ASDA: Market strategies

Task 1

Investigate the Planning and Range of Tools and Techniques involved in developing a Market Strategy.

Using marketing principles, theories and concepts critically evaluate a range of tools and techniques used by a retail store of your choice. You should begin with general evaluation of their marketing strategy and then consider each of the following:

An assessment of the importance and the use of information in their marketing strategy.

An analysis of how the global context has been incorporated into their marketing strategy.

A reflection on how the retail store has embraced e-business strategies in their marketing.

Introduction

The Planning and Range of Tools with Techniques are involved in developing a Market Strategy.

Using marketing principles, theories and concepts critically I am about to evaluate a range of tools and techniques used by a ASDA. The general evaluation of their marketing strategy is to be found considering each of the following:

the importance and the use of information in their marketing strategy.

an analysis of how the global context has been incorporated into their marketing strategy.

a reflection on how ASDA has embraced e-business strategies in their marketing.

Company Profile

ASDA was started with the vision of the founding fathers to make it a one stop shop for all the needs of the consumers. The company is one of the well known supermarket chains located in the UK. It has on offer food, clothing as well as general merchandise items for its consumers. In 1999 the company came together with Wal-Mart.

The history of the company goes back in time to the 1920s. At that time the Asquith family owned a butchers shop at Knottingely in West Yorkshire. The two brothers in the family, Fred and Peter took over the business and were also the founders of ASDA. At the same time another company with the name of Craven Dairies ltd was formed with the help of a group of West Riding Dairy Farmers. In 1949 the companies merged to establish the Associated Dairies & Farm Stores Ltd. It was only in 1965 that the company got its present name when Associated Diaries came together with Asquith. As per records of 2007 the company has a share of 16.8% in the grocery market of UK.

The format of the ASDA stores is simple with green and white colors. After it became one of the subsidiaries of Wal-Mart there were many super centers opened by both the companies jointly. At present there are a total of 21 such supermarkets in UK alone. In 2003 the company brought into the market “ASDA living” which was the first general store of the company. It sold a range of products including clothing, toys, home electronics, health products, homewares, as well as beauty products. The company has joined hands with the Compass group that has coffee shops in a few of the stores of the company.

In 2006 ASDA introduced ASDA Essentials that stocked the products of the company. This served to compete with the other discount supermarkets in the region. However the store was closed down in 2007. The company also has its online store that started in 1998. It sells items in a number of categories including travel, entertainment, furniture, electrical, gifts, mobile phones, and flowers. The company also sells its own brand of clothing known as George. In 2007 the company launched ASDA electrical that focused on electrical products. This is to compete with Tesco Direct of Tesco.

ASDA has been reported to be one of the best known companies to work for. There is a discount of 10% on all the goods that are purchased by the staff from the company. Also in December there is a double discount day wherein the staff members are allowed a discount of 20% on their purchases. The company strives to make shopping at the stores an enjoyable experience for the customers. The company has many disability as well as family-friendly services that are available at all the stores that ensure that the company is able to cater to the different needs of the customers.

Facts:

* ASDA employs around 160,000 employees.

* At the present ranks second among the retail chains in the country.

* The company has 365 stores across the globe.

Strategic And Operational Plans

ASDA prepared a new strategic plan that was endorsed by the then Minister for Sport and Tourism (The Hon Jackie Kelly MP) in September 2001.

The 2001-2005 Strategic Plan prescribes ASDA’s:

* future direction (vision);

* operating environment (mission);

* strategic breakthrough issues (goals);

* strategies (objectives);

* values (operating ethos); and

* key performance indicators (measures).

REVIEW

Marketing Plan

To provide goods/services that are cheap and affordable to consumers or the public.

reducing the cost objectives of their items/products

recycling their waste

packaging their products well

supporting voluntary services

ASDA leads the way in giving UK customers the products they want at the lowest prices and continue to widen the price gap between our competitors. We have always been committed to keeping prices low, something our customers value and recognize.

SWOT Analysis

ASDA is the second largest grocery retail in UK where as Wal-Mart is the largest in the United States, with an estimated 20% of the retail grocery and consumables business, as well as the largest toy seller in the U.S. It also owns and operates the North American Company of Sam’s Club.

Wal-Mart operates in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. It has wholly-owned operations in Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-Mart’s investments outside North America have had mixed results: its operations in South America and China are highly successful, while it was forced to pull out of Germany when its venture there was unsuccessful.

Wal-Mart has been criticized by some community groups, women’s rights groups, grassroots organizations, and labor unions, specifically for its extensive foreign product sourcing, low rates of employee health insurance enrollment, resistance to union representation, and alleged sexism.

Strengths.

A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.

1. Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.

2. Wal-Mart has grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA)

3. The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart’s efficient procurement.

4. A focused strategy is in place for human resource management and development. People are key to Wal-Mart’s business and it invests time and money in training people, and retaining a developing them.

Weaknesses.

The absence of certain strengths may be viewed as a weakness.

1. Wal-Mart is the World’s largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.

2. Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not have the flexibility of some of its more focused competitors.

3. The company is global, but has has a presence in relatively few countries Worldwide.

4. In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

Opportunities.

The external environmental analysis may reveal certain new opportunities for profit and growth. To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region.

1. The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer markets, such as China and India.

2. New locations and store types offer Wal-Mart opportunities to exploit market development. They diversified from large super centres, to local and mall-based sites.

3. Opportunities exist for Wal-Mart to continue with its current strategy of large, super centres.

Threats.

Changes in the external environmental also may present threats to the firm.

1. Being number one means that you are the target of competition, locally and globally.

2. Being a global retailer means that you are exposed to political problems in the countries that you operate in.

3. The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost regions of the World. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.

2.7 Conclusions

The business sector in which ASDA works is highly competitive. Supermarkets need to keep customers loyal. ASDA keeps them loyal by having a good effect in the places in which it works.

2.8 Recommendations

This section outlines future actions.

The Recommendations should:

Be action orientated, and feasible

Relate logically to the Conclusions

(i.e Conclusion 4.1 should lead to Recommendation 5.1)

Be arranged in order of importance

Be succinct

2.9 References

www.your.asda.com

2.10 Appendices

Appendices contain information that is too complex to include in the report. You need to direct readers to this information, as in

“Appendix A provides an overview of the existing company hierarchy”.