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2.0 ASDA’S ENVIRONMENTAL ANALYSIS 2.1 SWOT Analysis
STRENGTHS Strong financial position Strong bargain power Financial performance OPPORTUNITIES Acquisitions and Takeovers Emerging markets and expansion abroad WEAKNESS No loyalty scheme Signs point to serial acquisitions THREATS Increased Competition Economic slowdown External changes (government, politics, taxes, etc) UK structural change Table 1 – Swot Analysis
2.1.1 …show more content…
Asda, a subsidiary of the American retail giant Wal-Mart, (the world’s largest retailer) has a very strong financial position coupled with its un-abating financial performance underlines its strategic capabilities over its competitors. A summary of its 2009 growth of Asda and its UK competitors is shown below. Supermarket Asda Tesco Sainsburys Morrisons Consumer Spend (£000s) 3,411 6,453 3,239 2,327 Market Share March 2009 17.5% 30.4% 16.1% 11.8% +/- from March 2009 8.5% 4.3%, 5.7% 7.2%
Table 2-Growth in UK supermarkets Strong bargaining power: Asda is a big supermarket with a very strong bargaining power. This means that Asda can bargain for a cost effective supplies and hence lower their product prices (or profit margins) to attract more customers. This also means that customers get the product to suit their budget without compromising on the quality. 2.1.2 …show more content…
Substitutes of Asda’s food retail markets are off licenses and convenience stores. Though it is seen as low threat to Asda, Asda’s purchase of 147 Netto stores which are located in local towns and city centres creates a hurdle for these substitutes to enter the market. However, substitutes for non-food items, for example clothing, is fairly high. It should be noted that so long as the economic recession prevails, customers will be more geared towards discounted prices making Tesco is a threat to the speciality shops. 2.2.2 Threat of entry of new
STRENGTHS Strong financial position Strong bargain power Financial performance OPPORTUNITIES Acquisitions and Takeovers Emerging markets and expansion abroad WEAKNESS No loyalty scheme Signs point to serial acquisitions THREATS Increased Competition Economic slowdown External changes (government, politics, taxes, etc) UK structural change Table 1 – Swot Analysis
2.1.1 …show more content…
Asda, a subsidiary of the American retail giant Wal-Mart, (the world’s largest retailer) has a very strong financial position coupled with its un-abating financial performance underlines its strategic capabilities over its competitors. A summary of its 2009 growth of Asda and its UK competitors is shown below. Supermarket Asda Tesco Sainsburys Morrisons Consumer Spend (£000s) 3,411 6,453 3,239 2,327 Market Share March 2009 17.5% 30.4% 16.1% 11.8% +/- from March 2009 8.5% 4.3%, 5.7% 7.2%
Table 2-Growth in UK supermarkets Strong bargaining power: Asda is a big supermarket with a very strong bargaining power. This means that Asda can bargain for a cost effective supplies and hence lower their product prices (or profit margins) to attract more customers. This also means that customers get the product to suit their budget without compromising on the quality. 2.1.2 …show more content…
Substitutes of Asda’s food retail markets are off licenses and convenience stores. Though it is seen as low threat to Asda, Asda’s purchase of 147 Netto stores which are located in local towns and city centres creates a hurdle for these substitutes to enter the market. However, substitutes for non-food items, for example clothing, is fairly high. It should be noted that so long as the economic recession prevails, customers will be more geared towards discounted prices making Tesco is a threat to the speciality shops. 2.2.2 Threat of entry of new