Competitive Strategies Case Study

ASDA: Betting on Low Prices?

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Abstract:
ASDA, since its takeover by Wal-Mart in 1999, has been implementing several successful strategies, including the 'price rollback' and 'Every Day Low Prices' to attract customers. It has been, for eight successive years, ranked as the 'cheapest supermarket' by the Grocer, an independent magazine in the UK. However, continuous lowering of prices has reduced the profit margins of ASDA and led to a severe price war in the UK retail industry. ASDA has announced plans to diversify into non-food stores and financial services to improve profitability.

Pedagogical Objectives:

• To highlight competitive landscape of the British retail industry
• To discuss the competitive strategies adopted by ASDA and the challenges faced by it in the retail sector.

Keywords : ASDA; Wal-Mart; Retailing; ‘Every Day Low Prices’; Price war; Supermarkets; Tesco; ‘Price rollback’; UK; Consolidation in UK retail sector; Acquisitions; Grocery retail; Strategy; Growth Strategies Case Study; Discount retail chain

Contents : 
Income Statement
British Retail Industry:ABrief Landscape
Market Share Changes 1985–1992
Key Acquisitions in 2004
ASDA– Britain’s Cheapest Supermarket Chain
Wal-Mart andASDAin 1999:AComparison
Future Challenges
Share of UK Grocery Market: 12Weeks to May 22