Essays on New Business Opportunities for the Supermarket Chain ASDA Case Study

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The paper "New Business Opportunities for the Supermarket Chain ASDA " is a good example of a business case study.   It was in the year 1999 that Asda joined the Wal-mart family and Asda was a group that was found back in the year 1965 by a group of Yorkshire farmers. (Asda– Wal-Mart Case Study)The name that was put was put forward by the merger of Asquith and Associated Dairies. The Asquith chain had three supermarkets. ( Asda– Wal-Mart Case Study )Asda was trying to sell a wide product range in the year 1999 and there was a situation in the year 1993 when it had to ask the shareholders the necessary finance for avoiding insolvency.

The fortunes of the group were bought back to glory when the Archie Norman was recruited as the Chief Executive Officer from the Kingfisher group in the year 1991. Norman took the group back to its roots namely the food retailer and the group was trying to build the market share that was bought on the back of low prices and there was no loyalty scheme.

( Asda– Wal-Mart Case Study )The loyalty scheme was the fashion or the way in which competitors tried to build the customer base. ( Asda– Wal-Mart Case Study) Asda chain had 229 stores when it acquired Wal-Mart. Once the takeover has been approved, several Asda – Wal Mart super centers were opened and the model that was based was the US model. ( Asda– Wal-Mart Case Study )The Wal-Mart names did appear in the UK with the first supercenter in the Bristol. There were almost 259 stores in the year 2004 and there were almost 19 depots that were mainly in the areas of Scotland or Northern England.

There were 122,000 colleagues and it was estimated that the tie-up would benefit both the parties as both were concentrating on the low prices and that was in tune with Wal-Mart's marketing strategy. ( Asda– Wal-Mart Case Study) The year 2001 saw that the prices have been slashed by some £ 52 million, and that would include the range over the 400 smart price food products that have been based on the Wal-Mart budget brand. The price campaign that has been borrowed from Wal-Mart along with the smiling face rollback campaign made the position of Asda as the most affordable supermarket in the UK.

The claim was challenged by the competitors and the first five years after the acquisition saw that the grocery market share had increased from 13% to 16%. Asda had reached the position of the second rank and that was achieved in the year 2005. Asda saw the strategy in the larger stores closely following the Wal-Mart and that meant there was increasing of sale space and that was done by removing the backroom areas and there was increasing of non-food areas and this strategy meant that the other supermarket chains were struggling to catch up. The sales in the non-food lines were growing at 25% per year and the ability to source the products that were needed with Wal-Mart meant that the new product lines were being offered at low prices that were not getting matched in the UK market.

That meant that the products like toasters, kettles, irons were being sold at Pound 18.

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