SWOT Analysis Of The Asda Store Commerce Essay

turn out Analysis Of The Asda pedigree Commerce EssayThe aim of a SWOT analysis is to mention the extent to which the current strategy of a corporation and its specific strengths and weaknesses atomic number 18 relevant to, and cap fitted of, dealing with the adjustments taking place in the line of descent environment. It can also be used to assess whether there are opportunities to exploit further the unique re sources of the organization.It should also be remembered a SWOT is only a snapshot of a specific menstruation in date. Given the dynamic nature of the modern business world, organizations motive to continuously monitor their strategic position to ensure that their long-term strategies and operational procedures abide relevant to the needs of the market.ASDA Internal StrengthsFinancial Resources and Economies of surpassASDA was founded in 1965 by a group of farmers from Yorkshire. Since that time the comp any has undergone many changes. In the proterozoic 1990 s the telephoner was in monetary difficulty but was rescued by the leadership of Archie Norman.From this point onwards the company flourished and was eventu wholey bought by the US giant Wal-Mart in 1999. Wal-Mart is on the largest companies in the world with broad sales revenue ($316 billion). This tins ASDA with two internal strengthsFinancial Resources Should ASDA wish to contrive more than stores or diversify into a bare-assed range of products and services, Wal-Mart could provide the necessary financial resources to fund these upstart developments. This means that ASDA would not devour to rely upon external providers (e.g. banks etc) to provide the necessary funds for business expansion.Economies of Scale Being able to charge lower prices on a conformable basis, is a key factor in terms of securing a meaning(a) share of any market. Give the massive purchasing advocator Wal-Mart possesses, it is ide all(prenominal)y placed to negotiate substantial discounts on a t ruly widely range of products and services. ASDA can take benefit of these discounts.variegationThe profit margins on food items tend to be relatively low (e.g. 10 to 20%) when compared with early(a) goods and services. Asda, along with its three main rivals (i.e. Tesco, Sainsburys and Morrisons) have diversified into some other products and services in order to bolster their profitability. ASDA is also involved with financial services, clothing and property development.Clothing has proved to be its most favored element of its diversification policy. ASDA has its own range of clothing k straightawayn as George. This is marketed as quality fashion clothing at affordable prices. It is estimated that George is the tail largest retailer of clothing in the UK, after Marks and Spencers, the Arcadia Group and Next.Diversification into other products, services and markets provides an internal strength because it protects ASDAs profit base from very intense competitive evokeures in th e grocery retailing market.Employee Satisf feat / environmental IssuesBoth of these items are internal strengths for ASDA. In 2001, 2002 and 2003, the company was voted a assoil 10 UK employer by the Sunday Times Top 100 Employers Survey.The company recognizes the impact it has on topical anesthetic and global economies. ASDAs long-term aim is to source 100% re unfermentedable energy. It is committed to reducing fuel emissions by 80,000 tonnes by 2007. It has already reached half of this target. It is converting its entire fleet of trucks so that they run on bio diesel.ASDA Internal WeaknessesBeing Part of Wal-MartBeing part of the Wal-Mart group is double-edged. As outlined earlier. ASDA is provided with internal strengths by existence a Wal-Mart company. However, in the linked States, Wal-Mart has been in receipt of major criticism from a variety of potent sources all over a number of issues. These impart be discussed in honorable under external threats. Any form of crit icism generates negative press and television reports ultimately this wave of dissatisfaction could spread to the UK. This would reflect badly on ASDA.As Wal-Mart is the parent company it can ultimately override any decisions made by the ASDA board of directors. Thus Wal-Mart could force ASDA to introduce new working practices based upon its American operations. These working practices could be totally terra incognita to a UK workforce and possibly prove very difficult to implement.Employee DissatisfactionIn 2006 the company was found to be in breach of the UK employment virtue with regard to trade unions and was find 850,000. in addition in 2006 there was disoblige when some Asian employees working in their distribution centres were asked to produce their passports in order to prove that they were entit lead to work in the UK. This action led to claims that ASDA was acting in a racist manner. In 2005, it was revealed that in a survey, carried out by the company that only 1 in 4 of its staff shopped in-store.ASDA External OpportunitiesExternal opportunities would be identified by completing a PEST analysis of the companys external environment. Social factors offer ASDA a variety of opportunities to expand upon the range of products and services they currently provide.Life Trends / Demographics in spite of fluctuations in market and trade cycles over the last 30 years, the just liquid income per head of population in the UK has risen steadily during this period. In addition consumers have become much more sophisticated and demanding. They pack to buy top quality products at affordable prices. Clearly ASDA has managed to foregather the expectations of its guests with its George range of clothing.Given that ASDA currently holds 17% of the grocery retail market, being second only to Tesco it has established a very strong heading and brand awareness within the minds of its customers. It is well placed to take advantage of changes in lifestyle trends an d demographics, in terms of its capability to develop new products and services to meet the rising expectations and needs of its customers.Consumer Attitudes and Opinions / Consumer Buying Patterns / Advertising and promotional material / Brand, Company, Technology, ImageThese areas are closely related to life trends and demographics. As disposable incomes increase, ASDA need to influence consumer attitudes and opinions, and buying patterns, by reinforcing its brand image and customer loyalty, through effective advertising and promotion.A key aspect of having a large customer base is to encourage cross swoping. Thus the companys boilersuit number of customers may remain the same but over time the sales and profitability per head will increase. This will be achieved as ASDA expands the appeal of its products and services to all segments of its customer base.ASDAs External ThreatsThe Anti-Wal-Mart Lobby at that place is widespread resistance to the further development of new Wal-Mar t stores. Why? It is argued that the company undercuts local retailers by having goods made in developing countries (e.g. China and Bangladesh) in sweatshop conditions and then selling them at prices, no one else in the local area can compete with. Ultimately the smaller stores are pressure out of business and Wal-Mart gains a monopoly within that area. Wal-Mart also runs anti-union campaigns.Since taking ASDA over in 1999, Wal-Mart has largely left the UK management team to get on with the running of the company. However, if it attempted to use some of its more aggressive policies in the UK then, as evidenced by the American experience, this would result in a great deal of damage to ASDA in terms of lost customers and despicable publicity.Office of Fair affair InvestigationIn 2000 an investigation into the domination of the grocery retail market by the four big companies was glowering out. Since then, all four companies have adopted aggressive expansion policies. They now con trol 74% of the market. This time there is a groundswell which suggests supermarkets will not escape regulation. Tough curbs on their ability to expand, or even rules forcing them to sell off stores where they dominate, could be introduced.Stakeholder MappingIn order to determine how ASDA should decease forward in respect of the findings from the SWOT analysis, it is necessary to construct a stakeholder social functionping. This is necessary in order for ASDA to understand the support and opposition it will generate for a planned change.OppositionSupport prompt Opponents unresisting OpponentsFence SittersPassive SupportersActive SupportersHighOffice of Fair TradingASDA ShareholdersStakeholder PowerMediumAnti-Wal-Mart campaigners in the USAVarious other groupings remote to new retail developments e.g. local communities, local authoritiesASDA customersFood manufacturers pitiable railroad tie of Convenience StoresOther grocery retail customersStakeholder PowerStakeholders all have p ower, whether it is the formal power invested in a position or authority invested in a social power of being able to persuade others to support or oppose the change. Those with the higher power are going to be ASDAs most useful supporters or most hazardous opponents thus power analysis will help ASDA to prioritize its reduce on its stakeholders.The Office of Fair Trading (OFT) is a fence-sitter as it must remain impartial. The Association of Convenience Stores is an active opponent. This is because its members are adversely affected when ASDA opens up a new store. The Association has low power because its members cannot compete with the big four retailers in the market place. However, by expression an alliance, it is possible for an opponent to move upwards and into the high power box. This is because the Association has requested to the Office of Fair Trading that an investigation should take place.How Active Opponents With Low Power Can Increase Their Power positionThe anti-W al-Mart campaigners in the USA are listed because there is nothing to stop the anti-ASDA opponents from forming an alliance with them. forge alliances between opponents helps to make them stronger because they can exchange ideas etc. Plus several(prenominal) parties, acting as one body provides a stronger focal point in terms of raising media interest and public awareness.It must be remembered that a stakeholders mapping is dynamic and the position of the various parties on the map are likely to change depending upon what ASDA decides to do. If the company adopts the same aggressive policies as Wal-Mart in the USA, this will convert passive opponents into more active ones. Also such action could convert passive supporters into passive opponents. ASDA must enumerate all of its options before proceeding to take action.A Pre-emptive Strike To forfend OFT SanctionsProbably the most effective course of action for ASDA to celebrate is to sell off some of its grocery retail stores and b ecome more active in diversifying its range of non-food products and services. This would be a proactive admittance and could possibly help the company to avoid any sanctions the OFT could impose. If it did take a diversification policy it could meet stiff resistance from employees who do not like change.Management and Leadership TheoryThe main tenableness why employees do not like change is because it causes uncertainty. For example, will I still have a job after the changes are eat up? Will I have new responsibilities? And so on. When an organization is go about with massive change it needs to engage with its workforce and explain the situation in full. A variety of forms could be used by ASDA to give birth this message. For example, a newsletter, a series of presentations by members of the senior management team, doubtfulness and answer sessions etc.ASDA would need to explain the implications of doing nothing i.e. the OFT would credibly force the company to sell off some its stores. Such action will probably result in staff redundancies. By being proactive in terms of expanding its diversification policy the likelihood is that all of the staff would be redeployed within the companys new non-food retail outlets. Herzbergs Motivators and Hygiene Factors surmisal could be used to facilitate this change.The first stage involves hygiene (or maintenance) factorsStatusSecurityRelationship with subordinates individualized lifeRelationship with peersSalary manoeuver conditionsRelationship with supervisorCompany policy and administrationSupervisionThe employees need to find oneself secure and confident about the changes that are going to be implemented. These are the hygiene factors which need to be addressed. They are merely a launch pad for more developmental work when these factors are disgraced or undermined no platform for progress exists.The second stage involves exploitation the following motivatorsAchievementRecognitionWork itselfResponsibility AdvancementPersonal growthThese items are used to encourage the staff and make them feel positive about the changes that are going to be implemented. In other words the staff should see how they are going to benefit from the new direction the company is pursuing. The process of motivating the staff to embrace change will be improved if they are actively engaged in developing the content and responsibilities that their new position will entail.