Detailed Business Strategy Analysis for ASDA: Unit 32 Report

This report provides a comprehensive analysis of ASDA's business strategy, focusing on its internal and external environments. It begins with an introduction to business strategy and its application to ASDA, a leading supermarket chain in the UK. The report then delves into a detailed SWOT and PESTLE analysis to assess ASDA's strengths, weaknesses, opportunities, threats, and the political, economic, social, technological, legal, and environmental factors impacting its operations. Stakeholder analysis and value chain analysis are also employed to evaluate the company's resources and capabilities. Furthermore, the report critically examines the competitive environment using Porter's Five Forces model, identifying ASDA's existing and potential competitive advantages, and devising tactics and objectives to achieve strategic goals. Finally, the report evaluates various strategic directions accessible to ASDA, suggests suitable growth tactics and platforms, and assesses methods for monitoring the success of chosen strategies, concluding with a summary of the findings and recommendations.

UNIT 32: BUSINESS STRATEGY

Table of Contents
INTRODUCTION.....................................................................................................................................2
PART A......................................................................................................................................................2
Analyzing a detailed and considered SWOT and PESTLE of ASDA and evaluation of its capabilities
and resources...........................................................................................................................................2
Analyzing and critically examine competitive environment by using Porter’s five forces model............9
Identification of ASDA’s existing and potential competitive benefit....................................................10
Devising valid tactics and tactical objectives to achieve overall strategic objectives............................13
PART B....................................................................................................................................................13
Critically evaluate varied types of strategic directions accessible to ASDA..........................................13
Justify and suggest the most suitable growth tactics and platforms.......................................................15
Evaluating ways and means by which chosen strategies can be monitored to assure success................15
CONCLUSION........................................................................................................................................16
REFERENCES........................................................................................................................................17

INTRODUCTION
Business strategy defined as long term plan of action that design to achieve specific aims
or set objectives. It is a great map that allow management to take action and drive their attention
towards success. It helps organizations to carry out their strategic aims and get better success.
The current assignment will be based on ASDA, which falls under category of leading
supermarket chains in the United Kingdom. Its aim is to be the most faithful and trustable
retailers in the retail industry. Business objectives of this company is to source the best quality
items locally to offer customers fresh and healthy food items. The study will explain strategic
implementation of SWOT and PESTLE as well as other strategic models in the context of
supermarket. It will explain porter’s five forces and justify potential and current competitive
benefits. Furthermore, the report will clarify suitable strategies, types of direction, growth
platforms and tactics & ways to monitor success.
PART A
Analyzing a detailed and considered SWOT and PESTLE of ASDA and evaluation of its
capabilities and resources
External and internal analysis is considering as process of determining those elements
that may put direct impact on leadership and management practices of a company (Qiu and et.al.,
2021). It may contribute to evaluate key competencies, resources, threats and opportunities in
regard to organizations such as ASDA. In order to conduct both types of evaluation, PESTLE,
SWOT, Value chain and Stakeholder analysis as strategic concepts or models use below;
Pestle analysis-
This model is included in category of macro environmental analysis framework that help
analyzing external factors that are;
Political factor-
Changes related to any political factors such as taxes, trade, etc. may influence strategic
planning and practices of companies. For example, just because of COVID-19, in the UK tax rate
may increase more than 2019 that may put negative impact on trading related tactic of company
and drive their efforts to restructure everything accordingly.

Economic factor-
Pandemic raise unemployment rate worldwide, which may put positive influence on
ASDA strategy relate to selection and recruitment as it gives them chance to hire local people in
cheaper rate without conducing too much efforts for job promotion (PESTLE Analysis of The
Retail Industry, 2021). Just because of job requirement individual person may already apply
where they find vacancy.
Social factor-
In recent time certain changes happen in the context of this factor, due to emerging
market trend such as healthy lifestyle concerns among people and veganism (Wagner, Marcon
and Caulfield, 2020). These may put direct impact on ASDA inventory management strategy and
marketing practices negatively. It drives the efforts of store administration to develop new plan
and make all arrangement according to market trends or needs.
Technology factor-
Digital technology advancement may put positive impact on ASDA growth tactics in
term of driving attention of marketing and departments towards developing tactic to use advance
machines in term of technologies or tools such as social media for purpose of generate brand
awareness.
Legal factor-
Due to current economic development status and living standards of people that affect
due to COVID-19, in many nations government may take decision to pay half salary of workers
and guide companies to do so. It may put negative impact on ASDA strategies in regard to pay as
it may decrease its financial performance.
Environmental factor-
Government and customers concerns for environmental safety may put pressure on
ASDA to reduce its carbon foot print. As it influences its CSR strategies in positive manner by
driving focus of management towards developing new tactics that boost their performance that
outcomes in creation of sustainable business image in market.

Stakeholder analysis-
It is another concept that use for same purpose as above model is used in the context of
chosen supermarket (Clausen and et.al., 2020).
Keep satisfied-
 Government
 Stakeholders
Manage closely-
 Manager
 Leaders
Monitor-
 Customers
 Suppliers
Keep informed-
 Employees
Keep satisfied- (High power and interest)
It is important for ASDA to keep its stakeholders in term of investors and government
satisfy because these are one of those factors that may directly impact current management
practices and venture performance (Stakeholder Analysis, 2021). As they hold power to do so
and use according to circumstance.
Manage closely- (High power and less interest)
Along with above initiative, organization may do more in term of managing performance
and activities of leader and manager because they may have high power to influence people at
workplace who may contribute to gain competitive edge. These stakeholders are also less
interested in success of business due to having great employment opportunities in market.
Monitor- (Low power and high interest)
Monitoring related to consumer and supplier activities is essential for ASDA
management as it may affect business growth. Just because of low decision making power and
high interest in quality product purchase or sale, individual stakeholder impact current strategy of
company. Firm may take initiative to monitor them and their practices in term of market trend
adoption.
Keep informed- (low interest and power)

Leader and manager within ASDA may take less efforts in the context of this factor as
stakeholder. They may just inform them about current changes and further as well. The main
reason behind doing so is that some worker may do not interest to perform within one company
they may prefer to take experience while working in varied firms.
SWOT analysis-
In term of internal analysis, SWOT analysis framework is utilize to evaluate key resource
and capabilities of ASDA (Lagoudakis and et.al., 2020).
Strengths-
Wide range of goods and service-
It is one of the biggest strengths of ASDA which made it capable to retain potential
customers and gain attention of new towards range of items that they prefer to purchase.
Effective marketing campaigns-
Just because of this strength marketer may generate excellent brand awareness of ASDA
worldwide.
Weaknesses-
Limited global presence-
It is one of ASDA biggest weaknesses that may put negative impact on its business
progress and success in the future and may lead to decrease competitiveness.
Lack of strategic management-
This weakness of brand may negatively influence of ASDA productivity and
performance level, for which effective management and tactics may require to manage
everything systematically.
Opportunities-
Technology advancement-

ASDA may grab this opportunity by using social media platforms to promote its quality
items and business operations globally.
Online shopping trend-
Organization may take initiative to adopt this trend as well as business growth chance in
term of strengthening its online presence along with offline strongly.
Threats-
Pandemic-
This threat may almost put negative impact on entire world and due to this government in
every nation may take decision to shut down shops, companies, etc. that may lead to decrease
sales of ASDA products.
Intense competition within retail industry-
It also possesses threat for ASDA in term of putting a lot of pressure on managers and
other stakeholders to develop better plan and tactics to gain competitive benefits and be
competition forever.
Value chain analysis-
Primary activities-
Inbound logistics-
In term of capability, ASDA may store, receive and disseminate inputs of its goods. It
stores each item under safety measures, without using chemical to make fruits and vegetables
fresh, which may put negative impact on health of customers (Palacios-Mateo, van der Meer and
Seide, 2021). Furthermore, management is able to handle material and keep customers related
information safe.
Operations-
For purpose of supplying and delivering products to customers, ASDA may able to use
its own warehouse where worker’s manager everything according to strategic plan. It conducts

each operation related activities in systematic and effective manner. It enables firm to transform
raw materials into quality & well finished goods.
Outbound logistics-
In term of outbound activities, ASDA may have competence to fulfill wholesalers as well
as retailers order on time according to plan, which may contribute to build its strong and
trustworthy brand image in the market. It may efforts to manager activity in the context of
distribution chain or network.
Marketing and sales-
ASDA is able to promote its venture and existing offers through effective marketing
campaigns, which made marketer capable to gain the attention of new customers and retain
current that may tend to connect with popular and trustworthy brands like chosen. Sales force
management is another activity that company may conduct effectively and systematically.
Service-
In term of service, ASDA may attempt to make further improvements in regard to after
sales services, which allow manager and leader to enhance customer satisfaction. Moreover, it
may also efforts to offer post sales services that allow consumer to retain with brand in term of
purchasing quality products from supermarket or ASDA grocery store.
Secondary activities-

Figure 1: What is Value Chain Analysis
(Source: Value chain analysis, 2021)
Company infrastructure-
In term of intangible resource, ASDA may have systematic and effective organizational
structure where each department segregate clearly and handle specific accountability according
to their key competencies and abilities. For example, legal section may capable to deal with all
legal matter of supermarket effectively.
Human resource management-
In term of tangible resource, firm may have effective HR members that may capable to
enhance the performance level of employees and their productivity as well. They take initiatives
to build effective groups at workplace that are capable to achieve strategic goals of company by
performing according to role and position.

Technology development-
In term of capability, ASDA is able to utilize beneficial technologies like cash free
machines at stores to reduce work pressure among employees. It may also efforts to create
effective marketing campaigns by using advance digital sources. It helps to increase profitability
and customer base.
Procurement-
In order to gain competitive advantages, firm is capable to build trustworthy relation with
sustainable suppliers and use this relation in term of purchasing quality items from them
according to health concern and demand of consumers. ASDA efforts to make its target market
happy and satisfy.
Analyzing and critically examine competitive environment by using Porter’s five forces model
Bargaining power of suppliers-
The extent of this force is low because, number of suppliers in retail industry in which
ASDA may operate and manage its business activities is a lot (Dertwinkel-Kalt and Wey, 2020).
It may put positive impact on business activities in term of retaining potential and sustainable
supplier forever who may unable to affect pricing structure.
Bargaining power of customers-
Degree of this factor is also low, because lack of substitute items may accessible in the
grocery market that customers prefer to purchase. It gives opportunity to ASDA to retain existing
customer and attract more towards purchase, which help to increase profits margin of brand.
Threat of new entrance-
It is quite difficulty for a retailer or retail brand to achieve economies scale, which may
decrease the power of this force and make it a weaker one that provide benefits to ASDA, in
term of gaining competitive edge easily.
Threat of substitute products or services-
The extent of this force is low because those alternative items may available market are
poor in quality and not appropriate for customer’s satisfaction. It may drive the attention of

management within ASDA to maintain products quality which bring certain benefits for them as
well as brand.
Competition between existing supermarkets-
Level of this force as compare to above may high due to competitiveness in market where
supermarket operate its venture and other brands also do the same to be competitive and gain all
the advantages. Due to this factor, firm may felt a lot of pressure to be the greater and better than
key rivals.
Identification of ASDA’s existing and potential competitive benefit
Porter’s generic strategies-
Cost leadership-
In term of competitive edge, firm may grab chance to increase its customer base and
build wider one than any other company in retail industry by selling quality items at low and
affordable prices, which give tough competitive to its competitors (Nath and Bharadwaj, 2020).
Differentiation-
Excellent brand image and wide consumer base are those potential competitive benefits,
which ASDA may gain by offering unique and different items to each customer after
understanding their choices and needs. It may affect positively upon its business image in term of
driving attention of shoppers towards conducting word of mouth promotion.

Figure 2: Porter's Generic tactics
(Source: Generic Strategies, 2017)
Cost focus-
Organization may become the most trustable and profitable retailer in the world when it
may only focus on pricing tactic or cost relate to products, instead of concentrating on other
things like packaging, etc.
Differentiation focus-
ASDA may crate competitive benefit and grab the same with this tactic through
differentiating itself within segment, which is quite important to do so. As it contributes to gain
its potential customers attention more than existing competitors.
Ansoff growth matrix-
Market penetration-
Firm may efforts to create potential and existing competitive benefit for its business by
focusing on improving current products quality in order to sell existing customer base, which in
return maximize profits margin and productivity level of ASDA.

Figure 3: Ansoff's Matrix
(Source: The Ansoff Growth Matrix, 2021)
Market development –
It drives the attention of company towards formation of tactic which made it capable to
enter into new market where success and growth chances may accessible in bulk that ASDA may
grab as competitive edges.
Product development-
Supermarket and its management may take efforts to develop new service or product to
make customers happy and retain them for long time period that increase profitability and sales
level. This tactic may drive focus on management to do so.
Diversification-

It allows ASDA to move towards new markets where key success chances may high and
its business may grow even better than last year’s. It permits company to offer new item into new
market place to gain competitive edge.
Devising valid tactics and tactical objectives to achieve overall strategic objectives
It is important and beneficial for ASDA to take initiative to form strategic and valid
strategies as well as objectives which made it capable to achieve overall aim in effective manner.
In term of tactics, they may develop plan to train existing as well as new employees to
made them able to achieve each objective on time without facing any issue. Furthermore, it may
also efforts to develop valid objectives that are;
 To increase customer, base up to 50% within 1 year
 To gain competitive edge within 12 months
 To enhance consumer satisfaction level by 50% within 1 year and 2 months.
PART B
Critically evaluate varied types of strategic directions accessible to ASDA
Executive summary-
Business strategy is one of those components that help organizations to reach at top
position and obtain desire outcomes. It strengthens a company to achieve competitive advantages
and strategic objectives systematically and effectively. By developing appropriate strategic plan,
supermarket has successfully achieved set goals and entered into new market by using
differentiation and market development tactics. By taking porter and ansoff matrix models into
their considerations, management has applied effectives strategies to increased profitability.
Strategic directions-
In term of strategic direction, ASDA may choose appropriate approaches that contribute
to enhance its productivity and sales level more than other top supermarket brands that run and
manage their ventures activities into retail industry. In form of evaluation key benefits and
drawbacks of each direction may mention below;
Strategies directions Advantages Disadvantages
Cost leadership The key benefit of this On the other hand, it may

strategic direction is that it
may allow firm to increase its
market size.
reduce product innovation
and positive feedback of
consumers.
Cost focus It may permit ASDA to
increase its profitability and
sales even better than its
competitors.
Cost focus may put negative
impact on organization
success in term of limiting
further progress.
Differentiation focus In term of strategic direction,
firm may utilize this method
to compete market with
unique item or service.
It may negatively influence
company performance in term
of consuming time and efforts
to implement plan or
direction.
Differentiation It consists those benefits that
help firm to gain competitive
benefits in term of driving
attention of competitors.
It may consume less assurety
about business success in
market as people needs and
demand may change
according to market trend.
Market penetration It may lead to increase sales
and profits margin after sale
of each product.
On the other side, it restricts
ASDA to miss growth
chances.
Market development The most important benefit
that ASDA may grab by
using this option is to gain
new customer and build wide
base.
Implementation of market
development tactic into
practical manner may
requires a lot of funds, which
is not possible for firm to pay
continually.
Product development It may allow ASDA to
manage and effectively
measure organizational
success.
The biggest drawback of this
direction is that it consumer a
lot of time and require more
activities to conduct

practically.
Diversification It opens new ways for
business success and growth
within retail sector, which
firm may grab.
It may reduce quality when
management may do not
concentrate on it.
Justify and suggest the most suitable growth tactics and platforms
ASDA may take initiatives to achieve its strategic aims and objectives, for which it
chooses market development and product development tactics into consideration. These two are
the best approaches that firm may use to grow continually and rapidly that is much important for
it. Each approach or tactic may consider as appropriate growth strategies that allow firm to be
competitive and beat its rivals in retail industry that accessible at national and international stage.
Supermarket can use market development, because it is the best strategic approach and
tactic that organization and its management can adopt (Dragomir, 2020). It creates competitive
benefit and generate revenue of company. It gives organization chance to gain the attention of
profitable investors and customers. Investor may allow firm to reach at desire results and
contribute in growth of its venture, which is important. In order to implement this direction,
company may choose the best funding source such as Bank Loan. This method may permit
supermarket to reach at expected outcomes.
Furthermore, product development is another valid growth tactic that ASDA may select
and utilize for longer time period. Just like chosen strategy, it also may five unexpected benefits
to firm in term of increase profits margin than last year, which is not so easy to do so. It gains
attention of new customers and retain them forever. It allows supermarket to build strong and
influencing business image in market and give opportunity to reduce cost to enhance
competitiveness.
Evaluating ways and means by which chosen strategies can be monitored to assure success
Along with above initiatives, it is important for marketer to take other into their
consideration to assure success and growth of ASDA after implementation of current strategic
plan as above two chosen strategies. Monitoring is the key element of gaining competitive edges.
There are varied forms of methods accessible in the world of business, that they may utilize in

effective and systematic manner. For example, Benchmarking is one of the best strategic
approaches that many firms and marketers has used to measure success and ensure their success
after implementing specific plan and action. It drives the attention of management towards
analyze competitor’s strategies and success plan that they may implement to gain competitive
edge. It allows marketer to develop their own methods and ways that they may utilize in the
future to gain key advantages successfully and effectively.
Furthermore, along with above they may also determine gap between existing and last
year profitability and sales that clearly allow marketer to identify it. It permits firm to measure
success and assure that its plan is successful and providing desire outcomes. After implementing
both tactics marketer may gain several benefits and provide the same, which is essential and
beneficial and varied terms.
CONCLUSION
From above analysis, it has been concluded that by using the best strategic frameworks
organization has determined those factors that had put negative and positive impact on its
business and taken initiatives to deal with each in effective manner. With skilled and talented
employees, supermarket has given tough competition to its rivals that has managed their business
growth in similar industry. Furthermore, by summing up above discussion, it has been
determined that by improving quality of food and other grocery items and adopting current
market trend, management has increased their productivity and profitability more than other
companies in retail sector. With market and product development as well as lost cost pricing
strategy, organizations have successfully entered into profitable market where it has gained a lot
of success and progress. By using Benchmarking and determining gap between last and current
years’ profitability ration, manager has monitored success of their strategic plan.

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