In order to devise measures to overcome the competition, it is necessary to analyse the macro and micro factors that affect the operations of the supermarket. Therefore, the following section provides a detailed analysis of the factors using strategic models of PESTLE and Porters value Chain Analysis.
PESTLE analysis
PESTLE analysis is a strategic planning tool that deals with macro environmental factors that affect business operations (Vrontis & Pavlou 2008). The tool offers an overview of the external factors that directly or indirectly affect business activities. The main fields covered by the model are social, technological, economic, environmental, political and legal factors (Team FME 203). See Appendix for a summary of the macro factors that affect the operations of ASDA.
Political Factors
The U.K. is an open market economy which has good policies to protect investors. The country has been politically stable for many years; hence, a good business environment that prom
otes growth of businesses. In addition, the country has been a member of regional blocks such the European Union (EU). The EU provides ASDA a great opportunity to expand to other member with the community as there are no trade barriers. However, with the Brexit, ASDA expansion is likely to be curtailed.
Economic Factors
Countries have different economic policies which affect the tax regimes, return on investments and the inflations rates. These factors directly affect the operations of ASDA. For instance, the U.K has recovered from the 2008 recession; this shows that the purchasing power of the citizens has increased. As a result, the ability to buy products from ASDA and demand for its financial services has been on the increase. However, it is important to note that the purchasing power is not solely depended on the countrys economic outlook and policies; there are international market dynamics that influence the way customers spend and the costs of the goods.
Social Factors