30/2019 Business AdministrationAG 1
21/22
Created by Alex G
competitors. My second recommendation to Sainsbury's would be an
opening of local shops located in the city centre rather than on the
outskirts of the city. Customers often if do not need to do large purchases
are choosing local shops rather than supermarkets to save time andmoney, because undoubtedly in large stores often they acquire more than
actually have planned.
Good idea, which would attract additional customers to the Sainsbury's
would be the introduction of pay point or post office to the store, where
the customers immediately after purchase could pay their bills without
spending extra time to reach these places elsewhere in the city.
Conclusions
Sainsbury s f inanc ia l per formance in 2011 was except iona l .
Improvement in sales, profit margins, dividends and a stable liquidity
position should send positive messages to all stakeholders. The key corner
stone of Sainsbury overall success is providing its customers with Great
quality food at fair prices. It has stayed closely connected with the needs
of the customers regarding the quality, style, convenience, and price of
different products and have delivered accordingly by sub-branding own
label products to fit the requi reme nts of dif feren t custome r
segments . E .g . Bas ics for the down-market, Be good to
yourself for the up-market, and Taste the difference for the mid-
market.
S i nc e t h e l a un c h o f K i n g ' s r e c ov e ry p r o gr a m me , t h e
t u r n a r o u n d h a s b e e n phenomenal and the company has reported
twelve consecutive quarters of sales growth, most recently in January 08.
Despite distractions from potential takeovers s p e c u l a t i o n i n t h e
l a s t q u a r t e r o f t h e y e a r 2 0 1 1 , s t r o n g p e r f o r m a n c e w a s
delivered.
Overall Sainsburys growth will be affected by general market issues such
as the impact of regulatory and planning regimes on store
development and economic factors such as the level of household
21
-
7/30/2019 Business AdministrationAG 1
22/22
Created by Alex G
disposable income. However, Sainsburys is well positioned to
anticipate and meet the increasing consumer focus on fresh,
healthy, quality foods and fair prices.
Bibliography
Sainsbury publications
J Sainsbury`s Plc 2011 available at www.j-sainsbury.co.uk
Online financial publications
www.businessweek.com
www.ft.com
www.wikipedia.com
22
http://www.j-sainsbury.co.uk/http://www.businessweek.com/http://www.ft.com/http://www.wikipedia.com/http://www.j-sainsbury.co.uk/http://www.businessweek.com/http://www.ft.com/http://www.wikipedia.com/