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Examination of Asda Strategy to Improve Their Business Position

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ASDA Competitive Advantage

One of the major challenges that today’s business experience is how they can understand the needs, requirements and concerns for their customers so as to create as well as generate products and services that can allow them to attain a competitive advantage. Strategic management in a business plays a crucial role in terms of ensuring that the business will be capable of surviving in the long-run (Barnes 3). Long-term survival for an organization means that it can realize successes that can allow it to meet its objectives by making sure that it realizes a competitive edge over its rivals, as well as follow the appropriate business level strategies (Beer and Nohria 15).

A business level strategy targets the overall competitive theme that a business chooses to allow it lay emphasis to the manner in which it is positioned in the market. This allows a business to realize competitive advantage as well as position different strategies that an enterprise can adopt in various business environments. For instance, business level strategies or competitive strategy serves as a vital subsystem of corporate strategy (Barnes and Norris 15). It refers to a set of coordinated and integrated activities that help in the exploitation of core competencies and in the realization of competitive advantage. In this case, it is true that a business adopts coordinated and integrated actions to allow it exploit core competencies and realize competitive advantage (Barnes 5).

Competitive advantages are the ones that determine whether a business will succeed of rail. It is dependent on the capabilities, resources and core competencies of an enterprise. This is possible due to the fact that it is the role of the manager to control and implement support activities that create room for competitive advantage (Barnes and Norris 17). An organization is said to have realized a competitive advantage once it portrays traits that make it to appear different from its competitors, which then allow it to realize high yields in a sustainable manner. Therefore, a competitive advantage serves as a good image for a company, and an additional feature to a product or services that an enterprise provides to its consumers, as well as a prime location and a lower price than competitors can offer (Beer and Nohria 18). This paper will explore the role of competitive advantage in allowing ASDA to succeed in Manchester.

Company Background

ASDA Stores Ltd was set up in 1965 at Yorkshire, England by J.W. Hindel. During this time, the company engaged in the sale of a wide range of food and non-food items at a significantly low price. It started boosting its operations by increasing the number of stores that it hand in the UK. By 1978, ASDA had approximately 60 stores, and its stores had managed to make sales amounting to 1 billion pounds by 1980 (Thompson and Martin 54). Later, the company added furniture and carpets to its product portfolio by engaging in mergers and acquisitions. However, the company incurred huge debts while entering into these deals, and this issue caused significant strain to the financial resources of the company. ASDA de-merged in 1987 when it sold its MFI state to MFI managers. After engaging in the sale of MFI and Allied carpet, the company changed its name to ASDA Group plc (Robertson and Caldart 65).

ASDA opened its first store in south Britain in 1989. In 1990, it started its own private clothing label referred to as George, and distributed it to its 65 stores to allow it strengthen its clothing segment, and also allow it to compete effectively with Marks & Spencer. In the following year, the company acquired Gateway stores for 705 million pounds, which later put severe strain to its financial resources (Robertson and Caldart 24). Analysts believed that this issue resulted from the overpayments that ASDA made to these out of town outlets and other second-class sites. When the company started realizing strains in the profits that it was making, it started to raise the prices for its products, and started shifting away from its low price strategy, which its earlier success was based upon (Thompson and Martin 22). This is because the company was encountering challenges with respect to coping with the intense cuts in prices, and the tough competition that was being posed by other dominant market players such as Sainsbury and Tesco.

Early in 1991, ASDA appointed Archie Norman to help turn the falling company around. Norman reverted the company to its initial version as a food retail chain, as well as made its products more affordable that its competitors by laying emphasis on low process as opposed to loyalty schemes (Harrison 13). It raised company by going public both in 191 and 1993. By 1999, ASDA realized profits amounting to 405 million pounds after making sales of 8 billion pounds (Khosrowpour 21).

In 1999, Walmart was looking for ways in which it could expand its venues, and decided to penetrate British retail market, and it purchased ASDA for 220 pence for every share. This acquisition was anticipated to allow the company to have a significant impact both on the UK retain industry and financial markets (Addy, http://www.foodmanufacture.co.uk). Since ASDA had adopted a low price strategy by then, it was able to attract a significant number of British consumers. As a result, the post-acquisition process did not witness problems since Walmart was also pursuing a low-price strategy (Khosrowpour 22).

Today, ASDA is regarded as the second largest retailer in the UK. It is also the largest subsidiary of the Walmart family of companies. The scale of ASDA is appreciated based on the number of stores that it runs, and the people who work for it. For instance, ASDA has approximately 321 stores across the UK and Northern Ireland, 29 depots and about 148,000 colleagues. These establishments are the ones that allow the company to realize a turnover of more than 15 billion pounds (Addy, http://www.foodmanufacture.co.uk).

In the recent years, most of the colleagues from ASDA depots and stores are tending to be more involved with the community in order to help raise funds for charities (Ashley-Roberts, http://www.simplydigitalmarketing.com). This initiative has allowed the company to become more involved with the community, and allow it to improve the manner in which it addresses its mission, vision and purpose (Brinkman, Navarro and Harper, 87).

Additionally, the supermarket sector in the UK is becoming highly competitive. It is the contests that prevail among these competitors that allow the company to keep its prices down. The company also ensures that it makes those products that are in high demand in the market, and which the consumer have deep taste for (Harrison 65). However, with so many stores to buy from, estimates reveal that customers are becoming less loyal. Moreover, price competition is pushing customers to try out new stores (Ashley-Roberts, http://www.simplydigitalmarketing.com).

Most customers prefer price competition since it allows them to purchase goods at a relatively lower price and save money. The strapline that is associated with ASDA price has allowed customers to link with the store at the low price that the company offers. However, whenever modern consumers make a decision on where to buy their products, there are a wide range of motives that influence their choice (Brinkman, Navarro and Harper 54). Therefore, in order for ASDA to address these objectives in an effective manner, it should come up with a business strategy that can allow it to distinguish its stores (BusinessCaseStudies, http://businesscasestudies.co.uk). This can allow it to realize a clear competitive advantage. In the modern business environment, ASDA mostly embarks on price competition, though it also embarks on other forms of non-price competition, as well as its interest in the community in order to create a positive image in the minds of its customers (Brunn, 34).

Company Mission, Purpose and Values

The managers of a particular enterprise are supposed to lay emphasis on its mission, vision and values in order to influence its route. This is the way in which ASDA does it in order to boost its competitiveness in the market. The statements that the company makes are aimed at allowing the company to help its stakeholder to understand the direction that the company is following. A mission statement is aimed at setting out the overall long-term direction that an organization is following. The mission of ASDA is ‘to emerge as the best-value retailer in Britain, which goes beyond the needs of the customers always’ (BusinessCaseStudies, http://businesscasestudies.co.uk).

Also, apart from having a mission statement, ASDA has a statement of purpose. This allows the stakeholders of the company to gain a better understanding of the reasons as to why the business exits. The purpose of ASDA is ‘to make and services more available to everyone’. In addition, ASDA adopts a series of values, which serve as the moral statements that allow it to encapsulate its beliefs, which then determine the actions and decisions that it takes while in the market. The values of the company are respect for individuals, strive to excel and provide customers with high quality services (Researchomatic, http://www.researchomatic.com).

In order to ensure that the new colleagues at ASDA gain a better understanding of the company’s mission statement, purpose and values, they are provided with a 25-hour introduction program known as “Best Welcome”. Through the intranet, the company is able to undertake a survey which helps it to determine how colleagues, departments, teams and managers follow the mission, purpose and values while making decisions within the company (Researchomatic, http://www.researchomatic.com).

Competitive Advantage

Low Price Strategy

Being the second largest company in the United Kingdom, ASDA is adopting a new era. Its market share is 16.9 percent behind Tesco at 30.5 percent. Like its parent company, ASDA commits itself to adopting everyday low prices (EDLP) strategy as opposed to adopting the traditional high-low price mechanism that is adopted in various other stores in the grocery market. It is this commitment to EDLP that allows the company to realize the success in the market (Monaghan, http://www.theguardian.com).

ASDA was the first retail company that provided its clients with a price promise by introducing its ASDA Price Guarantee of 2010. Here, the company made promised that it would beat the prices that its rivals charged by 10 percent. Since then, Waitrose and Sainsbury have introduced initiatives that can allow them to match prices of branded goods. Tesco later followed by introducing its Price Promise that allowed it to match own-label and branded products (Monaghan, http://www.theguardian.com).

Since most of its competitors are moving in to adopt its low-price strategy, ASDA is supposed to adopt new strategies that can allow it to cope with the highly competitive market. There are two major challenges that ASDA faces with respect to marketing. These include communicating effectively with its ELDP positioning in the highly competitive market, and internal team structure in order to take advantage of those who are highly talented within the enterprise (EssayUK, http://www.essay.uk.com).

The challenges that the company is facing have evolved at a rapid pace for the past year. The major issue in this case is communicating EDLP to allow it break through in the clustered market. Therefore, it is crucial for the company to market its EDLP structure to ensure that it goes through successfully in the market (EssayUK, http://www.essay.uk.com).

ASDA has adopted a differential strategy to allow it beat the prices that its rivals set in the market. However, its competitors, such as Waitrose, Sainsbury and Tesco compete with the company by matching with the lowest prices that prevail in the market (Dransfield 35). However, the major challenges in this case prevails in terms of creating significant personality in the case of EDLP message and build more storytelling with respect to communicating the strategy (John, http://community.businessballs.com).

Most of the creative campaigns that ASDA practices in the past used to be successful. However, they have left a bridge that demands crossing in order to engage those people who do not shop at ASDA as well as develop an emotional understanding regarding the brand of the company (John, http://community.businessballs.com).

Most of those people who shop at ASDA are usually loyal to the brand. For instance on December 2012, a number of people were complaining about the sexist for portraying a mother who did all the work during the seasonal period (Corporate Watch, http://www.corporatewatch.org). This issue was highly criticized over social media, and it attracted about 620 complaints, though the campaign was cleared eventually. However, the public relations and communications team at the supermarket to bring down the fury since most of its loyal customers defended and offered the message pertaining to the supermarket support (Dransfield 32).

Strong Emphasis on the Needs of Stakeholders

Any group, organization or group that is influenced by the activities that the business engages in is referred to as a stakeholder. Internal stakeholders are usually found inside an enterprise such as managers, directors and colleagues. Conversely, external stakeholders are usually found outside an organization. Each of these groups are affected by the actions that ASDA embarks on (Corporate Watch, http://www.corporatewatch.org).

For instance, ASDA customers demand for quality goods that fetch cheap prices. Most customers today usually have high expectations for an enterprise, and they welcome them to participate in the activities of the local community. This allows them to gain a better idea about them and the operations that they embark on. Most of ASDA depots and stores have community noticeboards as well as a monthly magazine that features the activities that take place in the community. This makes customers to become more attracted to the company and portray their loyalty (Ruddick, http://www.telegraph.co.uk).

Most colleagues love to address the needs of the community where they undertake their business operations. The retail industry does not get high payments, and customers demand for low prices, and the operations require a large number of colleagues (Baker, http://www.marketingweek.co.uk). This means that working with the community plays an essential role in terms helping in the motivation of colleagues. In order to help motivate the other members of the community to participate in this initiative, ASDA holds events that are shared in a monthly newsletter that caters for in house needs (Ruddick, http://www.telegraph.co.uk).

All shareholders usually demand for a good return on the investments that they make towards a particular organization. They also believe in addressing the interests of the community, since they like to witness the company that they have invested in acting in a positive manner towards the environment. This means that as ASDA continues to remain a profitable company in the market, more people will invest in it, and this will help to build a reputation for the business, which will in turn help to boost its client base significantly (Baker, http://www.marketingweek.co.uk).

At a national level, suppliers serve as the largest suppliers to ASDA. They always look for avenues that can allow them to sell gods to ASDA in a large volume to allow them realize economies of scale. As a result, ASDA has worked quite hard in order for it to develop links with local suppliers. By working with both small as well as medium sized enterprises, ASDA finds it possible to offer products to small groups at those terms that are appealing to them (Ruddick, http://www.telegraph.co.uk).

Community Programs

ASDA adopts its community program to help it address its mission, purpose and values in an effective manner. The company does this to allow it remain unique from its competitors as well as motivate its colleagues. This program has been ongoing for a period of seven years, and it is at the center of the depots, stores and the head office. The actions that they engage in are determined by five criteria, which include health, people, education, big events and the community (UKEssays, http://www.ukessays.com).

Each of these criteria serve as a point of focus for the yearly program activities that the company engages in. The local events coordinator is the one who is endowed with the task of setting up each store when the activities approach. For instance, under the health criteria, ASDA depots and stores involve themselves in raising money to help support Breast Cancer campaigns and Breast Cancer Care (Addy, http://www.foodmanufacture.co.uk). The customers and colleagues are the ones who served as the blood donors. In order to facilitate this initiative, ASDA encourages blood donor vans to set up in their car parks, and to ensure that the services are available to each person from the community, and provide them with nutrition and dietary advice (UKEssays, http://www.ukessays.com).

The community program allows ASDA to meet its mission, purpose and values, as well as attain a competitive edge in the market place. This program allows the colleagues to participate in the activities of the local community, since they live there too. The process of working together with other people illustrates the value that the company allocates to its stakeholders. This then gives them a moral focus, which allows them to plan a direction for the enterprise (UKEssays, http://www.ukessays.com).

While under ASDA community program, the customers are able to experience a wide range of benefits, especially those that are focused on the local needs. The colleagues in this case get involved in order to help raise funds for the company. A major example is the Brake Walking Bus, which is a road safety charity that teaches school going children about road safety and helps them to walk to school safely. ASDA allowed this initiative to break a world record when more than 50,000 children participated in it in 2012 (Gregory and Willis, 67).

Moreover, ASDA participates in local product sourcing in order to meet the needs of customers and suppliers in specific areas, and also helps in campaigns related to local product recycling. Most of the ASDA’s colleagues spend a significant number of hours outside the stores and assisting the community in areas that they need help. Other benefits that are associated with this initiative target wider causes such as those that are related to Pakistan earthquake appeals and Tsunami (Gregory and Willis, 68).

As a result of being allowed to participate in this initiative, ASDA colleagues feel highly appreciated. For instance, based on a We’re Listening survey, it was evident that this practice was a reflection of how they really felt towards the organization. While working in the community, the colleagues have been able to realize high motivation (Kay 101). There are various issues that have played a vital role with respect to motivating ASDA colleagues. Firstly, with respect to action, the colleagues feel that their role is not just about heading to work and earn money, but it also serves as a way of assisting the community (Gregory and Willis, 70).

In terms of recognition, the stores are graded based on the initiatives that they undertake towards the community. Every year the ASDA colleagues embark on making improvements to community programs so as to allow the stores to get higher grades. In the case of portraying initiative, the colleagues are encouraged to set SMART goals. This means that the targets that they set should be Specific, Measurable, Achievable, Realistic, and Timely to facilitate for effective participation of the community (Kay 103). The colleagues are encouraged tom devise the most effective way that can allow them to realize their targets. This means that they are not ordered on what to do, but they have the freedom to use their own ideas so as to allow the community to realize benefits and make appropriate choices on what can address their needs in an effective manner (Wood, http://essentialmarketingplanning.blogspot.com).

In areas where colleagues feel highly motivated, their turnover goes down as well as the subsequent costs of training new ones. This also makes them to feel highly values and thus direct them to work so as to meet the mission, purpose and values of ASDA. This also plays a crucial role with respect to boosting the competitive advantage of ASDA (Wood, http://essentialmarketingplanning.blogspot.com).

Product Branding

Based on a survey that was carried out of UK retail market in 2004, the sales that this sector realized were able to reach approximately 246 billion pounds. This indicates that the retail industry is continuing to indicate positive signs pertaining to growth. Also, the retail industry in any country is highly active, especially since this sector is changing at a rapid pace. As a result, it comprises as one of the major sectors in any economy, especially with respect to turnover and transactions (Barnes 55). As a result, this sector is highly sophisticated and highly competitive.

Branding is highly crucial, especially in the case of the UK retail industry. Today, ASDA is adopting a strategy that it launched in 2010 after re-launching its mid-tier label range under the revolutionary “Chosen by You” brand name to allow it improve the perception towards the quality of food that it delivers to is clients. This new rang serves as part of the 100 million dollar investment that targets approximately 200,000 customers in the UK, especially with respect to benchmarking and testing of products (Brohan, http://www.internetretailer.com).

ASDA has also decided to launch its opticians business that adopts similar logos as well as using slogans that make indirect contact to the chain. To facilitate this initiative, ASDA undertook campaigns that featured two slogans. These include “Be a real spec saver at ASDA” and Spec Savings at ASDA”. These strategies are anticipated to allow ASDA to gain the satisfaction of its customers (Brohan, http://www.internetretailer.com). However, though ASDA is realizing continuous growth with respect to its diversification initiatives and existing stores extension, the retail market has become highly competitive, and has less share that can influence the overall ranking as well as positioning of the company in the international market. In this perspective, it is crucial to evaluate the strategic position of ASDA and compare it with other retailers in the UK in order to strengthen its position in this market, which is highly competitive to allow it realize sufficient satisfaction of clients as well as their loyalty (Brinkman, Navarro and Harper 89).

While under the same brand name, ASDA is offering its clients with financial services that comprise of insurance cards and loans, insurance, savings, energy supply, and motor breakdown cover. Based on a report that was carried out by BBC in 2010, ASDA was revealed to make plans to purchase Netto for 778 million pounds. Netto has about 193 stores in the UK, and they continued to operate under Netto until mid-2011 when the name came under ASDA (Management Paradise, http://www.managementparadise.com).

ASDA is promoting its brand on a continuous basis, and has made announcements to its customers that they will realize benefits from low prices in a broader range of products, and be complemented by a broad range of services that the company will offer at its smaller stores. For instance, ASDA brand “George”, which the company bought in 1995has grown to emerge as the largest clothing in the UK by volume. Walmart also trades this brand internationally (Management Paradise, http://www.managementparadise.com).

Quality Culture and Safe Environment Promotion

Organizational culture describes the manner in which beliefs, values, and assumptions are deemed as appropriate with respect to facilitating thinking as well as acting inside an enterprise. As a result of being shared by the elements that prevail within an organization, culture plays an essential role in terms of helping to solve as well as understand the extrinsic and intrinsic problems. Some of the major organizational rituals that are conducted within an enterprise every day comprise of rewards, staff meetings and evaluation processes (Management Paradise, http://www.managementparadise.com). This confirms that most of the activities that enterprises undertake are rituals based on proportion.

In the case of ASDA, the working environment is different from working in any other location because there are a variety of ways in which the organization makes its culture to remain unique. For instance, all the employees within the enterprise are supposed to wear a name badge, and they also have daily huddles with which they are supposed to remain up to date on the manner in which they are performing (Khosrowpour, 99). Also, the members of the business work as one team whereby, and put the needs of the customers first. Also, they offer care to their colleagues every day to ensure that they give their best while working within the organization. This has been one of the major reasons as to why ASDA has remained on the forefront with respect to performance of its employees and colleagues (Uni Assignment, http://www.uniassignment.com).

The colleagues at ASDA treat the customers as being at the heart of everything that the business undertakes. They believe that their major role is to ensure that the goods that they offer to them are as affordable as possible. Additionally, they follow a culture that makes all these initiatives possible. This is because the culture allows them to work as a single team so as to offer optimum support to their stores, gain from the strengths and expertise of colleagues as well as share successes that each individual realizes (Uni Assignment, http://www.uniassignment.com).

In the case of attitude, ASDA encourages its employees to develop a ‘can do’ and commitment attitude, which means that they can be able to implement great ideas within the enterprise quickly. This mostly targets the question of the way in which they can undertake tasks as opposed to looking for reasons to avoid them. Additionally, ASDA provides the employees within the enterprise with huddles, which serve as a way of keeping them informed about the manner in which the organization is performing (Haystack, http://www.haystackonline.com). This implies the way in which they outline as well as communicate their vital activities daily to allow them to remain focused on similar goals. This also allows them to acknowledge as well as celebrate the successes of the team and individuals in general.

All the members of staff at ASDA regardless of whether they work at the ASDA House, General Store or the Head Office, they are supposed to wear name badges. They engage in this initiative because they believe that a person is more approachable when being addressed by their first name. In this case, the staff can be able to communicate freely with each other, and the customers can also be able to address the employees without hesitation. As a result, the customers to the organization develop a positive image towards it, and tend to become loyal to the enterprise (Haystack, http://www.haystackonline.com).

ASDA holds The Big Lunch, which serves as the quarterly huddle at the enterprise. It is held at the ASDA house, and thus providing the colleagues with an opportunity to share crucial information in a manner that is regarded as being fun, relaxed and unusual, and hence ensure that every person in the enterprise is able to receive important news spreading within the organization (Haystack, http://www.haystackonline.com).

The members of staff at ASDA are not required to wear jackets. This is because the enterprise believes that jackets serve as barriers to approachability. As a result, whenever a person becomes a member of ASDA, he or she looks forward to saving the dry cleaning bills. ASDA also has a ’10 foot rule’, which most people regard as being mysterious. However, it is a simple concept, which implies that if someone is within 10 feet from them, regardless of whether he is a colleague, supplier or customer, the organization believes that they should always say hello to them (Micro Strategy, http://www.microstrategy.co.uk). This plays an essential role in building an atmosphere that is characterized by friendliness, respect and warmth.

ASDA has a strategic plan that fosters Health Safety & Care relations with the Community Health Improvement Plan. This plan also allows partners such as those who work at Forth Valley Health Board to make improvements to the health of the community, especially with respect to addressing issues related to substance abuse, mental wellbeing and smoking sensation. The Health Safety and Care Team also embarks on activities that target complementing the work that the Policy Unit undertakes in relation to the Falkirk Health Group and Community Health Partnership (Micro Strategy, http://www.microstrategy.co.uk). These initiatives play an essential role with respect to improving the overall health wellbeing of the community, and hence improving the agenda both at the operational and strategic levels.

The ASDA team operates both large and small services that are specific to safety and health events, which tend to be quite popular among its employees. This is because they are good in facilitating for team building as well as boosting morale of employees. These serve as the alternative forms of therapies available to them (Brohan, http://www.internetretailer.com). Moreover, ASDA offers additional wellbeing and health activities on a frequent basis. These are as follows

Look good, feel good. This is a course that is offered in line with Falkirk College, and it has been designed so as to offer employees a boost in their appearance, confidence and self-esteem. This makes them to be hardworking and improve the performance of the enterprise significantly.

Health Consultancy Service at Work. These services are offered to those teams who lay significant emphasis in promoting relaxation therapies and physical activities. Once the teams become relaxed, they manage to work appropriately in accordance with the organization’s expectations.

The other initiatives that the company promotes include offering healthy lifestyle cards. These are discount cards that allow employees to gain access to leisure facilities at a discount. Lifestyle 21C is a health and fitness program that goes for 8 weeks, and it is tailored to fit the individual needs of employees. Others include the Quit Program, which targets smoking cessation and External Counselling Service that is made available to employees based on self-referral basis (Brohan, http://www.internetretailer.com).

Most experts stipulate that measuring and diagnosis cannot produce effective change within an organization of its own. Change demands for time, effort and resources. Conversely, good diagnostics makes sure that resources and effort are properly channeled to facilitating in pinpointing accuracy as well as boost the likelihood of succeeding. Both corporate branding and organizational culture are inseparable in that both depend on each other to ensure that an enterprise remains successful (Lawson, http://www.retail-week.com). With the absence of these aspects, the competitiveness of an organization dies, and thus making the world of business to be regarded as dry and dull.

Technology as a Competitive Advantage Tool

With the advancements that have been realized in technology in the recent past, experts stipulate that it can play an essential role with respect to increasing the sales of an enterprise. This is because it is possible for an enterprise to use is as a marketing strategy, and thus boost its competitiveness in the m

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