ASDA's Market Position: An In-Depth Analysis and Strategic Review

This report provides an in-depth analysis of ASDA's current market position within the UK retail sector. It begins with an external analysis, employing PESTLE to assess political, economic, social, technological, environmental, and legal factors impacting ASDA. A competitor analysis is conducted using Porter's Five Forces, examining competitive rivalry, buyer and supplier power, and the threat of substitutes and new entrants. The report also includes a SPICC analysis, evaluating ASDA's suppliers, public image, intermediaries, customers, markets, and competition. An internal analysis follows, featuring a value chain analysis to identify key activities that contribute to ASDA's value proposition, and a marketing mix analysis. The report concludes with a SWOT analysis, summarizing ASDA's strengths, weaknesses, opportunities, and threats, ultimately aiming to provide insights into ASDA's strategic challenges and potential areas for improvement in order to regain its lost market share. Desklib offers a wealth of similar solved assignments and past papers for students.

ASDA INDIVIDUAL REPORT

Table of Contents
INTRODUCTION................................................................................................................................3
EXTERNAL ANALYSIS........................................................................................................................5
PESTLE ANALYSIS OF ASDA..........................................................................................................5
COMPETITOR ANALYSIS...................................................................................................................8
PORTER’S FIVE FORCES ANALYSIS................................................................................................8
SPICC ANALYSIS............................................................................................................................9
INTERNAL ANALYSIS.......................................................................................................................10
VALUE CHAIN ANALYSIS OF ASDA.............................................................................................10
MARKETING MIX OF ASDA.........................................................................................................12
SWOT ANALYSIS.............................................................................................................................15
CONCLUSION.................................................................................................................................17
REFERENCES...................................................................................................................................18
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INTRODUCTION
The current report is prepared with an aim to analyse the current market position of ASDA
which is one of the largest retail company in the UK. In last financial year, the company has
experienced falling sales in all quarters and was not able to stand its ground against top three
retail companies of the UK- Tesco, Sainsbury and Morison. The current report will analyse the
internal strength and weaknesses and the current market position of The Company in
comparison with its rival companies. The report will also highlight the external factors such as
political, economic and environmental policies of the UK government and the impact of these
policies on the working of the company. The competitive environment of the company will be
analysed with the help of Porter's five forces model which analyses the influence of the
competitive rivalry, suppliers and customers on the profitability of ASDA.
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ASDA OVERVIEW
ASDA is a retail company which is headquartered at West Yorkshire England. It is the third
largest retail company in the UK, behind Tesco and Sainsbury. The company was founded in
1949 and at present offers a wide variety of groceries and general Merchandise through its 642
stores. The company has employee strength of 160,000 and in 1999 it became a part of Wal-
Mart groups. The company has also entered in the clothing market with a brand name ‘George’.
The company has registered slow growth in last few quarters and is planning to analyse the
current situation of the company so that it can retain its customer base (ASDA, 2018).
Figure 1 : ASDA Logo
VISION
“The vision of the ASDA group is to provide value to the money of the customers by delivering
the right product at right time.”
MISSION
To become the best retail company in the UK and being able the offer goods and services at
affordable prices to the customers. To meet the everyday needs of the people, and help them
get more out of life.
PROBLEM STATEMENT
4

‘‘ASDA has suffered falling sales since 11 consecutive quarters. During this period, the sale
declined by 7.5 and the number of customers visiting the store reduced by 2 present. The
company needs to analyse the current position of the company and find a way to regain its lost
market share’’
5

EXTERNAL ANALYSIS
PESTLE ANALYSIS OF ASDA
The PESTLE analysis of ASDA is helpful in effectively assessing the macro environment of the
business. There are six elements on which the framework of the PESTLE analysis relied on such
as political, economic, social, technological, legal, and economic. The analysis has been
explained in detail as follows:
https://www.howandwhat.net/pestel-analysis-of-asda/
ELEMENTS INFLUENCE IMPACT
POLITICAL The national, international, and
the EU regulations possess a
huge impact on the consumer
rights, employment, taxes, etc.
++
The decision-making might be
impacted by the instability and
war
-
ECONOMIC The economic factors like credit
cost, labour supply & demand,
pay level, competitive
pressures possessed influence
on the company’s pricing
strategy
-
SOCIAL Celebrity following, healthy
lifestyle, and ageing population
is essential for business
development
++
Providing required products as
per the social needs
++
TECHNOLOGICAL Click & collect delivery of the
products through mobile apps
+++
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ENVIRONMENTAL Suitable policies must be
developed regarding the green
economy, carbon footprint,
organic food, pollution, and
hazardous waste
-
LEGAL Rules and regulations of the
operating countries must be
followed
-
Minimum wage should be pay
to the employees
-
POLITICAL
There are various kinds of regulations such as national, international, and the EU regulations
that possess a great influence on the ASDA in terms of consumer rights, employment, taxes,
etc. In addition, the instability and war could affect the decision-making of the company
(Sivalingam, 2015). ASDA should effectively monitor the political aspects and gain benefit
through the stable political situation.
ECONOMIC
It is essential for ASDA to manage the economic factors like credit cost, labour supply &
demand, pay level, competitive pressures in order to avoid any impact on the pricing strategy
(RetailWeek, 2013). The development of suitable strategies would help ASDA in managing such
aspects adequately and conducting their business operations adequately.
SOCIAL
ASDA should effectively consider the social aspects like celebrity following, healthy lifestyle, and
ageing population as it helps their business at the huge level. They could introduce new
products and services in the market for enhancing their sales. In addition to this, they could
develop the strategies for segmentation.
TECHNOLOGICAL
The technology has been growing rapidly such that the broadband is super fast and the mobile
applications are helpful in click & collect delivery of products and services (RetailWeek, 2013).
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ASDA should effectively apply the advances technology in their functioning for gaining
effectiveness in the market.
ENVIRONMENTAL
ASDA should be focusing on environmental aspects like green economy, carbon footprint,
organic food, pollution, and hazardous waste. It is essential for ASDA to effectively assess the
environmental factors and take necessary actions for conducting eco-friendly operations. This
would be helpful in conducting the business operations and enhancing the sales effectively.
LEGAL
There are certain rules and regulations of the country where the company would be operating
such that they should not be breached. ASDA should follow every law and regulation. For
instance, the employee should not be given less than the minimum wage of the country. In
addition, any employee could not be dismissed by the company unfairly.
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COMPETITOR ANALYSIS
PORTER’S FIVE FORCES ANALYSIS
Competitive rivalry
The completive rivalry is a strong force in the retail market of the UK. The market leaders such
as Tesco and Sainsbury regularly introduce new market offering to lure customers, therefore, it
becomes necessary for ASDA to remain competitive in the market by increasing its marketing
activities.
Bargaining power of buyers
In the retail market, the bargaining power of the buyers is weak because of the small size of the
purchases by individual customers (Roberts and Berg, 2012). The competitors in the retail
industry are presenting the similar products with exciting offers which provide an option to the
customer to make a switch. If the customers have a large number of options it increases their
bargaining power.
Bargaining power of suppliers
The bargaining power of the suppliers in the retail industry is weak because there are a large
number of suppliers in the UK and there is high competition among these suppliers to work
with leading retail firms like ASDA, therefore ASDA is in position to have a strong control over
these suppliers.
Threat of substitution
The threat of substitution is weak in the retail industry as a wide variety of products and
services are offered by ASDA. In addition, the policy of the company to keep the prices of its
products and services affordable reduces the threat of substitution (Fernie and Sparks, 2014).
Threat of new entrants
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The threat of new entrants is moderate because the retail market of the UK has intense
competition and the new entrant will require a large capital base to compete with these retail
giants. However, local stores can provide an option to the customers by providing personalised
services and effective customer care.
SPICC ANALYSIS
This is a marketing model which is used for the auditing purpose and it analyses the current
process of the company and determines how well these processes are doing in the current
market scenario. This model analyses the below-mentioned factors:
1. Suppliers: The network of suppliers of ASDA is quite strong and the company posses a
strong hold on the supply chain operations all across the UK.
2. Public: This includes the society in which the company is operating. Strong CSR activities
of ASDA have created a positive brand image of the company.
3. Intermediaries: These are the facilities which are used to make reach the product from
factories up to the end user. The stores of the company are also one of its
Intermediaries which are efficiently managed by the leadership of ASDA (Ramanathan,
et al. 2014).
4. Customers and Markets: This factor includes the end user of product and services and
ASDA regularly keeps analysing the requirements of the customers with the help of
consumer surveys.
5. Competition: The completion in the retail market is quite strong with big retail
companies like Tesco and Morrison’s.
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INTERNAL ANALYSIS
VALUE CHAIN ANALYSIS OF ASDA
The value chain analysis is done so that a valuable product can be delivered in the market. This
is done by analysing the various activities which are done internally in the business so that the
cost associated with the activities, as well as their location helps in building the value so that
the products can be differentiated in the market with respect to the competitors. The
advantage of conducting value chain analysis helps in increasing the profit of the organization.
The value chain analysis is based on two types of activities which are described below:
Figure 2 Value Chain Analysis
Source: Administrator, 2010.
PRIMARY ACTIVITIES
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Inbound Logistics
The logistics of the ASDA are available in the agile as well as in the inclined form and is based on
building the strategy of low prices for the products and services to be given to the customer.
ASDA possess a great scope as it has built its position in the market as the bargaining power of
the suppliers helps in accomplishing the strategy of implementing the low cost.
Outbound Logistics
The services of the ASDA organisation are available online as well as the offline so the
operations of the services are done easily. The Wall-Mart subsidiary is the ASDA organization.
The various processes, as well as the tools, are designed and developed so that services can be
implemented effectively (Bolwig, et al. 2012). The ASDA organization will provide the exposure
needed in the market for the customers with the help of various formats as well as the styles
needed for the various types of stores. The format comprises the Metro, Homeplus,
Superstores, Extra, etc. which provides help in doing the segmentation process by analysing the
customers.
Marketing and Sales
The ASDA has provided the various benefits and the schemes which will help in attracting the
customers. The main focus of the ASDA organization is to promote the customer satisfaction.
Also, the various issues concerned with the environment, waste management, creating
awareness are being looked into so that healthy meals can be prepared.
Service
The concept of Price Leadership is being followed by the ASDA organization. The services of the
customer are increased with the help of applying strategies for cost leadership as well as the
differentiation (Gereffiand Fernandez-Stark, 2016). Further, the production cost, as well as the
operation cost, is being minimized so that a position of leadership can be achieved.
SUPPORT ACTIVITIES
Firm Infrastructure
12