BUSINESS STRATEGY: ASDA SUPERMARKET (UK COMPANY) IN FOCUSBusiness strategy is one thing that cannot be ignored. Strategy refers to the unique plan that when applied, is capable of making an organization attain the set goals. A strategy is usually useful in attainment of goals especially where uncertainty aspect is available. With the existence of limited resources, it is important to note that strategy becomes very useful since it enables a business entity to attain its goals under such condition. This is because strategy makes the process of achieving a certain level of set goals easier and proactive. Strategic evaluation refers to the process through which a business entity looks at its wellbeing and productivity as well as the future direction of activities. This is usually carried out through looking beyond the normal factors which influence the productivity and state of a business. Strategic evaluation is usually known to look at the possible factors that may influence a business in future. It is important to look at the history, development and growth of an organization so as to come up with the necessary information for planning purposes.With companies in the retail business facing stiff competition in the market, it is important for ASDA to come up with a strong business strategy. ASDA Stores is a well known chain of supermarkets in the United Kingdom American owned. It handles clothing, foodstuffs, general merchandise, financial services and toys for children. It has an interest in the telecoms industry. Associated Dairies & Farm Stores Limited was the initial name of the company. ASDA operates under a mission statement to be Britains best-value retailer exceeding customer needs always. Additionally, the chain of supermarkets is known to have a vision statement to be the undisputed champion at making everyday life better for our customers by making our products more affordable. ASDA has also been able to come up with a strong alignment of its aims and objectives. Showing dominance in the industry of operation and offering fair prices in the market are some of the main notable objectives of ASDA. The Vision, Mission, Values and Objectives are all well placed in the current market where ASDA operates. This has been able to create a strong base for the company to profit from the industry. Additionally, the aims and objectives have been able to lead the ASDA to a path which makes it get endeared by the society.The external analysis of the company revealed certain opportunities and threats. The opportunities identified are able to take ASDA high in terms of market ranking. The treats identified are also not too hard to handle, meaning that they can easily be handled. All these have shown that with proper management, the company can be able to gain from the market as per expectation. The internal analysis of the company has been able to reveal a number of strengths and weaknesses of ASDA. The identified strengths of the company have been found to be good enough to propel the company to greater heights. The weaknesses are not grave as per the internal analysis of the company; meaning that they can be converted into strengths for the benefit of the company. The internal and external analysis of the company is carried out by the use of the applicable theoretical tools.2.1 The history of ASDA, development and growth ASDA..32.2 The development and growth ASDA..3Strategic management is one thing that should not be ignored by companies (Jones & Hill 2009). This is because it forms the backbone of the way forward towards success in the industry. With many challenges facing the supermarkets retail industry, it is important for companies in the industry to be extra vigilant. This means that ASDA has to come up with a good business strategy. Business strategy refers to the means through which a given business entity plans to achieve its set objectives (Johnson, Whittington & Scholes 2011). Business strategy can also be defined as the decision that the executives of an organization come up with regarding the way the business entity will triumph or win in terms of getting maximum value for the company. Coming up with a good business strategy requires proper analysis of the companies. This means that external and internal company analysis is quite necessary. The aims and objectives, vision and mission statement of the companies should be looked at to check whether they are the best for the business (Thompson 2001).2.1ASDA Stores limited is a supermarket chain in Britain. This chain of supermarket is American owned. ASDA is usually involved in retailing clothing, foodstuffs, general merchandise, financial services and toys for children. ASDA is also known to be involved in the telecommunications industry through the Vodafone network. ASDA is headquartered in Leeds, West Yorkshire at a building known as ASDA House. This business unit was incorporated in the year 1949. It is worth noting that the original name was Associated Dairies & Farm Stores Limited. A merger occurred in the year 1965 between Associated Dairies & Farm Stores Limited with Asquith and Dairies. This merger is what brought about the name ASDA which is an abbreviation of the two names.2.2ASDA started to develop consistently. There are several factors which contributed to the development of the supermarket chain. One of these things which ASDA took advantage of is the abolition of retail price maintenance. This move was carried out to create an opportunity for large-scale supermarkets which did business under low cost models. The chain of supermarket was also assisted by the fact that GEM retail and West Bridgford was taken over in November 1964. The already established names of these two business enterprises made it possible for ASDA to develop faster. For example, the sales of GEM were able to improve from 6,000 pounds per week to 60,000 per week. This was one specific thing which contributed to the good development of ASDA Stores Limited. ASDA-MFI plc held ASDA stores Limited for a short time in the year 1980. ASDA-MFI Plc also had MFI and Allied Carpets. After the sale of these two companies, the company changed its name to ASDA Group plc.The mission statement for ASDA is to be Britains best-value retailer exceeding customer needs always. According to Johnson, Scholes and Whittington (2009) and Barney and Hesterly (2010), mission statement is one of the things which determine the decision making process of a business entity. This helps in ensuring that ASDA does not work aimlessly in the industry. It helps in defining the aim of the supermarket chain. The management of the supermarket makes continuous appraisal of the mission. This helps in ensuring that the mission does not get out dated. This mission for ASDA helps in setting out the side the business is heading to. It also helps the stakeholders of the supermarket to understand where the company is headed to. The mission statement for ASDA is supported by the presence of statement of purpose. The statement of purpose assists in giving the stakeholders and other interested parties an understanding of why the supermarket exists (Minzberg, Ahlstrand & Lampel 2004).ASDA has also been able to set up certain aims and objectives. This has been in an effort to guide properly its direction. One of the aims is to dominate the world in the industry it is operating. This aim is supposed to ensure that ASDA is well known in the supermarkets industry. Another objective of the company is to make the prices of the things it offers affordable. This objective is aimed at making people rely almost solely on ASDA for their day to day shopping needs. ASDA has also been able to set an objective of beating the other players in the industry such as Tesco and Sainsburys.The aims and objectives of ASDA have been very beneficial in the supermarket company. According to Thompson, Strickland & Gamble (2010), aims and objectives of a firm are usually able to make focusing on the supermarkets business easy. This is through creating an opportunity to see the main areas of development and achievement. The aims and objectives have been very useful in planning any new ventures for the supermarket. This has been through giving guidance of the various new initiatives of the supermarket company. The aims and objectives of the company have been very useful in determining the future vision of the company. The aims and objectives of a company are a very good thing in determining the way the company is supposed to achieve success through utilizing its main plan (Olsen 2007). These aims and objectives of the company have been very instrumental in defining concisely the nature as well as purpose of the supermarket. Considering the aims and objectives of a company in policy formulation is very important (Wheelen & Hunger 2010). It is a very good thing for creating a good way of management through objectives. Since the aims and objectives of ASDA have been good, they provide a good avenue for chasing companys success.ASDA has also been able to come up with a vision statement. The Vision statement for this company is to be the undisputed champion at making everyday life better for our customers by making our products more affordable. This is what has been driving the companys efforts towards success. This vision statement for ASDA has been able to create a link between the current as well as future of the supermarket. ASDA has also been getting a lot of inspiration from its own vision statement. The inspiration has been forth coming since the vision statement gives hope for the coming days of the organizations operations. The vision statement for ASDA has also been very useful in the decision making of the company. It is worth noting that the vision statement of a business entity guides the decision making process (Dyson 2010). This has been through giving guidance in the process of making several decisions for the supermarket company. It is worth noting that the vision statement for the supermarket chain has been instrumental in determining its character as well as the avenues it can exploit so that it gains presence and benefit from any market it penetrates in. Therefore, the vision statement for ASDA has been a pillar of its success and a determinant of the direction the supermarket chain pursues. It has also been a big determinant of the satisfaction the customers receive once they purchase any of the companys products. Good service supports the customer service strategies of an organization (Wheelen & Hunger 2010).The development and growth of ASDA shows that there are options which can make an organization take the lead in the market. The options for success of a company are usually subject to strategic planning (Minzberg, Ahlstrand & Lampel 2004). Strategic planning cuts the path for an organization (Lynch 2006)Barney, JB & Hesterly, WS 2010, Strategic management and competitive advantage: concepts and cases. New Jersey: Prentice HallJohnson, G, Scholes, K & Whittington, R 2009, Fundamentals of strategy, Harlow: Pearson Education LimitedOlsen, E 2007, Strategic Planning for Dummies. Wiley PublishingDyson, JR 2010, Accounting for non-accounting students. 8th ed. Harlow: Pearson Education.Jones, GR & Hill, CW 2009, Strategic Management Essentials. 2nd ed. Southwestern: Cengage LearningLynch, R 2006, corporate strategy. 4th ed., Harlow: Prentice Hall.Minzberg H, Ahlstrand, B & Lampel, J 2004, Strategy bites back. London: Prentice-Hall.Thompson, JL 2001, Understanding corporate strategy. London: Thomson Learning.Thompson, AA, Strickland, AJ & Gamble, JE 2010, Crafting and executing strategy: the quest for competitive advantage concepts and cases. London: McGraw-HillWheelen, TL & Hunger, JD 2010, Concepts in Strategic management and business policy. 12th Ed. New Jersey: Prentice Hall.It is always for all people in business to have a business strategy. Strategy refers to the unique plan that when applied, is capable of attaining the set goals. According to Johnson, Whittington and Scholes (2011), a strategy is usually useful in attainment of goals especially where there is uncertainty. With the existence of limited resources, it is important to note that strategy becomes very useful since it enables a business entity to attain its goals under such condition. This is because strategy makes the process of achieving a certain level of set goals easier and proactive. Strategic evaluation refers to the process through which a business entity looks at its wellbeing and productivity as well as the future direction of activities. This is usually carried out through looking beyond the normal factors which influence the productivity and state of a business. Strategic evaluation is usually known to look at the possible factors that may influence a business in future. The success of strategic evaluation lies in the ability of a business entity to precisely analyze and predict several paths that enable it to come up with the best plan possible so as to succeed in future.ASDA Stores is a well known chain of supermarkets in the United Kingdom. It is an American owned company situated in Leeds. This company handles clothing, foodstuffs, general merchandise, financial services and toys for children. It has an interest in the telecoms industry. Associated Dairies & Farm Stores Limited was the initial name of the company. It obtained its current name as a result of a merger. The merger enabled the company to grow at a better rate than before. This led to an interesting growth rate in sales of the company.Looking at the organizations leadership of ASDA, a lot of positive things are identified. The CEO comes out as an asset to the company. The organizational structure is found to be hierarchical. This gives an indication of complex processes and systems. The organizational culture on the other side is quite good. It helps in positioning the company well in the society and market in general.The evaluation of the existing and the potential strategies has been instrumental in analyzing the company. Looking at how the strategy at ASDA is synchronized has also been useful. Analysis of the external and internal environment of the company has been carried out by the use of the best tools. SWOT, PEST, PESTLE, TOWS and Porters Five Forces Model have all come in handy in the analysis. This has been able to give the companys position internally and externally. This means that the position of the company with regards to its strengths and weaknesses is well revealed. Furthermore, the analysis of the companys financial health has revealed good state of affairs. All financial data has been looked at with a keen eye. This is necessary to ensure that all indicators pointing to the financial state in a company are well handled.On the other hand, the position of the company with regard to the opportunities and threats has also been revealed. Additionally, ASDA has been operating even with existence of competition in the market. The indications brought about by the diverse analysis of ASDA should not be ignored. This is because they determine the decisions which should be taken by the executive.3.1 Macro Environment Analysis.263.1.1 ASDA PEST/PESTEL .263.2 Micro Environment Analysis293.2.1 Porters Five Forces .Model29Appendices34Appendix1: The organizational structure Chart of ASDA34Appendix 2: The Organizational Culture diagram of ASDA34Bibliography..35A business entity should always ensure that the plans which are capable of achieving the set goals in a better way are arrived at efficiently. This brings about the strategic concept in business management. Business strategy is one of the things which require proper management. This is because the kind of strategy brought about in a business determines the direction the business takes. The strategies should touch on all areas of the business. To come up with the best strategies, it is important to have thorough knowledge regarding the business. This is achieved through the use of the best business analysis tools. These tools of analysis should be applied on the internal as well as the external environment of a business.The aims and objectives of this business report is to bring about an understanding of the link between the external environment and the internal environment. The report is also aimed at looking at the level of improvement brought about to a business by proper management of strategies.To be able to achieve the said aims, the report will;ASDA has a very complex organizational structure. This is why ASDA has a hierarchical structure. This is usually brought about by the fact that ASDA has many business units and activities to take care of. This means that information passes through many people even before the CEO gets wind of any action taking place. This is as a result of subordinates reporting to many people. Each of the many levels of ASDA is overseen by a person. It is worth noting that this type of structure has many layers or levels. The CEO is supported by directors, Managers and then the rest of the staff members. This is well reflected in Appendix 1.The leadership of ASDA Stores Limited is under the CEO and President Mr. Andy Clarke. Mr. Clarke has been sitting at the helm of this company since May 11, 2010. Before taking over as the CEO and President, he was the Chief Operating Officer of ASDA Group Ltd since the year 2007 up to May 2010. He has been in ASDA since the year 1992, where he has gained rich experience as a store manager, business unit director of categories such as Frozen, Bakery and Produce and retail managing director for Asdas central division among other positions.CEO Andy Clarke Asda is known to be under a very good leadership. The company is led by a CEO. The CEO for ASDA has been found to be an asset for the company. One of the reasons is because he is a leader. It is always important for a CEO to be a leader so that a business may end up successful. This is important because he is in charge of various teams. Secondly, the ASDA CEO is known to be strategic. This helps the group in achieving most of its set goals. This is usually shown through the fact that he always knows what to do and how o do it. The other reason why the leader of ASDA group creates success is through the fact that he is always clear. This is witnessed whenever he is issuing instructions to the workforce. An employee is left quite sure of what needs to be done.It is said that ASDA has a very good corporate culture. In fact it has been enlisted as one of the best companies to work for. Whenever people are talking, they all come to an agreement that it is worthwhile to work at ASDA.The company is usually considerate enough to its employees and public in general. The company has also developed a culture of engaging the workforce and the community in its plans. ASDA is also involved in corporate social responsibility activities as part of the rituals and routines. ASDA is usually under the leadership of CEO. The appointment of the CEO is usually very sensitive due to the competition and value in the supermarket chain company. This makes organization of the power structures manageable. ASDA has a very convenient organizational structure. The structure is necessary to create efficiency in the company. For example good corporate culture was the power behind ASDAs People, Prices, Planet campaign which focused on imparting sustainable business practices to the people. The company is also known to be quite ethical and conscious on matters of health among others. This was made more successful by coming up with the best fitting banner. The company ensures that the trade symbols are all well planned to capture the mood of the community and market.ASDA has been performing well financially. This has been possible to tell due to the increase in market share in the industry as compared to the other players in the industry. For example, recent research shows that the company controls 17.5% of the grocery market. This is the second largest market share in Britain. Recently, the company posted an increase in sales of this line by 8.5%; the biggest increase in revenue among the players in the industry. This can be clearly indicated from the table below;From the above table, the net income of ASDA stands at $443,854. This shows a very good position considering that the company has experienced a consistent growth in net sales.The gross profit movement of the company is as follows;This shows how the company has gone down in terms of profitability. This is because the gross profit margin has experienced a drop from the year 2010. In the year 201, the gross profit margin stood at 24.9%, but dropped to 24.8% and 24.5% in the years 2011 and 2012 respectively.The net income of the company is also good since it shows an increase from the year 2008 to 2012. This is as illustrated belowLiquidity of the companyThe companys liquidity ratio stands at 0.43The other liquidity values are as belowThis means that the companys liquidity is weak. This is because the higher the ratio the better for a company.ASDA has been able to realize the importance of strategies in an organization. This has led to the creation of strategies for the chain of supermarket. This British supermarket has been able to come up with strategies of different types. These ranges from;ASDA has been able to come up with strategies in all areas. These strategies include;There are other potential pricing strategies which ASDA can use. These include;ASDA has been able to put its strategy together by handling each strategy individually as well as jointly. This has made the supermarket company to succeed because of proper strategy formulation.For example ASDA puts together its marketing strategy through use of the five step process. This is as follows;PEST analysis involves the evaluation of a companys position with regard to political, Economic, Social and Technological situation at a given time (Wetherly & Otter 2008). On the other hand, when the environmental and legal factors are brought on board, the PEST analysis expands to make the PESTEL analysis. To show this, the PEST and PESTEL analysis has been carried together.PoliticalASDA being in Britain enjoys one of the countries where democracy is deemed to be fit. This means that the political situation in the country is fair for business. ASDA operates in a country where the politics are pegged around a constitutional monarchy. The Monarch is usually the highest person to hold a political office in Britain. There is usually the head of government. The Prime Minister is the head of government in Britain. There are also the governments of Scotland and WALES. These tow governments are usually under devolution. Britain is one of the places where multi-party system has been adopted. The Conservative Party and the Labor party have been the two big political parties in the country. Currently, there is a coalition of the two parties; which has never happened again since 1974.The political temperatures in Britain are just perfect for business. This gives ASDA the right political environment to carry out its duties.EconomicASDA operating in Britain gets the opportunity to be in one of the sixth largest economy in the world. Britain is ranked sixth in the world in terms of national economy measured by nominal GDP. This means that the rating of Britain in terms of exports and imports is good. For example the United Kingdom was ranked number 11 in terms of exports and 6 in terms of imports. The GDP OF Britain is also not bad. 78% of the Britains GDP is comprised of the service sectors impact. The retail sector in Britain is also a major contributor in the GDP of the country. This places ASDA at a very good economic environment. Utilized well, this good economic environment can spell success for the supermarket chain.Unemployment in Britain has been lower than expected, giving an indication that the economy is fair. However, the GDP has been a bit flat than expected. The inflation is also a cause for alarm in Britain since it has been rising recently. The country has been fighting debt. This has led to reduced government spending among other related issues. This can be indicated by appendix.1, 2 and 3.SocialBritain just like many countries in the world was exercising social castes system. This has been replaced by the existence of social classes in Britain. Britain is one of the countries in the world where social classes exist. It is worth noting that there are traces of marriages within the same social classes as well as hereditary tendencies. However, the social norms in Britain have changed a lot since the World War 2. There has been a solid change in the way the role of women in the society is viewed. The way people cooperate has also changed thus helping in shaping the social environment in Britain.TechnologicalBritain is one of the places where technology has received high levels of appreciation. The technological environment on Britain is impressive. This gives business people such as ASDA an opportunity to develop from this good technological environment. There have been numerous technological start ups in Britain giving the economy a big boost. A company such as ASDA will be able to benefit through the good technological systems in the market. This will be able to provide efficiency in operations among other processes.ASDA has been able to benefit from technological advancements in Britain through things such as stock control. The British government has also been able to pump money into research on technology. This is one thing that is likely to benefit ASDA more. Running of ASDA requires energy; something which is taken care of by the fact that Britain is ahead in terms of energy generation and cost control.EnvironmentalThe increase in demand has been very instrumental in decision making on things which might affect the environment. Things like packaging have been very challenging to decide on. The need to pack for all clients has sometimes been hard to carry out on environment friendly substances. The government has been very clear that every person should be able to pack in environment friendly way.Recycling has also been an initiative which the government has been fighting for. This is one thing that ASDA can take advantage of and get involved in related activities.LegalLuckily, the legal system in Britain is good. Systems have been streamlined to ensure that everybody gets justice. Several guidelines have been drafted to ensure that the law is followed. This has been able to create clarity on issues related to competition, employment and regulations of trade among others. The good legal platform created in Britain is good for ASDA to take advantage of so that operation may be smooth.New entries in a market are usually a source of more competition. It is always important to ensure that the company is ahead when it comes to market command. The new entrants in the market harm the business in that they also add more substitutes. ASDA has this threat since many companies are aiming at entering into this market due to its good business activity. ASDA should be able to position itself in a way which reduces the effects of new entrantsRivalry is the force which gives this model its strength. This force argues that competition is a big contributor to the way the company performs. This force advocates that a company should always work towards earning competitive advantage. ASDA has many competitors, whose threat can be fought using the best rivalry techniques. These competitors include Wal-Mart and Ocado Limited.
Threat of SubstitutesThe existence of options that clients can turn to is dangerous to accompany. At ASDA will not be able to do things such as raising prices of its products and services. This means that ASDA should be able to strategize so that the clients find the substitutes insignificant. This will be able to put ASDA in the forefront when it comes to market command.
Threat of SuppliersThis force argues that the suppliers of a company play a major role in determining its success. ASDA should be able to manage its affairs well with regard to suppliers. Proper communication channels should be established with suppliers so that efficiency exists. The way suppliers determine the market forces is also important to plan about. Sometimes suppliers are known to gang up so that they get a bigger share in the industry which is harmful to businesses.
Threat of BuyersThe buyers are also very influential to the performance of a business. It is important for ASDA to determine the power of the buyer in the industry. This will make sure that the supermarket strategizes properly.SWOT analysis is a process which shows the findings of an internal as well as external environment audit on a company. For ASDA the SWOT analysis brings about the impact of political, economic, social, technological, environmental and legal factors on Asda.Setting up good mission statement, Vision statement, aims and objectives of a company is a good step towards success of a company (Thompson, Strickland & Gamble, 2010). Components involved in formulation of the above should be well controlled to ensure that only the best is achieved.Development and growth of a company lies in the way it handles its affairs. The development and growth of ASDA is shown to be a result of the supermarkets proper plan and strategy. All strategies should always be brought together so that they work to the benefit of the company.ASDA should be able to improve on the strategy development process. Consulting experts on strategy would be a very helpful thing to do. The potential strategies should be tried out along the other existing ones. The ones which seem fruitful should be implemented fully in the company. The strategies to concentrate more on should be able to create unrivalled competitive edge in the market. This will be necessary in the efforts towards making the aims and objectives of the organization get achieved.Proper management of the organization structure would improve the companys efficiency. This would be possible through reducing the number of people a person has too report to.The organizational structure Chart of ASDAAnaloui, F & Karami, A 2003, Strategic Management in Small and Medium Enterprises. London: Thomson Learning.Campbell, D, Edgar, D. & Stonehouse, G 2011, Business Strategy an Introduction. 3rd ed. Basingstoke: Palgrave. Macmillan.David, FR 2011, Strategic management: concepts and cases. 13th Ed. New Jersey: Pearson Prentice Hall.De Wit, B. & Myers, R 2010, Strategy: Process, Content, Context An international perspective. 4th ed. Andover: Cengage Learning EMEA.Grundy, T & Johnson, G & Scholes, K 1998, Exploring strategic financial management. London, Prentice Hall.Johnson, G, Whittington, R & Scholes, K 2011, Exploring corporate strategy, 9th ed., Harlow: Pearson Education Limited.Jones, GR & Hill, CW 2009, Strategic Management Essentials. 2nd ed. Southwestern: Cengage Learning.Vineberg, H, Ahlstrand, B & Lampel, J 2004, Strategy bites back. London: Prentice-Hall.Thompson, AA, Strickland, AJ. & Gamble, JE 2010, Crafting and executing strategy: the quest for competitive advantage concepts and cases. London: McGraw-Hill.Wetherly, P. & Otter, D 2008. The business environment. Oxford: Oxford University Press.