Business Report: ASDA's Micro & Macro Factors and Strategic Analysis

This report provides a comprehensive analysis of ASDA, a British retailer and subsidiary of Walmart, examining its global business operations and strategies. The report begins by identifying micro and macro factors impacting ASDA's business, including employees, suppliers, competitors, investors, customers, and political, economic, sociological, technological, legal, and environmental factors. It emphasizes the importance of ethical behavior and corporate social responsibility in relation to social, cultural, economic, and environmental issues. The report then delves into ASDA's history, vision, leadership style, management practices, and strategic implementations, utilizing relevant business theories. It concludes with recommendations for improving ASDA's current business strategies, focusing on areas such as employee engagement, reward systems, and adapting to market trends. The report highlights ASDA's low-cost product strategy, customer-centric approach, and adaptation to online services, making it a key player in the UK and global market. The report also analyzes ASDA's leadership style and its impact on employee motivation and performance.

Context of business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Micro and macro factors that affect modern business globally..............................................1
2. Importance to behave ethically and manage responsibility in relation to social, cultural,
economic, environmental issues..................................................................................................3
TASK 2............................................................................................................................................3
1. History and summary of ASDA..............................................................................................3
2. ASDA's vision, leadership style, management practices and strategies with the use of
theory...........................................................................................................................................4
3. Implementation of strategies in company...............................................................................6
4. Recommendations for an improvement..................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
Business is an activity to produce goods & services and buying & selling for making money.
Global business is to expand business in whole world that built international connection and can
adopt other countries technology for better producing(vom Brocke, Zelt and Schmiedel, 2016).
Present study is based on ASDA company, it is a british retailer supermarket chain, founded in
1949. it is a subsidiary of walmart. it holds more 633 locations in global market.
Report will include micro and macro factor that affects global business of ASDA. It will
explain the importance of ethically and management responsibilities in relation to social,
cultural, economic, environmental issues. Last point describes the recommendations to improve
present business strategies of ASDA.
TASK 1
1. Micro and macro factors that affect modern business globally
Micro Factors that affects modern business-
 Employees-The more skilled , technical, and specialized workforce ASDA has
the more opportunities it can get and spread its business in other countries which
leads to increase in revenue of ASDA.
 Suppliers-at international level usually the supply chain or distribution channel is
quiet long , there are various intermediaries and broker in between the supplier
and final consumer , that can lead to increase in the cost of product of ASDA , so
to operate profitably it need to lower its cost in addition with providing same
quality of the product from customer and getting a good value , in turn(Sadiq and
Bala, 2016).
 Competitors- ASDA operates its business globally , so it is obvious that it has
competitors too, because of that its share of dollars customers spend
diminishes .On the other hand if ASDA fails to compete with its competitors then
it can not survive in the long run.
 Investors- For running any business or carry out its activities company need
funds and huge investment , and in case if company operate its business globally
then it need funds in millions and billions, so the more investors a company has
the more it can explore through out the globe.
1

 Customers- Segmenting market and targeting potential consumer and satisfying
need of those consumer is the key to success for every business and is an
essential part for every international business . For targeting customers there
should have an effective marketing campaign, proper selection of media channel
and media agency(Sadiq and Bala, 2016).
 Public and local media- A business carry out its activities in or around the
society , taking care of the society is the corporate social responsibility of a
business , because they pay taxes , provide People for employment and raw
material for manufacturing a product etc. If ASDA do not take care of general
public then it will have a negative image in front of its potential consumers.
Macro Factors that affect modern business
 Political factors- Interference of political party is quiet obvious in multinational
companies , it is directly linked with employment, consumer rights, legislation
etc, because of that companies maintain good relations with political parties for
having ease in flow of its business . ASDA has stable political environment in
UK(Teo, 2017).
 Economical factors-If there is an inflation in the economy then there will be an
increase in price of goods that decrease the purchasing power of the customer
ultimately it leads to decrease in profit of ASDA. Similarly in case of deflation
company has to lower its prices to stay competitive , then there will be decrease in
revenue of the firm.
 Sociological factors- Understanding sociological factor is very important factor
for ASDA. If it go with trend and understand the minds of young customers then
it can survive in long run . Also it should consider demographic and geographical
factors in the economy(Teo, 2017).
 Technological factors- Implementing new technologies and method of doing
business will help ASDA in capturing large no. of segments , large no. of
customers and easy access of online business. On the other hand it will have
negative impact if it does not have technical and skilled people in its organization
to operate any new software or technology.
2

 Legal Factors- ASDA must follow the rules that has been made by government
of UK at the time of registration or further in future .For example paying less than
minimum wages in UK is prohibited if any company do so than it have to pay
penalty or if a person in the organization does any misleading or unfair trade
practice it may subject to imprisonment or penalty or both (as may be prescribed).
 Environmental Factors- ASDA should take care of environment , it should be
aware of not causing harm to environment or its product should not contain any
material or substance that is hazardous for environment and life of people .
2. Importance to behave ethically and manage responsibility in relation to social, cultural,
economic, environmental issues
It is very important for companies to behave ethically towards social, cultural and
economic issues. One of the major ethical issue that face by ASDA is fulfilling corporate social
responsibility, protect individual rights and protect environment as well. If firm is operating in a
global environment, then it has become very important for organisation that to fulfil its CSR
responsibilities. This supports in raising brand image of organisation. The concept of CSR gets
developed due to changes in modern business operations. Now companies are required to ensure
quality of life of individuals, protecting natural resources as well. Industrial growth and has
become the main objective of companies now a day. Economic growth is highly interrelated with
consumerism and it helps in raising international trade activities to great extent. But if there is
economic slowdown then ASDA will have to face issues in conducting operations smoothly. In
such condition it becomes essential to manage its responsibilities so that it can sustain in market
for longer duration(Kolk, 2016).
As ASDA is operating its business in many locations, it provides services to different
consumers. If firm don’t look upon their cultural values and social issues, then it would not be
able to offer them satisfactory products. This would affect its profitability to great extent.
Sustainable innovations cause social and environmental issues in business centres. ASDA re
fulfils its CSR responsibilities. ASDA has developed a social system to fulfil its duties towards
environment. If firm emphases on managing social, cultural, environment, economic issues well
then it would be able to gain loyalty of consumers. Employees of the firm are required to ensure
integrity of society and have to take decision accordingly. Health and safety of individuals is
3

another major issue, if firm provides safer environment to its workers then enterprise will be able
to sustain in market for longer duration.
TASK 2
1. History and summary of ASDA
ASDA is a british retailer supermarket chain, founded in 1949. it is a retail sector
industry and subsidiary of walmart. it holds more 633 locations in global market. Chief executive
office of ASDA is roger burnley. It started their business with a small store in uk and now they
hold third position in uk supermarket. they have so many products such as- grocery, clothing and
home appliance etc with over 1000 of brand name. ASDA holds large market share by its price
strategy. it provides low price every day that is plus point for ASDA for keeping customers and
connecting new customers. It have more than 145000 employee as well as more than 18 million
customers. ASDA holds largest supermarket chain in the uk after merger with sainbury. ASDA
always change their marketing strategy by variation in pricing strategies, redesign their product
layout that attract their customers(Fisher, 2018).
It's preplanning marketing strategies makes ASDA to a market leader. It started online
delivery of its grocery items with free shipping that increase the demand of their products.
ASDA time to time change its strategy according to their market position that helps to keep their
existing share at higher and also enhance their market share.
ASDA provides best designing, quality and qualitative products to their customers. It
changes their poduct strategy according to customers needs and wants. They change their
products design time to time that helps to attract new customers as well as keep their existing
customers.
ASDA have large share in local as well as global market because it provides store as well
as online services. The main advantage of ASDA is its low cost product with attractive designing
layout. It launches innovative products time to time that helps in maintain their market share.
One more advantage is any can be make a member of ASDA supermarket by purchasing their
shares.
2. ASDA's vision, leadership style, management practices and strategies with the use of theory
ASDA's vision:-
4

A vision statement defined the path of the organisation that where they have to reach.
According to their vision statement company makes a plan to reach there. ASDA's vision
statement is “become a best value retailer in uk with always meeting customers need and wants”.
Autocratic leadership style:-
It is a style based on mutual work means the leader as well as employee both do not
participate in decision making process of organisation. The leader share their power with
employee and employees have to follow their decision related to their own area. The need of
supervision is very high. This leadership creates friendly environment but work pressure
sometimes demotivate employees in the organisation. The communication between leader and
employees is improved. this leadership style is maintain flexibility in the organisation(Holten
and Brenner,2015).
ASDA follows autocratic leadership style. They do not includes their employee in the
decision making process as well as any important decision related to organisation. It do not
provide work flexibility to their employees. They always ignore employees view points related to
workplace, work and any changes related to any strategy etc. the employees of ASDA follows
the instructions and they have no power to take their own decision related to their work. ASDA
do not organized events for their employees. This is critical in order to improve quality of work
and raising job satisfactory of workers(Iqbal, Anwar and Haider,2015).
Theory of leadership style:-
There are so many leadership style theory. Some of this are autocratic leadership style,
democratic leadership style and laissez-faire leadership style. Autocratic leadership style where
the power are in hand of leader. Employees have no right to take decision and they act as leader
directs. The leader gives order, instructions and assign tasks to their employees. Democratic
leadership style where the leader and employee both have power to take decision(Holten and
Brenner,2015). The employee is participate in decision making of the organisation. laissez-faire
leadership style where employee are highly qualified. There is no need of instruction. The
involvement of leader are very less.
Management practices:-
5

 Engage workers:- most of worker are do not care about their performance. They only
thing about the pay that decreases organisations performance. So, the first thing that the
management have to do is how to make employees more engage towards organisations
goal. In asda, they conduct various activity for their employee that motivates to work
hard and develop interest to achieve organisation goals. They engage workers through
involving workers in decision making(Gutierrez-Gutierrez, Barrales-Molina and Kaynak,
2018).
 Reward effort:- it is one of practice that helps to motivates employee by appreciating
their hard works through give incentives, extra pay or promote to the higher position etc.
In asda, if the employees achieved more than a target that is eligible for reward. This
provision get motivates to the employee to work hard and meet the target.
 Stay committed:-when employees do not know each, this create situation of conflict. So
it is important to know each other and stay committed always that save lot of time. In
asda, they organized get together for employees so they know each other and build their
relationships.
 Create cultural cohesiveness:- to shared their values and their ethics that helps in
developing productivity and achieving efficient outcomes. In asda, they do not hire in the
bases of gender, race and status. They only hired in the bases of their qualification, talent
etc.
Human relation theory of management:-
This theory focuses on employees satisfaction. This theory said that organisation can
achieve their goals by satisfying employees. This theory helps an organisation to improve
productivity by satisfying employee to changing environmental conditions such as temperature,
lighting and break time. All those changes effect positively towards the
organisation(Heifer,2017).
Asda follows human relation theory by implementing demographic leadership style. The
leader share their power with employee. The employees have power to take decision related to
their own area. They gets motivate and work hard to improve the performance and enhance the
productivity. This theory helps in creates friendly environment in the organisation.
6

3. Implementation of strategies in company
ASDA is the multinational retail firm, that operates across the world. The main agenda of
firm is to raise its profitability. In order to accomplish its objective company has implemented
autocratic leadership style. This is the type of style in which all the decisions are taken by higher
authorities. Management does not involve lower level employees in decision making process.
This type of leadership is also known as “leader centred style”. Higher authorities instruct
subordinates and lower level workers are required to follow their instructions(Tidy, Wang and
Hall, 2016). For example: if company plans to make changes in its technologies then top
management discuss about advantage and disadvantage about implementing these new
techniques and they pass information to middle level people. These strategic or middle level
employees circulate information to lower employees and they are bound to follow instructions
provided by higher authorities. By this way ASDA becomes able to implement changes
successfully within stipulated period of time.
By implementing this strategy ASDA becomes able to make quick decisions and as there
is close supervision thus, chances of happening mistakes get minimised to great extent. Higher
authorities closely monitor working of each employee and give them instructions so that all the
workers can perform their duties successfully. As there is not discussion held between top
management and subordinates thus, ASDA can keep its confidential matters safe. Leaders always
emphases on motivating its staff members and they give training time to time so that best results
can be generated in the organisation(Woo and Lee,2018).
Another strategy apply by ASDA is that it continuously organises formal training
sessions with staff members. This strategy is helpful in getting innovative ideas so that
enterprise can make necessary changes for the improvement of business. This is beneficial in
order to raise profitability of company and minimising conflict situation at workplace(Tidy,
Wang and Hall, 2016).
Providing meaning full feedback is one of the main management practice that apply in
ASDA. Top management of organisation continuously takes feedback from its employees. For
example: if there is high staff turnover then managers of ASDA utilise their management skills
appropriately and takes feedback from subordinates in constructive manner. This supports in
encouraging people. By this way employee become positive and loyal towards the brand. This
7

management practice supports the company in retaining its skilled employees in the organisation
for longer duration and creating healthy workplace culture.
Designing economic incentives are another most important management practice. ASDA
has designed different kinds of incentives, bonuses programs for its workers. Main focus on
organisation is towards providing incentives to staff members for their best contribution. Top
management continuously looks upon the level of performance of workers and accordingly
provide extra incentives to them. That is the reason people always support the organisation if
there is work load. They work so hard and work extra as well to meet the organisational
productivity targets(Woo and Lee,2018).
Providing training is another most important management practice, ASDA offers on the
job training to its employees. It gives practical knowledge to workers so that staff members can
know actual working place effectively. This type of training session supports the business in
improving knowledge and capabilities of workers. This enhances their confidence as well and
supports the firm in motivating its employees.
4. Recommendations for an improvement
 Top management of ASDA should apply participative leadership style at its workplace.
As autocratic style create burden on employees, they have to work under huge pressure
because sometimes manages can give punishment as well if they fail to complete their
work on time. Apart from this, there is no involvement of employees in decision making
process thus, they are unaware with actual polices of organisation. If managers involve
people in decision making process, then it would help in raising confidence of employees
and they will share their ideas with top management. This would create two-way
communication and managers will be able to take quality decisions for the growth of
business unit. This is beneficial in order to improve quality of work and raising job
satisfactory of workers.
 Managers of ASDA should provide financial and non-financial both kinds of rewards. As
right now company only gives incentives to its workers but if it recognises their work in
front of all workers and give them appreciation as well then employees will be boost up.
Furthermore, monitory and non- monitoring rewards will help in fulfilling their needs and
8

workers will like workplace environment. This is beneficial in reducing staff turnover
rate and raising their performance as well.
CONCLUSION
From the above study it can be concluded that context of business is very essential to
achieve the goals of the organisation. Present report has concluded that the ASDA company
achieving success by analysing the impact of macro and micro environment factors. The
management practices and leadership styles describes the current situation of an organisation.
With the help of recommendation, ASDA company developed its future marketing strategy.
9

REFERENCES
Books and journal
Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Fisher, K., 2018. Asda rolls out new mental health policy. Occupational Health &
Wellbeing.70(5). pp.22-22
Gutierrez-Gutierrez, L.J., Barrales-Molina, V. and Kaynak, H., 2018. The role of human
resource-related quality management practices in new product development: A dynamic
capability perspective. International Journal of Operations & Production
Management.38(1). pp.43-66..
Heifer, L.R., 2017. Overlegalizing human rights: International relations theory and the
Commonwealth Caribbean backlash against human rights regimes. In International Law
and Society (pp. 125-204). Routledge.
Holten, A.L. and Brenner, S.O., 2015. Leadership style and the process of organizational
change. Leadership & Organization Development Journal.36(1). pp.2-16.
Inkinen, H., 2016. Review of empirical research on knowledge management practices and firm
performance. Journal of knowledge management.20(2). pp.230-257.
Iqbal, N., Anwar, S. and Haider, N., 2015. Effect of leadership style on employee
performance. Arabian Journal of Business and Management Review.5(5). pp.1-6.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business.51(1).
pp.23-34.
Sadiq, S.A. and Bala, A.D., 2016. EXTERNAL ENVIRONMENT AND BUSINESS
SURVIVAL IN NIGERIA. GOUNI Journal of Management and Social Sciences. 4(1).
pp.47-57.
Teo, S.W., 2017. Telekom Malaysia Berhad (TM): Study of Relationship Between Performance
(ROA) and Internal, External Factor.
10

Tidy, M., Wang, X. and Hall, M., 2016. The role of Supplier Relationship Management in
reducing Greenhouse Gas emissions from food supply chains: supplier engagement in the
UK supermarket sector. Journal of Cleaner Production. 112.pp.3294-3305.
vom Brocke, J., Zelt, S. and Schmiedel, T., 2016. On the role of context in business process
management. International Journal of Information Management.36(3). pp.486-495.
Woo, K.Y. and Lee, S.K., 2018. Price convergence in the UK supermarket chains: Evidence
from nonlinear cointegration approach. Economics and Business Letters. 7(3). pp.115-
125.
11