Business Strategy Report: Macro Environment, SWOT, and Porter's Forces

This report provides a comprehensive analysis of Asda's business strategy. It begins with an introduction to business strategy and its importance, followed by an analysis of Asda's macro-environment using the PESTLE framework, examining political, economic, social, and technological factors impacting the company. The report then conducts a SWOT analysis to evaluate Asda's internal strengths and weaknesses, as well as external opportunities and threats. Subsequently, Porter's Five Forces model is applied to assess the competitive forces within the market sector, including the bargaining power of suppliers and buyers, the threat of substitutes and new entrants, and competitive rivalry. Finally, the report explores strategic planning for Asda, introducing the Ansoff's matrix to devise strategies for market penetration, market development, product development, and diversification, including a proposed marketing budget. The report concludes with a summary of the key findings and recommendations for Asda's future strategic direction.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies..........................................................3
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.............................................................................................................................4
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation.......................................................................................................5
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation..........................................................................................................6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is defined as the course of action or even set of decision which helps
organisation to achieve their specified goals. It is necessary because it helps to prepare plan and
policies on which company is required to work for accomplishing the targets. The organisation
which has been selected in this project is Asda Store Limited. It is one of the supermarket retailer
company whose headquarter is in Leeds, West Yorkshire. It was founded by J.W. Hindell. It
mainly deals in the field of groceries, clothing, furniture, home appliances and many more. In
this project, the topic which are to be discussed is related with PESTLE analysis, SWOT
analysis. Also, there will be brief discussion on Porter's five forces and why it is important and in
the last section strategic planning will be explained.
MAIN BODY
P1 Applying appropriate frameworks analyse the impact and influence of the macro environment
on a given organisation and its strategies.
Every organisation is required to know about the external factors through which day to
day working activity can be affected. In context of Asda store, they are required to be aware

about some of the external factors through which revenue of a company can be affected. For
having detail knowledge about macro environment they can conduct PEST analysis on it.
PEST Analysis on Asda store
PEST analysis is defined as the analytical tool that helps to do future planning for the
purpose of achieving organisational goals. PEST stands for Political, Economic, Social,
Technological factor. Detail information about this factors have been explained below in context
of Asda stores. Political Factor: Under this factor, any of the policies which has been commenced by the
government has the effect on day to day activity of organisation is known as political
factors (Chang and Graham, 2012). This factors had created various issues for Asda
stores because in UK policy were changed due to the Brexit and company was unable to
perform well in past. For ex: Due to the effect of Brexit, the taxation policies were
changed due to which company had to suffer from different losses. Economic factor: In this, inflation rate, interest rate, foreign exchange might be the
biggest challenge that is required to be faced by Asda store. Due to the effect of Brexit,
foreign exchange rate had increased and because of that company had to purchase the
product at high price which reduces the overall profit of the company (Davis, 2012). Social factor: This factor is related with the cultural aspects, attitudes, beliefs that can
impact on the demand and supply of the organisation. In context of Asda store, they are
required to focus on those essential products which their customers are willing for. Asda
store is required to bring new products through which customers can be attracted and that
will help them to expand their business.
 Technological factor: Technology is never same, as it does changes on every short period
of time within the boundary of United Kingdom. Asda store is also required to do some
of the changes in their technology where they can provide services to their customer
through online application and even they can introduce the e-wallet that can beneficial for
the customer. For example: In past, all of the rivalries company had already involved
them in online purchasing and selling but Asda was unable to do the same and because of
that they had to suffer from various losses. (Scholes, 2015).

P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks.
It is important in context of any organisation that they must know about their capabilities
so that they can perform better in future. In context of Asda store they are required to conduct
SWOT analysis for the purpose of finding the current position of company so that improvement
can be done if it is necessary.
SWOT on Asda Store
SWOT is defined as the framework that is used for the purpose of finding internal and
external capabilities of the company which do have the impact on company working company.
In context of Asda store, it will be beneficial for them as they will be capable to evaluate the area
in which they are still required to work. Below, SWOT is explained on Asda store.
 Strength: This area is well defined for any of the organisation as they are performing
well and able to achieve their targets on specific time period. ASDA do have number of
strength which is helping them to perform better in marketplace. Some of the strength of
company are listed below:
◦ They have connected themselves with customers through online services.
◦ There are around 1,50,000 employees who are working with the company in 500
different stores (ASDA SWOT Analysis, Competitors & USP, 2018).
 Weaknesses: It is the area in which Asda is required to focus more as it is one of the
reason that company is unable to perform better in some of the situation. Some of the
weaknesses of Asda store are:
◦ Profitability ratio a net contribution of Asda is low per the requirement of industry
average (ASDA SWOT Analysis / Matrix, 2019).
◦ They do not have better global presence when comparison is done with its rivalries.
 Opportunity: This is the area where company can perform better for the purpose of
earning additional amount of profit. In context of Asda store, there are number of
opportunity that can help them to accomplish their targets and they are:
◦ Opening new stores in rural area of UK where people do not get better facilities as it
will be help to attract new customer towards company.
◦ Venturing the business in fast growing countries like India, China etc.

 Threats: It is one of the biggest problem for Asda which they are required to solve
because it might create number of issues for them in future. Some of the threats of Asda
store are:
◦ Pressure of delivering the product and service at low price.
◦ Company is facing the tough competition from some of the small retailer like Lidi
and Aldi (SWOT analysis of ASDA, 2019).
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation.
Porter's five forces modal is an analytical tool for analysing a company's competitive
environment which can effect a company's report. By adopting these factors, a company can
determine the level of competition and can conduct their activities accordingly. In the context of
ASDA, these factors will play the huge role. It will help company to know about their
competitors, bargaining power of buyers and suppliers, threats of new entry, and industry rivalry.
In detail it has been explained below:
 Bargaining power of the suppliers: It is one of the situation where supplier can deliver
low quality of product at very high price if there are few numbers of supplier available in
the market. In context of ASDA, there is low supply power because there are ample
number of suppliers present within the market who can deliver the same product at
reasonable price (Slack, 2015).
 Bargaining power of buyers: This is a very critical situation for the any of the company,
in this condition buyers are using their purchasing power and demands goods at a very
low price with better quality. This situation arises because of the competition in the
market and in the same manner ASDA also have to compete with various companies like
Tesco, Sainsbury, and Morrisons's which are the major competitors in the retail
industries. There is high bargaining power of buyer in terms of Asda stores.
 Threats of substitutes: In supermarket industry there are so many traders which are
providing various same products which create differentiate one from the other in price,
quality, services, and brand. Hence, there are so many substitutes available in the market
which create a great competition between the various companies. Thus, if ASDA wants
to succeed in the market and compete with other companies then they must provide better

services to the customer at a very low price. Here, the threats of substitute for the
company in supermarket is high.
 Threat of new entrants: As ASDA is one of the large supermarket but still competition
is increasing day by day within marketplace so it never easy for any of the organisation to
sustain in the market. Here, Asda have high threats of new entrants (Helms and
Whitesell, 2013).
 Competitive rivalry: This force refers to the number and strength of the competitors in
the market. When rivalry is in the intense level ASDA can attract various customers with
aggressive price cuts, by established new schemes, different offers, several
encouragement activities, and fulfilling the customers’ needs. By using all these activities
company can inspire the customers to connect with them for longer period of time.
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation.
Introduction
Strategic planning can be explained as the art of formulating business for finding the
major impact of it for the purpose of achieving organisational goal. Here, ASDA wants to
introduce Ansoff's matrix for the purpose of expanding their business at greater platform
(Kernbach, Eppler and Bresciani, 2015).
Situational Analysis Summary
As per SWOT analysis, ASDA is performing well in the market and even they are
capable of delivering the goods and services which is required by their customers. But, they are
required to expand their business at greater platform and for that they must know the external
factor by taking the help of PEST.
Strategic objective:
Strategic objective of ASDA is to increase customer retention by achieving and
maintaining outstanding customer service. This long term goal should be accomplished by firm
for sustaining in the market.
Ansoff's Matrix
It is the marketing planning model that helps the top level management to determine the
marketing strategy through which organisation can expand its business at a greater platform. This
model focuses on four different dimensions for expanding their business and they are:

 Market Penetration: In this, organisation tries to increase its overall sale within the
same market where they are dealing since long period of time. The main way of
increasing the sale is advertisement.
 Market Development: Here, company tries to sell its existing product in new market by
the process of finding new geographical market. In this, organisation takes the help of
different distribution channels (Annabi and McGann, 2013). Product Development: Under this strategy, organisation is required to come up with
new plans and policies through which they need to introduce new product in the same
market for the purpose of earning additional profit.
 Diversification- It is quite difficult task because organisation is required to introduce
new product and try to find new geographical area for selling that product. It is one of the
risky job for any of the company.
In context of ASDA stores, they must adopt market development in which they will
target the new customer with the help of existing products. They can mainly focus on some of
the fast growing countries in it and they are China and India (Bucolo and Matthews, 2011).
Marketing Budget
Total amount allocated to the budget is £1,50, 000
Particulars £
Advertising on TV (10%) 20000
In social Media Platforms (25%) 50000
On newspapers (10%) 20000
Sales Promotion- (30%) 60000
Implementation and control:
For implementing and controlling this budget, finance department of ASDA have to provide
instruction to the head of marketing department for monitoring each activity. So that, estimated
amount will be used in optimal manner that leads the firm towards growth and success in market.

CONCLUSION
Business strategy is one of the most important concept that can be helpful for attaining
the missions of a company. There are number of factors like SWOT, PESTLE that helps
organisation to identify the current position of the company and what they are required to do in
future. When it comes to Ansoff's matrix, it is helpful for taking the best alternative decision for
the purpose of attaining goals. Overall it is necessary that how company perform and takes their
decision with the help of different models.

REFERENCES
Books & Journals
Annabi, H. and McGann, S.T., 2013. Social media as the missing link: Connecting communities
of practice to business strategy. Journal of Organizational Computing and Electronic
Commerce. 23(1-2). pp.56-83.
Bucolo, S. and Matthews, J.H., 2011. A conceptual model to link deep customer insights to both
growth opportunities and organisational strategy in SME’s as part of a design led
transformation journey. Design management toward a new Era of innovation.
Chang, K. P. and Graham, G., 2012. E-business strategy in supply chain collaboration: An
empirical study of B2B e-commerce project in Taiwan. International Journal of
Electronic Business Management. 10(2). p.101.
Davis, P. J., 2012. A model for strategy implementation and conflict resolution in the franchise
business. Strategy & Leadership. 40.(5). pp.32-38.
Helms, M. M. and Whitesell, M., 2013. Transitioning to the embedded librarian model and
improving the senior capstone business strategy course. The Journal of Academic
Librarianship. 39.(5). pp.401-413.
Kernbach, S., Eppler, M. J. and Bresciani, S., 2015. The use of visualization in the
communication of business strategies: An experimental evaluation. International
Journal of Business Communication 52(2). pp.164-187.
Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Online
ASDA SWOT Analysis / Matrix. 2019. [Online] Available Through:
<http://fernfortuniversity.com/term-papers/swot/1433/1162-asda.php>
ASDA SWOT Analysis, Competitors & USP. 2018. [Online] Available Through:
<https://www.mbaskool.com/brandguide/lifestyle-and-retail/2040-asda.html>
SWOT analysis of ASDA. 2019. [Online] Available Through:
<https://www.howandwhat.net/swot-analysis-asda/>