2.1 Introduction

In today’s rapidly changing business landscape, organisations must stay competitive to survive and succeed. The literature extensively studies the concept of competitiveness, with various theories and frameworks available for businesses to achieve sustainable competitive advantage. This chapter reviews existing research on the importance of competitive strategy and its impact on industries such as retail during times of crisis like pandemics from a third-person perspective. It also identifies fundamental factors that organisations such as ASDA, need to consider in order to remain competitive in today’s marketplace amidst COVID-19-related …

2.2 Concept of Competitiveness in Businesses

In today’s global market, it is imperative for businesses to maintain competitiveness in order to succeed. This involves implementing a range of strategies and tactics designed to surpass competitors, making the concept of business competitiveness complex and multi-faceted.
To stay ahead of the game, businesses need to create and market distinctive products or services, optimise their operational processes for efficiency and cost savings, allocate resources towards research and development efforts, enhance customer service offerings, and establish powerful brand identities (Chorna et al., 2019). Furthermore, a thriving business must always keep track of its own strengths as well as weaknesses while monitoring
In the retail sector, Amazon is renowned for its ability to maintain competitive prices and manage its supply chain efficiently (Amazon, 2022). Similarly, Walmart has established itself as a prominent player by streamlining operational processes and providing products at affordable rates. Additionally, while Walmart offers an extensive range of

2.3 Importance of Competitive Strategy

By implementing a successful competitive strategy, businesses can achieve greater market share, enhance profitability, and establish enduring customer loyalty. The main aim of such a strategy is to set the organisation apart from rivals by providing distinctive offerings and delivering superior value or experience compared to industry peers (Salunke, Weerawardena and McColl-Kennedy, 2019). Executing an efficient competitive approach entails identifying and
In order to succeed in the competitive world of business, companies must distinguish their products or services, optimise processes and constantly innovate. By implementing a competitive strategy, businesses can thrive in this dynamic market. To remain relevant amidst competition, it is essential for enterprises to highlight their unique strengths and add value through the differentiation of products or services from those of competitors. For instance, Amazon and Walmart have

2.4 Impact on the Retail Industry Due to the Pandemic

The retail industry has been drastically affected by COVID-19, with retailers needing to swiftly adjust to changes in customer behaviour such as an increase in online shopping and contactless deliveries. Implementing social distancing measures led to many physical stores closing or reducing operations resulting in a notable decline in sales and foot traffic. Nevertheless, some retailers who quickly adapted their business models with new technologies were better able to withstand the negative impact of these circumstances compared to others. The outbreak also emphasised that effective supply chain management and contingency plans are crucial for success within this
To illustrate, Walmart and Target are among the large retailers that swiftly broadened their internet shopping alternatives and established contactless curbside delivery in reaction to the pandemic. Nevertheless, smaller enterprises have been heavily influenced as they lack robustness and may not be capable of promptly adjusting. Additionally, consumer inclinations shifted toward indispensable products like groceries and personal care commodities while there was a substantial decline in purchasing non-essential items. The worldwide supply chain has been greatly affected by the pandemic, leading to disturbances and postponements for


Figure 2.1: Impact of the Pandemic on the UK Retail Industry

(Source: Statista, 2022d)
Based on a recent study conducted with UK retailers across various sectors, including food, fashion, and health and beauty categories, it has been revealed that the vast majority of these businesses are concerned about the impact that Covid-19 could potentially have on their sales. 34% of respondents believed that this impact would be significant in nature, there was still a sizable portion who thought that even if the virus continues to spread, its negative effects on
ASDA has designed a differential strategy to cope with the high level of competition as it offers goods at a very low price. However, the company is still facing challenges from other large retailers. ASDA manages to maintain the third position in terms of the top ten retailers in the UK based on sales.

Figure 2.2: Top Ten Retailers in the UK based on Sales (2021/22)

(Source: Statista, 2021a)
The above figure depicts a clear picture of the level of competition in the UK retail industry. Tesco holds a remarkably large market share as the total sales of the company in 2021/22 was 53.2 billion BP compared to 22.8 billion BP by ASDA. The sales volume of Tesco was more than twice as of ASDA. Hence, ASDA is facing serious challenges as a consequence of immense competition in the market. Moreover, the COVID-19 pandemic further increased challenges for
Amazon holds an unbeatable position in the UK when it comes to leading online stores. According to data, Amazon alone accounted for $17,078 billion in e-commerce net sales in 2021 (Statista, 2021b). Other retailers like

Figure 2.3: Top Online Stores in the UK in 2021 by e-commerce net Sales

(Source: Statista, 2021b)
The above figure signifies the position of ASDA in terms of e-commerce sales. ASDA lacks a significant market position in terms of e-commerce net sales in the UK. However, a high level of competition is posed by large online stores including Amazon, Tesco, Sainsbury’s, and Argos. Major retailers shifted their focus from traditional retailing practices to e-commerce business practices to maintain a competitive position in the market. Online selling and digital marketing were the main strategies followed by

2.5 Fundamental Factors to Remain Competitive in the Marketplace

To thrive in the modern marketplace, businesses must attend to a complex array of interconnected factors. One key element is relentless innovation, as consumer behaviours and preferences are  …
Equally important is the ability to leverage existing core competencies and cultivate a workforce with deep knowledge of their industry’s best practices – all in pursuit of operational efficiency and superior performance. In order for these efforts to succeed, close collaboration with partners and suppliers can streamline business processes and
Finally, organisational culture also has a crucial role in driving peak performance: creating an atmosphere where individuals feel motivated and supported by management structures capable of fostering creativity while still adhering firmly to defined goals, is a key driver of success in the marketplace today.
Undoubtedly, a favourable and all-encompassing corporate environment is now an indispensable component for achieving triumph. It not only establishes an atmosphere of novelty but also encourages teamwork, amplifies worker involvement, and

Figure 2.4: Factors to Remain Competitive in the Market

(Created by the Student)
In the current fiercely competitive corporate environment, investing in research and development has become a necessity rather than an option. Firms must constantly search for novel approaches to outperform rivals by anticipating forthcoming market patterns and
However, merely researching on its own is not enough; companies need to be agile enough when responding quickly to ever-changing competitive landscapes as well as consumers’ preferences which are

2.6 Transformation in Business Operations Due to Pandemic

The COVID-19 outbreak has had a major impact on everyday activities worldwide, causing significant disturbances. The retail sector is among the hardest-hit industries, as numerous enterprises have been compelled to shut down their physical outlets due to quarantine constraints. To cope with these adversities, retailers have had to revolutionise their business methods by transitioning towards digital commerce and implementing novel technologies like Industry 4.0 IT applications and solutions that optimise supply chains (Papagiannidis, Harris and Morton, 2020). An instance of this is global retailer Walmart which expedited its e-commerce capacities and digital transformation in response to soaring online requests brought about by the pandemic.
The e-commerce investment of the company has been expanded significantly through the seamless integration of its physical stores with online channels. This pioneering method allows Walmart’s customers to browse and purchase products easily on their user-friendly website or mobile application, while still giving them the choice to collect their orders at any nearby Walmart store. Additionally, a groundbreaking collaboration between Walmart and
Amazon has witnessed a significant increase in demand owing to the pandemic, and as a result, it has made substantial investments in technology and automation to enhance its operational efficiencies. The company is using robots extensively in their warehouses for picking and packing products which helps improve accuracy and speed. Additionally, Amazon has introduced new safety protocols like
Walmart’s Q3 2020 financial report revealed a substantial 79% rise in e-commerce sales compared to the previous year, with growth across all categories (Walton, 2020). Similarly, Amazon reported an impressive net sales increase of 37% in its Q3 2020 earnings report (Amazon, 2020). These figures illustrate how COVID-19 has prompted a considerable shift toward
The COVID-19 pandemic has forced retail companies to reassess their traditional ways of doing business and embrace digital transformation. Retailers have responded to the pandemic by

2.7 Theoretical Framework

The Resource-based View Theory can be aptly applied to ASDA as it underscores the criticality of leveraging distinctive resources and capabilities that allow firms to achieve long-term competitive advantage (Jurevicius, 2021). In essence, ASDA’s resource endowment – ranging from cutting-edge technology solutions to innovative supply chain management practices – could serve as potent assets capable of

Figure 2.5: Resource-based View Theory

(Source: Jurevicius, 2021)
Furthermore, the application of Dynamic Capabilities Theory to ASDA’s operations reveals a crucial aspect of its business strategy that revolves around adapting and evolving in response to changing market conditions. This approach enables ASDA to not only weather challenging situations such as the pandemic but also thrive amid them by developing new capabilities and

Figure 2.6: Dynamic Capabilities Theory

(Source: Teece, 2018)
The Institutional Theory, a well-established framework in organisational behavior, offers valuable insights that can be applied to ASDA. This theory acknowledges the powerful impact of institutional environments on businesses and how these external factors influence their behavior and decision-making processes (de Jonge, 2015). ASDA can leverage this knowledge by

Figure 2.6: Institutional Theory

(Source: de Jonge, 2015)
Moreover, the Social Identity Theory can also be applied to ASDA as it recognises the importance of social interactions and group identities in shaping individual behavior (Davis, Love and Fares, 2019). ASDA can leverage this theory to
Through the application of these theories, ASDA can develop and implement competitive strategies that are tailored to its unique resources and capabilities, adapt effectively to changing environments, remain compliant with relevant regulations and

2.8 Literature Gap

Although there is literature available on the evaluation of influential factors for making competitive strategies in the retail industry and identifying challenges faced by retailers during pandemics. This research specifically focused on determining effective ways for implementing competitive strategies amidst pandemic-related competition, which appears to be lacking in other research related to this topic. Additionally, studies have been conducted to estimate the importance of

2.9 Summary

The retail industry has undergone a digital transformation and increased e-commerce due to the COVID-19 pandemic. Retailers are now investing in technology like augmented reality, while success in today’s global market requires businesses to focus on distinguishing their products/services, improving operational processes, investing in research and development, enhancing customer service offerings, and establishing a strong brand identity. A competitive strategy is critical for