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Contemporary Management Issues

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Contents
Introduction.........................................................................................................................................1
Key Dynamic forces impacting on business and Society..................................................................2
PESTLE Analysis............................................................................................................................3
 Political.................................................................................................................................3
 Technological Factors..........................................................................................................4
 Legal Factors........................................................................................................................4
 Environmental Factors........................................................................................................5
SWOT Analysis................................................................................................................................6
 Strengths...............................................................................................................................6
 Weaknesses...........................................................................................................................6
Relationship between Forces..............................................................................................................8
Buyers’ Power..............................................................................................................................8
Impact on strategic decision-making and other activities................................................................9
Sainsbury’s respond to the drivers of change..................................................................................10
Recommendation...............................................................................................................................10
Conclusion..........................................................................................................................................11
References..........................................................................................................................................12

1
Introduction
Sainsbury's is a popular UK supermarket chain, They offer a high range of products, such as
groceries, appliances, kitchen equipment, clothes, and other household items. Sainsbury's has
small local convenience stores to big hypermarkets and supermarkets with a wide range of
products. Sainsbury's supermarkets are publicly held companies whose main shareholders are
Qatar Holdings LLC, having 21.99% of the voting rights. When Sainsbury's expressed
interest in emerging with Argos and the Home Base, most of the critics were skeptical and
wondered about the rationale behind it. However, Sainsbury's appears determined to take
over the family-owned distribution group, offering £ 1.3bn to acquire the group. The move is
seen as a rash move for expanding one's market base. Joining or emerging with the home-
retail group will help them in so many ways and, having followed Argos in many of its
household markets, is a step forward in the fight against the opposition. Additionally, the
supermarket claims to have a variety of complementary products from home retailers. Critics
have also argued that it can help to improve Sainsbury's "click and collect" service
(Sainsbury's, 2021).

Whereas, these reviews also remind us that Sainsbury's initially co-founded the home chain
and then sold it for almost 2000 for a total of £ 969 million. This only casts doubt on the
decision to acquire Argos. Furthermore, the food retail sector is affected by various forces
that create a constantly changing environment. For being profitable and increase its market
share in the external environment (bizibl, 2016).

Sainsbury's should know the key drivers of change that affect it and adapt its response to its
strategic goals and needs. Argo dealer. The retailer said cost savings earned profits while
adding Argo's retailers to Sainsbury's stores increased transaction intensity. Sainsbury's CEO
Mike said that the food market remained "powerfully competitive". Strategy development
continues with implementation, evaluation, and monitoring. As the best strategies cannot be
successful, if management fails, during their implementation or the evaluation of their
results (Sainsbury's, 2021).

Key Dynamic forces impacting on business and Society


The study will help to discuss the apparent dynamics of change in Sainsbury's case impacting
on business and society through PESTLE analysis and other marketing tools such as SWOT
and Porter analysis. It will help to discuss the nature of the change brought about by these
factors and assess Sainsbury's response to make relatable recommendations. The issues

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discussed in the study include issues that are important for strategic management as they
affect the operations of the organisation and its strategic direction. Understanding the key
issues in Sainsbury's case will enable the retail store for making better decisions and
successfully engage in change, thereby to respond competition and increasing their market
share  (Sainsbury's, 2021).

PESTLE Analysis
 Political
Some of the most important factors are very important in the organisational and commercial
context of Sainsbury's. Firstly, the environment of the UK is unstable politically due to
Brexit. Brexit has created an atmosphere of issues for companies due to its potentially
damaging effects on UK-based businesses. There are some of the ways Brexit could impact
Sainsbury's and other retail market chains of the UK. Such as, this could result in an increase
in taxes for imported goods and changes in production regulation. Furthermore, Brexit could
affect domestic work availability due to regulations on migrant workers. This can have a
minor effect on Sainsbury's, as retail markets often depend on low-cost, low-skilled labor for
some day-to-day operations (Jankelová, 2017).

A decrease in the availability of workers can lead to an increase in labor costs, which in turn
affects profits. If the company is deciding to tackle new labor costs by hiring fewer
employees than are necessary, it could impact service levels, prompting customers to prefer
other retail markets. Another factor that can affect influence Sainsbury's shortly is the relation
between the Qatar and UK. As the main shareholders are 100% owned by the State of Qatar
Holdings, political relations can affect these countries and Sainsbury's operations and their
desired profits. For example, a regulatory change that restricts foreign ownership can cause
Sainsbury's to be severely disrupted (Speare-Cole, 2020).

 Economic Factors

Globalisation is most of the essential monetary forces that would affect the destiny of
Sainsbury's. Globalization is related to the extended links and interdependencies of world
economies. In the prevailing case, the monetary courting among the UK and different nations
might also additionally affect funding opportunities, product export, and import and foreign
money tiers. Changes in foreign money tiers may also have a right away impact on
Sainsbury's due to the fact they affect profitability. Mostly, the lower in GBP ought to reason
a bad effect on Sainsbury's through limiting income and growing expenses, such as exertions

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and product imports. The contemporary political uncertainty obvious withinside the United
Kingdom has been contributing to modifications in GBP, weakening its function during the
last years for the reason that results in the Brexit in the year 2016 (the Guardian, 2016).

 Social Factors

The increase in knowledge and education of the local population are changing people's
lifestyles and most importantly, their habits of eating food. The focus shifts to healthy eating
habits that encourage the consumption of fresh and simple foods. This is a great opportunity
for Sainsbury's to introduce new dishes that promote healthy and humble eating habits. On
the other hand, the UK government advocates healthy diets primarily due to the growing
number of obese patients in the country. With the trend going to last, Sainsbury's could
benefit tremendously from this government incentive and source healthy eating and joining
the campaigns for promoting their products Finally, various social trends are affecting the
popularity of products or special categories. For example, the general interest in obesity and
fitness has given rise to low-calorie products, equipment, and organic products for healthy
meals. The Failure in responding to these social trends could cost Sainsbury's customers
dearly if they cannot find what they need in Sainsbury's convenience or supermarkets. From
this point of view, social factors increase competition in the market and force Sainsbury's to
constantly monitor people's attitudes.

 Technological Factors
Consumer behavior is changing and many retailers are trying to meet the increasing
expectations of consumers. Consumers are now expecting to shop online or in-store quickly
and to be able to relocate between channels. On top of that, customers want to choose their
order fulfillment methods, such as home delivery to in-store pickup. Due to changing
behavior of customers and the increasing competition in the food market, Amazo, Aldo, and
Sainsbury's had to adapt, But Sainsbury's primary objectives are the Argos web and
distribution platform, which is the result of investments worth millions of pounds. There is
some type of service, that is made possible by Argos' supply chain and logistics technology,
that will enable Sainsbury's to respond to the wishes of today's customers that retailers are, as
Coupon, "where or when" they want (Jankelová, 2017).

Argos is considered a mobile retail giant to generate £ 1 billion worth of mobile sales. This is
essential to Sainsbury's because it lacks the mobile shopping experience. Argos is a leader

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due to its technology development, Sainsbury's can outperform its competitors and gain
desired market share among a new generation of digital consumers (Speare-Cole, 2020).

 Legal Factors
The legal elements affecting Sainsbury's are commonly constituted of guidelines and
guidelines that manipulate how positive merchandise is sold, imported, advertised, and taxed.
The 2018 law brought a brand new tax for groups that produce excessive-sugar containing
drinks. While this doesn't affect Sainsbury's supermarkets is direct, brought on a boom in
sugary drink tax prices (Jankelová, 2017). This may want to affect the company's income
each definitely and negatively relying on whether or not or now no longer the multiplied
charge deters clients from shopping for sugary drinks. Another applicable law is the limit of
marketing and marketing of excessive salt, fat, or sugar meals and drinks. UK guidelines
imply that advertisements for HFSS merchandise can't be centered at kids on a social media
platform and are a few of the strictest withinside the world. Children are covered as much as
the age of over 16 considerably better than maximum countries, in which guidelines observe
simplest to beneath. These limits in supermarkets’ capacity to sell particular products to
persuade income, as a result affecting earnings from the transaction of such merchandise
(Sainsbury's, 2021).

 Environmental Factors
The greenhouse effects due to emissions in the environment are causing some concerns and
are no longer a fundamental problem. most companies such as Sainsbury's and all other
organisations need to demonstrate that they are reducing carbon emissions. Greenhouse gases
that emit or should be devoting their business functions to projects such as green technology
that uses biofuels. Landfills and environmental pollution are important factors and the
company must manage waste better. most companies such as Sainsbury's and all other factors
that are required to demonstrate that they are reducing the greenhouse gas emissions they
emit or should contribute to their function. for the use of biofuels (the Guardian, 2016).
Landfills and environmental pollution are important factors and the company must have a
stable waste management system. Environmental issues are complex and Sainsbury's may
find it difficult to balance their common views on environmental conservation without losing
customers due to rising prices (Gluck, Kaufman, and Walleck, 2014).

Indeed, the more important it is to preserve the environment, the more some consumers are
price-conscious and will tending to prices rise for environmental protection. Sainsbury's is

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required to properly manage its landfill so as not to pollute the environment. These issues are
very sensitive and Sainsbury's can struggle to strike a balance between a common stance on
preserving the environment without losing customers to rising prices. Indeed, if
environmental conservation is to be taken seriously, some consumers are price conscious and
will be inclined not to buy when prices rise in the name of environmental protection.
Sainsbury's is forced to properly manage its landfill so as not to pollute the environment
(Fuertes et al., 2020).

SWOT Analysis
 Strengths
The quality of their food, which is a combination of ethical standards and strong supplier
relationships, sets us apart from retail markets and helps their customers live well for less.
General merchandise and attractive clothing are the strengths as it is the most purchased
clothing brand as they sell more pies than their competitors. Additional services and
distribution channels that they offer a successful combination of convenience stores,
supermarkets, and online services. Some new Business Development that they continue to
move into the digital markets by the purchase of a controlling stake in Anobii, which now
functions as an e-book from Sainsbury's. Sainsbury's pharmacies have now opened in more
than 270 stores and some hospitals. They are looking for other new ways to deliver their
services, from their online website stores to the innovative Scanning mobile devices.
Expanding spaces and creating real estate values they are expanding their product portfolios
adding new bright and modern supermarkets and convenience stores (Speare-Cole, 2020).

Now that hopes of becoming a member of forces with ASDA to create a trendy products
powerhouse are fading, Sainsbury's have to are searching to enhance the sales of its trendy
products, especially in homewares, wherein the blended Sainsbury's proportion with Argos is
forecasted to dip down from 70% to 60% due to merging in 2016. It can simply be executed
to sell Argos' variety of homewares. The comfort supplied through the interior of its place
Sainsbury's and Fast shipping alternatives in the same day are clean strengths over
competitors, however as its attention falls away, those benefits are much less probably to be
realised  (Sainsbury's, 2021).

 Weaknesses
The retailer has recovered from a failed merger offer with the rivalry of Asda that caused its
share price to plummet, and CEO Mike Coupe's stimulus package has completely derailed. In

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May, he said the retailer was trying to overcome the changing needs of consumers in a
competitive market. However, in its own words, the plan "is evolving, rather than drastically
changing, such as the frequency in shopping trips, the need for being more convenient and
online shopping" seems too much. slow. Dealing with Sainsbury's health is seems to be a
difficult and inevitable task, to say the least, for anyone who can take the helm, according to
the analyst. Massive pressure has created many issues in the rest of the market, but
Sainsbury's seems to have accepted the brunt of the food revolution, by keep focusing on
pricing strategy as Tesco's competitors have done and kept it down by focusing on products
and services (the Guardian, 2016).

 Opportunities
Sainsbury’s should circulate Argos shops into their present supermarkets. They have three
hundred shops that should then emerge as click-and-accumulate spots. This idea is attractive
for the grocery store chain, as it may flip their retail markets into one-forestall save locations
for each Argos and Sainsbury's client, growing footfall and producing cross-promoting
possibilities throughout the portfolio. A most important factor is, 40% of Argo's rentals are
because expire inside the subsequent 4 years (Jankelová, 2017). To relocate those shops into
Sainsbury's stores in which suitable might extensively serve to optimise and operational
overheads in their retail store. Social factors that befell over the last many years elevated the
difference among desires and options of various generations. While younger human beings
might effortlessly navigate the brand new technology provided through Sainsbury's, older
adults would possibly discover it pointless or confusing. Therefore, to draw clients from all
generations, Sainsbury’s might want to make certain that the technology is easy to apply and
any clients who conflict with it could get hold of help in any respect times. It might
additionally be useful for Sainsbury's to do not forget geographical growth to regions outdoor
of the United Kingdom. While this can be an unstable endeavor, it may additionally bring
about elevated income quantity and profitability over time (Fuertes et al., 2020).

 Threats
The maximum tremendous threat for Sainsbury's is competition, which is rigorous withinside
the United Kingdom meals retail sector. A complicated and saturated aggressive surrounding
poses a right away hazard to the corporation with the aid of using restricting the opportunity
of marketplace percentage increase and requiring steady movement so as now no longer to
lose customers. This threat may be centered with the aid of using the use of the possibilities
mentioned above and discovering the marketplace maintains to reply to the most up-to-date

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social modifications as rapidly as possible. Another hazard comes from the confined
geographical attain of Sainsbury's. With the only consciousness in the United Kingdom, the
corporation may be afflicted by political, legal, and economic modifications that affect the
country. The most effective manner for the corporation to keep away from this hazard might
be to increase to different countries  (Sainsbury's, 2021).

Relationship between Forces


Competitive Rivalry

The 3 dominant players, including Tesco, Sainsbury's, and ASDA, compete fiercely in the
UK retail sector. The 16% of the market share achieved by Sainsbury's demonstrates how
competitive Tesco is, with a market share of 28. %. In particular, ASDA and Tesco focused
on price and value as well as providing the desired services. Additionally, two major
competitors have joined forces to expand their reach by the opening of new stores, creating a
competitive threat for Sainsbury's (the Guardian, 2016).

Barriers to entry

Entry into the food distribution sector is characterised by significant barriers to entry. In
particular, the sector is one of the most prestigious in the UK, with implications for the new
entrants that need significant investment. In addition, the commercial sector has reached a
stage of development in the UK which means that there are fewer opportunities for bringing
new partners which means that Sainsbury's has secured its place in a very significant way.

Threat of substitutes

The food distribution sector in the UK is little threatened by substitutes because the products
supplied are basic needs. Incorporate innovations that stimulate the consumer experience for
retaining and attracting new customers when they need food to survive. So the company
won't lose its loyal customers because food is a basic need (Fuertes et al., 2020).

Buyers’ Power
The purchasing power of the retail sector in the UK is essentially very high due to several
competitors offering similar services and products. Due to the low cost of switching and price
differentials, the purchasing buyer’s power affects some major industry players and their
customer loyalty. Hence, the purchasing power is high (Jankelová, 2017).

Power of suppliers

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The retail sector is dependent on many suppliers due to the variety of services and products
offered in supermarkets. Suppliers, therefore, reserve the right to determine acceptable prices
they supply for resale. This statement implication is that retailers will consider the purchase
because they need it to run their business. In such a case, Sainsbury's position affects the
price of its supply as well as the benefit of having the branded products (Jankelová, 2017).

Impact on strategic decision-making and other activities


Based on the evaluation above, the number one drivers of alternate in Sainsbury's case are
environmental and social elements affecting the performance of countries. On the only hand,
with the extraordinary bargaining strength of customers and the excessive chance of
alternative merchandise, in addition to with social adjustments mentioned in the PESTLE
evaluation, it's far important for Sainsbury's to reply to the wishes of its various purchasers
and their converting tastes to growth value. The nature of alternate delivered with the aid of
using this motive force is multi-faceted because of the variety of their customers. Changes
come from the stress of social elements issue the technology used, merchandise sold, costs
and promotions presented and the general customer support revel in provided. By responding
to the wishes of various purchasers successfully, Sainsbury's may want to beautify its
marketplace proportion and attain progressed income to enhance its aggressive position
(Speare-Cole, 2020).

Whereas, the environmental factors mentioned in the framework of the PESTLE analysis
plays important role in driving change in all areas of activity. The retail industry in the food
sector is no exception, By focusing on sustainability and CSR is a part of Sainsbury's that is
needed to continually improve its operations. Active participation in such activities and
efforts is important for three distinct reasons. First, it has to do with social change and buyers'
power of bargaining, as environmentally conscious consumers often choose companies with a
positive sustainability profile. Secondly, CSR programs ensure that the company meets the
regulatory requirements set by the state regarding its environmental impact. Finally,
sustainability is a key factor given the fierce competition in the food distribution sector. By
maintaining high standards for sustainability, Sainsbury's can become an industry leader in
sustainability, driving positive change in other businesses (Fuertes et al., 2020).

The nature of changes driven by environmental change motivations is primarily operational.


This involves Sainsbury’s reorganising its daily operations to reduce environmental inputs
and waste. However, changes in organisational culture, strategies, and supplier selection may

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be fulfilling a company's sustainability promise. For example, the growing reliance on
environmentally friendly suppliers rather than environmentally harmful companies and the
promotion of recycling programs in the desired workplace is one of the changes caused by
environmental impact, promoters of environmental change (Gluck, Kaufman, and Walleck,
2014).

Sainsbury’s respond to the drivers of change


In the current years, Sainsbury’s responded to each social and environmental alternate driver
in a good enough way. According to the social alternate driver, the organisation has been
making development to diversity its product variety in reaction to consumers’ desires. For
example, the current annual document states that the organisation has made development in
growing the variety and best of merchandise in its food product ranges, hence responding to
the developing consumers’ worries with fitness and the environment. Moreover, the
implementation of an internet shop enabled the organisation to cater to the desires of more
youthful consumers, in addition to folks that stay a hectic lifestyle  (Sainsbury's, 2021).

For improving the shopping experience of the young target market, the company also
introduces SmartShop automated analytics technology that enables cashless shopping. All the
changes are made according to customer’s needs in the market and based on their interests in
products and services. It is therefore clear that Sainsbury's has used strategic analysis and
decision-making for supporting the growth of sales and response to social change. With a
growing share of seniors in the UK, Sainsbury is also expected to focus on attracting new
boomers who may be struggling with technology and have other needs. different. This will
help add value to other customer segments, thereby attracting more customers to Sainsbury's
(Speare-Cole, 2020).

As for the drivers of environmental change, Sainsbury has made progress compared to that of
other companies in the sector. Sainsbury's business model is to evaluate suppliers for their
sustainability and ethics as well as to reduce emissions, water usage, and waste due to design
and operational changes. Sainsbury has a sustainable development plan with performance
indicators defined in line with the United Nations Sustainable Development Goals.
Sainsbury's has also created discussion groups focusing on sustainable agriculture, employee
behavioral changing programs, and events. Some of these changes are due to the pressures of
environmental change agents and the company's response has been sufficient and has
exceeded the standards in the industry. Some more improvements in this chain can be

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achieved by environmental awareness programs aimed at changing behavior, Also to improve
logistics, and promoting environmentally friendly products (the Guardian, 2016).

Recommendation
Sainsbury's needs to do not forget numerous techniques to gain its misplaced role in the
sector of the retailing enterprise withinside the UK. First of all, the agency desires to increase
the coverage that seeks to make bigger its diverse areas to take an aggressive benefit of the
rising markets. Also, the agency has to increase rules and systems that are seeking to enhance
the customers' purchasing reviews at its bodily and online stores. While Sainsbury's reaction
to each alternate driver diagnosed above is sufficient, the agency should use different
techniques to decorate its reaction over the subsequent decade. With regards to the social
alternate driver, the agency needs to awareness of growing costs for older companies of
customers. By the technological development is important for effective alternate, a few
technologies can be complicated for the old generation, and accordingly, the advantages
presented with the aid of using cutting-edge era might now no longer be to be had to unique
purchaser segments. To decorate its reaction to the social alternate driver, Sainsbury needs to
are seeking to create an available purchaser experience. For example, growing gadgets that
permit checkout-loose in-save purchasing and imparting assist to seniors the use of them
might supplement Sainsbury's cutting-edge reaction to social alternate. To improve the
accessibility of the web save to offer for the desires of humans with impaired imaginative and
prescient and improving over the smartphone assist also are a number of the feasible
techniques (Speare-Cole, 2020).

Conclusion
To conclude, it is analysed that Sainsbury's operates in an extensively competitive and
constantly changing environment, which is creating pressure for continuous improvement.
The most important drivers that are changing in Sainsbury's case were the environmental and
social change. It has a significant effect on the needs and demands of consumers, while
environmental changes push companies by focusing on sustainability. For now, the
company's response to these changing drivers could be improved. According to the analysis,
this study offers strategies and relevant recommendations for the growth and development
that can help Sainsbury's for improving its response to the dynamics of social and
environmental change that remain competitive and gain greater market share. The factor of

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expanding into new markets is growing revenues to overtake the main competitor, such as
Tesco (Sainsbury's, 2021).

Additionally, the importance of focusing on consumer satisfaction will manifest itself in


increased sales, which in turn will attract more customers to their store. Establishing defined
core strategies and policies will ensure Sainsbury's has a competitive edge in the retail
industry of the UK. Additionally, Sainsbury's has tested 10 Argos franchises in its
supermarkets. It is a profitable business as it has the potential to sell over 20,000 potential
products. In their buyout proposal, Mike Coupe laid out a plan to build a £6 billion business,
a value that could surpass the UK the general merchandiser John Lewis has said that it is
valued at around a billion £4.4. However, some critics still see the move as a step in the
wrong direction as it presents Sainsbury's with unforeseen challenges. Independent retailers
believe that Sainsbury's should remain true to its core food business. For him, the products
are the important aspects of the business, even if it seems boring. The delivery systems that
are used by these products are only an aid to increase productivity. They added that no
customer would pay for the delivery system, but would rather care about the product being
delivered. If it does not meet the requirements, the original business will go bankrupt (the
Guardian, 2016).

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