I believe that the strategic decision of enhancing differentiated food offers will be a successful decision to make, as food is known as the core of the business.
As we know, the strategic focus of Sainsbury’s is to help customers to live well for less, putting priority first and investigating in their ranges. This is beneficial for the company itself, as it will improve the way that they work, this is by changing the ways in which the employees operate in store and systems will be improved to make the store more efficient and a simpler management structure to motivate colleagues and improve service. An example of this would be that Sainsburys are known for selling gateaux and pastries, as it is sold in more than 500 stores. Sainsburys will try to enhance this by maybe introducing new products to their bakery section. This could lead to the gain of more customers, as their favourite food products will be available to them in a range of stores. On the other hand, the disadvantages would be that it can be quite costly as product differentiation requires a lot of resources for carrying out market research, such as customer preferences before thinking of enhancing an area of the business. The internal information used to consider this strategy would be marketing information, as it gives information about the company’s products.
Marketing information would be a reliable source, as it is taken from inside of the company from sources such as invoices, and customer purchases it includes information about the products sold at Sainsburys. Marketing information is always updated, when new products are delivered from suppliers. Also, another internal source of information that will be analysed before deciding will be purchasing information, as it is important to know about the potential suppliers who are going to provide the firm with these new food products. Purchasing information is appropriate to use, as the business will need to be aware of the supply chain. Sales information will also be looked at when deciding, as it provides past and current sales figures to monitor the performance of products. The external business information that will be used is trade groups, this source will be used to carry out research. This source is reliable as companies from the same firm provide information. Overall, this decision will be successful, as customers are in demand of new food products such as cakes, also we know that Sainsburys main source of finance is food, so it will be important for Sainsburys to consider this decision, as they want their customers to be happy with the products that are being sold.
• Diversify and grow Sainsburys bank:I agree with the fact that diversifying and growing Sainsburys bank is a good strategic decision, as it is part of the business and deserves to be as successful as the stores. Sainsburys bank currently have 1.9 million active customers. Over 81% of insurance customers and 75% of banking customers are linked to nectar cards. This decision will be beneficial for Sainsburys and customers because they will be able to shop and bank under one roof. The bank offers many rewards for customers to join, this will attract customers as they will be wanting to receive rewards, this could lead to the gain of customers for the bank, this will lead to diversifying the bank.
Also, the bank provides services such as mortgages. In the year 2018, the bank has received over 3000 mortgage applications, which indicates that the bank is developing. Whereas the disadvantages of this decision would be that other retailers such as Asda and Tesco would also want to open a bank, this will lead to the rise of competition in the market as all companies will want to enhance their businesses by opening banks. The internal source of information that will be used before making this decision is financial information. Financial information is a reliable source of information which provides the company a brief of its financial situation, for example the amount of money/profit the business is making throughout the year, or if they are financially able to make any changes in order to make the bank grow.
Financial profit figures will be taken a look at when considering any changes whilst making the decision. This information is updated quite a lot, as it has to be written into reports and figures. Overall, this decision will be effective, as the bank needs growing in order to become more prosperous and gain more customers to help the business grow.Conclusion:After taking a look at these three strategic decisions, it seems as though the most effective and successful one is most likely to be the merger of Sainsburys and asda, as 330,000 people are going to be employed, which means that there will be a decrease in unemployment. We have analysed different sources of business information within this report, and how effective they are when making these decisions