ASDA: ANALYSIS OF CURRENT AND POTENTIAL STRATEGIES
Introduction
Strategy is an integrated and coordinated set of corporate actions that are intended for companies to exploit their respective resources, competencies and competitive advantages to remain competitive or obtain market leadership (, & 2003 ). For some industries, however, strategy is closely tied with marketing processes this fragment of an organization is considered their connection to customers. In this paper, the strategic position of ASDA will be analyzed and alternative strategic policies including their implementation will be discussed with reference to theories on corporate strategy and marketing concepts.
Background of the Current Strategy
ASDA is using two prominent corporate strategies that endeavor to maintain customer loyalty; namely, community involvement and 50-plus recruitment. Both are adopted to get ahead from a very stiff competition that makes low-pricing, product quality and high product differentiation merely as requisites to enter the supermarket retailing industry. As observed, there are competitive strategies that should be developed in order for ASDA to minimize the upper-hand of Tesco’s size and advantages being protected by niche retailers. With this, the second largest UK retailer with 321 stores and 148,000 employees all over the country should implement strategic actions/ responses (A/R) to remain competitive, if not, head-to-head with Tesco ( ).
The purpose of community involvement is to imply marketing processes and non-price competition by helping local communities attain quality of life (). In addition, the mission statement and values of ASDA is directed towards long-term aims and belief in respect for individual, excellence and customer service which makes community-related activities a reflection of what the company’s want to achieve. Community programs deal with people, health, education, community and other events specifically hosting blood donation campaigns and solicitation for breast cancer treatment/ awareness. This strategy complements the motivation that customers, employees and shareholders are searching as customers want companies helping their community, employees gain recognition for their action and shareholders see volunteerism as good business sense.
On the other hand, 50-plus recruitment is the solution ASDA implemented to provide better customer service for the ageing customer base (Age Positive). According to statistics, forty percent (40%) of the UK’s population are 50 years old and above which lead to the rationalization of the 50-plus strategy. By having staffs that have same age to customers, the latter needs is more emphasized and addressed. In addition, ASDA extracts more flexibility as nineteen percent (19%) of its workforce are over 50 years old because these oldies are provided special part-time program which includes Benidorm leaves and seasonal squad. As a result, recruitment process becomes more efficient due to less need for retraining, reduced turnover and increasing customer satisfaction.
Analysis of Being a Market-Led Organization
As the plan basically involves market and product compatibility, the inability to satisfy customer needs by the available offerings would only result to a futile strategy. The weakness tends to be contagious since products are not adjusted to the market or vice versa. However, when a firm is market-oriented, it can easily identify and act in terms of the difference of business-to-customer (B2C) relationships ( 2003 ). This inclination has critical role in rationalizing, if not classifying, effective programs relating to four Ps of marketing. For example, B2C relationships emphasize more of the pricing aspect of the product except for high-end, specialty ones. Market-led cognition makes the firm aware on the extent of the program and its impact to individual as well as group customers including the associated costs and benefits.
Further, as market-orientation is the key in defining the operation of the business ( 2000 ), the purpose, mission and internal analysis parts of the marketing plan are made consistent to what the organization is capable of doing. In comparing a product- versus market-led description of the nature of business, the “we run an airline” tagline of the former is expanded to “we transport people and their goods anywhere in the world” by the latter. As observed, the succeeding statement is more particular in highlighting the capabilities of the firm and suggesting where it positions its competitive advantage. The preceding, however, sounds less valuable and differentiable to customers due to its generalization and standardization implications. In this respect, the affected initial and core parts of the plan tends to be straightforward that can immediately call for corporate or departmental attention.
On the verge of plan approval, funding requirements to the plan proposals are also resolved by a market-led organization. Since market-orientation gives the firm the ability to align vertical functions and horizontal processes ( 2003 ), the plan is basically prepared under the conditions of value-creating and cost-saving framework. This is because when the value chain is made lean but mean, it develops integrated links where knowledge can be shared, quality is standardized and inefficient associate is improved. On the other hand, similar chains can achieve economies of scale when processes are done in a coordinating manner. Operational defects, wastes and mediocrity are resolved in a choral manner. The motivation to do so come from the awareness of every organizational member that the end-result of what they do is intended to satisfy customer needs, boost sales and receive benefits from result outcomes. This scenario makes the market-led plan financially and strategically feasible.
Relationship marketing (RM) is the source of marketing partnerships, strategic alliances and networks which are methods that enable independent strategies of individual entities to benefit from other benefits brought about by collaboration with other ( 2000 ). For ASDA, RM can bring the company in a more formidable leadership position in a very competitive retailing environment. Although most retailers satisfy cost leadership and differentiation issues, absence of RM can result to hostile competition from several companies that may lead to loyalty demise of their customers. The core idea behind RM is building rapport with customers ( 2000 ) that can lead to customer retention. Such set-up lead to long-term and loyal customers which are found to be less costly, have willingness to pay premium price of the product and also willingness to engage in word-of-mouth referrals to prospective customers (cited in 2002 ).
However, there are pitfalls in RM and these are much related to implementation rather than RM strategy itself. One example is the lack of resources and deviation of corporate strategy that makes company efforts to understand RM in the point of view of customers difficult or impossible (cited in 2002 ). Without such understanding customers may not appreciate the feat and even treat it as completely negative campaigns. For example, it is indicated that catalogs and direct marketing were favorable to customers but e-mail messages are viewed less favorably (, 2002 ). Without understanding of customer needs and preference, the communication requirement of RM cannot be met. As ASDA is plowing deeper in customer relations by applying market-oriented and RM strategies, it may fail to understand what customers really wanted and ASDA would campaign unnecessarily.
Alternative Strategy Direction
To enhance the benefits of community involvement and 50-plus recruitment in the long-term, ASDA must supplement these strategies with customer information platform that can manage data and/ or address customer complaints. The rationale of this is to mitigate the problems post by the promises of RM, that is, ASDA may have difficulty in implementing its market-led organization due to lack of customer information and data. Customer service is a source of competitive advantage ( 2000). According to , quality is an insufficient source of best net value that makes customer service an augmentation of the uncompleted value strategy (cited in 1997 ). Customer service is highly related to 50-plus strategy but community involvement is more on public relations and promotional efforts of ASDA.
Therefore, ASDA must create a business information system that can balance its internal structure (i.e. 50-plus) and external strategy (e.g. community). Investing a lot of time and money in community or older workforce and vice versa can result in de-focusing the overall target and direction of ASDA. With information systems, it can balance their trade-off and put corporate resources on their best destinations. Database and internet marketing have two different meanings, but when combined, it provides accurate advantages of e-marketing. ASDA can simply create and maintain a website reflecting its sales and advertising missions; allocate relatively low-cost means of penetrating consumer base and competing against other brands; generate customer message, conduct reviews and provide appropriate actions; and measure the outcome of e-marketing in terms of communication and sales impact.
As a result, the primary goal of direct marketing (DM) of building and maintaining customer relationships ( 2003) can be carried efficiently, that is, allowing huge customer scope and communication at low cost. The database capability will also allow corporations to collect necessary and real-time information on product performance in the eyes of customers (potential or actual) that could aid them in evaluating the present DM strategies. On the other hand, the website can take orders, customer complaints and suggestions relevant at the present marketing mix performance making customer relationship management (CRM) at low cost while resolution at faster rate.
Implementation
The first thing to do is to plan strategically. DM activities should be integrated in a manner that all participating companies contribute and aware of their responsibilities. Regular meetings should be conducted to construct a comprehensive strategy with time frame that allows individual corporate objectives inputted and reconciled. This strategy will serve as the platform that will trickle down tactical and operational A/R not the reverse which is exhibited at present. In this planning effort, DM activities should not be limited to traditional media rather put emphasis to efficiency and CRM potential of digital DM including its adherence to long-run organizational aspirations like increasing profits, expanding customer base and enlarging train routes.
The second step is to implement and control the strategies. There are possible supplier detachments (e.g. telephone and paper) and downing regimes due to adoption of new technology while there would also be stakeholder relationship extension and enhancement (e.g. network provider, mailing company and computer-based customer service team). Thus, there is a need to handle stakeholder resistance and new relationships that could lead to societal dissatisfaction to the association. It is also high time for ASDA to sustain loyalty cardholders by sending them with personalized greeting cards or interesting journals through internet. Also, non-Great Britain market could be intensively tapped including foreigners by providing them an information gateway that is interactive and low cost without the need of telephone.
Lastly, evaluation of results stemmed in strategies including those from tactical and operational A/R. The annual marketing objectives and aims can serve as the benchmark to determine improvements on performance from the past. With this, necessary adjustments of resources can be determined and conducted (e.g. enhanced by customer’s database) efficiently, that is, being flexible due to pro-activeness to identify future problems and customer expectations. The evaluation stage can also advise the association if there is a need to fine-tune tactics which includes unidirectional media to meet environmental changes or customer shifted preference and even modify strategy (e.g. inserting B2B transactions in the interactive website for institutional customers) depending on the performance of adopted digital DM model.
Conclusion
Digital DM transforms the inefficient and short-term goal-oriented firm into a price competitive and customer-driven one. This modern DM strategy does not depart from the foundation and purpose of traditional DM observed in face-to-face and direct-intimate mails rather enforced and upgraded it to obtain cost-efficiencies and effective communication benefiting stakeholders in B2C and B2B transactions. As presented in this paper, it is also found that DM principles that ultimately aimed to build and enhance customer relationships can be personalized by a firm depending on its strategies. It can use different forms of DM from door-to-door marketing to an interactive website communication. However, as in the case of ASDA, the latter medium is more appropriate primarily because it is aiming for customer growth and customer loyalty. Without digital DM, the firm would probably be stocked focusing their sights at short term gains, thus, not supporting core goals which highly relies on CRM.
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