ALDI's Global Expansion Strategy: PESTLE Analysis and Porter's Five Forces for New Zealand Market

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ALDI SUPERMARKET
COMPANY Human Resource Management And Development

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Contents
Introduction................................................................................................................................2
Overview of ALDI.....................................................................................................................3
About potential countries...........................................................................................................3
Selection of country...................................................................................................................4
PESTLE analysis of New Zealand.........................................................................................5
Porter’s Five Forces of Aldi in New Zealand............................................................................6
Bargaining power of suppliers...............................................................................................7
Threats of New Entrants.........................................................................................................7
Bargaining threat of buyers....................................................................................................8
The threat of Substitutes.........................................................................................................8
Competitive Rivalry...............................................................................................................9
Porter’s value chain....................................................................................................................9
Primary activities.................................................................................................................10
Support activities..................................................................................................................11
Mode of entry in market...........................................................................................................12
Justification..........................................................................................................................13
Conclusion................................................................................................................................15
References................................................................................................................................16
Appendix..................................................................................................................................19
PESTLE Analysis of the Czech Republic and New Zealand...............................................19

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Introduction
The expansion is said to be the part of the business cycle at the time when a company moves
from the trough to a peak level. It is referred as a time period when the business activity’s
level flows and GDP (gross domestic product) expands till it touches a highest point or peak.
A period of expansion or development is also considered an economic recovery. The report is
being projected to identify the potential influencing market for ALDI’s future global
expansion strategy. A justification will be provided for the chosen potential market with the
help of macro analysis i.e. PESTLE. Along with this, the application of 5 Forces Model will
be done to critically analyze the competitive intensity of the industry. Further, the report will
perform the internal analysis on behalf of ALDI supermarket chain. In the end, it will suggest
the various modes of entry for ALDI to enter the potential market.

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Overview of ALDI
ALDI is the brand of two discount supermarket chain and has a leading position in the global
market with stores in 18 countries. It has been estimated that the turnover of the supermarket
is more than €50 billion. The supermarket is based in Germany and the chain was started in
1946 by Theo and Karl Albrecht brothers. ALDI is very famous in America and is counted in
one of the favorite grocery stores. The growth success is recognized by the commitment of
the company of making efficiencies at each level- from the construction of the store to the
particular product. Every phase of their functions is reinvented in order to increase the
product quality and customer’s savings (Aldi, 2018).
(Source: Aldi, 2018)
About potential countries
Czech Republic- Czechia is another name of Czech Republic. The country is placed in
central Europe due to which the company has been selected for the expansion of the business.
It includes the ancient provinces of Moravia and Bohemia along with the Silesia’s southern

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tip, cooperatively known as Czech Lands. The “Czechia” name was adopted in 2016 as a
summarized, name for the Czech Republic (Trade Portal, 2018).
New Zealand- New Zealand is an island country in the south-western Pacific Ocean. The
country includes two main islands one South and North Island. The country has developed
the country and has high rank while comparing it with the national performance in terms of
health, education, and quality of life. The country is welcoming the international companies
so that they can develop the better opportunities.
Aldi Company needs the evaluation in which the 2 countries represent the most potentially
attractive target market. Comparative PESTLE analysis of those macro-environmental factors
of 2 countries that are relevant to Aldi is discussed in the Appendix. The rating to factor is
given which helps in selecting the country for the expansion of the business in Appendix.
Selection of country
Aldi Company should expand its business in New Zealand market because the opportunity
for growth is vast in the country. Though, this is the fact that Supermarkets of New Zealand
found the fall in the past years during 2013-2014. Since then, the industry presented the
modest growth every due to strengthening income and population migration. The annual
growth is expected in the industry is 0.3% during 2013-2018. Aldi can bring the growth in the
supermarket industry of New Zealand by providing facility to the customers who include
online grocery shopping (IBIS World, 2017).
New Zealand country is selected after the comparative analysis of both the country. There
were few aspects which were good in the Czech Republic such as double population than
New Zealand. The more population simple means the maximum purchase from supermarkets
but this is also the fact that these people are migrated from different places which means that

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the supermarket might face difficulty in identifying the need of different consumer from a
different background (Afonina and Chalupský, 2012). Apart from this, the political instability
in the country may lead to many other problems for the company. Therefore, New Zealand is
the best selection for the Aldi Company.
PESTLE analysis of New Zealand
(Source: Haberer, 2010)
Political factors- The political factors include the rules and regulations formed by the
government. New Zealand government is stable due to which the companies find the
opportunity of success in the market. The rules and regulations in the country fluctuate after 3
years as the new government makes new rules and regulations (Faarup, 2010). In New
Zealand, the business freedom is 99.9% and the trade freedom is 84.6% which reflects that
New Zealand market is good for business and trading.
Economic factors- The GDP of the country is expected to rise to $207 billion by the year
2018. This shows that the people can purchase the product due to high purchasing power in
New Zealand. The economy of the country shows that if any company expand the business
then they need to invest huge amount for generating profit.