Essay Asda Muise

SWOT is a technique for analyzing the internal and external environments of an administration through the designation and appraisal of its Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis entails a distillment of the findings of an internal and external audit which draws attending, from a strategic position, to the critical organizational strengths and failings and the chances and menaces confronting the administration. Whereas PESTLE analysis is an audit of an administration ‘s environmental influences with the intent of utilizing this information to steer strategic decision-making. The premise is that if the administration is able to scrutinize its current environment and assess possible alterations, it will be better placed than its rivals to react to alterations. ( Kotler et al 2005 ) .

This survey will analyze the impact of political, economic, societal, technological, environmental and legal factors on Asda. It will besides place the key forces that represent both chances and menaces to its net income. Data is supplemented with inside informations on the company ‘s history, cardinal executives, concern description, locations and subordinates every bit good as a list of merchandises and services and the latest available company statement.


Asda Group ( Asda ) owned by Corinth, a fellow Wal-Mart group company, is a food market and general ware retail merchant in the UK. In 2008, Asda recorded a net income before revenue enhancement of ?520.4m, down somewhat from ?532.7m but exceeded arch rival Sainsbury ‘s. Asda ‘s gross revenues hit ?18.57bn, up from ?16.7bn, ranking the concatenation 3rd in the supermarket hierarchy after Tesco and Sainsbury ‘s.

Since 1999 Asda has been entirely owned by Wal-Mart -the biggest company in the universe by value, Asda is the 2nd biggest supermarket concatenation in the UK with 17 % of the market portion. This includes gross revenues of non-food points. Asda overtook Sainbury ‘s in July 2003 ( they are now staggering with 16.2 % of the market ) although it is still a long manner off Tesco ‘s about impregnable 28 % market portion. The coup d’etat of Asda by Wal-Mart has far-reaching effects for British retail as other companies react to it and happen new ways to vie.

Earlier this twelvemonth, Asda was named Britain ‘s Best Value Retailer for the twelfth back-to-back twelvemonth in the one-year Grocer 33 awards, compiled and presented by Britain ‘s top supermarket trade publication. Asda was named in the Sunday Times Best Green companies every bit good as being voted as one of the Top 50 topographic points for adult females to work by the Times newspaper.

Asda has besides been recognized for its environmental public assistance certificates, winning ‘Best big retail merchant ‘ at the RSPCA ‘Good concern ‘ awards for animate being public assistance and a ‘Business Committedness to the Environment ‘ Award for its attempts to cut down packaging and literally 100s of esteemed awards for our vinos and cheeses.

As of June 2010 Asda operated 377 shops and 19 terminals and employed 165,000 associates. Asda ‘s entire retail units is made up of

Asda Supercentre 29

Asda Superstore 297

Asda Living 25

Asda Supermarket 26

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Sixty per centum of Asda ‘s gross revenues are presently in food market points, although it intends to construct on the growing of non-food merchandises in shop, which may good alter this balance. Asda sells six own-brand labels: Asda Smartprice, Asda, Good for You! , Asda Organic, Asda Extra Special and More for Kids.

Non-food is the fastest turning country of supermarket retail, with a 15 % twelvemonth on twelvemonth growing. The George manner scope was launched in 1990 by George Davis, laminitis of the Next concatenation of high street shops. From five mercantile establishments, the label has grown into a ?1 billion concern. Asda has now overtaken Marks and Spencer as the UK ‘s biggest vesture retail merchant.

Many shops besides have petrol Stationss ; Asda is really proud of the low cost of its gasoline.

Asda ‘s forte concerns division includes pharmaceuticss, lens makers, jewelry and exposure sections. Asda acquired an in-house pharmaceutics through purchasing Moss Pharmacies from Alliance UniChem for ?100m in 2000. In 2004 Asda operated 83 in-store pharmaceuticss, and estimates it can open another 80 in the following five old ages as licensing Torahs have late been changed. The new regulations have been criticised for their potentially detrimental effects on community and infirmary pharmacies18. Many Asda shops now have lens makers, who provide ‘free NHS oculus trials for those who are eligible ‘ .

Board Of Directors

Andy Clarke, CEO

He joined Asda in 1992 and has worked in a assortment of functions, including shop director. He has besides been a concern unit manager of classs such as frozen, bakeshop and green goods and retail managing manager for Asda ‘s cardinal division. He was named A

sda ‘s main runing officer in 2007.

Andrew Bond – Part-time Chairman

David Cheesewright

David Downie

David Smith

David Dible

Harold Scott Jr

John Longworth

John Menzer

Angela Spindler

Judith McKenna

Company Secretary is John Longworth

Andrew Bond is besides president of belongings developer Gazeley, besides owned by Wal-Mart. hypertext transfer protocol: // articleid=75186

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John B Menzer is besides a senior officer of Wal-Mart, keeping the places Executive Vice-President and President & A ; CEO of the International Division

Hearers Ernst and Young.

Subordinates and confederations

1. Asda Employee Share Schemes Trustee Limited

2. Asda Quest Trustees Limited

3. Asda Storage Limited

4. Asda Stores Limited

5. Corinth Services Limited

6. Gazeley Holdings Limited

7. McLagan Investments Limited

8. George Davies Holdings Limited

9. APS ( Estate Agencies ) Limited

10. Asda ( Number 1 ) Limited

11. Asda Financial Services Limited

12. Burwood House Developments Limited

13. Company Chemists Association Limited

14. The Burwood House Group Limited

15. The George Davies Partnership Limited

16. Wal-Mart ( UK ) Limited

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Corinth, a Wal-Mart group company

SWOT Analysis


Asda/Wal-Mart is a powerful retail trade name. It has a repute for value for money, convenience and a broad scope of merchandises all in one shop. Like its parent company, Asda ‘s primary focal point is salvaging money and maintaining costs low. The company has a nucleus competency affecting its usage of information engineering to back up its operations. For illustration, it can see how single merchandises are executing store-by-store at a glimpse. IT besides supports its efficient procurance. Peoples are cardinal to the company ‘s concern and it invests clip and money in developing people, and retaining a developing them.

Its enlargement in non-food has been propelled by Wal-Mart. In the last five old ages the supermarket has quadrupled its non-food offer to more than 12,000 general ware lines. Asda recognised it was a great manner to speed up growing in the UK and has drawn on the expertness of Wal-Mart in this country. They have taken merchandise, gone on joint purchasing trips, sourced globally and shared class direction expertness on how to infinite and show.

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Wal-Mart/Asda challenge

Since the US shopping giant Wal-mart purchased Asda, Tesco ‘s rank as the top United kingdom

supermarket has been threatened. Asda can now vie highly good on monetary value

and scope of goods. Asda is the 2nd largest supermarket in the UK merely behind Tesco. Tesco is good cognizant of this, and has so far been speedy to maintain up with monetary value cuts or particular offers at Asda. Wal-mart may besides make up one’s mind to exert its purchasing power more to a great extent in the UK, and this could spell the terminal of Tesco ‘s trade name laterality in the hereafter.

And while Asda, unlike its challengers, do non take part in the convenience market with little shops and its non in the company ‘s existent estate scheme to develop convenience shops. It remains a large challenge for the supermarket giant to do shops easy to shop, and hence presenting against peoples ‘ demands for increased convenience ” and industry analyst fear that Asda may free clients to its chief rivals, as clients choose to shop in shops nearest to them.


A cardinal Asda failing is its deficiency of smaller supermarkets and convenience shops. Britain, like many European states, has placed crisp limitations on building of “ large box ” shops in suburbs and rural countries. While most Asda shops fall into that class, two-thirds of Tesco ‘s mercantile establishments are little or midium shops.

Wal-Mart is the World ‘s largest food market retail merchant and control of its imperium, despite its IT advantages, could go forth it weak in some countries due to the immense span of control.

Since Wal-Mart sell merchandises across many sectors ( such as vesture, nutrient, or stationary ) , it may non hold the flexibleness of some of its more focussed rivals.


As portion of the universe ‘s largest retail merchant, Asda has harnessed Wal-Mart ‘s tremendous purchasing power, particularly on general ware. Here, its ability to beginning stuffs like jean on a planetary graduated table has helped drive down the monetary value of a brace of denims from ?14 to ?4 over the last five old ages. But nutrient still accounts for the largest portion of Asda ‘s turnover and it is here where its low pricing theoretical account has truly fuelled gross revenues.

Asda has chances to take over, merge with, or organize strategic confederations with other planetary retail merchants, concentrating on turning both its nutrient and non-food markets. Harmonizing to Andy Bond, parttime president of the company, set out a series of cardinal marks for the concatenation, including catching Tesco to go ‘number one ‘ in non-food retailing in the UK and opening 100 smaller format supermarkets.

Asda buys Netto supermarket. The move signals supermarket concatenation ‘s committedness to smaller shop format, as it plans to integrate 193 Netto shops into its portfolio. The sale, which remains capable to regulative blessing, will see Asda change over all of Netto ‘s UK locations into Asda shops and incorporate them into its new supermarkets division for units smaller than 25,000sq ft. Asda expects the dealing, which will see it shut the spread between challenger concatenation Tesco, to finalize after blessing from the Office of Fair Trading subsequently this summer.

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Consumers, worried by the alliance authorities ‘s steps to harness in record debt with revenue enhancement additions and public sector cuts, are besides going more wary in their disbursement. Britain ‘s grocers are confronting more moderate nutrient monetary value rising prices and a leap in gasoline monetary values that has left shoppers with less to pass on food markets. Harmonizing to Asda, research carried out on its behalf by Cebr showed UK households ‘ disposable income in December is forecast to be 172 lbs, 5 lbs lower than 2009.

Asda ‘s second-quarter to June 30 study shows level implicit in gross revenues, impacted by subdued nutrient monetary value rising prices and consumer concerns over prospective revenue enhancement rises and employment uncertainness. That compares with a lessening of 0.3 per centum in the first three months of the twelvemonth, the first autumn since early 2006, and a rise of 4.6 per centum in the concluding one-fourth of 2009. hypertext transfer protocol: // [ 24/08/2010 ]

PESTEL analysis of the macro-environment

There are many factors in the macro-environment that will consequence the determinations of the directors of any administration. Tax alterations, new Torahs, trade barriers, demographic alteration and authorities policy alterations are all illustrations of macro alteration. To assist analyze these factors, directors can categorize them utilizing the PESTEL theoretical account.

Political factors.

Harmonizing to the conservative authorities ‘an all-embracing revenue enhancement ‘ was needed to increase the costs to all drinkers. Increasing revenue enhancements has been announced as portion of the Conservative ‘s intoxicant policy, but inquiries have been raised about how effectual it will be ‘to happen a just expression that could be used to judge whether a merchandise is being sold below cost ‘ , as outlined in their Green paper. Alcohol Concern have antecedently commented that increased revenue enhancements are a start, but that minimal pricing is the most effectual policy and prevents supermarkets from absorbing revenue enhancement additions on intoxicant as loss-leaders. Asda strategic contrivers will be watching this closely and would desire to analyze the impact it will hold on their policy of maintaining monetary values low.

Economic factors. With the budget looming and alliance economic policy still expecting definition, the call for a new, rigorous attack to competition has come under egg-shaped onslaught from both the political right and left. Asda like its chief rivals Tesco and Sainsbury have been accused of revenue enhancement turning away, striping husbandmans of a support and operation as contemporary monopolies that drive local concerns out of communities. There is increasing force per unit area on the conservative authorities to convey a stricter attack to competition to convey the large companies under control. This may hold really serious deductions for the long term operations of the supermarkets particularly Asda that prides itself on maintaining monetary values low. The inquiry to inquire is how of import are grocery monetary values compared with long-run market fight, little concern ownership and the support of agricultural manufacturers? The mean household spends 11 per centum of their income on nutrient, and this rises to 15.9 per centum for those on the lowest incomes. There is suggestion that decreases in nutrient monetary values considered in isolation over the past two decennaries have increased the criterion of life for the poorest by about 2.75 per centum, before rising prices is taken into history.

Consumers, worried by the alliance authorities ‘s steps to harness in record debt with revenue enhancement additions and public sector cuts, are besides going more wary in their disbursement. Identifying markets that are likely to be resilient and potentially turning during the recession requires analyzing what people and concerns are likely to make more during the recession. This leads to several general thoughts that may be applicable to a broad scope of concern. The most apparent growing possible exists in the low monetary value section as many consumers shift from premium trade names to budget replacements. Consumers will ever necessitate to fulfill their basic demands, and during recession they do so with tighter budgets. Evidence of successful value-for-money schemes exists in the low monetary value subdivision of retail sector. For case Asda has been describing gross revenues growing.

Social factors. Changes in societal tendencies can impact on the demand for a house ‘s merchandises and the handiness and willingness of persons to work. In the UK, for illustration, the population has been ageing. Some houses such as Asda have started to enroll older employees to tap into this turning labour pool. The ageing population besides has impact on demand: for illustration, demand for sheltered adjustment and medical specialties has increased.

Technological factors: new engineerings create new merchandises and new procedures. Online shopping, saloon cryptography and computing machine aided design are all betterments to the manner that Asda do its concern as a consequence of better engineering. The company has a nucleus competency affecting its usage of information engineering to back up its operations. For illustration, it can see how single merchandises are executing store-by-store at a glimpse. IT besides supports its efficient procurance.

Technological factors that have possibly had the most impact on Asda have been the growing in the usage of the Internet.A They have capitalised on the usage of online shopping and supply a bringing service through their web site at

Technology can cut down costs, better quality and lead to invention. These developments can profit consumers every bit good as the administrations supplying the merchandises. Technology has been used to back up and gain Asda ‘s primary focal point of salvaging money and maintaining costs low.

Environmental factors: Asda ‘s are besides instrumental as a retail merchant in back uping C decreases. Asda ‘s shops are eco-friendly, 40 % more energy efficient and emits 50 % less C dioxide than a standard new physique shop. Over the past twosome of old ages Asda have been working with their providers to cut down the sum of C emitted during the industry, turning and processing of their merchandises – something that ‘s known as embedded C.

Asda is besides portion of the Institute of Grocery Distribution, a think-tank and research administration for the sector, working with the British Standards Institute to happen a method by which all retail merchants can mensurate the sum of embedded C in their supply ironss.

If Asda did non take its corporate duties earnestly in relation to environmental issues it could hold desperate effects for its repute.

Legal factors: these are related to the legal environment in which houses operate. In recent old ages in the UK there have been many important legal alterations that have affected houses ‘ behavior. The debut of age favoritism and disablement favoritism statute law, an addition in the minimal pay and greater demands for houses to recycle are illustrations of comparatively recent Torahs that affect an administration ‘s actions. Legal alterations can impact a house ‘s costs ( e.g. if new systems and processs have to be developed ) and demand ( e.g. if the jurisprudence affects the likeliness of clients purchasing the good or utilizing the service ) .

Planing permission is an issue that Asda earnestly necessitate to be cognizant of due to their continued expansion.A Planning permission is to a great extent regulated in the UK.A A thorough PESTLE analysis would assist to place the relevant Torahs on planning permission and whether any opposition to planning was on lawful evidences or simply local people ‘s dissent.A The analysis would therefore ab initio measure the possible success of a shop in a new country.

There are issues about Asda driving out the competition from other retailers.A There are policies every bit good as Torahs and ordinances regulating monopolies and competition, which would be identified though a PESTLE analysis.A This is potentially one of the chief issues that Asda are faced with.A Protecting consumers and guaranting that enterprisers have the chance to vie in the market economic system are of import within consumer law.A Under EU jurisprudence, there is given that an administration with a big market portion is dominant.A The concerns with this are that quality of merchandises and services will steal and there is a hazard of paying higher prices.A Asda to day of the month has non been assessed as presenting a hazard of development but should bear this in mind.A


Directors must make up one’s mind on the comparative importance of assorted factors and one manner of making this is to rank or hit the likeliness of a alteration occurring and besides rate the impact if it did. The higher the likeliness of a alteration happening and the greater the impact of any alteration the more important this factor will be to the house ‘s planning.

It is besides of import when utilizing SWOT/PESTEL analyses to see the degree at which it is applied. A SWOT/PESTLE analyses are hence critical to the development and the success of Asda in add-on to the day- to-day direction of each shop in line with strategic decisions.A


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Kotler, P. , Armstrong, G. , Saunders, J. and Wong, V. ( 2005 ) Principles of Marketing, 4th erectile dysfunction, Prentice Hall.

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SWOT and Accounting Analysis of ASDA

rodrigo | December 20, 2012

WritePass - Essay Writing - Dissertation Topics [TOC]




ASDA stores limited was founded as Associated Dairies and Farms Limited in 1949 and it is basically an abbreviation of Asquith and Dairies (ASDA). In 1965 ASDA gets merged with the Asquith chain of three supermarket and Associated Dairies. ASDA introduced his first concept of the superstore in 1965. In the mid of 1980s ASDA started to expand his warehouse stores to face the fresh food selection sets by its competitors. In the late 1990s the ASDA had its 220 superstores in Britain which helps ASDA to become famous and popular. The basic origin of the ASDA is that they was formed by the English dairy farmers to protect themselves from the falling milk prices after first world war. After First World War when the price of milk gets in control a dairy farmer from Yorkshire named J.W.Hindell made Hindell Dairy Farmers Limited which deals in both wholesale and retail outlet of milk. In March 1949 it becomes a public company as Associated Dairies and Farm Stores Limited. It   includes some 26 farms, three dairies, two bakeries, 42 retail shops, and pork-butchering facilities (

Product of ASDA

ASDA stores deals in almost every product which comes under the daily life. The products of ASDA are highly trusted in quality. ASDA sells food item which includes milk, fruit, vegetables, meat, frozen foods juice, music cds , pharmacy and drinks. The quality of their products are the best in the entire market of UK. ASDA has also included the electronic product like laptop, music player, mobile phones and other electronic gadgets. They also sell the jewellery item. Its product is available in low price from the market which makes ASDA leading grocery store globally.    Competitors

ASDA has many competitors in the market such as Tesco, Safeway and Sainsbury are the main competitors of ASDA. ASDA has still maintained its status in the market by maintaining the quality of the product and the lowest price which makes ASDA on the top list of the UK market. They maintain their status so well that they didn’t change their products quality. They believe in giving 100 % customer satisfaction and they even don’t take it lightly.


ASDA only deals in supermarket not in manufacturing of products. The company buy the product from the farmers directly and sells those products in its stores by maintaining it quality. The customer selected the product which are placed in the food stalls, and take those products to the cash counter for the payment. If the customer is not satisfied in the product he can replace it at the same store. ASDA not only deals with food items they sell textiles, from where they earn majority of their revenue, they basically out sourced their textile products from Pakistan, India and Bangladesh. ASDA also do produce their own valued item in foods and confectionary.


ASDA Company had policies which follows the law and regulations. There laws and regulations are very strict in the terms of quality of their product. If the customer is not happy and satisfied with any product which they brought from ASDA like home and leisure, grocery, fresh or frozen items they can return the product and they will offer a full refund or replacement of their product. The receipt or proof of purchase is preferred but not essential in ASDA stores. There are some more rules and regulation applied for their different products like Electrical products, entertainments items (music, Films and games), fashion items range and in pharmacy also. If  the customer is not happy with these items they have to returned these items in 20 days from the date of purchase (

Management Accounting Techniques:

Methods and techniques

There are many methods and techniques in which we understand the management accounting some of them are as follows.

Activity based costing

Activity based costing is basically used for measuring activities and cost of consuming resources. Activity base costing is an activity which is generally based in the capacity of the manufacture. It is used to calculate the unit price of the product, costing of activities in the terms of variable and fixed cost.

ASDA is good in calculating its Activity based costing which helps in calculating cost at each activity such as supply chain cost, ware house cost etc which ultimately helps in minimizing cost at each activity and helps in maintaining overall cost.


Budgeting is very important technique which organizations adopt for their management accounting, whether it is small or big orgainzation in terms of planning, coordination, motivation, coordination, control, communication and in performance evaluation. It helps organization in order to control its expenses and cost. It is very helpful for the company to make a rough comparison between the income and expenditure of company on monthly basis. For the budgeting manufacture of the ASDA they include production, administration and sales budgeting.  Budgeting is prepared into two ways (David Hobbs; Management Accounting).

  1. Periodic budgets
  2. Continuous or rolling budgets

Periodic budget:

Periodic budget are those which are made for period of time, that period can be of one year, or either for quarters, it depends how big the organization is and how vulnerable its sales figures over the year.

Continuous or rolling budget:

Continuous or rolling budgets are those budgets in which there is master budget, which is usually for an year, and after each quarter or four months the the budget for next quarter is added into master budget (David Hobbs; Management Accounting).

As far as ASDA is concerned ASDA adopts the continuous or rolling budget, where they maintain the master budget for an year and in order to be competitive with other major competitors rolling budget should be revolved around their master budgets which helps in maintaining the plans according to change .

Job Ordering Costing

Job ordering costing method is basically the production in each time period. It is calculated by dividing the number of units in job by the total cost of job.

ASDA is a big organization where job ordering costing doesn’t applies as much they are basically supplying products in large quantity.

Recommendations for ASDA (Budgeting):-

ASDA adopts the budgeting technique which is explained above their major focus is on the rolling budgeting, which helps in estimating cost for each quarter. Budgeting is that one tool which makes relevant information and estimation about each department. It also creates a motivational factor among all the stake holders.

Budgeting has internal and external influence on growth of an organization and it helps in overviewing their plan to grow in international market such as in south Asian countries (Pakistan or India).

Rolling budgets are helpful in analysing financial control decision and helps in estimating overall cost for the whole year which can be changed according to sales figures of last quarter.

Job ordering is the least demandable for the ASDA because allocation of prices to each single thing is difficult such as overhead costs, direct costs.

According to the ASDA continuous growth showing to us that job ordering costing system is excellently managed by ASDA.

Activity based costing (ABC)

Activity based costing is a useful technique which is used to allocate cost according to product and services which helps in planning and monitoring.

ASDA should follow (ABC) because it is a new system for allocating prices to products and services. The usual accounting system is now obsolete and nowadays ABC is now mostly adopted as it has good control over pricing and costing.

Capital investment decision is also least concerned for ASDA because in its financial planning it is already settled and as a proof of the ASDA’s balance sheet is showing a continuous growth since last 3 years. ASDA has over all managed its budget quite well, because its continuous expansion and growing showed the credibility of the budgeting system. Budget is the key element for ASDA to manage its global operations.

SWOT analysis:-

SWOT analysis is used for identifying potential strengths and weakness for organization. SWOT analysis which is done accordingly.

This report is overall based on the personal reflection which I obtained from data related to ASDA which was easily accessible to be. This report doesnt only deal with fact and figures related to ASDA but give the recommendation relating ASDA management accounting technique. The major focus is on the budgeting technique that how ASDA is implementing budgeting technique to it its company and explains why rolling budgeting concept is applicable to ASDA and why it is the point of focus.

The other major technique which was considered for management accounting of ASDA is Activity based costing and how it helps an organization to maintain its costing. It also do explains why Job order costing is not applicable to ASDA.

The weakness which one might think about this analysis is the resources were quite limited and all consideration was made on personal obseravation and knowledge which I posses. The job order costing could be implemented but as my scope was limited so, I didn’t able to job order costing and its also not applicable for big company like ASDA.


History of ASDA group plc; Reference for Business,  [Accessed on 26th May, 2011]

Exchange and Refunds; Your ASDA, [Accessed on 26th May, 2011]

ASDA Direct; [Accessed on 26th May, 2011]

David Hobbs & Hugh Coombs; Management accounting: principles and application (book), 2005 SAGE Publications Limited [Accessed on 25th May, 2011]

Peter Atrill & Eddie McLaney; Management Accounting: An active learning approach, Blackwell Publishing 1994 [Accessed on 25th May, 2011]

ASDA History; [Accessed on 25th May, 20


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