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International Strategy

Undergraduate or graduate capstone course in strategy or international management course.

Faced with increased competition at home, Sainsbury's decided to expand its international operations by entering Egypt. Sainsbury's initially created a joint venture with an Egyptian food retailer, but quickly increased its commitment by opening over 100 stores in Egypt. Sainsbury's dream of capturing the Egyptian food market faded as quickly as it was started. Due to declining profits, Sainsbury's eliminated its exposure in Egypt by selling its interests to its Egyptian partner. Sainsbury's first developing-country venture could be regarded as an object lesson in how not to operate. The company failed to properly investigate its market and its partners, and showed insensitivity to local conditions. Moreover, entering the Egyptian consumer business sector may have been ill-advised. Egypt, with a low gross domestic product (GDP) per head of about $1,300 and a population of 65 million, while having growth potential, is a daunting market. Why a poor and frequently disorganized country was perceived as having excellent growth potential was not addressed by Sainsbury's in its headlong rush to invest. The case should be interesting for students because it highlights a situation where a firm's international expansion efforts failed after the firm had success expanding internationally previously. Numerous reasons are presented in the case for Sainsbury's failure. The case highlights the multiplicity of issues which a company faces when it “goes global.” While Sainsbury's withdrew from Egypt, the case affords students the opportunity to evaluate whether they would have made the same decision by providing a discussion of the alternatives suggested by Sainsbury's Chairman.

The Sainsbury's case is capable of addressing several important teaching objectives: the case is an appropriate vehicle to demonstrate what can happen to a firm as it expands globally; students will gain more knowledge concerning why companies expand into foreign markets and the impact of cross-country differences in market conditions; the case presents the multifaceted complexities involved in globalization efforts and issues faced by companies concerned with global competition and global strategy; students should apply the concepts and tools of industry and competitive analysis; students should gain a better understand how to manage globally; students should gain an understanding of the challenges of globalization and global competition; students should gain a better understanding of the evolution of strategy as industry conditions change and new opportunities arise. As with any case study, students should learn to translate good analysis into appropriate recommendations for action.

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The purpose of this study is to explore the conceptualisation of co-evolution using a corporate history research approach. While the application of the co-evolutionary perspective to the organisational-environmental relationships has uncovered significant evidences, little is understood about how the co-evolutionary process occurs over time between organisations and their institutional environment.

A co-evolutionary corporate history approach in used, as the authors investigated Sainsbury’s historical trajectory, exploring the role specific family members played in the evolution of the firm and the co-evolution of Sainsbury’s with its environment. This research design framework encompasses longitudinal archival analysis which incorporates both external and internal engagement which fostered Sainsbury’s joint evolution.

The findings from this study clearly suggest that certain organisations can and do co-evolve with their environment. However, organisations need to build legitimate cases for co-evolution to occur. In addition, they need to acquire certain resources that can be used to stimulate changes within their institutional environment.

Through a corporate history archival analysis, this study presents a UK company’s evolutionary narrative. The authors contribute to the growing literature on co-evolution in management studies by presenting a detailed historical narrative and interpretation of Sainsbury’s evolution at different time periods.

A two‐component framework for strategic marketing research, focused on the corporate level and the business‐unit level, to structure an interpretation of the strategic dimensions of the acquisition in November 1998 of Star Markets, a Boston, USA‐based food retail chain, by J. Sainsbury plc the UK’s second largest food retailer. Set within a broader context of the wave of acquisition‐driven consolidation rapidly transforming the US food retail industry during the late 1990s, the paper considers the extent to which the acquisition of Star Markets represented a strategic fit with Sainsbury’s existing US business, the alternative strategies available to the company at the time of the acquisition, and the resulting strategic centrality of the US business to Sainsbury’s corporate future. Focuses on the highly contested nature of the retail internationalization process and issues of sustaining international expansion during periods of retrenchment and strategic reassessment. Highlights the tensions which can be created within the portfolio of business units of a large multidivisional firm during the internationalization process, and the stresses in the relationship between management and the capital markets which can develop if the internationalization process is perceived, correctly or incorrectly, to threaten the strategic credibility of the firm.

The purpose of this paper is first, to explore the role of institutional theory constructs in a case of international retail divestment. Second, to examine the potential of constructed metaphors as a means of analyzing and communicating the findings of managerial research.

The data were generated from participant observations and interactions with stakeholder groups during a three‐month ethnographic study based in a Sainsbury store in Egypt. Data were analysed and presented via a constructed metaphor – namely Robert Louis Stevenson's story of Dr Jekyll and Mr Hyde.

The case illustrated an apparent paradox between Sainsbury's technical superiority as a retail operator in the Egyptian market, and its social inferiority in its interactions with a variety of stakeholders, primarily customers and employees. The use of the metaphor to organize, analyse and present the findings proves to be a fruitful way to illustrate this issue, and parallels between the two “stories” provide further insights into behaviour – the denial of responsibility for (and the existence of) social inadequacies; and the implicit (and inevitable) existence of the capacity for social inadequacy in any business organization.

The potential to communicate managerial lessons by telling “stories” (the case) through well‐known “stories” (the novel) is highlighted.

The use of the constructed metaphor to analyse a case of international retail divestment is, to the authors' knowledge, unique and enhances the understanding of the legitimisation process and the role of socio‐moral codes in this process.

Offers an appraisal of the corporate experience and prospects of J. Sainsbury plc in the USA, ten years after its market entry. In Part 1, focuses on Sainsbury’s New England subsidiary, Shaw’s, and shows that heavy capital investment, and the determined export of a British model of food retailing, has produced a chain of 119 stores enjoying rapid growth and impressive improvements in profitability. In Part 2, focuses on Sainsbury’s acquisition of 50 per cent of the voting stock (20 per cent of total equity) of Giant Food Inc., the market leader in the Washington DC‐Baltimore area. Shows that Sainsbury is poised to purchase full control of Giant (at an estimated cost of approximately $2 billion), is promoting a major expansion of Giant northwards into Philadelphia, and is on the verge of becoming one of the top ten firms in a US industry worth $410 billion per annum by 1995.

Offers an appraisal of the corporate experience and prospects of J. Sainsbury plc in the USA, ten years after its market entry. Part 1 focused on Sainsbury’s New England subsidiary, Shaw’s. Heavy capital investment, and the determined export of a British model of food retailing, is shown to have produced a chain of 119 stores enjoying rapid growth and impressive improvements in profitability. Part 2 focuses on Sainsbury’s acquisition of 50 per cent of the voting stock (20 per cent of total equity) of Giant Food Inc., the market leader in the Washington DC‐Baltimore area. Shows Sainsbury is poised to purchase full control of Giant (at an estimated cost of approximately $2 billion), is promoting a major expansion of Giant northwards into Philadelphia and is on the verge of becoming one of the top ten firms in a US industry worth $410 billion per annum by 1995.

The research outlined in this paper seeks to establish whether or not there are discernible differences in the positioning attributes of Aldi and Sainsbury's. Particular emphasis is given to price positioning and to what extent this can be explained by product quality differences.

Price differences are assessed using the shopping basket technique and product quality differences are evaluated using perceptual discrimination tests conducted blind of brand. Where differences between products are discernible, product preference is identified.

The study identified discernible differences in the pricing strategies of Sainsbury's and Aldi particularly amongst the higher added value products. Although differences in product quality were evident in some product categories, there was no statistically significant preference for one brand over the other.

Owing to the resource intensive nature of perceptual discrimination tests, this research was conducted on a relatively small number of products and cannot be extrapolated to the full range of products available from either retailer, though it may indicate comparable quality.

This paper evaluates the brand description of two UK‐based retailers, Sainsbury's and Aldi. In market positioning, they are at different ends of the retailing spectrum, with Sainsbury's a high added value retailer with an ABC₁ consumer profile, and Aldi a hard discounter with a largely C₂D consumer base. However, this study is based on a retail site that has the two brands located directly opposite each other in a conspicuously AB suburb of a major UK city. This location deviates from the holistic profile of the Aldi brand and as such provides a special research site.

The purpose of this paper is to examine the HRM factors that may have contributed to the failure of UK supermarket group Sainsbury's attempt to enter the Egyptian market.

The paper draws on participant observations and interactions with stakeholder groups during a three‐month study based in a Sainsbury store in Egypt.

The paper reveals that failure to listen to the advice of its Egyptian employees may have been a reason for Sainsbury's failure in Egypt, which occurred despite the supermarket's technical superiority over its rivals.

The paper highlights retailers' need for a deep understanding of host countries' cultures if they are to expand successfully abroad.

The paper presents some interesting suppositions on why, only 14 months after opening the first Sainsbury store in Egypt, the company pulled out and sold the subsidiary at a loss to its Egyptian partner.

Looks in depth at the operation of the first undergraduate degree in retailing to be operated at the Manchester Metropolitan University by distance learning exclusively for J Sainsbury plc. Draws on experience and maps the dimensions of how this was accomplished. Makes some suggestions for making successful collaborative work between business and higher education, based on the experience of the university’s Department of Retailing and Marketing, particularly working together and growing to operate with mutual understanding.