Strategic Direction of an Organisation - ASDA
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Strategy is a word of military origin and now refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked. Strategy is a certain course of action to meet designed goals and objectives, generally supposed to remain unchanged for a fairly long time period as the change in strategy may further lead to unnecessary expenses of both money and effort.
The term strategy has got its long history attached with mankind though its origin is from the warfare literature or battlefield. Even if rules are changed, the strategy may remain the same.
'A company's strategy is management's action plan for running the business and conducting operations.'
"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".
(Johnson and Scholes,2005)
This report intends to highlight the various strategic issues associated with ASDA right from its formulation to its implementation along with organizational stakeholders analysis.
ASDA is the second largest UK retailer with 321 stores in the UK and 148,000 colleagues.The process of marketing is often defined as finding out what customers want and then providing it for them. Businesses now generally interpret this more widely as also doing good in the communities in which they operate. Customer loyalty is extremely important, especially in a highly competitive market such as supermarket retailing. Competing on price helps to retain customers, but so does non-price competition, such as having a good image in the community. This case study looks at how ASDA has developed a vision that includes community involvement.
Mission and Vision Analysis of ASDA
Values, visions and missions are all about the wishes and expectations of key stakeholders. A vision is an inspirational statement that ensures the direction of the stakeholders to go in future.
ASDA makes clear statements of its mission, purpose and values to help stakeholders see the direction the business is taking. The mission statement sets out its long term aims and is 'To be Britain's best value retailer exceeding customer needs always.' Its purpose is stated as 'To make goods and services more affordable for everyone'. Its values show what the company believes in including respect for the individual, excellence and customer service. New colleagues receive a detailed induction into all three elements.
''A strategic vision delineates management's aspiritations for the business providing a panoramic view of '' where we are going'' and a convincing rationale for why this makes good business sense for the company''(Thompson et.al. 2007)
Analysis of vision entails the judgement of its suitability in the context of organisational goals and objectives. Suitability (Hamel and Prahalad, 1994) of the vision of the organisation is judged mainly on the basis of these factors i.e.Foresight,breadth,Uniqueness,aspirational values, consensus, and actionability.
In the context of the vision of ASDA, it seems appropriate and able to be executed.
The vision of the company seems to be strong and has got certain level of coherence that could be achieved through the development of corporate culture and robust financial strength.
Its vision seems quite suitable and meet the set standard of SMART criteria.
Evaluation of the strategic skills
Decision taking is one of the vital managerial aspects of every organisation. It leaves every organisation into serious and difficult turn of its development if the decision taken does not go long lasting. There might be considerable amount of expenses and investment in terms of finance, time and man power to reach into that specific decision but its failure may lead all the investment in vain. As per the nature and financial strengths of the organisations, decisions are of different categories themselves but major concern of all the decisions are their reliability, suitability and justification.
If the decisions taken don't address the primary issues or problems apparently, such decisions are nothing than wastage of investment in true sense.
Simply, in any sort of organisational set up, there would be a level of top executives to take critical and major decisions which are to be implemented in lower level of the organisation.
These are the common steps supposed to be followed in decision taking making.
- Setting objectives
- Collecting information
- Identifying alternative solutions
- Evaluating options
- Selecting the best option
And these are the various techniques to be followed while making effective decision.
- Ideas writing
- Disney method
- Setting well formed outcomes
- Mind Mapping
- Lateral thinking
- Six thinking hats
- Decision trees
- Ishikawa fishbone diagrams
- Force field analysis
- Future pacing
Relevancy of integrated competency model for gap analysis
In business and economics, gap analysis is a tool that helps a company to compare its actual performance with its potential performance. If a company or organization is not making the best use of its current resources or is forgoing investment in capital or technology, then it may be producing or performing at a level below its potential. This concept is similar to the base case of being below one's production possibilities frontier.
The goal of gap analysis is to identify the gap between the optimized allocation and integration of the inputs (resources) and the current level of allocation. This helps provide the company with insight into areas which could be improved. The gap analysis process involves determining, documenting and approving the variance between business requirements and current capabilities. Gap analysis is a formal study of what a business is doing currently and where it wants to go in the future. It can be conducted, in different perspectives, as follows:
Managing personal leadership development
The Johari Window is a communication model that can be used to improve understanding between individuals within a team or in a group setting. Based on disclosure, self-disclosure and feedback, the Johari Window can also be used to improve a group's relationship with other groups.
Developed by Joseph Luft and Harry Ingham (the word "Johari" comes from Joseph Luft and Harry Ingham), there are two key ideas behind the tool:
- That individuals can build trust with others by disclosing information about themselves.
- That they can learn about themselves and come to terms with personal issues with the help of feedback from others.
The Johari Window model consists of a foursquare grid (think of taking a piece of paper and dividing it into four parts by drawing one line down the middle of the paper from top to bottom, and another line through the middle of the paper from side-to-side). This is shown in the diagram below:
Using the Johari model, each person is represented by their own four-quadrant, or four-pane, window. Each of these contains and represents personal information - feelings, motivation, etc. - about the person, and shows whether the information is known or not known by themselves or other people.
SWOT analysis of ASDA
SWOT analysis has been used as a common tool of strategic analysis of most of the business and commercial concerns. Here, too, in case of ASDA plc, the same tool has been used.
- ASDA is a powerful retail brand, sharing 16.8% of the UK grocery market
- ASDA has very few innovative ways to reduce its impact on the environment (recycling, packaging & energy efficiency)
- Wide range of many different products andVery high brand name reputation
- Well-developed corporal strategy Low-cost prices
- ASDA has won a lot of awards (such as TOP 10 employer in the UK etc.)
- Since ASDA sells wide variety of different products (food, clothes, stationary) the flexibility might not be as good as competitors.
- Too much employees can be internal weakness, especially in case of a strike
- The products might lose their value and quality if ASDA decides to enlarge their productivity
- Threat lies that ASDA might lose their reputed brand name, because they became a subsidiary of the American retail giant Wal-Mart in 1999.
- Opportunity to widen product range and come up with new ones (tourism - tickets, entertainment - cinemas, theatres).
- Expansion into European markets
- Apply ASDA's brand name capital in new areas.
- Tax-reduction and support by the government.
- To go through a big expansion plan in order to offer more jobs and grow overall revenue.
- Come up with a new and better marketing campaign - use of celebrities and use some money for charity.
- Change in consumer taste.
- Rising labour cost.
- Potential environmental threats.
- The growth in expenses due to a statutory law or a tax-raise.
- Rise in new or substitute products.
- ASDA being constantly in UK's TOP 3 means that they are target of competitive
Leadership Development through education, training and development
Management of any Company has to develop his leadership and managerial skills to manage new market and new business development, while he plan to development market, new office, new warehouse and branches. However he has to take knowledge from different sources and approaches as follows.
Training Course: - Leadership can be developed by conducting and participate in different training course to develop his managerial and leader capacity. Management consultant will provide this of training, and these kinds of training are provided by lecture method or discussion method. It has main objective to build managerial skill, such as leadership, presentation & communication skill, sale and marketing etc. Fashion-to-go leader need to analysis the training to his employee which will help to leader for the further planning and development of his company.
Coaching:- Coaching refer that activity of coach for developing of ability of coaches or client, focus on achievement of specific goal, mission and target of company or improving in managerial and leadership of the CEO of Fashion-to-go. Coaching is the direction with emerging patterns, mentoring, training and solution to surface. Coaching is a future-focus practice and Fashion-to-go manager should use to his follower for introducing with the mission, vision, goal and objective of the company. Leadership style can be learn and benefitted by coaching of Fashion-to-go management team and develop new method of leadership.
Action Learning: Action learning means learning by doing and practise. It focus leader learn by every work and in every problem coming in organization. This is the one of the effective learning process which develops practical knowledge. This is one process which participant and then improve and participant again improve this is a development of situational learning method. This learning will help to CEO to a situational leader which appreciative in improving in time when problem creates
Developing new leader: Company has to develop it employee as the future leader and provide different training and development program, visiting different company and gaining knowledge about management and leader. Every person wants promotion on his work and wants to be superior on his step and gain more knowledge from upper lever management. Fashion-to-go has created this environment for the development of future leaders.
Work of council for excellence in Management and leadership: - This theory uses wide range of data to support the inquiry. This theory focuses on the information and data analysis and provides information about training centre which is assisted by British government. This is also a learning style which will help to provide training and development
EVALUATION OF STRATEGY EFFECTIVENESS
It is a matter of great concern that every business man would be worried towards the success or failure of his business strategy he had put into excercise. There are certain parameters by which he comes to know that to what extent his strategies are successful and at the mean time, he would get some corrective feedbacks for further developing his future strategies. Here are some idea worthy to bring the strategies into evaluation.
Asda already had one piece of the jigsaw in place - owning larger stores than its rivals. The next step was to copy the 'everyday low price' strategy, concentrating on continuing low prices rather than a series of promotions backed by expensive advertising. That has developed with the 'Roll-back' campaign, again borrowed from Wal-Mart.
After years of mutual fancying, Asda was bought - or 'became part of the Wal-Mart family' - on 26 July 1999 for $10.8 billion. Since then, Asda claims that it has gained one million new customers. It is converting some stores to Wal-Mart's supercentre format under the ASDA-Wal-Mart banner. The Wal-Mart name first appeared in the UK in July 2000, when the Asda-Wal-Mart super centre opened in Bristol. Two more Asda-Wal-Mart super centres opened in 2000, and it is likely that another ten will open by 2006 (see section on destroying local shops and communities). (http://www.corporatewatch.org.uk)
Promoting a healthy and safe environment supporting a quality culture
Organizational culture is a structure of values, beliefs, and assumptions deemed appropriate in thinking and acting inside an organization. Being shared by the organization's elements, culture helps solve and understand extrinsic and intrinsic problems.
Staff meetings, reward and evaluation processes, and lunches are some of the organizational rituals conducted day-to-day. This confirms that many of businesses' daily organizational activities are rituals in proportion.
Working at ASDA is completely different from working anywhere else because there are so many ways our culture is unique. For example all the employees wear a name badge, they all have daily huddles to keep up to date on how they're performing and sometimes they even all join together for the ASDA chant.
- One team
They suppose all colleagues working across the business as a team. They put their customers first every day. They care for their colleagues everyday and they strive to be the best they can every day.
Customers are at the heart of everything they do and their purpose is to make all their goods and services as affordable as possible. Behind this is their culture that makes all this possible.
It's a culture where they work as one team to support their stores, drawing on the strengths and expertise of individuals and sharing in each other's successes.
Then there's the drive, commitment and 'can do' attitude that means great ideas can be put into action quickly. It's really a question of askingthemselves how they can do things instead of looking for reasons not to do them.
Huddles are their way of keeping them all informed about how the business is performing. It's how they outline and communicate their key activities for the day and helps them all to remain focused on the same goal. It also gives them a chance to acknowledge and celebrate team and individual successes.
- Name badges
It's not just their store colleagues who wear name badges.They all do - wherever they work - from all the colleagues at ASDA House, their Head Office, to their General Store Managers and Directors. They think it helps to make everyone that bit more approachable when they're all on first name terms.
- The Big Brunch
The Big Brunch is their quarterly huddle held in ASDA House in Leeds. This gives colleagues the opportunity to share important information in a fun, unusual and relaxed way to spread the news to everyone.
- No jacket required
They think jackets are a barrier to approachability. So when one joins ASDA, he can also look forward to saving on those dry cleaning bills!
- 10 foot rule
Sounds mysterious, but it's really very simple. If someone's within 10 feet of them, either a colleague, customer or a supplier, they believe they should always say "hello" to them. It just takes a second, but it builds a real atmosphere of friendliness, warmth and respect.
The Strategic Plan for Health Safety & Care links to the Community Health Improvement Plan. It also links to work being done by partners such as Forth Valley Health Board to improve community health relating to smoking cessation, substance abuse and mental well-being. Health, Safety & Care Team activity also complements the work undertaken by the Policy Unit in relation to the Falkirk, Health Theme group and the Community Health Partnership in promoting the wider local health improvement agenda at both strategic and operational levels.
The team runs large & small, Service-specific based Health and Safety events which are extremely popular with our employees as they are good for team building and act as morale boosters given that alternative therapies are made available.
A range of additional health and wellbeing activities are offered on an ongoing basis, these initiatives include:
Looking Good, Feeling Good - a course delivered in conjunction with Falkirk College which has been designed to give employees a boost in terms of their confidence, appearance and self-esteem.
Health at Work Consultancy Service - delivered to Services/teams, which focus on promoting physical activity and relaxation therapies;
Mens Health Clinics - Given that men are normally reluctant to go to their General Practitioner, specialist men's health nurses are available at our events to allow confidential access to advice and assistance. The local men's health community clinic is also promoted at our events.
Healthy Lifestyle Card: a discount card for employees to access leisure facilities at a discount;
Lifestyle 21C: an 8 week health & fitness programme personally tailored to suit the individual employee;
The Quit Programme: for Smoking Cessation
External Counselling Service: available to employees on a self referral basis;
It can be said that measuring and diagnosis on its own will not produce effective organisational change. Change needs resources, time and effort. On the other hand, good diagnostics will ensure that the effort and resources are channelled with pinpoint accuracy and so increase the likelihood of success.
Organizational culture and corporate branding are inseparable in that the former generates the latter and the success of the latter depends on the sustainability of the former. Without the former, all the existing firms-if they will ever persist in existing at all-cannot be differentiated from one another, killing competition and competitiveness and making the business world dull and dry.
ASDA has delivered impressive results in the recession. The UK grocer achieved a 12th successive quarter of market out-performance in the first quarter of 2009, with like-for-like sales increasing by 8.4%. While ASDA's strong price proposition is attractive to the current frugal consumer, therefore boosting growth, the retailer must continue to improve its quality perception to ensure that this performance is maintained in the long term.
ASDA beat both its sales and profit targets for the quarter and grew profits ahead of sales through clearly appealing to the more frugal and price conscious consumer. The brand is continuing to gain customers from its rivals and, more crucially, retaining existing ones. Indeed, the growth achieved is comfortably ahead of the most recent performance reported by both Sainsbury's and Tesco.
Three key elements are behind ASDA's recent success: a strong price proposition, an increased focus on quality and a swift response to the demands of its customers. On top of this, ASDA has also continued to develop its online operation, which is currently growing by 50% year-on-year, and is planning to re-launch its food website in June, with an enhanced capacity and improved navigation. Despite its online capabilities reaching over 90% of UK households, the grocer intends to increase its geographical penetration - meaning its online grocery sales are expected to grow by 11.7% in 2009 and be worth 4.4% of total grocery sales.
However, ASDA still needs to improve its quality perception, and although it is working hard to achieve this, much remains to be done. In the short term, with price remaining the main battleground, ASDA is clearly emerging the winner. However, this is only one battle, and to win the war ASDA must remain focused on improving quality, especially if it is to retain its newly found customers once their spending ability allows them to return to their primary choice of supermarket.
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