Asda: Enhancing Business Performance Through Strategic Operations

This report provides a comprehensive analysis of Asda's business performance, focusing on the role of operational strategy in achieving organizational success. It identifies key operational issues such as operational complexity, poor management, and lack of global consistency, and proposes actionable changes to address these challenges. The report evaluates potential solutions using investment appraisal methods like Net Present Value, Payback Period, Performance Matrix, and SAFE criteria, ultimately recommending a reduction in product range to mitigate operational complexity. Furthermore, the report discusses the application of continuous improvement techniques, particularly the PDCA cycle, for effective change management within Asda. It highlights the importance of project planning and resource allocation, including skilled manpower, to successfully implement the proposed changes and enhance overall business performance. Desklib offers similar solved assignments and resources for students.

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
4

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