Settling for Second Best? Reflections after the Tenth Anniversary of Wal-Mart’s Entry to the United Kingdom

Structured Abstract Purpose-This paper evaluates the comparative progress of Asda in the UK since its surprise takeover by Wal-Mart in 1999. Wal-Mart expected to become the #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 organisational, 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 organisational 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 reconsider 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 takeover 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.