Business Strategy and its Impact

This assignment examines the critical role of business strategy in achieving organizational success. Students will delve into Porter's Generic Strategies (cost leadership, differentiation, focus) to understand how businesses can gain a competitive advantage. The analysis also incorporates stakeholder mapping to identify key stakeholders and their influence on strategic decision-making.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 The way ALDI's vision, mission, core competencies and objectives inform strategic
planning.......................................................................................................................................1
1.2 Factors to be considered while strategic planning formulation............................................2
1.3 Effectiveness of methods used when developing strategic planning....................................3
TASK 2............................................................................................................................................4
2.1 Organisational audit of ALDI...............................................................................................4
2.2 Environmental audit of ALDI...............................................................................................5
2.3 Significance of stakeholder analysis when implementing new scheme................................6
2.4 Presenting an innovative strategy for ALDI.........................................................................8
TASK 3............................................................................................................................................9
3.1 Appropriateness of alternative strategies linked to market entry..........................................9
3.2 Justifying the strategy selection for ALDI............................................................................9
TASK 4..........................................................................................................................................10
4.1 Roles and responsibilities of personnel who charged with strategy formulation................10
4.2 Estimated resources required in order to implement new strategy.....................................10
4.3 Contribution of SMART objectives....................................................................................11
CONCLUSION ............................................................................................................................11
REFERENCES .............................................................................................................................12
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INTRODUCTION
Business strategy can be stated as a process in which plans and strategies are being made
in order to attain the objectives and goals of firm. This can also be stated as a process as science
and act of marshalling along with planning of resources in order to make the best use of it
(Business Strategy, 2015). In simple words, business strategy can be stated as a process of long
term policy along with plan of action for accomplishing certain targets and goals. This in turn
will help in enhancing turnover of the firm along with sales within specified tenure. This report
is based on ALDI which is a retail and supermarket chain across the globe. There are certain
things which will be discussed in this report like mission, vision, and other various elements
which are utilised in the formation of strategic planning. Apart from this, organisational and
environmental audit of ALDI will also be discussed. Further, SMART objectives of company
which will be determined as well.
TASK 1
1.1 The way ALDI’s vision, mission, core competencies and objectives inform strategic planning
Strategic planning: This can be stated as a process which mainly cover the strategies and
thus, it is being followed by each and every kind of organisation for achievement of objectives.
This in being done with the motive of determining usage of resources and managing up the
drivers which impacts the process of business.
Mission: The main motive of the firm is to attain the desired aim and objectives of firm
which are beings set. This provides assistance in market size of ALDI and thus encourage the
stakeholders by tackling performance of strategies utilised by the company. For example: in case
of ALDI the mission aspect is “Top product and services quality at incredible low cost
guaranteed”. With the aid of this kind of statement, maximum satisfaction should be provided to
all clients by developing essential values within the kind of digitalisation and services
(Ackermann and Audretsch, 2013).
Vision: This can be stated as a motive for which the business is launched. This is a long
term process that mainly provides assistance in attaining certain objectives. In case of ALDI,
vision statement is “To revolutionize or modify the grocery sector with an attractive and unique
business model”. From this point of view, objectives will be acquired through strategic planning
along with the parameters set for the attainment of objectives.
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Goals: There is particular destination which is being chosen by the owner before
implementation of business strategies. Basically, there are two types of goals described as below: Short term goal: These types of goals provide assistance to company in order to make
them face regular difficulties and thus, manage the whole process. For example: in ALDI,
short term goals are basically innovative and creative way to attract millions of
customers. Long term goal: These types of goals are being manufactured in order to accomplish the
targets which are being set up by company. For example: ALDI's long term goal is to
attain the leading position in marketplace.
Objectives: The main objective of the firm which is ALDI is to provide high level of
satisfaction and utilise digital technology which can in turn can raise the sales ratio of the
company along with expansion of business.
Core Competencies: This is highly supportive in the strategic planning and also helps
company to achieve company's main goals along with the competitive benefits. This also focuses
on enhancing the skills and abilities of employees (Annabi and McGann, 2013). Aim of ALDI is
to reduce cost of operations and increase the profit ratios for developing onto better positions and
image within marketplace.
1.2 Elements which includes in strategic planning formulation
Strategic planning can be stated as highly essential element for the company like ALDI
which can attain the long term goals. However, while planning there are some factors which are
being involved and they need to be focused in deep manner. This becomes highly difficult for the
company and its administration to select the forces against the precedence. There are few
congruence of business process regarding the factors and priorities and this will in turn possibly
change the process.
There are several elements which are needed to be active while enhancing the strategic
plan suitably are follows:
Managers: These can be stated as main factor of company who are mainly focused on
hierarchy of business covers, Middle, Front Line and top level management. Designing is being
done by the upper level of management within the company who are working towards the
objectives of the firm (Auzair, 2011). Targets are being classified in the middle level
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administration which are the main responsibilities of managers and departments so that they can
cope up with plan.
Delegation: Generally duties and responsibilities are being delegated by the upper level
of management to the middle and lower level of management. Roles and responsibilities are
being classified as per the skills and abilities of an individual or the team. Delegation is being
formulated on the basis of factors which are attached with the targets and goals of the company
so that maximum productivity can be attained.
Resources: These kind of element can be stated as highly essential factor for the
company in order to implement the strategic planning. This is being fixed by company point of
view along with objectives and mission and other forces like knowledge, human capital, finance,
place and various equipments are required (Azar, 2011). It is highly essential for the company to
assign them in proper manner as per the result of deficiency and the process of root-age which
can take the crisis in planning.
1.3 Effectiveness of methods used when developing strategic planning
The base of strategic planning is based on situation of the company. This can provide
assistance to the company in terms of uplifting and maintaining their brand image and position
within the marketplace. There are some various kinds of facts like PIMS, SPACE, Scenario
Planning and BCG growth matrix which are being followed by evaluating the potential of plans
developed by ALDI. There are some strategies which are being followed and they are described
below:
BCG Matrix: This can be stated as an essential part of the company which mainly
determines the link of organisation with business share. There are four dimensions which can be
stated as beneficial for the company like ALDI as the strategic plans are being set to gain the
actual growth rate and position of the firm. Those four factors are being described below: Question Mark: This mainly helps in determining the question mark sphere of the
company where there is low market and growth can be maximised. This can be proved as
highly essential for enhancing the sales and revenues (Bharadwaj and et. al., 2013). Stars: This kind of context is known by the ALDI and have been utilised in high market
growth and share. This can be stated as highly essential for Company like ALDI in order
to determine the position and image of competitive place.
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 Cash Cows: This type of sector in ALDI compiles of maximum price share along with
minimum growth rate. In this kind of section, large group of customers are being
attracted regarding business products and effective services.
 Dog: This section of the firm mainly shows up the low growth and market share. In this
growth and success of company is very low in nature which is less useful within the
respective company.
PIMS & Space matrix: PIMS which can be stated as Profit impact of marketing strategy
which mainly assist the company for determining the atmosphere of business. This kind of
approach mainly helps in determining the whole situation of the marketplace including various
other factors like goodwill, expansion of company and market growth so that analysis of
strategic planning can be done with some certain techniques in successful manner. In addition,
assistance is being provided by the Space Matrix for position evaluation of the company within
marketplace. Every kind of business needs an element which is sustainability and that can be
brought with help of this approach (Bucolo and Matthews, 2011). Moreover, this also helps out
in evaluating up of financial forces which mainly covers up the cash flow, liquidity and turnover
along with some advantages. Utilisation of these kind of tools and techniques can make company
adopt flexibility in better and effectual manner.
TASK 2
2.1 Organisational audit of ALDI
Organisational Audit mainly consider the value chain and SWOT analysis which provide
assistance in determining the strength, weaknesses, opportunities and threats. This mainly helps
in formulating up of new strategies which are being evaluated below:
Value chain analysis: Value chain is being selected by ALDI which mainly covers up
the operations which are being evaluated, inbound and outbound logistics, sales and marketing. It
is highly essential for ALDI top undergo reviews for the raw material, stock cost and many more
as they are highly essential for the company audit. Business task additionally needs to be
consider as it continue into put the yield and info systems. In this outbound logistics which is
stated as an effectual activities to the final storage of product which are being needed to be
modified from one place to another one (Kalyani and Sahoo, 2011).
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SWOT Analysis: This mainly includes the business strength, weaknesses, threats and
opportunities of the company which are being determined below:
Strengths Weakness
 They mainly claims up for offering top
and high quality goods and services.
 Products are being provided at
reasonable rates.
 They have strong footsteps in Germany
as there are more than 2500 outlets
established.
 They are operating across 15 nations
worldwide.
 Management is low in nature.
 There is lack of raw materials and other
resources.
 Company is successful in managing
business across the globe but still there
are some areas where they lack.
Threats Opportunities
 Expected level of experience is not
gained by customers.
 High level of competencies which can
be seen within marketplace (Köseoglu
and et. al., 2013).
 There is high need of investing up in
advertising for beating up of
competition.
 Expansion can be done into growing
economies like Africa, Asia and many
more.
2.2 Environmental audit of ALDI
There are various elements which mainly affect ALDI. PEST analysis of ALDI is being
stated below:
Political: This mainly includes the rules and regulations which are being made by the Govt.
There are various legislations which are being followed by ALDI while manufacturing goods
and services in order to maintain the operations in better and effectual manner.
Economic: There are various kind of factors which are being included in economic situation of
country. There are various plans and strategies which are being made so that company can
compete with other firms.
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Social: ALDI is among the highest paying supermarket within the UK as they raise pay in
salaries of 3000 staff members with the motive of uplifting the standard of living and long term
relations can be maintained.
Technology: Company has been adopting latest technology as the number of consumers are
increasing and they are expecting self-service checkout from the outlets (Matzler and et. al.,
2013). Still there are some technologies which are left pending, so work needs to be done on that.
Porter’s Five Forces Model
Threat of new entrants: This can be stated as low in nature. Funds needed to establish new
brand is high, so more investment is needed.
Threat of substitute products: This is high in nature so innovation is needed to be done within
the products as per trends.
Bargaining power of supplier: It is low in nature. So there are various kind of discounts which
are being provided for enhancing the sales.
Bargaining power of buyers: This is high in nature. There are different demand of different
products so ALDI can provide attractive and appealing offers to discounts.
Rivalry among the existing firms: Low pricing strategies are being utilised by ALDI due to high
level of competition and high advertising. Along with that min focus should be on advertising
campaigns and other promotional activities.
2.3 Significance of stakeholder analysis when implementing a new strategy
In a business firm, Stakeholders are most crucial element which is plays effective role in
the operations of business (Stakeholder Analysis, 2017). Importance of ALDI'S stakeholders are
described as below:
Employees: This element can be stated as backbone of the industry. Their main role is to attain
the tasks and objectives which are being allotted to them and along with that, should also provide
suggestions and feedbacks in various plans and policies so that company can attain growth and
success.
Manager: There are some crucial decisions which are being taken by the managers for creating
plans and policies. Responsibilities are being delegated to the employees so that they can give
high level of performance. They mainly provide help in managing the operations which are being
conducted.
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Suppliers: Raw materials are being supplied by the suppliers which are highly needed in order to
manufacture the goods (Meskendahl, 2010). This can mainly result in enhancement of
production and this leads to improvement of sales of the company.
Mendelow's Matrix
This can be stated as process which is highly utilised in performing up the stakeholder
mapping. In this, interest of stakeholder is being analysed and thus strategic decisions are being
taken. There are 4 parts which are being described below: Minimum effort: This can be stated as low interest and power so the company does not
put their focus on staff members for creating strategies (Mitra and Bhardwaj, 2010).
 Keep informed: This element has high interest and low power and management has to
convince the stakeholders for formulating strategies.
Illustration 1: Stakeholder Analysis
(Source: Analysis of Stakeholder, 2017)
 Keep satisfied: It needs to be assured by the management that results occurred should be
effective in nature so that interest within the company can be maintained along with
loyalty.
 Key players: They have high interest along with high power. So it is highly needed to
communicate effectively regarding plans and policies by which effective strategies can be
made.
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2.4 Presenting an innovative strategy for ALDI
There are new strategies which are being made by the company in order to attain high
level of development along with growth of company. ALDI has selected Porters generic strategy
which is highly essential for the organisation to develop within marketplace in successful
manner. There are four dimensions which are being described below:
Cost Leadership: By utilising this aspect, turnover rate can be maximised by the ALDI.
So this can be useful for the company for increasing the productivity and profitability level. This
provide help in reducing the additional and wastage cost of product.
Cost differentiations: By the help of this kind of product, new operations can be easily
created by company along with other activities as it is required in the growth of firm. There are
various range of food products which are being provided by the ALDI so that high level of
satisfaction is being provided (Porter's Generic Strategy Assignment Help. 2017).
Illustration 2: Potter's Generic Strategy
(Source: Potter's Generic Strategy, 2015)
Cost Focus: This kind of approach provide assistance in determining the needs and wants
of the clients regarding products and services. This mainly helps in acquiring large number of
customers in an effective and efficient manner.
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Differentiation: In order to use this kind of aspect, the main focus should be on its own
potential and clients who can purchase various goods and services provided by ALDI. So it is
essential and significant for the company to maximise their turnover in less time period
(Schaltegger and Wagner, 2011).
TASK 3
3.1 Appropriateness of alternative strategies linked to market entry
There are number of strategies which are mainly followed up by ALDI for developing up
the plan in effective and better manner. The main focus is on formulating and creating strategic
planning of the company for attaining future growth and success of an organisation.
Substantive growth strategy: Enlargement of business activities and other functions
which are being done by ALDI in two different two ways such as vertical and horizontal. Every
action and activities are interrelated with entire operations and other functions which are
essential for enhancing the turnover of the company. By using this type of strategy, new services
can be introduced along with quality products to the clients.
Limited growth: By utilising this kind of technique, desired objectives can be attained by
ALDI. There are various kind of forces like penetration, innovation and product development
which are beneficial (Slater, Olson and Finnegan, 2011). Facilities like home delivery and other
can be introduced.
Retrenchment: This can be stated as effective and significant strategies which provide
assistance in to the business manager for evaluating effectiveness and profitability of company.
This can be useful for the company for decreasing the additional cost within operations.
3.2 Justifying the strategy selection for ALDI
ALDI which is a retail enterprise who is dealing across the globe and due to that they
have chosen substantive growth strategy. This can be stated as useful for the business operations
and activities and with it they can improve their turnover ratio. This in turn helps out in attracting
large number of customers regarding business services and quality products. This can be stated
as valuable and useful strategy in order to enhance the performance level and productivity in
minimum tenure.
Enlargement of business is being done by the company like ALDI in domestic country
and across the globe. This needs to be done so that desired aims and objectives of firm can be
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attained in better and effective manner (Teece, 2010). One of the major purpose is to apply this
kind of strategies for enhancing up the performance and productivity of the company. This can
provide assistance providing food and non-food products by satisfying them. By the help of this
kind of context, future strategic can be introduced which can help in enhancing up the turnover.
TASK 4
4.1 Roles and responsibilities of personal charged with scheme formulation
There are number of people who have the potential to develop business strategies in a
better manner. In this, needs and wants of customers should be determined so that ALDI can
enhance their success and growth in the marketplace. There are certain persons which have some
duties and roles in developing strategies in an effective and efficient manner.
Managers: These can be stated as the main assets of company which mainly play an
essential role in developing effective strategies and that too, in an effective manner. They mainly
formulate the entire strategy in an appropriate manner. There are some skills and talent which
provide help in developing the complete action plan.
Leaders: This can be stated as a crucial element for company as assistance is being
provided for accurate guidelines and right direction for formulating better strategies (Tsamenyi
Sahadev and Qiao, 2011). The major motive is to provide high level of satisfaction through high
quality products and services.
Employees: They are the most essential elements for company which play a vital role in
forming business strategies in a proper way. They have effective skills and talent for attaining the
desired aim in limited period of time.
4.2 Estimated resources required in order to implement a new strategy
There are number of factors which are being required for formulating innovative business
strategies. Resources are being determined as below:
Financial resources: This kind of element can be stated as an essential resource which
are mainly utilised by the managers for formulating new strategies. This can be stated as
financial abilities for handling the capital. For example: strategies are being created by ALDI for
developing the better scheme which are highly valuable for company.
Technical resources: It is highly essential for the business manager so that better and
effective strategies are formulated and developed. Digital technology is utilised by ALDI in
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order to promote the goods and services to customers. This will need innovative technology for
producing goods in a systematic manner (Valos and Bednall, 2010).
Raw materials: It is a highly essential element which is being followed by the business
administrator for formulating and developing plans and strategies. In ALDI, sufficient raw
material is not present which becomes difficult for the company to develop the effective
strategies.
4.3 Contribution of SMART objectives
This can be stated as highly essential aspects for company in order to formulate and attain
the desired aim and objectives of firm in a better and smooth manner. There are various ranges of
products which are being provided by ALDI to the customers so that they can gain expected
growth in sales and profit ratio. SMART objectives include for dimensions which are important
and defined as below:
Specific: This mainly provides help in targeting certain areas which has the sign of
progress and is highly essential for the business entity to develop plans and strategies in effective
and efficient manner. ALDI wants to provide quality products to their ultimate customers for
better and efficient target accomplishment.
Measurable: This can be stated as important approach which mainly shows up the
progress and success of the company which is being enforced. ALDI wants to increase their
market share with 30% within next two years.
Achievable: In this kind of strategy, there are some needs and wants which needs to be
fulfilled by the team and group workers (Woerner and Wixom, 2015). This target is achievable
in nature because business have good market growth which depicts effective and appropriate
outcome.
Realistic: This needs to be done and implemented and that needs to be practical and
realistic as per the resources accessibility which should be practical in nature. Increase in sales
by 30% is realistic goal for a company which reflect better and appropriate working so that
suitable gain get enhance.
Time related: In this, business entity should have certain mind-set, and it needs to be
time bounded which will provide various kinds of benefits. Increase of sales by 30% within next
two years state that objective of a business is time based in nature.
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CONCLUSION
From the above report, it can be concluded that business strategies are highly essential for
the development and growth of business. There are various tools which are being used like
PEST, SWOT, Porter’s generic strategy and other various aspects. There are different factors
which provide assistance to company for the implementation of business strategies. SMART
objectives also prove to be assistive for the system to attain all their tasks in specified tenure.
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REFERENCES
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Online
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<http://finsburyfoods.co.uk/who-we-are/business-strategy/>.
Porter's Generic Strategy Assignment Help. 2017. [Online]. Available through:
<http://www.assignments4u.com/porters-generic-strategy-assignment-help/>.
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<https://knowhownonprofit.org/organisation/strategy/directionsetting/stakeholder>.
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