ASDA successful and ethical practices

ASDA's Model For Success And Ethical Grounding

ASDA is one of the most successful and visible firms in Great Britain. Its consumer model is built on the combination of low prices and widespread visibility in middle class markets and contexts. Though it has endured an often rocky history of ups and downs, its current phase is one of success and expansion. Its various relationships in the retail world, its strategic positioning and its approach to consumers collectively fit the mold forged by the policies of globalization. Quite to this point, "owned by Wal-Mart Stores, the biggest company in the world by value, ASDA is the second biggest supermarket chain in the UK with 17% of the market share" (CWUK, 1) Its perceptive tactics in this context have made it one of Britain's most notable corporations as well as Wal-Mart's most successful foray into the British market

ASDA's early initiation suggested a chain due for expansion and set on achieving a scale relative to its top competitor, Tesco. Accordingly, "ASDA was formed in 1965 by a group of farmers from Yorkshire, and its activities are still mainly based in the north of Britain. It expanded south in the seventies and eighties, in 1989 buying rival chain Gateway's superstores for £705m." (CWUK, 1) This would prove a premature move, resulting in an over-expansion and a struggling chain entering into the 1990s. As global markets had begun to open up to corporations in the developed world, revealing opportunities for new partnerships as well as access to the labor and environmental scenarios in the developing world, the struggling ASDA initiated the strategy that would posture it for a return to form and, subsequently, an acceleration of its successes. When it hired Archie Norman as its new chief executive in 1991, ASDA placed itself on a fast track toward eventual merger with Wal-Mart. (CWUK, 1)

Declaring himself a dedicated admirer of Wal-Mart and its tactics, Norman set a pace for the current success enjoyed by ASDA by turning its attention to claiming and manifesting to the best of its abilities the very lowest prices. Its slogan was adopted to "Britain's Lowest Priced Supermarket," a claim which it has used variously and recurrently. This is part of a familiarity which ASDA would establish with its customers. The largeness of its stores, the lowness of its prices and its permeation of Great Britain would make ASDA a household name, as would its historical 'jingle' campaign, in which individuals are tapping their pants pocket twice to demonstrate with a jingle the money that was saved by shopping at ASDA. (Wikipedia, 1) This campaign has established a level of penetration over the years which has seen it adapted to various forms as well, with some campaigns using celebrity 'jinglers' and others replicated the sound of the jingle without any individuals displayed. The use of only certain elements suggests a success at establishing a brand identity that resonates with shoppers. To be sure, its marketing prowess has played a part in its success.

But perhaps no force has been of greater importance to its success than its philosophical and, thereafter, legal relationship to Wal-Mart. Norman's declared admiration for the chain would quickly reveal itself in an approach which expanded ASDA store sizes and emphasized the low everyday cost in a way that almost mimicked Wal-Mart. And thus, when in 1999 ASDA was officially named as a subsidiary of the world's largest retailer, it was viewed with little surprise in the industry, but with much apprehension. As Eurofood (1999) would report, "the day that many UK supermarket groups have long feared has arrived: the world's largest retailer, Wal-Mart, has made one of the big four an offer it cannot refuse. Just weeks after Asda, the UK number three, agreed to merge with compatriot retailer Kingfisher, Wal-Mart has topped its bid with a 6.7bn [pounds sterling] (10.4bn) cash offer Asda looks unlikely to decline, especially since it will retain its fascia and management team." (Eurofood, 1)

Indeed, ASDA would gain new ownership, but the strategic resonance between itself and Wal-Mart would make its already present management team particularly well-suited to running the chain. The greatest changes for ASDA would be its direct affiliation with Wal-Mart ad campaigns, its access to a far greater pool of overhead resource for expansion, and placing it within Wal-Mart's innovative and powerful supply chain. (Taylor, 1) This has been a boon for ASDA, which emerged from a decade which it began in arrears as a cornerstone in Wal-Mart's focal strategy for expansion in European markets where it has struggled.

This points to a significant aspect of ASDA's success, which is its simultaneous reflection of British values, marketing comprehension and consumer realities and of corporate retail ideologies which mirror quite significantly the culture built over many years at Wal-Mart. This would allow it to eventually become an attractive outlet for Wal-Mart's European ambitions, producing a happy solution for ASDA's struggles with expansion as well. Today, its bigger concern is in finding ways to counteract the infamy which the Wal-Mart name often carries with it. Particularly, as it enters into communities which are psychologically resistant to the reviled American firm, it has found ways to situate itself ethically that function as a response to its detractors.

One example is drawn from a recent compromise struck between ASDA and a Scottish town where it will soon begin operation. At the forefront of its new intensification of expansion is an ethical posture where community needs are concerned that speaks well to the company's character. Accordingly, STV (2009) would report that "an agreement has been reached which will see the supermarket giant contribute £1.5million to road improvements at the Slackbuie site provided traffic increases beyond a certain point." (STV, 1) One of the areas in which ASDA has experienced some of its greatest success has been in working with the communities where it sets up its operations in order to address the concerns that will have arisen from its intended presence. In this instance, the Scottish town under consideration will most assuredly experience a significant rise in through-flowing automotive traffic. In order for the supermarket to accept financial responsibility for road and traffic improvements, there must only be a 10% increase in traffic. The strong likelihood that the new store would have that impact denotes that ASDA has found a way that is both ethically compelling and strategically beneficial to function as corporate citizen. This is a matter of great importance with respect to the perception of its operation by Britons.

This is particularly true given the various claims against it in light of its involvement with the American retail giant Wal-Mart as well as its adoption of Wal-Mart's various strategies for operation and profit. This is to say that many labor rights activists have objected to its employment of low wage labor in developing countries for acquisition of its 'lowest price' consumer appeal. Therefore, the degree to which it works to adjust its image and to genuinely improve the conditions of the communities in which it operates will be significant to the public's perception of ASDA.

Indeed, evidence suggests that ASDA's ethical operation within the context of Great Britain and in the communities where it courts shoppers is one of its strategic strengths. Recent recognition stands as evidence that ASDA is also among the leaders in its field where environmental advances are concerned. In an industry where widespread shipping, energy usage and resource are exhausted for daily operation, ASDA's commitment to improving its own environmental efficiency has the capacity to make a true impact around Great Britain. According to Greener Buildings (2009), "a new Asda supermarket in a Liverpool suburb that diverts 95% of its operational waste and slashes greenhouse gas emissions by 50% has been awarded an 'excellent' green rating from the British Research Establishment Environmental Assessment Methodology." (GBS, 1)