Business Strategy - ASDA

Business strategy- ASDA

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Activity 1.........................................................................................................................................3
1.1 Discussing an environmental analysis conducted on ASDA using PESTLE.......................3
1.2 An organizational audit on ASDA using SWOT analysis ...................................................6
Activity 2.........................................................................................................................................7
2.1 An analysis of strategic capabilities of ASDA using VRIO framework...............................7
2.2- Mckinsey’s 7S model as a strategic management tool........................................................9
ACTIVITY 3 .................................................................................................................................12
3.1- Applying Porter's five forces model to examine competitive forces of retail industry
where ASDA operates...............................................................................................................12
3.2- Using Ansoff matrix to devise suitable tactics to improve competitive edge and market
position based on results...........................................................................................................14
ACTIVITY 4..................................................................................................................................16
4.1 Interpreting strategic planning for ASDA applying porter's generic strategies .................16
4.2 strategic management plan for ASDA ...............................................................................18
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................22

INTRODUCTION
An action performed by the company and decision taken to achieve business goals and
target in order to secure competitive position is called business strategy. The present report will
give detailed information business strategy used by ASDA, UK the retail store providing
facilities like fresh groceries, clothing and homeware. The case study will highlight SWOT and
PESTLE analysis of ASDA and the impact of macro environment. The strategies can evaluate
the strength and weakness and what more improvement are to be needed. Furthermore, the report
analysis strategic capabilities and key components by using the VRIO framework. Along with
that, the case study provides evaluation of the internal environment by using McKinsey's 7S
framework. Additionally, report will produce an industry analysis using Ansoff matrix and
porter's five forces model. Ansoff matrix is strategy used by company in order to find out growth
and development of business. At last, the report will provide strategic management plan and also
outlines the recommendations on it.
Activity 1
1.1 Discussing an environmental analysis conducted on ASDA using PESTLE
A. PESTLE analysis
It is a business tool which is used by company to gain knowledge about various key
factors of an environment. Nowadays, it becomes necessary for every company to keep track on
each business decision. According to experts, everything happen around globe leaves an effect
company. This method is used by company to determine the future requirement of business and
in improving measures for strategic and effective management. The present company utilize this
method as business analysis tools for making suitable decision for their present and future
requirement. It is said that this method is more than just understanding the strategy of market. It
is mandatory to conduct a situational analysis before taking any strategic decisions in the
business.

Source: (pestle analysis, 2021)
C. Analysing the impact and influence of the macro environment on ASDA
Political factors- There are many political factors that impact on ASDA like any other
company. Factors like legislation, consumer rights, tariffs and taxes. Different Factors in which
rules, policies and regulation of local government determine the growth of business, fall under
this category. There are few factors that can impact on ASDA like war. Due to Brexit, many
companies has faced challenges and it has created a lot of uncertainty. The cited company
benefits from a relatively stable political atmosphere in the UK (Perera, 2017). The firm should
think of supply chain of future in response to Brexit. According to experts, it is noted that this
deal between the EU and UK has been a hope for both parties and many other firm. It is seen that
there is a negative side of political decision as political instability has been caused the lobby shift
from one manager to another. Because of political leadership modification decision-making
process has been affected.
Economic factor- Economic stability and performance of the company is totally
dependent on the economies' situation. However, due to government consumption and inflation
rate, the firm is also positively and negatively affected by these factors. Because of less
unemployment rate which was 3.9%, the clients for the company kept on increasing on the daily
basis. Many people lost their jobs thus, it reduces their purchasing power and shopping activities.

After pandemic Covid-19 the unemployment rate is increasing and there is a decreasing trend of
sales in ASDA.
Social factor- There are many important social changes for ASDA they are a healthy
lifestyle, ageing population, physical fitness. With the help of social factors company can
introduce new services and products in the market. By evaluating the services and products the
company can improve its segmentation strategies which is positive impact. Nowadays, increase
in demand for vegan food, vegetarian and organic food items has become opportunities for retail
company which deal with groceries. As there is an increasing demand of ethnic food the supply
chain has been developed in many other countries where ASDA operates its business. It is noted
that majority of the population is young in the UK, and they fall under the segmentation category
of ASDA. Moreover, it has been noted that there is a shift in the taste and trend in the society
with the increase in the market competition of the company. It has affected the revenue of the
firm and now they devised an effective plan to compete in the market.
Technological factor- Due to rapid change in technology and innovation many
businesses has affected. ASDA also use the latest technology in order to satisfy their customers.
The firm used the fastest and latest technology in its retail business and distribution which has
benefited the firm in decreasing the wait time. All the big companies dealing in same business
are constantly working on how best to make use of new technology in order to attract customers.
The firm needs to be ready to implement any rapid changes in the technology. Due to this, the
firm needs to keep funds always ready to deal with the changing technology in order to compete
in the market and remain stable.
Environmental factor- These factors include waste disposal laws, energy consumption
and atmosphere protection and biodiversity protection laws. It is noted that factors like pollution,
green economy and carbon footprint are important part for ASDA. Nowadays people are more
aware about the impact company have on the environment, therefore due to such pressure or one
can say burden all companies need to operate in an eco-friendly manner. For example- Due to
legislation made by government to protect the atmosphere, the company has started making eco-
friendly products. Thus, they have focused on investing into sustainability and CSR, which
effects and influence on the finance of the firm.
Legal factor- It includes employment law, labour law and consumer law which is made
by the government. All the documentation part of the firm such as audit, bookkeeping etc. comes

under the legal structure. It creates negative impact also as sometimes too much government
intervention legal structure may harm the operations of business. Due to government rules on
minimum wages in the UK, firm cannot pay any employee less than required wages.
Step taken by ASDA to overcome PESTLE factors
In order to overcome with the PESTLE factors ASDA Focused on supply chain
management, labour supply and pricing strategies in response to Brexit so that they can deal with
the challenges during sending and receiving goods. Also, the company has concentrated on
developing new technologies in order to gain competitive advantages. By investing more on its
websites and mobile app so that customers can purchase easily. The firm is also stopped using
plastic and focused on carbon footprint to protect environment.
1.2 An organizational audit on ASDA using SWOT analysis
A. SWOT analysis
This is a method used by company to analyse financial position and performance of
business. For successful business, every company must evaluate its weakness and strength before
making any strategic decisions, business should ensure a complete and proper detailed list of
threat and opportunities so that they can take action accordingly.
C. Analysing the impact and influence of the macro environment on ASDA
Strength- It is the most popular retail company in UK and provide the customers to save
money and make a better living using their huge range of products and services. ASDA provide