Organisational Structure and International Expansion of ASDA

This presentation discusses the organisational structure and functional areas of ASDA, a British supermarket chain that has expanded across more than 25 countries. It explores different types of organisational structures, factors affecting international expansion, PESTLE and SWOT analysis, and impact of digital technology. The report concludes that the organisational structure plays a critical role in understanding the performance of an organisation in the international market.

Organisational
Structure and
International
Expansion

Table of Contents
INTRODUCTION...........................................................................................................................1
About the organisation that had expanded in the international market and is the organisational
structure is suitable for expansion..........................................................................................1
Different functional areas of the organisation........................................................................1
Different types of organisational structures...........................................................................2
Organisational structure of the chosen organisation..............................................................3
Influences or factors that have affected the international expansion of the business.............5
PESTLE analysis of the organisation.....................................................................................6
SWOT analysis of the organisation........................................................................................7
Impact of digital technology on the international business....................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Organizational structure refers to the specific framework of an organization which consists
of its functions, operations, departments, subsections, branches and employees through which the
flow of activities within an organization is maintained and operated. In the world of globalized
economy the process of international expansion has also rapidly increased and most of the huge
companies across the globe are preparing an organizational structure that can be helpful in
expanding to other countries. The following presentation will be describing the organizational
structure and functional areas of ASDA. ASDA is a British supermarket chain which is
headquartered in Leeds, England and was founded in the year 1949. Moreover, this report will
discuss various requirements of a company for analyzing the external market environment of the
foreign location to expand there. In the end, this report will describe various impacts of digital
technology on the international expansion activities of the organization.
About the organisation that had expanded in the international market and is the organisational
structure is suitable for expansion
ASDA has already expanded across more than 25 countries in the world which is a huge
achievement and shows the strength of its organizational structure to support its expansion
internationally. ASDA is a British retail supermarket chain that was established in the year 1949
and is headquartered in Leeds, England. According to the study of company facts, ASDA
operates across more than 25 countries with its more than 6000 retail units, which operate under
63 banners and have revenue of more than 20 billion this make it among the biggest retailers
across the UK. Due to this the company structure of ASDA is considered strong enough to
support the organization to expand across new foreign locations in the globe.
Different functional areas of the organisation
The functional areas in ASDA help it to operate and deal with the day-to-day activities
within the organization. The functional areas in ASDA are as follows:
 Administrative function: ASDA management performs many administrative roles that
are helpful for the organization to keep a track of activities within the organization. The
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administration function involves proper coordination with legal affairs, insurance,
stakeholders, employee safety and security etc.
 Production function: This function of the organization is mainly concerned with
acquiring raw materials and resources in order to produce products or services at low cost
for maximizing profits.
 Finance function: The finance function in ASDA consists of certain activities which
include finance management, financial plan, preparing policy for organization, payroll or
salary management, reduction of expenses, and many others to decrease the overall
operating costs and maximize profits.
 Information technology and communication (ITC) function: The organization utilizes
various tools and technologies within the organization which helps to improve the overall
functioning of all the activities within the company. The main activities of ITC function
within ASDA include managing the network, advancement of tech, repair and customer
support through contact and online services.
 Customer services: The customers are the heart of any business and they require support
of the organization with the help of information, credit facilities, deliveries, payments,
after sales services etc.
 Marketing and sales function: Marketing activities of a business helps it to create
awareness among the customers regarding a product or service and enhance overall sales.
The marketing function of ASDA is mainly responsible for increasing its sales and
managing activities such as export, market research, advertisement etc.
Different types of organisational structures
Mainly there are seven types of organizational structures which are given below:
 Hierarchical organizational structure: It is a form of well-designed hierarchy within an
organization which consists of a structure from top to bottom where the person at top
holds the maximum power and the power gradually declines while moving towards the
lower segments.
 Functional organizational structure: the functional organizational structure is also a
form of hierarchical structure but in this structure along with the declination of authority
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the responsibility also declines. In this form of organizational structure the person at top
is most responsible for the activities that are performed by the people in the lower level.
 Horizontal or eggetarian organizational structure: This form of organizational structure
is mainly helpful where the organization is small and it consists of very few people to
manage. In this form of organizational structure there is a person at top and all other
people are under the same categories who work under top level.
 Divisional organizational structure: This form of organizational structure is mainly
based on the division of skills of the same class in a particular section to create a
department who are responsible for a particular activity.
 Matrix organizational structure: This form of organizational structure combines
different organizational structures and does not contain any specific sequence and all the
work within the organizational structure is based on the interrelation of employees within
the organization.
 Team based organizational structure: Under this form of structure the people with
different abilities are combined in a single unit to complete a given task. In this form of
organization structure the departments are not present and teams are made in which
everyone possesses a specific skill and knowledge which are combined together to
achieve specific goals and objectives.
 Chain or network organizational structure: This form of organizational structure is very
inconsistent and the employees perform exchange of information and work within the
organization to complete their activities and objectives at the workplace.
Organisational structure of the chosen organisation
Mainly ASDA follows divisional organizational structure in which the people with specific
skills are put under one category to form a department and complete specific tasks. The
departments within ASDA work in collaboration for achieving the objectives of the organization
effectively and efficiently. The divisional structure of the organization also helps to facilitate
smooth flow of activities and advantage of quick work due to the availability of skills in a
particular department who perform outstanding to achieve the goals and objectives of the
organization.
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Influences or factors that have affected the international expansion of the business
The main factors that have affected or influenced the internationalization of a business are given
under:
 Market drivers: There are many opportunities for growth in the international market due
to the availability of resources, supplies and demand of customers. The number of
customers across the globe has risen significantly due to the liberalization and
globalization policies of the government to expand internationally. Due to the
unavailability of certain products at some place the organization like ASDA got chances
to improve their presence across various countries.
 Cost drivers: The cost of a product at one place may be higher in comparison to the cost
of product at another place. This is why the companies gain a chance to establish their
businesses in other geographical locations in the international market. The availability of
raw materials, cheaper supplies can help the organization to gain more profits in the
international market which is the reason for companies' growth globally.
 Competitive drivers: The competitors in the retail industry are many and the countries
which are already developed provide fewer chances for organizations such as ASDA to
expand its activities internally. In order to avoid competition in the domestic market the
companies look forward to growing in the international market which provides higher
opportunities for growth due to low competition.
 Government drivers: The legal political disturbances affect the international growth of
businesses across the globe. But due to the changes of border policies in recent decades
by the governments across the globe has made it easier for the companies to expand their
businesses internationally. The general agreement for tariff and trade (GAAT), 1947 and
World Trade organization (WTO), 1995 has intensified the growth of companies in the
global market.
 Technological drivers: The rapid changes in technology has become one of the major
aspects of globalization and interlinked communities across the globe. The people sitting
at one corner of the world can order things from another geographical location with a
single click on their smartphone. Due to the rapid advancement of technology and the
upcoming of the internet in the previous decade has fastened the globalization process
across the world.
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PESTLE analysis of the organisation
Pestle analysis is an effective tool that is helpful in evaluating the external environment
factors that may affect the business and its activities. The organization such as ASDA should
examine its external market in the foreign geographical location to expand its activities
effectively and efficiently. The pestle analysis is given below:
 Political factors: It refers to those factors or elements that consist of the government policies
such as trade restrictions, quota barriers, tariff, exchange rates, export and import activities
of the business across borders. The political factors have a major impact on the international
activities of a business. Therefore, ASDA should critically analyses political aspects of the
international market where it operates in order to continue smooth flow of the activities.
 Economic factors: It mainly consists of those influences that occur in the external market
economy. The economic factors have a major impact on the external or international
activities of the business. ASDA should critically examine the inflation and deflation rates,
GDP, employability, availability of resources, etc. in the international market to expand its
activities effectively across the borders. ASDA has very high growth opportunities in the
international market due to the positive economic conditions across all the economies in the
world due to rising disposable income of people and across cultures that support
international business.
 Social factors: It refers to those cultural, moral values, ethics and norms that are generally
accepted by the people who are residing at a particular place. In order to expand
internationally the companies should examine their products' values, ethics and norms to suit
the taste and preference of customers across the international market and the company does
not face back off in the international market.
 Technological factors: The rapid increase in the level of technology in the international
market has been among the crucial aspects of internationalization of a company. The
interconnectivity of people due to the advancement of technology and availability of internet
and online platforms to serve the customers, the chances for organizations such as ASDA to
grow in the international market has increased. Even if the company works or operates in a
single country it may take its business across the globe with the help of advanced technology
to serve the customers.
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 Environmental factors: It includes the psych geographic conditions of a particular location
which affects the business of an organization. It should critically examine and analyses the
physical conditions such as pollution levels, climatic conditions, weather and natural
influences of the foreign location where it wants to expand. This would be helpful for the
organization to precisely develop its products according to the needs in that particular
situation.
 Legal factors: It mainly refers to the laws and regulations that are compulsory to be
followed by an organization that wants to expand its activities across the international
border. ASDA should comply with certain laws and regulations regarding antitrust laws,
memorandum of association and article of association, health and safety regulations of
employees, employment laws etc.
SWOT analysis of the organisation
SWOT analysis is an effective tool that is helpful to identify the internal strengths and
weaknesses of an organization and possible external opportunities and threats that may arise in
the external market. The swat analysis of ASDA is as follows:
Strengths Weaknesses
 Huge Range of Products
 Extensive Distribution
 To-You Parcel Services
 Excellent Marketing Campaigns
 Good Connection
 Acquisitions
 Various Store Formats
 Various Brands and Services
 Sustainability
 Limited Global Presence
 Restricted business entry
 Dairy Price-Fixing
 False Advertising
 Critics
 Horse Meat Scandal
Opportunities Threats
 Expansion into New Domains
 Expanding into Other Countries
 Acquiring Smaller Company
 Price with other Retailer
 Government Changing Policies
 Consistent Price Cut from their
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 Presence in Online Market
 Long Term Goals
Competitor
 Other Online Retailers
Impact of digital technology on the international business
One of the major factors that is responsible for the continuous changes in the world is the
advancement of digital technology and up gradation of networks. Due to the rapid advancement
in digital technology the companies have established direct contact with the customers and
provide goods and services with the help of instant payment systems and online banking
availability. The rapid advancement of digital technology has provided the opportunities for the
company to grow its business across multiple Nations without actually taking its company across
the border. Moreover, digital technologies have made it possible for the organization and
customers to contact directly with each other II and the purchase and selling activities have
become more feasible and easy for them. Due to the help of digital technologies the world has
created a virtual network of the customers and producers in real time to provide best experiences
and products and services across the borders in the foreign location. These advancements in
technology significantly aided the development of ASDA in the international market and this
helped the business of the company to expand globally.
CONCLUSION
From the above report it had been concluded that the organisational structure plays a very
critical role in understanding the performance of an organisation in the international market. It
had been obtained in the above report that there are various functional activities, such as finance,
production, marketing etc. that are performed by a business. Also, the report had been providing
about the various organisational structures such as hierarchical organisational structure, flat
structure etc. that may be adopted by an organisation. Moreover, the report had been providing
detailed analysis of various driving factors for internationalisation of a business. Further, this
report had provided PESTLE analysis and SWOT analysis in order to evaluate internal and
external market environment factors during the internationalisation. Along with this the report
had explained the role of digital business in the internationalisation of the business.
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