Sainsbury plc is a trading company in London. This trading plc is considered as second biggest supermarkets chain in United Kingdom. It has the market share of 16%. Sainsbury is known to be the early adopter of the self-servicing retail stores in United Kingdom. However, Tesco and Asda gave the tough competition to Sainsbury. Its objective and vision are to become the trusted retailer in the country. The company aims to provide the best retailing services and motivates its employees to perform better (Sainsbury, 2020).
The Ansoff matrix is a marketing tool used the company for the future growth strategies. It is a planning tool that helps companies in growing in combination of products and services. The Ansoff matrix suggests four major growth strategies, which are, market penetration, market development, product development, and diversification. Here is the detailed Ansoff matrix analysis of Sainsbury.
Market Penetration
Market Penetration is the growth strategy suggested by Ansoff Matrix. This strategy deals with the company selling current products to current market. This is the least risky strategy among all four. This helps the company in increasing the market share in the industry by increasing the sales. Sainsbury has adopted this strategy for the growth in the industry when Tesco and Asda came in competition. It started to adopt competitive pricing strategies and cut the costs on many of the products. It also started to give offers. Moreover, Sainsbury started to increase its advertising pace and sales promotion to increase the sales. The company started to offer loyalty incentives to its loyal customers. This helps the company lot in increasing the profit margins and competition from Tesco didn’t affect much of the Sainsbury’s revenue (UK essay, 2018).
Product Development
Product development is the growth strategy where company introduce new products for the current market or consumer base. This may possible that either company introduce completely new product or relaunch the new flavors or new versions of the existing products. Sainsbury realize to adopt the product development strategy right after the Tesco when it introduces Tesco Metro. Sainsbury introduced “Sainsbury Central” format. This project offered some new facilities for shopping to consumers in small towns. This further leads to expansion in country stores too. Sainsbury formatted these stores by considering the distance of buyers they have to travel weekly for groceries. This service helps them to do shopping nearby rather than travelling to cities. They introduced this in South east which is their strong market. Sainsbury standardized these stores as the regular stores. The supermarket maintains them according to the trading terms (UK Essays, 2018).
Market Development
Market Development is the strategy suggested by Ansoff matrix which deals in market expansion. This is the strategy suggests companies to increase the sales of the product in the new markets. This could means targeting new customers in different geographical markets or expand the market according to psychological segments. Sainsbury should expand itself in new markets mainly international markets like Tesco. The company should increase its services of banking, credit cards, insurance, holidays, and other services it is providing in United Kingdom. Although the company has not been seen in any international market like Tesco. The company can venture in international forum for growth mostly in Southeast Asia or China (Sanusi, 2014).
Diversification
Diversification is the riskier strategy suggested by Ansoff matrix. It deals with launching the new product for the new market where company never operated before. It is the new experience for the company and if it will be hit, this will be beneficial for the company. Before adopting this strategy, company needs to investigate the market and consumer needs. The investment will be increased in the R&D department of the company. Sainsbury was the grocery retailing store initially, but later it started its own clothing. The company also diversified itself in the financial market, providing insurance and credit card facilities. However, the company is operating in United Kingdom only and does not expand itself in international markets yet (UK essay, 2018).
References
Sainsbury, 2020. About us. [Online], Available at: https://about.sainsburys.co.uk/about-us/our-vision, [Accessed on: 2nd February, 2020].
Sanusi, S. 2014. Strategic analysis of Sainsbury plc. [Online], Available at: https://www.academia.edu/35204980/Strategic-Analysis, [Accessed on: 2nd February, 2020].
Uk essays. 2018. An Analysis of Sainsburys Supermarket. [Online]. Available at: https://www.ukessays.com/essays/marketing/an-analysis-of-sainsburys-supermarket-marketing-essay.php?vref=1, [Accessed on: 2nd February, 2020].
UKEssays. 2018. Situation analysis of Sainsburys. [Online]. Available at: https://www.ukessays.com/essays/marketing/situation-analysis-of-sainsburys-marketing-essay.php?vref=1, [Accessed on: 2nd February, 2020].