In what ways has Sainsbury’s gained, kept or lost competitive advantage?

During this assignment we will be severe to start off the ship fecesal in which Sainsburys has gained, kept or befuddlight-emitting diode war-ridden favour. Competitive advantage is something that makes a business, like Sainsburys, better than its competitors such as Tesco or Asda. The ways in which Sainsburys may arrest gained, kept or lost competitive advantage is through innovation, temperament and relationships therefore these ar the three factors we will be looking into to discover whether or not they have been fitted to have competitive advantage within their club.The innovation within the go with will find from the introduction of new products and finding new ways of doing things within the federation however, it overly involves being innovative through go forth the whole company and looking at how the employees think. Reputation and relationships come from the company being innovative, for example, if a company introduces new products better than early(a) com panies can then they will develop a reputation but they can also develop a reputation by slip awaying their prices low and appealing to a range of consumers. If a company is adequate to appeal to a wide range of consumers they ar able to gain good relationships with custom-builters, which is what a business needs to be successful.A good company also needs a close relationship with employees and suppliers as without these people a company would find it difficult to be able to run. However it is not only these three aspects that we will be looking at but also how Sainsburys may add added value, the profit they make and their mart explore. We will be deciding whether or not Sainsburys has gained, kept or lost its competitive advantage by undertaking a number of methods to successfully decide how the company has performed. These methods will include primary coil enquiry, which will involve an interview or questionnaires, and secondary research such as the Sainsburys website, newspa per articles or company accounts. I timbre that Sainsburys will have lost competitive advantage however by using the research we undertake we will be able to find the answer to our question.Research FindingsCompetitive advantage is gained through good innovation, a good reputation and good relationships. Since doing research on Sainsburys we have discovered that they are losing their touch and customers because of mistakes they have made when it comes to innovation. However, through primary research in the form of an interview an employee of Sainsburys feels that they are still pleasing customers.What innovative products have Sainsburys introduced?* ragweed carte du jour* Using Accenture* Internet ShoppingHow do you hold back a strong relationship with customers?* All customers who are signed up to ambrosia Card and other clubs receive regular newsletters and silver-off coupons to show them we care about their custom.How does Sainsburys feel they add value to their products?* Qu ality Service* Quality FoodWhat food market research does Sainsburys undertake to keep giving people what they want?* Customers are regularly subject to in store questionnaires that they can fill out to tell us what they want. This helps Sainsburys know how to please customers and to think how we can achieve this.How do you cope with competition?* Sainsburys satisfies customers because we know what they want which is cod to good market research. We also keep our prices competitively low and make sure that everything we do is of a high standard.Do you feel that you will ever regain enough market dower to become market leader?* NO COMMENTHow are shareholders taking the slump in share prices?* Any shareholders of Sainsburys receive quality service from us and every of them are happy and proud to be associated with the Sainsburys brand.Sainsburys decided to outsource their IT capability to Accenture1 believing that they would benefit from huge cost savings giving them competitive ad vantage on their rivals. However, four years later Sainsburys are losing a large percentage of their market share to rivals like Tesco1. When Accenture was first announced to be taking over Sainsburys IT, Sir Peter Davis, who was Chief Executive at the time, said he felt that Accenture would help us achieve real competitive advantage and efficiencies quickly and cost effectively.2 However all(prenominal) this new system has done has send Sainsburys into a slow deterioration weakness to get goods onto shelves, which in hug drug has meant customers are unable to buy the goods they require.This problem is affecting the impact that Sainsburys has on the market but they have tried to improve the situation with the introduction of the bitterweed Card, which is a card that customers can use to collect points when they purchase goods and in persuade the points can be used to buy goods. Internet shopping has also been introduced by Sainsburys where customers can buy all goods on the net and have them delivered to their door, however this is also an idea favored by Tesco, Waitrose and Asda. Tesco is market leader at the deport moment with Asda following closely behind meaning that Sainsburys is slowly slipping and are making their first ever release this year3.Sainsburys is now trying to regain the credence of customers by making sure that any relationship they build is a good and stable one. Sainsburys aim to ensure that all colleagues have opportunities to develop their abilities and are well rewarded for their contribution to the success of the business. The company feels that if they meet their customers needs effectively by providing the best quality and choice to meet frequent shoppers needs they will thereby be providing shareholders with good, sustainable financial returns.The tactics that Sainsburys has used to gain, keep or lose competitive advantage have all been discussed above and using this research we now have to decide whether or not the company has been successful in the ways it has used.DiscussionShareholders of Sainsburys should be frustrate this year as it is the first time they have made a loss which in turn means that all stakeholders will lose out if they decided to sell their shares. It could also have a long term effect on the company because if shareholders decided to sell shares quickly before prices slumped any longer they would be unable to sell them on because people are not going to buy shares of a failing company or any company who has had financial problems in recent years.However if we were to look at the primary research undertaken we would come up that an employee of Sainsburys feels that any stakeholders of Sainsburys, including shareholders, is happy to be with the company despite it losing money and no longer being market leader. The question asked about market share was passed by the employee but through secondary research we can front that Tesco is market leader and Sainsburys isnt even in secon d place showing the rapid decline in peoples faith in the Sainsburys brand.Sainsburys are trying to keep competitive advantage through innovation, reputation and relationships but during my primary research we can see that they feel they have introduced innovative products in Internet shopping, Accenture and the Nectar Card. However, many other supermarkets favour Internet shopping which means they are not a monopoly in this market and are far from leading it by looking at their overall market share. Accenture is a system they introduced but has so far failed to work and is causing problems within stores, which means that because goods are failing to get onto shelves customers are deciding to do their shopping somewhere else.Not only has Accenture not been innovative but it has also destroyed relationships with stakeholders of Sainsburys because they dont have faith in the company when it comes to stocking the goods they want and need. Research shows that Sainsburys reputation is fa lling because it faces that Sainsburys no longer holds a high stake of market share and has been overtaken as market leader. We can also see that the Sainsburys employee feels relationships with all stakeholders in great with customers receiving regular newsletters and in store questionnaires. This is showing customers that they care but they are still losing custom because of mistakes and newsletters wont stop customers from going elsewhere if they think theyll get a better quality of service, food and value for money.One thing that Sainsburys does well is appeal to all markets those with children, single people, the elderly and married couples. The way they are able to do this is because the products sold is the stores are items that everybody needs but then they also have clubs that are open to different types of people, some of the examples of the clubs are Little Ones Club and Drinks Club.They are use their innovative Nectar Card to appeal to everyone and because you can use t hem in different stores they appeal to a wider variety of people rather than if they were just for use at Sainsburys. To appeal to the public Sainsburys also uses celebrity chef, Jamie Oliver, to advertise its goods, which is a way of bringing in a good reputation and appealing to all markets. If customers think that a celebrity is involved with a brand call forth they are more likely to use it because a celebrity involved often makes the public think that a place is worthwhile.Sainsburys is faced with a potbelly of competition and although they are not market leader at the present they feel they are trying to regain a large chunk of the market share and win customers back. As we discovered during research, Sainsburys are making their first ever loss this year which means that competitors are able to push barely ahead in order to win over customers and make themselves market leader with a huge market share. During the interview with the Sainsburys employee we can see that they fe el the way they feel that Sainsburys add value is through quality service and food. However through secondary research we found that service was poor due to Accenture as Sainsburys were unable to get products on shelves as they ran out.This was due to Accenture being a failure to the company and losing them huge money. As the companys service was poor if customers werent able to get the products they required it is most likely they would have gone to a competitor supermarket, which is why Sainsburys are no longer market leader.Market research is often carried out in Sainsburys according to the interview that was undertaken with the employee. They stated that customers of the company are often subject to in store questionnaires and asked what they want, how they feel and what changes they would like to see being made. However if we were to then look at secondary research it seems unlikely that any comments made by customers are actually taken into favor as food is still unable to ge t on shelves and once again this shows by the fact that Sainsburys are making their first ever loss this year. The employee stated that Sainsburys care about their customers because they say that newsletters are regularly sent out however, we cannot see that what customers think is taken into account as Sainsburys still seem to be running in the same poor quality way.ConclusionThis assignment was to discover whether or not Sainsburys have gained, kept or lost competitive advantage. To do this we had to do a mixture of primary and secondary research into the way Sainsburys is run and the way the company is performing at the present moment. Once research was carried out we then discussed it and decided that there were a large number of factors that interconnected to what is felt has lost Sainsburys competitive advantage.Looking at the discussion where we have analysed the research that was conducted we can see that Sainsburys are a slowly failing company and this decline has been most ly since the introduction of Accenture. The innovation that Sainsburys has had, has any been very poor for example Accenture, or has also been favoured by other companies including the current market leader, meaning that Sainsburys has no competitive edge on other companies. We also saw that Sainsburys felt that they added value to the company by quality of service and products but as we also saw in the discussion that led nowhere.To read this assignment and the research that was carried out to go with it you would automatically feel that this company was a failing establishment that was going nowhere and was sinking. It is possible that Sainsburys could turn their misfortune around with help from experts who could help them appeal more to the public and reconstruct the way their stores work for example, once the contract with Accenture has run out do not renew it but until then improve all the other problems associated with failing. Sainsburys will not become market leader for lon g time, if at all, if they do make the changes that are needed but to be able to be thought of as a good supermarket they need to change.Overall, to answer the title question it is manifest that Sainsburys have lost competitive advantage by ways that have been spoken about during research and the discussion and as read above we can see how it is possible for Sainsburys to change themselves.AppendixDuring researching into Sainsburys competitive advantage a telephone call was made to their head office in order for primary research to be carried out. We were transferred to their Corporate Communications Department and when they were asked about the competitive advantage they felt Sainsburys had gained, kept or lost, we were informed that no information could be given at this time and were directed to the Internet to look for our own research.