Proposal
Report on A Critical Analysis of the Sainsbury-ASDA Merger and future directions for the retail industry to collaborate
1-Report Title: Management Report on Critical Analysis of Sainsbury-Asda Merger
2-Business Context:
The proposed Sainsbury-Asda merger has been an engaging story over the last year. From 2018 to April 2019, the story has gained much popularity in public. Sainsbury and Asda are top performers in the UK retail industry, but they were underperforming over the last years (Olczak, 2015). They chose to merge their businesses, and the deal was successful in progress. Both companies were ready to finalise the agreement that the UK regulator blocked it. It resulted in a backlash in the standing for both companies, and it raised serious concerns over the retail industry in the future (Fofana and Jaffry, 2015).
3-Project Questions:
- The topic is interesting because a proposed merger has been blocked. Later, it has the possibilities of opening a new scenario for the industry. The research would find out what are the pros and cons of this merger. It would also discuss the jurisdiction of the regulator.
- The literature on the topic would find the reasons why both companies decided on a merger. Later, it was blocked, and the literature would find the reasons for blocking the proposed merger. Then, literature would help to find the right course of action in the situation.
- End purpose of the research is to know how the retail industry in the UK can be competitive. It would also work on the jurisdiction of the regulator as some circles are criticizing the decision. So, the end purpose would help to know the future of retail industry in the UK.
4-Current/ preliminary research and relevant theory:
Proposed Sainsbury-Asda Merger:
The proposed merger deal was about to finalise and Sainsbury would retain control of the merged company because it paid Asda’s parent company more than 2 billion pounds. As a result, the combined company Sainsbury PLC could reduce prices for consumers and become more efficient in its operations (Leyland and Quinn, 2018).
Impact of Blocking Merger on Both Companies:
The competition watchdog blocked the merger deal as it could result in unfair competition in the UK retail industry. The industry where Tesco has been performing quite well, and both parties to the merger deal are facing pressure from other good performers like Aldi. The impact of blocking merger has reduced the market value of both companies. It has also raised questions over the decision by the regulator.
Pros and Cons of Merger concerning Consumers and Retailers:
A merger is a common practice in business, and in the UK retail industry, a merger might be a viable decision for many competitors. The merger could affect the competition, but there are already enough competitors in the UK market that any company may charge higher prices. Greater efficiency and the ability to lower rates on goods could eventually benefit the merged company. However, there are some valid points with the regulator that the merger could present a less competitive environment in the market. It is the areas of critical analysis to look into the pros and cons of the regulator’s decision (Davey and Sandle, 2019).
Future Directions for the Retail Industry to Collaborate:
The case of blocking the merger deal between Sainsbury and Asda may become a standard and ideal case to draw implications for the retail industry. In the UK context, where Asda parent company, Walmart, has been assisting its UK operations for years, the impact may be long-lasting. It would be a learning case to know future directions in the retail industry. First, there is an intense desire for companies to a merger to be competitive. Second, there are limitations from the regulator over the merger of large players in the market (Busby, 2019).
5-Method of Inquiry:
The Method of inquiry for the proposed research is secondary research as there is plenty of available data on the proposed merger. However, there is need to synthesize the data to draw findings. Content analysis and synthesizing information from secondary sources is an appropriate method of inquiry. It helps taking notice of different perspectives to find the best one.
6-Identify ethical issues that you might face.
Any research may compromise ethical standards because researchers may not find appropriate ways to search for data. It is more a problem with ethical issues in primary research while in secondary research, it has a different shape. The study would get data from secondary sources, and it is ethical to provide appropriate references to obtained information. The proposed study would handle issues by using legal access to data sources. Moreover, any view or opinion on the topic from any author would not be changed to draw desired outcomes.
7-Planning:
The following Gantt chart has a plan of research on the topic.
| Weeks | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Proposal Stage | * | ||||||||
| Working on Introduction | * | ||||||||
| Conducting Literature Review | * | ||||||||
| Conducting Literature Review | * | ||||||||
| Interpreting data on the topic | * | * | |||||||
| Results and Analysis | * | ||||||||
| Discussion and Findings | * | ||||||||
| Conclusion | * |
8-Professional and career development skills:
From this proposed research, there are some targets to develop professional and career development skills. The proposed research would be helpful in developing skills to find in-depth insight into a scenario. The proposed research and its outcomes would help in professional career as any professional position requires rigorous research to get conclusions. Targets for the research include to get these results.
The analysis of the pros and cons of merger and future direction for the retail industry to collaborate would bring the findings to the study. There is abundant data on the topic, and those sources would lead to drawing and synthesise new findings.
9-References:
Busby, A. (2019) Why The CMA Were Wrong And Where Now For Sainsbury’s And Asda?, [Online], Available: https://www.forbes.com/sites/andrewbusby/2019/04/26/
why-the-cma-were-wrong-and-where-now-for-sainsburys-and-asda/#2166b02b3550 [5 December 2019].
Davey, J. and Sandle, P. (2019) Explainer: With merger blocked, what happens to Sainsbury’s and Asda?, [Online], Available: Explainer: With merger blocked, what happens to Sainsbury’s and Asda? [5 December 2019].
Fofana, A. and Jaffry, S. (2015) ‘Assessing retail market competition for multi-aquaculture products’, Journal of Economic Studies, vol. 42, no. 3, pp. 462-476.
Leyland, A. and Quinn, I. (2018) Sainsbury’s Asda £51bn combination play: what we know and what it means, [Online], Available: https://www.thegrocer.co.uk/sainsburys-asda-merger/sainsburys-and-asda-mega-merger-what-we-know-and-what-it-means/566476.article [5 December 2019].
Olczak, M. (2015) ‘Chain-Store Pricing and the Structure of Retail Markets’, Journal of Industry, Competition and Trade, vol. 15, no. 2, pp. 87-104.
