Improving Business Performance

This report discusses the role of operational strategy in improving business performance, using Asda as a case study. It identifies operational issues and suggests changes to address them. It also explores investment appraisal methods and techniques for continuous improvement. The report concludes with a project plan and risk management strategies.

Improving Business
Performance

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................3
TASK 3............................................................................................................................................4
..........................................................................................................................................................6
..........................................................................................................................................................7
..........................................................................................................................................................7
..........................................................................................................................................................8
..........................................................................................................................................................8
..........................................................................................................................................................9
TASK 4..........................................................................................................................................10
TASK 5..........................................................................................................................................12
TASK 6..........................................................................................................................................13
TASK 7..........................................................................................................................................14
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17
2

INTRODUCTION
The role of operational strategy is very critical. This requires business executive to
develop strategic decisions. The role of strategy is very significant in attainment of success by
the business. Through improvement their gap can be reduced between existing as well as desired
performance (Cronin and et.al., 2011). The present report demonstrates the contribution of
operational function in developing and implementing strategy of the organization. It also makes
evaluation of several business situations and make suggestion of improvement for the issue.
Implementation of changes is regarded as complex process in the organization. The present
report would make identification of the manner in which changes are being managed within the
firm. The organization selected for the present study is Asda.
TASK 1
Asda is American owned, British Supermarket retailer. The organization has become the
subsidiary of the American retail corporate giant Walmart. Apart from the core supermarket
retail format the business is engaged in offering wide range of products. This includes financial
services as well as mobile phone company (Douglas and Craig, 2011). The promotions relating
with marketing is being carried out Asda entirely on the basis of price. Asda promote itself under
a slogan that is Save money Live better. The business has huge number of stores across the
globe.
TASK 2
At international level, the company like Asda has attained huge amount of success. In
comparison with the other retailers it has gained top most position in the market. The products
and services of the organization has become popular within the industry. Beside this strategy of
pricing which is being complied with by the brand acts as major attraction for the customers to
purchase the product (Fifield, 2012). Asda has become representative of globalization. In
accordance with the experts it is essential to praise organization towards improving the standard
of services in the market where it operates. Further the company is renowned brand that makes
modification within its products as per the requirement of the market. This results in increasing
satisfaction among customers.
3

In present time one of the world's largest retailer is experiencing decline in sales. The
organization's stock price are in sluggish. Such kind of is not expected in case of brand that has
been leader in the retail segment. Poor performance has lead to development of several issues
within the company. This has results in gaining critical attention in the business environment.
Such has resulted in influencing the financial performance of Asda to a greater extent. While
carrying out research three operational issues were identified which are as follows: Operational complexity: The company like Asda is experiencing greater amount of
wastage. This is because of the use of inaccurate amount of ingredients while producing
the products that are required to be offered to customers. Such kind of complexity in the
products increases confusion among the customers (Hultman, Katsikeas and Robson,
2011). In addition to this the firm has increased the product range but it has deviated from
the products which were offered initially. This has lead to decreasing the satisfaction
among customers. Further it has resulted in causing several issues relating with internal
operations. Further it has increased the waiting of the people at stores. Poor management: The company like Asda to a greater extent is suffering from poor
management that has resulted from ineffective financial performance. Majority of the
employees from the firm has given resignation because of arising controversies. There is
weak nature demonstrated in the strategic decision making which is due to lack of skilled
personnel (Leonidou, Palihawadana and Theodosiou, 2011). At management level, Asda
is required to make appointment of people who can pay attention towards operational
issues. Thus there is greater need of people who can bring innovations as well as
advancements.
 Absence of consistency at global level: Apart of attainment of success in immense
number of markets the organization is experiencing issue in relation to lack of
consistency in the global operations. There is no uniformity in the progress of firm and
activities. For example, the different scandal of the firm in the industry affects the image
of the brand to a significant level.
TASK 3
It has been clear that Asda is suffering from three operational issues. This includes poor
management, lack of consistency in global operations as well as operational complexity. For the
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purpose of resolving the determined issues the organization needs to adopt three changes which
have been enumerated in the manner below:
Issues relating with operational complexity: The issue can be resolved by reducing the size of
number of product ranges. Further by reducing the level of segmentation in the product the issue
can be addressed to a greater extent. The clients may not get confused and can buy the product in
accordance with their need.
Poor management: The problem associated with poor management can be addressed by
recruiting skilled personnel (Morgan, Katsikeas and Vorhies, 2012). There is greater requirement
of the people who can look at several operational issues. This is results in generation of more
ideas in relation with innovation. Further it is effective in strengthening strategic decision
making of the firm.
Lack of consistency at global operations: Such issue can be resolved by the development of more
consistent global standards. The progress as well as procedure of firm need be used in uniform
manner.
Investment appraisal methods
The changes above can be evaluated with the assistance of several investment appraisal
tool which are enumerated as under: Net present value: In accordance with the views of Papadopoulos and Heslop (2014) it
has been examined that net present value is regarded as discounted cash flow approach
that assist in appraising and selecting the options relating with project. It is present value
of net cash flow minus initial cash outflow. This method is effective as it takes time value
of money into consideration. Payback period: As per the views of Varadarajan (2010) it has been determined that
payback period is defined as the number of years that are taken by project to recover the
amount of initial investment. This techniques is very easy to understand and can assist in
making analysis of the project in an effective manner. However it can be critically
assessed that this method does not consider time value of money into account. Performance matrix: In accordance with the views of Zeithaml, Bitner and Gremler,
(2010) it has been determined that role of performance matrix is effective in examining
the performance of specific project as well as behavior of organization. It offers greater
5

assistance to wide number of stakeholder needs that ranges from customers, shareholders
to personnel. There is presence of various parameters that assist in assessing the
employees performance. This involves safety, time, cost, scope, actions, resources as well
as quality. But it has been gained that when the value of information is measured through
mathematical technique it reflects that experts of even performance metrics select
measures that possess less value. Safe criteria: In accordance with the views of Czuchry and Yasin, (2012) it has been
determined that safe criteria can be used for the purpose of assessing the performance of
specific project. This can implemented on the employees performance as well.
Implementation of techniques
6

Net present value
7

Performance matrix
8

Pay back method
Safe criteria
9

Evaluating option 3
After making application of investment appraisal tool it is being suggested to Asda to
make selection of 1st option for implementation of change. This implies that firm is required to
lay emphasis over reducing the number of product range. Entire three technique presents that
option 1 possess the potential to produce higher returns as well as profitability. The outcomes of
net present value needs to be considered as it takes into account time value of money.
Minimizing the product range it also effective in reducing the amount of wastage. The customers
will not be confused in situation when their choices are more particular.
TASK 4
In accordance with the views of Hall and Duperouzel, (2011) continuous improvement is
regarded as the general procedure of improvement. It is considered as the ongoing improvements
of the products, processes and services. In addition to this it is meta process for various systems
of management.
Radical change
As per the views of Hitt, Ireland and Hoskisson, (2012) radical change is referred to as
the change that has been derived from the accepted or traditional forms. In this it is being
expected that personnel will respond in different manner to the new techniques as well as
approaches. This kind of change might emerge in dramatic way. However it has been critically
assessed that radical change takes out the people out the comfort level.
Techniques of continuous improvement Deming cycle: It is technique of continuous improvement that is also known as Four step
quality model. It is comprised of four stages which includes plan, do, check and act. At
10

the plan stage firm needs to determine the opportunity and plan for change. In the another
stage the change is being executed on smaller scale. At the step of check the data is
utilized in order examine the outcome from change. Further differences are being
analyzed (Continuous Improvement, 2016). At the end in case there is success in the
change then it can be implemented on wider scale. In situation if the change do not work
then assessment of outcomes is done on regular basis. Six sigma: In accordance with the views of Petruska, (2012) it has been examined that six
sigma is considered as data driven approach that eliminates the number of defects. It is
effective measure of quality wherein efforts are made to reach level of perfection. This
tool utilizes statistical as well as empirical technique to gain suitable outcomes. Kaizen approach: It is considered as the approach that assist in bringing continuous
improvement. Asda can make application of this approach in the firm in order to manage
proposed change. It is considered as the long term technique to systematically attain
small and incremental changes within the processes in order to enhance the quality.
Application of quality model on Asda's change
It is suggested to Asda to make selection of PDCA cycle for implementation of change.
This technique is effective and possess potential to execute the change with perfection. Plan: Under this stage firm can develop plan with respect to change. It presents that
strategies needs to be decided in relation to reducing the product range. Further there
needs to be planning regarding the item which has to be kept and which must not be. Do: Initially Asda change bring changes on smaller scale. This implies elimination of
unessential task. Check: Under this step firm can make analysis of the outcomes. This has to be examined
that whether there is presence of any difference within the organization. The impact can
be examined on the operational level. Act: In situation if the changes have been proved to be successful then it can be executed
on wider scale. The assessment of the outcomes can be done on regular basis.
Project management model
Prince 2 Model
11

12

TASK 5
Asda needs to pay attention towards preparation of the project plan in order to bring
required changes. For the purpose of resolving the issues in relation with operational complexity
firm needs to reduce the range of product. While carrying out project the factors which needs to
be taken into account are as under:
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 Manpower: For the purpose of implementing this change organization require highly
skilled manpower. Change is regarded as complex process as it reflects resistance from
the individual who are affected through it. Therefore there is importance to increase
awareness among the people regarding the importance of change that will be applied
within the organization. Strategic approval: It is another factor that relates with taking approval from the
management. It is essential for the individuals to make evaluation of the proposal from
different aspects before making its implementation (Douglas and Craig, 2011). Approval
from the employees is also essential for effective implementation.
 Appropriate funds: This is regarded as another crucial factor that relates with availability
of financial resources. It is important to make arrangement of stable funding source in
order to meet the requirement the funds. There is greater difficulty in implementing
change in situation of absence of funds.
TASK 6
As per the views of Womack, (2013) it has been examined that risk management is
widely practiced tool within the organization. In the present era it has become very important.
Determination of risk acts as an aid in preparation of measures for solution. The major objective
of such practice is to make sure the uncertainty that does not has impact on the success of the
organization. The threat may result from several unidentified sources. Therefore it is essential
that firm is prepared for risk management at every point of time. There is presence of several
risks that arise in the organization:
Market risk: It is considered as the threat that can emerge from loss of economic value and
unfavorable changes within the market rates or price. Asda exposure to market risk is due to the
reason of customer driven transaction.
Liquidity risk: In this case firm doe not possess sufficient amount of financial resources so as to
meet its liabilities. The firm needs to borrow financial resources at higher cost.
There are several methods that can be used for the purpose of mitigating the risk:
FMEA: Failure Mode and Effect Analysis needs to be carried out for the purpose of identifying
potential failures. The technique makes evaluation of the impact of failure on the organization.
14

TASK 7
Project Plan
Radical change approach has to be implemented in this project. The sources of finance
required in the project includes bank, retained earning etc
Task Name Duration Start Finish Predeces
sors Resource Names Cost1
change
management 24 days 23-03-
2016
25-04-
2016 $250.00
Create urgency 6 days 23-03-
2016
30-03-
2016 Adam,Nikson $260.00
Identifying the
need of urgency 3 days 31-03-
2016
04-04-
2016 2 Puipil $300.00
identifying
potential threats 6 days 05-04-
2016
12-04-
2016 3 KIck $300.00
Examine
Opportunities 6 days 13-04-
2016
20-04-
2016 4 james $300.00
request support
from customers 6 days 21-04-
2016
28-04-
2016 5 Rite $250.00
Form a powerful
coalition 18 days 29-04-
2016
24-05-
2016 6 Rate $300.00
Identifying key
people 4 days 29-04-
2016
04-05-
2016 6 Adam $400.00
Analyzing their
potential 5 days 05-05-
2016
11-05-
2016 8 jack $300.00
Ask for an
emotional
commitment
2 days 12-05-
2016
13-05-
2016 8,9 dawson $600.00
work on team
building 3 days 16-05-
2016
18-05-
2016 10 Roma $220.00
Working on
coordination and
integration
2 days 19-05-
2016
20-05-
2016 11 Roma $360.00
swat analysis of
team 2 days 23-05-
2016
24-05-
2016 12 yui $350.00
Create a vision 9 days 25-05-
2016
06-06-
2016 13 Rtaai,KIM $350.00
determine the
values 1 day 25-05-
2016
25-05-
2016 13 Adam,Puipil $350.00
realizing the
importance of values 2 days 26-05-
2016
27-05-
2016 15 Adam,Kol,Nikso
n $350.00
15

developing a short
summary 2 days 30-05-
2016
31-05-
2016 16 Adam $350.00
Creating a strategy 1 day 01-06-
2016
01-06-
2016 15,17 Peter $350.00
pros and cons of
strategy 2 days 02-06-
2016
03-06-
2016 18 diesel $350.00
practicing change
coalition 3 days 02-06-
2016
06-06-
2016 17,18 Adam $400.00
Communicate the
vision 20 days 07-06-
2016
04-07-
2016 19 bruce $350.00
talk about the
change vision 2 days 07-06-
2016
08-06-
2016 20 Peter $360.00
developing vision
according to the
scenario
2 days 09-06-
2016
10-06-
2016 22 Adam $250.00
Address people
concerns 2 days 13-06-
2016
14-06-
2016 22,23 james $350.00
Apply the vision to
all operational
aspects
3 days 15-06-
2016
17-06-
2016 22,24 shreya $400.00
getting support 7 days 20-06-
2016
28-06-
2016 25 james $350.00
removing obstacles 4 days 29-06-
2016
04-07-
2016 26 shreya $360.00
Hire leaders 24 days 05-07-
2016
05-08-
2016 27 Almight $350.00
organizing
structures 3 days 05-07-
2016
07-07-
2016 27 Rite $550.00
Developing the
structures 3 days 08-07-
2016
12-07-
2016 29 Rate $550.00
recognize and
reward people 7 days 13-07-
2016
21-07-
2016 30 KIM $550.00
identifying people
who are resisting the
change
4 days 22-07-
2016
27-07-
2016 31 Troy $550.00
Making them
understand 4 days 28-07-
2016
02-08-
2016 32 Tiff $550.00
taking corrective
actions 3 days 03-08-
2016
05-08-
2016 33 sonir $550.00
creating short term
wins 60 days 08-08-
2016
28-10-
2016 34 beetel $440.00
16

Look for sure-fire
projects 4 days 08-08-
2016
11-08-
2016 34 RD $440.00
Dealing with the
clients 50 days 12-08-
2016
20-10-
2016 36 dawson $440.00
Don't choose early
targets that are
expensive.
2 days 12-08-
2016
15-08-
2016 36 Kol $440.00
performing
filtration 3 days 21-10-
2016
25-10-
2016 37 james $440.00
thoroughly analyze
the potential pros
and cons of your
targets
3 days 26-10-
2016
28-10-
2016 38,39 Rate $200.00
Build on the
Change 65 days 31-10-
2016
27-01-
2017 40,36 Trin $200.00
Analyze what went
right, and what needs
improving.
4 days 31-10-
2016
03-11-
2016 40 james $200.00
Developing
improvements 47 days 04-11-
2016
09-01-
2017 42 shreya $100.00
set goals 2 days 10-01-
2017
11-01-
2017 43 $200.00
Learn about
kaizen, the idea of
continuous
improvement.
4 days 04-11-
2016
09-11-
2016 42 Kol $250.00
Applying the
Kaizen 8 days 12-01-
2017
23-01-
2017 42,44 Almight $200.00
Keep ideas fresh
by bringing in new
change agents
4 days 24-01-
2017
27-01-
2017 46 Rite $300.00
performing
discussion 4 days 10-11-
2016
15-11-
2016 45 Rate $100.00
Anchor the
Changes in
Corporate Culture
26 days 30-01-
2017
06-03-
2017 48 Numer $150.00
Talk about
progress every
chance
2 days 30-01-
2017
31-01-
2017 47,48 Troy $200.00
Monitoring the
progress 18 days 01-02-
2017
24-02-
2017 50 Tiff $150.00
Include the change 3 days 27-02- 01-03- 51 sonir $100.00
17

ideals and values 2017 2017
Publicly recognize
key members of
change coalition
3 days 01-02-
2017
03-02-
2017 50 beetel $200.00
Identifying their
skills 2 days 02-03-
2017
03-03-
2017 52 RD $200.00
Create plans to
replace key leaders
of change as they
move on.
3 days 02-03-
2017
06-03-
2017 53,52 KIck $100.00
Planning 11 days 07-03-
2017
21-03-
2017 55 Nikson $100.00
Identifying
essentials 2 days 07-03-
2017
08-03-
2017 54 Robertson $300.00
Approving the
project from senior
management
3 days 09-03-
2017
13-03-
2017 57 Puipil $350.00
Plan development 5 days 09-03-
2017
15-03-
2017 57 Adam $100.00
resource allocation 4 days 16-03-
2017
21-03-
2017 59 Troy $400.00
Prepare the designs 3 days 14-03-
2017
16-03-
2017 58 Tiff $300.00
Reviewing
Specifications 2 days 14-03-
2017
15-03-
2017 58 sonir $300.00
Finalizing the
specifications 4 days 16-03-
2017
21-03-
2017 59 beetel $300.00
Reporting the final
specifications 13 days 17-03-
2017
04-04-
2017 61 RD $500.00
Approve the
Project 4 days 17-03-
2017
22-03-
2017 62 dawson $500.00
Reporting to the
Management 3 days 22-03-
2017
24-03-
2017 63 Rate $500.00
Application of plan
as per the provisions 4 days 27-03-
2017
30-03-
2017 66 james $500.00
18

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CONCLUSION
It can be concluded from the study that Asda is facing problems in relation with
operational issue. The issues can be addressed through adoption of suitable strategic actions. The
global operations needs consistent global standards. The issues relating with poor management
can be address through recruitment of skilled personnel. Failure Mode and Effect Analysis can
be carried out for the purpose of determining potential failures within the firm.
21

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marketing strategy. Journal of International Marketing, 19(1). pp.82-101.
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performance: the role of international experience. Journal of international marketing. 19(4).
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programs as drivers of organizational resources and capabilities: effects on strategy,
competitive advantage, and performance. Journal of International Marketing. 19(2). pp.1-29.
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implementation, export marketing capabilities, and export venture performance. Journal of
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Papadopoulos, N. and Heslop, L.A., 2014. Product-country images: Impact and role in
international marketing. Routledge.
Petruska, R., 2012. Gemba Walks for Service Excellence: The Step-by-Step Guide for Identifying
Service Delighters. CRC Press.
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Varadarajan, R., 2010. Strategic marketing and marketing strategy: domain, definition,
fundamental issues and foundational premises. Journal of the Academy of Marketing Science.
38(2). pp.119-140.
Womack, J., 2013. Gemba Walks. Lean Enterprise Institute.
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Continuous Improvement. 2016. [Online]. available through: <http://asq.org/learn-about-
quality/continuous-improvement/overview/overview.html>. [Accessed on 23rd March 2016].
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