Supermarket

Introduction

Wm Morrison is one of the most popular retailers in UK and it offers a great price and quality of food. For me, as a student and an athlete always looking for fresh, healthy food at good prices it is on of the best options to choose. That is why I have chosen this company to evaluate. Also, I will be able to find some new information about Wm Morrison, which will be useful for me as a customer.

The essay includes information about background, current strategy, strengths, weaknesses, opportunities and prospects. Background Wm Morrison was founded in 1899 by William Morrison, an egg and butter merchant. Now, it is one of the largest supermarket chains in the UK, offering a vide range of goods including other brands and own label products. The company is headquartered in Bradford, the UK and employs about 124,530 people. And it has assuranced to create about 5000 jobs this year. It operates over 382 stores and 287 petrol stations all over UK. With such a growth Morrison became a member of the “Big Four” grocery retailers. ttp://www. guardian. co. uk/business/2009/jan/13/morrisons-supermarkets (15/11/09) www. morrisons. co. uk/Corporate/About-Morrisons/Company-history1/ (15/11/09) Current strategy Wm Morrison has a vision called ‘Food Specialist for Everyone’. It has three different brand values: Fresh, Value and Service. Those three values should give them flexibility to react to market changes and customer tendencies. Brand values: Fresh The Company’s aim is to prepare more freshly food than any other retailer. That’s why they have more staff preparing food than others.

The company is strong by having their own factories, production facilities and distribution network. With these facilities they can get food to stores faster so that it is always fresher. Value Value is the key to the vision and is very important in the market conditions. They offer quality and freshness at a price which people like. Their offers are about saving customers money. And their prices are great value across the ranges. Service Because they have their own distribution network, they can be sure that the right products are always available for our customers.

The staff is well skilled so they give customers what they want – fresh food served by helpful, friendly, well-trained people. http://lispac. lsbu. ac. uk/record=e1000089 (15/11/09) Strengths Financial performance With high revenues of ? 14. 5 billion, Morrison is UK’s fourth largest food retailer. The company operates 382 stores and serves 10 million customers every week. According to TNS market research, it has a market share of 12. 3 % in the grocery market. Morrison has achieved numerous of awards in 2008, including “Retailer of the Year”, the “Grocer of the Year” and many others.

It develops the brand image of the company and provides a competitive lead. Vertically integrated operations Morrison is unique food retailer because it is the only one which owns and runs fresh food making and processing abilities. This company has 12 manufacturing places in the UK and a vide transport park. This is how the company provides economies of scale at a high level and is solid in its operations. Focus on conscious consumers In response to the recession Morrison has to offer something attractive to their customers. That is why company rolled out offers such as ? family meal deals, 2 for 1 offer on party foods and many others. With such a strategy Morrison can drive sales in a weak economic environment. www. marketlineinfo. com. lispac. lsbu. ac. uk/library/Default. aspx (16/11/09) Weaknesses Lack of taking part in online shopping Online shopping is growing every year in the UK. With such a high speed of growing online shopping, supermarkets start their online sales channels to increase the revenues. ASDA, Tesco and Sainsbury in the UK have started their channels in the online shopping. However, Morrison has not started this trend which could limit growth opportunities. ww. marketlineinfo. com. lispac. lsbu. ac. uk/library/DisplayContent. aspx? R=A72DB36B-5734-4779-B792-270152CA738A=4294836834=IDA2XUJB#IDA2XUJB (16/11/09) Opportunities Optimization plan Morrison started an optimization plan by 2007 to develop operations by FY2010. As a part of optimization plan, the company completed the re-branding of all its stores and over 3,000 own-brand Morrison products received new packaging. One part has been completed, to re–brand all stores and over 3,000 own-brand Morrison products have new packaging. The Company also installed self-scan checkouts over half stores.

Successful optimization plan could develop market share, brand value and success for the company. Growth in private brand markets The private brand market is about a strong growth in sales and is expected to reach about ? 52 billion by 2011. These products have high margin potential. . Morrison offers 18,000 product lines in a typical store, 32% of which are own-brand labels. The growth in private label products could be a major opportunity for the company and could increase its success. www. marketlineinfo. com. lispac. lsbu. ac. uk/library/DisplayContent. aspx?R=A72DB36B-5734-4779-B792-270152CA738A=4294836834=IDA2XUJB#IDA2XUJB (16/11/09) Positive attitude for healthy foods Natural and organic food products sector is one of the fastest growing categories in food selling. Morrison offers a range of organic products, through its own label “Organic”, including eggs, cheese, potatoes, mushrooms, tea bags and muesli. The growing market for organic products could largely increase revenues. Prospects Recessionary climate Like most economies, the UK is now on recession, as well. Because of recession, unemployment is increasing and consumers have to be more cautious of spending.

As a result, the company’s sales and margins will be under huge pressure during such difficult economic times. www. marketlineinfo. com. lispac. lsbu. ac. uk/library/DisplayContent. aspx? R=A72DB36B-5734-4779-B792-270152CA738A&N=4294836834&selectedChapter=IDA2XUJB#IDA2XUJB (17/11/09) Rising work costs in the UK Employment costs are on the rise in the UK. Te adult minimum wage has increased from ? 5. 73 in October 2008 to ? 5. 80 which will come into effect in October 2009. An increase in labor costs will increase Sainsbury’s in service costs and impact its margins.

Intense competition Morrison is facing intense competition in their business from other supermarkets and stores. Tesco drives trough multiple store formats. Marks and Spencer’s and Waitrose supermarkets are planning development in the UK. Growing competition could lead to the pricing pressures, which would reduce the company’s turnover. www. marketlineinfo. com. lispac. lsbu. ac. uk/library/DisplayContent. aspx? R=A72DB36B-5734-4779-B792-270152CA738A&N=4294836834&selectedChapter=IDA2XUJB#IDA2XUJB (18/11/09) Conclusion Wm Morrison has a good vision to their further marketing.

They put a lot of attention on a fresh and healthy food which becomes more popular between consumers. With a strategy like this, they can stand strong between top 4 retailers in the UK. However, Morrison is not interested in online shopping, which according to the statistics will increase very fast in the next few years. What is more, in such difficult economic times consumers are eating out less and looking for cheaper forms of entertainment. It will be tough to keep high revenues facing recession and intense competition from other supermarkets.

In order to investigate my assignment I am going to conduct a research of an organisation that has an online presence, and I am going to compare my chosen business with a different business that doesn’t have an online presence. An online presence means setting up a Web site for your business. The Web site may have a variety of functions, ranging from promoting the company to a wider audience, offering support/advice or selling products and services through e-commerce.

Jack Cohen, who served with the Royal Air Force during the First World War, founded Tesco. After returning in 1919, 21-year-old Jack invested 30 pounds of his reward for military service to buy surplus food stockpiles and he opened a little stall in East London. On the first day he had a four-pound turnover and one pound profit. Little by little, his business started to boom and Jack expanded to other markets all over London. He also began wholesale trade.

Slowly this business expanded and at this present time it’s the leading supermarket across Britain and also a multinational company and trading in a multiplicity of different countries, Tesco has also begun to further develop into selling not just grocery but also in other operations such as insurance policies and mortgages, gasoline retailing (Tesco express), small urban stores (Tesco metro), electronical/computer products for instance games, cds, DVDs, mp3s devices, toys etc… The company runs more than 2,700 supermarkets, super centres, and convenience stores in the UK, Ireland, Central Europe, and Asia.

Built on the “pile it high and sell it cheap” philosophy of founder Jack Cohen, Tesco abandoned its discount format, with its down-market image, for a variety of dressier midmarket formats. Now a global leader in online grocery sales, it owns a 38% stake in US grocery chain Safeway’s grocery works. Pictured is the present view of Tesco’s web page. As you can see they are promoting their services by advertising them on its web page, there are of sub headings on the bottom of the screen. Across the page there are headings leading/linking to other products and information about Tesco plc.

Majority of the businesses are in trading to make a profit, they’re known to be in the ‘private sector’, most of these organisations have set an online presence on the Internet. By creating an online presence would increase the number of customers and would give the business more opportunities to expand on its business. By doing this it has helped the business to reach most of its aims and objectives. As already mentioned I am going to conduct a research on a well-known business, ‘Tesco’, and to carry out a research to identify its aims and objectives.

Foreign Direct Investment Wal-Mart

ASDA Wal-Mart is an American company, based in Arkansas, USA that runs large discount department stores. The company was started in 1945 when Sam Walton open a store in Arkansas, the premise behind the company was to slightly undercut its competitors while still making a profit. This idea proved a large success. In 1962 the name Wal-Mart was established when Walton open ‘Wal-Mart Discount City’ store by the time the company was incorporated in 1969 it had expanded 38 stores spread over 3 states, again operating under the same premise of marking up slightly less than the competitors.

ASDAs life began in 1965 with the merger of Asquith supermarkets and Associated Dairies, the name ASDA is an abbreviation of the two names ASquith Dairies. In 1968 ASDA bought two large stores from Government Exchange Mart (G. E. M) that were failing and in the first week of trading by ASDA the sales grow. The space given by the size of the stores allowed ASDA to create its own range of goods, which is considered to be on of the reasons behind the company’s early growth. By 1981 ASDA had expanded out of its northern home south with a total of 80 stores.

Unfortunately this time also seen the managing director leave the company to be replaced by John Fletcher whose ideas to improve profitability was to increase profit margin on branded items, this increased profits in the short term but lowered the companies price competitiveness, straying away from the company’s founding principals. This led to decline in customer numbers and Fletcher left the company just 3 years later. By the beginning of the 1990’s ASDA was falling apart it had bought a chain stores know as Gateway for a high price and was struggling due to it, and ASDA entered in a doomed loop of increasing prices and loosing customers.

Archie Norman took over the company as CEO after the share holders revolted. Made some radical changes to the company, completely changing it management style and returning back to the companies base ‘ASDA price – Pocket the Difference’ In the 1980’s Wal-Mart continued to expand in to southern United States states and by 1987 had 1198 stores. The 1990’s saw continued growth it to other United States states such as New York and by 1993 the company had managed to reach one billion dollars worth of sales in one week.

By 1995 Wal-Mart were well on there way in to foreign markets with 276 international stores, by the time Wal-Mart looked in to purchasing ASDA in 1999 it was the world’s largest private employer. After ASDAs struggling period in the early 1990s, its future was looking up towards the end of the 1990s. 1999 saw a large discussion about a ? 18 billion merger between ASDA and kingfisher, but this was no more than just a ruse to cover what was really happening to ASDA. The kingfisher merger was days away when Wal-Mart made a ? 6. 7 billion offer the ASDA could not refuse.

Both ASDA and Wal-Mart had very similar ideas about management style and, giving the customer what they wanted, cheap goods. In addition both had spread out from just groceries in to other areas, such as ASDA’s George Clothing range. The Asda acquisition thrusts Wal-Mart into the midst of a government inquiry of supermarket pricing A regal entrance into the U. K. Chain Store Age, 10870601, Dec99, Vol. 75, Issue 13 The Time that Wal-Mart purchased ASDA may also cause them problems; in 1999 the office of fair trading asked the competition commission to look it to the possibility that supermarkets were bullying suppliers.

Wal-Mart are an international brand they would have intended to use this to there advantage and ‘shop around’ for the cheapest goods, this investigation would have caused them to look closely at how they source there suppliers to ensure that they are not caught up in the inquiry. If it wasn’t for the kingfisher merger possibility Wal-Mart may have waited until the air had cleared over the investigation before attempting a purchase. Britain was always a big target for Wal-Mart to step in to, the United Kingdom shopping culture has always been very similar to the United States, ith the tendency to buy everything from one shop. But Britain was always Wal-Mart’s great hope. Here was a country with an established supermarket culture.

The natives shopped in similar ways to Americans (who tend to prefer large, one-stop excursions, unlike Germans, for example, who buy their ham from one store, their toilet paper from another) A long, long way from Bentonville. Economist, 00130613, 9/30/2006, Vol. 380, Issue 8497 The Asda acquisition provides Wal-Mart with a foothold in the U. K. , where it previously had no retail presence Knestout, Brian P. Wal-Mart Buys Britain! Eyebrows Arch!, Kiplinger’s Personal Finance Magazine, 1056697X, Sep99, Vol. 53, Issue 9 ASDA would have been considered a good step by the American giants Wal-Mart. Wal-Mart previously did not have a big grocery stronghold, where as with ASDAs backing there power would be increased. Where as Wal-Mart will give ASDA big purchasing power to enable cheaper purchases and therefore lower cost to the consumer. This was expected to cause a price drop industry wide in order for the other supermarkets to attempt to compete with ASDA / Wal-Mart.

Much has been written about the good cultural fit between Wal-Mart and Asda… Wal-Mart should also be able to improve Asda’s buying terms in both foods and non-foods. The result will be sharper prices and reduced margins that will progressively spread throughout British retailing. Asda’s expertise in grocery and petrol retailing may be helpful to Wal-Mart… Rogers, David S, Possible Consequences of Wal-Mart’s Acquisition of ASDA, European Retail Digest; Sep99 Issue 23, p51, 2p Hofstede’s Cultural Dimensions are very useful when looking at how similar/different two countries are from one and other.

The following graphs show both the UKs and the USAs scores relating to Hofstede’s Cultural Dimentions. As you can see from the chart both countries are very similar in each area, I will briefly explain what each category is and how it relates to Wal-mart / ASDA Power Distance Index (PDI), Looks at how business in the country are affected by the small members over the managerial positions. Wal-mart has always pushed its self in this area saying that every staff member is of equal importance, which would imply a low PDI. Which is what both the USA and the UK show, this means there is a large amount of equality between societal levels.

Individualism (IDV)

Looks at how an individual lives, either by his/her self in small family groups or in larger community based groups, where everyone helps each other. Again both countries are very close to each other, and both with very high scores, implying that both countries are very individualist. There are only 7 countries in the world according to Hofstede that have Individualism as there highest value the USA, Australia and the UK being the top 3. Masculinity (MAS), Refers to how the country is ran, a score around 50 implies that the country is very diverse in sexuality with equal opportunities for both man and women.

Both the USA and the UK have scores of around 60 showing that each country is reasonably diverse even if slightly male lead. Uncertainty Avoidance Index (UAI), Shows how much a country avoids new things and new ideas, until it is certain they good. The UKs uncertainty avoidance index is low, lower than the USAs and low over all, meaning that a new company entering the county is likely to be accepted, where as the USA is higher meaning they are untrusting of new companies, luckily for Wal-Mart they were investing in to the UK meaning a low UAI was good for them, but to avoid any problems the continued to trade under the know name of ASDA.

Long-Term Orientation (LTO), examines the culture of the country. A county with a low Long-Term Orientation score tends to prefer to stick to traditional values, and doing as the society expects, where as countries with high long-term orientation scores look more to the future rather than sticking to historical values. Again both countries are very similarly rate but both are very low this was probably one of the reasons Wal-Mart continued to trade under ASDA in the UK so the traditionalist can continue to do there local shopping in the place they are se to under the name they are use to. One of the big problems facing Wal-Mart is that the supermarket industry in the United Kingdom is highly concentrated, and will face a larger amount of competition in a smaller area than they would in the United States. As well as a land issue, Wal-Mart had a tendency to build large stores on unoccupied land, where as in the United Kingdom spare land is scares and local governments are reluctant to allow the building of large American style retail outlets.

In the United Kingdom, Wal-Mart will have to deal with a supermarket industry that is more highly concentrated than in the United States, a government probe on pricing as well as resistance by some local governments to the construction of American-style big box retail stores. A regal entrance into the U. K. Chain Store Age, 10870601, Dec99, Vol. 75, Issue 13 Wal-Mart made a very risky decision investing in ASDA when they did, considering ASDAs poor performance in the decade prior to the purchase.

Their timing was probably slightly hastier than they would have liked, but die the kingfisher deal being imminent Wal-Marts directors had to make some quick decisions. As to not open rumours of the purchase to some other competitors the directors visited the ASDA stores as though they were the public to see if they believed that ASDA was a viable purchase and that they could make the company work for them.

Wal-Mart and ASDA were built on similar core principals, cheaper prices for the consumers, and during the ASDA re-growth prior to the purchase ASDAs management style changed to one which put the store staff in a better place, similar to the way that Wal-Mart encourages. This meant that a purchase from Wal-Mart would have very little effect on ASDA in the short run which is good for the consumers and hence good for the business. The shopping culture in the United Kingdom was very similar to the United States with UK shoppers tending to buy all there goods from one place.

However expansion may have been a problem for them and a large change from what they were use to in the United States but ASDA gave Wal-Mart a good step in to the European market.

References

1. A long, long way from Bentonville. Economist, 00130613, 9/30/2006, Vol. 380, Issue 8497
2. A regal entrance into the U. K. Chain Store Age, 10870601, Dec99, Vol. 75, Issue 13 A
3. bout ASDA – History, http://www. asda-corporate. com/about-asda/history. asp (Accessed 10/02/2007)
4. Frank, T. A. “A Brief History of Wal-Mart. The Washington Monthly. April 1, 2006
5. Geert Hofstede Cultural Dimensions, http://www. geert-hofstede. com/hofstede_dimensions. php (accessed 22/08/2008)
6. Knestout, Brian P. , Wal-Mart Buys Britain! Eyebrows Arch! Kiplinger’s Personal Finance Magazine, 1056697X, Sep99, Vol. 53, Issue 9
7. Rogers, David S, Possible Consequences of Wal-Mart’s Acquisition of ASDA, European Retail Digest; Sep99 Issue 23, p51, 2p
8. Teena Lyons, Competition Commission inquiry into supermarkets, guardian. co. uk, Wednesday October 31 2007

EXECUTIVE SUMMARY This report provides a view on operations of SAINSBURY’S , the third largest supermarket chain across United Kingdom. SAINSBURY’S , in spite of being the longest standing retail chain has been facing stiff competition from rivals like TESCO , MORRISONS. The competitors seemed to have developed at a faster pace since SAINSBURY’S has been through a difficult time in recent years and TESCO is now twice the size in terms of turnover. Matter of analysis in terms of SAINSBURY’s supermarket is the operational strategies that have been implemented to cope up given the current downturn.

The operations management concepts incorporated in SAINSBURY’s operational routine can play a vital role to achieve its main performance objectives like customer satisfaction, fast operations , achieving flexibility for the customers needs and retaining loyal customers. There is also a scope for SAINSBURY’S to meet its target growth and regain its position if it is ready to make a few changes in its operations in terms of a better inventory management , Robust technological advancements and creating a better customer base.

The report discusses the various successful implementations and certain flaws that can be wiped in order to attain smoother operations at SAINSBURY’ OPERATIONS MANAGEMENT ASSIGNMENT INTRODUCTION: An operation is a process transforming a set of resources into services and goods. The input resources may be raw materials, information, or even the customer. These resources are transformed into final goods or services by facilities and staff of the operation( Fig 1). Operations Management is very important in business operations since it forms the heart of the organisation by controlling the system of operation.

Operations management plays a vital role because any operation requires a combination of merchandising, logistics, coordination and cost control skills to move products from production facilities to the consumer(2). [pic] Fig1 Input output transformation model for operations. [pic] Sainsbury’s Supermarkets is the UK’s longest standing and third largest major food retailing chain, having opened its first store in 1869. The Sainsbury’s brand is built upon a heritage of providing customers with healthy, safe, fresh and tasty food.

The stores serve over 18 million customers a week and offer around 30,000 products, having a market share of around 16 per cent(3). An internet-based home delivery shopping service is also available to 88 per cent of UK households. PROCESS LAYOUT: Fig. 2 Layout design of Sainsbury’s The supermarket is positioned as a process layout. Wherein the physical components are arranged or grouped according to the general function they perform (Fig. 2). It operates in a manner that is designed to move the customer through the store until they end up at the cash register.

First thing that a customer encounters is the customer services in case of any initial enquiries by the customers. Along the first aisle are aligned the fresh food items for everyday requirements. The dry goods and breads are placed in the middle aisles. The frozen food section is placed near the checkouts to keep them from defrosting while the shopper is moving around the aisles. What makes the layout of the store so coherent is the fact that essentials are lined along the walls and corners and items that are appealing right in the eyesight.

PROCESS FLOW OF THE OPERATION: [pic] Fig. 3 Process flow of Sainsbury’s operations. Sainsbury’s process flow illuminates various stages between stocking and delivering the product that a customer chooses to buy from the supermarket (Fig. 3). Initially the inventory stores the goods and materials that are held available in stock for the business. To manage the stock there is an effective solution in place named “Wesupply” which has been implemented at Sainsbury by IBM (5) . It allows monitoring the status of orders all across the Sainsbury’s network.

It regulates the item supply at the shelves, and helps delivery system coordinate with the inventory replenishment. The manager regulates and changes the item price according to the demand . The customer has access to the price rates and various schemes and offers, this is the display stage, once the products are chosen the billing takes place at the cashier, leading to the packaging stage where the customer is handed over the product which was formerly stocked at the inventory. IMPORTANCE OF PERFORMANCE OBJECTIVE TO THE OPERATION: THE QUALITY OBJECTIVE:

Sainsbury’s customers give most credit to the company’s passion for healthy, safe, fresh and tasty food . Despite the present economic conditions the company stands by its quality related objectives. Good food at fair prices, providing a satisfying shopping experience, spreading and reaching out to customers by opening new stores at various locations. Hygiene anh heath and safety issues given utmost importance . THE SPEED OBJECTIVE: Sainsbury’s tries best to synchronize supply with demands. Goods are made immediately available to the customers.

According to the industry speed checks a customer spends an average of eight minutes, from joining a queue to receiving the receipt. Sainsbury’s is recruiting an extra and of 10,000 all across the chains to cut down the checkout queues. The extra staff will mainly be the part-time positions (6). THE DEPENDABILITY OBJECTIVE: Specifying the supermarket timings , providing product related information and schemes in form of shelf toppers , discounts , posters ,makes the supermarket a reliable place to visit every time .

There is a constant availability of parking ,and special slots are reserved for the disabled and ‘parent and child’ parking at all times . Making shopping at the supermarket a hassle free experience. THE FLEXIBILITY OBJECTIVE: Sainsbury’s creates brand ranges for various needs, inclusion of healthier and value dishes in addition to the irresistible and authentic dishes, incorporating organic ranges of food if one suffers from allergies and health related issues, defines the level of flexibility Sainsbury caters to for its customers.

Extra tills are opened at peak hours and more staff is recruited to adjust to the number of customers that are served at Sainsbury’s. THE COST OBJECTIVE: The cost at the supermarket is incurred at maintaining the inventory, implementing various technologies and facility cost, staff cost. The facility cost can be reduced by getting rid of the aging equipment, and using renewable forms of energy. Sainsbury’s initiative to switch to Enercon E40 KW ( wind turbine) has lead to enormous cost saving. VOLUME VARIETY VARIATION AND VISIBILITY CHARACTERISTICS OF SAINSBURY’S:

Volume and variety: A relationship between volume and variety are as shown: the general position of operations is along the diagonal, when the volume is high, variety is high and vice versa. [pic] Supermarkets offer a high variety of products and yet sell in high volume.. But in this case, the process is standardized for all the customers . All the customers receive similar kind of services, the process is not customised or tailored keeping each individuals needs in mind. Therefore, considering a supermarket process, the variety would still be considered low and the rule still stands.

Hence in a supermarket scenario there are high levels of capital investments, systemizations, routinized workflow which leads to low unit costs. Variations: Sainsbury is in the high levels of demand variation and has changing capacity . The company has to stay in touch with the variations in customer demand constantly which would lead to high unit cost. With various sections at the supermarket ranging from electronics to household items the stacks have to be replenished on the regular bases.

Visibility: A new solution named “Wesupply” has been implemented at Sainsbury by IBM which allows monitoring the status of orders all across the Sainsbury’s network, this leads to visibility within operations which amplifies stock availability for the customers. The supermarket uses various communication tools like discount vouchers, shelf toppers, posters at the entrance and various displays in the aisles to equip the customer with information on product availability and offers. A supermarket website displaying the product promo sections is also available. (11).

INFERRED OPERATIONS STRATEGY OF THE ORGANISATION: The supermarket aims to meet the “Making Sainsbury great again “target, which would involve generating sales growth of ? 2. 5 billion putting it in a strong position during the latter months of the year(7). The supermarket wants to concentrate on sales-led recovery that makes availability of items its top priority. Introduction of 250 new ranges of products and retaining emphasis on healthier food in the new range “Taste the Difference” advertised by celebrity chef Jamie Oliver has been paying off for the supermarkets growth.

With the re-launch of non-food items Sainsbury’s offers to drive sales momentum (3). Sainsbury’s another operational strategy pertaining to its employees is to move the HR function to a more centralised, paperless system. It would be a gradual process to turn off the current labour intensive system. The new software system will free up personnel managers from their admin duties to focus more time on training and coaching staff and managers(10). SUGGESTIONS: SAINSBURY’S uses “Wesupply” solutions to monitor the status of orders across its entire network and manage the availability of products.

This improves the visibility of supply chain performance of the supermarket(5) , but in recent times a new solution named Radio-frequency identification (RFID) is used for the further improvement of inventory accuracy (8). It allows a far more scope of cost cutting and flexibility via wireless mobility. Retail chains like ASDA, TESCO, MARKS n SPENCERS have already incorporated this system into their operations. CONCLUSION: Behind the largest companies to the minor stores, there needs to be a system that makes it run.

Sainsbury’s being the third largest retail chain organisation too dwells on the operations management concepts to be able to manage all the goods and services that they distribute at a global level. The various performance objectives that are important to an organisation like maintaining speed in operations, bringing flexibility to the customers, maintaining the dependability from customers perspective, saving operational cost and enhancing profitability become realizable when operations management focuses on subtle routines and activities of the various processes.

Seeing 1. 3 billion additional sales and a wide focus on quality values (Introduction of “Try something new today “) which was branded incredibly successful and encouraged people to adapt better eating habits proves that Sainsbury is well on the path of achieving the target “Making Sainsbury’s great again” (9). REFERENCES [pic]1) Danny Samson and Mile Terziovski (1999), The relationship between total quality Management Practices and operational performance, Journal of Operations Management, Volume 17 Issue 4: 393-409. Department of [pic]Management,[pic] University of Melbourne, Australia b Department of Business [pic]Management,[pic] Monash University, Australia Received 11 September 1997; accepted 8 July 1998. Available online 10 May 1999. Abstract Total quality [pic]management[pic] (TQM) has been a widely applied process for improving competitiveness around the world, but with mixed success. A review of the literature revealed gaps in research in this area of quality/operations [pic]management,[pic] particularly in the area of empirical testing of the effectiveness of TQM implementation.

The aim of this study was to examine the total quality [pic]management[pic] practices and [pic]operational[pic] performance of a large number of manufacturing companies in order to determine the relationships between these practices, individually and collectively, and firm performance. We used a large data base of 1200 Australian and New Zealand manufacturing organisations. The reliability and validity (construct, content, criterion) of the practice and performance measures were evaluated.

Our study showed that the relationship between TQM practice and organisational performance is significant in a cross-sectional sense, in that TQM practice intensity explains a significant proportion of variance in performance. Some but not all of the categories of TQM practice were particularly strong predictors of performance. The categories of leadership, [pic]management[pic] of people and customer focus were the strongest significant predictors of [pic]operational[pic] performance.

This is consistent with literature findings that behavioural factors such as executive commitment, employee empowerment and an open culture can produce competitive advantage more strongly than TQM tools and techniques such as process improvement, benchmarking, and information and analysis. Author Keywords: Quality; Operations [pic]management[pic]; Performance; Human resource/OM interface; Empirical research Article Outline A. Introduction 2. Literature review and research problem background 2. 1. Purpose of the literature review 2. 2.

The development of TQM 3. Theoretical framework and research hypotheses 3. 1. TQM elements 3. 1. 1. Leadership 3. 1. 2. People management 3. 1. 3. Customer focus 3. 1. 4. Strategic planning 3. 1. 5. Information and analysis 3. 1. 6. Process management 3. 1. 7. Performance 3. 2. Research hypotheses 3. 2. 1. Hypothesis H1 3. 2. 2. Hypothesis H2 4. Methodology 4. 1. Background 4. 2. Sample 4. 3. Survey instrument 4. 4. Data preparation 4. 4. 1. Selection of questions 4. 4. 2. Screening of outliers 4. 4. 3. Treatment of incomplete responses 4. . Analysis procedures 5. Results 6. Discussion of results and findings 6. 1. Tests of hypothesis H1 6. 1. 1. Validity 6. 1. 1. 1. Content validity 6. 1. 1. 2. Construct validity 6. 1. 1. 3. Criterion validity 6. 1. 2. Reliability 6. 2. Test for hypothesis H2 6. 3. Findings 7. Conclusions, limitations and further research Appendix A. 1. Survey questions A. 1. 1. Leadership A. 1. 2. People management A. 1. 3. Customer focus A. 1. 4. Planning A. 1. 5. Process management A. 1. 6. Information and analysis A. 1. 7. Organisational performance

References 2) Rodolfo Vazquez , Ignacio A. Rodriguez-Del Bosque, Ana Ma Diaz and Agustin V. Ruiz (2001), Service quality in supermarket retailing: identifying critical service experiences, Journal of retailing and customer services, Volume 8 Issue 1: 1-14. 3) http://www. sainsburys. co. uk 4) http://www. j- sainsbury. co. uk/index. asp? PageID=424==2000=130 5) http://www. wesupply. com/news/articles/news_090409 6) http://www. thisislondon. co. uk/news/article-4216114-sainsburys-10000-queue-cutters. do 7) http://www. kessays. com/essays/accounting/sainsburys-plc. php 8) http://fplreflib. findlay. co. uk/articles/4563/RFID%20barcodes. pdf 9. http://www. independent. co. uk/news/business/news/123-profit-rise-makes-sainsburys- great-again-424381. html 10). http://www. personneltoday. com/articles/2007/08/07/41820/jobs-in-firing-line-as-sainsburys-plans-to-centralise-its-hr. html 11) Chambers, S. , Slack, N. , Johnston, R. , & Betts, A. (2009). Operations And Process Management: Principles and Practices for Strategic Impact. Prentice Hall. [pic]

Describe the type of business, purpose and ownership of two contrasting businesses. I will be speaking about two organisations the first organisation I have decided to discuss is ASDA and I will follow it of by McDonald’s as the second organisation. Asda is a Public company and is a British supermarket chain which supplies various services to the customers such as: Clothing, Food, and General Merchandise etc. It has become a multi-national store leading of its subsidiary of Wal-Mart which is American based. It is quite a large business and has approx 231+ superstores within the UK, and the number of store openings is still arising.

The purpose of ASDA is to sell its services and goods to the local consumers of different areas/cities within the UK and also out of the UK. It offers a wide range of services to its customers, supplying goods such as: clothing and food it is a quite a commonly known organisation. Asda is concerned in attracting the budget market as any other business would look into the same type of aim, as a business it is achieving massively in result to the number of stores and the investment into Netto which was brought by Asda in 2010.

The ownership of Asda is a PLC (Public Limited Company) this is because its shares can be brought on the share market making it a PLC. The purpose of Asda is that they exist to gain profit, the openings of more stores is to gain sales and so that more customers come into their business etc. As my second organisation I have decided to discuss about McDonalds, it is the world’s largest chain of fast food restaurant. The business began in 1940 the Headquarters are based in the United States and the corporation was founded by a businessman.

In 2003 the company had launched the “I’m Lovin It” campaign. The purpose of the business is to serve its customers with the excellent quality of food that they provide. It is a worldwide company and has over 33,000 stores in approx 118 different countries, and serves about 64 million daily. The number of worldwide employees for McDonalds is 1. 7 million, and the chief executive director for McDonald’s is Jim Skinner.

Many companies or organisations are involved in more than one activity, for example Tesco’s not only sell food products, clothing and fancy goods but also sells services such as photographic film developing, insurances and some branches even have restaurants or cafes. However their main source of income is their sale of groceries this is known as their ‘core business’. EasyJet’s main activity is clearly selling low cost flights. But what else do they do? EasyJet run alongside other separate easyGroup companies such as easyInternetCafe, easyCar. com, easyMoney, and easyValue.

There are no “cross-shareholdings” between easyJet and these other easyGroup companies. EasyJet operates independently from the other companies, although some “cross-marketing” agreements do exist. Sainsburys core business is selling groceries. But also work along side with other companies within their business. The founders’ principles and values guide us as strongly today as they did at the outset – to be the customer’s first choice for food shopping by providing high-quality products, value for money, excellent service and attention to detail.

Sainsburys also own another branch of supermarkets called Shaws, these supermarkets are based in the U. S. Sainsburys also do banking and have their own Baking service. Sainsbury’s Bank opened for business on 19 February 1997. A joint venture between J Sainsbury plc and Bank of Scotland, Sainsbury’s Bank was the first Supermarket Bank in the UK. This ground-breaking venture has attracted over 1. 25 million customers with deposits in excess 2. 0 billion and advances, including undrawn commitments, of 1. 0 billion.

Regardless of whether you are looking for an outstanding return on your savings or competitive rates on a mortgage or personal loan, Sainsbury’s Bank has always offered some of the most attractive rates around. Sainsbury’s Bank continues to lead the field in the research and delivery of new products to meet the needs of our customers. Our current product range includes: Instant Access Savings Account, Direct Saver Account, Personal Loans, Sainsbury’s Bank Drive, VISA credit card, Home Mover Mortgage, First Time Buyer Mortgage, Buy-to-Let Mortgage, Remortgage, Home and Contents Insurance, Travel Insurance and Pet Insurance.

JSD developments is also a part of Sainsbury’s, J Sainsbury Developments Ltd (JSD) was formed early in 1993 and is a wholly owned subsidiary of J Sainsbury plc. JSD is a property development trading company which acquires new sites, constructs, lets and then sells the investment of the development on practical completion of the scheme, rather than holding developments for investment purposes. JSD is predominantly a retail developer but has diversified into mixed-use schemes, including other elements such as leisure, offices and residential.

JSD is looking for development opportunities in out-of-town, edge-of-town and town-centre locations throughout the UK. JSD has developed over 3. 5 million sq ft of space in the past nine years it has been trading and is scheduled to construct 425,000 sq ft of new space during this current financial year. And lastly Sainsburys do sell property, yes that’s right SPC, Sainsbury’s Property Company (SPC) was formed in November 2000 with the aim of maximising value from Sainsbury’s Supermarkets property portfolio. With over 450 stores based in the UK, valued at 4. 5 billion, it is one of the tenth largest, corporately occupied portfolios in the country. SPC is looking to develop mixed-use schemes, such as housing, leisure and offices on up to 50 sites over the next four years, as well as developing supermarkets. Through increased asset values, reduced capital expenditure and enhanced levels of service, SPC will generate financial benefits from the under-exploited supermarket portfolio. Since February 2000 in excess of  566 million has been raised through the development of innovative ‘sale and leaseback’ schemes.

SPC is structured into three different areas:

Asset Development and Portfolio Planning, Delivery and Performance.

The Development and Planning group aims to maximise the return on existing assets and identify potential sites for development. Delivery will handle acquisitions, disposals and the construction process, including store refurbishment, extensions and facilities management, while the Performance group will seek funding, measure the financial returns of the property business and monitor customer satisfaction.

Organisations are formed and run in a certain way that it maximises on minimal resources that are available. An example of such business is supermarkets that usually stock an array of products and also they offer services based on consumer requirements. In the United Kingdom, four major supermarkets have market share of 70%, which are Sainsbury, Tesco, ASDA and Morrisons (Pederson, 2008). Thus, the aim of this paper is to analyse Sainsbury Supermarket and ASDA Supermarket utilising four approaches, which are SWOT analysis, PESTEL analysis, 4Ps analysis, and Five Porters Analysis. Sainsbury Supermarkets

Sainsbury is a UK food retailer that doubles up its activities in financial services. Some of the companies that make up Sainsbury include Jacksons Stores, Sainsbury’s Local and Sainsbury’s Supermarket to name some. The reasons of the organisation to diversify into convenience stores is analysed in the Porters 5 forces analysis. However, their main aim to serve consumers well translating in value for shareholders. Moreover, the organisation champion employees requirements and they have provided an environment in which employees are rewarded while they are provided with opportunities to develop their careers.

Additionally, the organisation policy is to champion cordial relationships with suppliers, recognise mutual benefit, and fair treatment among the suppliers, and have appropriate social corporate framework. SWOT Analysis Strengths

• Has local shops • Among the leading supermarket located in UK

• Provide nector cards for their customers

• Perceived to be providing quality goods and services

• Range of services and products that include online shopping and banks Weaknesses

• Products and services are expensive compared to competitors (Pederson, 2008)

• Back firing of Jamie Oliver’s endorsement Opportunities

• Huge capital reserves

• Increase in consumer consumption Threats

• High employee turnover

• Competition from other stores and supermarkets

• Profit is reported to be decreasing continuously

• Consumer health awareness Analysis Political Factors

• Political changes as enabled maximisation of globalisation, which also pose numerous challenges for the organisation.

The challenge of globalisation is intense competition while the benefit is that they can enter any emerging market through partnerships or joint ventures, even though such plans have not been reported. • Changes in policies and introduction of investigation such as the investigation of price fixing among the major supermarkets may have negative impact to the entire industry. Even though the supermarket is well established among the customers, the entire allegations may negate the supermarket image (Hoover, 2007).

• Reduction of corporation tax from 30% to 28% could save the supermarket huge amounts of cash that they may decide to re-invest Economic Factors • The cost of food has increased across the world, which means that Sainsbury’s will have to purchase its products at high costs. This would translate in reduction of margins or even its consequences may be transferred to the consumer. Moreover, increase in fuel costs may affect supply chain of Sainsbury’s and may contribute to overall increase in prices.

• Financial crisis may change consumer behaviour since it could decrease the purchasing power while shying from luxury goods. This could greatly affect operations of Sainsbury’s Supermarket • Competition is inherent in any business sector, which means that increase in competition would force Sainsbury’s to decrease the prices resulting in decrease in margins Social Factors

• Societal changes have introduced emphasis on easy cooking and fresh cooling. This is an opportunity that can be maximised by Sainsbury’s through encouraging new unfussy eating and recipes

• The government of UK has started emphasising on healthy eating due to increase in level of obesity. This has resulted in many consumers shifting to healthy eating and thus it is an opportunity for Sainsbury to provide and create healthier foods at cheaper price. Technological Analysis • Online technology is growing at a faster rate in Western countries, which means that Sainsbury’s can leverage in this technology and utilise it to create competitive advantage. • Supermarkets are associated with long queues in which every person without preference of items purchased to queue.

Thus, the use of checkout machines could greatly help in ensuring that such complications are avoided. • A new technology such as Radio Frequency Identification Device can be used to greatly help in Sainsbury’s supply chain. Incorporating such technology especially in inventory could result in a leaner and more profitable supermarket Environmental Factors • Many western countries and NGOs continue to request companies and organisations to improve on energy efficiency and reduce carbon footprint. This means that Sainsbury’s will be forced to invest in green initiatives

• Ethical and moral considerations may affect the way Sainsbury’s operates in that issues such as ethical treatment of animals and sale of organic food. They will be forced to balance between such requirements and the issue of price to prevent losing of consumers because of increase in prices while meeting sensitive issues. Legal Factors • Sainsbury’s Supermarkets will be forced to address stringent laws on drinks and food and thus they will be forced to follow more labelling and packaging policies to deal with these legal resulting in increase in operation costs. Five Porter’s Forces Analysis

Competitive rivalry

• Supermarket business is becoming more competitive, which means intensification of competition could decrease revenues collected

• Other business such as Tesco has an advantage in the market, which means that the company has a considerable distance to cover.

• The competitive advantage of Sainsbury’s relative to other competitors is the presence of convenience stores Barriers for entry

• Food retail is amongst the most sophisticated sectors in United Kingdom, which means that it requires huge capital investment and also could require brand development which is an expensive initiative

• The retail industry is advanced and may not easily allow environment for new entrants to establish • Knowledge and consumer understanding is something that is difficult for foreign firms, which mean shat it is difficult for new entrants. Threats of Substitutes • Threat of substitute is minimal because many consumers see it as a necessity • New technologies and innovations that tend to assimilate and converge food products makes it difficult for entry of substitute • Internal threats exists in that one because laps up the business of other supermarkets

Buyer Power

• The power of buyer is high because there are numerous competitors who sale the same products

• Switching for the consumers is always low e. g. shifting between type of products Supplier Power

• Relationships is mutually dependent 4Ps Place

• Strategically located

• Convenience stores Product

• Diversified products

• Quality products

• money services and products Price

• Relatively cheaper

• Price are somehow equal through out the industry Promotion

• Loyalty promotions

• Media and charity presence to market their products