Asda Strategic Initiative Report Essay examples

4275 Words Aug 24th, 2011 18 Pages
Kingston University London

Kumi D. Atiadevey (K1038399)
MSc Information System

Strategic Initiative Report

Strategic Information System for e-business (CIM401)

June 2011


EXECUTIVE SUMMARY Asda stores ltd. is a British supermarket chain which retails food, clothing, toys, general merchandise and financial services,[1] as well as a mobile telephone and broadband network (Asda mobile launched in April 2007). ASDA’S roots dates way back to the 1920s when a group of Yorkshire farmers came together and formed the Hindell's Dairies. Its first supermarket was then opened under the 'Queens' name in Castleford in the early 1960s and became a subsidiary of the American retail giant Wal-Mart (world’s largest retailer) in
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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 Weakness

 No loyalty scheme: Asda does not run a loyalty card scheme, stating that "they prefer to invest the money they would use to set up such scheme into driving down prices". [6] However, this is a major setback as implementation of such scheme has increased its competitor’s customer retention rate. [7]  Signs point to serial acquisitions: Asda clearly demonstrates that, it has an enormous firepower. It also has a vast range of products and hence could justify its purchasing ego. But while it’s ‘fill the gap’ method might of use to the company (as its been the case), it raises an asserting danger of Asda becoming a serial acquirer and this tends to reduce earnings visibility and quality. 3|Page



 Acquisitions and Take Overs: The commercial network of Asda is growing at a profitable pace. It has opened over 20 new stores since 2010 and subject to a final regulatory approval will operate an additionally acquired 147 Netto stores in various geographical parts of the UK, [8] adding 1.2 million square feet of space to its portfolio. The geographic diversification will help Asda in improving its economy of scale, while minimising its exposure to systemic risk. 

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