Tesco Strategy Report

Pestel Factors

As well as monitoring factors within the organization it is important for Asda to examine activities out with the organisation which may have a direct impact on them. Factors such as political, economical, social, technological, environmental and legal are all important. An important factor to be considered is the political aspects of the government. Asda's competitiors are facing tesco are facing implications with regards to expansion. It is mentioned "Indeed, such is the company's dominance of the Uk supermarket sector that there have been some calls for government to step in and limit their continued expansion" (Coombe, 2006). This is a set back for organisations that have a strategy of growth. In response to this it will be of importance to take a creative streak and try and lobby the government. Trying to bring about a change in law may allow Asda to continue and build on their growth strategy. Research has shown "the supermarket offered hundreds of thousands of pounds to Manchester City Council for a piece of land in an effort to prevent rival Kwik Save building a store there". This is regarded as unfair trading and with a change in law through lobbying this will not be a hinderance for organsations.

Social issues are of importance to organizations because the industry we operate in is sensitive to changes in the environment. Educating and investing money in schools will enhance the image of Asda in the public eye. This is seen by the BBC who state "this is very useful to the government in trying to fulfill its target number of young people in apprenticeships". By fully concentrating on their political factors identified in the PESTEL will enhance the view of the orgainsation in eyes of the government. This will also give Asda the influencing power when making decisions as they will have the back of the government and the influential public.

Internal

BCG

In order to understand the market Asda are competing in, it is important to understand where they are. The Boston consultancy group matrix explains the growth and market share of each company.

Asda main competitor Tesco is in the stars quadrant because they are industry leaders and have high growth and high market share. Tesco maintains itself in the stars quadrant because it invests in changing its products and services to meet the needs of the industry.

Asda are also in the stars quadrant because of their high market share and growth. Although Asda have a high market share, Asda can become more profitable if they are to invest money into their product portfolio. The main weakness in Asda's portfolio of products is their online system. Most major organisations in today's industry rely in the internet for business, and this is an area Asda is lacking in. Asda could invest more heavily on creating a better online shopping experience.

By investing in an more robust online system will increase sales, offer services to customers on a larger scale and create brand awareness and loyalty. It should include within their strategic planning to improve or create a new strategy to offer a more efficient online sytem.

Porters generic strategies

Porters generic strategies framework shows organizations how to gain competitive advantage through cost leadership, differentiation and focus. By focusing on a certain strategy will help an organization too see an area they are lacking in and onw which could benefit by competitive advantage. An area which porters 5 forces could be applied to is Asda's cost leadership strategy.It is quite clear that

Asda's main competitor Teswco along with the other two competitiors, there is a fierce battle to reduce the price of products. As the cost leadership is tied in conjuction with differentiation, this is the area in which Asda should look at. An example being while all supermarkets are lookin at cutting costs it is important to undwerstand that a tailored and personal shopping experience may be more infuential than just low cost products. As the are subsititue products available, Asda could differentiate by allowing customers to input a list if products and the trolley directing the customer through a screen to where the cheapest product is located, the trolley would have a scanner as each item is placed within the trolley it would be scanned and a self checkout payment system would allow the customer to pay for the goods while they take them away in the same trolley. This would save the customer waiting in queues, looking for products, trying to find prices, reduce the number of staff needed, decrease overheads and make it generally more efficient than having to queue up. The drawback may be that customers not have bank cards and cannot purchase through the trolley. This form of differentiation may offer the customer a personalized and differentiated service which may take them away from their usual supermarket.

Strategy Implementation

Strategy implementation is an important factor which Asda should not overlook. Strategy implementation encompasses most personnel within an organization and it is important to understand the strategy being implemented. It is important for organizations to market and position products, invest in technologies according to the market, have enough capital available. An important aspect in Asda is to focus on the marketing aspect because marketing will allow the customer to see the potential benefits they may receive. This broadens into the category of market segmentation and product positioning. This base has been selected and applied to Asda because marketing plays a critical role in attracting customers. Although Asda have marketing strategies it is important for Asda to market online in amore effective manner. To date, Asda's online system does not offer customers to view products and services in real-time. This means consumers prefer to shop in store so they can feel and touch products. Asda's wenbsite also do not encompass software which track their consumers movements, this could be used as a marketing tool. This could