Business Strategy Analysis: ASDA's Macro Environment Report

This report provides a comprehensive analysis of ASDA's business strategy, examining the impact of the macro environment using PESTLE analysis and stakeholder analysis. It delves into ASDA's internal environment and capabilities, utilizing SWOT and VRIO analyses to assess strengths, weaknesses, and competitive advantages. The report further evaluates the competitive forces within the market sector through Porter's Five Forces model, devising strategies to enhance ASDA's market position. Finally, it applies various strategic theories, concepts, and models to interpret and formulate strategic planning, culminating in a strategic management plan with actionable priorities, objectives, and tactical actions. The conclusion synthesizes the findings, providing a set of valid strategic directions, objectives, and tactical actions for ASDA.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
P1:Applying suitable structure analyse the impact and influence of macro environment on
company and its strategies......................................................................................................1
M1:Critically analyse macro environment to determine and inform strategic management
decisions.................................................................................................................................4
TASK 2............................................................................................................................................4
P2:Analyse internal environment and capabilities of a industry using suitable structure......4
M2:Critically Evaluate internal environment to assess strengths and weakness of company's
internal capabilities, skills set and framework.......................................................................7
TASK 3............................................................................................................................................7
P3:Applying Porter's Five Forces model evaluate competitive forces of market sector for
company.................................................................................................................................7
M3:Devise suitable strategies to improve competitive edge and position in market based on
results......................................................................................................................................8
TASK 4............................................................................................................................................8

P4 Apply range of theories, concepts and models interpret and devise strategies planning for
given organisation..................................................................................................................8
M4:Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives..............................................................................................................................10
D1:Critique and interpret data and information applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions........11
CONCLUSION..............................................................................................................................12
REFERENCES.............................................................................................................................13

INTRODUCTION
Business strategy refers to combinations of all decisions taken and perform actions by
business to achieve common goals and secure position of competitors in market. Business
strategy is backbone of any organisation to mapping the strategies which assist in performing
tasks and business strategy (Bentham, 2018). It is essential to get positive outcomes of any
business activities in specific industry. Below report is based on ASDA, it is British supermarket
chain in Leeds, England and this company founded in 1949 by peter, Fred Asquith and Noel
Stockdale. This report includes the macro environment and strategies of business impact and
influence to company, internal environment and its capabilities, porter's five forces model and
models, theories and concepts to assist understanding of strategic directions in firm.
MAIN BODY
TASK 1
P1:Applying suitable structure analyse the impact and influence of macro environment on
company and its strategies
ASDA is a leading British supermarket chain founded in 1949 in Leeds, England.
Company based on retailing sector and they provide various goods and services such as
Groceries, services based on finance, Asda mobile and many more. Company manage more than
165,000 employees in 631 plus outlets.
Vision: ASDA dealing in groceries and many goods or services, so their vision statement
is to provide best quality at affordable rates. Company also use eco friendly materials and carry
bags to protect environment from many issues. Their slogan is “save money, live better”.
Mission: ASDA is a well known organisation in UK and they serve their products and
services in other countries also (Bentham, 2018). Company's mission statement is to become
Britain's best valuable retailer through providing best quality and fulfil customer;s needs.
Objectives: Company's main aim is to generate maximum revenue by serving good
services to consumers.
Macro environment
It is defines situation that survive in economy as a whole, instead than in specific
industry. It includes inflation in country, fiscal and monetary policy, spending, employment and
etc. In context of ASDA, They increase their success and profit for this company require to
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examine external environmental factors by using PESTLE analysis, it defines structure of
environmental factors that are used in canning elements of strategic management. It includes
various factors which is describe below as:
 Political factor: These factors are determine extent to which government may influence
industry or economy (Bentley-Goode, Omer, and Twedt, 2019). It includes fiscal
policy, tax policies and etc. In context of ASDA, company take benefits from stable
political environment in UK. At the same time due to Brexit industry face lots of
uncertainty because government makes many changes in policies, tax rates and many
more due to Brexit. For ASDA company this is biggest threat for business.
 Economical factor: These factors are determinants of performance of economy that
directly affects an organisation and have resounding long term impacts(Blythe,and
Martin, 2019). In ASDA context, company Requires to consider economic factors like
cost of credit, pay level, energy prices and etc. These are affect the pricing strategies of
industry significantly such as in 2020 due to Covid pandemic government regulate many
rules and regulations and economic lock-down affect people's job and customers reduced
their purchasing activities, so this is biggest threaten for ASDA.
 Sociological factor: These factors are based on social environment of market which
includes population analytics, demographics, cultural trends and etc. In current scenario
demands of people increasing and due to increasing demand for vegan and organic food
is growing quickly. Demand for particular foods is also at high level in UK and other
locations where ASDA operates. Company sell products in huge numbers in market with
improved quality to society.
 Technological factor: These factors are based on new and innovated technologies which
assist in business in achieving growth. It includes digital platforms, automation,
development, research and etc. In context of ASDA, now days use of technology is
growing because people get their order and services with one click on online application.
This factor provide opportunities to ASDA and helps in reach more people in market
from various areas.
 Legal factor: These factors are have both internal and external sides. These are various
laws that affect an organisation's environment in specific country. It includes consumer
laws, labour laws, safety standards and etc. In ASDA context, they understand their legal
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rules and regulations such as they provide standard wages to every employees and fulfil
workforce satisfaction as per labour law.
 Environmental factor: These factors based on surrounding environment which includes
climate, global changes in c climate, weather, environmental offsets and etc. In context of
ASDA, now days people are aware about environment that affect organisation. Company
must demonstrate that it is a Eco friendly organisation.
Stakeholder Analysis
It is based on procedures of analysing people before begins business project; make team
as per their levels of participation, influence and interest in project and also deciding how best to
involve and communicate stakeholder team. For ASDA it is beneficial to grouping stakeholders
according to their interest and levels. There are three steps that manager of industry to
stakeholder analysis which explain below as;
STEP 1: In this ASDA identify various stakeholders from different departments such as
from sales, marketing, customer and etc.
STEP 2: At this stage after identify their stakeholder,(Ciampi, Marzi, Demi, and
Faraoni, 2020) ASDA rate according to stake-holder's influence power, interest, participation
levels and etc.
 High interest, high power: In this stakeholders have high interest and high power such
as shareholder, board of directors and etc.
 High power, low interest: In this stake holders have high power and low interest such as
suppliers, customers and etc.
 Low power, low interest: In this stakeholder have low power and low interest such as
employees, leaders and etc.
 Low power, high interest: In this stakeholders (Ciaramitaro, 2018) have low power
and high interest such as employees and etc.
STEP 3: This is last stage where manager of ASDA interact with their stake-holder
according to their interest and power rate, so that business can achieve objectives in particular
time frame in effectual manner.
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M1:Critically analyse macro environment to determine and inform strategic management
decisions
As per above discussion, ASDA operating in retailing supermarket, in current scenario
they experiencing major changes in grocery sector such as small scale industry like ALDI and
LIDI are give tough competition to retailing sector. Now ASDA serve their services and goods at
higher cost as compare to competitors this provide threaten to business. Digital shopping markets
are most trendy in market because of customer's busy schedules so this provide more
opportunities to company(Fisher, 2018). Due to a reach of other changes in macro environment,
ASDA requires to develop innovated strategies to hold their consumers and survive in market.
Firm needs to focus on marketing and pricing strategies to overcome form Brexit situation.
Stakeholder analysis assist in grouping stakeholders from different department section as per
their participation, power and interest. This analysis helps in achieve growth and profit at high
level and get competitive advantages in market.
TASK 2
P2:Analyse internal environment and capabilities of a industry using suitable structure.
SWOT analysis of ASDA:
This model helps in understanding about internal and external factors that have an impact
on decision making process. SWOT analyse assist the company to understand about their
strength and weakness that are internal factor of the company and various opportunities and
threats that are external factors of the company. Below are detail explanation of SWOT analysis
in the context of ASDA.
Strength Weakness
 The main strength of ASDA is
company has huge range of product and
they also provide financial services to
their customers.
 ADSA has good connect with their
customers with the various social
networking sits.
 The main weak point of company is
they have limited market presence as
compare to other competitors in the
market.
 ASDA restricted business entry in some
few countries because they fear about
the increase in high competition from
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the local vendors.
Opportunities Threats
 Company has various opportunities to
expand its business in new industries
such as pharmacy, jewellery etc.
 ASDA can increase its presence in
online market that could help in better
profitability and expand its market at
online business.
 The major threat for the company is the
high competition level in the market,
and price war with other retailers in the
market.
 The government policies of UK keep
changing and it could impact the
business of the company.
VRIO analysis of ASDA:
This analysis is an strategic tool design to analyse the business's uncover and protect
resources that help their business to gain competitive edges in the market(Fraser, 2019). VRIO
analysis use to analyse the various capabilities of business that helps in better growth and
profitability in competitive market. Below are detail explanation of VRIO analysis in the context
of ASDA.
Valuable: The VRIO analysis of shows that financial resources of the company is most
valuable, this resource helps company to invest into new opportunities in the market. Employees
of the company is also an valuable resource for the company, that helps ASDA in effective
productivity and growth of the company.
Rare: Financial resources of ASDA found rare resource, they have strong financial
position in the market, employees of the company also found rare, because the company focus on
attracting talented and skilled employees in order to gain better quality and effective production
in the company. Supply chain and distribution network of the company is also an rare resource
that other company can not adopt.
Imitable: The financial resources of the company is costly to imitate by the competitors
in the market. Employees of the company is also not costly to imitate by the other competitors
because other firms can (Liu, Nelson, and Erdélyi, 2019) also attract talented and skilled
employees in the organisation and provide them training according to the jobs they have to
perform in the company.
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Organized: Financial resources of the company are organised capture by the VRIO
analysis. This resources of the company use strategically to gain competitive advantages in the
market. Distribution network of the company is also most organized resource that helps in better
functioning and growth of the company.
Mckinsey 7S model:
This model helps organisation to analyse its organisational design, the goal of 7S model
is to explain how company's effectiveness in company's structure helps in achievement of goals
and objectives (Lu, Kuhnle, and Cheng, 2018). This model can help ASDA, to analyse its
company's structure and understand effectiveness in order to achieve various goals and
objectives.
Strategy- This refers to the well structured business plan that allow company to
formulate strategy for the achievement of goals and objectives. Business strategy reinforced by
the mission and vision of the company that provide insight about how company can achieve its
target and objective by effective strategy.
Structure- This is the way by which company arrange its chain of command,
accountability that form organisational chart. Effective arrangement of all the department of
company helps in better growth and objectives of the company(McIntyre, Srinivasan, and
Chintakananda, 2020).
System- This refers to the technical infrastructure of the business that helps in workforce
management and effective management of chain of decision making. System reflect all the
activities of organisation in order to gain better and effective productivity.
Skills- This refers to the capabilities and ability of company to effective manage its
workforce and business strategy in the market. From the various skills and capabilities of the
employees helps them in the achievement of all goals and objectives of the company.
Style- This refers to the attitude of managers and other senior employees in the
organisation that establishes code of conduct that interaction and decision making of business.
Which reflect management style of leaders and their attitude towards the other employee of the
company.
Staff- This refers to the management of talented and skilled employees in the
organisation so that they can help in effective decision making of the company.
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Shared values- The mission, vision, objectives and values of the company play an
important role effective design of the organisation and its growth in the market.
M2:Critically Evaluate internal environment to assess strengths and weakness of company's
internal capabilities, skills set and framework
From above discussion it is critically examined that for effectively analyse the intrinsic
aspect ASDA company can adopts the SWOT, VRIO and McKinsey models. all these analysis
are very important for achieving higher level of profits and revenues and also execute the
specified activities in particular time frame(Moktadir, Kumar, Paul, Sultana, and Rezaei,
2020). The major strength of using these models is that it assists in effectively analyse the
qualities and abilities of the ASDA resources for achieving competitive benefits. By adopting
above described models industry requires to invest higher price and time frame due to which
expenses operating would be higher due to which smaller industries cannot afford it.
TASK 3
P3:Applying Porter's Five Forces model evaluate competitive forces of market sector for
company
Porter's Five Forces
It is based on structure of methods for examine competitors of a business in market.
ASDA analyse this model by using five factors that are;
Threat of new entrants: This defines that how new entrants affect existing industries
(Roberts, and Pérez Horno, 2020). For ASDA, they face less threat of new entries because
company well known established in market and other locations. Industry focus on effectual
strategies to hold customers and their reaching rate is high in market. There is low switching cost
because organisation have few competitors and some how they provide their products at same
price level.
Threat of substitute services and products: In market availability of substitute products
and services build more challenges. In ASDA context, consumers cannot derive same utility and
switching cost is high. Company provide convincing reasons to users by providing best
experience and higher value for amount.
Rivalry among existing industry: It shows competition among existing industries and
for ASDA there are less numbers of competitors in market. Company growing very quickly and
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in market there is clear leader. To reduce existing competition organisation can focus on new
market trends and customer's needs and expectations.
Bargaining power of suppliers: It indicates pressure exerted by suppliers on
organisation by accepting various tactics such as reducing quality, product availability and many
more. This factor become high if ASDA is not well trained and educated. In market when
suppliers are less and demand of their offered goods is high. This will be low if switching cost is
low and suppliers are not concentrated. To over come form this company can decrease
dependency on only one supplier, they need to explore and build connects with other suppliers
also.
Bargaining power of buyers: It shows pressure that users exert in company to get higher
level quality of goods and services at affordable rates. There are various factors which increase
this factor such as high market knowledge, less switching price and many more. To over come
form this factor company need to focus on promotional and advertising activities through this
ASDA reach more people and understand user's needs and wants.
M3:Devise suitable strategies to improve competitive edge and position in market based on
results
As per above discussion it is examine that performing on all five factors shows the main
affect on sales and revenue of the ASDA. To survive for a long period of time, company require
to focus on making innovated strategies so that ASDA can beat the competitors in within market
and reach the consumer base for long period of time frame. To avoid and overcome these threats
of substitutes industry focus on providing the unique serving that fulfils expectations and wants
of customers in society. To overcome from threat of Rivalry Company can focus on providing
sustainable differentiations in their serving that also assists in increasing revenue and growth in
current market trend.
TASK 4
P4 Apply range of theories, concepts and models interpret and devise strategies planning for
given organisation.
Porter's Generic model:
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This model helps to understand the various strategies that businesses use to gain
competitive environment in the company. The strategies are related to the extend to the scope of
business in order to gain high level of profitability. In the context of ASDA, below are various
strategies that managers of respective company can use in order to gain competitive advantages.
Cost leadership: In this strategy business reduce their cost of product and services to
gain competitive edges. Companies use this strategies by decrease the cost of production so that
they can offer product and services at low price. In the context of ASDA company use cost
leadership strategy for the achievement of competitive advantages.
Differentiation: In this strategy company use innovation and creativity in their product
and services for the achievement of competitive edges (Seyfang, 2008). the main motive of this
strategy is making product and services different from other competitor so that it can helps in
better achievement of competitive edges.
Focus: In this strategy company focus on particular segment of target group in the
company, in this businesses ensure that they can focus on the needs and wants of the customers
and make effective strategy to fulfil those needs and wants.
Ansoff's Matrix:
This matrix helps to look various opportunities and make plan to adopt appropriate
strategies for the business and its growth. Below are Ansoff's matrix is explained in the context
of ASDA.
Market penetration: In the context of ASDA, company use market penetration to
promote its pre existing products and existing market. The first strategy that organisation apply
on is their stores, company works to increase its market share by increasing the number of the
stores in the market.
Diversification: In the terms of ASDA, company has diversified its business in various
ways such as, supermarkets, money exchange services, gas station. Company has various
opportunities to expand its business horizontally into other industries such as shoes, electronics,
sports, etc.
Market development: This refers to the promotion of pre existing products in the
market, it helps business to expand their business new market and gain better growth. This can
also be an benefit for the ASDA to increase its promotion into an new areas of market.
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