ASDA Individual Report: A Comprehensive Analysis of the UK's Third Largest Retailer

This report provides a comprehensive analysis of ASDA, the UK's third largest retailer, focusing on its current market position, internal strengths and weaknesses, and external factors influencing its performance. The report utilizes frameworks such as PESTLE, Porter's Five Forces, SPICC, and SWOT analysis to provide a detailed understanding of ASDA's competitive landscape and strategic opportunities. It also examines the company's value chain and marketing mix, highlighting key areas for improvement and future growth.

ASDA INDIVIDUAL REPORT

Table of Contents
INTRODUCTION................................................................................................................................3
EXTERNAL ANALYSIS........................................................................................................................5
PESTLE ANALYSIS OF ASDA..........................................................................................................5
COMPETITOR ANALYSIS...................................................................................................................8
PORTER’S FIVE FORCES ANALYSIS................................................................................................8
SPICC ANALYSIS............................................................................................................................9
INTERNAL ANALYSIS.......................................................................................................................10
VALUE CHAIN ANALYSIS OF ASDA.............................................................................................10
MARKETING MIX OF ASDA.........................................................................................................12
SWOT ANALYSIS.............................................................................................................................15
CONCLUSION.................................................................................................................................17
REFERENCES...................................................................................................................................18
2

INTRODUCTION
The current report is prepared with an aim to analyse the current market position of ASDA
which is one of the largest retail company in the UK. In last financial year, the company has
experienced falling sales in all quarters and was not able to stand its ground against top three
retail companies of the UK- Tesco, Sainsbury and Morison. The current report will analyse the
internal strength and weaknesses and the current market position of The Company in
comparison with its rival companies. The report will also highlight the external factors such as
political, economic and environmental policies of the UK government and the impact of these
policies on the working of the company. The competitive environment of the company will be
analysed with the help of Porter's five forces model which analyses the influence of the
competitive rivalry, suppliers and customers on the profitability of ASDA.
3

ASDA OVERVIEW
ASDA is a retail company which is headquartered at West Yorkshire England. It is the third
largest retail company in the UK, behind Tesco and Sainsbury. The company was founded in
1949 and at present offers a wide variety of groceries and general Merchandise through its 642
stores. The company has employee strength of 160,000 and in 1999 it became a part of Wal-
Mart groups. The company has also entered in the clothing market with a brand name ‘George’.
The company has registered slow growth in last few quarters and is planning to analyse the
current situation of the company so that it can retain its customer base (ASDA, 2018).
Figure 1 : ASDA Logo
VISION
“The vision of the ASDA group is to provide value to the money of the customers by delivering
the right product at right time.”
MISSION
To become the best retail company in the UK and being able the offer goods and services at
affordable prices to the customers. To meet the everyday needs of the people, and help them
get more out of life.
PROBLEM STATEMENT
4

‘‘ASDA has suffered falling sales since 11 consecutive quarters. During this period, the sale
declined by 7.5 and the number of customers visiting the store reduced by 2 present. The
company needs to analyse the current position of the company and find a way to regain its lost
market share’’
5

EXTERNAL ANALYSIS
PESTLE ANALYSIS OF ASDA
The PESTLE analysis of ASDA is helpful in effectively assessing the macro environment of the
business. There are six elements on which the framework of the PESTLE analysis relied on such
as political, economic, social, technological, legal, and economic. The analysis has been
explained in detail as follows:
https://www.howandwhat.net/pestel-analysis-of-asda/
ELEMENTS INFLUENCE IMPACT
POLITICAL The national, international, and
the EU regulations possess a
huge impact on the consumer
rights, employment, taxes, etc.
++
The decision-making might be
impacted by the instability and
war
-
ECONOMIC The economic factors like credit
cost, labour supply & demand,
pay level, competitive
pressures possessed influence
on the company’s pricing
strategy
-
SOCIAL Celebrity following, healthy
lifestyle, and ageing population
is essential for business
development
++
Providing required products as
per the social needs
++
TECHNOLOGICAL Click & collect delivery of the
products through mobile apps
+++
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ENVIRONMENTAL Suitable policies must be
developed regarding the green
economy, carbon footprint,
organic food, pollution, and
hazardous waste
-
LEGAL Rules and regulations of the
operating countries must be
followed
-
Minimum wage should be pay
to the employees
-
POLITICAL
There are various kinds of regulations such as national, international, and the EU regulations
that possess a great influence on the ASDA in terms of consumer rights, employment, taxes,
etc. In addition, the instability and war could affect the decision-making of the company
(Sivalingam, 2015). ASDA should effectively monitor the political aspects and gain benefit
through the stable political situation.
ECONOMIC
It is essential for ASDA to manage the economic factors like credit cost, labour supply &
demand, pay level, competitive pressures in order to avoid any impact on the pricing strategy
(RetailWeek, 2013). The development of suitable strategies would help ASDA in managing such
aspects adequately and conducting their business operations adequately.
SOCIAL
ASDA should effectively consider the social aspects like celebrity following, healthy lifestyle, and
ageing population as it helps their business at the huge level. They could introduce new
products and services in the market for enhancing their sales. In addition to this, they could
develop the strategies for segmentation.
TECHNOLOGICAL
The technology has been growing rapidly such that the broadband is super fast and the mobile
applications are helpful in click & collect delivery of products and services (RetailWeek, 2013).
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ASDA should effectively apply the advances technology in their functioning for gaining
effectiveness in the market.
ENVIRONMENTAL
ASDA should be focusing on environmental aspects like green economy, carbon footprint,
organic food, pollution, and hazardous waste. It is essential for ASDA to effectively assess the
environmental factors and take necessary actions for conducting eco-friendly operations. This
would be helpful in conducting the business operations and enhancing the sales effectively.
LEGAL
There are certain rules and regulations of the country where the company would be operating
such that they should not be breached. ASDA should follow every law and regulation. For
instance, the employee should not be given less than the minimum wage of the country. In
addition, any employee could not be dismissed by the company unfairly.
8

COMPETITOR ANALYSIS
PORTER’S FIVE FORCES ANALYSIS
Competitive rivalry
The completive rivalry is a strong force in the retail market of the UK. The market leaders such
as Tesco and Sainsbury regularly introduce new market offering to lure customers, therefore, it
becomes necessary for ASDA to remain competitive in the market by increasing its marketing
activities.
Bargaining power of buyers
In the retail market, the bargaining power of the buyers is weak because of the small size of the
purchases by individual customers (Roberts and Berg, 2012). The competitors in the retail
industry are presenting the similar products with exciting offers which provide an option to the
customer to make a switch. If the customers have a large number of options it increases their
bargaining power.
Bargaining power of suppliers
The bargaining power of the suppliers in the retail industry is weak because there are a large
number of suppliers in the UK and there is high competition among these suppliers to work
with leading retail firms like ASDA, therefore ASDA is in position to have a strong control over
these suppliers.
Threat of substitution
The threat of substitution is weak in the retail industry as a wide variety of products and
services are offered by ASDA. In addition, the policy of the company to keep the prices of its
products and services affordable reduces the threat of substitution (Fernie and Sparks, 2014).
Threat of new entrants
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The threat of new entrants is moderate because the retail market of the UK has intense
competition and the new entrant will require a large capital base to compete with these retail
giants. However, local stores can provide an option to the customers by providing personalised
services and effective customer care.
SPICC ANALYSIS
This is a marketing model which is used for the auditing purpose and it analyses the current
process of the company and determines how well these processes are doing in the current
market scenario. This model analyses the below-mentioned factors:
1. Suppliers: The network of suppliers of ASDA is quite strong and the company posses a
strong hold on the supply chain operations all across the UK.
2. Public: This includes the society in which the company is operating. Strong CSR activities
of ASDA have created a positive brand image of the company.
3. Intermediaries: These are the facilities which are used to make reach the product from
factories up to the end user. The stores of the company are also one of its
Intermediaries which are efficiently managed by the leadership of ASDA (Ramanathan,
et al. 2014).
4. Customers and Markets: This factor includes the end user of product and services and
ASDA regularly keeps analysing the requirements of the customers with the help of
consumer surveys.
5. Competition: The completion in the retail market is quite strong with big retail
companies like Tesco and Morrison’s.
10

INTERNAL ANALYSIS
VALUE CHAIN ANALYSIS OF ASDA
The value chain analysis is done so that a valuable product can be delivered in the market. This
is done by analysing the various activities which are done internally in the business so that the
cost associated with the activities, as well as their location helps in building the value so that
the products can be differentiated in the market with respect to the competitors. The
advantage of conducting value chain analysis helps in increasing the profit of the organization.
The value chain analysis is based on two types of activities which are described below:
Figure 2 Value Chain Analysis
Source: Administrator, 2010.
PRIMARY ACTIVITIES
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Inbound Logistics
The logistics of the ASDA are available in the agile as well as in the inclined form and is based on
building the strategy of low prices for the products and services to be given to the customer.
ASDA possess a great scope as it has built its position in the market as the bargaining power of
the suppliers helps in accomplishing the strategy of implementing the low cost.
Outbound Logistics
The services of the ASDA organisation are available online as well as the offline so the
operations of the services are done easily. The Wall-Mart subsidiary is the ASDA organization.
The various processes, as well as the tools, are designed and developed so that services can be
implemented effectively (Bolwig, et al. 2012). The ASDA organization will provide the exposure
needed in the market for the customers with the help of various formats as well as the styles
needed for the various types of stores. The format comprises the Metro, Homeplus,
Superstores, Extra, etc. which provides help in doing the segmentation process by analysing the
customers.
Marketing and Sales
The ASDA has provided the various benefits and the schemes which will help in attracting the
customers. The main focus of the ASDA organization is to promote the customer satisfaction.
Also, the various issues concerned with the environment, waste management, creating
awareness are being looked into so that healthy meals can be prepared.
Service
The concept of Price Leadership is being followed by the ASDA organization. The services of the
customer are increased with the help of applying strategies for cost leadership as well as the
differentiation (Gereffiand Fernandez-Stark, 2016). Further, the production cost, as well as the
operation cost, is being minimized so that a position of leadership can be achieved.
SUPPORT ACTIVITIES
Firm Infrastructure
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The ASDA infrastructure includes the management needed for the conductions of the various
operations of the organization and also looking for the planning which can be done to increase
the sales and profits.
Human Resource Management
ASDA believes in building the relations with the employees so that their performance can be
enhanced. The organization recruits the potential candidates needed for the desired profile
through the recruitment processes and providing them with further training in order to
improve their performance (Soosay, et al. 2012).
Technology Development
Advancement in the technology by using the latest and innovative one helps in increasing the
satisfaction of the customers. Technology brings easy access to the products as well as the
services offered by the company (Fearne, et al. 2012). ASDA is based on the policy of making
the customers happy as they believed that what customers think is right always.
Procurement
The ASDA has built the effective communication with its suppliers which helps in providing the
raw materials needed for the finished goods in the bulk quantity and also of the superior quality
so that the productivity of the company can be increased thereby increasing thesales.
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MARKETING MIX OF ASDA
The marketing mix helps in analysing the organization of the ASDA so that the strategy of the
marketing can be built accordingly. The elements of the marketing mix are described below:
Figure 3: 7 P’S Marketing Mix
Source: Admin, 2012.
Product
The ASDA provides the unique services to its customers which includes the financial services, as
well as the stores of the mobile phones (Melis, et al. 2015). The other products provided by the
ASDA include the clothing, electronic items, grocery materials etc. It provides both types of
services online as well as the offline.
Price
The focus of the ASDA organization is on providing the customers with the numerous varieties
of the products at the lower prices. The additional benefits to the customer are given on the
various occasions so that this will help in targeting the customers with their needs as well as the
demands. This made the ASDA a successful grocery retailer organization.
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Place
The stores of the ASDA are located throughout the United States and it follows the approach of
the Walmart store (Palmer, 2012). The stores are also relocated in those places which provide
more places than the usual stores covering about 90,000 square feet of area.
Promotion
ASDA gives the promotion of their products by offering the customers with the discounts as
well as the schemes. The ASDA believes in the concept of providing the valuable products at the
reasonable price (Kirbyand Kent, 2010). This also takes into account the needs of the people. It
has also gained ownership with the Walmart Group. The organization has also launched the
logo which helps in attracting the customers as well as building the position in the market by
creating brand awareness.
Physical Evidence
The strength of the ASDA comprises of its numerous stores located worldwide so that it can be
classified into various categories. The supermarket division is being formed in the year of 2009
which was actually a store of the small size and later it was taken by the Cooperative Group in
the year 2010. The ASDA living which is called the store merchandise of the ASDA is attached
with a group of compass who are running and operating the shops of coffee. Generally, the
business is of the beauty products, clothing, electronic materials, and health-related products,
etc.
People
The number of employees of the ASDA organization crosses more than 180,000 which includea
huge customer base built for the organization. The training is being given to the staff members
so that their performance can be improved in delivering the services to the customers as well as
also building the potential to enhance their skills (Baksheeva, 2011). Huge investment is done
by the ASDA in giving the training as well as the development to the people of ASDA.
Process
Firstly, ASDA organization focuses on the selling the food to the customers. After that, it started
selling the kitchenware goods which are households. The meat products are also sold by the
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ASDA organization including the four brands of it. The other things such as the insurance as well
as the financial services are also included in the ASDA.
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SWOT ANALYSIS
STRENGTH
 ASDA has a policy of providing a variety of merchandise items at affordable prices which
is the strength of the company.
 Brand value of the company and a strong position in the retail market.
 Good customer services provided at its various stores and timely resolution of
complaints.
 Strong dealer community is also one of the strengths of the company. These dealers and
distributors also help in promoting the product and services and project a positive image
of the company (Swoboda, et al. 2013).
 In the recent years, the company has integrated a number of technology firms which
has helped in streamlining its operations as well as customer services.
 The company has a large team of highly skilled workforce and it regularly runs training
and development programs to enhance their skills.
 Strong brand portfolio of the company makes the launching process of the new product
easy.
 The new taxation policy of the UK government also presents an opportunity to reduce
the cost of its operation and reduce the prices of products and services.
WEAKNESS
 The company has expanded its operations in very few countries and therefore it is not
able to take benefit of emerging economies and achieve economy in scale.
 The attrition rate of ASDA is quite high as compared to other retail companies. high
attrition rate increases the expenses of the company in new recruitments.
 The company's investment in research and technology is not at par with its peer
companies, the company requires more investment in researching new technologies.
OPPORTUNITIES
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 The company has the opportunities to make alliances with global retail companies and
enter emerging markets of developing countries (Hooley, et al. 2012).
 The company has just entered the clothing sector with brand name ‘George' and it has
opportunities to increase its scale in this highly growing sector.
 Changing lifestyles and the increased use of internet and smartphones has provided
new opportunities to the company to provide its wide product offering on these digital
platforms.
 The company has an opportunity to use innovative techniques to market its products
and services through social media and other digital mediums. These methods of
marketing are cost effective and have wide audience reach.
 After years of recession in the UK economy, it is on a track of recovery which has
increased the consumer spending. Therefore, ASDA has an opportunity to increase its
market share by attracting new customers.
THREATS
 Tough completion is given by the top retail companies operating in the UK. These
companies include Tesco, Morrison’s and Sainsbury.
 The product range of the company has some gaps which provide an opportunity of
switching to the customer (Heger, et al. 2012).
 The new products launched by ASDA are in the response to the products launched by
rival companies, the company should innovate new products to present a variety to the
customers.
 Rising prices of the raw materials have increased the overall cost of the company which
erodes the profit ratios of the company.
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CONCLUSION
The current assignment analysed the current market position of ASDA, which is a well-known
retail brand in the UK. The company has established its brand as a company providing a
different range of products at an affordable cost. The present market share of the company has
reduced in recent quarters and the company needs to analyse in strength and weaknesses in
order to regain its market position and give a tough competition to its rival companies.ASDA
has strong brand recognition in the retail market but lack of innovativeness in its product range
and high attrition rates has reduced the market share of the company. Increase in the customer
spending has given a hope of quick recovery to the company and ASDA needs to take the
benefit of this opportunity to regain its market share.
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