Customer Relationship Strategy Case Study: Sainsburys

Customer Relationship Strategy Case Study: Sainsburys Research background: This research paper is focused strategy fallowed by Sainsbury to maintain customer relationship. In this research paper we will go through the different methods implemented by Sainsbury to gain relation with a customer. In todays global market relationship management had gained a lot of importance in every  business. The customer relationship is not confined with service industry, now a days  manufacturing industries too fallowing good relationship with their customers. The customer relationship management is applied by most of organizations because customer is the king in every business and he is the centre point to provide the revenue to a organization. Customer relationship management is a transparent wall between the customer and organization. Customer relationship will be measured based on the loyalty presenting by customer. So now going to discuss about the strategy fallowed by Sainsbury to maintain customer relationship 3. Organization background: Sainsbury is a super market which will operates its business in retail sector from the year 1869. Sainsburys is started by james and Mary Ann Sainsburys. The growth and development of the Sainsbury was increased rapidly and leads to one of the major player in the retailers of UK. It started from single shop and now grown up to 900 retail outlets in the UK. It performs its business operations with 180,000 employees. Sainsburys is the first supermarket which came in market with their own products like soft drinks, food materials and glossaries. It is one of supermarket which provides it services by online and the customer in the store is also given the chance to bill their products. The major competitors of the Sainsbury are TESCO and ASDA. In the part of business, store deals with different range of products for all class of people in the society. Sainsbury maintains good customer relations. Pest Analysis of Sainsbury Political Factors Taxation Sainsbury will get taxed based on their taxation code provided by the governing  bodies of taxation. Salary The employees are paid highly when compared to the other supermarkets.   Working hours They will give only 2 hours per school children and 20 hours for the  people aged above 18. They follow equal employment and wages act and they provide more health and safety to  employees. Economical Factors- Inflation Rates Unemployment Levels Income Labour laws Skill level of work force Social Factors Demographic Trends Level of education Culture living styles Lifestyles and Attitudes Technological factors Online shopping facility Self checkout tills Widespread availability and high speed broadband internet Electronic Data Interchange 4. Rational for the chosen topic: It is decided to research on the above topic, because of academic, personal and business perspectives. In academic carrier, research proposal study is very appropriate subject for course and my future purpose .This research paper is focused strategy fallowed by Sainsbury to maintain customer relationship. In this research paper we will go through the different methods implemented by Sainsbury to gain relation with a customer. In todays global market Customer relationship management (CRM) is one of the important  tactics to gain the relation between consumer and organisation. Customer relationship  management will leads to the enhancement of popularity of the organization in the global  market. In todays market many of the organisations are implementing this customer  relationship management because customer is the centre point at every business. From the  past records organisation came to single opinion i.e. which organisation has good relation  with it customer will survive for long period in the market. 5. Literature review: According to (Mike Hoots), Customer relationship management is implemented by most of  organizations to know the potential customers of their business and their requirements  expecting from organization side. The organization position in the global market may defined by the customer relations and  their satisfaction. In todays scenarios customer is the king and he is one and only option for  generating the revenue to the business. Customer plays a key role in almost of all the  industries which are service and manufacturing. The organization which is having good  customer satisfaction and excellent customer relationship will gain the business from the  market and the growth of that particular organization will be more when compared with other  organizations which are giving less priority to customer relationship. 6. Research questions: According to the reviewed literatures, they all mentioned that the important of customer satisfaction programme and in which ways it is gained in an organisation. But they did not discover that how the customer satisfaction programmes and customer satisfaction draws a path to a organisation toward success. Thus, this research proposal proposes to analyse to answer these questions: 1. What are the key activities included into Customer relationship management? 2. What are the customer services provided towards customer satisfaction? 3. To what extent does the Customer relationship management contribute to Sainsbury financial success? 7. Research objectives: Objectives of this research paper are to present the evidence for some of the questions and to  gain theoretical knowledge on whats customer relationship management and its effects on  the business. Find out Sainsburys improvement in customer satisfaction and its relationship with existing customers? What are the best approaches to gain a relationship with a loyalty customer? What are the influences of customer relationship on the Sainsburys business and its  development? What are the important strategies implementing by Sainsbury in customer relationship  management to return to its old market position in the retail sectors? 8. Methodologies: Methodology Exploratory research method chosen for this research paper Exploratory research will present the relationship which is existing between two different  variables. Before starting with exploratory research we shall know about the advantages in  taking this kind of research method and how it is more helpful than the other research  methods. Exploratory defines the relationship between the two distinct factors and it will be more  convenient method for this research. This research method is very flexible for providing a  understanding during the decision problems and opportunities. This research method will  help in grabbing the strategy fallowed by sainsburys for gaining the relationship with the  existing customers and to attract the new customers from the global market Sainsbury and customer relationship management are the two distinct variables in this  research paper. This research will goes on what are the different strategies fallowed by  Sainsbury to maintain good customer relationship. Exploratory research will be comfortable  method to carry this research. Data is gathering from either sides of the organization. Inside of a organisation data is  collected from employees and from the customers of Sainsbury That to data is collected from  the employees who are involved in maintaining customer relationship management. Data is  gathered by introducing myself to the customer and explaining the objective of the project  and later had chat about the satisfaction and impression on the organization. Due to casual chat with customer and enquired by about some important things like cost, quality and services providing and finally collecting the information from employees about the customer number of visits to that particular shop Later i followed the passive style, in which i observed reactions of the customers for the  services providing by the employees in the Sainsburys. This research paper is mainly focused to gain a brief understanding about the customer  behaviour; this study was done more qualitative rather than quantitative research. Qualitative  method was carried based on three types which are mentioned below. Face to face interview Semi-structured interview Passive style Face to face Interview- The face to face interview was done with topic related employees in  the Sainsburys and later conducting a interview to a customer directly. This face to face  interview is also called as In-depth interview. Semi-structured interview this is same as face to face interview but i distributed the pre-questionnaire concerning about the interview. Passive style- Passive style is the process of observing the customers without informing them. The customers are identified secretly when the employees are providing service. Apart from the three methods, fallowed the survey method. In the survey method i went through the secondary data like, company website, news papers  and the articles related to the Sainsbury. In this research paper the data collected through both quantitative and qualitative methods. In  the quantitative method the data is in the form of numbers and which is collected by using the questionnaire. The qualitative data which provides the information in the form of description  which is collected by conducting the interview to customers and the employees of  Sainsburys. This research paper needs a detail study so sample questionnaire is supplied to the existing and new customers of Sainsbury and even collected the information orally by asking about the services provided by Sainsbury. Data collection: When conducting data collection, the un structured interviews will be used with Tescos employees and customers to evaluate customer loyalty programme and investigate the customer perspectives. The data concern with perspectives like thinking, satisfaction and believes. To collect these qualitative data, un structured interviews will be suitable than other methods. Because, we can not have predetermined questions for the perspective which might change for place to place as well as person to person. That is why it is decided to conduct un structured interviews. The data will be collected with selected sample units by asking one or two opening questions and conversations for ten or fifteen minutes. The questions will interact with some matters, for example, why Tesco introduced loyalty card?, why the customer prefer often to shopping in Tesco?, how the customers fell when using loyalty card in Tesco?, what are the other services provided to customer? Is the loyalty programme useful to customer? At the mean time, do Tesco achieve its purposes by that programme? This interview will be conducted once a week for five weeks in the Tesco in London. Every time will choose different areas for research; this is because the answers of customers will vary from place to place. And 3 sample units will be selected to investigate each time. 6. Data Analysis: The collected data from fifteen sample units by interviews, will be analysed to accomplish the objective of research proposal. The obtained qualitative data such as opinions, satisfaction and believes will be analysed to decide that really the customer loyalty programme brings customer satisfaction as well as customer satisfaction brings financial success for Tesco within competitive market in UK. References Alan Bryman Emma Bell,2007, Business Research Methods, second edition, Oxford  University press, UK. Mc Burney White, 2007, Research methods, eighth edition, wadsworth cengage learning,  USA. John gill and Phil Johnson, 1991, Research methods for managers, first edition, paul chapman  publishing ltd, UK. AD Jankowicz,2000, Business Research projects, third edition, Thomson learning, UK. Judith Bell, 2008, Doing your Research project, fourth edition, open university press, MC  Graw hill education. UK. www.sainsburys.co.uk, 2010, Sainsbury company overview, (Online), Available from URL   http://www.j-sainsbury.co.uk/index.asp?pageid=12, Accessed on 27th -03-2010. www2.sainsburys.co.uk, 2010, customer and marketing, (Online), Available from URL-  http://www2.sainsburys.co.uk/aboutus/recruitment/Store+Support+Centre/Custo mer+and+Marketing/Customer+and+Marketing+Overview.htm, Accessed on 01-04-2010.a www.thisislondon.co.uk, 2008, Sainsbury defies the City with yet more sales growth,  (Online), Available from URL-http://www.thisislondon.co.uk/standard- business/article-23496207-sainsbury-defies-the-city-with-yet-more-sales-growth.do, Accessed on 02-04-2010. www.oppapers.com, 2010, Customer relationship management, (Online), Available from  URL-http://w ww .oppapers .com/es s ays /Cus tomer- R elationship-Management/189988, Accessed on 07-04-2010. www.rgis.com, 2010, Sainsbury overview, (Online), Available from URL-  http://www.rgis.com/assets/pdfs/casestudies/Sainsbury_Case_Study.pdf, accessed  on 09th-04-2010. Corporate Strategy: Financial Strategy and Cultural Effects Corporate Strategy: Financial Strategy and Cultural Effects Introduction The objectives of this paper are two-fold: first, the paper looks at the role of financial strategy in an organisation, the risks faced by an entity and how these risks affect the financial strategy; second, the paper provides a discussion in relation to whether cultural factors have an impact on corporate strategy, as well as whether it is beneficial for an organisation to be ethical. The paper begins by looking at financial strategy and organisational risks. It will later consider cultural and ethical issues. The role of financial Strategy in an Organisation. Financial strategy can be defined as the practices adopted by a firm to achieve its financial objectives. (Harvey, 2004). According to Calandro and Flynn (2007) â€Å"financial strategy can be defined as an interdisciplinary methodology to more efficiently allocate resources within a firm to better or more economically satisfy customer preferences over time†. The later definition stresses the need for customer satisfaction indicating that shareholder value creation depends on customer satisfaction. Although an organisation’s overall objective is shareholder value maximisation, it can only achieve this through high levels of customer satisfaction because it is only through high levels of sales that profit can be generated and high levels of sales can only be achieved through high levels of customer satisfaction. The main financial objective of a profit-making entity is to maximise shareholder value. (Ogilvie, 2005). Shareholder value is measured by the returns shareholders receive each year, represented by the dividend received each year, plus the capital gains from capital appreciation, which is measured by the growth in the share price of the entity. In addition to maximising shareholder value an organisation may have other objectives such as satisfactory returns, high sales levels, high level of customer satisfaction, etc. (Ogilivie, 2005; Calandro and Flynn, 2007). Kaplan and Norton (1996) identify three different stages for a business and note that each of these stages has its own unique financial objectives. The three stages include: (1) rapid growth; (2) sustain; and (3) harvest. (Kaplan and Norton, 1996). At the rapid growth phase the financial objective will be to achieve sales growth, achieve sales in new markets and to new customers, achieve sales from new products and services, maintain adequate spending level for product and process development, establish new marketing, sales and distribution channels. At the sustain phase the organisation will emphasize traditional financial performance measurements, such as return on capital employed, operating income and gross margin. Standard discounted cash flows and capital budgeting analysis will be used to appraise investments although some companies may emphasise the use of more recent appraisal techniques such as economic value added and shareholder value added. At the harvest phase, the main financial objective will be to achieve sustainable levels of cash inflows, in which case any investment project must have immediate and certain cash paybacks. (Kaplan and Norton, 1996). Financial strategy constitutes three main stages, which are temporarily linked in a financial feedback loop as shown in figure 1 below. These stages include: (1) strategy formulation; (2) resource allocation; and (3) performance measurement. An important aspect of strategy formulation is strategic planning, which according to Myers (1984) involves the process of deciding how to commit the firm’s resources across different lines of business. Based on the above discussion, one can observe that financial strategy plays an important role in an organisation. It enables the organisation to formulate its strategy, determine how to allocate its resources and enables the company to measure its performance. Financial strategy enables an entity to make an assessment of its financial needs, the sources of support required to meet its objectives and fulfil its mission while at the same time planning for growth and stability. Financial strategy is an indispensible prerequisite for the formulation and development of the budget. Organisations often face a number of risks. These include liquidity risks, interest rate risk, business risks, financial risks, etc. these risks may affect the financial strategy in a number of ways. Financial risk for example is the risk that the company may be unable to meet its commitments to repay interests and principal repayments on its long-term financial obligations. The effect of such a risk on the financial strategy is that the company will emphasise the use of internally generated funds and equity to finance long-term projects rather than issue bonds or other long-term debt securities. Interest rate risk may also affect the firm’s capital structure decision in that perceived high levels of interest rates on long-term debt may reduce the company’s motivation to use debt financing. Foreign exchange rate risk may affect the company’s prospects to expand production abroad, as well as the currency denomination of foreign contracts and sales. Liquidity risks may affect the company’s short-term borrowing. The presence of high liquidity risk may warrant the company to resort to a just-in-time inventory system, reduce short-term debtors by maintaining more strict short-term credit policies and factoring of accounts receivables. Effect of Cultural Factors on Corporate Strategy Andrews (1997: p. 52) defines corporate strategy as â€Å"the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organisation it is or intends to be and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities†. Corporate strategy in effect maps out the businesses in which an organisation intends to compete in a way that focuses resources to convert distinctive capabilities into competitive advantage. (Andrews, 1997). The definition of corporate strategies emphasises the need for the organisation to satisfy the needs of all the stakeholders if the organisation is to achieve is overall objective of maximising shareholder value. Stakeholders include employees, customers and the communities in which the organisation operates. Employees, customers and communities therefore have a significant impact on the success of the organisation and thus on the corporate strategy of the organisation. In formulating corporate strategy, organisations need to identify and priorities strategic issues, which involves scanning, selecting, interpreting and validating information. (Schneider, 1989) To properly formulate its corporate strategy, an organisation must assess its organisational strengths and weaknesses, as well as its environmental threats and opportunities, which will enable it choose among alternative courses of action. (Hofer and Schendel, 1984) cited in Schneider, (1998). This indicates that an organisation must perform a SWOT (strengths, weaknesses, opportunities and threats) analysis prior to formulating corporate strategy. A number of factors have been identified as having an effect on corporate strategy formulation: for example, Kets de Vries and Miller (1984) suggest that managerial personality and experience is an important determinant of the strategy formulation process; Janis (1972) considers group dynamics as an important factor affecting the formulation of corporate strategy while Frederickson (1984); Lyles and Mitroff (1985) suggest that organisational structure plays an important role in strategy formulation. Schneider (1998) citing Schein (1985) notes that National culture could play an important role in strategy formulation as it derives from assumptions regarding relationships with the environment as well as relationships among people. Schneider (1998) argues that these assumptions will influence how information is gathered and how that information is interpreted within the organization. The strategy formulation process can therefore not be considered ‘culture-free’ because information is embedded in social norms and acquires symbolic value as a function of a particular set of beliefs in a particular set of cultures. (Feldman and March, 1981). There are considerable differences in cultures across countries. Culture is defined as â€Å"a system of shared assumptions that has developed over time to solve problems of environmental adaptation and internal integration†. (Schneider,, 1998: p. 152) citing Schein (1985); Van Maanen and Barley (1983). Culture is expected to affect the process by which the environment is known and responded to because it is thought to influence the way people perceive, think, feel and evaluate. (Schneider,, 1998). There are two sets of cultural assumptions that are thought to be specifically relevant to the formulation of corporate strategy. These include external adaptation and internal integration. (Schneider, 1998). On the one hand, external adaptation refers to the relationship with the environment while internal integration on the other hand refers to the relationships among people. The forgoing indicates that cultural factors have a significant effect on corporate strategy and thus calls for a critical consideration of cultural differences especially for multinational companies that usually operate in a number of different countries with varying degrees of culture. A company therefore stands to gain a lot from being ethical. Companies that are perceived as being unethical may suffer from declining sales and thus declining profit margins. There are also differences as far as ethical issues are concerned. What may be considered unethical in one country may be considered ethical in another country. For example, Muslim communities do not eat pork meat and thus will consider a company that attempts to market pork related products as contravening their cultural believes. In addition there are considerable differences in relation to organisational hierarchy across countries. In countries where power distance is considered very important, information is likely to flow only from top to bottom and not from bottom to top. In addition, an autocratic form of leadership is likely to prevail in such societies. On the contrary, in a country where power distance is considered less important, there would be a two way flow of information and a democratic leadership style is likely to prevail. For example, Motorola faced a number of problems when it expanded its activities to South Korea. (Siegal et al., 2007). In like manner IKEA, the giant furniture dealer faced difficulties when it expanded its activities into the United States. (Grol et al., 1998). BIBLIOGRAPHY Andrews K. (1997). Resources and Strategy: A Reader, edited by Nicolai J. Foss. Oxford University Press, ISBN 0198781792, 9780198781790 Calandro, J. Jr., Flynn, R. (2007). â€Å"On Financial Strategy†, Business Strategy Series, vol. 8, No. 6, pp. 409-417. Harvey G. (2004) â€Å"Financial strategy† available online at: http://financial-dictionary.thefreedictionary.com/Financial+strategy Grol, PC, Schoch, C, CPA. (1998). IKEA: managing cultural diversity. In Cases in International Organizational Behavior. Oddou G, Mendenhall M (eds.). Blackwell: Malden MA; 88-112. Janis, I. L. (1972) â€Å"Victims of groupthink†, Boston: Houghton-Mifflin. Kaplan, R. S., Norton, D. P. (1996), â€Å"Linking the Balanced Scorecard to Strategy†, California Management Review, vol. 39, No. 1, pp. 53-79. Feldman, M. S., and J. G. March (1981) â€Å"Information in organizations as signal and symbol†, Administrative Science Quarterly, vol. 26, pp. 171-186. Fredrickson, J. W. (1984) â€Å"The comprehensive of strategic decision processes: extension, observations, future directions†, Academy of Management Journal, vol. 27, No. 3, pp. 445-466. Kets de Vries, M. F. R., and D. Miller (1984) â€Å"The neurotic organization†. San Francisco : Jossey Bass. Lyles, M. A., and I. I. Mitroff (1980) â€Å"Organizational problem formulation:  an empirical study†. Administrative Science Quarterly, vol. 25, pp. 102-119. Myers, S. C. (1984). â€Å"Finance theory and financial strategy†, INTERFACES, vol. 14 No. 1 pp. 126-137 Ogilvie, J. (2005). Financial Strategy, Butterworth-Heinemann ISBN 0750664894, 9780750664899 Schneider S. C. (1989), â€Å"Strategy Formulation: The Impact of National Culture†, Organization Studies, vol. 10, pp. 149-168. Siegel, J. I., Licht, A. N., Schwartz S H. (2007). Egalitarianism, Cultural Distance, and FDI: A New Approach available at: http://ssrn.com/abstract=957306