SWOT analysis of ASDA

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Last updated: December 2016

SWOT

Organisations use a variety of analytical tools to determine their business strategies (Hitt et.al., 2007). One of the most popular such tools is SWOT. SWOT stands for strengths, weaknesses, opportunities and threats. It helps an organisation contrast its ‘strengths’ and ‘weaknesses’ with the ‘opportunities’ and ‘threats’ in the market or external environment.

SWOT deals with both external and internal environments of a business. Success and sustainability of an organisation depends on its ability to audit external environment where it operates (Kotler and Armstrong, 2009).  External environment also indicates the opportunities and threats for a business. However, strengths and weaknesses of an organisation are internal aspects.

How to apply SWOT analysis?

The discussion that follows includes a brief SWOT analysis to show how the tool can be applied in the context of ASDA. This analysis of ASDA is from the perspective of its UK retail operation.

Strengths

Strong management: ASDA is famous for its strong management. Walmart, the parent company of ASDA, has recently announced senior management changes in International Business Leadership in UK, China and Canada.

Innovative culture: ASDA’s continual innovation drives the retailer forward (Clarke, 2014).

Other strengths: ASDA is also well-known for its economies of scale and superior technology.

Weaknesses

ASDA does not have mini stores like Tesco express or Sainsbury’s local.

No loyalty card yet to retain customers. Competitors such as Tesco has Clubcard and Sainsbury’s has Nectar card.

Some critics argue that ASDA products are not as good as those of Waitrose and other similar brands.

Opportunities

Online market: More and more customers are shopping online in the UK; hence a great opportunity for ASDA

Expansion: ASDA has huge opportunities to grow both in the UK and abroad. The company announced last year its plan to invest £600m to open 17 new supermarkets and revamp 62 more.

Threats

ASDA faces a fierce competition from smaller retailers such as Lidl and Aldi.

Consistent price-cut from competitors such as Tesco is also a threat for ASDA.

Growth of independent online retailers is also a threat.

Further reading/references

Hitt, M.A.., Ireland, R.D. & Hoskisson, R.E., 2007. Strategic Management: Competitiveness and Globalization. 7th ed. Versailles: Thomson.

Author: Dr. Sewel Sodry

Dr. Sewel Sodry is an internationally acclaimed author and teacher of business management. He is also a specialist coach, trainer and educationalist. He holds a Master of Business degree from Victoria University, Australia and a PhD from King’s College (University of London).