STRATEGIC MANAGEMENT AND SUSTAINABILITY

STRATEGIC MANAGEMENT AND SUSTAINABILITY

Students must answer any three of the four questions contained in this paper.

All questions carry equal marks.

Students are allowed to take into the exam two hand written sides of A4 note paper.

The case study for this exam was pre-released.  A clean copy of the case study is provided with the exam paper.  Any versions received previously, whether annotated or clean, cannot be used during the exam.

ASDA

COMPANY OVERVIEW

Asda Stores Limited (Asda or “the company”), a wholly-owned subsidiary of Wal-Mart, is a grocery and general merchandise retailer in the UK.  Asda operates about 377 stores that primarily sell groceries and apparel. The company is headquartered in Leeds, the UK and employs about 170,000 people.

As a division of Wal-Mart, the company recorded revenues of $31.2 billion during the financial year ended January 2010 (FY2010), a decrease of 8.2% over 2009.  Currency exchange rate fluctuations during 2010 compared to 2009 negatively impacted Asda’s sales.

BUSINESS DESCRIPTION

Asda is one of Britain’s leading retailers.  It operates 377 stores, including eight recycling centres across the UK (Great Britain and Northern Ireland).  The break up of the 377 stores is this—29 Asda Supercentre, 297 Asda Compact Hypermarket, 25 Asda Living and 26 Asda Supermarket.  It has its main home office in Leeds, Yorkshire and its George clothing division based in Lutterworth, Leicestershire.  Asda serves over 18 million shoppers a week in store and its growing home shopping business serves over 97% of UK homes.

Asda specializes in supermarket retail, selling a range of both food and non-food products.  With an emphasis on fresh food, the company has a number of bakers, butchers and greengrocers in its stores.  Asda’s non-food offerings cover apparel, entertainment products, electrical goods, home ware, toiletries and photo processing.

HISTORY

Asda Stores Limited (Asda) was formed in 1965 by a group of farmers from Yorkshire, UK. Led by brothers, Fred and Peter Asquith, Asda established a shop to sell its fresh produce.  Through a slow process of acquisition and shop building, the company grew from one shop into a chain of supermarkets.

Asda merged with MFI (Mullard Furniture Industries) in 1985.  Two years later, the company sold MSI in a management buyout for GBP500 million (approximately $739.6 million).  In 1990, Asda launched its first range of apparel.  The George range of clothing was offered in a select number of stores but soon became a feature of nearly all Asda stores.

In 1999, Asda was acquired by Wal-Mart for GBP6.7 billion (approximately $9.9 billion) and became part of the world’s biggest retailer.  In the following year, Asda opened a first Asda Wal-Mart supercentre at Patchway over 93,000 sq feet.  In line with Wal-Mart’s plans, Asda announced a plan in 2002 to deliver 12 new, refurbished, or extended stores within the M25 area.

In 2003, Asda began to offer home, travel and motor insurance in all its stores.  The company also launched a dedicated e-commerce site at asda.com through which shoppers could also take out policies online.  In the same year, Asda opened its first standalone George store in Leeds.  The first Asda Living store was opened in Walsall in 2004.  In the same year, the company opened it’s 100th photo centre at Tamworth.  Asda launched 30 new photo centers in 2005.

In 2006, Asda’s George brand moved into homeware.  Asda launched its online business, Asda
Electricals in 2007.  Asda launched its Asda Direct website in 2008; the website offered 9,000 various products includingits apparel brand, George.  In February 2009, the company launched its own TV channel Save you money in You Tube which aims at furthering the customer service by providing information on saving money.   Asda opened its 25th Asda Living in Telford, Shropshire during April 2010.  During May 2010, Asda announces a commitment to sell all privately prescribed cancer treatment drugs on a permanent “not for profit” basis.

(Adapted from Datamonitor 360)

Students must answer any 3 of the 4 questions contained in this paper.

QUESTION ONE

Evaluate the usefulness of the value chain in analysing ASDA’s activities and demonstrate how it can contribute to adding value in each of the areas.

QUESTION TWO

Analyse the extent to which ASDA use techniques and policies such as Corporate Social Responsibility (CSR) to satisfy stakeholders’ expectations.

QUESTION THREE

At Corporate Level there are alternative strategic options for growth that an organisation can take in terms of choices about products or markets.  The Ansoff Matrix can be used to identify various strategies that could be adopted by an organisation to pursue growth.  Using the Ansoff Matrix, and making reference to examples, evaluate the various strategies that ASDA could consider in order to pursue growth to develop their competitive position.

QUESTION FOUR

Assess the major macro-environmental trends facing ASDA as they operate in the supermarket sector and highlight the implications on the organisations strategic decisions of the trends identified.

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