Competitive Analysis of ASDA in the Retail Industry

This report provides a comprehensive analysis of ASDA's competitiveness in the retail industry, including a business overview, analysis of the competitive environment, application of Porter value chain, and suggestions for innovative ideas.

REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Business overview.......................................................................................................................3
Analysis of competitive environment.........................................................................................4
Porter value chain .......................................................................................................................6
Suggesting use of innovative ideas.............................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The industry competitiveness is defined as the ability of the company to compete in the
highly competitive industry and whether they will be successful or not. For getting successful it
is very necessary for the company to have high capabilities and competitive advantage and this
will help company in getting successful (Varelas and Georgopoulos, 2017). The present study is
based on ASDA which is a British supermarket established in 1949 and is headquartered in
Leeds, UK.
The present report will start by giving the overview of ASDA and its products and
services. Further the report will outline the competitive environment of ASDA with reference to
retail industry. Next this discussion will demonstrate the application of Porter value chain and
will outline that how the company adds value to the company. In the end some innovative ideas
will be developed for improving the business competitive position within the whole industry
(Asda, 2020).
MAIN BODY
Business overview
Asda stores ltd, is a British supermarket retailer, who used to offer variety of different range of
product in the nation. Asda was founded in the year 1949 by the founder Noel Stockdale and
J.W. Hindell. Asda was formed as a result of acquisition between Asquith family merged with
the Associated Dairies company of Yorkshire. Asda is ranked as a second largest retailer
company of the organization. Asda is just behind the Tesco is ahead of Sainsbury and Mark and
Spencer. Asda has seen the good amount of the competition in the industry from the starting
point itself. As there are many different small and big organization who used to operate in the
retail industry of the UK. Asda is located at 631 different location throughout the world. Asda
headquarter is located at Leeds, west Yorkshire, England. Asda used to operate at the global
level and used to provided the employment to 165,000 employee in the world. Asda used to work
as a subsidy company of Walmart. There are other subsidies firms of the organization as well i.e.
Asda mobile and Asda money. Asda used to offer the product of the company with the help of
the different format of the Asda stores Such as Asda super center, It is the type of the store in the
market which is very big in the size, they used to offer almost all the product of the company
under one roof. Asda superstore, is another type of the store which is not that big in the size.

They generally used to offer more specific range of the product in the organization. Other store
through which Asda used to offer different variant of the product are Asda supermarket, Asda
living, George stores and Asda essential. There are many different type of the brand which is
also owned by Asda in the market i.e. Asda Smart Price, Chosen by you, George Clothing, Asda
mobile and money in the market.
Asda used to offer many different type of the product in their product line. Generally they
used to offer the product of different big retailer in their store and also used to manufacture
product in their own name and used to offer the same in the market. Product Line of the
organization includes the clothing, retailer and grocery and different child product in the
organization. Also organization used to offer variety of different type of the healthy product also
in the organization, of own brand and also of the other companies brand in the nation.
Analysis of competitive environment
The current world is highly competitive and there are many different companies which
are competing in the same industry to high level. Thus, it is necessary for the companies to
effectively manage the business so that they are able to manage their business in this highly
competitive world. Thus, it is very important and crucial for the company to analyse its
competitiveness within the industry. This is possible with help of model of Porter five force
analysis. This is a model which is being developed by Michael E Porter in the year 1979 for
analysing the competitive strength of a country within the whole industry. This will help the
company in deciding for the policies which will help the company in improving their
competitiveness. Thus, for knowing the competitiveness of ASDA, Porter five force is applied in
the following manner-
Threat of new entrant- this is a threat in which outlines the danger of new entrants or
companies coming in the retail industry. This threat outlines the number of new entry which will
be going to be done in near future (Wee, 2017). The retail sector is a growing and fast
developing sector so it attracts many people to come and enter in the retail market of country and
to earn high amount of profits. But there is high entry barrier in the retail industry as already the
competition is very high so the new entrant thinks twice before entering into the market place.
This is because already the competition is high and if they will enter then they will not have
appropriate market as already the market is being captured by existing companies. Also,
investment for retail company is very high and because of these new entrants do not enter the

retail industry (Julita Julita and Si, 2019). Thus, the entry of new entrant is low because of high
barrier in entry.
Threat of substitute goods- the substitute goods are the one which can be used in place of
the existing goods. Hence, this force studies the fact that how easily the consumers of company
can switch over to other substitute goods. If the consumers have easily availability of substitute
products, then it will weaken the market of the company. In case of ASDA, there are many
substitute products as all the other competitors are also dealing in same products. Hence, ASDA
has to take care of the prices and other policies being adopted by the other competitors and then
fix the prices so that the consumers not goes to the products and services of competitors.
Bargaining power of suppliers- this is defined as the power which are held in the hands
of the suppliers in deciding the prices of product and services. The supplier power is driven by
size of supplier and total amount of supplier in that market. Since, the competition is very high
hence, the supplier has low power as the competitors are high and if the companies group
together and avoid any supplier then they will have no power (Carraher, 2018). Thus, the
supplier has low power and because of this the power of the companies is very high.
Bargaining power of buyers- the buyers are the king if the market and it is the duty of
the companies to take care of the needs and demands of the consumers. Buyers have the power to
lower or increase the prices and quality of the products and services of ASDA. The power of
buyer is high because if they will not buy the products of company then the company may face
many losses. Thus, it is the main responsibility of ASDA to cater to all needs of consumers and
to provide them products as per their requirement. Otherwise the sales and income of ASDA will
decrease as consumer will not buy the products of company.
Competitive rivalry- this refers to as the competition which is present in the industry as a
whole. In case of retail industry, the competition is very high and there are many different
companies dealing in retail sector other than ASDA. These competitors are like Tesco,
Sainsbury, Morrison, ALDI and many other different retail companies (Prasad and Warrier,
2016). Hence, for facing this competition ASDA has to make use of many different types of
marketing and promotional strategies. Also, the company has to set its prices keeping in mind the
prices of the competitors. This is necessary because if the prices of competitors are less then
consumer will go towards product of that company.

Hence, from the above analysis it can be justifies that the competitiveness of ASDA is
high within the retail industry and the competition is also very high (Salsabilati, 2018). Thus, to
face this competition ASDA has to implement different types of marketing and promotional
activities and also has to make use of effective pricing strategy. This is necessary because the
price will determine the sales of the company and how much revenue will it earn.
Porter value chain
Porter value chain is a model which includes a set of activities which a company uses in
order to create some value for the consumers and the company itself (Koc and Bozdag, 2017).
This is majorly because of the fact that if some values will not be provided to the consumers then
they will not like to buy and use the product of ASDA. Hence, it is the responsibility of ASDA
that the product and services which are being provided by the company provides some value to
the consumers and satisfy their need. The model of value chain includes two type of activities
that is primary activities and the support activities. Thus, for this the Porter value chain is applied
on ASDA in the following manner-
Primary activities
These are the activities which directly relate with the activities which are directly
involved in the production of product like sales, maintenance, physical creation and many other
activities (Al-Shammari and Al-Faqir, 2017). Some of primary activities of ASDA are like-
Inbound logistics- this is the activity which includes the whole process which is involved
in the manufacturing of the product. This includes the process relating to receiving, distributing,
storing of material internally within the company itself. With reference to ASDA the inbound
logistics procedure of company is very good and it uses agile form and there is high commitment
to the management of company. Here the company has applied all the latest method and is using
the latest technology of managing supply chain and inventory within company.
Operations- the operation is the actual process of manufacturing of the goods and
services being provided by ASDA to their consumers. The operation process of company is very
easy and it is majorly because of the use of model of supply chain and inventory (Simatupang,
Piboonrungroj and Williams, 2017). This is because of the reason that if operation will not be
good of company then the consumer will not like the product. Thus, for improving operations
ASDA is using total quality management and lean manufacturing approaches of operation.

Outbound logistics- these are the activities which are undertaken at time of delivering the
goods and services to the consumers for consumption (Amara, Halilem and Traoré, 2016). This
includes a range of activities like storing the finished good till they are reached to the consumers,
distribution channel of through which the goods and services are distributed. ASDA uses both
the direct and intermediary channel for the distribution of its goods and services.
Analyse two support activities
Technology development- this is a support activity which needs to be majorly considered
by ASDA at time of primary activities. In this globalised environment there are many different
types of technological advancement in the retail industry which needs to be adapted by ASDA
for success. There are many latest technological advancements in retail industry like use of
robotics, chatbots, artificial intelligence, augmented and virtual reality and many other
technological advancements. Thus, for getting successful it is the duty of ASDA to take into
consideration all these advancements (Flanagan, Lepisto and Ofstein, 2018).
Human resource- this is also an important support activity in the primary activities of
ASDA. This is majorly because of the reason that without human resource no work can be done
and for getting successful it is necessary for ASDA to employ and recruit qualified and effective
employees who can easily carry on their task. This will ensure effectiveness of work and the
whole operation process of making the goods and services.
Key value adding activities
The two major value added services of ASDA are stated below.
Providing internship to college students: ASDA provides various opportunities to
students to build a career in sales and distribution. It has employed over 200 thousand people
across various domain. It has also promoted a dedicated weekend in which students can work
from Friday to Monday morning. Other than this, ASDA also provides internship opportunities
to students to gain some work experience (Asda. 2020). It even provides placement opportunity
who wants to build their career in retail. It also has a programme for university leaver to give
them the chance to focus on other segments like retail and distribution management, finance,
marketing, e-commerce, customer service. All these activities are adding value to the business.
Enhancing customer service: ASDA has an effective customer care services which
differentiates it from others. It has partnered with Tata Consultancy Services with the objective
to enhance customer experience (Asda Launches Game-Changing “ToYou” Services. 2020). The

main aim of ASDA is to provide value added services which will result in improved customer
experience. In this, ASDA allows its customers to collect and return products purchased by the
users from the third party retailers. This collaboration is to name as 'ToYou' service. To
empowers the ASDA's store colleagues, it has developed an application that will help them to
manage the parcels and effective management of collection and return process of customers. This
will help ASDA in providing value added services to its customers which will help in building a
positive brand image among customers.
Suggesting use of innovative ideas
There are many different type of information technology which can be used by the organization
to enhance the performance of the individual and whole organization. Some of the different type
of information technology tool are as follows:
Transaction processing system (TPS) : It is the type of tool which generally used to
records the different stats in the organization to conduct the different operation of the firm. Asda
can use the same in the organization for the purpose of sales order, entry, payroll and shipping
record. This will eventually help the company in synchronizing different data of Asda in a way
that it can help the company in having better knowledge of current position of the business. This
report will also help the company in making different future decision in an organization.
Decision Support System: It is another type of system which can be used by the
organization at the workplace. This system of the organization used to help the company in
making different decision in the organization in more efficient way. Generally this tool used to
assist the management of the organization with different aspect of problem solving in an
organization. This tool used to help the organization in sourcing the variety of the information
about the complex problem which are also faced by the organization in the market (Ueno,
Sharma and Kingshott, 2018). DSS used to collect the information in the organization with the
help of variety of different source i.e. people, networking, communication, information, data,
hardware, technology, software.
Customer relationship management Software: It is another information technology
which can be used by the organization to improve the performance of the business in front of the
customer in the market. Customer relationship management Software will help the organization
in getting the different information about the customer need and preference in the market, on the
basis of the same organization can plan different activity in the way that it can help the company

in satisfying the level of customer satisfaction in the organization. Also, Customer relationship
management Software will also provide good platform for the consumer in the market, to
communicate with the organization. This will eventually help the company in promoting the
good image of the company in front of the customer in the market.
Work flow system: It is the type of the system, which can be used by the organization to
organized different activity of an organization. Workflow system in the organization used to
directs, coordinates and monitor the different application of task in the organization. This will
help the company in delegating the different task in the organization in a way that it help the
organization in bringing the good sort of the clarity in the organization. This eventually help the
different interested parties in the organization in understanding the different task which they
have to perform in the organization. Also, it will help the company in fixing good sort of
responsible authority in the organization (Pantano and Vannucci, 2019).
CONCLUSION
For getting successful it is very essential for the company to analyse its competitive
position within the whole industry. This is necessary because of the reason that if the company
will not have competitive position then the product and services of company will not have good
market value and will not be liked by the consumer. Thus, the current report stated that ASDA
has a wide range of product and services such as retail, grocery and technology product. Further
with help of competitive analysis model of Porter five forces was used and it was outlined that
competitive rivalry is very high and new entrant is low.
Further with help of Porter value chain all those activities which adds to the value of
company profitability was discussed. With the discussion it was outlined that the primary
activities which are important for ASDA was inbound and outbound logistics and operation, out
of supporting activities the main were technological advancement and human resource. The
activities which added in value of company was like providing internship and customer services.
In the end some suggestion was highlighted relating to the innovation for improving the business
are like TPS, CRM and work flow.

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Online
Asda Launches Game-Changing “ToYou” Services. 2020. [Online]. Available through:
<https://www.tcs.com/asda-launches-toyou-services-redefines-value-retailing>.
Asda. 2020. [Online]. Available through: <https://www.e4s.co.uk/profile/618/asda.html>.