SITUATION ANALYSIS UK Supermarket Industry in the 1990s The supermarket industry in UK was characterized by fierce competition and low profitability, with big players dominating the marketplace. Porter's five forces analysis (summarized in Exhibit 1) provides insights into the industry: Rivalry: Since there was little product differentiation between the multiples, price was commonly used as the competitive weapon. While the demographic profile of the shoppers of each chain was different, with Sainsbury at the top end, …
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…rst step towards identifying and satisfying their unmet needs. Sainsbury needs to better segment and target the more profitable customers- Best Friends. Finally, Sainsbury needs to recapture the initiatives from Tesco by being more innovative and quicker to introduce new services. One area of opportunity was in the Post stage of the Activity Cycle whereby Tesco had not done particularly well. Examples of Post stage value add could be home delivery and customer feedback system.