SWOT analysis of ASDA (ASDA SWOT)

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SWOT analysis of ASDA (ASDA SWOT)

This is a detailed SWOT analysis of ASDA. It aims to examine the strengths and the weaknesses of ASDA. It also examines the opportunities the company should explore and the threats it should keep a close eye on. ASDA is a British supermarket, headquartered in Leeds, England. Its new owners are the billionaire Issa brothers (Mohsin and Zuber Issa).

 

Strengths of ASDA

ASDA is the third largest retailer in the UK. It has 14.3% market share (Kantar, 2022) and has over 630 stores. It is famous for its strong management. It has filled a number of its strategic positions over the years by hiring people from other big global names such as Carrefour. It is widely regarded as the first UK discounter that offered customers the best value for money.

 

ASDA has expanded very well in the UK over the years. It serves more than 19 million customers every week and 98 per cent of the UK homes are served by its online platforms www.asda.com and www.george.com. It has a range of store formats i.e. Supercentres, Superstores, Supermarkets, Asda Living, George stores, and Petrol Filling Stations (ASDA, 2022).

 

ASDA offers a very wide range of food and non-food items. Though not available in or adjacent to all stores, its services such as petrol filling stations, café, pharmacy, hairdressers, optician, and dry cleaners have drawn a lot of attention. Likewise, its Smart Price – a variety of simple products packaged at the right size and price to help customers complete their shopping list, is also very popular.

 

ASDA sells a massive number of its own branded products and other famous brands. Its marketing campaigns are excellent as well. Both the marketing campaigns, and the products and services have helped it reach out to wider audiences efficiently.

 

ASDA is well-known for its economies of scale and superior technology. Its continual innovation always drives it forward. Its loyalty scheme earns customers reward points on homeware and clothes purchases. ASDA is also famous for the quality of its products. It has been crowned the UK’s lowest-priced major supermarket for the 25th consecutive year by The Grocer in its annual ‘Grocer Gold’ industry awards (ASDA, 2022).

 

ASDA also has a strong brand image, which gives it an advantage over other retailers in attracting potential customers. It has built up a strong reputation among its customers, with a large majority of them rating it highly.

 

Weaknesses of ASDA

Weakness is the next element of examination in this SWOT analysis of ASDA. ASDA has positioning problems. Some critics argue that its products are not as good as those of Waitrose and other similar brands e.g. Sainsbury’s. Likewise, it is not cheaper than discounters such as Aldi and Lidl. This is certainly not convincing for many customers.

 

It is reported that ASDA has approximately £3.5 billion worth of debt. This is an enormous amount which impacts on the financial stability of the company. However, to address the issue, the new owners have devised different strategies (Rojas, 2021).

 

ASDA has been mired in a number of controversies over the years. For instance, it was found (along with other supermarkets) in the past in price fixing of dairy products costing consumers around £270 million. It was criticised for misleading advertising campaigns and its positions in the horse meat scandal. Similarly, it was accused of forcing workers to sign up to a more flexible contract in the past which was very controversial and made many people disheartened.

 

Opportunities for ASDA

Some analysts have identified several opportunities while conducting a detailed SWOT analysis of ASDA. For instance, more and more customers are shopping online in the UK; hence a great opportunity for ASDA to secure more marker share. The company can grow further by opening new stores and taking over smaller companies as it did with Focus DIY in 2011. ASDA converted five of six Focus DIY stores into supermarkets.

 

Similarly, going beyond the UK to explore opportunities abroad is worth the efforts. By expanding into new markets, ASDA could find new customers to increase sales. Likewise, it could also look to expand its range of products and services which will be useful to attract those customers who might not have otherwise shopped at its stores.

 

Though ASDA’s attempt to merge with Sainsbury’s was blocked by The Competition and Markets Authority (CMA), it has the option to explore similar moves in the future. It has also been reported that the new owners have a number of different plans to take the company further.

 

Threats to ASDA

Threat is the last element to discuss in the SWOT analysis of ASDA. ASDA faces a number of competitors in the UK. While this means that customers have more choices, it also means that the company will have to work harder to stand out from the crowd. Tesco is the market leader, while Sainsbury’s is ASDA’s nearest rival. Other notable competitors are Morrisons, Waitrose, Aldi, Lidl, and Co-op.

 

It is also worth noting that growth of independent online retailers is a threat. Similarly, lawsuits can be problematic for ASDA. It was fined several times in the past by various authorities for breaking certain rules.

 

Summary of the SWOT analysis of ASDA (ASDA SWOT)

This detailed SWOT analysis of ASDA reveals that the company has strengths in its customer base, brand, and reputation for low prices. However, positioning issue, debt, and controversies are some of its weaknesses. Opportunities for it include expanding its product range and expanding into new markets. However, it faces strong challenges from several competitors.

 

We hope the article ‘SWOT analysis of ASDA (How to apply SWOT analysis)’ has been helpful. You may also like reading PESTEL analysis of ASDA & Marketing mix of ASDA. Other relevant articles for you are:

Stakeholders of ASDA (an analysis of ASDA’s stakeholders)

Competitors of Tesco

PESTEL analysis of the UK

SWOT analysis of Sainsbury’s

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Last update: 15 October 2022

References:

ASDA (2022) Company facts, available at: https://corporate.asda.com/our-story/company-facts (accessed 15 October 2022)

Kantar (2022) Great Britain: Grocery Market Share, available at: https://www.kantarworldpanel.com/en/grocery-market-share/great-britain (accessed 7 October 2022)

Rojas, J. (2021) Asda’s new owners plan to sell petrol station business and take on debt, available at: https://news.sky.com/story/asdas-new-owners-plan-to-sell-petrol-station-business-and-take-on-debt-12207578 (accessed 05 June 2021)

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).