Icon College Business Strategy Report: ASDA's Strategic Analysis

This report provides a detailed analysis of ASDA's business strategy. It begins with an introduction to business strategy, followed by a profile of ASDA, including its mission, vision, and objectives. The report then applies the PESTLE model to analyze the macro environment, examining political, economic, social, technological, legal, and environmental factors affecting ASDA. A SWOT analysis is used to evaluate ASDA's internal strengths and weaknesses, as well as external opportunities and threats. The report further delves into the internal environment, employing the McKinsey 7S model to assess internal capabilities and the VRIO framework to identify sources of competitive advantage. The analysis covers strategic analysis, strategic choice, and strategic implementation within ASDA, offering recommendations for improvement and growth. This comprehensive approach provides insights into ASDA's strategic positioning and its ability to compete effectively in the marketplace.

Business Strategy

INTRODUCTION
Business strategy is the set of competitive refers as well as action which a business uses to attract
more customers, compete successful by beating their competitors at marketplace. This is the
outline the business by carrying out to reach the desired goals and objectives of company. This is
the backbone and roadmap of company which help to organization and company to achieve
desired goals and objectives of company in effective manner. The present report is based on the
“ASDA” which h is British supermarket retailer company. The company has 165000 employees
with 633 locations. A report will apply by the appropriate framework to analyse the macro
environment and internal environment for organization as well as capacities of its. A report
highlights the porters five force analysis for evaluate the competitive forces of market to
industry. At the last of report, will apply the range of theories and models as well as strategic
planning for organization.
LO 1
Framework for analysing macro environment
Profile of Asda
ASDA is the chain of retail sector and supermarket which sells general-purpose merchandise,
clothing, financial services or food items. The company owned by American based retailer Wal
mart. ASDA is the second largest company which have higher market share with the market
leading. The company is follows hierarchical structure to performance their task in effective
manner. This has various level in which company have specific roles as per departments
(Audzeyeva and Hudson, 2016). In additions to that the human resource policy of company is
recruitment system is designed to seeks and select the best and eligible candidates for the vacant
position in order to ensure that the person is right who will help to organization for achieve goals
and objectives of company in peopr manner. Management is drawn effective aims, objective,
vision and mission in order to perform their task by considering those. Those are as follows:

Mission
The mission of ASDA is customers satisfaction, pleasant living environment and quality
production. The company is coming out traditional building patterns as well as able to produce
modern and contemporary dwellings.
Visson
Asda is third largest retailer company in the UK. The company have vision to be the
highly valued business by the customers serves, operates with communities, loyalty and
committed to employee. Th main vision of the company is to satisfy the need of the customer in
the market in such a way that all the consumer are happy in the organization.
Objectives
 The main goal of the company is top reduce the cost of the company product by reducing
the cost of the packaging in the organization.
 Another main objective of the organization is to maximize the profit margin by 20
percent by the way of reducing the external cost of the product.
Those are the aims, objectives and mission of company through that company is able to make
effective results form marketplace. Business strategy creates various opportunity of ASDA
because this provides step by step direction to management for completing their tasks or for
achieve goals. This help to get proper and strategic direction by using different framework and
tools.
Macro environment of Asda
For that, here is use PESTLE model for analysing those factors which affect business form
outside the business. That are as follows:
Political factors
The national, international or EU regulations are directly affecting employment, customer rights
and taxes etc. Likewise, war and instability are also affected to ASDA and its decision-making
process (Barrett and Murphy, 2017). For example: Taxes rate increase on import and export

products and services to another location is created negative impact because in that company has
to pay extra tax for that. But on the other side, if tax rate is decrease then it creates benefits for
company because through that import sales process if easier from outside.
Economic factors
The economic factor gives an impact on the companies because considers like pay level,
competitive pressures and cost of credit. This factor is impact on price and its strategies of
company significantly (PESTEL analysis of ASDA, 2017). For example: company is face
increase competitive pressure in the marketplace. This give negative impact on the company and
decrease their growth with their competitors strategy. In that case, customers are dissatisfied and
move to another company and supermarket. This decrease profit margin of company but on the
other side, this can create benefits for company if competition is decrease or make strategy to
beat their competitor in marketplace very badly.
Social factors
The social factor is consists with customers taste, needs, culture etc. For example: now days
more customers are attracted and go towards organic food. This can create problem for company
because customers are gone through others for collecting their organic and healthy food. In that
case, ASDA need to ensure about its organic and healthy food in its offering in order to meet
needs and wants of customers who are keen on organic foods which is gives positive impact.
Technological factors
Now days technology is more advanced which can be created issues for company. The
technology such as growing and fast broadband and mobiles apps long by clicking can collect
delivery services fast and in effective manner. This is extremely important for ASDA to follows
that for creates positive growth at marketplace. For example: ASDA company is now using
mobile apps for fast delivery in that case customers gone others for online shopping which gives
negative impact on company. But, if company is use mobile then customers are directly booked
their orders and increase sales of company in positive manner.
Legal factors

There are various rules and regulations which can affect to business. For example: employment
acts, said that provide proper wages to employees but company is not provide that then
employees are demotivated and leave office and increase employee retention (Birkin, Clarke and
Clarke, 2017). That give negative impact in its company on the other side, company is provide
proper wages as per their performance then give positive impact on the company.
Environmental factors
Environmental factor can affect to company in both negative and positive manner. Recently,
most of the customers are think about the GO Green environment of country. For example:
company is have plastic packaging and that is affect to company in negative manner. But
company follows, this use Eco — friendly packaging then customers attract and creates positive
impact by protecting environment.
In order to analysis, internal strength and weakness or external opportunity and threat of the
company, here is select SWOT analysis model:
SWOT analysis:
Strengths Weaknesses
The company have stronger brand
image with various stores.
The company has strong management
which is famous at marketplace (SWOT
analysis of ASDA, 2018).
The other strength is well-known
economic scale and superior
technology.
Company does not have any mini store.
No loyalty card yet to retain customers.
Some people said that products are not
good and they wait rose and other
similar brand.
Opportunities Threats
Online market is the great opportunity
to has for ASDA.
Expansion on the other market is also
The company have threat from their
competitors.
Growth of company is independent

opportunity for ASDA. online retailer is also a threat.
Those are the strength and weakness of ASDA. For company, here is mention some
recommendations to turn weakness in strength by using opportunity. Recommended, the
company have use their opportunity for growth.
 After going through the macro environment it has been criticized that company has
stronger brand image in the market but at the same time not have that much of offering to
maximise the same which used to impact the efficiency.
 Asda is having good opportunity to expand there business at the same time there is good
sort of competition which is present in front of the organization.
LO 2
Models for analysing internal environment
The internal environment is composed with different factors within company like the employees,
management and organizational structure (Björklund, Forslund and Persdotter Isaksson, 2016).
This help to design the employee behaviour and direction for achieve vision and mission of
company. In order to evaluate strategic analysis, here is mention three components are as
follows:
Strategic analysis
The strategic analysis is more important for ASDA which is helps to understand the strategic
position of company. The key objective of strategic analysis design the factors which impact to
organization's present and future performance.
The environment of company exist with interact with complex economic, social, commercial and
technological factors which impact strategic plan by creating changes. That reflects in SWOT
analysis of company through examine external threat and internal weakness.

The resources of business are influence internal capabilities. The internal strength and external
opportunity are the great capabilities of ASDA.
Strategic choice
This choices are based on the evaluation of strategic options which undertaken by strategic
analysis of company.
Strategic implementation:
This refers a way in which turn strategy in the cation which are take at workplace for the
better improvements (Bogomolova, Szabo and Kennedy, 2017). Careful planning and proper
development of organization structure. Those are key element of strategic capabilities which help
to make effective changes for company. For that here is use McKinsey 7's model for analysis
internal capabilities are as follows:
This model is a great tool which is analysed organizational design by looking at 7 internal
elements with capabilities of work. That are decided into two part hard and soft elements which
are as follows:
Illustration 1: Internal capabilities
(Source: McKinsey 7s Model, 2019)

Hard elements:
Strategy: Strategy is the plan which is developed by firm for achieve sustain competitive
advantage successfully to compete in the market. This is very important and effective for
the ASDA company to design a best strategy for achieve goals and objectives of
company.
Structure: Structure is another important factors which consists with different
departments of company. ASDA company have hierarchical organizational structure
which provide proper information to employees for competing with any tasks related
problems.
System: System is considered right place on regular basis in order to keep the business
and their operations and forwards. The proper system is help to make right work and
ensure about the employees are working in right and proper manner or not.
Soft elements:
Style: The style is represented the ways company is managed with top management
actions. In that employees are follows top manager and seniors styles for solving any
other problems and situations.
Staff: Staff is the main elements of company which reflects a higher efforts for achieve
goals (McKinsey 7s Model, 2019). The leader of ASDA uses the effective leadership
which help to them to meet needs and wants of employees and suppliers.
Skills: Skills of employees and manager are most important and effective for company.
Skills like critical thinking, management skills and another skills which reflects and help
to make decision to meet needs and wants of different stakeholders customers, suppliers
and employees.
Shared values: The shared values are another important elements which is creates more
competitive environment at workplace by knowing proper details about the culture and
objectives of ASDA. That are considers with norms and standard of company which
guide employee behaviour and company actions thus that are foundation of every
organization.
Critical analysis of the internal environment

Those are the internal strength and weakness of ASDA which help to take decision as per needs.
The McKinsey model is help to make effective strategy plan for achieve goals and organization
of ASDA. The strategic analysis is the tool which is help to uncover their resources and
capabilities which are related to viewpoint of company (Burt, Johansson and Dawson, 2017). To
analyse strategic capabilities, here is select VIRO model for finding competitive advantage.
Valuable
The ASDA have the great financial resources are very high valuable to this company is helping
in investing into external opportunities. As well as leaders style gives direction to management
and employees to handle situations. Market position is creates successful brand with flexible
supply chain management.
Rare
the Financial resources of ASDA are found to be rare according to the VIRO model which is too
strong and provide a great and strong competitive advantage. Their supply chain management
rare because competitors required more investment in the business (Fernie, Fernie and Moore,
2015).

Imitate:
there market position is challenging because financial resources are completable. Company not
have proper leadership style which is imitated for company.
Organization:
the financial resources of company are organized and capture values which are identified by the
VIRO. These resources are used strategically to invest in the right place for creating good
opportunities. The distribution network of ASDA is organized for ensuring the products and
services are available at every outlets.
This model is provided a proper information and details about the products and services of
company as well as strategic capabilities presents at market places. This helpful for evaluate
external environment of ASDA with PESTLE model. By this company is able to meet strength
and weakness. The strength is make directions as per requirements and weakness shows
important elements of company.
LO 3
Porters five force model for evaluate competitive force.
The ASDA company is facing strong competition at market place for attracting
technology. In that company need to analysis the competitive market which is help to make
proper strategies for company. In order to analysis, here is select porter five force are as follows:
This model is help to analysis techniques which aim at establish position of an
organization in given industry in the perspective of five different forces are as follows:

Threat of new entrants (Low):
This factor are low because every new in this business required lots of investment for
establishing the business in the market place. That also take new entrants lots of time to make
their brand image at market. In this industry is required strong product differentiation because
customers are looks forward at unique and different products. The have good production
differentiation as per that threats of new entrants are lower factors which is not affect ASDA.
Bargaining power of suppliers (Low):
A supplier has the highest bargaining power in the situation. The bargaining power ASDA
suppliers said to be low because they have supplier products as per various supermarket terms.
The company operates is an important customer for its suppliers which means creates higher
profits tied that of the suppliers.
Illustration 2: Porter five force
(Source: ASDA Porter Five Forces Analysis, 2018)