In such competitive era, it is essential for firm to introduce effective strategies so that performance of firm could be improved. Thus, through identifying the issues it helps in improving the performance of firm and overcome the issues so that set targets could be attained. With the help of identifying the problem it is essential for firm to assess that declining in sales of Sainsbury is one of the main issue which impacts upon the profitability of firm. It can be evaluated that there are different reasons sue to which business operations gets affected (Van Boeckel and et. al., 2014). Thus, here major issue being discussed is that decline in sales which affects the profitability of firm in market. Therefore, it is considered as one of the main problem that impacts upon the business operations which helps in overcoming the issues faced by firm so that desired outcomes could be attained. Sainsbury has been selected which is a second largest chain of supermarket and thus provided wide range of products or services to influence consumers. It is the largets grocery retailer and adopt self service relating in UK. Company faces several issues which impacts upon the business operations so that successful outcomes could be attained. Thus, carrying out significant approach results in identifying the main reasons of decrease in sales and its impact upon profitability of business (Mani, Kesavan and Swaminathan, 2015).
There are several reasons such as dissatisfaction among customers, low quality products, high price as compared to rivals etc. Thus, all such issue helps in identifying the significant impact upon business operations as they are considered as the main reasons due to which sales of Sainsbury is facing serious decline. From the last several years, Sainsbury is facing serious decline in sales and thus influence the business performance so that profitability could be attained. It could be evaluated that through adopting effective strategies it becomes significant for firm to overcome the issues faced by business and thus improve the performance of firm in market (Hainmueller, Hiscox and Sequeira, 2015). Decline in sales of Sainbury is considered as one of the major problem and thus it is being identified as the main issue so that profitability of firm could get affected. Through identifying the issue it becomes easy for firm to overcome them and thus improve the performance of firm in market. It is significant for enterprise to assess their main issues and thus identify that decline in sales is considered as the main problem and therefore, it needs to be avoided so that sales could be increased. Declining in sales could be affected and therefore, it is the main issue which is being faced by businesses in relation to enhance the sales and profitability aspect of firm. There are various competitors of firm i.e. Asda, Tesco that are offering high quality products or services at minimum prices so that it gives tough competition to rivals. Thus, overcome such issue and results in improving the business performance and enhancing their sales and profitability aspect so that set targets could be attained (Cao and Li, 2015). Decline in sales is considered as one of the main issue that results in affecting the business functions and therefore adopting effective strategy helps in improving the business performance so that customers could be attracted towards firm.
The Issue Or Need
The main issue identified here is decline in sales of firm and thus it provides opportunity for business to improve its business performance. Decline in sales is the major problem being faced by firm and therefore, it is essential for business to identify the issues so that appropriate outcomes could be attained in terms of improving profitability. However, in regard to evaluate the results, it is essential for firm to overcome the issue and thus bring positive outcomes so that brand image of firm could be raised (Gallino and Moreno, 2014). Such issue need to be discussed in regard to bring change in the environment, people and top management so that problem could be avoided. Thus, such problem is considered as the main issue and therefore it needs to be identified so that it needs to be solved and thus goals could be attained. The identified issue is essential for firm to bring in notice so that decline in sales could be evaluated and thus develop objectives so that sales could be improved. Top management of firm requires to assess the prevailing issue faced by firm and thus bring positive outcomes so that appropriate outcomes need to be evaluated so that best performance could be attained. Thus, identifying the issue results in implementing effective strategies and thus attain set targets. Management initiates in regard to stand by the problem and tackle the same with appropriate decisions so that issues could be avoided (Hong and Li, 2017). Decline in sales is one of the major issue that results in assessing that it is one of the main problem so that appropriate outcomes could be attained. Management need to adopt effective strategy so that sales could be overcome and attain appropriate results. Dissatisfaction among customers, low quality of products and high prices are considered as the major issue and thus it affects the brand image and popularity of firm in market (Edwards and Jenkins, 2015).
Aims And Objectives
While, preparing the aim of business it is essential for scholar to identify the issues found so that it could be researched in terms of evaluating the outcomes. Following is the aims and objectives that is being discussed underneath- Aim-
To analyse the reasons of decline in sales of Sainsbury on the profitability of firm. Objective-
- To identify the main reasons of decline in sales of firm.
- To assess the impact of declining in sales of Sainsbury on the profitability of firm.
- To recommend the strategies through which declining in sales could be overcome.
The main reasons of decline in sales of firm
According to the view of Kirilenko, Kyle and Tuzun, (2017)it is stated that there are various reason of declined in sales which lead to impact the profitability of an organization. Sales of product can be declined because it not fulfils the needs and demand of customer. If company fail in making product and services as per taste and preference of consumer, then it directly impacts sale. In modern era, needs and demand of people change with change in time. They look out for new things instead of going on with existing product. Needs and demand of people increases time to time and it makes difficult for an organization to fulfil the needs and wants of time. This decrease the satisfaction level of customer and they switch to other brand product in respect to fulfil their needs and wants. Further, there are many competitors in retail industry who make similar type of products for customer and sale them at lower pricer. Increase in competition level also impact the sale of specific organization. Moreover, to survive in competitive market firm need to lower the price of its product and services which impact the profit of an organization. Therefore, increase in competition level also decline sale which directly impact profit of a company. Pouliot and Babcock, (2016) explained that if an organization not use effective marketing strategy then it also decreases the sale. Company make different type of product and services for its customer, but it need to ensure that customer know about its product and services or not. Moreover, if company not make its customer aware about product and services which they are selling then people will not prefer to buy them. As, it can be stated that people prefer to buy popular brand product. So ineffective marketing strategy also impact the sale of organization which directly impact the profitability. Furthermore, if company not make good quality of product and services then customer may not wish to buy particular firm product and services. It is important for an organization to focus on quality of product as customer mainly prefer to quality at the time of buying product and services.
The impact of declining in sales of Sainsbury on the profitability of firm.
According to the view of Feletto, Burton and Egger, (2017) decline in sale lead to impact the profitability of an organization. If sale is declined then it impacts profit because company make product for its customer and if they not buy product and services then it impact sale. Some time company invest huge fund in making high quality product and services and attractive packaging. Further if people not like to but those products then company cannot recover its making charges and unable to make profit. Along with this organization also invest huge expenses in marketing its product and services but due to high price of product customer avoid buying those expensive product may decrease the profit of an organization. Increase in level of competition also diver the mind of customer in buying particular company product and services. There are more choice available for shopper and different company provide discount offer to its customer which grab the attention of large number of customers. This impact sale as well as profit of other organization. Furthermore, if sale is not increase then company cannot make profit to pay salary and wages to its employees. Therefore, it can be stated that sale is very important for an organization in order to make huge profit.
Strategies through which declining in sales could be overcome.
Guo and Xiong, (2016) explained that there are different strategies which company can adopt in order to increase sale and make huge profit. One of the effective strategy which an organization can used is effective marketing techniques. Through this company can easily enhance the sale of its product and services. Further it supports in making aware people about the product and services. Company can use modern marketing techniques such as social networking site. Through the help of this company can easily target large number of customer in less time. Company can provide detail information of its product on social networking site for grabbing the attention of large number of customer. Furthermore, there are many advance technology which can be used for making innovative product and services for its customer. If company used new technology and make product which were different from its competitor, then it can easily increase sale. Further, if products are different from its competitor then company can easily keep high price of its product because then it has less competitor. This assist organization in making huge profit. As pre view of Mohammadtalebi, Nasr and Mohammadtalebi, (2016) a company can make product and services focus on fulfilling the needs and demand of its customer in order to overcome decline of sale. For this purpose, firm can conduct marker research for identifying the needs and demand of its customer and focus on making product according to the taste and preference of customer. With the changes in time needs and demand of people also changes, through the help of market research company can easily in identify the needs of people and fulfils it. Further if firm get product as per their needs and want then they will not switch to other brand. Apart from this Company need to ensure that product and services which they are making is of good quality and grab the attention of people. This overall increase sale as well as profit of an organization.
Research methodology is an important part of study which enable to present the finding, in an appropriate manner. Furthermore, one of the significant aspect is data collection which taken into consideration by researcher. There are two methods for collecting data that is primary and secondary. Primary information is that information which is fresh and new while secondary information is that information which was already published by different author in books and journals (Patino, Au and Vollmer, 2016). In the present report both primary as well as secondary research is conducted in order to deep understating of research aim and objectives. In primary research researcher used interview method for collecting information. In interview question were asked from different department leader of saisnbury organization. After the collection of data it is important to properly analysis the collected data. On the other hand secondary information is gathered with the support of books, and journals. All the primary and secondary information is presented in systematic manner in order to reach aim and objectives of research. Furthermore, interview is conducted for primary research under which 4 leaders has been selected as sample size.
Presentation of Research and Evidence
The research study basically aims to emphasize on the factors that leads to decline the ratio of sales in Sainsbury; hence according to the research aim, researcher has used various primary and secondary sources (Wirtz, 2012). Herein, this section provides detailed analysis about the information collected from primary and secondary both the sources. Since, books, journals and articles are being accessed in the research work; therefore on that basis, several factors are being explored that has a direct link with company’s sales prospect. While carrying out the study, attention has been given towards the factors that have a direct impact on declining the sales and profitability aspects of the business. Moreover, in this regard it can be said that due to increasing level of competition, company’s profitability aspect is reducing (Stahlberg and Maila, 2013).
On the basis of secondary research, it is also ascertained that employees are required to focus on enhancing the service provision dimension so that it can have a direct impact on company’s profitability and success facets. This can be supported with an example which states that customers always prefer to purchase products from those business entities which are highly focused on quality dimension (Siu, 2012). However, currently the sales ratio of Sainsbury also seems to reduce because somewhere Sainsbury is not meeting all the quality dimensions. Apart from this, the use of primary source also depicts that Sainsbury is losing its market share because the business has been focusing on multiple services which not only impacts the sales; but also disturbs other operations.