Strategic Management Report: ASDA's Strategic Analysis and Tools

This report provides a comprehensive analysis of strategic management, focusing on the application of various tools and models within the context of the British supermarket retail company, ASDA. The introduction defines strategic management as a continuous process of setting objectives, analyzing the competitive environment, determining internal organization, evaluating strategies, and ensuring the execution of the plan across the company. The main body of the report delves into the process organizations use to determine strategies, including external and internal analysis. It then evaluates models and tools such as PESTEL and SWOT analysis, and Porter's five forces, illustrating their application within ASDA. The report further examines the importance of change management in the transformation process. Through the use of SWOT and PESTEL analyses, the report provides a detailed examination of ASDA's strengths, weaknesses, opportunities, and threats, as well as the impact of political, economic, social, and technological factors on its business. The conclusion summarizes the key findings and emphasizes the significance of strategic management in achieving organizational goals. This report is a valuable resource for students studying business development, as it provides a practical application of theoretical concepts, all available on Desklib.

Strategic Management

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Introduction of strategic management.....................................................................................1
2. The assessment of the process that is used by organisations to determine their strategies.....1
3. Evaluation of the models and tools that used by companies to analyse their strategy............2
4. Application of these tools in context of the firm.....................................................................4
5. The importance of change management based on the transformation process........................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management indicates to an action and a process of setting aims and objectives,
analysing competitive environment, determining internal organisation, evaluating strategies and
ensuring that management rolls out the plan of action across the company (Ansoff and et. al.,
2018). It can be an ongoing planning, determination and assessment all the needed things that are
required to attain goals and objectives of the firm. This written report is based on ASDA which is
a British supermarket retail company. This company was incorporated in 1949 and
headquartered in West Yorkshire, England. This assignment will explain about the process that is
utilised by organisations to determine their strategy and the conceptions or techniques which is
implement and applied by the administration of the company in term of analysing their plan of
action. Moreover, the report will contains the application of these tools and the importance of
change management that is supported to transformation activity.
MAIN BODY
1. Introduction of strategic management
Strategic management is an ongoing planning, determining, analysing and assessment of
all that is needed for a company to meet its aims and objectives. It consists setting objectives,
analysing and competitive environment, analysing the internal organisation, measuring plan of
action and ensuring that management rolls out the strategies cross wise the firm.
2. The assessment of the process that is used by organisations to determine their strategies
In reference to make sure efficaciousness in execution, there are multiple ways in which
the organisation make their strategies and apply those strategies effectively. These strategies also
need proper application to apply over it for the improvement and results. There are some ways in
which these can apply as follows:
External analysis: One of the best way before apply it over large process, apply on a
macro environment. It signs towards the analysis of all the parts in the external business
environment of a firm which have large impact on its business description and strategies. These
analysis need the firms in reference to explain the processes which are in contact with
economical condition, political staleness, social requirements, advancement of Technology and
atmospheric concerns as well as effective considerations of legal things in the business sector. In
spite of it, this analysis provides the feedback regarding the current position of company in the
1

global in respect to customers, suppliers, new competitors as well as existing competitors. All
these activities provides the feedback to the administration so that the position of company in
global can be improved (Ansoff and et. al., 2018). Whereas it seems to be an efficient, there are
many limitation attached with this process in reference of helping the organisation in case of
analysing its strategy. For instance, it is necessary during the period of analysis of the external
forces and their effect on the organisation. In spite of this, it does consider the facts that
somewhere exist in the firm's offering which are able to manipulate the external forces causes to
uniqueness.
Internal Analysis: It is another way which is used by firms to observe their internal plans of
action to analyze the internal ability and weakness. This analysis is the most important in terms
of organization as it has an effective perception regarding firm strength and also for those factors
which play important role in development (Ginter, Duncan and Swayne,2018). This activity also
contains different important increment factors of the firm like its main capabilities and weakness
as well as also have multiple growth option and risk connected to business activities and
operations. This analysis is also most important for the firm because this analysis provides the
data regarding threats which can effect the firm growth so to remove it from the business
process. So that, this is analysis it connected with the existing plan of the company to provides it
best in removing out the threats and increase the business of firm.
Hence, from these above analysis we concluded that both the internal and external analysis
are important in terms of firm to be used for proper growth of the company and also carry out the
threats which effecting the growth of the organization, so every firm need to accept both the
analysis to analyses their internal growth as well as weakness. In spite of this, internal analysis is
also important for the firm has exclusive facilities to provide, external analysis is used by
companies to analysis threats in the distribution of goods and facilities that are provided by the
firm.
3. Evaluation of the models and tools that used by companies to analyse their strategy
As per preceding analysis, the activities that are determined by companies are most essential in
order to determining their strategies in an appropriate manner. According to it, there are different
models and approaches that are supported and provided direction to organisation that how
properly they could use the above explain activities to monitor plan of action (Moutinho and
Vargas-Sanchez, 2018). These models are much adequate when it comes to assisting a company
2

in form of measuring its strategies and tactics. Thus, different approaches and conceptions in
term of external and internal analysis of the firm are defined as below:
PESTEL Analysis
This concept is utilised and applied by the organisation to analyse the influence of macro
atmospheric component that create impact over business activities and operations. This analysis
is essential as it assist in determining the position of the market, preferences of target audiences,
legislative and political need that could drive a business towards development band success. In
addition to it, this conception can also be utilise and implement in determining the positive and
unfavourable impact of these factors on the firm that could efficaciously ensure path ways
through which the enterprise can accomplish its success in market (Okumus and et. al., 2019).
All the components adopted by the venture in term of that it is an efficacious analyses of the
market that help in shaping the plan of action of the firm in proper way.
If this concept is crucial in order to provide shape up the strategies, it does not take in to
consideration one particular force that is required to be dealt with, which is competitive. This
component is effective because it assist in monitoring the way that enables a company in
moulding its operations to earn competitive edge. This might also negatively affect the company
in term of long time sustainability in a specific business industry.
SWOT Analysis
This concept is known as strategic analysis of a company that provide information about the
internal factor of a firm. By utilising this model the management of an organisation can get
information about the capability, weaknesses, growth options and threats. It is one of the
simplest approach that require limited determination and appropriate overview of the firm to
analyse the potential success and development chances and risks that are associated to same. In
reference to implementation of this conception, it is applied by first monitoring strengths and
weaknesses of the company the efficaciously determine the threats and growth options. In
favourable favour of this model, it is one of the most appropriate applicable concepts for a
business. Because it help in providing information about the capability and growth options of the
company to management (Carayannis, 2018). Whereas negative aspects, there are few
restrictions in term of scope and perspective in which it is implemented.
Porter’s five forces analysis
3

This model can be used by the firm to determine the competition in specific business
industry in which the firm operate. This will help in offering information about current rivalry so
the firm can develop strategies and plan of actions to successfully run and sustain till long term
duration.
Therefore, both concepts have their own benefits and drawbacks that are needed to be
evaluated and analysed by the administration of company to frame a plan of action and tactic that
capable to satisfy agendas of these both models in improved manner.
4. Application of these tools in context of the firm
SWOT analysis of ASDA
It mention to a strategic determination that is implement and utilised by the
administration of ASDA to monitor the internal business environment (Ginter, Duncan and
Swayne,2018). With the application of this model, the management of the respective company
can analyse the strengths, weaknesses, and chance of growth and threats of the firm. SWOT
analysis of ASDA is explained as under:
Strengths Weaknesses
 The major strength of this company is
that the company offer wide range of
products and connect with its customer
by online services.
 The firm also fulfilling its customers’
needs and to get information about their
demands, they constant touch with
them via social media, ask feedback
etc.
 The main weakness of the firm is
limited international presence in
comparison to other retail
supermarkets.
 Their capability to sell prices have
limited their entry in few nations due to
fear of generating rivalry with local
vendors.
Opportunities Threats
By making business expansion in new regions
like jewellery, pharmacies and many more
(Moutinho and Vargas-Sanchez, 2018).
 By making acquisition of small
organisations can assist the firm in
further development.
 The major threat which is faced by this
retail firm is changes in government
policies that highly affect the business
of the firm.
 Price war with other retail supermarket
chains also generating risk and threat
4

for the business of this company.
PESTEL analysis of ASDA
It knows as the macro environment analysis in which firms determine external factor and
component of organisation that create influence over the business of a company. By
implementing this analysis, the administration of the firm can monitor the impact of them over
business operations and activities. The explanation of this concept, in context of ASDA, is
defined as under:
Political factor- It consist different elements like political stability, corruption, taxation policy,
trade restriction, foreign exchange and others. The mentioned components affect the company
when any kind of change generate within them. For instant, due to Brexit, there are several kind
of changes occurring and taxation polices are changes in from of high rate. These create negative
impact over the business of ASDA (Okumus and et. al., 2019). Apart from it free trade of
business operations creates favourable impact. With the help of it, respective firm can make
development in its business by expanding its business different nations.
Economical factor- This factor of Pestel analysis contains different components like
unemployment rate, economic growth, inflation, currency rate, exchange rate, tax rate, interest
rate and many more. For example, when Brexit come in sight in UK, the situation of inflation is
arisen and due to which interest rate and tax rate are increased that create negative impact over
the business operations of ASDA. Currency rate is another factor that is also altered and
influences the economic condition of respective company in unfavourable manner.
Social factor- It include culture, value, demographic, belief and many other components.
Change in customer needs is a demographic element that is a most important factor that highly
impact the business companies like ASDA (Carayannis, 2018). Taste and needs of customers are
modified quickly that unfavourably impacted respected company in form of providing quick
satisfaction to them. These kinds of changes are occurred due to change in trends that influence
customer’s needs and changes are generated.
Technological factor- It include different elements like advancement in technology,
artificial intelligence, research & development and many more. For instant, the management of
ASDA use different technologies in its business that favourably affects the business of the
company. The administration use different promotional tools like social media tools, wed ads etc.
5

that help in getting attention of consumer and providing their response regarding its products and
services. Online shopping technology of this company also positively affects the organisation in
term of improving sales and profits.
Environmental factor- It includes different environmental components like weather,
climate, environmental legislations and many more. The administration of ASDA, effectively
consider all the environmental act like pollution act, carbon emission etc. So that they can create
favourable impact over the atmosphere (Holloway, 2018). The company use high technology so
that they can use less paper. This also contributes in environmental safety and security.
Legal factor- It mention to that rules and policies that are formulated and developed by the
government of a particular nation so that the business that are operated within that country, run
in effective or legal way. This factor contains different laws and legislations like consumer
protection act, health and safety laws, employment legislation and others. The company properly
consider consumer protection act and employment law so that they can secure their customer and
make effective relation with them (Holloway, 2018). By following employment act, the firm
provide a safe and healthy workplace where employees can do their work in proper manner
without facing any kind of discrimination.
Porter’s five force analysis
It is a competitive analysis that can be used by the administration of ASDA in term of
monitoring level of competition in particular business industry. The force that contains by these
tools is defined as under:
Threat of new entrants- the firm has less threat of new entrants because it operate its business in
retail sector so to operate in this industry, company require more capital to invest and there are
various laws that are strictly follow by the firm that operate in this sector.
Bargaining power of buyers- This force less affect ASDA because respective company offer
quality product at affordable prices. The company also offer a range of products as per
consumers needs.
Bargaining power of suppliers- Respective organisation operate in retail sector so their number f
supplier who are ready offer needed material to, operate the business, company in reasonable
prices.
6

Threats of substitutes- this force highly affect the business of firm because there are number of
enterprises that operate in retail sector with range if substitute products. So the promotion and
pricing strategies of these firms generate threat for ASDA.
Rivalry among existing competitors- This force also negatively affects ASDA in term of
creating high competition. There are several firms like Tesco, Aldi, Lidl and others generate high
level competition for respective firm.
5. The importance of change management based on the transformation process
In continuation of the preceding description, need of hour for ASDA is to have various
forward-looking critical modification within the organization that supports the ASDA complying
with the dynamics economic environment conditions. Hence it is crucial for the company to
minutely evaluate the benefits of change management. Change management process provides
conceptual scaffolding for people, the process, and the organization implementing change. It's a
framework used to support and understand the change and its effect on the organization and its
people. For ASDA importance of change management is described as under.
Complexity– One of the most important parts of change management is the acceptance by the
existing system framework. That makes the process of change management very complex. The
change management not only having impact on the overall way an organization functions but
also have impact on each and every process and people associated with the organization (Teece,
2019). Referring to the ASDA context it acceptance of change management by people associated
will be a challenge. Hence it is more important for ASDA to engage the people in the process of
change management resulting into better understanding and acceptance. Additionally, critical
analysis of change management process covering timeline, effectiveness and cost needs to be
done.
Cost– One of the most critical parameter is the cost associated with any change.
Organization needs to incur various costs related to consultancy fee, human resource expenses,
infrastructure expenses, marketing and promotional costs etc. These costs will have an
immediate impact on the financial condition of the organization whereas the benefits will arise in
a future time frame with uncertainty on the quantum.
Risk– As mentioned earlier that change management is a complex process due to which it
has inherent risk factors associated with it. Major risks are with reference to acceptability of
structural change plans by the people. Without people acceptance implementing effective
7

administrative process change is difficult. It may lead to a total failure of the change process. TO
deal with the associated risk employee engagement in process change drafting and administrative
implementation is more critical.
Sustainability– Continuing from the complexity, cost and other challenges involved in the
change management another key aspect is the sustainability of the process. Frequent changes in
the processes may lead to financial loss due to cost as well projected revenue loss for the
company (Meyer and Xin, 2018). For effective results organization like ASDA shall look
towards the long-term view on implementing change management in the organization which is in
line with the long term vision and mission of the company. People engagement, cost
management are the other areas help in a sustainable change management program of the
company.
CONCLUSION
This has been summarised form the preceding define information that strategic management
is an effective action of setting aims and objective of a company so that the employees can
accomplishing the business gal in effective manner. There are different tools that are used by a
firm to analyse its plan of action. With the help SOWT and PESTEL analysis the company can
determine its internal and external business environment that how they influence the business of
firm. There are different kind of changes occurred in business sector that affect cost, arise risk
and improve the sustainability of the firm.
REFERENCES
Books and Journals
Ansoff, H.I. and et. al., 2018. Implanting strategic management. Springer.
Carayannis, E., 2018. Strategic management of technological learning. CRC Press.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Heath, R.L., 2018. Issues management. The International Encyclopedia of Strategic
Communication, pp.1-15.
8

Holloway, S., 2018. Changing planes: A strategic management perspective on an industry in
transition. Routledge.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal. 39(6). pp.1530-1545.
Meyer, K.E. and Xin, K.R., 2018. Managing talent in emerging economy multinationals:
Integrating strategic management and human resource management. The International
Journal of Human Resource Management. 29(11). pp.1827-1855.
Moutinho, L. and Vargas-Sanchez, A. eds., 2018. Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Okumus, F. and et. al., 2019. Strategic management for hospitality and tourism. Routledge.
Teece, D.J., 2019. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers. 53(1). pp.1-43.
9