Sainsbury Case Study Example | Topics and Well Written Essays - 2500 words

Sainsbury - Case Study Example In 1972 the company was placed on the London stock exchange. The family members maintained eighty five percent of the shares. In 1979 they went into partnership with GB Inn BM a retail company from Belgium. And started a chain store using their Home base. Soon after buying Texas Home care in 1995 the size of home base became tripled. In 2000 Home base was sold by Sainsbury. Currently it is planning to relocate to King cross the support centre store from Holborn. This year it has also added to itself Curley's store from the Irish. It is currently operating eight hundred and twenty three supermarkets and stores. Out of these five hundred and four are supermarkets. While three hundred and nineteen are convenience stores. It is also offering shopping on internet; they have also started a bank in conjunction with a Scottish bank. Its supply chain is also operating in 10 centres of region distribution. The pestel model can be used to analyze the macro environment factors that are likely to affect the business for example the changes in the in taxes imposed, trade laws, change in government policy, and change in population and many more others. The model takes into consideration the following factors; Political, Economic, Social, Technological, environmental and the legal factors. ThPolitical Factors: The Government announced last month that's its intending to decrease the taxes it is imposing to the corporation companies by two percent (from the current thirty percent to twenty eight percent). This will have a big impact to the corporation Sainsbury included they will be able to save a lot of money. The money they will have saved will be allocated to an alternative use. (Department of Treasury 2008). There were allegations in UK about the retailers who were fixing prices. The government has established commission of enquiry. The investigation is mainly done to the biggest four retail industries who have been accused of the malpractices J. Sainsbury included. This is going to affect Sainsbury despite the fact that they have already established themselves with their customer. As many of their customers will have a negative perception about them, they will think that they have all along been cheated. (Doherty 2008 page 15) The good infrastructure which the government has provided like good roads has also impacted positively on them, as this has made their goods to move with ease. In 1997 the government (Labour party) established the Monetary Policy Committee. The body was given the mandate to set the rates of interest. Despite this being political it had an impact on the economy of the country which in turn affected the profits earned by Sainsbury in their banking business. Economic Factors: The food problem that the world is currently undergoing has made the prices of the food to increase. This has greatly increased the cost of expenditure which Sainsbury is using to buy food. Their profit margin is expected to reduce to some small percentage. The prices of most commodities have raised in the supermarket a fact that is attributed to the current food shortages. All these are expected to have an impact on the profit margin that is the profit margin is expected to reduce. (Sir Henry 2007 page 23) The current economic turmoil