Strategic Management Report: Analysis of ASDA's Business Strategies

This report provides a comprehensive analysis of ASDA's strategic management, encompassing its strategic directions, industry analysis, and recommendations. It begins with an introduction to strategic management and its importance for organizations, followed by an overview of ASDA's strategic directions, including marketing development and market penetration strategies. The report then delves into an in-depth industry analysis using PESTEL and Porter's Five Forces models to assess the external environment and competitive landscape. Further, it examines strategic drift faced by the organization, along with the demand of mission and vision and strategic capability of the company. Finally, the report concludes with strategies ASDA can follow to defend its core business, offering insights into its overall strategic approach and future prospects.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
ASDA strategic directions...............................................................................................................1
TASK 2............................................................................................................................................2
Analysis of industry with using different models.......................................................................2
TASK 3............................................................................................................................................5
Strategic drift faced by organisation...........................................................................................5
Demand of mission and vision....................................................................................................5
Strategic capability of company..................................................................................................5
Canvass model............................................................................................................................6
TASK 4............................................................................................................................................1
Strategies which can be followed by ASDA to defend its core business....................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Strategic management is very essential for any organization. It is the process of planning,
making strategy continuously in firm to achieve business goals. Strategic management is very
important for leaders, managers and owner of company. This process helps firm at the time of
facing crisis in industry through making new ideas and plan which is different to their market
competitors. Steps, components and meaning is the process of strategic management. It is a set of
strategy that has to be followed by managers in organization. It is long termed concept that take a
lot of time (Robson, 2015). Benefits of this planning are that it increase operational skills and
help in making business more successful in marketplace. ASDA is a British leading retailer
company in UK. It provides various range of products in their firm for people. It established their
headquarter in West Yorkshire, England and Leeds. They sell their grocery products by using
online services. In this report it defines strategic direction followed by company and its
contribution in developing within past 5 years. This study explains the process of analysis by
using different models which organization is included for operating its functions. It also analyzes
resource implication which is recommended that firm has to address.
TASK 1
ASDA strategic directions
ASDAs is very famous corporation in UK, they provide the best quality products and
services. It was founded in 1949. Andrew Bond, John Long worth, Judith McKenna are the
board of directors of company. They built their business for offering services to customers
according to their needs. It is owned by Walmart. During the 1950s to 1960s company expand
their business by establishing grocery store in many places. In the process of expanding their
business they faced a lot of problems, after struggling in market they raise productivity by
making good quality products in reasonable price (Hill, Jones, and Schilling, 2014). ASDA open
supermarket in UK for providing goods according to customer’s demands and requirements.
ASDA is one of the leading supermarket retailer industries. The company offers grocery
products including fresh foods and fruits, drinks in various flavors, beauty and health products,
clothing and home, frozen food; they also make baby products etc. Firm manufactures goods for
men, women and kids. It also includes other services through offering bedroom products, chest
of drawers, mattresses and pillows, bathroom products such as towels, bath mats etc. through
doing this effort customer attract towards their services in supermarket and grocery shops. It will
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create positive behavior for company by customers, because firm made products according to
requirement and needs of people. Consumer Behavior help company to understand about their
like and dislikes. This process explain groups and individual customers products choice, use and
ideas about services of ASDA. It is very important for firm to get all information about client
behavior towards goods and services. The aim of this company is to satisfy their customers.
Organization used different types strategies in past for developing their business growth.
1. Marketing development strategy: ASDA followed marketing development strategy to
expand their business within existing products and services. It helps in developing new market
for company products but with same goods. This strategy focused on non buying client in recent
mark segments. Company used this function to spread their products services at every place in
country or state level (Hitt, and Duane Ireland, 2017). They want to attract new customers
towards their goods such as food and clothes, grocery, home furniture etc. this process also help
firm in expanding their business through including new uses for products. ASDA marketing
manager make this development strategy to raise business growth in all over the world. In this
activity it takes a lot of risk more than other strategic directions.
2. Market penetration strategy: Market penetration carries low risk in process of
business growth. ASDA follow this function to spread their business branches deeply in entire
world. Company used this process in the activity of selling their products and services. It helps
organization to increase their market share through buying goods by people.
ASDA followed marketing development strategy within past 5 years ago. It helps in
improving their position in marketplace against to its competitors. This strategy is very helpful
for company by searching market activity. It gets developed firm products and services within
new style of production according to people demands and needs.
TASK 2
Analysis of industry with using different models
1. PESTEL analysis: it is very important before making any decision on ASDA
organization. PESTEL help company to understand the effect of external environment in their
business.
Political factors: political factors effect process of productivity in firm. According to this
it is governed by government, ASDA pay taxes for serving their products in market place. They
need to follow all the rules and policy according to UK government to run their business. But on
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some time changes in political factors effect their business and decrease their productivity. This
changes might be held through applying heavy taxes in making products of organization (Doz,
2017). It also impacts by creating new laws and regulations.
Economic factors: this factor effect ASDA business directly on their profitability and
growth. Interest rates, supply and demand, inflation are the function of economic analysis. It
depends upon customers demand of products, changes in economy effect business growth and
success. It also raises price and interest on products(Ginter, Duncan and Swayne, 2018). For
example, if ASDA make new products within different type at high price according to demand of
client in marketplace, they also raise their price according need of products more than supply.
Social factors: social analysis impact on ASDA business. They need to research in
economy and society to understand their likes and dislikes, after that process company make
products on the bases of getting social analysis. It helps firm to get the knowledge of the latest
trends between society. Organization need to search what is the culture of people and what they
want according to it. Firm make those products which customers beliefs in culture.
Technological factors: ASDA need to know about the use of new technology for making
their products different from the other company. They used new technology for increasing its
productivity and growth of firm(Freeman and McVea, 2015). It is very important for company
face their competitors in market place. Technology is not only based on making new products , it
also helps in distributing services of company. By making research in market improving industry
growth and also help in exploring new ways of engaging, communicating and interacting with
target customers.
Environmental factors: environmental factors highly effect in business growth in
ASDA. It does not come with in planning or making any strategy. Firm need to analysis this
factor because it impacts the productivity process and decrease prices on services. People buy
those products that are environment friendly.
Legal factor: ASDA follow government policy and rules to increase their business.
Changes in legal factors impact on business trading process because after changing firm need to
make change in their whole process of production. It effects in trading process by applying heavy
taxes on products.
2. Porters five forces: this process help ASDA to analysis the competition in
marketplace. It is based on 5 points.
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Competitive rivalry: ASDA followed this model function to know about the current
position of their competitors in market areas and also understand its strategy in business. This
competition raises on high level after the new organization established their business within
same products and services like ASDA have.
Bargaining power of suppliers: this activity of business help in analyzing competitors
power of bargaining in products. Thus, after understanding competitors bargaining power ASDA
need to innovate in their products and raise their own supplier power of bargaining better than its
competitors in market areas.
Bargaining power of customers: ASDA analysis this factor for getting customers
bargaining power and its effect on quality and pricing in products. Company need to fix their
prices than the other organization have(Freeman and McVea, 2015). If effect business because
people attract towards low price products. ASDA need to low in products price that attract
customers more than other firm have.
Threat of new entrants: after doing all the process of analysis. ASDA face another fear
of new organization entry. It is very difficult at the situation of selling products because they do
not have any knowledge of competitors strategy and plan of expanding its business in
marketplace. At that time ASDA need to make market research for getting all the basic
information about competitors.
Threat of substitute products: if company do not make products according to need of
customers it decreases its productivity and growth. ASDA need to make those products and
service that is related to client requirement, demands and needs, it can help them in increasing
their business growth and success process and also help in achieving business goals and
objectives(Hitt, and Duane Ireland, 2017).
Thus, after doing both analysis company improve their strategy and planning of making
products. PESTEL and Five forces both impact on business growth. ASDA need to work after
making report of analysis in marketplace to know about the competition and competitors. It can
help in getting information about market areas and running activity inside it. ASDA market share
is better than it competitors in marketplace. In 2018 organization is placed on third position
within 15.6 % of market share.
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TASK 3
Strategic drift faced by organisation
Strategy get drift after changes in social and technology. ASDA faced drifting in it
strategy by having changes in environment of economy. Failing in business growth effect highly
on company. Sudden changes can not adopt by company, this will happen at the time when
company make their strategy and plan but they can not work on this process and until they get
failed in its process of running business. Strategic drift on the base of four phases such as
incremental changes, strategic drift, flux and transformation change or death. Changes in
external environment effect company growth and productivity. Management right decision also
effect this process in business.
Demand of mission and vision
ASDA mission is to established their business in all over the world. They need to provide
their products according to customers demand and needs which make good brand image in
marketplace. This process help stakeholders to realize the important of business and exists
purpose. The main aim of this company is to make good quality products and services better than
its competitors in mark areas which is affordable in price. They get aligned their aim within
marketplace and client demands. Manager make decision of overall process of managing
employee performance in work areas, they motivate workers to give their high performance for
completing customers requirement.
ASDA vision is to achieve good customers experiences towards their products and
services. Company matches their mission and vision according to market demand. They make
products by searching in market areas needs of people and business. Company respect for
individual values in work place. They want to give their good services to clients and completing
its wishes in products.
Strategic capability of company
ASDA have the capability for making strategy that is different with the other companies.
It defines the ability of succeeding business in marketplace. They make new strategy to face all
the issues and problems at the time of crisis in business and sudden changes in external and
internal environment. It gets implement in their planning and strategy according to business
situations and customer demands. Strategy is based on manger and leaders decision after
analyzing environment of market areas.
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ASDA cannot establish their position in marketplace without using different strategy.
Success of strategies helps in achieving business goals and objectives. It was continuous running
process in firm. In today’s business world this process helps in increasing growth of productivity
and profitability. Company need strategy at the time of customers’ demands and another reason
is changing external environment or threats of competitive rivalry in market area within same
products and services.
Canvass model
Key partners Key activities Value proposition Customers relationship
 Distributors and
Manufacturing
 Contract
manufactures
 Busyness and
supplier at
global and
regional level.
 Petrol and
banking
company.
 Major brands
 Subsidiaries
(ASDA stores,
supercentre,
ASDA living
stores, ASDA
petrol filling
etc.)
 Logistics
organisations
Customer
segmentation
 Marketing
 Customer
fidelization
 Diversification
 Selling and
purchasing of
client products.
 Pricing
 Identify customer
needs and demand
 Effective
distribution
process.
Key resources
 Wide presence
 Complementary
services
 Safety
 ASDA cover all
segments of
marketplace.
 Wide selection
 Good prices
 Online business
Channels
 Trust
 Self-services
 Community
 Affiliation
 Brand awareness
 Long term
relationship with
clients
 Pay in ASDA
with phone
 Customer
loyalty
 Free delivery
services
 Online shopping
 Discount clubs
 Internet retailing
 Automation
Cost structure
 Cost of goods
 Logistics
infrastructure
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 Housewife
 Students
 Mass market
 Middle income
 Older people
Revenue streams
 Online sale
 Ware housing
 It infrastructure
 Store and logistics
assets
 Supply contracts
 ASDA is one of
the biggest retailer
with operations in
many countries
 Employees over
500,00 people and
serving million of
client
 ASDA own
supply chain and
distribution
network
 Affiliates network
 Hypermarket
 Superstore
 Supermarket
 Events
 Mobile application
 Social media
 Petrol station.
 Gift cards
 Advertising
 Staff
 Capital
expenditures
 Taxes
 International
operations
 Presences
 Warehousing
and logistics
 It capability
development
and maintenance
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 Advertising
 Retail sales
 Financial
income,
insurance and
bank business.
 Commission on
affiliates sales.
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TASK 4
Strategies which can be followed by ASDA to defend its core business
Implication of strategies the best assistance for the organization as it enables support to
managing for carrying out smooth business process. It offers base of carrying out operation in
order to manage innovation and creation in business services. Strategies offers different and
unique changes in management of cost, differentiation, competitor analysis, market development,
product development etc. The focus of ASDA is on offering low price product in order to gain
consumer trust and gain loyalty o buyers. The business aim at enabling access to different type of
buyers to its products and services (Zekiri and Nedelea, 2012). In accordance with approach and
product of ASDA, it can be stated that company comply imply use of strategic approaches like,
BCG matrix, cost leadership strategies, Swot analysis and, Pestle analysis, porter 5 forces, etc.
The firm can imply use of Ansoff matrix approach which is discussed below:
Existing market New market
Existing market Market penetration
 In this ASDA will be able to
analyze ways of increasing
sales within existing market
which is cost effective process
and helps the firm in meeting
customer expectation of
domestic market.
 In accordance with this step
the firm will be able to explore
the needs to existing market
more deeply.
 For example, the firm can
hike its share of grocery
businesses. With this the
management will be able to
meet needs and preferences of
Product development
 It is based on development
of new product by studying
market trends and customer
expectation.
 This is the best plan for
ASDA where management
can gain consumer attention
and making innovation in
products and services.
 This will lead to expansion
sales of retailer and will
boost financial services of
business.
 For example ASDA can
study the need to add new
product in stores which will

potential shoppers. increase sales and will
boost financial performance
of business.
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