Strategic Analysis of ASDA: External and Internal Factors Report

This report provides a strategic analysis of ASDA, a major UK supermarket retailer. It begins with an executive summary highlighting the importance of strategic analysis in understanding an organization's external environment. The report then delves into ASDA's external environment using PESTEL analysis, examining political, economic, social, technological, environmental, and legal factors. Internal analysis is conducted using SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. Furthermore, the report employs VRIO analysis to evaluate ASDA's resources and capabilities and applies the McKinsey 7S model to assess internal factors like shared values, staff, skills, style, strategy, structure, and systems. The conclusion summarizes the impact of both macro and micro environments on ASDA's performance and emphasizes the need for continuous evaluation for future growth. The report uses relevant frameworks to analyze ASDA's position in the market and provides insights into its strategic planning.

Individual
Coursework

Executive summary:
Strategic analysis is a process that is adopted for the purpose of conducting research on a
particular organisation based on its external operating environment. This type of analysis is very
Crucial to formulate the future strategic development. Generally such strategies are different
from the overall regular functioning of the business as there is identification of some of the
specific type of information that will assist in the process of appropriate strategy development.
Further there is also use of some of the analytical techniques in order to evaluate the factors that
are part of the macro and the micro environment by application of relevant tools such as SWOT
analysis and the PESTLE analysis.

Table of Contents
INTRODUCTION...........................................................................................................................4
External analysis:....................................................................................................................4
Internal analysis:.....................................................................................................................6
REFERENCES .............................................................................................................................11

INTRODUCTION
Strategic environment is described as the broad range of strategic factors that are in
possessing a impact on the overall global conditions. These factors include both the factor that
are associated with macro and micro elements (Morozov, 2018). ASDA is a popular retail brand
that belongs to births supermarket retailer that was started in the year 1949 and its headquarter
are present on Leeds, west Yorkshire. Present report is based on a organisation so that there can
be future research that can be conducted by use of strategic management tools such as pestle and
swot analysis to evaluate the environment in which a organisation is operating. Further analysis
is used to reach to relevant conclusions.
External analysis:
PESTEL analysis
As there in the percent market condition, multiple types of business and competitor are
running their organization in the same or different market place and position (Policy, 2018). So
for the success in the market, in comparison to the competitor they need to do the analysis of
organisational strength, weakness, opportunity and threat (SWOT) and in the SWOT analysis it
involves the analysis of various external and internal factors which are part of organisation
planing and effect it highly. So for the analysis of external environment factors there is the well
organized framework available that is PESTEL analysis (Gallego-Posada and Puerta-Yepes,
2018). This frame work involve the investigation of these external factors such as Political,
Economical, Social,Technological,Environment and Legal factor.

ASDA is the use PESTEL analysis for the strategic planing their business. The strategic
planner of ASDA conduct the PESTEL analysis, whenever they want to plan some new
strategies and whenever thy face market force (loss) so this can help to plan good and effective.
As ASDA is an supermarket retailers, there is the highest competition with the walmart and
TESCO. The PESTEL analysis of organisation is given below (Student, 2016). They focus on
the political environment continuously to monitor it. Organisation is getting the higher advantage
from the stable political environment in the UK.
Political: The political factors are the elements of government intervenes such as the
policy of tax charges, environmental laws, political stability, labour law, the changing debate of
politics related to the industry's highly effects the organisation planing. ASDA is always consider
the political factors and monitor it in their plan which benefits them .

Economical: This can be a financial sate of customers, employment, Interest rate , supply
and demand, Foreign exchange tax etc. economics factors effects the pricing strategies,
marketing strategies (Perera, 2017). It effects almost the complete business plan so that's way
ASDA is analyses the economic factors for the current strategy development.
Social: Social factor is the ethical and modern bivalves and needs of the society which
highly effects the sale of product and services. SO ASDA is analyse the social factors the plan
for their product development strategies.
Technological: New technological arrival of equipments and machinery with the
innovative skills. Helps the ASDA to update their supermarket and product services techniques
in order to reduce the time consumption. Such as the developing mobile app and internet services
help the organization make higher selling strategies.
Environmental factors : As the demand of particular products get change with
atmospheric season. The other factor is availability of agricultural product is depends on the
environment (Adem, Çolak and Dağdeviren, 2018). So that's way ASDA make their product
collection strategies on the basis of environment factors. From their side they also try to reduce
the use of plastic to save our environment by providing the paper carry bags.
Legal: this involves the legal registration of the organization. As well as every company
needs to take the legal permission for some strategies of their business (Islam and Mamun, ,
2017). So ASDA always try follow the legal rules of the country such as they provide the right
wages to their employees.
Above mentioned are some of the aspects that are part of the external environment and
consist of both threats and opportunities that can be used by ASDA in order to expand
their present markets share.
Internal analysis:
There are some of the techniques that can be used in order to make a detailed evaluation of the
present internal strengths and weakness that are part of the organization by use of some of
internal analysis frameworks. For the purposes of making a analysis of ASDA there is use of
SWOT analysis as a technique to analyse the different associated factors:
SWOT analysis:

Strength Weakness
 ASDA is dealing in wide range of
products and services that includes
clothing, financial services.
 There is extensive distribution
strategies as they are having 25
distribution centres across UK
 ASDA is maintaining a constant
connections with their customers by use
of techniques of social media marketing
by analysing timely feedbacks of
customers.
 There is limited global presence of
ASDA as compared to its other
competitors such as TESCO.
 There is false advertising in year 2010
as they used a tag-line of “lower prices
on everything you buy” that was
leading to misconceptions by their
target segment of customers.
 In year 2013 ASDA has involved in
horse meat scandal where ASDA
entered in a controversy of DNA test
that beef of ASDA consist of horse
meat. This instance resulted into a
negative impact on brand image of
ASDA.
Opportunities Threats
 ASDA can expand in new Domains by
expansion of their business operations
in new market areas such as jewellery,
pharmacy that can lead to expansion of
market share (Wang and Wu, 2019).
 ASDA can expand in developing
countries such as India & China.
 ASDA can acquire smaller companies
so that there can be expansion of busies
operations.
 ASDA is understand from high price
war as compared to low cost leadership
position that is acquired by TESCO.
 The present situation of outbreak of
COVID 19 virus has resulted into a fats
changing situation of prices and is
creating a huge threat for the business
as customers have developed lower
preferences for making purchases apart
from necessities goods.

VRIO analysis:

It is a tool that is used for the purpose of making a detailed evaluation of the forces and
resources that are providing a organisation with achievement of higher competitive vanadate. For
this there is a need to analyse the resources that can assist in development of organisation.
Valuable: It includes the resources that are extremely valuable for a organisation and are
assisting them in carrying on their functions in such a way that overall mission & vision is
properly achieved. In case of ASDA it include the competent human resource management,
technology integration, R&D departments, inbound & outbound logistics and high quality
services.
Rare: Some of the resources that are rarely present with a organisation are leading to
achievement of competitive advantage as in ASDA the resources that are rarely available with
the organisation includes competent human resources, R&D development department and the
presence of high quality products & services.
Imitable: It includes the resources that may not be easily imitable by other competitors.
In ASDA these resources consist of higher technology integration along with the strong network
of inbound and outbound logistics that is leading to delivering of higher quality products and
services to their target segment of customers.
Organisation: It is necessary that all the resources have to be properly kept organised in
ASDA there is focus on the establishment of future network for distribution of products by
establishment of inbound and outbound logistics so that the products can reach to each potential
customer in the least possible time period.
7S model:
For the purpose of making a detailed evaluation of the some factors that are affecting the internal
functioning of the organisation there is need to focus on some of the hard and soft factors that are
posing a effect on ASDA.
Soft factors:
Shared values: It is the core aspects of the McKinsey model. It sets the standard and norms to
guide the behaviour of employees and overall actions of companies that is foundation of every
business. ASDA is focussing on meeting of stakeholder needs with the timely community

involvement. ASDA is the second largest retail brand where it has been subsidiary of Wal mart
that is appreciating for their 321 stores across UK and locations of Northern Ireland.
Staff: It is related to the overall Human resource policy of a organisation. Employee
involvement is big factors that is affecting the operations of ASDA where there are suggestions
that are highly valued as employers are having focus on creative and innovative approach in the
overall process of decisions making in the organisation.
Skills: it is the abilities of employees in a organisation that arises from the reinforcing of
any new Strategy or a new structure in the organisation (Kudriavtceva, , 2019). ASDA has been
using different skill development life projects so that employees are given below average
numeracy and literacy skills so that they are given opportunities to learn something new.
Style: It represent the way organisation is able to manage their top management the way
of interaction and the actions to be taken to achieve higher symbolic value. There is use of
autocratic style of management that has been adopted by the top management of ASDA where
all the decision are taken by the experience and seniors management of the company who posses
required training to perform and lead the teams in organisation.
Strategy: It is representing the overall organisations plan that has to be used for
achievement of higher competitive advantage as compared to its competitors. ASDA is focussing
on use of their logistic management as a tool to achieve higher competitive advantage over
competitors such as TESCO, sainsbury's Morrisons.
Structure: It is describing the way in which teams and departments are structured by
establishment of clear reporting relationships in the organisation (Sarsby,, 2016). The overall
organisation structure of ASDA is formal hierarchy functional structure according to functional
departments that is human resource, finance, marketing etc.
Systems: It is defined as the procedures and the activities that are to be used to get the
work done by the other staff members. The overall system of ASDA is focussed on enchaining
the process of innovation and quality that is comprehending with the substantial operational and
corporate responsibility. There is a strict product design and standardised system that is adopted
by the management of ASDA (Madsen, 2016). All the different functional departments are
mainly focussed on functions of Research and development, quality control, sales engineers,

project manage and further development stage is also revolving around the specific customer
needs.
Above mentioned is the McKinsey 7s Model that has been formulated for the purpose of
maximisation of the effectiveness in the internal functioning of ASDA that can result into
utilisation of strengths so that there can be maximization of future and preset growth
prospectives in the changing macro environment.
CONCLUSION
It can be summarized from the above mentioned aspects that both macro and micro
environment is posing a impact on the overall functioning of the business. For this there is a
necessity to evaluate the different external factors based on the competencies that are part of the
micro and macro environment. In case of micro factors VRIO analysis and SWOT analysis are
two major tools that are providing a detailed overview of the internal strengths and weakness of
organisation. PESTLE analysis is another tool that is used as a strategic management tool so that
there can be timely evaluation of the changing factors of macro environment that are affecting
the process of decision making and the strategy formulation process.

REFERENCES
Books and Journals
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Gallego-Posada, J.D. and Puerta-Yepes, M.E., 2018. Internal analysis and optimization applied
to parameter estimation under uncertainty. Boletim da Sociedade Paranaense de
Matemática, 36(2), pp.107-124.
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Kudriavtceva, A., 2019, March. SWOT-analysis of digital technologies for an industrial
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p. 012012). IOP Publishing.
Madsen, D.Ø., 2016. SWOT analysis: a management fashion perspective. International Journal
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Morozov, E.G., 2018. Oceanic internal tides. Observations, analysis and modeling. Springer
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Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Policy, P., 2018. What is pestle analysis.
Sarsby, A., 2016. SWOT analysis. Lulu. Com.
Student, A., 2016. To investigate the use of Employee Engagement at Asda Waterlooville, and
the impact it has on shop floor colleagues, in 2016, to generate recommendations for future
business development (Doctoral dissertation, University of Chichetser).
Wang, F. and Wu, H.B., 2019, August. Current Situation Analysis and Development Strategy
Research on Educational Live Broadcasting Technology Based on SWOT Theory in Post-
MOOC Era. In 2019 10th International Conference on Information Technology in
Medicine and Education (ITME) (pp. 336-340). IEEE.