Aldi Business Strategy Analysis

This assignment examines Aldi's business strategy, emphasizing the importance of advanced technology for efficient operations. It argues that sufficient funding is crucial for successful technology adoption. The analysis further highlights the significance of SMART targets in achieving organizational objectives, outlining specific, measurable, achievable, relevant, and time-bound goals.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
(a) Contribution of ALDI’s mission, vision, objectives and core competencies to inform
strategic planning....................................................................................................................1
(b) Factors considered by ALDI while formulating strategic plans.......................................2
(c) Worth or usefulness of techniques used when businesses develop their strategic plans. .3
(d) Organisational audit of ALDI to analyse current strategic position.................................4
(e) Environmental audit for ALDI showing both micro and macro environment..................5
(f) Significance of stakeholders analysis for ALDI in formulation of new strategy..............6
(g) New strategy for ALDI.....................................................................................................6
PART 2............................................................................................................................................7
(a) Identification of market and appropriateness of strategy..................................................7
(b) Justification of adoption of strategy..................................................................................7
PART 3............................................................................................................................................8
(a) Roles and responsibilities of personnel involved in implementation of strategy.............8
(b)Resources required for implementation of the strategy.....................................................9
(c)SMART targets contribute to achieve objectives ...........................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
An organisation can achieve growth and success in the competitive market world for
longer duration only when they have effective business plans and strategies in order to compete
with their rivals. Strategy refers to plan and action which is designed to achieve the desired goals
and objectives of company. Such strategies are formulated related with mission, vision, and
objectives, etc. which help in guiding and directing employees to perform in right direction.
Main purpose of preparing this report is to provide the importance of business strategies in
growth and success of an organisation (Akter and et. al., 2016). ALDI, a UK based company
which deals in food, beverages, sanitary articles, household goods, etc. and attained a large
number of super market chains is selected for preparing this report. The project covers factors
needed to be considered by company while formulating business plans. It is also important for
company to conduct organisational audit to analyse the strategic planning and environmental
audit to show micro and macro environment. Roles and responsibilities of personnel and
contribution of SMART targets in achieving strategic objectives are also mentioned in this
report.
PART 1
(a) Contribution of ALDI’s mission, vision, objectives and core competencies to inform strategic
planning
Strategic planning: It refers to the plans and actions which are designed to achieve the
desired goals and objectives in an effective and efficient manner. It includes decision making
process relating to allocation of resources, assigning roles and duties to employees on the basis
of their skills and capabilities to achieve common goals. Strategic planning is made after making
proper analysis of internal strengths in order to gain support from them to achieve desired
objectives (Alsudiri, Al-Karaghouli and Eldabi, 2013). It is also important for company to
analyse macro environment factors which affect the business performance either in a negative or
positive way. The manager is required to first determine various issues related to stakeholders,
environmental audit, strategy positioning, organisational audit, etc. The manager of ALDI is
required to consider following points in order to formulate an effective strategy:
Mission: It refers to the future course of actions which are needed to be performed in
order to achieve success and growth of an organisation in competitive environment. It provides
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information relating to segments in which company deals and offers their services. Mission of
ALDI is to achieve growth and success in competitive market for longer duration with the help
of different departments in an organisation. As company is dealing in providing grocery products
therefore, it is important for them to provide standard quality products and services to their
targeted customers.
Vision: It refers to an ability to make an effective plan for future on the basis of
imagination so that they can manage all business activities which help in executing future plans.
The vision of ALDI is classified in five ideologies that consists of huge savings, superb quality,
standard value, special buy and for attaining confidence of customers.
Objectives: It refers to the desired goals which are required to be achieved by company
within stipulated period of time in order to compete with their competitors. Main objective of
ALDI is to attain a large market share in competitive market and has become one of the largest
grocery brands among their rivals and this can be achieved only when they are able to gain trust
of customers through providing quality products.
Core competencies: Company can achieve competitive advantage only when they can
make an effective and competitive strategy planning which helps them in defeating their rivals in
their market. For this, ALDI should have skilled and knowledgeable employees who are able to
perform in an effective and efficient manner that will bring positive results to company (Azar,
2011).
(b) Factors considered by ALDI while formulating strategic plans
Strategic planning refers to plans or actions which are designed and executed in order to
attain desired goals and objectives but there are some factors or barriers which affect the
strategic plan. Such factors include internal and external. Internal factors are those which exist
within an organisation whereas external factors are those which exist in the business
environment. Therefore, the manager is held responsible to consider such factors while
formulating plans and strategies which are as follows:
Organisational culture: It is considered as an internal factor which can affect the
performance of company. As ALDI is a multinational company where large number of
employees are engaged in performing different business activities, therefore, different employees
have their different culture due to which the opinions and views are different with each other.
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Thus, manager is needed to consider such factor and motivating them to follow company's rules
and norms while performing their assigned work.
Competition: There are many competitors in market who give tough competition to
ALDI due to which the implementation of effective plans and strategies is essentially required in
order to compete with them. The manager of ALDI needs to first identify their strengths and
weaknesses and accordingly formulate competitive strategy in order to attain a large market
share (Barberá and et. al., 2012).
Technological factor: It is important for an organisation to bring efficiency in their work
so as to achieve competitive advantage. Using outdated technology will bring difficulties for
company to compete with their rivals. Therefore, the manager needs to focus on implementing an
effective decision regarding installing advanced and updated technology which enhances level of
production as well as aloes maximising the stupefaction level of employees. Using advanced
techniques will help in utilising available resources in an optimum manner that will give
maximum positive results to company.
Strengths and weaknesses: The manager of ALDI is required to do SWOT analysis
through which they can be able to identify their strengths, weaknesses, opportunities and threats.
It will help the manager in making an effective decision after determining these all.
(c) Worth or usefulness of techniques used when businesses develop their strategic plans
There are various techniques and methods which are needed to be adopted by company
according to their needs and requirements. All such techniques and models have their own
benefits and limitations. The management of ALDI is required to adopt two useful techniques
which are BCG matrix and PIMS in order to utilise available resources in an optimum manner.
These techniques are described as below:
BCG matrix: This matrix is useful in making an effective strategic planning which also
helps in considering the growth opportunities. It is divided into 4 quadrants which are as follows:
Stars: This quadrant indicates products of ALDI whose growth rate and market share are
high. Therefore, it is important for company to arrange adequate amount of funds with the help
of which they can improve their products (Chang and Graham, 2012).
Cash flows: This quadrant shows products whose market share is high but has low
growth rate. Therefore, company should get high profit opportunities due to high market share.
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Dogs: This segment provides the information of those products of ALDI whose growth
rate and market share are low. This shows and directs the manager to focus on minimising their
cost and utilise available resources in an optimum manner.
Question marks: This quadrant indicates those products of ALDI whose market share is
low but growth rate is high. It directs the management to focus on expanding market share in
order to recover losses.
(d) Organisational audit of ALDI to analyse current strategic position
An organisation audit need to conduct through SWO analysis on regular basis which help
them in identifying their strengths, weaknesses, opportunities and threats. This will help
company in knowing their accurate position in market and accordingly make an effective plans
and strategies to grab future opportunities in order to gain competitive advantage.
Strengths: It describes the qualities of company with the help which they can attain strong
position in competitive market. Such strengths are as follows:
 Offered good quality products and services.
 Charge an affordable prices
 Engaged in different variety of goods such as food, home products, beverages etc.
 Has operated its business operation in more than 15 countries
Weaknesses:
 Small sized business as compared to other brands.
 It has been found that ALDI provides low and cheap quality products which decrease the
level of satisfaction.
 Has attained less chain of stores due to which they cannot make huge impact at global
level.
Opportunities:
 Expanding business operations in Africa, Asia etc. in order to capture huge market share.
 Investing huge amount in marketing tools to advertise their products in order to gain
competitive advantage.
Threats:
 Due to high competition from competitors such as Sainsbury and M&S.
 Lost trust of customers over quality of products (Chu, KrishnaKumar and Khosla, 2014).
 Government regulation.
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(e) Environmental audit for ALDI showing both micro and macro environment
It is important for company to conduct environmental audit so that they can able to
identify the factors which affects their business operation either in a positive or negative way. It
help manager to adopt useful and effective model in order to face challenges and issues occurred
due to such factors. Such models allows the management of ALDI to understand the strategies of
competitors and forces which are exist in the market. Poster five forces analysis is described as
below:
Competitive rivalry: This step help company in identifying the competitors of ALDI in
market. There are two main competitors of ALDI which are M&S and Sans Bury which gives
tough competition to ALDI and its strong position in market. The company should formulate
plans and strategies according to their competitors plans which help them in gaining competitive
advantage. Different Marketing tools need to be adopted by company in order to cpature large
market share (Elhamma and Zhang, 2013).
Suppliers power: As ALDI in engaged in retail sector where large number of supplier are
there ton provide them products in large quantities. ALDI can able to meet needs and demands of
customers on time with the help of suppliers so it is important to maintain healthy relationship
with them. But suppliers cannot influence the market and business operation of company as
selecting new suppliers is very low.
Buyer power: ALDI has attained large number of buyers through providing good quality
products and services across worldwide. The buyers has power to influence the price of the
products. For example if the particular product is high in demand then the price of that product
will be high. Therefore it is important for company to analyse the needs and requirements of
buyers and accordingly set the prices of their product.
Threat of substitution: As there are large number of competitors who provides substitute
products and services of ALDI in market. Through this, ALDI may loses their loyal customers.
Therefore it is important fro manager of company to focus on improving their quality products
and add some extra values and attributes which help in attracting large number of customers
towards their product.
Threat of new entry: Entering into retail industry is easy for new companies as they need
not to follow any rules and regulation implemented by government. This will bring threat to
company as the new companies may offer similar products at low prices than ALDI. This will
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reduces the market position as well as profitability. Therefore the management of ALDI need to
update their products on regular basis so as to attain strong position in market (García‐Rodríguez
and et. al., 2013).
(f) Significance of stakeholders analysis for ALDI in formulation of new strategy
Stakeholder is play an important role in achieving growth and success of an organisation
through providing them financial resources. It is the process of gathering quantitative
information which hep manager in making an effective plans and strategies for the company.
They provides maximum support to business in order to expand to expand their business
operation at large scale. Stakeholders includes employees, shareholders, suppliers, investors etc.
whose contribute make business more successful and sustain in competitive market world.
Therefore while implementing an effective plans and strategies the manager must required to
focus on maximising their interest level so that the company get required support from them in
emergencies. It is also important for manager to maintain healthy relation with them and
involves them in decision making process so that it maximises their level of satisfaction.
(g) New strategy for ALDI
A new strategy is required to formulate by the management of ADLI company for the
purpose of achieving desired goals and objectives. Through strategies the manager can guide
and direct the employees to perform their delegated activities in an effective manner. It is
required for company to adopt Porters generic model to make an effective strategy for ALDI.
This model includes four parts such as:
Cost differentiation : According to this, the company is required to bring innovation and
creation in order to produce products different from their rivals. Providing unique and quality
products will help company in gaining trust of customers.
Cost leadership: This implies that company should required to use an effective
technologies and equipments in order to bring efficiently in production process so that they can
able to offer products at lower price than their competitors which help them in attracting large
number of customers (Gold, Seuring and Beske, 2010).
Cost Focus: Through this, the company is required to focus on particular markets
through examining the needs and requirements of customers. This help company in making their
own market which cannot be influence by competitors.
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Differentiation: This means that the company should require to make products or
services which are unique and different from their competitors. Therefore the company need to
formulate strategy regarding enhancing the features and attributes of products which maximise
the level of satisfaction of customers. Adding extra value to the product will easily grab attention
of customers to buy their products.
PART 2
(a) Identification of market and appropriateness of strategy
As ALDI company is not attaining strong market share in Europe and Asia due to which
the management of company need to concentrate on the spreading their business operations in
Asia so that they can capture huge market as compared to their rivals and achieve huge
profitability and brand image. This will help company in attaining huge customer strengths.
ALDI company is required to adopt substantive growth strategy in order to expand their business
operations in Asia. Through this strategy the company can able to capture large market share and
compete with rivals. This strategy is helpful in two ways. First, coordinating with the clients who
are active in similar market and other one is implementing new technologies through which
company can bring efficiency in result of business activities (Haley, Haley and Tan, 2011).
Through these methods the company can avail an opportunity to improve their products
and services in market and attain sustainability and profitability in competitor world.
(b) Justification of adoption of strategy
The management of ALDI is adopted substantive growth strategy through which they can
decide to coordinate with other business agents in Asia which help them in providing goods and
services. This help company in entering into market of Asia. With the help of using this strategy
the company can provide its products and services through online software. This will company in
reaching the targeted customers at less time. Marketing factors is aloe one through which the
company can communicate its customers about the quality goods and services they offered in the
market. This will help company in generating huge sales and profit.
Through such contribution the company can able to grab opportunities that will help them
in competing with their rivals and attain sustainability. Online methods are also play an
important role in influencing interest and buying behaviour of customers as the customers gets an
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opportunity to select product of their choice among various alternatives that will maximises their
level of satisfaction as well.
PART 3
(a) Roles and responsibilities of personnel involved in implementation of strategy
In order to achieve growth and success for longer time period, it is important for an
organisation to make an effective plans and strategies with the help of taking support of
personnel such as managers, employees and engineers. Through an effective strategies the
company can achieve many benefits such as competitive advantage, increase in profitability,
high market share and strong brand image etc. All such personnel are performing their allotted
task in the different departments of an organisation (Melville, 2010). Therefore it is important for
them to understand their roles and responsibilities which need to be performed by them so that
the policies will be implemented in an effective and efficient way. Roles and responsibilities are
different personnel are described as below:
Managers: They are the one who has an authority to formulate and implement plans and
strategies for ALDI. The manager is held responsible to gather material information from
different departments and accordingly utilised them while implementing strategies in an effective
manner. The managers of different departments are liable to arrange funds and resources in order
to accomplish their desired target within pre-determined period of time.
Employees: They are the one whose performance will directly impact on the company's
overall performance. Without contribution of employees the company cannot achieve its desired
objectives therefore it is essentially required for manager to maximise their level of satisfaction
through assigning them roles and responsibilities on the basis of their skills and capabilities. The
manager is responsible to communicate plans and policies of company to all members of an
organisation so that they can perform in right direction and achieve organisational objectives.
Engineers: These are the one who are responsible to provide technical guidance to
employees of ALDI. Such engineers helps other employees in using new technologies in such an
effective manner that will bring efficiency in work. This all can be done on the basis of new
strategies and policies (Tsamenyi, Sahadev and Qiao, 2011).
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(b)Resources required for implementation of the strategy
Huge resources are required by the organization so that strategy can be executed in a
proper and efficient manner. Various resources are required by the organization such as
financial,physical and human resource etc. Through all this resources activities and tasks run
successfully in Aldi company. Resources required by Aldi company are- Physical resources – It means the tools and equipments used in the production process.
This includes the land, building, machinery, technical equipments and tools in the
organization. For example Aldi company needs to use advanced techniques and tools
which results in manufacturing of good quality of products. This results in increasing of
the production and profits of the firm. If the physical resources are not used by the
organization then plans and policies cannot be implemented properly. It leads to low
performance of the firm. Human resources – It involves the management of all the employees and managers so
that organization can run successfully (Pohl and Tolhurst, 2010). Managers can motivate
all employees so that they can perform better. If employees are not present in the
company then firm cannot make effective plans and policies. Thus strategies cannot be
implemented in a proper manner.
 Financial resources – Company requires funds for functioning of various operational
activities and tasks. For example Aldi company can adopt advanced technology if it has
sufficient funds and this results in efficient functioning of activities in the firm. If funds
are not available then activities cannot run properly and results in low performance of the
firm.
(c)SMART targets contribute to achieve objectives
SMART targets are important for Aldi company so that they can achieve the targets and
goals in the organization. SMART targets involves the specific, measurable, achievable, realistic
and timely goals. These targets are followed by company so that firm can achieve the objectives
in time. Contribution of SMART targets of Aldi company to achieve the objectives are - Specific – Aldi company can have specific goal for the manager and the employees. It is
made so that manager can make plans and polices and can motivate employees to achieve
the objectives. Through this employees can work efficiently and effectively (Smith,
2013).
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 Measurable – Goals can be measurable for the company. For example Aldi company can
increase sales by 50%.It helps the firm and the employees ton achieve their goals. It
results in improving the performance of the firm. This results in growth and success of
the firm. Achievable – Objectives made by company can be attainable for the employees. For
example Aldi company has fixed that employees have to increase the sales by 30% in 1
month. It is achievable for all employees. Relevant – It means that goals are meaningful for the employees and management. The
objectives which are fixed can increase the productivity and profits of the company. Then
only it can improve the performance of the company in the future.
 Time bound – Objectives which are fixed by the Aldi can be completed in time by the
employees. This results in completion of objectives in proper time. This results in
increasing the productivity of company (Stiakakis and Georgiadis, 2011).
CONCLUSION
It has been concluded from the above project report that Business-strategy is essentially
required to formulated by company in order top achieve growth and success in competitive
environment. Such strategies should be based on achieving mission, vision and objectives of
company. It is also required for an organisation to conduct organisational and environmental
audit in order to identify the factors which affects the business operation of company so that an
effective strategic planning could be made.
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REFERENCES
Books and Journals
Online:
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Business Strategy. 2015. [Online]. Available Through:
<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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