Asda has witnessed immense growth despite several challenges within the industry. Consequently, most people have been keen on its competitive advantage, focusing on its SWOT analysis.
Therefore, if you need step-wise scrutiny of Asda’s SWOT analysis, including the strengths, weaknesses, opportunities, and threats, keep reading for more useful facts!
Key Takeaways
What is Asda’s Swot Analysis In 2022?
Asda’s SWOT analysis highlights the company’s strengths in offering a wide range of products and services while maintaining a solid brand name in the UK in 2022. However, the analysis also reveals the company’s weaknesses in maintaining a limited global presence amidst expansion and international growth opportunities. The analysis also presents Asda’s threats, such as stiff competition.
Read on to have a deeper understanding of Asda’s strengths, weaknesses, opportunities, and threats!
What are the Strengths of Asda?
Asda’s strength in the SWOT analysis provides internal strategic factors that elevate its ability to succeed and meet its short-term and long-term goals.
Asda’s strengths include the following factors:
- Extensive range of products and services
- Strong brand name
- High product quality
- Extensive distribution network
- Various brands and services
- Constant engagement with customers
- Sustainability
- Use of technology
1. Extensive Range of Products and Services
Asda offers consumers a wide range of products and services, including fresh foods, entertainment items, clothing, and household items.
Moreover, in some of its store locations, the company offers customers services such as petrol filling stations, pharmacies, cafés, opticians, hairdressers, and dry cleaners.
As a result of its extensive range of products and services, Asda has several store formats, including Superstores, Supercenters, Supermarkets, Asda Living, Petrol Filling Stations, and George Stores.
These services play a significant role in attracting more customers to shop at one of the retailer’s stores.
2. Strong Brand Name
Asda prides itself on having a strong brand name, especially in the UK.
This company is considered one of the largest retailers in the UK, with a market share of 14.4%.
Asda’s strong brand name is attributed to its strong management since it’s famous for filling its strategic positions by hiring individuals from other big brands.
3. High Product Quality
Asda is renowned for offering its customers high-quality products. Due to this aspect, the company has received recognition from different bodies.
For instance, in 2019, Asda was declared the Retailer of the Year.
In the same year, the company was also crowned Bakery Retailer of the Year, Chilled Retailer of the Year, and Drinks Retailer of the Year.
4. Extensive Distribution Network
Asda’s strengths also include the company’s extensive distribution network. The company has 25 distribution centers across the UK, which serve the company’s network of stores.
It uses the distribution centers to store chilled foods, ambient products such as cereals, carbonated drinks, and clothing.
5. Sale of Private Brands
Asda sells a large number of private brand items alongside other popular brands.
With the help of the company’s strong marketing campaigns, Asda manages to reach out to wider audiences that drive the sales of the company’s private brands.
6. Constant Engagement With Customers
Through its excellent marketing campaigns, Asda maintains constant touch with its customers through different social networking sites.
Additionally, the company maintains a system of getting feedback from customers and initiating competitions for customers to relate to them so that they can deliver customers’ needs.
7. Sustainability
Asda also appeals to more customers due to its sustainability.
The company maintains well-defined strategies to reduce the environmental impact of the firm’s operations, the products and services they sell, and the suppliers that produce its offering.
As a result, the company appeals to customers keen on sustainability.
8. Use of Technology
Asda is widely known for its superior technology and economies of scale.
The efficient use of technology helps the company increase its product innovation and, consequently, advances its product portfolio.
What are the Weaknesses of Asda?
In Asda’s SWOT analysis, the weaknesses highlight internal strategic factors that limit the company’s business operations.
These weaknesses refer to areas where the company needs to improve in order to increase the company’s revenue.
Asda’s weaknesses within the retail industry include the following:
- Limited global presence
- False advertising
- Critics
- Controversial claims
- Company debts
1. Limited Global Presence
Asda’s greatest weakness is that it has a limited global presence compared to most of its competitors.
The company has restricted its ventures in some countries due to the fear of aggressive competition arising from competitors
2. False Advertising
In 2010, Asda was called out for claims of false advertising.
The company had a famous press ad with the slogan, “Lower price on everything you buy,” alongside a column heading, “Lower prices than other supermarkets.”
This advertising has been marked as false advertising, hence creating a negative image for the company.
3. Critics
Asda has faced several critics arguing that the company’s products are not as good as products at Waitrose and other similar brands like Sainsbury’s.
Furthermore, the critics brought forward the claims that the company is more expensive than most discounters, including Lidl and Aldi.
4. Controversial Claims
Over the years, Asda has been mired with several controversial claims. For instance, in 2007, the company was found along other supermarkets engaging in price-fixing of dairy products, causing a colossal loss to consumers.
In 2013, the company also found itself at the center of controversy when DNA test results revealed that fresh beef from Asda’s Chosen By You contained horsemeat.
Additionally, the company was accused of forcing its employees to sign up for a more flexible contract, which was taken negatively by many people.
Overall, these controversial claims have gone a long way in jeopardizing the company’s reputation.
5. Company Debts
It’s reported that Asda has company debts worth billions of Euros, and such a huge amount of debt can adversely affect the company’s financial stability.
However, to address the impact of the company debts, the new company owners plan to sell the company’s extensive network of petrol stations.
What are the Opportunities Open to Asda?
Asda’s opportunities highlight external factors that can propel the company’s growth is considered.
The opportunities can be compared to avenues within the industry to capitalize on to increase returns.
Asda’s opportunities include, but are not limited to the following:
- Global expansion
- Increasing the company’s online presence
- Improve employee satisfaction
- Strategic acquisitions
- Achieving its long-term goals
1. Global Expansion
Asda has the opportunity to expand its business activities beyond the UK.
Although previous attempts by the company to merge with Sainsbury were antagonized by CMA (The Competition and Markets Authority), the company should seek other avenues to explore new markets.
2. Increasing the Company’s Online Presence
With the recent surge of online shopping, Asda should take the opportunity to increase the company’s online footprints.
The company can also improve its official site and social media platforms to increase the firm’s popularity among consumers.
3. Improve Employee Satisfaction
The company can improve its service offerings by working on employee satisfaction. This way, it can serve customers better and hence appeal to the masses.
4. Strategic Acquisitions
Asda has an excellent opportunity to secure more market share through more strategic acquisitions.
For instance, Asda bought six Focus DIY stores and turned them into convenient supermarkets in 2011.
The company can increase its revenue by opening new stores and purchasing smaller companies, just like it did with Focus DIY.
5. Achieving its Long-Term Goals
Asda can fuel the company’s growth by striving to achieve its goal, as it aims to produce 100% sustainably sourced fish and 100% recyclable packages, recycle operational waste for anaerobic digestion and reduce food wastage.
What are the Threats Facing Asda?
Asda’s threats in the SWOT analysis reveal external factors in the retail industry that can be detrimental to the firm’s growth. Some of Asda’s threats include the following:
- Stiff competition
- Lawsuits
- Rules and regulations
- Currency fluctuations
1. Stiff Competition
Asda faces aggressive competition from similar retailers around the UK. For instance, its competitor, Tesco, is the UK’s market leader, while Sainsbury is considered Asda’s closest rival.
Other competitors within the industry include Waitrose, Morrisons, Aldi, and Co-op. Furthermore, the rampant growth of independent online retailers poses a threat to the company.
2. Lawsuits
Lawsuits against Asda also pose a significant threat, as the company has been fined on several occasions for breaking different rules.
As a result, the company has lost a significant amount of money, which is affecting the general growth of the business.
3. Rules and Regulations
The legal standards set by policy-making bodies can be a major setback for Asda.
Any changes in the regulatory framework and the introduction of regulations to the organization may pose a drawback to the company’s operations.
Furthermore, liability laws in different countries may expose the company to different liability claims due to various market policies.
4. Currency Fluctuations
Due to the company’s operations in different markets, Asda faces threats arising from currency fluctuations in different countries.
Furthermore, cultural diversity resulting from globalization may lead to the company’s lack of cultural intelligence.
To know more, you can also see our posts on what is Asda, Asda statistics, and if Walmart owns Asda.
Conclusion
Conclusively, Asda’s SWOT analysis describes the company’s strengths in being one of the largest retailers in the UK.
However, the company’s weaknesses in opening up limited retail locations may lead to a limitation in the growth of the business.
As a result, the company can use opportunities in the market to improve the company’s growth and also devise strategies to overcome challenges such as competition.