Swot analysis of ASDA Stores Ltd. Asda is the UK’s chain stores supermarket company. Sir Noel Stockdale, Peter, and Fred Asquith were the founders of ASDA, and they laid the foundation of the company on February 19, 1949. The headquarter of the company is in Leeds, UK.
Walmart acquired the chain supermarket brand ASDA for 6.7 billion pounds in 1999. The company remained the top UK chain brand from 2003 to 2014 in terms of market share. However, TDR capital and Issa Brothers bought ASDA in February 2021.
According to an estimate, the total net revenue of ASDA was 6.1 billion dollars in 2022, and the company ranked at 56 positions globally. The chain supermarket brand has employed more than 165,000 employees to manage its worldwide operations.
Today, we’ll discuss the swot analysis of ASDA. It’s going to focus on the internal strengths and weaknesses, and external potential opportunities and threats that supermarket brand has to face. Here’s the swot analysis of ASDA as follows;
Strengths of ASDA
Awards & Recognition
ASDA has won many awards and accolades over the years for its excellent service. One of the most notable Oracle Retail Week Awards was Innovative Employer of the Year in 2009. Some of the other awards are Drink Retailer of the Year in 2019, Bakery Retailer of the Year, and Chilled Retailer of the Year.
Asda has a very large database of loyal customers and the supermarket brand is connected with them on social media platforms. The company frequently asks them for their feedback and reviews, it helps the company to improve its offers.
Asda has a very large distribution network, and the company has got roundabout 25 distribution facilities in the UK. The company carries the inventory of cereals, soft drinks, ambient products, clothing, and food items in those storage facilities. The supermarket brand has made a deal with ToYou Parcel Service.
Asda has a strong market presence with a network of a total of 630 stores and supermarkets and a market share of 14.4% in the UK’s market. The company hires such employees that have got the working experience of the world’s leading stores. The brand has established the reputation of being the first discounted store in the UK.
Variety of Products
The product portfolio of Asda is very large and the supermarket brand provides a wide variety of products and services. Some of them are dry cleaners, opticians, hairdressers, pharmacies, cafés, petrol stations, and other services. The price range of the company’s products and services is very attractive to the customers.
Along with a vast product portfolio and its own branded products, Asda also offers the product of the world’s leading famous brands to the customers. The supermarket chain brand launches the marketing and promotional campaign to reach out to the customers.
Asda has a very large database of loyal customers. According to an estimate, approximately 19 million customers visit its stores weekly, and the company’s online store serves 98% of the UK’s home products. The company’s stores are of various formats like Petrol Filling Station, George Stores, Asda Living, Supermarkets, Superstores, and Supercenters.
Weaknesses of ASDA
There was a controversy back in 2007 that Asda had involvement with price-fixing during the period of 2002 to 2003 of the dairy products. Its cost was roundabout 270 million pounds, and the whole incident brought a lot of criticism to the company for launching the misleading campaign. However, there was another controversy about selling horse meat to the customers.
Asda had a debt of approximately 3.5 billion pounds in 2021, and it’s a huge amount. It could jeopardize the financial stability and even the very existence of the company. In order to pay off its debt, the company has to liquidate its major assets.
Market Position Issues
Many users have claimed that Asda’s products aren’t good as some other brands like Sainsbury’s and Waitrose.
The discount the company offers isn’t the same as that of Lidl and Aldi. Such issues are making it difficult for the supermarket brand to sustain its market position.
Opportunities available to ASDA
Merger & Acquisition
Asda has a history of mergers and acquisitions; first Walmart in 1999 and then TDR Capital in 2021. The company should follow the same trend of mergers and acquisitions with leading brands. It would allow the company to expand its market and share resources.
Online shopping trends are increasing in the UK and other markets across the world. Asda has already got an online store. The company should now exploit this opportunity by launching various marketing and promotional campaigns in order to increase sales.
Asda should open its stores in various developing markets across the world. The expansion is highly beneficial in many ways like market growth, influence, profitability, and market share.
Threats ASDA has to Face
Online stores offer both opportunities and challenges. For instance, it has allowed the company to increase its market share, and easiness to launch the store brought so many online stores as competitors in the digital market.
Co-op, Lidl, Aldi, Waitrose, Tesco, and Morrisons are some of the main competitors of Asda in the UK’s market. It has become difficult for the company to sustain its market position due to its presence in the market.
The legal framework and new laws are making it difficult for the company to run and operate its business. In fact, the legal structures of running things are increasing the cost, and the legal stature of different countries is different.
Conclusion: ASDA SWOT Analysis
After an in-depth study of swot analysis of ASDA, we’ve realized that Asda is a leading chain supermarket brand in the UK’s market. The chain store company should focus on its strengths in order to exploit opportunities and work on its weaknesses in order to avoid threats.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.