Advanced Management Accounting - Essay Sample

Published: 2021-08-15
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Vanderbilt University
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The prospective for using Sustainable Value Chain Analysis, as an instrument for accomplishing improved arrangement amongst resource provision, environs supervision, and customer value. The focus of sustainability is to increase demand of goods and services provided by that particular firm or company. Sustainable Value Chain Analysis can be applied in companies to improve sales and in this case, the Sainsbury supermarket has been picked.

Sainsburys is a supermarket found in London, united kingdom. The supermarket has over 17% shares in the United Kingdom Koontz Harold and Weihrich, (2010). The supermarket is said to be the second largest in UK and is unique in its own way from the rest of the supermarkets by superiority, client knowledge, and perception Mason, (2017). The purposes and plans of Sustainability Value Chain Analysis are to look at how Sainsburys can achieve its operation. Presently, there is high antagonism in the supermarket industry. It is therefore important to use the sustainability Value Chain Analysis to find out how easily the sales in this particular supermarket can be improved.

Consumer value

Sainsburys should expand into new countries like Africa and Asia that have emerging market to meet all consumer values. The strategy of expansion is in line with the goal of Sainsburys. The market for supermarkets in the United kingdom is approaching its saturation point, and this leads the company to exploit its capability to expand into the countries it has not expanded to like Europe and Asia Rumelt, (2012). These two countries offer an excellent market for Sainsburys since they have large population sizes and the people have high standards of living with a disposable income that is high. In addition, the people there are beginning to accept and adopt the western lifestyle in their lives. Expansion into new markets is suitable for accessing the success of the company because the success of supermarket industries now depends on going into the markets that have not been exploited. The UK market has already been exploited Milio, (2013).

By expanding the distribution network, Sainsburys can form mergers with other companies like Internet Cyber Cafes. This option can increase the market share of Sainsbury and also increase the synergy between the company and the cyber cafes it will form a merger with. These companies will, in turn help Sainsburys to distribute its products through their online channels where they will advertise the companys products. The research and development of Sainsbury have identified the internet as being a need for the customers who do not need to come to the shop but order their products online and have them distributed to them Moon, (2003). Therefore, this is a successful idea. Sainsburys will just have to use the resources of the company it will merge with to sell their products online and have the employees of the merger to distribute the products to the customers. This will increase the distribution channel for the company.

Differentiating its products from those of its competitors will make consumers notice the difference and have a reason to shift from other companies in the same industry to Sainsburys chains of supermarket Mason and Leavitt, (2011). This will increase the customer base for the company. There are many supermarkets in the United Kingdom, which are offering similar products like those of Sainsbury and are trying to imitate the strategy in which the supermarket uses. The objective of these companies is to capture the customers that Sainsburys already has. Therefore, this factor is very significant in accessing the success of Sainsburys.

The value propositions

Making their products unique is the only factor that will differentiate Sainsbury from its competitors and therefore be able to retain its current customers. Customers always want something that is unique and with value. Given, the high prices the company charges, their products have to be exceptional to attract customers Barney, (2014). Customers cannot pay a high price for a product, which they know they will get at a lower price from another company.

Sainsbury should also choose the related type of diversification as a strategy to use in the future, where the supermarket will offer new services that have a relation and connection to the activities of Sainsbury. This is a critical success factor because, in the recent past, Sainsbury has introduced various diverse products in the market such as Tea, sweets, coffee beverages, books, gifts, music and serving and brewing equipment and they are doing well.

The supermarket, therefore, can launch new products like the pre-order product and the prepaid Sainsburys card. The company should also bring about changes in its stores for instance offering Wi-Fi with high speed and install espresso machines that are automatic. This could be treated as both product diversification and differentiation Voigt, (2017). The company can introduce products of sell savory like pastries. If the supermarket is able to provide products that can act as a substitute for lunch for the customers, they will be able to stay and have no excuse for leaving.

Value chain analysis

Sainsbury is already embracing diversification. The new products, which the company has launched, have been a success in the market. The savory snack that the company has introduced appeals to some customers especially the young generations of professionals that always rush to the stores for short dinner breaks. This option has been financially viable for the company and campaign able. However, it has been a threat from competitors in the same industry that knows the market well as compared to Sainsburys Mason, (2017). Therefore, the company is likely to lose focus on the original function and not accepted by various stakeholders.

In addition, for diversification to thread well for the supermarket, the new products should be marketed thoroughly for them to be able to survive in the market. According to research, the company is not marketing well which is the reason the new products facing competition from companies that already know the market more than Sainsbury because of their marketing strategies Elboghdady, (2012). Sainsbury needs to buy additional equipment like ovens and heating stands. This, therefore, makes it very risky since the supermarket may not be able to raise resources and capacity that they need to sell new products effectively. Additional space is also required in the stores. Therefore stores might be required to go be restructured entirely, and this might be expensive.

Sainsbury managed to bring one of the oldest commodities in the world and turned the commodity into a new differentiated lasting brand. The sources of differentiation the company embraces are product design, innovative design, and a positive brand image. The key to the differentiation strategy of Sainsbury is that whatever product or service attributes the company selects for differentiation, it must m be able to set the company apart from the competition in the industry. Sainsbury needs to know that differentiation entails creativity for the company to compete effectively. It cannot be achieved just by using standardized techniques and frameworks. There are two requirements the supermarket has to know in order to create differentiation of products that is profitable. On the side of supply, the supermarket has to know the capabilities and resources that it can use to create uniqueness Sun, (2017). On the side of demand, the company has to insight into the customers and their wants, needs, and preferences. These two sides form a major component of a differentiation strategy.

Sainsbury has reached its goal of establishing and leveraging its premium brand by introducing new concepts and products, developing new distribution channels and expanding its retail operations. Sainsbury has expanded its operations to places such as Bulgaria, Argentina, Portugal and the Czech Republic. In Buenos Aires, the biggest store found in Latin America, Sainsburys has also entered Poland. The places that the company has not yet explored include Asia and especially Europe. This is where the company should focus its expansion strategy on. It is a good opportunity given that the living standard of people in this places and their income are high Koontz Harold, (2011).

The supermarket has also progressed in establishing a number of distribution channels. Apart from the standalone stores, Sainsbury has launched carts and cafes in hospitals, banks, buildings, office buildings and shopping centers. Further contracts of distributions have included airlines, supplies of office products, and hotel products Rumelt, (2012). The office products have been a large market section for sales. The services associated such as a supplier of commodities in offices provide the supermarket with a method of delivering supplies to thousands of customers in businesses around the U.K. The company just needs to expand into distribution to shipments and use internet cyber as a method of advertisement and distribution of its products.


However, despite the fact that the supermarket is among the biggest and well-known chain of the supermarkets and the existence of the company is also definite in the civic areas, research indicates that only a small percentage of people in the United Kingdom have tried the products of Sainsbury. This reveals that the company has to expand more especially its distribution chain and stores to rural areas to explore the local market Elboghdady, (2012). There is an opportunity for rural expansion since not many companies have ventured into that. The company should include additional contracts of distribution and product joint ventures to seize the market of the United Kingdom.


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