Asda Marketing Strategy

Topics: Supermarket, Strategic management, Asda Pages: 23 (5404 words) Published: August 4, 2010
Executive Summary- 3 -

1.0 Introduction- 3 -

2.0 External Analysis: PESTEL Framework- 6 -

3.0 Industry Analysis: Porter’s Five Forces- 9 -

4.0 Internal Analysis- 11 -

4.1 SWOT analysis- 11 -

4.2 Value chain analysis- 12 -

4.3 Resource & Competencies- 14 -

5.0 Vision, Mission, Objectives & Measures- 15 -

5.1 Vision- 15 -

5.2 Mission- 15 -

5.3 Objectives- 15 -

6.0 Strategic Options- 16 -

6.1 Generic strategy- 17 -

6.2 Competitive strategy- 17 -

7.0 Developing Strategies- 18 -

7.1 Corporate strategy- 18 -

7.2 Business strategy- 19 -

7.3 Functional strategy- 19 -

8.0 Implementation Plan- 20 -

References- 21 -

Executive Summary

ASDA is one of the biggest retail supermarkets in the UK. It has 17% (in 2009) of market share in the UK retail market. The UK retail sector is highly competitive and ASDA has to act according to changing business environment and adopt new business strategies to improve its market position by increasing its market share. This document is an analysis of ASDA’s current position in the market and strategy which can be applied to improve its position in the UK retail market.

The relevant theories such as PESTLE Analysis, SWOT Analysis, BCG Matrix, Porters five and Ansoff‘s matrix have been use to explain the business environment of ASDA.

The new vision and mission statement has been developed and business strategy which can be used to improve ASDA’s market position in three years time is clearly defined.

1.0 Introduction

Company profile

ASDA Stores Limited was founded as Associated Dairies & Farm Stores Limited in 1949 in Leeds. The adoption of the ASDA name occurred in 1965 with the merger of the Asquith chain of three supermarkets and Associated Dairies; ASDA is an abbreviation of “Asquith and Dairies”, often capitalized. ASDA became a subsidiary of the American retail giant Wal-Mart, the world’s largest retailer, in 1999, and is the second largest chain in the UK after Tesco, having overtaken Sainsbury's in 2003. ASDA's marketing promotions have usually been based solely on price, with ASDA promoting itself under the slogan “Britain's Lowest Priced Supermarket, 12 Years Running”. As a competitor in the market, ASDA has been clearly appealing to more price conscious and frugal consumers through their established low price strategy and value proposition. This has been invested through their savings from “Operating for Less”’ program (Your ASDA, 2009). Still lately they have reported to have lowest growth rate among four biggest supermarkets in UK with a market slip of 17% to 16.9%. (International Supermarket News, 2010)

Industry analysis

The report below provides an insight into the supermarket company, ASDA, with emphasis on its external environment and company's analysis of resources, competence and culture. Two future strategic options are suggested in regards to the resources based strategies. According to TNS Market Research (2009), grocery market share figures published for the 12 weeks ending 22nd March 2009 reveal that the success of the discounters is continuing. The Discounters now account for a 5.9% share of Grocery Spending, higher than ever before reported, and they are also the fastest-growing sector of the market. The total grocery market continues to grow strongly (+7% year-on-year), fuelled partly by food price inflation and also by better performance for Supermarkets than other Retail Outlets. Among the Top 4, both ASDA and Morrisons enjoyed 9% growth, ahead of the market and yielding higher shares than last year. Tesco’s growths of 7% and Sainsbury’s of 6% were still creditable but slightly behind the overall market resulting in small share erosion. Such performance is indicative of the overall buoyancy but intense competition within the Grocery Sector in the current economic climate. | |...


References: Ansoff Matrix (2007) QuickMBA, [Online], Available: (http://www.quickmba.com/strategy/matrix/ansoff/) Last accessed: 14th April, 2010.
ASDA Careers: Culture (2010) Your ASDA, [Online], Available: (http://www.asda.jobs/why-join/culture.html) Last accessed: 07th April, 2010.
ASDA thrives on premium lines and more organic food (2006) The Guardian, [Online], Available: (http://www.guardian.co.uk/business/2006/nov/15/supermarkets.asda) Last accessed: 05th April, 2010.
Awbi, A (2006) ASDA Wal-Mart guilty of anti-trade union activity Food&Drinkeurope.com, [Online], Available: (http://www.foodanddrinkeurope.com/Retail/Asda-Wal-Mart-guilty-of-anti-trade-union-activity) Last accessed 05th April, 2010.
Creevy, J (2009) ASDA launches first eco-friendly depot RatailWeek, [Online], Available: (http://www.retail-week.com/in-business/responsible-retail/asda-launches-first-eco-friendly-depot/5004274.article) Last accessed 05th April, 2010.
Hczynski, A & Buchanan, D (2007) Organizational Behavior. 6th ed. Essex, England: Pearson Education Limited.
How do we keep our costs so low? It 's all about the ASDA culture (2009) Your ASDA, [Online], Available: (http://your.asda.com/2009/8/6/how-we-keep-our-costs-so-low) Last accessed: 01st April, 2010.
Johnson, G Scholes, K & Whittington, R (2008) Exploring Corporate Strategy. 8th ed. Essex, England: Pearson Education Ltd.
Longbottom, C (2009) ANOTHER RECORD SHARE FOR ASDA TNS Global Market Research, [Online], Available: (http://www.tnsglobal.com/news/news-0686D44B3AF84B6DB2B75A7CFA9ECFFA.aspx) Last accessed: 01st April, 2010.
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Spend a Penny, Save Pounds (2010) Your ASDA, [Online], Available: (http://your.asda.com/2010/3/1/spend-a-penny-save-pounds-2) Last accessed: 07th April, 2010.
UK Grocery Retailing (2009) IGD, [Online], Available: (http://www.igd.org.uk/index.asp?id=1&fid=1&sid=7&tid=26&folid=0&cid=94) Last accessed: 01st April, 2010.
Value Chain TheManager.org, [Online], Available: (http://www.themanager.org/models/ValueChain-Dateien/image002.gif) Last accessed: 07th April, 2010.
Why colleagues want to stay at ASDA (2010) Your ASDA, [Online], Available: (http://your.asda.com/2009/8/6/5-years-and-counting) Last accessed: 05th April, 2010.
Wood’s, M (2007). Essential Guide to Marketing Planning. Essex, England: Pearson Education Limited.
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