Assignment Subject: Management Principles Q.3 Case study In May 2008, Justin King (King), CEO of UK-based J Sainsbury plc., 4 which owned Sainsbury's Supermarket Ltd (Sainsbury's), one of the largest retailers in the UK, topped Marketing's annual list of 100 most powerful people, earning the distinction of being the country's most powerful marketer5.6 "Having beaten his own growth targets, set three years ago, and pocketed a 7m bonus in the process, King has achieved what many thought was unachievable. By successfully striking a balance between making the supermarket appeal to consumers through its promotion of quality, price, and ethical provenance - its entire own-brand banana, sugar, and tea offering has been converted to fair-trade - and producing sales figures that have impressed the City, King has more than proved that his strategy was right," the magazine said Analysts felt that King was instrumental in turning around the fortunes of Sainsbury's and reversing the decline that the company had suffered in the UK retail market between 1995 and 2008. Sainsbury's, which was started in 1869, was the leading retailer in the UK till the early 1990s. In 1995, Tesco plc. (Tesco) 7 overtook it to become the leading retailer of the country. Analysts were of the view that Sainsbury's ignored the growing clout of Tesco as its sales were growing (Refer to Exhibit II for Financial Performance of Sainsbury's between 1996-2000). In early 2000, Sir Peter Davis (Davis) was brought in as the CEO to help the company recover market share. He invested heavily in several initiatives to revive the company's share, but these did not prove successful. Sales started to decline slowly after 2002 and in 2003, Sainsbury's was pushed to the third position by the Asda Group plc Sainsbury's made its beginning in 1869, when its first store was opened by John James Sainsbury (John) and his wife Mary Ann Sainsbury (Mary) at their home in Drury Lane, London. The store offered high quality food at reasonable prices. Initially only fresh food was sold. Later, the store started to stock some packaged grocery items like tea and sugar. From the very start, the emphasis was on cleanliness, hygiene, quality, and order of keeping things within the store. This kind of organized store, a new concept in those times, drew several customers who till then, had to be content with small, cluttered family-owned shops, and unhygienic stalls and carts of the street vendors. During the mid-1990s, Sainsbury's enjoyed supremacy in the retail industry. At that time, the entire retail market was going through a lot of changes. Many big and small retailers, including hard discounters entered the market with new initiatives and marketing strategies. In March 2000, in an attempt to revive the company and get back market share, a new CEO, Sir Peter Davis (Davis), was appointed in place of Adriano. Davis had earlier worked with the company between 1976 and 1984 and had handled marketing and buying operations. On March 29, 2004, King was appointed as the company's new CEO. He had earlier been employed with the food division of Marks and Spencers (M&S) (since 2001), before which he had worked with Asda. (Refer to Exhibit V for a brief profile of Justin King) King spent the first six months in the company reviewing the business completely. As part of his assessment program, he started a direct mail campaign reaching out to 1 million customers asking them for their personal feedback about the company's condition, their expectations from it, what they felt was wrong, and what they wanted improved By March 2006, 31 stores of the 131 earmarked had already been refurbished. Price reductions were made on more than 8,500 products In March 2007, after two years of the MSGA plan being put into effect and almost achieving the targets, the company launched new targets for the period 2007-2010 to further bring growth and stability to the business (Refer to Exhibit VIII for Recovery to Growth Plans 2007-2010). Questions: (Any two) (10 + 5 + 5 = 20) 1. Examine reasons for Sainsbury's growth and its subsequent slide in the 1990s and early 2000s. (5) 2. Analyze the reasons for the recovery efforts taken under various CEOs including Peter Davis that did not yield the desired results. (10) 3. Analyze Justin King's 'Making Sainsbury's Great Again' plan. (5