ASDA Environmental Analysis

Running head: ASDA ENVIRONMENTAL ANALYSIS
ASDA ENVIRONMENTAL ANALYSIS
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1ASDA ENVIRONMENTAL ANALYSIS
Task 2
LO3: MACRO Environment
The aim of this paper is to discuss the essentiality of analysing the macro and micro
environment of ASDA Stores Ltd. which is a British supermarket retailer. It is a part of retailer
giant Walmart and mainly focuses on the core business of supermarket. Along with the
supermarket business, the company also provides financial services as well as mobile phone
products. The marketing promotions of ASDA chiefly focuses on the price structure. Unlike the
parent company Walmart, ASDA is also operating under the slogan “Save money. Live better”
(Asda.com 2019). This report will discuss the PESTLE of the United Kingdom in regards to
ASDA and analyse the strengths, weaknesses, opportunities and threats. Based on these analyses,
the paper will provide some recommendations which will help the company to expand their
operations in the foreign markets in one hand and solve the internal issues without much effort.
PESTEL Analysis
The PESTLE analysis of the country where the company has been operating for more than 60
years is the United Kingdom. This analysis aims to address some of the very important political,
economic, social, technological, legal and environmental factors that have either benefited the
companies operating in this market or putting pressure on them for surviving.
 Political Factors:
It is related to government policy that can have an effect on business such as new legislation
and regulatory shifts. For example, stable government of China has been attracting more
business operators to enter the market.
 Positive Impacts

2ASDA ENVIRONMENTAL ANALYSIS
The United Kingdom consists of Wales, England, Scotland and Northern Ireland. This is one of
the most powerful and influential countries of the world. The country is marked by political
stability which has been a great strength for both the nation and the business. The country has
been in a focus for foreign direct investment. The business tycoons around the world have
directly invested in various Industries originated in the UK. Despite the fact that there is some
hidden corruption in the political structure but these do not affect much on the policies of the
country which can manipulate the business organisations.
 Negative Impacts
Due to BREXIT, there are some political issues which have affected the business
organisations in a negative way. This has created uncertainties as well as political debate. To
some BREXIT will create chaos but others state that it will definitely open doors to immense
opportunities for the business organisation situated in this country. The company will be affected
by the national and international regulations along with those of the European Union. These will
affect the legislation, consumer rights of employment and taxes. Therefore, the decision-making
process of the organisation will also be manipulated. Therefore, it must monitor the political
environment of the country consistently and bring changes into the company policies to survive
in this highly competitive market.
 Economic Factors:
High economic growth helps companies to attain more success in the market as economically
strong market has consistent customers and employee. For example, with the largest economy of
the world, the US attracts more business than any other countries.
 Positive Impacts

3ASDA ENVIRONMENTAL ANALYSIS
The UK has more and less stable economy and it is the fifth largest economy by the nominal
GDP in the world. The decision of 2008 had created some uncertainties for the economic
landscape of the country but the government had taken all the necessary steps to improve the
situation. The government has announced to reduce the corporation tax. In 2020 financial year
this tax will be 17%.
 Negative Impacts
The common household in the UK faces some challenges since 2017. The prices in the shops
was rising fast as the value of pound was reduced. Over the cost of importing goods in the
country was much high. Moreover, wages why not up to the line along with the increased prices.
However, this situation has improved after 2017 as the inflation rate rose to 3.1%. Now the
economic condition of the UK is supportive of business for ASDA (Beitelspacher and Rodgers
2018). The company needs to consider financial factors like cost of credit pay level or more
competitive pressures, energy prices and civil supply and demand. This will definitely impact on
the price strategy of ASDA.
Social Factors:
The countries where the population is highly educated and skilled and the standard or living is
higher, cultural diversity increases. This helps the companies to work more competitive manner.
India is highly diverse market along with its large in size therefore, many companies are entering
this country for business.
Positive Impacts
The UK has a huge consumer market for which most of the International Organisation
accumulate in this region. In July 2017 the national statistics published that the country has a
population of 65.6 million in 2016 (Ons.gov.uk 2019). The diversity of culture is high in this