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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.

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.

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.

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.

Reviews an article on celebrity endorsement and brand alliance

Reviews a case study of Jamie Oliver's endorsement of Sainsbury's

Jamie Oliver launched his career as a TV chef in the late 1990s with The Naked Chef. Soon loved for his cheeky persona and approachable demeanour, he attracted the attention of Sainsbury's, a UK supermarket chain whose reputation had become outdated. The consumer market at the time understood the Sainsbury's demographic as middle aged and middle class. Oliver's charisma, his good, simple cooking, and his wide appeal to young people made him the perfect choice to revitalize their brand. In 2000, he became the face of the chain in a deal worth £2m a year. The Sainsbury's/Oliver partnership is one of the longest standing brand alliances in the UK, and has therefore attracted much analysis.

Suggests that a celebrity endorsement should be approached as a brand alliance. Offers suggestions for further research

Puts forward a new thesis on branding

The purpose of this paper is to observe that UK supermarket giant Sainsbury’s has opened a college to train management teams for its fast-expanding network of local convenience stores.

This study describes the reasons for the college and what it will seek to achieve.

This paper explains that the company has more than 3,000 team-leader and management positions to fill over the next four years to power the growth of convenience stores in Greater London. The new convenience training college will train team leaders and store managers in technical and behavioral skills.

It reveals that the college has six training rooms and will be run by “convenience capability trainers” to ensure that everyone has the right skills for the job. It complements Sainsbury’s existing training facilities – six food colleges and one bakery college.

The paper highlights the growing importance of convenience stores on the UK retail scene.

It claims that the new training college will not only benefit Sainsbury’s convenience-store growth but will also give managers the expertise and theoretical knowledge about what it means to be a leader in retail.

Aims to examine the effectiveness of UK supermarkets in transferring store loyalty to online loyalty.

An online survey of university staff is used to test both the brand equity proposition that loyal customers are more likely to adopt brand extensions, and the double jeopardy model's prediction that market leaders benefit disproportionately from loyalty transference.

The study provides support for the brand equity and double jeopardy propositions. Tesco's and Sainsbury's dominance of both the online and offline markets, coupled with their retention indices of 92 per cent (Tesco) and 76 per cent (Sainsbury's), support the brand equity view. Tesco also attracts a disproportionately higher percentage of its customers from competitors (67 per cent) compared with Sainsbury's (14 per cent), suggesting that it is benefiting from its market leadership position, as predicted by the double jeopardy model.

The relatively small size and restricted nature of the sample means that the exploratory findings now need to be investigated more rigorously. A larger sample would permit a more detailed exploration of the relationships between the different aspects of online loyalty.

The research suggests that smaller retail brands have two main options, namely growing the size of the brand or building a niche brand. For a market leader the challenge is to become a “super‐loyalty brand”. That is, to achieve levels of loyalty higher than predicted by the double jeopardy effect, either through segmentation or through better service provision than that of competitors.

This is the first study to examine transferability of store loyalty to online loyalty and demonstrate the usefulness of the brand equity and double jeopardy models for understanding and predicting loyalty transfer behaviour.

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.