Strategic Management of ASDA Organization

The report provides an analysis of the strategic management of ASDA organization, including a PESTLE analysis, SWOT analysis, and recommendations for accounting techniques, budgeting concepts, and leadership management.

Running head: STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Strategic Management of ASDA Organization
Name of student
Name of University
Author’s Note
Table of Contents

1STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................3
Background of ASDA..................................................................................................................3
Process.........................................................................................................................................3
ASDA’s Current performance overview of 2017........................................................................4
Main analysis...................................................................................................................................5
Pestle Analysis of ASDA 2017....................................................................................................5
Conclusions....................................................................................................................................10
Recommendations..........................................................................................................................10
Diagrams........................................................................................................................................12
Tables.............................................................................................................................................13
Graphs 2:........................................................................................................................................16
Tables 3: Stores of ASDA.............................................................................................................16
Graphs 3:........................................................................................................................................17
References......................................................................................................................................18

2STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Executive summary
The report gives the basic information about the process of ASDA Company with some
background overview. This report provides the data with fact and figures that are related to
ASDA. It contains information about the current performance in the market. It also gives
recommendation related to the accounting technique of ASDA, explains the application of
rolling budgeting concept, activity base costing, and provides some information on good
leadership management. The report mainly contains the analysis of SWOT or PESTLE are
important to manage the day-to-day stores of ASDA. The report contains the structure of the
ASDA organization. The table gives detail information about the income tracker from the year
2013 to 2017. The next table gives information about the share spending. The information has
even provided graphically for better understanding of the nature. The final table contains the
information of the number of store of ASDA.

3STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Introduction
ASDA Background
ASDA is the abbreviation of Asquith and Dairies (ASDA) and in 1949, it was founded as
Associated Dairies and Farms Limited. In 1965, it introduced the concept of superstore. In late
1990s, the company of ASDA had 220 superstores in the country of Britain and this for this
reason ASDA become famous and popular. After the First World War, the farmers of English
dairy protected themselves from the price fall of the milk through which the ASDA has
originated (Krämer, Jung and Burgartz2016). To control the price of milk a Yorkshire dairy
farmer name J.W.Hindell had made a Hindell Dairy Farmers Limited for both retail and
wholesale milk outlet (Hingley, Lindgreen and Grant 2015).
Process
ASDA deals only with supermarket not with product manufacturing. The farmer sells the
products directlyto the company and the company maintain the quality of the product and sell
them in its stores. The customers that are placed in the food stall and make payment for the
products that are taken to the case counter then select the product. In any case, the customer
might not be satisfied with the product might want to replace it in the same store from where
they order. ASDA deals only with sell textile and items of food through which majority of the
revenue are earned. Their textile products are outsourced from India, Bangladesh and Pakistan.
In confectionary and foods, ASDA produce their own valued item.
The group of ASDA owned by Corinth is a general merchandise and grocery retailer in
UK. ASDA has 321 stores and 148000 colleagues in UK and is among the second biggest chain
of supermarket in UK with a share market of 17% (Mahdi and Sadrinia 2014).In the competitive

4STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
supermarket retailing, the loyalty of the customer is extremely important. ASDA deals with daily
life products. The quality of ASDA is trusted highly. The food items sells by ASDA includes
fruit, milk, meat, food juice that are frozen, vegetables, pharmacy, music cds and drinks. Over
the entire market in UK only ASDA provide the best quality product. Electronic Products like
mobile phone, music player, laptop and other electronic gadgets are also included (Shulyn and
Yazdanifard2015). They also sell jewellery item. Most of these products are available in low
price and this is the main reason that the grocery store of ASDA leads globally. The company of
ASDA still has a status maintain their market with many of the competitors such as Sainsbury,
Safeway and Tesco. It still has the quality product and lowest price and this makesASDA to be in
the top list of UK market (Shi et al. 2018). Their status is so well maintained in the market that
they do not require any changes in the product quality. Their believe is in 100 % customer
satisfaction.
ASDA’s Current performance overview of 2017
It has been seen that ASDA is investing continuously in lower prices. In 2014, the
company has alone invested 300 million in lower prices but with better quality(Haleem and
Jehangir2017). It seem like when the ASDA lowers the prices, the sales figure also drop and
lower at times when they hope for a gain in sales volume. In fact in the report it was suggested
that in the couple of years the number of people has sharply drop and this people say that most of
their money is spend in the ASDA shop. With the recent fall of scale, the ASDA report suggests
that consumers are most probably drifting awayfrom the supermarket. Since 2012, all the Big
Four grocery losestheir market share, yet in such market share ASDA has experience a large dip
(Haslam et al. 2014). Today, the organization has encountered biggest challenges that can
understand the concern, needs, and requirement of the customers and generate or create a

5STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
successful products and services for a competitive advantage (Albrecht et al. 2015). The
management of strategic ensures the organization survival for a long term to meet the
competitive edge of the competitors to follow a planned level of the strategy of the business
(Brea‐Solís, Casadesus‐Masanelland Grifell‐Tatjé 2015).
The company chooses a competitive theme for the level of business strategy to gain some
competitive advantage and use a different strategy to position them in a different environment.
For a corporate strategy the level of business strategy or the competitive strategy is the most
important subsystem (das Nair and Dube2015). In UK, supermarkets are associated with the
retailing and the most competitive markets around the world. The two giant supermarket
industries namely Sainsbury’s and Tesco dominate the UK market. Today Sainsbury and ASDA
are in a race to achieve the market large share. In this industry, the companies are trying to
provide new offers to maintain the competitive advantages to ensure the loyalty of the customer.
With the use of PESTLE and SWOT, an analysis of the report will show the recent poor
performance of ASDA’s due to the internal weaknesses like the poor rating of the quality of
fresh food available. Moreover, the report will analyze the current strength like the strong online
offer and the service of click-and-collect service.
Main analysis
Pestle Analysis of ASDA 2017
The environment of the current business as is affecting the grocery retailing industry of
UK is made of macro environment and micro environment. For the business environment, macro
environment is the most boarder environmental factors that have an impact for both the ASDA

6STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
and the rivals and in almost all the operating supermarket in UK (Paillé et al. 2014). For any kind
of strategic planning PESTEL analysis is the most important framework to analyze the macro-
environment factors that effects the business environment.
In the UK based context, PESTEL analysis of ASDA has discussed below:
Political
Like the other organization, the impact of international, EU and national regulations and
the directives that are affecting legislation, consumer rights, employment, taxes and lot more has
also it effect on ASDA. The instability and war also has it impact on decision-making of an
organization. Thus, it is important to constantly monitor the political environment.
Economic
The economic factor of ASDA considers the cost of the credit, level of pay, labour supply
& demand, competitive pressure, energy prices and many more. The economic factors impact the
company strategy of the pricing significantly.
Social
For ASDA social changes like healthy lifestyle, celebrity following and ageing
population are important. It is helpful to understand the social factors of ASDA as for the market
it can introduce new product/services.
Technologies
The ever growing use of technology , mobile apps and superfast broadband has the
service of click & collect the deliveries is very important for ASDA. The big supermarkets are

7STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
making the best use of their technology that comes in theirfavour.Technology can reduce the
costs, lead to an innovation and improve the quality for the benefit of the consumers and
organization that provide the products. Technology has realise and support the primary focus of
ASDA’s in keeping the cost low and save the money.
Environmental
People are aware of the impact of the pollution, hazardous waste, organic foods, carbon
footprint that has on the environment of the organization. Thus, for the ASDA Company it is
important for them to demonstrate that the company is an environmentally friendly company.
The stores of ASDA’s are eco-friendly, as compare to the new standard build store; it emits50 %
less carbon dioxide and 40 % more efficiency of energy (Jackson, Schuler and Jiang 2014). In
the past years, embedded carbon was used to reduce the emitted amount of carbon during the
time when their product was manufacturing, growing and processing.
Legal
The operation of ASDA abides the countries rules and regulations. For example, if the
company dismisses any employee for unfair reasons then the concern of the employee of ASDA
can take to employment tribunal. In addition, the company cannot pay any of the employees less
than the minimum wage in UK.
Today ASDA is also experiencing a huge change in the grocery sector as it operates as a
retail supermarket. One of the significant changes that have shaken the whole industry is the
smaller size operators like the Lidl and Aldi. The unique point of selling for ASDA is the lower
prices, ASDA is not the cheapest market anymore, and Lidl and Aldi are in fact the well-known
discounters. Today ASDA triggers the price war of the supermarket and due to changes in the

8STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
external environment; ASDA has to develop some new strategies to retain the customer to
survive.
Most of the business and commercial use SWOT analysis as a common tool for strategic
analysis. The ASDA also use the same tool for strategic analysis (Mahdi and Sadrinia2014).
SWOT analysis will identify the potential strengths and the weaknesses of the ASDA
organization.
Strength
 As a powerful brand of retail ASDA
share 16.8% of the grocery in the UK
market
 ASDA reduces the environment
impact but in a very few innovative way
 Corporal strategy are well-
developed with low cost prices
 Reputation of the brand name is
very high and different products have wide
range
 Various awards has won by ASDA
Weakness
 There are different products of
ASDA for sells such as clothes, stationary,
food and many more. This product might
not have good flexibility as the
competitors.
 Lack of convenience store and
smaller supermarkets
 If the employees are too many, it
can be an internal weakness especially
when there is a strike
 The quality and value of the
product might lose if in any case the
productivity is enlarge when decided by the
ASDA
 In 1999,since ASDA became a
subsidiary of the Wal-Mart of American

9STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
retail subsidiary. The name of the brand of
ASDA might lose.
Opportunities
 The product range is widen and a
new ones has come up with this
opportunity (entertainment – theaters,
cinemas, tourism – tickets)
 European markets expansion
 The capital brand name of ASDA’s
has to apply in new areas
 The government support and reduce
the tax
 More jobs and to grow overall
revenue is offer to expand the planbigger
 Thinking of a better marketing
campaign – for charity , some money and
celebrities are use
Threats
 The taste of the customer changes
 The cost of the labour rises
 Due to raise in tax or statutory law
there is growth in expenses
 Products that are new or substitute
products are rise
 ASDA being targeted for the
competitive means, as they are constantly
in TOP 3 in the UK’s
Conclusions
The analyses of SWOT or PESTLE are important to manage the day-to-day stores of
ASDA. The managers should consider the factors that impacts the operations of ASDA. The
ASDA managers’ role is to make decision, management of the cost, management of the
technology, management of the human resource, coordinating with the whole store of ASDA.

10STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
The staffs know about the offer and have good knowledge about the product. The ASDA
strategic role is to retain the customers, growing the share of the market to enter into the new
markets. In the company the operations manager is responsible to control and manage the
environment inside the business. ASDA has become a Well-structured entrepreneurial
organizationto provide theright information and tools required by an organization. ASDA
impulses the employees to take initiative in the existing environment.
Recommendations
From the report above it is recommended to improve and increase the environment of the
business of the ASDA Company. The strategy of ASDA for the lower prices is very much
successful in the market. It is recommended the ASDA organization to be aware of theircurrent
strengths, reduces the weaknesses, seizure the opportunities, and be careful of the threats. It can
be maintain without compromising the product quality and service to the customer.The company
ensures a good relationship with the suppliers regarding the bulk orders and the payment. Then it
is definite that the organization can achieve success.The company has contributed economic wise
growth to the country in order to maintain the brand image. The company has even fined by the
government organization several times.
ASDA should maintain a good management and leadership with the employee to make
them satisfied with the work place in the competitive market. ASDA should review their
strategic plans from time to time and is aware of the policies of the competitor’s will keep
maintain their position in the market.
Rolling Budgeting: Budgeting plan the overview to help grow in the international market.
Rolling budgets analyze the financial control to take decision and help to find the estimation

11STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
ofthe cost of the whole year which later can change to last quarter of sales figure. Since a price
allocation is difficult in each single thing, thus ASDA managed excellently the costing system of
job ordering.
Activity Based Costing (ABC): This technique helps in monitoring and planning the cost of
product and services. This new system of allocating products prices and services is good to
follow, as there has a good control for the cost and price of the product.
Diagrams
Figure 1: Structure of ASDA

12STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Source: Author
The supermarket chained chalked 7.5 % drop in sales store which was the worst
performance in the half-century (Soosay and Hyland 2015). In 2017, ASDA first like-for-like
sales growth report of three years has shown in the figure below.
Tables
Table 1: The Average Income Tracker excluding bonuses for the UK household, current
prices, £ per week
Month Income Tracker
(£)
Jan-13 166
Feb-13 163
Mar-13 162
Apr-13 167
May-13 167
Jun-13 169
Jul-13 168
Aug-13 166
Sep-13 166
Oct-13 167
Nov-13 167
Dec-13 165
2013
Average
166.0833333
Month Income
Tracker (£)
Jan-14 170
Feb-14 169
Mar-14 168
Apr-14 170
May-14 171
Jun-14 171
Jul-14 173

13STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Aug-14 173
Sep-14 174
Oct-14 176
Nov-14 179
Dec-14 181
2014 Average 172.9166667
Month Income
Tracker (£)
Jan-15 185
Feb-15 185
Mar-15 186
Apr-15 188
May-15 188
Jun-15 189
Jul-15 191
Aug-15 191
Sep-15 192
Oct-15 193
Nov-15 193
Dec-15 193
2015 Average 189.5
Month Income
Tracker (£)
Jan-16 195
Feb-16 195
Mar-16 195
Apr-16 198
May-16 198
Jun-16 198
Jul-16 198
Aug-16 199
Sep-16 199
Oct-16 199
Nov-16 200
Dec-16 198
2016 Average 197.6666667

14STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Month Income
Tracker (£)
Jan-17 201
Feb-17 197
Mar-17 196
Apr-17 196
May-17 196
Jun-17 198
Jul-17 199
Aug-17 198
Sep-17 198
Oct-17 199
Nov-17 199
Table 2: ASDA Share of Spending
Year Share of Spending
7/7/2013 12.8
29/9/2013 14.4
22/12/2013 12.9
16/3/2014 13
6/7/2014 12.6
28/9/2014 11
21/12/2014 9.5

15STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
15/03/2015 9.4
5/7/2015 9.2
20/12/2015 6.9
10/4/2016 8.4
3/7/2016 6.5
2/7/2017 8.4
Graphs 2:
7/7/2013
29/9/2013
22/12/2013
16/3/2014
6/7/2014
28/9/2014
21/12/2014
15/03/2015
5/7/2015
20/12/2015
10/4/2016
3/7/2016
2/7/2017
0
2
4
6
8
10
12
14
16
ASDA annual Income Tracker
Share of Spending
Year
Share of Spending (£)
Figure 2: ASDA annual Income Tracker
Tables 3: Stores of ASDA
Number of Stores
units of Retail (total) 631

16STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
Superstore of Asda 339
Supermarket of Asda 206
Living of Asda 33
Supercentre of Asda 32
Station of Petrol Fueling for Asda 21
Graphs 3:
Number of Stores
0
100
200
300
400
500
600
700 631
339
206
33 32 21
units of Retail (total) Superstore of Asda
Supermarket of Asda Living of Asda
Supercentre of Asda Station of Petrol Fueling for Asda
Figure 3: Stores of ASDA

17STRATEGIC MANAGEMENT OF ASDA ORGANIZATION
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