ASDA Case Analysis on Strategic Management
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The following 4 questions are Based on the attached Case study of ASDA in PDF format.
1. Critically evaluate ASDA's positioning as a "value-for-money" store. What are the advantages and disadvantages of this approach?
2. The case study suggests that ASDA is currently pursuing a number of initiatives. To what extent are these being driven by competitive forces and how would you evaluate their effectiveness?
3. How would you manage the impact on the workforce of implementing (in 2005) the removal of 1400 middle management posts?
4. What is your overall assessment of ASDA's current situation and what recommendations would you make for their future strategic direction? Explain the reasoning behind your recommendations.
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Solution Summary
ASDA is a value retailer. This posting gives you a detailed case analysis of the ASDA case.
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Case Study - Strategic Management
The following 4 questions are Based on the attached Case study of ASDA in PDF format.
1. Critically evaluate ASDA's positioning as a "value-for-money" store. What are the advantages and disadvantages of this approach?
ASDA's positioning as a "value-for-money" store does not help the company. The reason is that even though the products may be sold at the 'lowest' prices in the market, the out of city locations of ASDA make it costly by way of time and driving cost to reach the stores. Why did ASDA suffer when the economy turned downwards? Thee are several reasons for it. When the economy turns downward and the spending needs to be less smaller purchases are made by consumers. They do not want to made a full months purchase at a time. So they prefer stores that are located nearby. Second, when there is economic downturn the purchases of bargain seekers are most strongly affected, so those customers that are seeking the lowest prices purchase less and ASDA suffers.
The advantages of this approach are;
1. ASDA increases its sales by proffering the best deals;
2. ASDA can increase its reach in new regions because bargain seeking customers are ubiquitous;
3. ASDA saves on real estate costs as it can go in for large out of town locations;
4. ASDA receives support from Wal-Mart as it has positioned itself as a low-cost store.
The disadvantages are:
1. ASDA suffers the most with every economic downturn;
2. Its profitability remains low:
3. Sourcing is difficult;
4. There is a strong competition from TESCO and Sainsbury.
5. ASDA is not able to create a unique position for itself; the low cost retail store market is overcrowded because of ...
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