Strategic Management Plan for Asda: A Competitive Analysis

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Business strategy
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TABLE OF CONTENTS
Introduction......................................................................................................................................5
L01...................................................................................................................................................5
P1 Applying appropriate framework analyse the impact and influence of the macro
environment on a given organisation and its strategies...............................................................5
M1 Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................8
LO2..................................................................................................................................................9
P2 Analyse the internal environment and capabilities of a given organisational using
appropriate framework.................................................................................................................9
M2 Critically evaluate the internal environment to assess the strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set........................................................13
LO3................................................................................................................................................14
P3 Applying porter five forces model evaluate the competitive forces of a given market sector
for an organisation.....................................................................................................................14
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes..............................................................................................................................16
LO4................................................................................................................................................17
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation...................................................................................................................17
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objective.....................................................................................................................................18
Conclusion.....................................................................................................................................19
References......................................................................................................................................21
LIST OF FIGURES
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Figure 1: Pestle analysis..................................................................................................................7
Figure 2: The structure, conduct and performance model...............................................................8
Figure 3: SWOT analysis...............................................................................................................11
Figure 4: VRIO framework...........................................................................................................12
Figure 5: Ansoff matrix.................................................................................................................15
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LIST OF TABLES
Table 1: Pestle analysis....................................................................................................................6
Table 2: SWOT analysis................................................................................................................10
Table 3: Mckinsey’s 7S model......................................................................................................11
Table 4: VRIO framework.............................................................................................................12
Table 5: Porter five forces model..................................................................................................14
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Introduction
In the modern era, assessment of the business environment at regular intervals has become
critical for the success, growth and sustainability of an organisation. The assessment of the
business environment is also considered as vital because the changes in macro environmental
factors have a direct impact on the overall operations and activities of a business enterprise (Hill,
2017). The assessment is also considered critical because it supports companies in developing
more useful and effective strategies to attain the desired goals and objectives in the long-run.
Nowadays, different models of strategic management are available and these models can be used
by organisations to assess the business environment and devise useful strategies.
The present study is based on Asda which is one of the leading and most renowned chains of the
retail supermarket in the UK. The business was founded in the year 1949 and the brand is
currently serving more than 18 million customers every week (Asda, 2019). The impact and
overall influence of the macro environment on Asda's business strategy have been analysed in
this study. Apart from this, a strategic management plan for the company has also been
developed in the current research.
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L01
P1 Applying appropriate framework analyse the impact and influence of the macro environment
on a given organisation and its strategies
The mission, vision and objectives are considered as an essential element because they provide
adequate guidelines and directions to businesses. Furthermore, the vision, mission and objectives
of Asda are mentioned below as:
Vision
The vision of Asda is to make services and goods affordable for everyone.
Mission
The mission of Asda is to become the best value retailer in Britain and to exceed the customers
need and expectations in the best and every possible manner.
Objectives
 To respect individuals
 To strive for excellence
 To deliver the best possible and quality services to customers
 To meet the needs and expectations of stakeholders
It has been analysed that the role of business strategy is significant in the accomplishment of the
business goals and objectives of Asda. The statement can be justified by the fact that business
strategy provides Asda with adequate guidance and directions in the context of the way in which
efforts and resources need to be invested.
Furthermore, the business strategy of Asda also plays a critical role in providing the company
with an opportunity to understand and focus on areas which are important in delivering the best
performance. The business strategy of Asda also supports the selected organisation in delivering
satisfactory products and services to customers according to their need, demand and expectations
(Hill et al. 2014). Nowadays, there are wide ranges of tools and techniques of strategic planning
available, and businesses can use any of these tools to attain their goals and objectives.
Considering the case of Asda, it has also been analysed that at present benchmarking, capability
analysis, competitive intelligence, goal planning and forecasting are some techniques of strategic
planning which the company is using.
The Pestle analysis of Asda is carried out below as:
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Table 1: Pestle analysis
Macro environmental Factors Discussion
Political At present the political environment of UK is stable, and this has
provided Asda with an opportunity to carry out the smooth flow of
all operations and activities. However, the operations of Asda have
been adversely affected in the past because of political decisions
such as Brexit
Economic Economic factors such as tax avoidance and depriving farmers have
negatively affected the overall business operations of Asda. The
increase in taxes and cuts in public spending are some other adverse
economic factors which are affecting the organisation (Hitt and
Duane Ireland, 2017).
Social The demand for products and services offered by Asda is directly
affected because of the changes in social trends in the country. The
ageing population in the country is a major social trend which is
affecting the growth of Asda's food and non-food products in a
negative sense.
Technological Advanced and upgraded technological environment of UK is
positively affecting the company by providing an opportunity to
deliver fast, effective and more accurate services to customers
Legal The employment laws and regulations linked with food, safety and
health has become very strict in the country, and this has resulted in
making the operations of Asda more complex
Environmental The pressure from government and other regulatory bodies have
forced Asda to emphasize areas such as carbon reduction and to
employ sustainable practices. This has resulted in enhancing the
brand image of Asda in the UK market.
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Figure 1: Pestle analysis
The structure, conduct and performance model is also taken into account by Asda to make
adequate and satisfactory relations among three major variables which are market structure,
market conduct and market performance.
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Political
Economi
c
SocialLegal
Technol
ogy
Environ
ment

Figure 2: The structure, conduct and performance model
Regarding market structure, it can be expressed that at present Asda is operating within a perfect
competition market and here there is huge demand of services and products in the market (Doz,
2017). The concept of conduct outlines the fact that the buyer and seller emphasise areas such as
high-quality products and low prices. Asda can attain high and satisfactory performance by
focusing on areas such as effective resource allocation and product quality.
M1 Critically analyse the macro environment to determine and inform strategic management
decisions
From the analysis of Asda’s macro environment it has been identified that at present, the brand is
getting both positive and negatively affected by the changes in the business environment. The
political, social and economic trends are affecting the operations and activities of Asda in a
negative sense.
The management of Asda is now required to develop effective strategies and action plans to
reduce the negative impact of macro environmental factors and attain its objectives in the long-
run (Barney, 2017). For example, the selected organisation can take strategic management
decisions such as reducing the cost of operations. This will further support Asda in offering
products and services at low prices to customers.
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Structure
Conduct
Performan
ce

Apart from this, strategic management decisions in the form of carrying out effective marketing
of services and products to create high demand among customers are also important for the
brand. On the other side of this, it can be critically argued that Asda is getting positively affected
because of factors such as technology and environment (Ginter et al. 2018). The strategic
management decisions of Asda here should be directed towards employing new and advanced
technology at regular intervals.
In addition to this, the decisions of Asda should also emphasise making the operations and
business activities more sustainable and environmentally friendly. It is also beneficial for the
brand to carry out analysis of its business environment at regular intervals because the analysis
will help the business in understanding the changes in the environment in the best possible
manner (Meyer et al. 2017). The information collected from the analysis can be further taken
into consideration by the brand to develop useful strategies for growth and development in the
long-run.
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LO2
P2 Analyse the internal environment and capabilities of a given organisational using appropriate
framework
As per the view of Bettis et al. (2015), strategic capability is termed as the overall ability and
effectiveness of a business enterprise to adopt and employ different plans and strategies
successfully to sustain in the highly competitive marketplace. Considering the case of Asda, it
can be expressed that the company's strategic capabilities consist of different components such as
human resources, leadership and services.
The selected brand is operating with a team of highly skilled and competent employees, and the
staff members are contributing a lot in providing a competitive advantage to the business. The
statement can be justified by the fact that effective human resources deliver satisfactory services
and products to the customer and this further contribute in enhancing the overall level of
competency of Asda (Bettis et al. 2015)
On the other side of this, the leadership employed by Asda can also be termed another important
element of the company's strategic capabilities. The leadership within the selected organisation is
contributing a lot in making changes successful and retaining the employees in the long-run. The
customer services delivered by Asda are fast, accurate and satisfactory and therefore, can be
termed as an important component of the firm’s strategic capabilities.
The resource-based view is a critical strategic management model which is used by companies to
analyse the overall effectiveness of their resources (Lasserre, 2017). From the application of the
model, it has been identified that at present Asda has employed a useful business strategy which
is directed towards the exploiting the current core competencies and existing resources of the
brand in the best possible manner.
At present, the business has capabilities such as adapting the changes and meeting customer
expectations. To attain capability such as adapting changes, the brand has places resources such
as people, process and technology. Asda has employed growth strategy which encourages the
business to expand its online and offline operations in the marketplace. Apart from this, the core
competency of Asda is to provide quality goods and services at low prices, and this has further
the brand in becoming a leading supermarket retailer in the UK (Ethiraj et al. 2016).
The SWOT analysis model has been used here to assess the organisation's internal environment
and the model has been applied below as:
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SWOT analysis
Table 2: SWOT analysis
Strengths
 The wide and diverse range of services
and products
 Effective and outstanding marketing
strategies and plans
 Satisfactory customer relations
 Initiatives in the form of corporate
social responsibility
 Skilled and efficient human resources
Weaknesses
 Limited presence in the global market in
comparison with its main and key
competitors
 Low-profit margins
 Falling sales and operating profits
 Long queues within stores
Opportunities
 Expansion of product line in segments
such as pharma and jewellery
 Expansion in developing markets such
as China and India
 Acquisition of small retailers operating
in the country
Threats
 Increasing competition in the industry
 Growing price war in the industry
 Changing policies and tax regulations
by the UK government
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