The purpose of this business report is to explain the purposed change so that the company can remain competitive in the future given that it will have many pressures on the industry sector.
Background of the Company:-
The company Asda started off in 1949 in Leeds with the name Associated Dairies & Farm Stores Limited in 1949. Which later changed to Asquith and Dairies. The retail company Asda operates within Britain which sells mainly food, beverages and does other retailing such as general merchandising, clothing and toys. Asda is currently working under the American retail company Wal-mart. They are also operating a mobile network called Asda Mobile. Some business reports say that Asda has overtaken Sainsbury's back in 2003 and becoming the second largest retailer in the United kingdom. Asda is marketing itself with the slogan " Britain's Lowest Priced Supermarket, 12 Years Running". Being part of Wal-mart Asda is submitting its financial accounts to its owner Wal-mart. Recently in 2009 Wal-mart has decided to sell Asda over to a company called corinth based in Leeds, which works as subsidiary of Wal-mart in £6.9 billion.
SWOT analysis of ASDA
Swot Analysis Is a planning method that is used to evaluate the Strengths, Weaknesses, Opportunities, and Threats in a business.
Strengths show the positive things about the company that helps gaining its goals.
Strengths of ASDA are:
Better understanding of customers buying behaviour
They offshore their business to partners and suppliers
Having the updated knowledge of the competitors
Keeping the companies information up to date
Claiming to have the lowest prices for the goods.
Better cost cutting measures.
Weaknesses shows what obstacles are in the company which wont let them achieve its goals.
Weaknesses of ASDA are:
Not making much profit because of its " lowest price campaign".
Besides claiming to be the number second retailer in UK, its operating profit has decreased by 42 million pounds from (2007) comparison.
Often long queues in the store
Asda does not have smaller supermarkets such as Tesco express.
Opportunities show what external sources can help the company.
Opportunities of ASDA:
Can attract customers as its stores are located widely spread throughout the UK.
Its maintained its good quality products with lower prices.
Wal-mart is there to support Asda if it is going on a downfall.
Asda can learn and improve on their strategies by adopting Wal-mart's strategies to improve on their performance.
Threats are the sources that are harmful to the companies objectives.
Threats to ASDA:
Its competitors such as Tesco and Sainsburys
Recession is not helping customer's buying behaviour
No availability of space for big box stores in UK
Depreciation is increasing year by year
ASDA is operating under the retail sector. The retail industry consists of many other sectors such as food and beverages, liquor products, clothing, toys and general merchandise, but we are discussing the food and beverage part of it.
Company Competitors and Market position
The main competitors of the company are Tesco, Sainsbury, sommerfield and Marks & Spencer.
Asda's Performance compared to its competitors
y-axis:- profit in million pounds
As shown in the above chart ASDA has improved more than TESCO this year. As TESCO has only had a slight increase.
These figures show that ASDA 's market share has increased by 8.5% in comparison to 4.3% of TESCO and 5.7% of SAINSBURY 'S. Company is growing faster than the other two. Even though TESCO is having almost double consumer spend its growth is almost half in comparison to ASDA.
Asda's Scale of its operations in relation to its competitors
As shown by the graph ASDA 's scale of operations is not as large as compared to TESCO. ASDA has one third in comparison to TESCO 's employees, but still it is doing doing reasonably well.
ASDA'S companies Product, Services and main selling points
ASDA products in comparison to TESCO
PEPSI DIET 2 ltr Bottle
Famous Grouse Scotch Whiskey 1 ltr
Golden Granulated Sugar 1kg
OL semi skimmed milk 2 ltr
This table shows that similar products in both companies. Comparing both products, ASDA against TESCO, showing that ASDA is cheaper in most of the products.
Some services that ASDA offers are:
Credit cards compared to Tesco credit cards
Typical 16.8% APR variable
2points for every £4 spend
5,000 points equal £50 in vouchers!
Typical 16.9% APR variable
1 point for every £4 spend
£2.50 in Clubcard vouchers equals 60 Air miles
ASDA'S main selling Points
The main selling point of the company is the respect to the customers, Customers always feel close to the store, main strategy behind the selling of goods is "Customer buys benefits, not the features". They are giving 200% ASDA brand and fresh product guarantee, if you are not satisfied with the product , you can always return it to ASDA within 28 days of purchase. Asda cares so much about customer's needs, as putting Braille price stickers on products, providing scooters to disabled customers, helps customers to pack their baggage.
Culture is based on value, customers, attitude and ASDA gathering.
ASDA claims its culture to be unique, as I know that all the staff join together and discuss about there daily activities and what needs to be done to help the company to improve its performance.
It believes in one team culture with over 150,000 employees working for them.
ASDA' s Value
The main three values that it inherits are that it gives it first importance to its customers, they care for there customer's as well as the employees and show honesty in the work a person is doing everyday. They believe that if anyone within ten feet away from you then even you should say hello and treat them with respect.
ASDA' s Customers
ASDA lowers its prices for its products and services so that customers can afford it, while thinking about the profitability at the same time.
ASDA' s Attitude
ASDA has an attitude that it can be the best by having the 'can do' mindset. Therefore one should not have an attitude of thinking that they cannot do a task, they should always have a positiveness towards everything.
ASDA' s gatherings
The employers of ASDA keep all employees informed of all the activities done in ASDA and allows them a chance to celebrate team success. Those who are new comers can also get a chance to get familiar to the company. ASDA also has a big brunch which is held quarterly in the ASDA House in Leeds. This is another way for the employees share information and share the news with everyone.
ASDA culture of saving money this is done by:
recycling whatever they can
Repairing damages instantly to avoid safety issues
Treating as though its your own company
Finance & Accounting
Finance and Accounting is about making financial reports which helps managers to make decisions about the company.
Management in ASDA,