SWOT Analysis of ASDA Supermarket

The assignment provided is a detailed analysis of ASDA Supermarket using the SWOT framework. It involves a thorough examination of the company's internal strengths and weaknesses, as well as external opportunities and threats. The analysis includes a review of relevant literature, such as academic articles and business reports, to provide a comprehensive understanding of ASDA's position in the retail market.

Business and Business
Environment

Table of Contents
INTRODUCTION..........................................................................................................................1
TASK 1............................................................................................................................................1
LO1..................................................................................................................................................1
P 1.& P 2 in PPT .......................................................................................................................1
P 3.Explain the relationship between different organisational functions and how they link to
objectives and structure...............................................................................................................1
TASK 2............................................................................................................................................4
LO3..................................................................................................................................................4
P 4 Using PESTLE analysis, discuss the various macro environmental factors the impact
ASDA's business operations. .....................................................................................................4
LO4..................................................................................................................................................5
P 5 Conduct the internal and external analysis for ASDA, to identify its strengths &
weaknesses. ................................................................................................................................5
P 6 Explain the interrelationship between SWOT and PESTLE analysis of the company. .......8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment is consisted of all internal & external factors that has an impact on
the company's working including customers, employees, and management & business
regulations. With UK on verge of leaving the European Union and uncertainty in the turbulent
dynamic business environment, it needs to develop effective strategies bearing in mind the needs
& its valuable stakeholders.
As a business analyst of ASDA, the UK based supermarket retailer, dealing in wide range
of food products, dairy items, groceries, online shopping, etc., required to investigate different
types and sizes of the business. Apart from this, it will cover purpose & scope of the
organisation. Further, it will explain the impact of micro and macro factors on selected
company's decision making.
TASK 1
LO1
P 1 & P 2 in PPT
LO2
P 3.Explain the relationship between different organisational functions and how they link to
objectives and structure.
ASDA is a well-known supermarket chain located in United Kingdom and other parts of
Europe. Quoted firm deal in many kinds of products like grocery, general merchandise and non-
food items. ASDA have different types of stores and super-centres which deals in all sorts of
goods and services provided by chosen firm. Thus, established entity apply different
organisational functions to get things done and make their product available to prospective
consumers and buyers (Bull, Jobstvogt and Carter-Silk, 2016).
Organisational functions refers to different departments and functional areas which help
in achieving company’s goal and objectives. These functions are; Marketing, Finance,
Production, Human Resource management, Purchasing, Research and Development. They are
key areas of every business as they support functioning of company and help in delivering firm
objective and vision. ASDA is a multinational company and has different departments which
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effectively did their job for achieving company’s goal and targets. Relationship between
different organisational function is as follows: Finance: It is the most crucial area of quoted company as it keep transaction of monetary
inflow and outflows. Further, finance department is responsible to formulate budget for
different departments of organisation. It is interlinked to each areas of ASDA and keep
record of all profits and losses earned by company in a financial year. Marketing: It is concerned with analysing and identifying current needs and demands of
consumers at right price. Marketing department are required to analyse what consumer
want and how ASDA can fulfil through its operation. This department of quoted
company is linked to all other functional areas and it’s interlinked. For instance;
Production department of chosen firm is depend upon marketing sector as they have to
produce what is need and demand. Similarly, only through marketing department
Research and Development area can work and find the best method or way through
which ASDA can achieve its goal and expand their business (Burrell and Morgan, 2017). Human Resource Department: This section of chosen firm plays an important role in
accomplishing ASDA objectives. HR deals in recruiting, selecting, maintaining and
retaining employees which are the most important assets of quoted enterprise.
Organisation is dependent on their staff members and proper recruitment and selection
requires careful management. Further, Human resource officers are responsible to analyse
job vacancies in the chosen entity and fulfil it through recruiting the best professional. Purchasing: This concern works for acquiring goods and services which is been required
by ASDA like; raw materials, production equipment and manufacturing. It is crucial area
within chosen firm as ASDA deals in grocery products and general merchandise which
needs careful purchase from suppliers. Further, purchase department is related to
marketing, finance section as through this section, it is been estimated that what quantity
and quality of product will be purchased and at what price. Moreover, marketing
department make strategy of attracting consumer on basis of purchase product
 R&D: The Research and development team works in finding new ways and ideas which
company can apply in order to attract more consumer and garner more profits. ASDA has
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R&D team which help chosen company to evaluate about their target consumers and
developing new technologies for their supermarket chain.
Link of organisational function to objectives and goals of company: Human Resource Department: HR professionals are required to perform different tasks
through which it can recruit, maintain and retain workforce of company. ASDA is a huge
company which has diverse range of products and services which requires efficient
labour force. HR. departments recruit competent staff which works for ASDA and help in
accomplishing established entity goals (Sodry, 2018). Finance: The department of finance and accounting looks after all monetary outflow and
inflow of ASDA. They are important for chosen company as through this department it
can analyse about their current profit and loss and analyse whether chosen firm was able
to achieve its target or not. Further, finance department did proper allocation of budget to
each functional area which further leads to accomplishment of quoted firm objectives. Purchasing: This sector of ASDA is responsible to make all the purchase which will be
required by opted company. Purchasing manager is responsible for buying the best
quality equipment, goods and services at competitive price to enable chosen company to
garner more profit. R&D: They play an important role in success of business and operation of ASDA. It
help in many ways for instance if chosen company is going to launch a new product or
services through their current outlet research and development team conduct a thorough
and detail study to support the project. Similarly, if quoted enterprise want changes in
their existing product they will require help from R&D sector. Thus, it play essential role
in fulfilling goals and objectives of ASDA.
 Marketing: It is an indispensable organ of the firm be it a small or large enterprise every
business dependent on marketing department. ASDA has separate marketing section
which works for accomplishing objectives of quoted firm. Marketing team works to
know what are current demands and trends going in market or particular industry in
which ASDA operates and accordingly formulates plans and strategies which help firm to
attract consumers.
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TASK 2
LO3
P 4 Using PESTLE analysis, discuss the various macro environmental factors the impact
ASDA's business operations.
PESTLE analysis is done to analyse the outside business environment of company by
evaluating political, economic, social, technological, legal, and environmental factors. The
analysis for ASDA Stores is explained below:
 Political factors: Legal changes such as laws on food products, rate of unemployment,
competition laws, tax policies, etc. are involved in these factors. Presently, the company
is operating in UK and currently its political environment is stable. The organisation
identifies some planning laws & follow them to reduce any interruption to its stores
expansion. This law has supported ASDA's opening of a new store in an area. It is
determined that this was made possible by the UK government as it allowed them
planning permission to build. The UK is a member of EU, so its laws should be abide by
ASDA, e.g. competition laws (Sodry, 2018).
Political instability in target market impacts the business operations negatively. For
example, due to uncertain changes in political forces by the government, compulsory restrictive
measures to be followed by the company and restructuring of corporate strategies. These changes
not only affects the organisation for short period, but also limit it from making strategic
investment in target market.
 Economic factors: It consists of competition, recession, inflation, taxes etc. ASDA needs
to take all these forces into consideration. These impact the pricing strategy of a
company. It has been determined that the firm has been accused like its competitors
Tesco & Sainsbury, for tax avoidance, functioning as modern day monopolies that pull
local companies out of the community. ASDA has expanded & has forced many other
small scale retailers out of the business. In this context, the company has problems
responding positively to changes in the environment of business, it could also have
negative impact on its clients. Customers can change their preference and could buy from
its competitor’s supermarket.
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 Social or demographical factors: Changes such as, gender roles, customer age,
consumption patterns, culture of population, etc. are important for ASDA to analyse
because it will help the firm to design its strategies for segmentation. Nowadays, people
love to consume dietary food products and for this the company has responded by
expanding its range of foreign eatables as Chinese, Indian and Mexican. On the other
side, it has to avoid selling items and using of marketing campaigns which may affect the
values of some social groups. Hence, the company has been suggested to sell only those
goods which match these social factors & help it to making more consumers (Della Porta,
2014).
 Technological: It is one of the most crucial part as there have been many advances in it.
One example of this is the broad usage of microwaves, and ASDA deals in range of
microwaveable food products. Moreover, new technologies enable improvements to the
way the company does its business. It has been suggested that, the organisation is
required to use advanced payment system, electronic marketing, inventor control and
other technological tools to keep up with its competitors (Gerow, Thatcher and Grover,
2015).
 Legal factors: Legal policies and regulations imposed by government for manufacturers,
trade, retailers and service companies adversely affect their business operations. ASDA
is also abided by some rules of the country. For examples, it cannot pay less than the
minimum wage to any employee and likewise it cannot fire an employee by unfair
means. Therefore, it has to follow all rules in order to function in the market in a
legalised way.
 Environmental: ASDA needs to focus on ecological forces such as organic, recyclable,
reduce waste etc. One of the biggest natural threat to the company is global warming. To
adapt to these changes, the firm supports carbon dioxide reductions in most of its stores.
Hence, some of these wrong responses by the organisation can impact negatively and
affect its public relation.
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LO4
P 5 Conduct the internal and external analysis for ASDA, to identify its strengths & weaknesses.
Swot analysis of Asda Some other strengths, weaknesses,
opportunities and threats
Strengths: ASDA, as one of the leading
supermarket in its industry, it has many
strengths that allow it to thrive in the market.
These not only help the company to protect its
market share but also help in penetrating new
markets. It has reputed powerful retail brand &
the good market position. Its strategies offers
low prices in different brands of items, hence,
it has good impression on its consumers
(Goffee and Scase, 2015). Since, it has been
owned by Walmart, this can be taken as its
strength for ASDA, because it can easily adopt
 Strong brand portfolio: The company
has invested in building a strong brand
portfolio and this can be extremely
useful if it wants to expand into new
categories of products.
 ASDA hires highly skilled workers and
invest a lot in their training & learning
programs which results in effective
workers and also motivate them to
attain more (Sodry, 2018).
 The resources are being provided in the
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Illustration 1: ASDA Supermarket
(Source: Gibson and Ahmed, 2017)

a conception that works in America in UK. hands of company as it has free cash-
flow to expand into new projects.
Weaknesses: Weaknesses are those areas
where ASDA can improve itself. The
organisation main weakness is that it deals as
cheaper retailer which often shows that it deals
in poor quality products. As it operates on a
large scale, it can be sometimes tough to
manage & coordinate operations of the
business (Hair, Wolfinbarger and Page, 2015).
 It has been seen that, there are gaps in
the range of products sold by company.
This lack of choice, can give a new
competitor a foothold in the market.
 Since the company has not been able to
tackle challenges presented by new
rivals in the market, hence, resulted in
loss of small market share in the niche
categories.
 Recent development in technologies
has affected ASDA's business
operations. Hence, it needs to invest
more money in new tools to integrate
the process broadly.
Opportunities: ASDA has a lot of
opportunities for expansion. UK is a part of
European, hence it is an opportunity for the
company to use EU markets for development.
It can merge with other retailers available
globally, by concentrating on growing it's both,
food and non-food markets.
 Its development in the market, leads to
weakening of its competitor's
advantage & allows ASDA to raise its
competitiveness.
 Emerging of new trends in the
consumer's behaviour can have
opportunity for company to open up
new stores, build new revenue and
diverse into new product.
 Government Green drive also acts as a
possibility for acquisition of the
organisation's products by the state as
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well as federal government contractors.
Threats: The company's major threat is
increasing competition such as Tesco,
Sainsbury and Morrisons. The market share of
Sainsbury is 16.5%, is very close to ASDA's
market share 16.8%.
 New environment rules under Paris
agreement, 2016 could be a threat to
certain existing products (Nathanael
and Marmaras, 2016).
 The company may be exposed to some
liability claims, as these laws are
differently based on various countries.
 Another threat to its profitability is
rising raw material.
 Price war with other retailer
competitors.
According to SWOT analysis of ASDA, it is a procedure of identifying the factors which
play an important role in its success and understanding these factors, serves as a basis for
strategic decisions.
P 6 Explain the interrelationship between SWOT and PESTLE analysis of the company.
Strengths & weaknesses of ASDA are linked with the macro environmental factors,
because in some cases company may be affected by outside factors. It has been determined that,
many organisations are unable to find out factors that affect the decision making process directly.
On the other side, SWOT analysis act as an opposite factor which provide power, threats,
weaknesses and opportunities to company.
The social factors affect ASDA, by making quality products for various types of
customers. The company has been conscious regarding its healthy food products & adopted by
environment in the marketplace. Through this, the company draw an advantage from their
competitors and provide best services to their consumers. Hence, socio-cultural environment
affects decision making and helps in making the perfect strategy survey for a company. In
addition, these factors response to buyer's lifestyle (Niederwieser, Baldomero and Iida, 2016).
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Furthermore, it has been determined that technological factors affects the business operations of
the organisation. Nowadays, with increase in the usage of internet, customers prefer to order
online. ASDA, offers their products on the online system and collect reviews from their
customers. This results in loyalty and building strong customer relationship. The positive
response from them, gives advantage to company in the world market. Technological
advancement, helps the organisation to gather the right information from consumers regarding its
brand image. These strategic decisions help ASDA to ensure the customer's buying behaviour
and response accordingly (Wetherly, 2014).
Economic and political factors are the main weaknesses for this company, as it cannot
expand its business due to low economy & politics. The rise of retail shops have been affected by
the business contraction strategy. The retail shops like ASDA, cannot draw advantage from the
political environment. Moreover, it has been determined that economic factors are different
based on various countries, hence the company cannot be benefited from it as well. But the
organisation get opportunities in political & economic environment from global market.
Therefore, both micro and macro factors influence the activities of company. It is the duty of
ASDA to follow social factors as in financial terms it can be weakness for it.
External risk that company faces are known as threats which are uncontrollable. So, it is
necessary for the company to design certain plans to overcome these risks. Newcomers in the
market, who significantly alters product offering can also affect ASDA and can act as a threat.
The impact of economic cycle is another potential threat which is far more predictable. Many
successful companies are reviewing their target market and services to know that how they can
raise their market share. The increased in technological changes has enabled it to achieve rapid
growth using out sourcing. Another external macro factor that can help to get future
opportunities is change in legal rules and regulations by the government.
Both SWOT and PESTLE have become elements of a good business plan and are
important in analysing environmental factors. SWOT is concerned with those factors which
affect the company directly as internal forces have direct impact. In contrast, macro environment
analysis evaluates all external forces that affect organisation both negatively and positively
(Schlagwein and Hu, 2017).
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CONCLUSION
The report concluded that, there are different types of organisation like; Sole
Proprietorship, Partnership and Corporations. Organisational functions are key areas of every
business as they support functioning of company and help in delivering firm objective and
vision. Further it aimed at conducting the internal and external business environmental factors of
Asda and impact of pestle analysis on operations of the company. It concluded that, these affect
the pricing scheme of the company. It has been determined that the firm has been accused for tax
avoidance. Furthermore, it has many strengths and weaknesses through which, the company
draw an advantage from their competitors and provide best services to the consumers. Hence,
both SWOT and PESTLE have become elements of a good business plan and are important in
analysing environmental factors.
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