SWOT & STEEP Analysis (A Case Study of ASDA)

Presentation: Strategic Planning . Strategic Management and Leadership

INTRODUCTION
ASDA was originally formed in the 1920s as Hindell’s Dairies. ASDA was established by a group of Yorkshire farmers who processed and sold meat and milk products through Hindell’s Dairies. In 1949, the company changed its name to Associated Dairies and Farm Stores Ltd. The grocer merged with Queen’s Supermarkets to form ASDA Stores Ltd in 1965 (www.asda.com).

AIMS

ASDA aims to be a value retailer that surpasses the customer’s expectations in terms of product price. To this end, the supermarket chain says that it will provide customers with goods as a lower price than its competitors do. At its more than 300 stores across the United Kingdom, ASDA sells food and groceries, as well as other products for the home (Koch, 2006).

MISSION STATEMENT

A mission statement sets out the long-term direction of the organisation. ASDA’s mission is: ‘to be Britain’s best-value retailer exceeding customer needs always‘ (www.asda.com).

SWOT analysis entails a distillation of the findings of an internal and external audit which draws attention, from a strategic perspective, to the critical organisational strengths and weaknesses and the opportunities and threats facing the organisation. Whereas PESTLE analysis is an audit of an organisation’s environmental influences with the purpose of using this information to guide strategic decision-making. The assumption is that if the organisation is able to audit its current environment and assess potential changes, it will be better placed than its competitors to respond to changes  (Ronald, 2013).

This study will analyse the impact of political, economic, social, technological, environmental and legal factors on Asda. It will also identify the key forces that represent both opportunities and threats to its profit. Data is supplemented with details on the company’s history, key executives, business description, locations and subsidiaries as well as a list of products and services and the latest available company statement (Thomas, 2007).

SWOT analysis is the study undertaken by an organization to identify its internal strengths and weaknesses, as well as its external opportunities and threats (Julie, 2009).

A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, straightforward model that assesses what an organization can and cannot do as well as its potential opportunities and threats (Albert, 2008). The method of SWOT analysis is to take the information from an environmental analysis and separate it into internal (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives, and what obstacles must be overcome or minimized to achieve desired results (Jean and Glen, 2010)

Strengths 1.Wide range of product offerings and service offerings include financial services 2.Known for its amazing marketing campaigns 3.In constant touch with its customers via social networking, asks feedback, conducts competitions, etc. 4.Socially responsible through CSR initiatives 5.ASDA has over 140,000 employees working at over 500 stores (Menon, 2010).

    Weaknesses

1.  Limited global presence as compared to few other competitors

2. Their ability to sell prices have restricted their entrance is few countries as the country fear a competition with local vendors (Hill & Westbrook, 2007).

Opportunities

1.  Expanding in new areas of pharmacies,    opticians, jewelry and photo department.

2. Venturing into markets that are growing like India, China etc

Threats

1.Price war with other retail chains brands 

2.Pressure of maintaining low prices.

3. Ever changing policies of various central governments

STEEP Analysis

External environment factors such as down turns in the economy, and a lack of investment in innovation can have a significant impact on a firm’s strategic options (Koch, 2006). To obtain a better glance of how these factors will affect the planning process, analysts can utilize the STEEP analysis tool. When used correctly, the tool will furnish decision makers with information which should be used to improve existing strategic plans (Ronald, 2013).

Political Factors

1.Government policy on taxation, Employment laws including wages, rates etc.

2.Political unrest: due to influx of large number of foreign nationals in the country (Thomas, 2007).

3.Unstable Government: due to govt inability to stabilise the economy (Julie, 2009).

4.Government education policy: efforts to encourage more people to stay on high education

Economic Factors

1.Interest Rates 

2.Inflation 

3.Economic growth 

4.Exchange rates 

5.Stage of business cycle 

6.Assisting people entering and re-entering the job market

7. Maximize the contribution of local and regional economies 

8. Disposable income

Social Factors

1.Large influx of EU citizen in the country leading to a high demand for accommodation, welfare, healthcare and education (Jean and Glen, 2010). 

2.Changes in social trends

3.Ageing population could lead to an increase to ASDA’s pension payment for their employees. It could also lead to another source of labour pool for ASDA to tap into.

4.An ageing population could also lead to unwillingness to work and an increase in pension .

5.Lifestyle changes: Longer opening hours in supermarkets means that people are working longer and / or flexible hours  (Albert, 2008).

6.In areas of high concentration of ethnic groups, goods and services are targeted towards that ethnic group e.g. Slough / Southall Lifestyle

7.Charity: benefits to the community

8.Branding 

9.Demographics 

10.Lifestyle changes 

11.Health and welfare 

Technological Factors

1.New ways of shopping: online shopping

2.New product types i.e. mobile phones, MP3 players etc. 3.Improved efficiency in stock control due to bar coding

4.Cost reduction due to introduction of new technology i.e. lower cost of labour

5.Self scanning of products

6.Chip and Pin

Environmental Factors

1.Increased demand could lead to increased

2.Pursuing environmentally friendly strategies i.e. focused on recycling 

3.Packaging Recycling

Published by MALI

Writer is post-graduated in Computer science, Business Administration, Marketing and Innovation. He has 10 years of business academic research writing experience.

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