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Free Essay Sample «SWOT Analysis of Asda»

«SWOT Analysis of Asda»

One of the many supermarket stores that exist in the Britain is the Asda. This chain of retail self-election shops deal with a wide range of merchandise including clothing, food staffs and financial services. Other products that are dealt with by Asda shops are mobile Telephone services and children toys. This market player has an estimated market share for grocery standing at around 16 %. This giant business is operated from its headquarters located in the West Yorkshire.

SWOT analysis is a tool that has been brought forward to aid in strategic planning. This tool has a wide range of application ranging from diagnostic to strategic planning. Basically, this tool is used to assess the health of a business in all runs (Friend & Zehle 2009).

Asda has a wide array of strength resulting from various factors. Such include a well-known business name due to its size and the range of products it deals with. The second most crucial strength that Asda has is well established brands of products whichhelp to generate consumer loyalty. Thirdly, Asda enjoys large economies of scale as it buys their stock in large quantities. This makes the cost of products cheaper and hence profitable. The forth strength of Asda arises from its sound and effective management. This has enabled it to remain profitable and hence able to survive and grow (Arkebauer & Miller 1999).

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Moreover, space in Britain and other parts of Europe becomes expensive; parking has become an issue for most other supermarket stores. On the contrary, Asda has a large parking space in which buyers’ comfortably park as they shop. Other strengths that have enabled Asda to grow include its hours of opening, availability of essential support services such as travel agents, coffee shop and a large resource muscle (Steiss, 2003). Finally, its outlets are easily accessible.

There are weaknesses that Asda has which include the following. Some analysts argue that this supermarket is too big which slows down decision making down process. The second weakness of Asda is caused by the wide range of products dealt with. This poses a particular challenge to managers and bookkeepers. The third weakness is that the supermarket deals with its brands which limit its freedom to diversify (Creative Educational Video & Insight Media 2009). The fourth weakness of Asda is legislation in the UK and the larger European Union that bars firms from exploiting their monopolistic abilities. Another weakness arises from the challenges of maintaining health and safety standards for food stuffs and grocery as this leads to huge operational costs.

Many opportunities exist for Asda; the most crucial one lies in expansion as Asda is diversifying its services to include takeaway meals and also mini restaurants. The second opportunity includes availing of cyber cafes to consumers. The business has can also venture in online business; this has ability to enable buyers to buy from homes especially for auxiliary shopping and also to cater for emergencies. Asda can also venture in telecentres through which customers can access services such as fax and internet among other services (Grensing 2011).

Asda faces many threats which include oligopolistic market that encourages very stiff competition. Secondly, Asda faces a serious loss of business due to online shopping in which competitors have taken it to a step further. Thirdly, there has been a rise in operational costs that has arisen due to rising of minimum wage. Rapidchanges in the current trends and emerging issues in business are other factors that keep large business on toes for fear of losing business.

A balanced score card is a strategic management tool that enables managers to communicate their strategic plans to as many relevant persons as possible while keeping the strategy original. The overall effects of balanced score card is to enable managers to align their daily objectives to the long-term strategic plan. This also aid in budgeting and also to assist managers to spend considerable amount of their time to strategic planning (Jenster & Hussey 2001).

A balanced score card focuses on objectives, inventiveness and means of evaluation. These three features are used to evaluate aspects of strategic planning which are finances, business process, customer and learning and growth. The financial strategy of Asda is a unique one as it focuses on increase of sale and reduction of costs (Lake 2012). This firm has invested in financial strategies that leads to increased consumption and hence enjoy even larger economies of scales as they purchase their stock.

The aspect of customers’ service has been emphasized in the strategic plan of Asda. This includes the massive steps that have been taken by the leadership of this firm. For instance, store managers were advised not to wear on their jackets a step that made them more approachable to buyers. Additionally, these managers were encouraged to offer help whenever they get close to a customer. This strategy has greatly boosted sales. The management also made changes to make the process of clearance at the counter more efficient. Furthermore customers were happy with the services of online price confirmation but would like ASDA to move ahead and avail its products for online buying.

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Asda has a very strong internal process perspective. Their future strategy focuses on responding to the currents and emerging needs of their customers in order to keep them and also win others over. This is the reason they have been focusing on services such as cyber cafes, telecentres and others in order to holistically satisfy the needs of their consumers ( Dobbins & Pettman 1997). The other internal strategy of Asda is to boost efficiency and achieve their objectives fast using minimum amount of time and money.

One of a very unique characteristic of Asda is their ability to learn and respond appropriately to consumers’ needs, current trends and emerging issues. To Asda, every new product is studied and monitored closely by a specialized sales team as it is treated as an opportunity to learn. This has enabled the firm to respond appropriately to the market and boost its profitability.

Another aim of ASDA is exploiting opportunities available for small outlets such as telecentres and cyber cafés in order to compete favorably with its main rivals.



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