Strategy Evaluation: A Strategic Management Report on Asda

This report provides a comprehensive evaluation of Asda's strategic management, beginning with an assessment of the processes used to determine their strategies, emphasizing the importance of organizational purpose, mission, vision, and objectives. It critically evaluates and applies models and tools such as PESTEL analysis, VRIO analysis, and Porter's Five Forces to analyze Asda's strategies, considering political, economic, social, technological, environmental, and legal factors. The report also discusses the significance of change management based on the complexity, cost, risk, and sustainability of the transformation process, highlighting the need for Asda to adapt to external factors and maintain a competitive advantage. The analysis underscores Asda's focus on customer value, employee relations, affordability, and brand image, concluding that these elements are crucial for achieving organizational goals and sustaining market leadership. Desklib provides a platform for students to access similar solved assignments and past papers for further study.

Strategic Management -
Strategy evaluation

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
A critical assessment of process used by Asda to determine their strategies..............................3
Critically evaluate the models and tools used by Asda to determine their strategies.................4
Apply the models and tools used by Asda to determine their strategy.......................................5
Importance of change management based on complexity of transformation process, its cost,
risk and sustainability..................................................................................................................9
Conclusion.....................................................................................................................................10
REFERNCES:................................................................................................................................11
Books and Journals:..................................................................................................................11

Introduction
Strategic management is the process of managing all those strategies which is beneficial
for an organisation in such a way which provide more productivity and profitability. Strategies
help the company to analyse the directions toward the success of a company (Fuertes and et. al.,
2020). It is one of the most important task of a company to make appropriate strategies for their
company's benefit because strategies helps to increase the performance of employees so that
company will achieve their objectives on time and in a effective manner. Asda is a popular
supermarket chain which is headquartered in Leeds, UK. It was founded in 1949 by Noel
Stockdale and J.W. Hindell. They are popular for their groceries, financial services and general
merchandise. The following file covers the process used by Asda to determine their strategies,
evaluation and application of models and tools used to analyse Asda's strategies and importance
of change management.
Main Body
A critical assessment of process used by Asda to determine their strategies
There are various ways which can be used by a company to determine their effective
strategies which will further help them to achieve their organisational goal. Organisational
Purpose, Mission, Vision and objectives plays an important role to determine the strategies for an
organisation. Asda's determine their strategies by following ways-
Purpose of Asda- The main purpose of Asda is to achieve a positive customer value for
their company in context of their product and prices which they offer to them. The purpose of
Asda help them to determine their strategies to maintain the quality of their products by regularly
testing the quality of their manufactured products to gain customer satisfaction. This will help
them to achieve their purpose (FarajAllah and et. al., 2018).
Mission statement of Asda- The mission statement of Asda is to encourage everyone to
be open and honest. Here, company mainly focuses on maintaining good relations with their
customers as well as with their employees so that they will share their actual experience to
company. This will further help the company to adopt changes to make their people more
satisfied. To achieve the mission of Asda, they ask their customers to provide them feedback that
whether they like or dislike their products and services. This will further help them to analyse

which product and services is lacking behind to satisfy their customers so that they will make
changes.
Vision of Asda- Vision of Asda is to make goods and services more affordable to
everyone. Hence, they can make strategies by focusing on their distribution channels and make
sure that they will have stores in crowded areas to attract more customer's attention. In context of
online orders, Asda makes sure that they will deliver the products to their customers in good
condition without having any damage to products. They also focus that their they will maintain
good brand image by delivering their products on time to their end customers (Alshaerb and et.
al., 2017). Their main concern is to make the prices lowest as much as possible without declining
the quality of products and services. To attain their vision, Asda makes sure that they will deal
with those suppliers who will sell their products to company in lower prices so that the company
will sell the same product to their customers in lower prices They also have large variety of
products with different prices to target low income, middle income and high income customers.
Objectives of Asda- Asda have few objectives which are discussed below-
 To provide goods and services which are cheap and affordable to their customers. To maintain the brand image in market and gain the competitive advantage (ASDA's Aim
and Objective (2013)).
From the above objectives it is clearly evaluated that Asda create their strategies for maintaining
their good quality of products which they have maintained by purchasing their raw material from
highly competitive suppliers who have good reputation in the market to sell good quality of
products. Asda also uses their own packaging and branding name to reduce the cost (Kreiser and
et. al., 2021).
From the above information, it is critically evaluated that vision, mission, objectives and
purposes of Asda plays an important role in managing strategies and help them to achieve their
organisational goal.
Critically evaluate the models and tools used by Asda to determine their strategies
There are various kind of models and tools which are used by Asda to determine their strategies
and they are explained below-
 PESTEL analysis- This model is used to analyse the impact of external business
environment. It is essential to analyse the external factors of business and their impact
upon business because they are uncontrollable factors (Song, Sun and Jin, 2017). It is

considered that external factors are uncontrollable. Hence, making strategies to handle
these factors are essential. With the help of this model Asda can formulate their strategies
so that they will grow high by defending all threats of those factors which are
uncontrollable.
 VRIO analysis- It is the model which is used to analyse the value and importance of
resources of a company (Yudiono, Wilopo and Iqbal, 2019). Therefore, this model helps
to determine those resources which are not so important for the company which will
further help the company to stop investing in those resources. This model also help Asda
to identify the ways to use their most essential resources of organisation to earn more
profit. With the help of this model Asda analysed that their most effective resource is
their manpower who operate all operational activities.
 Porter 5 forces- This is the model which is used to determine competition in the
industry. It is important to analyse about competitors and their competitive strategies
upon existing company (Cécile, 2020). Hence, Porter 5 forces model help Asda to
determine those strategies which will help to gain competitive advantage in the market
and lead the market by gaining trust of more customers by offering good quality of
products in lower prices as compared to the competitors.
Apply the models and tools used by Asda to determine their strategy
Critically evaluate and apply the models and tools used by Asda to determine their
strategy
There are various types of models and tools which are used by a company to determine their
strategy. For analysing strategies to manage external environment of business PESTEL can be
used. Hence, PESTEL analysis of Asda are given below-
Political factor- It describe the tax rates, government interference, trade restrictions and many
others factors (Turkyilmaz and et. al., 2019). In context of Asda, there are many positive as well
as negative impacts of political factor upon them which are mentioned below-
Positive impact of political factor- According to the Edgington (2021), In context of UK, their
government have stability. UK has no trade restrictions for UK based companies. Hence, Asda
can import raw material and export their finished goods to other countries without many
restrictions . Hence, the trade policy of UK helps Asda to expand their business.

Negative impact of political factor- In context of UK, they are having high corporate tax which
impact Asda negatively by reducing their earning income in paying high taxes.
Economical factor- It consist of cost of raw material, growth rate of a nation, infrastructure and
many others.
Positive impact of economic factor- In context of UK, they are having good GDP growth which
further help Asda to expand their business and gain profit. According to the McAuley (2021),
Currently, GDP growth rate of UK have shown the growth of 0.8% from last year.
Negative impact of economic factor- The cost of raw material in UK is higher as compared to
many others companies. In case they purchase raw material from other countries then also they
have to pay shipment charges, export charges and many others. Due to this reason Asda is
investing more investment on the purchase of their raw material.
Social factor- It consist of customer behaviour, their preference, purchasing habit, beliefs, values
and many others (Kara, 2018).
Positive impact of social factor- In context of UK, the people of UK are having high purchasing
power and they prefer to purchase high quality of products whether the product is having high
prices. Hence, this is beneficial for Asda to offer high quality of products to their customers and
gain more customers satisfaction. This will further help to gain high brand image.
Negative impact of social factor- During covid 19 pandemic, the income of customers decreases
and they become more health conscious. They prefer to eat and consume healthy food products
which maintain their fitness. This will force Asda to focus on their product and prefer to add
more healthy food products with good taste which will increase their cost.
Technological factor- It consist of type of technology and method of adoption of new
technology by a nation. It is good for the company if they have modern and advanced tools and
machines.
Positive impact of technological factor- UK is the nation which is well known for their
technological factor. They are having better and advanced technology for UK based companies
for their growth. Hence, Asda have positive impact by this factor to use most advance and
modern technology for their operational activities. This will help Asda to adopt high tech tools
which will help them to achieve their organisational good in better ways on time. This will also
help them to achieve competitive advantage.

Negative impact of technological factor- In context of UK, companies adopt technology as soon
as it enters the industry. Hence, due to this reason Asda's competitors adopt technology and start
working with new technology. Therefore, sometimes Asda lack behind to work innovative with
new technology.
Environmental factor- It consist of tourism rate, pollution rate, climate, temperature of nation
and many others (Wisetsri and et. al., 2021).
Positive impact of environmental factor- UK recently focusing on their CSR activities by their
corporates. Hence, this is beneficial for Asda to have those CSR activities which will protect
their environment like planting trees at the end of every financial year. This will help them to
gain more customer attraction and gain better brand image.
Negative impact of Environmental factor- In context of UK, they are having lot of air pollution
and 8% deaths in UK has the major cause due to their respiratory issues and lung issues which is
caused by air pollution. Hence, this will harm the health of Asda employees. They can use air
purifier to reduce the effect of their air pollution in their stores and keep their employees healthy.
Legal factor- It consist of all legal rules and regulations made by a nation to maintain the
discipline and protect the right of customers and employees.
Positive impact of legal factor- According to Stibbs (2021), There are many legal laws in UK
like National Minimum Wage Act 1998 states that there will be minimum wage which should be
provided by employer to their employees. This will help to satisfy the employees for providing
them the payment equal to their work. There are many other laws which help the Asda to work
properly in full discipline.
Negative impact of legal factor- According to Pathak (2020), companies are having their own
policies and rules and regulations. Hence, the employees are required to obey the rules and
regulations of their company as well as of their legal laws. This cause to take any decision
flexibly.
VRIO model-
Resources Valuable Rare Inimitable Organized
Financial
Resources
Yes No No No
Distribution Yes Yes No No

Network
Brand image Yes Yes Yes No
Human
resources
Yes Yes Yes Yes
Valuable-
Financial resources- Asda need to maintain their budgets to operate their operational activities
and manage their each department perfectly. This will also help them to control their expenses.
Hence, financial resources are valuable for Asda.
Distribution network- Asda's one of the objective is to make their distribution channel so
flexible that their customers will feel free to purchase their products easily. On the other hand,
their most of the customers are satisfied with their distribution services. Hence, distribution
network is valuable for them (Ariwibowo, Saputro and Haryanto, 2021).
Brand Image- Asda is having high brand image due the quality of their products and their
affordable prices which further help them to attract more customers. Hence, their brand image is
valuable for Asda.
Human resource- Employees of Asda help them to provide good services to their customers and
manage their operations to achieve organisational goal. Therefore, Human resource is valuable
for Asda.
Rare-
Distribution network- There are different ways and procedure which are followed by Asda to
distribute their products. Hence, their distribution networks are rare for them.
Brand Image- Brand Image of Asda help them to attract more customers and it is also rare
because other companies are not able to copy the brand image of Asda.
Human resource- The skills and talents of human resource help Asda to achieve their
organisational goal in those methods which is flexible for them to achieve the goal of task as
soon as possible.
Inimitable-

Brand image- Brand image is the factor which is created by company's good work and
dedication to work. Various companies have different brand image in their market. Hence, brand
Image of Asda is not copied by any other company. Therefore, it is inimitable.
Human Resource- Other organisations are not able to copy the skills of Asda's employees to
gain their organisational goal. Hence, human resource is inimitable for Asda. (Buzatu and et. al.,
2019). Hence, human resource of Asda is inimitable.
Organised-
Human Resource- Human resource of Asda is well organised because they are well aware about
their roles and responsibilities. They are hired due to their skills and talents and they are given
duties according to their available skills so that they can manage their work easily. Hence, this is
why Human resource of Asda is consider as organised for them.
It is critically evaluated from the above VRIO model that Asda is having various kind of
resources in their organisation which help them to achieve their organisational goal. One of the
most essential resource of Asda is their Human Resource because this resource is valuable, rare,
inimitable as well as well organised.
Porter 5 forces of Asda-
Threat of new entry- This factor analysis the threat of new companies while they
entered in the i9ndustry upon existing companies. In context of Asda, it is working under
retailing sector of UK which consist a huge investment to enter the industry. Secondly, Asda is
well established and have good brand image which will help them to reduce the negative impact
of new entrance because their customers prefer to purchase their products. It is recommended for
Asda to keep the prices of their products low and make changes in their strategies on timely basis
to reduce the threat of new entrance.
Threat of substitute goods- Substitute goods are those goods which are used in place of
each other due to same characteristics and same features (Grebenshchikova and Yakushev,
2017). In context of Asda, they are having high risk of substitute goods because they sell home
products, food products and few others which are available easily in the market. Hence, other
companies can easily offer same kind of products at lower prices. Hence, to reduce this threat
Asda is recommended to focus on their promotional strategies and mention the benefits of their
quality products in their advertisements.

Bargaining power of suppliers- Asda did not depend upon single or few suppliers, they
are dealing with many suppliers which help them to switch to another supplier as soon as
possible in case their regular supplier deny to take their orders of raw material. Therefore, there
is low risk of this threat to Asda. It is recommended to Asda that they can maintain good
relationship with their suppliers so that their suppliers will not deny to offer their raw materials
in low prices.
Bargaining power of customers- Customers of Asda trust their brand and prefer to
purchase products from them (WIDIAWATI, 2020). On the other hand, the behaviour of
customers in retailing sector is very dynamic which changes rapidly. In case the competitor of
Asda offer better quality of products to the customers and have lower prices than Asda then the
customers of Asda will switch to their competitors services . Hence, it is recommended to Asda
that they must introduce new services and new product portfolio on regular basis.
Competitive rivalry- This factor describe the impact of competitors on selected
organisation (Irwin and et. al., 2018). According to Vakhariya (2007), in context of Asda, there
are many competitors like Tesco, Morrison’s, Sainsbury and many others which are having good
competitive strategies to compete the market. Hence, there is high risk of competitive rivalry for
Asda. To reduce the impact of this factor, Asda is required to opt adaptation strategy and keep
their prices lower than their competitors.
Importance of change management based on complexity of transformation process, its cost, risk
and sustainability
Change management is the process of adopting an appropriate change within an
organisation for their benefit. The main aim of change management is to adopt those change
within the organisation which will enhance their productivity and profitability (Al-Ali and et. al.,
2017). In context of Asda, they adopt changes in their CSR activities. They try to adopt many
CSR activities which will help them to develop their brand image. They aim to become zero
carbon producing business by the year 2040.
Complexities to adopt changes within Asda-
 High cost- Adopting any new change within the company consist to invest high cost
because adopting new methods and devices consist to invest high amount. In context of
Asda, they are adopting change to have new CSR activities which aims to reduce carbon
dioxide production by them and become zero carbon dioxide company by 2040. This will

consist to purchase those production expensive tool and machines which consist to
produce less or no carbon dioxide.
 Managing staff to adopt change- It is not compulsory that the staff will adopt changes
and agree to work with new strategies and policies of company. Hence, this is one of the
biggest issue with change management where employees may deny to work according to
new change.
Overcoming resistance to organisational change-
 It is essential for Asda to adopt those changes which are under their budget. It is also
essential for them to provide training to their employees to use their new technology. To manage the staff to adopt changes, Asda can explain them the benefit of new changes
for their employees.
Importance of change management regarding its risk: Change management is
important within Asda because it further help to determine the ways by which they can earn
more profit for their organisation (AlManei, Salonitis and Tsinopoulos, 2018).
Importance of change management regarding its sustainability: It also help to reach
employee satisfaction because most of the changes which are adopted by the company are based
on increasing their productivity by adopting those methods with which they can gain employees
satisfaction.
Importance of change management regarding its cost: Change management is used to
manage cost because while adopting change Asda focus on preparing a fix budget for their new
budget which further help them to manage their cost by working under a fix budget.
Conclusion
It is concluded from the above information that strategic management is one of the most
essential management plan within the organisation. Company's mission, vision, purpose and
objectives help them to determine their strategies. For example, most of the firms mission is to
gain customer satisfaction by providing them good quality of products in reasonable prices. For
this, they formulate strategies to maintain the quality of their product by testing on regular basis
and they also focus to maintain their financial management. PESTEL analysis is used to identify
the impact of external factors of a business. Hence, it is helpful to make those strategies which
will defend the threat of external factors. VRIO analysis is used to identify internal environment
of a business where the company determine their most valuable resources for their company. In

context of most of the firms, their most important resource is their Human Resource. Change
management help to analyse the changes which is require to earn more profit by a company.
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