An evaluation of management process such as CHANGE in the case of ASDA supermarket

Home/An evaluation of management process such as CHANGE in the case of ASDA supermarket
An evaluation of management process such as CHANGE in the case of ASDA supermarket 2016-11-10T15:00:31+00:00

Project Description

An evaluation of management process such as CHANGE  in the case of ASDA supermarket

It was asserted that change is indeed universal in any organization (Beer and Nohria, 2000). The case of ASDA supermarket is no exemption, for it also underwent quite a number of modifications in its own business operation. Changes are inevitable for organizations to ensure their survival. Accordingly, they need to adapt to rapidly changing environment in order to sustain competitive advantage. For organizations, its environment is encompassed by societal, environmental, and internal factors. The recent impact of globalization prompted organizations to cope up with dynamic and inevitable changes in the environment. Hence, resulting to intense competitions in the market. Moreover, external (globalizations, workforce diversity, technological advancement, et al.) and internal forces (declining sales, crisis, changing work climate, etc.) are likewise contributory to emergence of change in an organization.

As an example, ASDA opted to make strategic changes particularly with regards to its capability to cope with rapidly changing market. One of the most important changes that happened was the acquisition of ASDA by Wal-Mart, which is the giant among all retailers in the world (Zacuna, 2005). This is the result of the strategic move of Wal-Mart to enter European market through acquisition of the third largest retailer in Britain. Prior to the take-over, ASDA opted to stay in the United States to concentrate on developing its range, while other retailers are expanding internationally. The change that occurs as a result of Wal-Mart’s acquisition of ASDA in 1999 consequently impacted the company generating more opportunities for growth and expansion across Europe (McLoughlin and Aaker, 2010). Inevitably, this change in regards to management of ASDA yielded the company with more revenues through global purchasing and cost-cutting capabilities. In addition, the entry of the U.S. giant retailer into European market was a “knockout blow” to European retailers as described by analysts. Nonetheless, the negative effect was more prominent to small, less profitable, and financially highly leveraged retail stores compared to those with stronger financial resources and more grounded organizational and competitive experience (Gielens et al., 2008). In terms of consumers’ benefits, the acquisition of ASDA by Wal-Mart is perceived positively for it enables more intense competition and lower prices (Hausman and Leibtag, 2005). Indeed, the strong price positioning of Wal-Mart/ASDA along with its strong financial resources, make the company more capable to withstand impact from external threats and therefore maintained a key position as one of the largest retail companies in Europe.

Another significant change for ASDA is the adoption of technology to boost its marketing capabilities. In order for an organization to stay competitive in the face of stiffer competition and technological advance, adopting strategic changes are necessary (Kotter and Schlesinger, 2008). Accordingly, the internet has enabled the development of a new platform for distribution in connection with the stores; thus, helping companies to widen their range of services and providing clients with diverse purchasing options (Dawson, 2000). Hence, from the traditional usage of internet as research tool, it has also become a sales tool that allows companies to promote their products and services to customers in a multi-channel strategy. (The Store, 2001). It was asserted that the use of internet to facilitate marketing is threefold (Hart et al., 2000). First, it is a means for communication where customers are enabled to derive information about products and services of various retail stores (Bruno, 1997); Second, it serves as a proactive marketing tool for retail companies such as ASDA supermarket to invite customers interactively through the Web to acquire more information about the product during the consumer’s critical phase of decision-making process (Hazel, 1996); And lastly, the internet also acts as a sales tool that actually allows on-line purchasing instead of going to physical stores (Hoffman et al., 1996). Although Wal-Mart/ASDA is just second to Tesco when it comes to penetrating the online market, it has still made a remarkable presence on e-commerce arena (Colla, 2004).

The third structural changes that the management of ASDA introduced in the company is the removal of top layers of hierarchy and freezing wages (Beer and Nohria, 2001). Unlike with other modifications that have been perceived positively by employees, this particular change was different. Nonetheless, despite its painful structural change, the result of which entailed a much better performance for the entire organization. As a consequence, it did foster transparency and egalitarianism throughout the firm and even made Wal-Mart/ASDA consistently one of the top UK employers today (Grandison et al., N.d.). The key objective of such change was achieved through significant increase in shareholder value and the development of a culture of trust and openness (Beer and Nohria, 2001). In addition, the organization is also supportive of work-life balance and values their workers through positive reinforcements such as discounts and recognitions.

Summary

Indeed it is true that the only stable in any organization is change. It is an inevitable phenomenon that any organization, regardless of size and structure, must accommodate in order to ensure survival. Coping up with rapidly changing environment is important especially in this globalized economy. In the case of ASDA, there are three structural changes that happened as part of the firm’s strategic management processes. First, the take-over of ASDA by Wal-Mart is a highly significant modification that vastly resulted to not only changes within the organization but even to Europe’s retailing environment in general. The brand reputation of Wal-Mart even more increased ASDA’s stature in the UK retail market and likewise expanded its business horizons throughout Europe. Moreover, another change also occurred by adopting technology in ASDA’s marketing strategy to parallel with the growing number of retail stores engaging in e-commerce. The objective of which is to further expand not only marketing capability of the company but also to build a wider customer-base. The potential benefits of internet for businesses like ASDA is stressed to be threefold: (a) as means of communication tool; (b) a proactive marketing tool; (c) and as a sales tool. Lastly, the structural change implemented within the organization has also been painful for it resulted to removal of top layers of hierarchy and freezing wages. But nonetheless, it resulted to positive benefits for the organization in the long run especially that such modification enabled a culture of trust and openness where shareholders are valued as well. In effect, ASDA has been consistently recognized for being one of the best employers in UK.

References:

Beer, M. and Nohria, N. (2001). Cracking the code of change. Harvard Business Review.

Bruno, L. (1997). Working the web. Data Communications, 26(5), 7-9.

Colla, E. (2004). The outlook for European grocery retailing: competition and format development. International Review of Retail, Distribution, and Consumer Research, 14(1), 47-69.

Dawson, J.A. (2001). Is there a new commerce in Europe? International Review of Retail Distribution and Consumer Research, 11(3), 277-299.

Gielens, K., Van de Gucht, L.M., Steenkamp, J.B.E.M. and Dekimpe, M.G. (2008). Dancing with a Giant: The effect of Wal-Mart’s entry into the United Kingdom on the performance of European Retailers. Journal of Marketing Research, 45, 519-534.

Grandison, L., Cawthorn, E., and Applebee, N. (N.d.). ASDA Case Study. CIMA

Hart, C., Doherty, N. and Chadwick, F.E. (2000). Retailer adoption of the internet. European Journal of Marketing, 34(8), 954-974.

Hausman, J. and Leibtag, E. (2005). Consumer benefits from increased competition in shopping outlets: Measuring the effect of Wal-Mart. National Bureau of Economic Research, Working Paper No. 11809.

Hazel, d. (1996). Non-store retail comes together with chains. Chain Store Age State of the Industry, Supplement, 32A-33A.

Hoffman, D.L., Novak, T.P., and Chatterjee, C. (1996). Commercial scenarios for the web: opportunities and challenges. Journal of Computer-Mediated Communication, 1(3)

Kotter, J.P. and Schlesinger, L.A. (2008). Choosing strategies for change. Harvard Business Review, 1-10

The Store (2001). The Store of the Future, A study conducted for the Coca-Cola Retailing Research Group, (Europe: Coca-Cola Services S.A.)

Zacune, J. (2005). Asda Wal-Mart: Cutting costs at any cost. ZNet. Avaialble

Project Details