Settling for second best? Reflections after the tenth anniversary of Wal-Mart’s entry to the United Kingdom

Citation

Sparks, L. (2011), "Settling for second best? Reflections after the tenth anniversary of Wal-Mart’s entry to the United Kingdom", Strategic Direction, Vol. 27 No. 7. https://doi.org/10.1108/sd.2011.05627gad.009

Settling for second best? Reflections after the tenth anniversary of Wal-Mart’s entry to the United Kingdom

Article Type: Abstracts From: Strategic Direction, Volume 27, Issue 7

Sparks L.International Journal of Retail & Distribution Management, 2011, Vol. 39 No. 2, Start page: 114, No. of pages: 16

Purpose – Seeks to evaluate the comparative progress of Asda in the UK since its surprise takeover by Wal-Mart in 1999. Wal-Mart expected to become the number 1 retailer in the UK and many commentators saw massive problems ahead for local retailers. These expectations were not met; this paper investigates why. Design/methodology/approach – Asda’s progress is considered through a brief discussion of the company’s history to 1999, an investigation of the changes Wal-Mart subsequently made to Asda’s operations, the comparative impact of these changes and then a consideration of the restrictions on impact deriving from organizational, competitive and environmental factors. Findings – Despite the strong rhetoric on entry, the commercial reality has seen only moderate success for Asda and a widening gap to the market leader, Tesco. Explanation for this includes competitive strategy and reactions, market restrictions particularly in land-use planning and unwillingness by Asda (Wal-Mart) to alter their focused store format strategy in line with competitor actions and market directions. Research limitations/implications – The analysis is at a macro corporate and national level, drawing mainly on published data. Research implications include the rebalancing of considerations of organizational competence and market environment factors on international success. A focus on political and non-market activities is suggested, though an unwillingness of companies to reconsider strategic directions is also indicted as a key factor. Practical implications – Implications for national and international strategic decision making at the corporate and governmental levels are identified. Businesses can use the findings to re-consider their positioning and actions. Reflections on hyperbolic reactions to takeovers might also be provoked. Originality/value – No other paper has considered the market level changes in connection with Asda since its take-over by Wal-Mart and sought explanations for the relative (lack of) performance. The conclusion, that Asda has not been as successful as reported in the literature and the media, is original.Article type: Research paperISSN: 0959-0552Reference: 40AE952

Keywords: Business performance, Competitive strategy, Globalization, Supermarkets, United Kingdom