ASDA's Customer Service Policy and Its Impact on Strategic Management

This report analyzes the customer service policy of ASDA and its impact on strategic management. It includes a SWOT analysis of ASDA, implementation of the policy, significance of the policy, and its role in strategic customer relationship management.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive Summary
This current report deals with the business policy of ASDA. It has been received that ASDA has
developed a customer service policy for the organization to provide an excellent customer
service. However, the main aim of this policy is to make this organization as a trustable retailer
in UK. The customer service policy of ASDA is helpful to make an effective communication
with the customers. In order to enhance the trust of the customers, any organization needs to
gather feedback from the customers. This customer service policy is a short-term policy. In order
to improve such customer service policy, long-term result is required from this policy.

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Table of Contents
Introduction......................................................................................................................................4
Analysis...........................................................................................................................................4
Company Background.....................................................................................................................4
Implementation of the policy...........................................................................................................6
Significance of the customer service policy in ASDA....................................................................8
Role of customer service policy in strategic customer relationship management...........................9
Impact of customer service policy in ASDA’s strategic management..........................................10
Porter Five Force Model analysis..................................................................................................11
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................16

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1.1 Introduction
Strategic management is a process to achieve the business goal by using the
organizational resources. Strategic management involves in generating business objectives and
analyzing the competitive environment (Hill et al. 2014). It is important for an organization to
enhance their strategic management process by introducing organizational policies and
procedures. Strategic management enables an organization to compare itself with the
competitors. On the other hand, to improve the customer service strategic management in the
business is necessary. This study deals with the strategic management process in the context of
ASDA. However, the customer service policy of ASDA needs to relate to its strategic
management. Their unique customer service policy leads this organization to gain competitive
advantages and customer loyalty in their business. In this study, the effectiveness of the customer
service policy will be discussed in the context of ASDA.
2.0 Analysis
2.0.1Company Background
SWOT Analysis of ASDA
S-Strength
 Strong brand recognition
 High quality service
W-Weakness
 Poor operation process in grocery
service
 Need to improve customer policy
O-Opportunity T-Threat
 Huge competition from Tesco and

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 Scope for service improvement
 Introduction of new policy
Morrison
 Changing behavior of the customers
ASDA is a popular retail organization in UK. This is the major strength of this
organization. It is a British supermarket retailer and it was established in 1965. ASDA provides
various grocery items to the customers in UK. This is a leading grocery organization in UK.
ASDA has a large supermarket chain. The mission of this organization is to be the most trusted
retailer in Britain (Asda.com 2018). Their vision is to serve excellent customer service across
UK. The grocery section of ASDA tends to improve the customer service level. This highlights
the weakness of this organization due to poor operation in grocery section. In order to improve
the customer service, such organization aims to adopt customer service policy in their strategic
management process. However, improvement of the customer service policy brings new
opportunity for this organization to maximize the level of customer satisfaction. Threats include
huge completion from the Morrison and Tesco. These two retail organizations are the major
competitors of ASDA in UK. They offer almost similar products to the customers. However, the
Morrison and Tesco provide a large range of grocery to the customers. Hence, there is a threat of
alternative products. On the other hand, Tesco offers similar service at low price. Moreover, both
Tesco and Morrison also taken customer service policy through collecting feedbacks from the
customers. Thus, it is crucial for the ASDA to provide unique customer service to gain
competitive advantages and to minimize the threats of other competitors.

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2.0.2 Business Policy
Every retailer gives their concern towards the customer service policy to ensure the high-
quality service. Establishment of customer service policy helps an organization to understand the
way through which the customers are served (Green et al. 2017). ASDA has taken customer
service policy as a business policy to provide high-quality service and satisfy their customers. As
argued by Mutalib et al. (2018), often customers leave the organization if they are not being
entertained and treated properly. Based on this issue ASDA has introduced their new customer
service policy. However, a proper customer service policy allows the business to retain their
customers and to gain competitive advantages in the market. Customer service should be the top
priority of every business. In the recent years, ASDA has been facing a high level of competition
as the competitors give latest customer service. The main aim of their new customer policy is to
treat all customers equally and to reduce any type of discrimination in terms of gender, language,
social and economic status.
2.0.3 Principles of the policy are as follow:
 All the staff members are responsible to provide best customer service. Therefore, the
customers are empowered by the employees to take a decision. This ensures the best
customer experience.
 During the communication over the phone, the employees need to identify themselves
and the department, in which they work. The employees should wear their name tag as it
helps the customers to identify the staffs easily.
 The staffs are suggested to give assistance to the new customers without infringing the
service of other customers
 To improve the customer experience by taking a new approach

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 The staffs need to show polite behavior and effective communication while solving any
query of the customers.
 The staffs need to provide a solution to the customers based on their problem
2.0.4 Implementation of the policy
In the recent years, ASDA has been facing challenges due to the changing behavior of the
customers. However, ASDA wants to grab the rapidly changing habit of the customers, which
can be done by using effective communication. In order to make an informed decision, ASDA
wants to anticipate the demand and queries of the customers regarding their service. For this
purpose, their new customer service policy is introduced. For a business, it is important to
implement the policy properly besides its introduction (Chen et al. 2015). In order to implement
their new business policy, ASDA decided to develop an insight community for the customers.
This is due to the enhancement of the customer engagement. Enhancement of the customer
engagement is an important part of the strategic management (Mutalib et al. 2018). By
developing such insight community ASDA is able to engage their customer to gain their
feedback and insight. They have launched Pulse of the Nation, which is a community of
customers. 22,000 customers are attached with this community and share their insight. ASDA
has a focus to identify the needs of the customers and their changing behaviors. Therefore, they
want to be an environmentally shoppers. In order to understand the demand of the customers,
ASDA has launched two customer sub-communities that are Everyday Experts and Mumdex.
To bring innovation in the strategic management process the business organization needs
to gather feedback from the customers (So et al. 2016). By taking help from Pulse of Nation
ASDA is able to use customer intelligence. The insight community of customers enables ASDA

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to make a plan for the campaign, seasonal promotion and refine the product line. This
community helps ASDA to understand the feeling, lifestyle, and concern of the customers. The
principle of customer service policy includes effective communication to understand the problem
of the customers.
ASDA has given training to the staffs to adopt this customer service policy properly.
However, in order to implement a customer service policy, it is crucial for every organization to
provide training to the staffs to understand the principles of the business policy (Ramayah and
Yeap 2017). However, improvement of the customer experience is another major principle of
ASDA’s customer service policy. In order to maximize the customer experience, ASDA focuses
on providing value-added retail service to their customers. In order to deal with the evolving
behavior of the customers, ASDA started to redefine value retailing and empower the customers.
This is done by allowing the customers to collect and return the products that are purchased from
third-party retailers at ASDA store. On the other hand, ASDA provides a convenient way for
their customers to track their parcel via online and to visit the retail store also. This approach
improves the strategic management decision by maximizing the customer experience in the
context of ASDA.
In order to implement a policy in an organization it is crucial to follow the theoretical
framework. One of vital management theory is the Mintzberg theory. According to this theory
skills are achieved through experience (Mantere 2017). This theory highlights that braking down
of the management roles and responsibilities help an organization to bring changes in an
organization. Segmentation of the management role enables the individuals to simplify the
management concept. This allows the organization to establish a good culture in an organization
and to develop the skill of the employees. Based on this theory it has been received that the

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managers need to play different roles at every day. However, ASDA wants to establish a
customer relationship policy to improve the customer experience. In order to implement this
policy the managers need to define their exact role and to improve the skill of the employees to
give shape this policy. By following Mintzberg theory the managers of ASDA will be able to
categorize their different functions to implement the policy successfully. To implement this
policy the managers need to carry out decisional role and informational role. Decisional role will
help the manager to take decision to introduce this policy and informational role will lead the
managers to share information regarding the policy among the employees. As result, such
customer service policy will be implemented successfully in ASDA.
2.0.5 Significance of the customer service policy in ASDA
For the small organization, it is easy to hold and retain the customers as they have a small
base of customers. However, for the large and growing organization, it is often difficult to retain
and satisfy their customers (Ivanauskiene and Volungenaite 2014). From the above discussion, it
has been covered that ASDA has been facing the changing behavior of the customers. In order to
deal with the process, they have introduced a new customer service policy, which improves the
customer experience. ASDA uses various channels to communicate with their customers as a
result, an error occurs. Moreover, staffs negligence is a big drawback of this organization, which
hampers the customer retention in this organization. The customer service policy of ASDA
allows this organization to keep consistency in their customer management process. Managing
the customers is an effective aspect of strategic management process (So et al. 2016). One of the
major aspects of customer service policy is to manage the customer relationship. However,
customer service enables the organization to provide high customer service, which also builds a
good relationship with the customers. Customers are the lifeblood of an organization. Hence,

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ASDA needs to define its customer service policy properly to make their customer happy and to
loyal to this organization.
Customer service policy has a great impact on the bottom line of a business (Kaura et al.
2015). This highlights the way through which public see an organization. In the context of
ASDA, the customer service policy enables this organization to remain at the top of the retail
industry. However, their customer service policy includes effective communication, which
empowers the customers to increase their experience in this organization. On the other hand,
polite interaction with the customer is another principle of this policy. This satisfies the
customers as a result, they are influenced to purchase a product from ASDA. One of the major
positive outcomes of the customer service policy is to retain the customers once they come to the
organization. Therefore, the customers are able to share their feedback with the staffs through an
effective communication process. Customer service policy enables the organization to respond to
the customers directly. This improves the service of an organization. However, the customer
service policy includes quick service delivery to the customers. This is effective to retain the old
customers and to cover the new customers. Customer service policy is directly associated with
the customer satisfaction. This policy allows the customers to share their concern regarding the
service of an organization. This maximizes the customer loyalty and the customer experience.
2.0.6 Role of customer service policy in strategic customer relationship management
Strategic customer relationship management or CRM is a vital aspect of the strategic
management of an organization. The main purpose of strategic CRM is to increase the
knowledge about the perspective of the customers (Khodakarami and Chan 2014). Strategic
CRM will help ASDA to improve the relationship with the customers by enhancing the

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interaction with them. Customer service policy helps an organization to manage strategic
customer relationship in their workplace. This policy allows ASDA to amplify the commitment
of the customers, which is an important part of customer relationship management. It is
important for an organization to get feedback from the customers while developing any business
strategy for them. Customer collaboration is a major part of strategic customer relationship
management (Soltani and Navimipour 2016). ASDA’s customer service policy includes two
different communities that engage a large number of customers. Hence, the customer
collaboration can be done through this process. Therefore, development of a single real-time
view for each customer is another part of the strategic customer management. Hence, the
customer service policy of ASDA includes an online approach for the customers, which helps
such organization to get the real-time view of the customers.
2.0.7 Impact of customer service policy in ASDA’s strategic management
Strategic management refers to the fulfillment of the vision and mission of an
organization through some specific business strategies. ASDA's vision is to provide excellent
customer service and its mission is to be the most trusted retailer in UK. To meet these objectives
they have proposed customer service policy. However, the major principle of this policy is to
improve the customer experience by using effective communication process. In order to be a
trusted business, it is important for an organization to retain their customers and enhance the
number of repeat customers (Wong et al. 2015). Customers always think while they are spending
money in an organization in order to purchase a product. Hence, for every business, it is
important to keep their customer coming back. This can be done by using the customer service
policy as it allows ASDA to understand the customer concern and to provide them value by

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resolving their problems. It is important for ASDA to link their customer service policy with the
strategic management to improve the experience of customers.
Apart from this, the customer service policy allows an organization to gain competitive
advantages, which is another aspect of strategic management (Rahimi and Kozak 2017). ASDA
has taken value retailing service approach to improve the customer experience level. Despite this
effectiveness, such customer service policy has some drawbacks. It is a short-term policy and it
is no longer effective.
3.0 Porter Five Force Model analysis
3.1 Threat of new entrants
Porter five forces analysis is an important theory to understand the current business
environment of an organization (Mathooko and Ogutu 2015). In the context of ASDA such five
force model is helpful to understand the effectiveness of their customer service policy in gaining
competitive advantage in the market. Threat of the new entrants is a major element of Porter
Five Forces model. The force of new entrants can affect the power of an organization (Greenspan
2015). However, if a new competitor provides excellent customer service then they can easily
enter into a market. However, by using the customer service policy ASDA is able to reduce the
threat of new entrants as they are able to meet the changing behavior of the customers.
3.2 Power Of supplier
Power of supplier is another element of this model. This highlights the how easily the
suppliers drive up the price of service and goods. If the number of suppliers is less then the

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company depends more on the suppliers. This increases the power of the suppliers. However, the
customer service policy has no impact on the supplier power in ASDA.
3.3 Power of Customers
Power of customer is a vital element of Porter Five Forces model. Power of the
customers refers the ability of the customers to drive the price down (Dobbs 2014). This depends
on the number of customers in an organization. However, ASDA has a large number of
customers thus, the bargaining power of the customer is high. Hence, by using customer service
policy this organization is able to gain feedback from the customers and to reduce the bargaining
power of the customers.
3.4 Competitive Rivalry
High competition is an important element of this model. This highlights the number of
competitors and their capacity to generate threat for the other organizations. In order to deal with
the competitors, the organization needs to increase their customers by providing excellent
service. By providing excellent customer service ASDA will be able to gain competitive
advantages in the global market.
3.5 Threat of Substitute product
Customer service builds customer trust for an organization. Hence, if an organization is
able to serve excellent level of customer service then they will be able to achieve competitive
advantages. The most important element of Porter Five Forces Model is to the threat of product
substitute. Often the competitors offer a similar product in the same market segment (Yunna and
Yisheng 2014). This creates a threat to the existing business. In the context of ASDA, they have

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taken a unique approach to implement their customer service. By providing an excellent
customer service an organization is able to reduce the threat of an alternative product. ASDA
provides value retailing customer service to their customers. This enables the customers to keep
an online track of their parcel and to visit in the retail stores of ASDA to improve their
experience. This unique customer service is not provided by the competitors of ASDA. Hence, it
is beneficial for this organization to reduce the challenges regarding the threat of substitute.
Figure 1: Porter Five Forces Model
(Source: Yunna and Yisheng 2014)
4.0 Recommendations
 From the above analysis, it has been received that the customer service policy of ASDA
is a short-term policy. Hence, to get long-term benefit from this policy ASDA needs to

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develop a long-term goal to implement this policy. However, by taking long-term goal or
initiatives this organization will be able to get a positive outcome from this policy.
 ASDA has developed two sub-communities such as the everyday expert and mumdex to
gain feedback from the customers. Despite creating two sub-communities development of
a real community will be beneficial for ASDA to enhance the effectiveness of their
customer service policy. However, two different communities may create conflict while a
single community will be helpful for this organization to gather feedback from all ranges
of customers.
 Incorporation of the technology into customer relationship management process will be
effective to improve the customer service policy of ASDA. As for example, by using
CRM software this organization will be able to connect the customers worldwide and
share their organizational vision and mission. Such technological incorporation into the
CRM system will develop the customer service policy in this organization. However, a
combination of the customer service policy and the modern technology will maximize the
effectiveness of this policy in the context of Woolworths.
 By creating awareness among the employees regarding the necessity of the customer
service policy ASDA will be able to enhance their CRM. However, by generating
awareness among the employees ASDA will be able to make them effective while
following the policy. Such knowledge distribution will help the employees to maintain
each principle of the customer service policy while communicating with the customers.
5.0 Conclusion
The entire piece of work highlights the business policy of ASDA to improve the customer
service. However, customer service is an important part of the strategic management. By

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providing excellent customer service ASDA is able to compete in the global market. ASDA has
introduced a customer service policy to enhance the customer loyalty. Providing excellent
customer service is the main motto of this policy. They have taken several approaches to
implement this policy. Development of sub community is an effective approach, which is taken
to implement such policy. On the other hand, providing value retail service is another approach
that is taken by ASDA to give shape their customer service policy. Hence, it can be concluded
that development of the customer service policy is a good decision for any business to improve
their strategic management. Moreover, customer service policy is helpful to establish the
strategic customer relationship management.

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