Asos Environmental Analysis


Asos is a British fashion and cosmetic retailer that majorly operates online. Since its inception in the year 200, the company has adopted various strategies to steer it to the top of UK’s fashion industry. This essay seeks to evaluate Asos’ internal and external environment to identify some of the factors that have facilitated or limited its success. Therefore, there will be an analysis of the company’s macro and microenvironment, as well as an analysis of the industry it operates in. in the end, the essay argues that Asos has managed to implement various strategies that has continued to promote its dominant presence in the UK’s fashion and cosmetics industry.

Asos’ current strategy

Asos’ current and previous strategies are majorly aligned to its vision and mission. According to Camargo et al (2020), the company’s vision is to be the “world’s best fashion destination for the twenty-somethings,” and most of its marketing strategies shave been geared towards achieving this objective. For example, considering that the company’s target market has a significant online presence, it has implemented an online marketing strategy that entails publishing online fashion and lifestyle content and creating a consistent social media dialogue with its target market to develop an emotional connection with them (McCormick & Livett, 2012).

Macro Environmental Analysis

Asos’s macro environment consists of various factors that can change to not only affect Asos but also other players in the fashion and cosmetics industry. Against this backdrop, a PESTEL analysis can help in conducting a broad fact-finding activity about political, economic, social, technological, and environmental factors that can influence the company’s operations (Izquierdo-Yusta et al, 2016). Through PESTEL, Asos can identify how these external factors can influence decisions made within the organization (Vego Scocco, 2018).

Considering that Asos cannot affect these factors on its own, nor can the factors directly affect Asos’ operation, a PESTEL analysis provides an opportunity for ASOS managers to deeply understand the imperatives of these external environmental factors and make informed decisions as to the strategic direction the organization might take to achieve its objectives. But Jin & Cedrola (2017) argue that a PESTEL analysis may not help organizations if they fail to collaborate and use their expertise in identifying these factors. Meanwhile, the following table illustrates a PESTEL analysis for ASOS:

PESTEL analysis for ASOS
Resources and capabilities

Asos’ resource capabilities can either be in the form of threshold capabilities and competitive advantage capabilities. According to Camargo et al (2020), Asos’ threshold resources a are both tangible and intangible. The tangible ones include its material and financial resources while the intangible ones include technology, branding and its market resources.

Value Chain Analysis

Conducting Asos’ value chain analysis can help in identifying various sources of competitive advantage as well as the relatedness of various activities that it can trade for economic benefit (Bertram & Chi, 2017). For instance, after identifying the various activities and how they are related, Asos can use them as barriers to new entrants or even create a cost disadvantage for the competitors. The following table illustrates Asos’ value chain analysis:

SWOT analysis

A SWOT analysis entails and evaluation of both internal and external factors of the organization that influences its ability to achieve its mission, vision and objectives (Jin & Cedrola, 2017). according to Chen (2013), this entails an evaluation of an organization’s strengths, weaknesses, opportunities and threats and identifying how these factors can be used to enhance business performance. The following table illustrates Asos SWOT analysis:

SWOT analysis

To address the issue of increasing shipping costs, Asos should develop a strategy that helps it to find discounted supplies through companies that offer discounts on shipping services while investing in cheaper supply boxes such as air fill, bubble wraps and dunnage to save on shipping costs.


Using Gibb’s model of reflection, this section will highlight my reflection on the various learning experiences I had in my group. Basically, the Gibbs reflective model gives structures to learning experiences by offering a cyclic framework through which people can learn and plan things depending on whether they went well or did not go well (Vego Scocco, 2018). In doing so, according to Camargo et al (2020), the Gibbs reflective model facilitates the individual to describe the occurrence, highlight their feelings and thoughts about those experiences then evaluate them before analysing and concluding with an action plan.

One of my greatest learning experiences with the group was just being part of a discussion and give my ideas about the topic of discussion without fear of sating a wrong thing or feeling guilty of my points. The fact that there was no limit in sharing ideas and discussing them with others means that I had endless opportunities to learn from others through feedback and let others learn from me. Therefore, receiving feedback is one of my key processes of learning now.

The topic that I liked most was micro and macro environment analysis for organization, where I found it interesting that behind every successful company, there are a lot going on with regards to an evaluation of both internal and external factors influencing organizational success. I realised that business environmental analysis is an extremely important tool for decision-making and understanding a business’ situation. Through environmental analysis, managers can make precise decisions that define the best options for the growth and success of the organization. Apart from helping to identify an organization’s strengths, opportunities, weaknesses and threats, environmental analysis facilitates managers to adopt an optimum use of resources while maintaining the required level of growth and survival. I now plan to develop my skills on how I can use both internal and external environmental analysis to inform both short-term and long-term organizational objectives. Therefore, my intention is to learn more about long-term and short-term business planning strategies through a proper analysis of various environmental factors.

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Bertram, R.F. and Chi, T., 2018. A study of companies’ business responses to fashion e-commerce’s environmental impact. International Journal of Fashion Design, Technology and Education, 11(2), pp.254-264.

Camargo, L.R., 2018. Paving the way to ultra-fast fashion: an exploratory research (Doctoral dissertation).

Camargo, L.R., Pereira, S.C.F. and Scarpin, M.R.S., 2020. Fast and ultra-fast fashion supply chain management: an exploratory research. International Journal of Retail & Distribution Management.

Chen, Y.W., 2013. A Research Study of the Management and Sales Service of Global Fashion Online Shopping Website: the Example Case of" ASOS".

Griffiths, G.H. and Howard, A., 2008. Balancing clicks and bricks–strategies for multichannel retailers. Journal of Global Business, (2), p.1.

Hodson, J., 2020. Missguided–How to stay competitive?.

Izquierdo-Yusta, A., Labajo, V., Jiménez-Zarco, A.I. and Martínez-Ruiz, M.P., 2016. Online distribution strategies: A mix of globalization and diversification in the fashion market. In Handbook of research on strategic retailing of private label products in a recovering economy (pp. 491-512). IGI Global.

Jin, B. and Cedrola, E., 2017. Brands as core assets: Trends and challenges of branding in fashion business. Fashion Branding and Communication, pp.1-39.

McCormick, H. and Livett, C., 2012. Analysing the influence of the presentation of fashion garments on young consumers’ online behaviour. Journal of Fashion Marketing and Management: An International Journal.

O'Donnell, G. and Robertson, N., GCU Inaugural Professorial Lecture: ASOS-Retail in the New Age.

Parker-Strak, R., Barnes, L., Studd, R. and Doyle, S., 2020. Disruptive product development for online fast fashion retailers. Journal of Fashion Marketing and Management: An International Journal.

Vego Scocco, F., 2018. Networks in the fashion business: From a production and distribution organizational form to a successful innovation driven brand strategy (Bachelor's thesis, Università Ca'Foscari Venezia).

Continue your journey with our comprehensive guide to Architects of Prosperity: Investigating Sony's Organisational Structure and its Impact on Business Success.

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