Enterprise Management: Current Position of ASDA and Application of PESTLE Model in Retail Sector

This report discusses the current position of ASDA, a British supermarket retailer, and the application of the PESTLE model in the retail sector. It covers the overview of ASDA, the PESTLE model, and its application in the retail industry. The report concludes with the opportunities and threats faced by ASDA in the business environment.

ENTERPRISE MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of current position of ASDA..................................................................................3
PESTLE model.......................................................................................................................3
Application of model in retail sector......................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Enterprise management implies for the administration of day to day operations so that
goals can be achieved within suitable time frame. It emphasizes on examining organizational
strategies with the motive to bring changes in their working criteria. The present report is based
on ASDA , British supermarket retailer company, founded in 1949. It deals in various products
and services which they are provided to customers. The report will cover a brief summary of
current position of ASDA. This will explain PESTLE model related to assess the general
business environment. This will also highlight the application of model in retail industry.
MAIN BODY
Overview of current position of ASDA.
ASDA is the British supermarket retail firm that is associate dairies of Yorkshire. They
are engaged with around 165000 number of employees with 633 number of location. It mainly
deals in various products like Grocery, General Merchandise and financial services of business.
Its marketing promotion usually based on price like its parent company. They recently promoted
slogan which is “Save money, Live better”. In the 2018, company is announced a merger plan
with Sainsbury which have combined supermarket an estimated 30% share of UK (Rapo, 2019).
The current position of company is better and have loyal customers.
In 2019, certified management accountant blocked the proposed merger by suggesting
which it increases price for customers and make competition unfair for the other retails of UK.
ASDA sales increase 0.1% in the 12 weeks which is taking share to 15.4%. But as comparison to
other business, they are falls their business which means their market share are dropped. This is
the main reason ASDA has overtaken Sainsbury to become UK second largest supermarket to
suggested for business. Current ASDA is the largest stores which is offers extended range across
food, George and non-food. Recently ASDA is make their complete focus on food and
conveniences and offers essential non-food items.
PESTLE model
PESTLE model is mainly adapted to identify the impact of macro environmental factors
in the business. Through this manner, it helps in making the appropriate strategic and undertakes

direction which results in taking the right decision (SHTAL and et.al., 2018). This refers with 6
elements and factors which are affect and assess with the general business environment. Political factor: This factor is mainly undertaken in taking the government norm and also
companies had to work according to the set directions. It mainly carries the government
policy which is implemented on companies regarding working in set guidance and not
violating any of the norms or laws which is imposed for securing the right of the persons
(Zhao and Dou, 2019). It covers taxes and laws which secures the rights of nation
regarding taking initiative to bring changes in their working management. The
opportunities through these factors is gained regarding getting liberal in paying taxes if
company is planning to expand the business into different countries. The threats are
examined in context of having different taxes policies in different countries. Some
countries not allow other countries to import the goods in own country in respect of
enhancing the own country economy. Economic factor: It carries the aspects which results in affecting the economy of the
country through facing issues regarding variances in rate. It mainly includes the interest
rate, inflation rate, foreign rates in respect of expanding business both domestic and
overseas market. If any company dealing in carrying foreign trade I.e. importing and
exporting the business, then in respect of imposing the exchanges rates, the growth of
business is fluctuated (Thompson and McLarney, 2017). The external economic factors
which affects the growth of business to sustain in market for longer way is relating to
inflation rate. In this the prices of the products are increased and decreased due to
changes in market trends which results in arising competitors in market. It affects due to
rising demand of the online products which results in causing impact on economy. Social factor: The major impact examined in business due to external factors is relating
to the cultural aspects. As every person belong to different culture so, preferences of
availing the products is also different. Consumer taste depends upon the changes in time
and also they mainly focus on preferring the organic products (Düerkop and Huth, 2017).
In such manner, the impact examined regarding changing in market trends and also
people are focusing more on preferring the healthier products which resulting in
sustaining their interest in longer way. Product quality and innovative customer services

results in increasing the growth of the business and also helps them in analysing the
business capabilities regarding undertaking changes in their exiting strategies. Technological factor: For operating the business at global level, the impact of
technological factor is examined regarding choosing the advanced technology to promote
the business in market and distracting customer towards preferring their own products
(Policy, 2016). It results in promoting the business through digital marketing by
undertaking the innovative advertisement concept or any other promotional activities to
retain the customer interest. As due to changes in time customer are attracting more
towards the company innovative websites or fastest technology in respect of getting order
within the set time limit (Walsh, Bhagavatheeswaran and Roma, 2019). Thus, by
adapting such changes resulting in getting high sales and also increases the promotion of
the products through preferring the innovative promotional concepts. Thus, changes in
technology helps business to conduct more research about the products usage and also
examine the taste of the customer regarding preferring the particular products. Legal factor: In context of operating the business at larger level, various laws are to be
maintained in business such as health and safety law, employment legislation, consumer
laws (Gheibi and et.al., 2018). As the impact upon the company arise through not taking
care of the employees when they are working under the hazardous places (What is
PESTLE Analysis? A Tool for Business Analysis, 2020). The opportunities which is
gained to business is relating to enhancing the sales, if they are working as per the set
guidelines issued by the parliament. The threat arises in respect of not following the
norms as it results in decreasing the sales in the company by not managing the interest of
the employees at work place.
 Environmental factor: The major impact through this factor is raised regarding changes
in climatic condition or destroyed of products through natural calamities. It also affects
due to changes in demand of the people regarding the preferences of eco-friendly
products (Perera, 2017). In such aspect to reduce the impact, company mainly deal in
producing such products which results in eco-friendly environment or also providing
such products with the set quality within the set time limit. It helps companies in respect
of sustaining the business in market for longer way and also helps business in dealing in
organic products or also reduces the impact of carbon footprints.

Application of model in retail sector.
By conducting the PESTLE analysis in business, management of a company like
ASDA can identify the factors which may create major opportunities or threats for business at a
certain marketplace (PESTEL analysis of ASDA, 2017), in following way -
Political factor: The major impact which is faced by the ASDA is changes in
government norms which is relating to the taxation policy. As the norms and regulation of the
government are strict in respect of importing and exporting goods in own country or in different
country. Thus, the issues arise regarding variation in taxes policy which results in restricting
ASDA to expand the business into different countries (Eisenberg, 2019). The positive aspects of
government taxes is that it restrict business to import their goods as it provide chances to other
companies to promote such products in market. Brexit's uncertainty is one of the biggest Threat
in front of Asda, as it will get difficult for organization to import goods at same cost from
international market. This has eventually affected the efficiency of business in long run.
Economic factor: In context of external environment, the major impact lies on the bases
of inflation rates regarding expanding the business at global level. As the major inflation which
is faced by ASDA is relating to cost of labour. As due to less in demand of the ASDA products,
they had to manage the expenses which is incurred in respect of producing the products by
labour and also had to bear expenses in respect of purchasing the raw materials (Rapo, 2019).
Thus, the impact faced by ASDA is on the bases of pricing strategies which they imposed on
dealing in particular products. The positive impact of economic factors on ASDA is that they
enjoy the high benefits of purchasing power in respect of providing high quality products. The
negative impact lies on the bases of inflation in cost of labour regarding facing less demand on
particular products but had to pay money to labour on agreement bases. Rising minimum wage
rate and fuel charges in the nation are the biggest threat result, as it can create negative impact on
the performance of business. This has increased the cost of the company and minimized profit
margin of the company in the market.
Social factor: In respect of undertaking the social factor in ASDA, it mainly results in
causing impact through changing their norms as per the market trends. The culture and taste of
the person are fluctuated depending upon the changes in time and environment needs (Ghez,
2019). Thus, the impact which is faced by ASDA is relating to imposing such policies which
results in securing the interest of customer towards the business for longer way (Debra Paul and

Cadle, 2019). The positive impact arise in respect of increasing the pension scheme for the
employees of ASDA so that it results in sustaining in business for longer way. It also results in
gaining advantages from social factors through opening the supermarket for longer hours, so that
they can fulfil the needs of the customer in better way. At the same time organization has to
bring variety of different operational change in the organization on regular basis, which used to
has a negative impact on efficiency of the business. Reason behind continues change, is changing
trend and preference of consumer in the market.
Technological factor: The impact arise due to adapting the advanced technology in business or
making continuous improvement of exiting online sites to regain the interest of customer. The
impact which is faced by ASDA is relating to enhancing their online networking sites in faster
way and also securing the customer details and information after availing the services of ASDA.
As ASDA is planning for bringing new strategies in business such as self scanning of the
products, once they are taken by the customer (Peace, 2016). Though this manner they re helping
customer through saving time by just clicking the requirement of particular products and avail it
within the less time limit. The oppourtunity which used to arise through adapting the advance
technology is that the chances of developing quality company product. This will help company
in improving the product line of company and will also increase the customer base of ASDA.
Legal factor: The legal factors which results in causing impact to business is relating to the
health and safety laws, employment legislation laws and consumer laws. The impact on ASDA is
faced regarding not paying any less amount to employees as per the amount fixed under the
minimum wages act in UK. The opportunities which is adapted to ASDA through legal factor is
that it secure the rights of the employees at work place through wearing the equipment if they are
working at hazardous places. It also helps ASDA to set some limitation to the employees
regarding taking strict action in case of breach committed in not following any of the norms
(Bentham, 2018). The threats to ASDA is that they had top work according to the norms
mentioned by the government regarding taking care of employees and if not work according to it,
employee carry the right to file suit against the company under the employment tribunal.
Environmental factor: The impact which arises to business is relating to the providing the eco
friendly products in market and also deal in organic foods which retain the customer interest in
longer way. The opportunity to ASDA is that they retain the customer interest through providing
the goods which are eco friendly and also as per customer demands (Evans, 2017). They

accordingly produce such products which satisfy the customer needs for longer way. The threats
arise regarding facing tough competition in market regarding providing the eco friendly
products. The threat also occurs in respect of not providing the products within the set time
period due to changes in climatic condition or issue arises due to natural calamites. As this
resulting in causing negative impact upon these factors regarding not fulling the customer needs
though providing the products within the set time period.
CONCLUSION
Present report concludes the matters relating to identifying the meaning of the enterprise
management which results in managing the overall activity of the business which results in
gaining advantages to business. The management is to be done regarding controlling the
inventories, managing activities of human resources and building the strong relationship with the
customers. In this report, the matters is presented for the ASDA and the discussion is undertaken
on the basis of conducting the PESTLE and analysing its impact upon the business environment.
Through undertaking various external factors resulting in managing the business activities in
better way and also identified the opportunities and threats which arise by adapting this external
factors.

REFERENCES
Books and Journals
Bentham, J., 2018. Business and Economics in the News–Sainsbury's and Asda-the decade's
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Eisenberg, P., 2019. Financial Analysis of Primark Stores Ltd. with regard to a Stock Exchange
Floatation (IPO). International Journal of Management. 7(1). pp.91-112.
Evans, N. N., 2017. The internationalisation strategies of small and medium-sized enterprises
(SMEs) clothing suppliers in the UK (Doctoral dissertation, Manchester Metropolitan
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Gheibi, M. and et.al., 2018. Controlling air pollution in a city: A perspective from SOAR‐
PESTLE analysis. Integrated environmental assessment and management. 14(4). pp.480-
488.
Ghez, J., 2019. The Power of Analysis. In Architects of Change. (pp. 95-109). Palgrave
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Peace, C., 2016, March. Supply chain-related risk management. In Supply Chain Collaboration–
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Perera, R., 2017. The PESTLE analysis. Nerdynaut.
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Rapo, N., 2019. Marketing the high street: a solution to the British retail crisis?.
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Walsh, K., Bhagavatheeswaran, L. and Roma, E., 2019. E-learning in healthcare professional
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Zhao, J. and Dou, X., 2019. A Study of British Organic Food Market.
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