Business Environment of Organization Analysis 2022

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The procedure of evaluating, analyzing and summarizing the business environment of
the organization is known as strategic management. The procedure of strategic
management requires the tools or models from which the analyses of business
environment have been done by the organization. There are numerous strategic models
that an organization used to examine the internal or external factors and these are
resources based view, generic strategies, PESTLE Analysis, Value Chain Analysis,
Porter’s Five Forces Framework, SWOT Analysis and the others. These tools assist the
corporation to take the right decision or to develop the strategies for the growth as per
the environment (Ansoff, Kipley, Lewis, Helm-Stevens, and Ansoff, 2018). The paper is
based on the topic “strategic management models”. In this paper, the practical example
will also be discussed by implementing these tools on the organization. In this paper,
Aldi has been taken into consideration as an practical example for the analysis. Aldi is
the common brand of two families of German that is owned on discount supermarket
chains with the 10000 stores in 20 countries. It has been evaluated that the combined
turnover of the company is more than €50 billion. The firm was split into two separate
groups such as Aldi Nord, and Aldi Sud. The company is operating in the retail industry
and offers the products such as food, beverages, and household essential. It operates
in 11234 locations (Aldi, 2018a).
SWOT Analysis is a strategic framework that analyzes the internal and external
environment of the organization. This tool is used by the company to improve the
weaknesses and use the strength to grasp the opportunity. SWOT Analysis is used to
evaluate the specific areas to operate smoothly and efficiently. Strength, Weaknesses,
Opportunity and Threat are the four areas on which the SWOT Analysis is based
(Phadermrod, Crowder, and Wills, 2019). It is observed that the company operates the
business smoothly after evaluating these areas. This tool is implemented in Aldi to
evaluate the areas and those are discussed below:
Strength: Strength refers the ability or capability of the company that supports to gain
the advantage in the market. In the case of Aldi, high brand image is the major strength
of the company. Another point of strength of the company is its strong pricing value. It is

MANAGEMENT 2
observed that the organization provides the discount or offers the low prices as
compare to others in order to attract them.
Weaknesses: Weaknesses defines the areas of improvement. It is require for the
organization to evaluate the weaknesses areas for the improvement. Low margins, poor
penetration in high income groups, and poor employee satisfaction are the areas where
the organization needs to focus to improve (Aldi, 2018a).
Opportunity: Opportunity defines the areas that the organization has to grasp to enjoy
the advantage. According to analysis, it is observed that Aldi has the opportunity to
grasp the online market by investing more time or money on it. The other opportunity for
the company is to implement the pricing premium strategy to earn the high revenue as it
offers the product in low prices.
Threat: Threat refers the factors of risk. In the case of Aldi, In Aldi, it has been
examined that the business has the high degree of threat of its competitors and those
are Woolworths, and Coles. In the online market, Amazon is also a main competitor.
Porter’s Five Forces Framework is a strategic model that is used to evaluate the
arrangement of the industry. The main aim of using this tool is to analyze the
competitive environment of the company (Mind Tools, 2018). It assists to evaluate or
measure the competitive position in the competitive market. The porters five forces
framework analyze the key drivers such as competitors, suppliers, customers, substitute
and new entrants. This tool is implemented on Aldi:
The threat of new entrants: It has been seen that the degree of threat of new entrants
of the corporation is high. It is observed that there is low capital is required to enter the
retail industry so that the any new firm can easily establish the business. The other
factor behind the new entrants is price strategy. In this market, the company who offers
the low price that can easily grasp the market share and beat the existing competitors.
The threat of competitors: The threat level of competitors is high for Aldi as there are
numbers of companies that delivers the similar services to consumers. Lidl, Penny