STRATEGY

Understanding Strategy: Internal and External Analysis of ASDA

Understanding Strategy: Internal and External Analysis of ASDA

Introduction

Johnson & Scholes (2002) define strategy to be a direction and scope of an organisation for over a long period such that it brings advantages for the organisation by its use of resources within this competitive environment, is able to meet the needs of the market, and is able to meet the expectations of the stake holders. Strategy has an important role to play in an organisation. According to Campbell (2011), among the most important activities undertaken by an organisation, strategic thinking and strategic management also fall. The success or failure of the business depends on the manner in which these activities are carried out. Business strategy is not a simple process but involves a lot of complexities with a range of stages that are required to be taken simultaneously. Furthermore, it is not a process that has to be undertaken only once; rather it has to be considered continuously to keep with the changing environment. Ross & Kami (1973) are of the view that an organisation without a strategy can be compared to a ship without a rudder, that goes around in circles such that it does not have any place to go. It is suggested by them a lot of businesses because of their lack of strategy or in some cases because of wrong strategies or in adequate implementation of it. It is concluded by them that without an effective strategy in effect, failure of an organisation is only a matter of time. Keeping in view the importance of strategy, there are various analytical tools that can be used for strategic analysis such as SWOT analysis, PESTLE, Porter's five forces analysis, value chain analysis and many others (Downey, 2007, p. 3). The next section of the report is now focused on the internal and external analysis of ASDA, a UK based supermarket chain.

Internal and External Analysis of ASDA

A lot of authors such as Peng (2008), Keegan & Green (2005) and Thomson & Fuller (2010) have discussed some of the common analysis techniques for the internal and external analysis of an organisation. These include techniques such as SWOT analysis, PESTLE Analysis, Michael 5 Porter Analysis among many others. The purpose of this part of the report is to carry out an internal and external analysis of Asda for which it is significant to get an overview of the organisation and the environment which is presented as follows:

Overview of the organisation

Asda is a private sector UK based supermarket chain that sells general merchandise, electronics, grocery, financial services, as well as clothing among others. The chain is currently owned by Wal-Mart—one of the leading companies in the world—and was named by Forbes in 2012 as the largest retailer in the world. Within the context of UK retail market, Asda is the 2nd largest supermarket in terms of the share that it has in the market with currently around 16.6% market ...