Asda Stores Ltd. is a supermarket retailer in the United Kingdom. The company has its headquarters in Leeds, West Yorkshire. The company was found in 1949 by Peter Asquith, Fred Asquith, and Noel Stockdale (CH, 2019). Asda has 633 supermarket outlets across the nation (Walmart, 2019). In 1999, Asda was acquired by Walmart and remains a subdivision of the company operated by British management and staff. Currently, it is the second-largest supermarket retailer in the country based on market share just behind Tesco. In 2016, the company declared revenue of 21.666 billion Pounds and had more than 165000 employees across the nation. Asda Mobile and Asda Money are two subsidiaries of the company in Britain. As its parent company is American, the company is required to submit its accounts to the US SECP.
Following are the four dimensions of the Ansoff Matrix for Asda:
Market Penetration
Asda works on market penetration by promoting its existing products in its existing markets. The first strategy that Asda applies is marketing its stores. Whenever a new store is launched, the location is marketed across various channels, especially in the areas surrounding the store to generate awareness. The company works to increase its market share by increasing the number of stores. It also works to offer savings that attract customers that desire to be savvy. Asda offers discounts, promotions, and other schemes that allow buyers to save money. The company advertises the fact that it offers lower prices offering customers to save their money. Asda also works to increase barriers to entry for new competitors by increasing store sizes and ensuring that it leads the market in various ways. All of these measures help to increase the sales of the company.
Market Development
Market development refers to promoting existing products in new markets. The prime strategy Asda uses to develop its market is to open new stores at new locations. It ensures that each store covers a certain region. The company also holds the potential to expand outside of the United Kingdom into neighboring European nations, the Americas, and Asia to gain more global market share. At the moment, the company only operates in the United Kingdom and holds a significant share of the market. Since the parent company, Walmart, has a strong presence in the US and other nations, it has the potential to grow internationally. The company can also establish an online grocery delivery system to capture more market share. Asda holds excellent potential in terms of market development.
Product Development
Launching new products in existing markets is referred to as product development. Asda does this in numerous ways. The first is the expansion with new products. The company adds new products to its stores regularly. Also, the company has worked on various new products such as gas stations selling petrol, money exchange services, and various other products. However, the brand name is known for its relationship with the grocery store and supermarkets industry. This makes it difficult for the company to associate the brand name with other products. The company also regularly renovates its supermarkets, petrol pumps, and other businesses as a part of its product development strategy. The outlook of the stores is also renovated to reflect the changes the company wishes to highlight. Any new products the company launches are advertised in-store and on various media as well. Product development allows the company to boost its sales.
Diversification
The company can diversify in various ways. It already has diversified in various unrelated ways such as supermarkets, gas stations, and money exchange services. It also holds great potential and can expand horizontally into other industries such as consumer electronics, sports, shoes, and so on. It can also vertically diversify by creating its own supply chain solutions to transfer products from manufacturers to the stores. It can also start its own organic and other farms to grow its products. This would require extensive investment but will help increase sales. Conglomerate diversification can also be executed by entering various other industries that are not related to a supermarket. It is a risky strategy that would require Asda to plan and execute carefully to avoid any losses. Brand loyalty and brand image can help the company in this.
References
CH, 2019. ASDA STORES LIMITED. [Online] Available at: https://beta.companieshouse.gov.uk/company/00464777 [Accessed 01 Jan. 2020].
Walmart, 2019. Unit count information as of October 31, 2019. [Online] Available at: https://stock.walmart.com/investors/financial-information/unit-counts-and-square-footage/default.aspx [Accessed 01 Jan. 2020].