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MS4536
UK
University of Aberdeen
The environment is ever changing so this report is based on the Strategy and Change Management of the two organizations. There were several global forces which are affecting the environment so strategic theories and planning is required to respond to those changes effectively (Guo and Wang, 2019). The theories of the change management and strategic business help in taking the effective decisions and helps in evaluating the opportunities and facing the threats in more effective way.
Sainsbury's is dealing in the retailing industry which was founded in the year 1869 by John James Sainsbury. The headquartered of the company is London, UK which majorly deals in the products of Hypermarkets, convenience shop, supermarket, etc. The company is the second largest chain of the supermarket in UK and their market share is 16.0% in the sector of the supermarket.
Morrison’s is dealing in the retail industry which was founded in the year 1899 by William Morisson and has the headquartered in the England, UK (Sogn-Grundvåg, et al, 2013). The company is serving the products like Food and Drinks, CDs and DVDs, books, clothing, magazines, etc. The company has 494 stores and has the fourth largest supermarket chain of supermarket in the UK.
According to the Wheelen strategic management model there are four basic elements which enable the organization to satisfy its approach which are environmental scanning, strategy formulation, strategy implementation which are formulated and last process is to evaluate and control the strategy which are made (Stetler, et al., 2017). As per this model the environmental analysis has done of the companies so that an effective organizational direction can be established. The organizational strategy is formulated and implemented in this model and after that strategic control is also done so that strategic planning can be done effectively.
Both the companies have the different strategy in respond to the market and the strategic management helps the company in rationalizing the change and actualizing the change (Shah, et al., 2015). The strategic management models and theories helps the company in communicating the employees regarding the need to change better and also brings discipline to the activities in both the activities of internal and external.
Political: The major impact on the retail sector occurs from the Brexit uncertainties. UK has voted to leave the European Union which will cause the difficulties for the supermarket in importing the products from abroad.
Economical: The major economic factors which affect Sainsbury’s are raising fuel cost, fierce competition in the market, rising salaries, etc. the cost of the company get increased in the transportation with rising fuel prices so it decreases the overall profitability (Park, 2018).
Social: There were several social factors which were affecting the retail sector or supermarket stores such as healthy eating making the people, concerned towards their health, fair-trade movement, etc. that affects the profitability of Sainsbury’s and Morrison’s.
Technological: As the technology advancement is taking place there were many factors which are affecting the company Sainsbury’s and Morrison’s such as online shopping, use of artificial intelligence and digital data that helps in operating the operations of the company in more effective way.
Environmental: In the retail market the major environmental factors which were concerned are carbon footprints and the Plastic waste (Bottani, et al., 2017). Both the companies are concerned towards the reducing the carbon footprints and become more environmentally by reducing the ecologically damage.
Legal: There were no as such legal factors which are affecting the retail sector but if there are any laws and regulations which are governed by the government than the company has to comply with.
The companies Sainsbury’s and Morrison’s get to know the opportunities which are prevailing in the market so that they can expand their business and also evaluates the threat which will affect the profitability of the company so they can make the strategic planning to respond to those changes (Arnaout and Esposito, 2018). The companies can take the effective decision by controlling the external environment factors which are affecting the company badly and also recommend the areas which the business can be more efficient.
The environment is changing so to sustain in the market the change is needed in the companies as well. Changes occurs due to the several reasons such as change in the technology, the internal and external factors, etc. The organizational change in both the companies become effective when the top trigger is followed of new leadership changes to leadership and management.
The 7S model of McKinsey is the tool which helps in evaluating the organizational design of the company. The interactions of the seven key elements are done so that effectiveness in the organization can be achieved.
Strategy: Both the retailing company should make an effective strategy so that they can attain the advantage over their competitors (Horst and Järventie-Thesleff, 2016).
Structure: As pert this theory the company should be properly structured in teams and departments so that effective operations can be done.
Systems: There should be proper system in both the companies to respond to the changes by doing daily activities and procedures in the effective manner.
Shared values: As per this theory the core values in the organization are also important so that work ethics and corporate culture in the company can be maintained.
Styles: Sainsbury’s and Morrison’s both should adopt the style of leadership so that changes can be responded effectively and employees are convinced to accept the changes.
Staff: The companies should also hires skillful employees which have general capabilities.
Skills: In this element the thing which needs to reinforce is actual skills and competencies of the employees of the company os that alignment can be maintained and performance can be improved during the other change.
It is the movement in the company which is needed to attain the desired future from its present state so that competitive advantage in the company can be achieved. It is the approach which is used by the companies so that organization strategy structure can bring about congruence and can also respond to the larger environment (Adewuyi, 2016). Strategic change is important in the companies as it helps in responding to the technological and social environments and also maintains the alignment of the company with the shifting competitive.
Both the approaches of the strategic change are different as the Emergent approach mainly focuses on the notion of strategic learning’s but the approach of the Prescriptive approaches focuses on the directions and control. Emergent strategy is also called realized strategy where the patter of actions is developed when the mission and goals in the company are absent (Hornstein, 2015). In the Prescriptive approaches how the things get done are evaluated by involving and telling people what they should do instead of describing the things and doing suggestions.
It is the approach where the change can be successfully initiated by understanding the strategic change dimensions. There are basically three such dimensions in this approach which needs to be understand which are content of change such as objectives, purposes and the goals of the strategy. After the content of change is evaluated the process of change is done by implementing the strategy and third dimension is the context of change which decisions are made related to the internal and external environment in which the strategy is operating.
In this model there are the 3 step process which includes Unfreeze, Change, and Freeze. This change theory model provides the high level improvement where the perception is created for the change and then it moves towards the desired level of the behavior and in the refreezing process that new behavior is solidifying as the norm.
KPI is the tool of the measurement which helps in evaluating the performance of the company by measuring the different indicators that helps in achieving the key business objectives. This tool helps in evaluating the success of the company by engaging with the activities in particular the company is involved.
There are several benefits of KPI to both the organization which are it helps in setting the business goals, offers the measurable results, helps in evaluating the issues which are occurring in the business strategy and also discover the strength and align with the marketing efforts. There are also several drawbacks of KPI which are to measured evaluate the performance is quite difficult and expensive as it requires lots of time and cost with historical data. They also turn into the toxic materials which affects the improvement of the performance of the company.
Sainsbury’s: The sales of the company in the year 2018 28,456 which has increased in the year 2019 with 29,007 £m. In the year 2020 due to Covid-19 pandemic the sales of the company has declined with 28,993. The revenues of the company are fluctuating but during the pandemic the sales of the company has declined.
Morrison’s: In the year 2018, the revenues of the company is 17,262 which has increased in the year 2019 with 17,735 £m. In the year 2020, the revenues of the company have declined with 17,536 (Bhayangkara, et al., 2020).
Sainsbury’s: The net profit of the company in the year 2018 was 309 which has declined in the year 2019 with 219 £m. In the year 2020, the net profit of the company is 152 £m which has declined from the previous years with the high rate so it is indicating the profitability of the company has declined in the recent years.
Morrison’s: The net profit of the company in the year 2018 was 380 £m which has reduced in the year 2019 with 320 £m. In the year 2020 the net profit of the company has increased with 435 £m. The profitability of the company has decreased but in the recent years the profitability of the company has enhanced.
Sainsbury’s: In the year 2018, Sainsbury’s company has the gross profit of 1882 which has increased in the year 2019 with 2288 £m. In the year 2020, the gross profit of the company has declined with 2016 £m.
Morrison’s: The gross profit of Morrison is declining as from the last few years as in the year 2018 the gross was profit was 633, in the year 2019 it was 652 and in the year 2020 it was 629. During the pandemic the company affected badly as their revenues has declined.
The Pandemic has affected both the companies badly as their revenues get declined so they need to make the strategic plans so that they can deal and respond to the changes effectively. Both the companies are operating in the same retail industry but if they are compared it was found that the profitability and revenues of both the companies has declined but in comparing both Sainsbury’s is more effective than the Morrison’s.
Benchmarking results helps in comparing the similar products and gives the score. If the performance will be better the score will be better and if the performance is not good then the score will be lower. As per the performance score of the benchmark the strategy are made in the company. As both the companies are not scoring good so they need the effective strategic planning as per the metrics in which they have attain lower score.
From the above report it was concluded that strategic change management is needed in the company to respond to the changes effectively and to even meet the organizational goals, objectives and the mission. There are several theories and models which have explained related to the strategic change which helps in responding to the changes effectively in the company. KPI and benchmarking of both the companies have done to evaluate the performance and it was evaluated that Sainsbury’s is more effective than the Morrison’s.
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