Asda has been criticised for misleading advertising, using suppliers who are known to have illegal employment practices, ignoring planning regulations and destroying greenbelt land, lack of serious environmental policy and blatant green wash. With its ‘strategy of consolidation’, copied directly from Wal-Mart, Asda pursues an aggressive takeover policy of small towns, wiping out local competition and local jobs. False claims by the company about 'value' and 'convenience', have been challenged, along with the exploitation of every opportunity to push impulse buying.
In 1989 by buying the large format stores of rival Gateway Superstores for £705 million. This move overstretched the company and it found itself in trouble trying to sell too many different products. The company found itself in deep trouble trying to sell too many different products. It came close to going bust as a result it was forced to raise money from shareholders in both 1991 and 1993. To relieve the situation Archie Norman was recruited from Kingfisher as the new chief executive, and Asda returned to its roots as a food retailer, standing out from the crowd by being significantly cheaper than its three large rivals. This was achieved through concentrating on prices instead of loyalty schemes.
In 2005, there was a report concerning within Wal-Mart about a slippage in market share, partially due to a resurgent , Asda's chief executive, Tony de Nunzio left, and was replaced by Andy Bond. In 2005, Asda expanded into by purchasing 12 Safeway stores from .
Asda was following and copying Wal-Mart practice through most of the nineties. So to understand the changes Asda is going through and their consequences we must take a look at Wal-Mart. Planning laws currently make it difficult to develop hypermarkets and Wal-Mart style supercenters in the UK. However, with businesses continually lobbying the government and finding loopholes in planning law, they are not out of the question.
Asda’s response to changes in the business environment of retailers in the United Kingdom is very competitive. Nevertheless, with a number of supermarket retailers competing in the UK market such as Tesco, Sainsbury and Morrison. The business environment of the supermarkets retailers is very competitive; therefore different strategies are being made in order to keep up, like in the case of ASDA, the company is lowering the prices of its goods, however other retailers have followed also this strategy making the competition even more tougher, added to the fact that in some areas of the United Kingdom, Tesco which is ASDA’s biggest competitor, have already been dominating because ASDA was unable to set-up stores. And in order to be successful in the retail industry, Asda is focussing on the prices of the products rather than expensive advertisement and the companies must continue to research and developed products and services that the market will like and at the same time be updated to new technological advancement.
On the other hand, Asda supermarket stores as they now have become one stop shops for food, clothes, and electrical goods and so on. The reasons behind the changes are considered by customers.
Conclusion
ASDA is one of the retail giants in the UK; the company’s strengths include the fact that it already experienced being on top and being in the low therefore, the company is more flexible and can be able to surpass the incoming problem. Another is the strategy wherein prices of the products are being priced very low. However, the company also has its weaknesses such as it wasn’t able to saturate the whole UK and it also has internal problems with the employees. The threats of the company are its competitors because these companies are also following the steps that ASDA had undertaken and are more aggressive than ASDA. On the other hand, there are also opportunities such as the expansion of specialty department and the Georges the apparel of the company which has been growing in sales and even expanding in other countries.
Read more:
Mr Naser Page
by
shakil12 (student)
