Business Strategy: A Case Study of ALDI

Business Strategy: A case study of ALDI
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Table of contents
Introduction................................................................................................................................3
Part 1: Evaluating the strategy...................................................................................................4
1.1 Provide an assessment of the extent to which Aldi’s missions, visions, objectives, goals,
core competencies inform strategic planning.............................................................................4
1.2 Analyse the factors to be considered by Aldi when formulating their strategic plans.........5
1.3 Using evidence to support your answer evaluate the worth or usefulness of techniques
used when businesses develop their strategic plans...................................................................8
2.1 Carry out an organisational audit for ALDI and provide an analysis of their current
strategic position......................................................................................................................11
2.2 Carry out an environmental audit for ALDI showing both micro and macro environment.
..................................................................................................................................................12
2.3 Assess the significance of stakeholder analysis for ALDI when formulating new strategy.
..................................................................................................................................................14
2.4 Using the research and information collected about ALDI, present a new strategy ALDI
can follow.................................................................................................................................15
Part 2: Making a strategic choice.............................................................................................17
3.1 Identify a market (new or existing) and analyse the appropriateness of suitable strategy
for ALDI in relation to substantive growth, limited growth or retrenchment..........................17
3.2 Provide a justification of one of the strategies for market entry and growth that you have
discussed in 3.1........................................................................................................................17
Part 3 – Implementing the strategy..........................................................................................18
4.1 Provide an assessment of the roles and responsibilities of personnel who are involved
with the implementation of the strategy...................................................................................18
4.2 Provide an analysis of the resource requirements for the implementation of the strategy.18
4.3 Evaluate how the use of SMART targets (give examples) can contribute to achieving the
strategic objectives...................................................................................................................19
Conclusion................................................................................................................................21
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Reference List..........................................................................................................................22
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Introduction
In the present scenario, it has become increasingly important for organizations to have a well-
defined plan in front of them so that they can maximize their profits. Most large organizations
now make use of think tanks who are assigned the tasks of coming up with various different
strategies that should not only help a company maintain its competitive advantage but help
them in aspects of sustainability as well. All of these processes that a company undertakes to
function as optimally as possible are generally referred to as strategic planning. It
encompasses the formulation of various new approaches that an organization could undertake
and at the same time, focuses on the correct distribution of resources as well.
This study shall shed light on the many processes that are included in the vast field of
strategic planning. The organization that will be referred to is Aldi, one of the largest
supermarket chains in the world. For better understanding and correlation, the study has been
divided into different parts which shall help the reader in grabbing the most important factors
that companies have to look after for their sustained functioning.
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Part 1: Evaluating the strategy
1.1 Provide an assessment of the extent to which Aldi’s missions, visions, objectives,
goals, core competencies inform strategic planning.
Aldi, one of the leading supermarket chains in the world, has combined revenue of more than
€ 50 billion and functions in more than 18 countries across the globe (Aldi.us, 2018). Their
functioning as well as their success in this field is highly attributed to their strictly followed
framework. This framework not only lets them prepare for unforeseen circumstances, but
they are able to maintain a healthy competitive advantage at present at well. Discussed below
are some of the factors that shall help the reader understand Aldi’s way of strategic planning,
better.
Mission:
 To be the largest groceries and food retailers in the world.
 To treat all consumers with respect and not to discriminate amongst them on any
grounds.
 To have the highest regards for their stakeholders
 To focus on the health and safety on their officials, employees and managers alike
Visions:
 To make the whole shopping experience cheaper for their global consumers
 To provide the best quality products at the cheapest prices possible
 To make the consumers “feel rich” whilst paying minimum for the products
Objectives:
 To grow in market shares on a global basis
 To maintain excellent relationships with their consumers
 To emphasize on all received feedback from both their employees and well as their
consumers
 To create a sustainable future by emphasizing on the needs of recycling, reuse etc.
Goals:
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 To ensure the eradication of hunger and health hazards arising from cheap and low
quality food products Promote gender equality and empowerment of women Promote and ensure sustainable development through proper and efficient functioning Reduce the carbon footprint by enabling various environmental measures in their day
to day functioning
Core competencies:
 A strict focus on pricing- Aldi has always sought to maintain competitive advantage
in the market through their effective pricing strategies. Offering high quality goods at
very affordable prices is something that has made it a consumer favourite.
 Emphasis on own brands- Aldi has always maintained a high regard for the brands
that they themselves have developed. Doing this not only helps them for their own
policies and pricing strategies, but it also allows them to remain independent of
outside pressures (Steenkamp, 2017).
 Focus on consumer as well as employee satisfaction- Aldi function with a high regard
for their employees and treat them more as assets than liabilities. They are the only
supermarket chain in the world that provides chairs to the employees at checkout and
payment stalls.
 Optimal labour costs- Aldi are known not to employ any additional staff. Casual staff
is almost inexistent and the salaries paid are comparable to those of other similar
businesses. This allows for a higher profit margin even if sales are low.
1.2 Analyse the factors to be considered by Aldi when formulating their strategic plans.
There are various factors that have to be taken into consideration before any company can
formulate their strategies. In case of Aldi as well, this fact is not devoid from their
organization. Discussed below are some of the factors that affect Aldi’s strategic planning.
Market Position: It was observed that when consumers began focusing on convenience rather
than range, the “Big Four” of the UK grocery retail market were hit very hard. At such a
time, supermarket chains like Aldi and Lidl made it into the UK market and have never
turned back ever since. According to reports, by the end of 2017, Aldi was in command of
more than 6.8% of all grocery stores in the UK. Lidl was second, with 5%. In terms of
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