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In the present world, for organisations to be competitive, it is required that creation of superior value is ensured which is possible through innovation. It helps an enterprise in getting established effectively in the market (Kindström and Kowalkowski, 2014). Sainsbury is the second largest retail store in market and is doing business since 1869. Due to its wide scale of operations and variety of products, it faces a number of problems which will be discussed in detail in the following report. Different aspects that lead to problems in Sainsbury will be highlighted along with the discussion of each factor as how they are affecting innovation capacity of firm.

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Innovation may help many organisations in proceeding towards their goals and attaining competitive advantages but at the same time, it creates more challenges in-front of an enterprise. Sainsbury's is facing mainly three main issues i.e. high cost of innovation, employee’s resistance and sustainability (Product and Service Innovation. 2018). These issues are happening because of different reasons like the nature of company, type of industry, etc.

Figure 1 Increase in Business Performance through Innovation

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Different Issues and their Reasons are Discussed as below:

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Different Issues and their Reasons are Discussed as below:

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Resistance to Change –Company is the second largest retailer firm in UK. Almost 1, 62, 700 people are working in this organisation and they are running around 1415 stores across the globe. Most of them are present in the same country and significant amount of revenue of this company is coming from this region. Sainsbury is trying to implement innovative ideas in their enterprise but because of more number of employees and their vast presence, they mostly fail to get desired results (Nambisan, 2013). Providing training about how to use new software to few people is easy but when company has to teach it to thousands of employees then it involves huge cost.
Also, many workers resist new changes because they feel that they may have to take additional training for learning the way to work on new innovation without being paid any extra sum. Some employees do not support innovation because they consider it as an additional burden. Sustainability is another key issue which is directly connected to the size of organisation. This company may bring new technology in their enterprise but it may last in the organisation for significant period because research and development wing of firm may develop new software/process of working (Bucherer, Eisert and Gassmann, 2012).

Figure 2: Resistance to Change

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Cost of Implementation– Sainsbury is a part of retail sector which has got major issues of competition as there are endless options available for the customers. It is important for this organisation to implement change in a manner that does not affect the choice of its customers. If customers find the innovation done by company is against their interest than they switch to the other option very easily (Lee, Kao and Yang, 2014). Therefore, it creates pressure on the management to make the alteration in a manner that does not affect the customer choice. For same special and skilled employees need to be employed which charge much and hence increases the total cost of operation for the organisation (Bucherer, Eisert and Gassmann,  2012).

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Difficulty in understanding the New Idea– Most of the customers of the refereed origination belongs to middle age group who are very busy and get used to a particular practice very easily. They do not appreciate much change in their routine practices and which restricts the capacity of an organisation to make alterations on regular basis. The products used by the consumers are of basic nature which restrict major changes. Consumers find it more comfortable to have a routine practice when they visit the supermarket. If changes are done in the layout or the placement of variety of products then it creates problem for them and they show a negative response to same (Gustafsson, Kristensson and Witell, 2012). Therefore, while bringing innovation in location or placements or in any other sector of the supermarket, management needs to give more emphasis on type of consumers it has. They have to make sure that no issues or least problems are faced by the clients for which before implementing change, proper survey has to be done.

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Types of Products – Sainsbury understands that offering more products in their stores is only possible when they use innovative techniques of working. Innovation is essential for bringing down the cost of business. Company can use innovative ideas for selling more products but they may not sustain in the market if employees resist to cooperate. Sometimes, employees know that offering more variety to customer results in making them confused. This negatively affects the sale of organisation and creates hurdles to sales representatives who want to attain their targets. Employee’s resistance can also happen because of the fear of uncertainty. Organisation may ask them to sell different types of goods but because of lack of knowledge about product, they may deny to keep new type of commodities in the stores (Ordanini and Parasuraman, 2011).

Another problem with offering more brands in the stores is related to high cost of business. Innovation can be done for improving the customer experience, like offering more options of a product but one should also understand that it will increase the overall cost of operations. The problems of sustainability are very serious in case of selling different kinds of products. Some commodities do not get necessary demand in market and then it negatively affects the growth of company. Innovation can be used for increasing offerings from the side of enterprise but creating and maintaining demand of a particular brand in store is very difficult for every firm (Shaw, Bailey and Williams, 2011).

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Bucherer, E., Eisert, U., & Gassmann, O. (2012). Towards systematic business model innovation: lessons from product innovation management. Creativity and Innovation Management. 21(2). 183-198.

Gustafsson, A., Kristensson, P., & Witell, L. (2012). Customer co-creation in service innovation: a matter of communication?. Journal of Service Management,. 23(3). 311-327.

Kindström, D., & Kowalkowski, C. (2014). Service innovation in product-centric firms: A multidimensional business model perspective. Journal of Business & Industrial Marketing. 29(2). 96-111.

Lee, J., Kao, H. A., & Yang, S. (2014). Service innovation and smart analytics for industry 4.0 and big data environment. Procedia Cirp, 16, 3-8.

Nambisan, S. (2013). Information technology and product/service innovation: A brief assessment and some suggestions for future research. Journal of the Association for Information Systems, 14(4), 215.

Ordanini, A., & Parasuraman, A. (2011). Service innovation viewed through a service-dominant logic lens: a conceptual framework and empirical analysis. Journal of Service Research. 14(1). 3-23.

Product and Service Innovation. 2018. [Online]. Available through <https://centricconsulting.com/business-consulting/transform-grow-your-business/product-and-service-innovation/>.

Shaw, G., Bailey, A., & Williams, A. (2011). Aspects of service-dominant logic and its implications for tourism management: Examples from the hotel industry. Tourism Management. 32(2). 207-214.