Business: Late- 2000 s Recession and Sainsbury Essay

Submitted By OliMolly
Words: 886
Pages: 4
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In this task I am going to be going through the problems that may occur on the business activities (Economic, Demand, Supply, and Global Interaction – in the UK and China) within Sainsbury’s.

Economic (UK):
Problems within the UK, that could affect Sainsbury’s is that there is a recession, because of this people won’t be able to spend as much on the products they may have bought in the store, and Sainsbury’s will have to put their prices up. Also credit in banks in the UK aren’t giving out as much money as what they used to, this means that if Sainsbury’s wanted to make progress within their business they may not be able to because they won’t have the money to.

Economic (CHINA):
China’s food prices have increased by 3%, the biggest items that have increased in price were fresh vegetables, which increased by 11.3%. there were various other products as well such as liqueur and tobacco, this shows us that it wouldn’t be a good time for Sainsbury’s to move over to China’s market. If Sainsbury’s were to gradually open stores in china, in the state that the country is in, they would have to still put their prices up on their products, to which nobody would be very interested in, and they may not be able to make a profit, considering it would be a new business over there. Also, in the south of china the months from April to September the humidity increases and then can cause Typhoons. The impact that this could have on Sainsbury’s is more money having to be sent into re doing the store if anything were to happen to it.
Demand (UK):
Problems within the UK, that could affect Sainsbury’s is their competition, such as Tesco, this is because if Tesco has cheaper products customers may stop shopping at Sainsbury’s and start to shop there instead. Also, if the recession were to get worse, because Sainsbury’s serves for the middle market, this means they can serve for the whole clientele, they would have to put up their prices and people may not be able to afford to go there anymore, which means they would lose customers, that also links into affordability. Strategies that Sainsbury’s could use is by making offers on their food so that more people are more attracted to buying from there, and won’t think too much about the price.

Demand (CHINA):
The problems that Sainsbury’s may face in China is that they will be at the bottom of the competition because it is a new supermarket over there, this would be a problem for them as they would then have to advertise a lot and change some of the products that they sell to fit the consumer needs in China, this will be costly for the business. They may also have to change the clientele that they serve for to higher or lower instead of middle-higher. As China’s prices of products have increase, Sainsbury’s would have to do the same if they were to move to China’s market, although make them match china’s competitors (Wallmart)

Supply (UK):
Problems within the UK, that could affect Sainsbury’s is the fact that the Government don’t give out much support to business anymore, the only time that they would help would be so that the Government get good taxes from them. Although
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