Strategic Management of ASDA: Gaining Competitive Advantage in Retail Sectors

This report discusses the strategic management of ASDA, a supermarket retailer, and how it has achieved competitive advantages in the retail sector. It explores the M.E. Porter value chain framework, SWOT analysis, and other models and concepts. The report also highlights the primary and supportive activities of ASDA and its marketing and sales strategies. Additionally, it provides recommendations for the company's internal structure evolution.

Strategic management
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
M. E. Porter value chain framework............................................................................................3
SWOT ANALYIS.......................................................................................................................6
Porter five forces..........................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Strategic management is a process that includes planning of set of actions, activities and
task need to be undertaken, monitoring and analysis outcome of its so that correct action can be
taken for growth and development of firm. In another words, management and seniors executives
have to set standard objectives, analysis internal and external environment and decide
appropriate strategies that would be beneficial for organisation. ASDA is supermarket retailers
that provide varieties of product and services ranging from home care, personal care to financial
services. It have use slogan “Save Money, Live better” in order to create awareness among
customers and promote brand image of enterprise. So, this report is all around strategic
management of ASDA and the way it have attained competitive advantages in retail sectors.
Several models, theories and concept have been used to understand and analysis strategic
management of firm.
M. E. Porter value chain framework
Company can differentiate itself from other competitors in market by designing
innovative method to market, manufacture and deliver products to end customers. As porter, firm
can enhance its overall profitability and market share by making best use of their capabilities and
strength. ASDA by focusing on its several activities or operation have delivered highly
qualitative products and services to wide range of customers. There are two activities that helped
in adding value to organisation such as “primary” and “secondary”. Therefore, porter value chain
framework is used to understand and evaluates the way company have gained competitive
advantages in retail sectors (Carayannis, 2018). Such as:
Primary activities: These are activities or action that helps in creating new products or services
that could contribute in satisfaction of customer’s requirements. It includes all function from
purchase of raw material to processing it into finished goods so that it can be delivered to end
users. ASDA have emphasis more on its primary activities so that best outcome can be yield in
minimum cost and time. Therefore, various primary activities that are performed by ASDA to
add value are illustrated below:
Inbound Logistic: It is process which illustrates the way raw materials are obtained from
suppliers so that they can be used for making finishing products. ASDA have strong reputation in
market so numbers of suppliers are interest to provide it raw material at lower cost so that they
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can earn profit. Company have also maintained good relationship with suppliers by making
timely payment thus it have contributed in getting qualitative resources at lower cost.
Operation: It is another primary stage that have added value to company and building brand
image in minds of number of people that are living in UK. Management of ASDA have clearly
define roles and responsibilities that need to be complete by specific individuals, set standard,
procedure about the way task need to be completed. Superior and line manager of firm
continuously monitor and evaluates performance of each and every individuals. Thus, find
alternative options that could be fruitful in increasing productivity and performance of
employees so that goals can be achieved (McMillan and Overall, 2016). Leaders of ASDA have
also put their best efforts or provide guidance, support and assistances to employees regarding
the way particular task can be completed. Thus, it has offer employees ease and comfort, reduce
amount of mistake, errors and they have make best utilisation of resources. ASDA have make
use of innovative technology such as computer, information technology to manage data,
information related to customers, actual sales of firm, inventory etc. Collection and preservation
of data have contributed management in taking timely and corrective decision so that maximum
outcome can be gained. Therefore, effective operation of several functions and key activities has
helped in brining economic of scale within organisation and achievements of end goals.
Outbound logistic: ASDA management have also taken crucial steps to effectively and
efficiently deliver products or services to end customers. It have number of warehouse with large
space, well equipped infrastructure, facilities where it is able to store raw material and finished
goods in order to deliver products in limited time frame. ASDA also have several stores or
supermarket in different location of UK and other countries thus customers can easily make
purchase while staying safe and secure at their home (Fitri and et.al., 2019). Strong supply chain,
distributional channel and network have helped in timely delivery of services to wide range of
customers that are living in society. With changes in trends and updation in technology, company
as also make use of digital platform to deliver products to customers. Such as people can easily
see or review different products or services it have and select best possible for them in order to
fulfil their expectancy. So, official websites and home deliver services have contributed in
growth and development of ASDA in retail sectors of United Kingdom.
Marketing and sales: It can be stated that marketing is one of the most important function that
helps in increasing number of customers or generating awareness of firm. ASDA marketing
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manager and sales executive have make use of marketing mix strategy to influenced diverse
group of individuals. Company by promoting low price strategy have easily gained competitive
advantages from others thus is able to create for other large organisation such as Tesco, Marks
and Spencer in retail sector of UK. It has also make use of digital platform such as posted video,
image on Facebook, Twitter and Instragram so that people can be aware of its products and
discount pricing. “Save Money, Live better” slogan, discount offers, promotion through
advertisement, billboards, personal selling are some more method of marketing and sales that
have been used by ASDA to retained loyal customers (Cosenz and Noto, 2016). So, that firm can
enjoy higher profit margin and sales for longer period of time by meeting requirements of
customers beyond their expectancy. ASDA marketing manager have also put efforts to build
strong relationship with customers by understanding their existing taste and preference or taking
feedback from them so that necessary improvement can be made.
Services: These are services that are provided to customers after products are sold to them like
guarantees, warranties. So, ASDA has provided 24 hour services to people thus customers are
free to share their problems and grievances that are resolved within limited time frame as
possible. It have hired talented and skilled employees that are deliver services to people as per
their requirements and needs thus it helps in adding more and more customers from around
worldwide for growth of firm. It has also offered home delivery services to people thus they are
able to get products in minimum cost and time.
Supportive activities: These are activities that support or assist primary activities thus without
supportive activities primary activities are useless. Research and development, human resource,
infrastructure and procurement are four key main areas of supportive activities of ASDA that has
helped in achievements of organisational goals. The way supportive activities has help in
satisfying customers requirements can be stated below:
Firm infrastructure: Company have invested in development of standard infrastructure,
facilities within stores so that customers are attracted to visit in stores and make purchase as per
their choice. Divisional organisation structure of ASDA have contribute in enhancing efficiency
of business thus deliver of more qualitative products to customers. Therefore, it can be stated
that well equipped, effective arrangement of resources has helped in delivering maximum value
to end customers (McKiernan, 2017). Through strong infrastructure ASDA is able to complete
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all primary activities or support them such as handle inbound and outbound logistic, service and
marketing and sales of firm.
Human resources management: This department is responsible for hiring and retaining highly
talented employees within organisation so that task can be completed in bet possible manner. HR
of ASDA by following three procedure that is filling of application form, taking preliminary test
and conducting interview have recruit right individuals at right place at right time. It have
ensured that employees are provide safe and secure working environment or all safety measure
are taken so that no harm can be caused to other individuals. HR manager of ASDA have
motivate and influence employees to work hard by providing them proper training or promoting
to higher level or offering incentives (Adegbile, Sarpong and Meissner, 2017). Therefore, by
fulfil requirements of each employees it have influenced them to delivered best possible services
to customers so that company can enjoy more market share in United kingdom.
Technology development: There are huge advancement and development in technologies with
globalisation, increasing in competition level so customers are forcing companies to make use of
them. ASDA have provided convinces to easily book, make payment of products and services
without standing in queue. Employees performance, stock of inventory and detailed related to
customers are maintained and record through computers. It have also invested in several software
to perform different task such as HR manager to maintained attends of employees , actual cost
incurred and profit margin earned by organisation (Li, 2018). ASDA have trained employees the
way they have to deliver online services to customers so that they does not change their decision
and are influenced to be part of firm for longer time frame.
Thus, in this way ASDA have managed its several strategies so that company can enjoy
competitive positioning and achieve its goals or long term vision.
SWOT ANALYIS
The swot analysis is one of the most important internal factors analysis where there are
various paradigms which will focus on gaining functional innovation within longer time run and
also to potentially build analysis towards wider domains.
Strengths:
Huge range of products: ASDA has wide range of products and services within its brand and
also widely has been performing well within retail industry paradigms, to gain strong goodwill
among consumers. This is strength when it comes for gaining new functional large range of
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products and also to focus on new growth aspects, where brand will be able to develop new
innovation by investing further. The company is also having wide range of products and services
which has made customers goodwill to be satisfied widely and also to yield focus on major
operations.
Large number of stores: The company is also having large number of stores within UK which
has made its reach highly effective, for gaining consumers focus on larger parameters, to
generate stronger performance measures within goodwill goals. The large number of stores has
enabled high access to be worked on large arenas and also to build wider functional domains for
generating larger revenue goals. Large number of stores has made its reach among various
customers to be worked on and also there is wide availability for consumers.
Weaknesses
Limited global presence: ASDA is lacking global presence as competitive industry is large and
there is limited global presence and also high presence worked on where various brands are
gaining pace to form high competitive pressure. ASDA is widely lacking places within untapped
market arenas and new competitive goals to be formed into international market where
innovation and specialised functional diversity needs to be enforced (Elavarasan, Afridhis and
Nurunnabi, 2020).
High competition factor from external industry: ASDA is also facing high competition from
external retail business industry, where there are high consumers preferences shift and also
factored on growth fundamentals for larger diversification. The brand has been also potentially
facing high competition within demand and supply shift paradigms due to ineffective market
strategies and larger pace within retail industry to be worked on.
Opportunities
Developing presence in online market: ASDA can fundamentally focus to build new larger
presence in digital market where there are online platforms to be used for promotion and also
largely grow on new quest horizons. This is widely important and will also functionally enhance
company marketing scenarios, diverse growth parameters to serve customers online. The online
market has high scope to be leveraged as new strength towards generating diversity goals and
also to grow competitive force within varied arenas (Phadermrod, Crowde and Wills, 2019).
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High expansion in new domains: ASDA has high business opportunities within business areas
where there are active domains and specialised focused synergy pertaining large wide focus and
also to exercise growth within wider new goals. It could be understood that new investment
should be done within innovation and technical advancement goals where ASDA has new
business grow scope along with particularly also focusing towards diversity. This factors hold
high importance and synergy of diverse growth to be potentially worked on, where quest for
active large innovation has to be formed widely and also there is high potentiality to be worked
on to enter into untapped arenas.
Threats
High competition rising within technology external factors: ASDA faces high competition
within rising technology factors in businesses within larger retail industry which is not only
competitively growing, but also there is active high end growth. ASDA technical efficiency is
widely lacking innovation standards which are not only hindering profits and new end work
goals, but also there is lack of strategic management which is impacting operational efficiency.
The company is facing high shift among consumers demands and within external factors where,
wide diversification factors are there to leverage wide competitive horizons.
Less skilled management employees: ASDA has high deficiency within its operations and
technical skills within employees where all factors of activities to experience new horizons are
lacking. Diverse parameters of innovation have to be trained on and also there shall be
motivation built up for gaining stronger synergy, managers and leaders have strong focus to be
developing larger networks of training by bringing on larger goals within ASDA. This threat of
less skilled management among employees may impact in higher turnover rate and also there is
wide lacking efficiency parameters, which may also reduce all over production revenues
(Vlados, 2019).
RECOMMENDATION FOR INTRENAL STRUCTURE EVOLUTION \
With retail industry competitive growth Asda shall invest on building inner growth of
technical innovation and new functional growth aspects on longer time frame, by strategic
planning of varied elements. There shall be training and development of various employees for
bringing on new functional scale growth for consumers, which will encompass strategic vision
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and also for targeted operational avenues which gives boost to productive growth synergy in
wider levels.
Porter five forces
It is analytical tool that helps in identifying existing competition level in particular industry and
the way company have make use of particular strategy to attained its goals. Power of suppliers,
power of consumers, existing rivalry, threat of substitute products and threat of new entrances
are five forces that helps in understanding or analysis of particular industry (Barca, 2017). So,
the way ASDA have manage its strategies in retail industry can be evaluated by making use of
Porter five force model. Such as:
Existing rivalry (High): Retail industry has number of competitors with wide range of products
and services, customers or market share, capital that are operating functions to gain higher profit
margin. TESCO, marks and Spencer, ALDI are some of the famous firms that used different
marketing strategies to influenced people so that it can generate more revenue. They provide
better qualitative products at competitive prices thus it causes threat for growth and sustainability
of ASDA in business environment (Ethiraj, Gambardella and Helfat, 2018). Therefore, company
in order to compete with other firm have selected low pricing strategy thus it has helped in
adding more and more customers within organisation over period of time.
Power of consumers (High): Globalisation have contributed in increase in competition level in
retail sectors of UK thus customers have more power or alternative options to select specific firm
in order to fulfil their respective requirements. Due to low switching cost, people can easily
change their decision to use products of TESCO rather than ASDA or any other company. Thus,
ASDA in order to add more people with organisation have chosen low cost strategy that helps in
yielding more outcome.
Power of suppliers (Low): It can be stated that there are number of supplier of products and
services at reasonable rates in UK so ASDA have option to select best among them to get raw
material. Company have also emphasis on building strong relationship with suppliers by making
timely payment so that they are ready to deliver specific quality and quantity of products at
reasonable prices (Barney and Mackey, 2018). Therefore, due to low power of suppliers, ASDA
is able to lower down its production cost and able to offer products at prices that make customers
happy and satisfied.
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Threat of substitute products (Medium): UK have large number of small and medium
enterprise that tries to imitate or copy products of huge organisation so that they can meet
customers’ requirements at lower prices. Threat of substitute products is medium as there are
some firms that have tried to imitate products in order to earn profitability thus ASDA have
differentiate its products by unique labelling and designing. So that customers are able to
differentiate and take correct decision regarding particular firm and products that they have to
select for fulfilment of their needs.
Threat of new entrance (High): This factor explained the threat of new entrances or firm in
particular industry which is high in retail sectors. Most of the entrepreneurs or individuals thinks
that investing retail industry would be more fruitful as there is tremendous increase in demand of
customers over time. ASDA have created barrier for new entrances through offering products at
high discount prices that is somewhat difficult or impossible to offers (Muriuki, Thomas and
Joyce, 2017). At the same time company have strong brand image, high confidence level and
more capital, investment so it is difficult for new entrances to compete with such firm in order to
grow and sustain.
CONCLUSION
From the above report it can be concluded that external and internal analysis of business
environment helps management to take timely decision for growth and expansion of firm. It is
able to understand current and future trends that are going to affect business in near future
circumstances. Thus, able to identify or find available opportunities and threat in environment
and decide core strategies that could promote sustainability and expansion of business. The
report also summaries that company by making efforts to enhance its primary and secondary
activities is able to deliver services that make customers more happy and satisfied. At last it have
been learnt from above analysis, that suppliers, use of technology, infrastructure, the way
products are delivered to customers help in adding value or building strong brand image in
external market.
RECOMMENDATION
It can be stated from above analysis, discussion that there are key areas in which
company needs to work in order to gain and retained its competitive positioning in external
environment of United Kingdom. Such as:
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 Threat of existing rivalry is high so company needs to focus on quality and uniqueness
of products so that it can create differentiate positioning in minds and hearts of
customers. Differentiate with reasonable prices will also helps in reducing overall
switching power of consumers thus maximum individuals would be like to be part of
organisation. Company need to emphasis on more satisfaction of customers, use of
digital technologies in order to provide seamless experienced to individuals so that they
are motivated to be retained within organisation.
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REFERENCES
Book and journals
Adegbile, A., Sarpong, D. and Meissner, D., 2017. Strategic foresight for innovation
management: A review and research agenda. International Journal of Innovation and
Technology Management, 14(04) p.1750019.
Barca, M., 2017. Economic foundations of strategic management. Routledge.
Barney, J. B. and Mackey, A., 2018. Monopoly profits, efficiency profits, and teaching strategic
management. Academy of Management Learning & Education, 17(3), pp.359-373.
Carayannis, E., 2018. Strategic management of technological learning. CRC Press.
Cosenz, F. and Noto, G., 2016. Applying system dynamics modelling to strategic management: a
literature review. Systems Research and Behavioral Science, 33(6). pp.703-741.
Elavarasan, R. M., Afridhis, S., and Nurunnabi, M., 2020. SWOT analysis: A framework for
comprehensive evaluation of drivers and barriers for renewable energy
development in significant countries. Energy Reports, 6, pp.1838-1864.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2018. Theory in strategic management. Strategic
management journal, 39(6), pp.1529-1529.
Fitri, H and et.al., 2019. Strategic management of organizational knowledge and competency
through intellectual capital. Polish Journal of Management Studies, 19.
Li, W. S., 2018. Strategic Management Accounting. Management for Professionals.
McKiernan, P. ed., 2017. Historical Evolution of Strategic Management, Volumes I and II (Vol.
1). Taylor & Francis.
McMillan, C. and Overall, J., 2016. Wicked problems: Turning strategic management upside
down. Journal of Business Strategy.
Muriuki, J. W., Thomas, C. and Joyce, K., 2017. Strategic management practices and
sustainability of state corporations.
Phadermrod, B., Crowder, R. M. and Wills, G. B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, pp.194-
203.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
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