Jevaluate the Competitive Strategy of Sainsbury over the Last Decade Essay
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3 – Evaluate the competitive strategy of Sainsbury over the last decade
This question requires you to look at how Sainsbury’s have attempted to achieve a competitive advantage over their rivals. Firstly, you must identify what their strategy is and secondly, the question asks you to “evaluate” it. This means justifying, in relation to the theory, what is strong about its strategy and what is weak. This will also be related to the issue of sustainability.
A classification of competitive strategies is provided Porter (1985). These can be seen in figure 6.6, page 287, generic strategies. To identify which generic strategy Sainsbury’s have been following then it might be useful to revisit the value chain analysis you undertook in question 2. This will highlight how the firm is adding value in terms of cost or differentiation. You must then decide whether it is a narrow or focussed strategy. Remember however, that most models will have its critics and one such criticism of this model is that Porter believes an organisation should only follow one generic strategy for fear of being “stuck in the middle”. Critics claim that there are many examples of firms attempting to follow a hybrid of these. From the evidence in the case and using the suggested tools you would need to decide whether it was following a cost leader strategy, a differentiated strategy or a hybrid. You would also need to identify whether it was focussed or narrowly based.
Having identified the bases of its competitive strategy it is then necessary to evaluate it. This can be done by looking at the advantages and disadvantages of its generic strategy. These must then be assessed in light of the level of sustainability which will involve looking at the underpinning of competitive advantage against people, organisation and technology, as well as against its rivals through for example benchmarking. Clearly,