Business Strategy Report: Analysis of ASDA's Strategic Position

This report provides a comprehensive analysis of ASDA's business strategy, examining its operations and market position. It begins with an introduction outlining the objectives and scope of the report. The main body utilizes various strategic frameworks, including PESTLE analysis to assess the macro-environmental factors influencing ASDA, SWOT analysis to evaluate its internal strengths and weaknesses alongside external opportunities and threats, and Porter's Five Forces model to determine the competitive forces within the retail industry. The report then delves into ASDA's strategic planning, discussing its objectives, strategies, and key performance indicators (KPIs). The report concludes by summarizing the findings and emphasizing the importance of strategic analysis for ASDA's success in the market, highlighting the insights derived from the application of various models and concepts to formulate effective strategies for market share expansion and profit maximization. The report references academic sources to support its analysis.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Pestle Analysis........................................................................................................................3
LO2..................................................................................................................................................4
P2 Swot Analysis ........................................................................................................................4
LO3..................................................................................................................................................5
P3 Porter's Five Force model.......................................................................................................5
LO4..................................................................................................................................................6
P4 Strategic planning of ASDA ..................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business is an institution that performed varieties of activities for exchange of good and
service to earn profit and achieve objectives of the business. Various strategies are prepared by
the company for achieve of its objectives of the company in effectively way. ASDA is a British
super marketer retailer company that provide financial services and mobiles phone. This report
covers the impacts and influences of macro environment on organisation and its strategies. It
analysis internal environment and capabilities of ASDA using appropriate framework. It
identifies the competitive position of ASDA in the market by using Porter's Five Forces. By
using various theories, model and concept assist in understanding and interpretation of strategic
decision for an organisation.
MAIN BODY
LO1
P1 Pestle Analysis
Pestle is a marketing tool that is used by the marketer to analysis and monitor various
factors of environment that affect functioning of organisation. This tool is used by the marketer
at the time of launch of new product or expansion of market share for effective achievement of
company goals.
Political factor: It describes the level and extend to which government interfere in the economy
of particular country. Company has to considered all such policies, rules and regulation of the
government before launching of new product or expanding business in new market
(Venkatachalam, 2018). As ASDA is operating its business around the globe it needs to consider
political factor of different countries. ASDA is operating its business UK which is facing
political instability due to withdrawal of UK from EU and UK was one of the most trading
partner of EU. So, this policy has adversely affected trade of ASDA, its functioning and profit
margin.
Economical Factor: This factor help in determination of performance of economy in the
country such as interest rate, exchange rate, unemployment rate, purchasing power of customer's
and its growth. UK's economy is facing situation of recession that have been advantage to the
ASDA as it sales product at lower cost. Thus, influencing customers to prefer product of its
company instead of competitor product and thereby increasing profit margin of the company.

Social Factor: It represents custom, beliefs, value and demographic structure of the population
in which company operates its business. Company had to effectively analysis and evaluate all
such factor before expansion or new launch of product as it help in identifying customer's needs
and the way they it can be satisfied (Putter, 2018). ASDA is effectively able to maintained and
increase its market share by understanding customer's demand for organic product and including
it in product blends.
Technological Factor: It refers to present level of technology, various technological innovation
and its research and development department in order to bring economy of scale for achievement
of organizational objectives. Through innovative technology the company is able to effectively
manage its resource and timely supply of raw material to reduce delay in offering products to
customers. Thus, ASDA is able to provide effective personalized services and convenient
shopping to its customer's with the help of innovative technology.
Legal Factor: They are similar to political factor but yet they differ such as employment laws,
health and safety law, consumer protection laws and discriminative laws made by government tin
order to protect consumer and employees of the organization. All companies have to abide by
legal rule in order to achieve objectives of business in ethical manner. ASDA has adhered to all
rule of government while operating its business thus have build strong brand image and
competitive position in the market.
Environmental Factor: This issue has recently forefront due to increasing scarcity of raw
material and awareness for environment conservation among consumers (Satalkina and Shpak,
2018). ASDA has to ensure various environmental factor while operating and manufacturing of
its product to maintain its brand image and increase its market share. ASDA by offering organic
product in its product range is able to protect environment and satisfy the needs of customer's in
effectively way.
LO2
P2 Swot Analysis
Swot analysis help in planning business strategies on the basis of its current position in
the market. It also helps in identifying the areas in which the company excel and where it needs
to improve itself at the same time protect company from various threats and avail various
opportunities. Thus, swot analysis is very essential in determination of the company position and
achievement of company objectives.

Strength: It explains the company positive attribute or the area in which the company excels that
is essential in success of the company. Every company strength lies in its resource and
capabilities to perform functioning effectively and to get competitive position in the market
(Pandya, 2017). It may be patents, strong brand image and innovative technology of the
company that differentiate it from other company in the market. ASDA strength lies in
innovative technology as it able the company to bring economy of scale by reducing cost,
maintaining quality and increase profit margin. Management of the company is also strong that
help in effective delivery of services to its customer's and thereby maintaining customers loyalty.
Weakness: The areas in which company is lacking and need more improvement to achieve
objectives of the company and for gaining competitive advantage. It may be weak brand image,
lack and ineffective utilization of resources and ineffective distribution channel. ASDA is not
able to position its product in minds of customer's as they think that it does not provide
qualitative products as other brand in the market. ASDA is not able to expand its business in
international market as compare to other competitor and it mainly depends on UK market for
sales.
Opportunities: This is the situation of external environment that provide opportunities to
company to expand its business and promote profit and growth of the company (Phadermrod,
2016). ASDA has an opportunity to expand its business in global market as it provide quality
products at reasonable cost. It can also make use of social media, build its own website and
pages to sell its product online as the customers feels ease and comfortable while making
purchase through online.
Threats: Any change in external environment may affect the company function adversely so it
helps in identification and protection of various threats of the company. ASDA is facing tough
competition from other competitor such as ALDI and LIDI who are known for good discount
provider. Thus, increasing competition compel the company to reduce its cost of product and
therefore affecting its profit margin.
LO3
P3 Porter's Five Force model
Porter's Five Force Model helps in evaluation of competitive forces of retail industry in
which ASDA operates its business. It helps in determining level of competition, identify
structure of industry and thus help in enhancement of long term profit of the company.

Competition Rivalry: It helps in determining number of competitor in the market and the
product and service the company offers. ASDA is operating in retail industry which is facing
tough competition due to various aggressive price and targeting strategies of competitors
(Gansand Ryall, 2017). Rivalry among existing competitor is high as there are number of
competitors in retail industry, customers easily switch from one brand to another and the
economy in which ASDA is operating has less growth rate.
Power of supplier: This factor help in identification of number of suppliers in the industries,
availability of input and its uniqueness. Thus help in determining the bargaining power of
supplier in the market and effect in cost of the product and profit margin of the company. The
market in which ASDA operates supplier have low bargaining power as number of supplier are
less, company have sufficient knowledge and is highly price sensitive. It helped ASDA by
providing inputs continuously, at lower cost thus increasing profit margin of the company.
Power of buyer: It helps in identification of number of customers, their age and preference thus
determine power of buyer to drive price lower. Power of customer's in the market ASDA
operates its business is high as the switching cost low, number of seller are high and consumer
are highly priced sensitive (Murphy, 2016). Thus, ASDA in order to get competitive position in
the market had to reduce its cost which decreases its profit and increases competition.
Threats of Substitute: It refers to such product or service that can be used in place of company
product by consumer thus affect company overall sells and profitability. Threats of substitute
product is low as the industry in which ASDA operates have less substitute product and
company that provide substitute have also low profit margin. So, it helps in ASDA in expanding
its market share and maximize its profit.
Threats of new entry: It helps in determination of potential new entry in the market the
company operates by identifying cost of entry into market, number of competitors (Gandrita and
Rosado, 2019). ASDA by bring economy of scale in retail industry able to create barrier for new
entry, capital requirement is also high and political instability. Thus, ASDA has low threats of
new entry in the market it operates and high chances of expansion of its business.
LO4
P4 Strategic planning of ASDA
Objectives: ASDA objectives is to provide quality product at reasonable price to attract large
number of customers and to get competitive advantages.

Strategies: To achieve the objectives of the company various strategies plan are made by ASDA
such as it has to improve its process and technology for manufacturing product at lower cost.
Company strategies is to bring economy of scale thus reducing the cost of manufacturing the
product (Hersperger and et.al., 2019). The company also want to expand its market share by
operating its business across the globe and increasing its profit margin.
 Company should arrange its input of material at lower cost.
 Use of updated technology in manufacturing and delivery of products to customers.
 Increase knowledge and skill of employees to use updated technology.
 Trained and develop employees of the company to provide quality service to its
customers.
KPI
Revenue of the company: ASDA can effectively evaluate its strategy plan by measuring its
total revenue generate during the financial year.
Customers satisfaction and loyalty: It is also an indicator of successful implementation of
strategy plan by determining retention and increase in customers of the company.
Profit margin: It is also an indicator that help in determining effectiveness of strategy plan by
analysis and evaluating profit margin of the company.
Sales: Increase in sale of ASDA company will indicate the successful implementation of
various strategies to increase sales of the company.
CONCLUSION
This report concluded from the above report that Pestle analysis help the company in
understanding various external factor that impact on its functioning. It also explains that Swot
Analysis help in identification of opportunities that are available in the market at the same time
protect the company from various threats. It also helps in identification of competitive position
of ASDA in market by using Porter's Five Force Model. At last this report by using various
models, theories and concept is able to effectively prepare strategies plan for the company. Thus,
ASDA on the basis of evaluating and analysis of various factor is able to expand its market share
and profit margin.

REFERENCES
Books and Journals
Gandrita, A. and Rosado, D. P., 2019. The Effect of Incorporating a Human Capital’s Analysis
into Strategic Planning. Journal of Reviews on Global Economics.8. pp.206-225.
Gans, J. and Ryall, M. D., 2017. Value capture theory: A strategic management review. Strategic
Management Journal. 38(1). pp.17-41.
Hersperger, A. M. and et.al., 2019. Understanding strategic spatial planning to effectively guide
development of urban regions. Cities. 94. pp.96-105.
Murphy, C., 2016. Competitive Intelligence: Gathering, Analysing and Putting it to Work.
Routledge.
Pandya, S., 2017. Improving the learning and developmental potential of SWOT analysis:
introducing the LISA framework. Strategic Direction.
Phadermrod, B., 2016. Mining survey data for SWOT analysis(Doctoral dissertation, University
of Southampton).
Putter, A. A. D., 2018. Wind Energy in Japan: A PESTLE Analysis and Implications on
Government Policy. (Bachelor's thesis).
Satalkina, L. and Shpak, N., 2018. Evaluation of the Influence of the Macro-environment on the
Social Innovation Activity of Enterprises. Organizacija. 51(1). pp.36-48.
Venkatachalam, A. M., 2018. Identifying dynamics of growth in a competitive and transitioning
lighting industry using PESTLE and SWOT analysis.
Online
Murphy E., 2018, ASDA Porter Five Forces Analysis. [Online]. Available
Through:<https://www.essay48.com/term-paper/13769-ASDA-Porter-Five-Forces>.
Sodry S., 2019, PESTEL analysis of ASDA. [Online]. Available Through:
<https://www.howandwhat.net/pestel-analysis-of-asda/>.