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This report analyses the UK food retail sector, evaluates the sustainability strategy, analyses ASDA’s current performance, as well as discusses the impacts of sustainability on ASDA and modifies its strategies.
The major finding is that ASDA has pursued a weak sustainability plan and maintained ‘laxity’ in brand image. Furthermore, it delivers inconsistent sustainable commitments within stores. In fact, it has failed in changing consumers’ perception on sustainable consumption and purchasing behaviour.
The purpose of this report is to discuss how sustainability influences ASDA’s performance. However, these practices are found concentrating on sustainable supply chains, without differentiation from competitors, which has threatened its market position. By conducting the SWOT analysis, it is clear that ASDA requires improvements in its sustainable strategy within stores to raise customers’ awareness, in order to change their attitudes and behaviours on sustainable consumption.
The UK food retailing market has been evidently dominated by four major supermarkets (see appendix.1), accounts for over 60% of entire food retail sales. According to previous research (Ng, 2012), this sector becomes intensive competitiveness. It has reflected a strong tendency on adoption of sustainability to exploit new sales opportunities.
The purpose of this report is to examine the impact of sustainability on operation of ASDA, the second supermarket market in the UK, through evaluation of sustainability in food retail sector and analysis of ASDA’s current performance. It concludes with some reflections on importance sand impacts of adoption of sustainability and offers more viable recommendations for further development.
Evaluation of Sustainability Strategy Food Retail Sector
The effectiveness of sustainability on food retailing has been frequently argued by recent academic researchers (Millington & Williams, 2004; Clark, 2005; Jones, et. al, 2005; Jones, et.al, 2009; Wrap, 2008; WBCSD, 2008; Darragh, 2010; Coley, et al., 2011; Perks, 2011 cited on Ng, 2012). These arguments tend to focus on two aspects: value and commitments delivery.
One of the arguments in support of sustainability is that; it helps addressing price inflation pressures by offering discount priced products (Perks, 2011). This argument, however, was against by both previous & recent academics (Millington & Williams, 2004; Jones, et.al, 2009 & Ng, 2011), that food retailers recognise and being able to obtain a bundle of benefits from deployment of sustainability, for example, cost savings.
This position goes on to further argue that sustainability commitments are exaggerated and inconsistent delivered (Jones, 2005; Clark, 2005; Coley, et al., 2011). However, sustainability commitments have also receiving merits as WBCSD (2008) and Darragh (2010) pointed out: (1) consumers awareness increase; (2) sustainable issues decline and (3) consumers expenditure on sustainable products increase despite turbulent economy impact.
Both sides of arguments are rational, but it remains clear that: whether a food retailer effectively pursue a sustainability model takes account of its advantages and disadvantages (see appendix. 2)(Ng, 2011).
Analysis of ASDA’ Performance
The intense rivalry has led ASDA to impose sustainability into its business. A SWOT analysis (see appendix.3) of ASDA’s current performance has been conducted by Datamonitor( 2012).
Business strategy代写 Strength:
• Strong Support from Wal-Mart
Integration with the world’s giant supermarket leader – Wal-Mart, enables a more flexible cash flow to support ASDA’s activities, as well increases its brand reputation and bargain power in supply chain.
• Wide product and service portfolio
ASDA maintains a broad range of products and services, helping to target at various customer segments without constraints from single target market.
Business strategy 代写 Weaknesses:
• Product recalls affect the brand image
Numerous of product recalls raise consumers’ skepticism on ASDA’s product quality and sustainability claims.
Business strategy代写 Opportunities:
• Increasing demand for private labels
Private labels have been perceived as value added by consumers. ASDA has extended numerous of its product ranges to private labels such as ‘Chosen by You’, reflecting a potential growth matches the rising demands.
• Rising popularity of online shopping
An increasing trend towards online shopping is transforming the retail channels. It is estimated that enhancement of ASDA’s online retail service would improve its sales performance.
• Slowdown in UK economy
In line with predictions of the unstable economy, ASDA’s revenue appears more vulnerable as consumers are presumably being more cautious with their spending.
• Intense Competition
Food retailers in the UK compete fiercely in attempt to obtain larger market shares. Strong competition presents most threat to ASDA, as it would attribute to a lower market position with less profitability.
Discussion of impact of Sustainability in ASDA
From the above analysis of ASDA’s performance, and a previous evaluation of sustainability in the food retail sector, it is clear that sustainability has not yet been effectively performed by ASDA.
The current report has found that overall operations of sustainability in ASDA have been somewhat flawed. It is perhaps not surprising to find that ASDA is heavily focused on price promotion by adopting its parent company’s ‘everyday low price’ concept. This concept has been claimed as a sustainable mission of ‘saving customers’ money’ by ASDA. However, it could be argued that with regards to this operation ASDA is driven by a commercial profit, as discount price strategy is potentially pursuing consumers spending more, which goes against Millington & Williams (2004) true sustainability claim that less should be consumed.
From the SWOT analysis, it is clear that the implementation of sustainability has become increasingly difficult for ASDA, as a result of the strong threats from a slowdown in the UK economy and from intense competition. Furthermore, weaknesses may also become one of the barriers, such as brand boycott for example. However, there being financial support by Wal-Mart in ASDA, and rising demands in private labels, these findings further support the idea of Jones (et al., 2011) that implementing a sustainability strategy without a profit driven motive brings greater success.
Considering this evaluation of sustainability, the indications are that the company would benefit from considering advantages and disadvantages whilst proposing a sustainable sustainability.
In conclusion, the current UK food retail sector is fiercely competitive. Sustainability has become a core consideration for food retailers. It helps to obtain competitive advantages such as raising brand images and values, enhancing relationship with stakeholders and obtaining long-term profits. However, there are barriers to concern including costs and risks of over ambitious commitments.
In sum of the SWOT analysis, ASDA possesses skepticism image in its food products. Though increase threats from the strong competitors, ASDA maintains an excellent agile reverse system with suppliers. As demands on private label are continually growing, sustainability strategy is suggested to continue whereas ASDA may consider numerous changes of its value perception and consistent delivery within store (see appendix.3).
Appendice. 1:Business strategy代写UK Food Retail market shares (Defra, 2012)
Appendice. 2: Advantages and Disadvantages of Sustainability (Ng, 2011)
Business strategy 代写 Advantages of Sustainability
The incorporation of sustainability is claimed ‘to bring least harm to the society, the planet and to the next generation (Christopher, 2011)’, in other words, presenting an ethical business value to stakeholders. Previous research (Milne et al., 2009) also observed various benefits of implementation of sustainability, including:
- (1) Increase return on profits in long term
- (2) Strengthen relations with stakeholders
- (3) Improve reputation and brand image
- (4) Improve trusts and loyalty
- (5) Improve sales performance
- (6) Obtain contracts from multi-national organisations
- (7) Increase product ranges and values
Thus, in a whole, sustainability maintains competitive advantages for organisations to compete in today’s turbulent market.
Business strategy代写 Disadvantages of Sustainability
On the contrary, sustainability possesses certain levels of disadvantages which may defer organisations’ strategy decision or affect its delivery of sustainability. Before rewarding, sustainability often requires ethical investment on non-relevant business activities such as helping development in ‘the third world’, which Rainforests (2012) claimed that sustainability in short-term is a costly strategy. Furthermore, sustainability bears risks of over-ambitious on setting commitments (Shriberg, 2002), for instance, being watched, compared and judged relevant performance by stakeholders and critical negative effects may lead to boycott. Though food retailers are striving for sustainability operations, Jones (et. Al, 2009) And Clarks (2005) questioned the effectiveness of the practise and criticised that many food retailers are pursuing a weak sustainable model in practise.
Appendix.3 : Business strategy 代写 SWOT Analysis of ASDA