Impact of Macro Environmental Factors on ASDA

Business Strategy

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
LO1............................................................................................................................................3
P1 Analysing the impact and influence of macro environmental factors on ASDA.............3
LO2............................................................................................................................................5
P2 Analysing the internal environment and capabilities of ASDA........................................5
LO3..........................................................................................................................................10
P3 Porter’s five forces model in context of ASDA..............................................................10
LO4..........................................................................................................................................11
P4 Theories, model and concept to understand and interpretation of strategic direction that
are available to organisation.................................................................................................11
CONCLUSION........................................................................................................................15
REFERENCES.........................................................................................................................16

INTRODUCTION
Business strategy are key actions, activities or steps that management of company
have planned in order to achieve short, medium- and long-term goals of firm. There are
number of points which are considered by manager while deciding appropriate business
strategy to use such as mission and vision statement, target customers, types of products and
services etc. Marketing manager formulate several effective strategies that could influence
customers to be part of organization for satisfaction of its needs. ASDA is British
supermarket retailers that offers varieties of products and services at highest discounts so that
customers can easily fulfil its requirements. The company was initially established in 1949,
71 years ago and now it is having approximately 165000 employees and revenue around
21,666 million. This report has discussed about various macro environmental factors that
impact business operation and strategy of ASDA. It has also assessed internal capabilities and
skills of organization by applying VRIO and Mickey 7k’s model. Porter five forces model is
used to understand competition level within industry so that effective plan or tactics can be
made so that company can gain competitive advantages in retail sector of United Kingdom.
At last, this report has included various model and theories to assist and direct strategic
direction or alternative option that are available to firm for growth and development.
LO1
P1 Analysing the impact and influence of macro environmental factors on ASDA
Company overview
ASDA is one of the largest British super market which is headquartered in England.
The organization was founded in the year 1949. Asda is now a part of Walmart which mainly
concentrates n the main business of supermarket. Along with this, the organization also
provides financial services and the mobile phone items. The Mission of Asda is to become
the Britain’s best retail service provider by exceeding the consumer’s needs. The core
purpose is to produce affordable goods and services for everyone.
PESTLE analysis
Political factors: It relates to the government policy prevailing in the country and its
impact over the business operation. UK is considered as the most powerful country in the
world. The global political factors influence the performances of Asda. It includes changes in
the tax rates, legislations and the stability in the country the business is operating (Priporas
and et.al., 2019). UK political market is stable though the negative impact of Brexit cannot be
ignored which is relatively uncertain. The organization has always shown it ability to operate

in a conducive market. Thus, the impact of this factor is moderate on the functioning of the
Asda.
Economic factor: This factor is very crucial as with the emergence of global
pandemic Covid-19 which has resulted into increase in the unemployment in the nation and
which consequently caused reduction in the disposable income. This has caused less spending
and switching more to the lower price product and services. This has severely affected the
operation of Asda and its profits as well. Along with that, the increase in the labor cost and
implementation of higher fuel tax rate has resulted into costing the organization million of
pounds each financial year.
Social factors: the organization has undertaken various initiatives for the purpose of
meeting with the changing needs and expectations of the customers. Social factors such as
ageing population and healthy lifestyle are the most crucial factors for Asda in order to meet
with the changing requirements of the business (Vintilă and et.al., 2017). This factor will help
Asda in introducing new items and services in the marketplace which will help in effectively
taking the advantage of first mover. Thus, this factor is having a significant influence over the
company.
Technological factors: With the increasing use of technology along with the
availability of mobile application has resulted into significant growth of the business
organization. Asda has already implemented various technology in its stores like AI based
check in and check out, fast billing system. This has helped in reducing the time spend on the
billing counter in a long queue. This technological factor is having a greater influence over
the working of the organization; therefore, Asda is required to upgrade its technology for
grabbing more customers.
Legal factors: Asda is required to comply with all the relevant and prevailing rules
and regulations in the country in which it is operating and any breach of the law might result
into punitive actions of the respective authority (Glowik, 2017). For instance, Asda is
required to pay the minimum wage amount set under the law. Therefore, this factor is very
important as it has the potential to affect the reputation of the company as well.
Environmental factor: the increasing awareness of the consumers in respect to the
well-being of the environment, it becomes significant for the organization to understand its
responsibilities for the betterment of the surrounding. Asda has already undertaken initiatives
for reducing the reducing the negative impact of its business operation on the environment.
Thus, it becomes essential to for the organization to demonstrate to the people the steps
undertaken by it which will create a positive brand image which will be beneficial for the