Business Strategy and Design: A Comprehensive Analysis

This assignment provides a comprehensive analysis of business strategy, including its definition, importance, and application in different industries. It covers various topics such as strategic management, competitive advantage, and the relationship between business strategy and performance. The assignment also includes a review of relevant literature and online resources related to business strategy, providing students with a thorough understanding of this critical concept.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
a) Assessment of ALDI missions, visions, objectives, goals, core competencies..................1
B & C) The factors that ALDI needs to consider while formulating strategic plans.............2
D) Different planning techniques...........................................................................................3
E) Organisational Audit for ALDI.........................................................................................5
F) An environmental analysis for ALDI ...............................................................................8
G) The significance of stakeholder analysis.........................................................................11
H) New strategy for ALDI...................................................................................................13
TASK 2..........................................................................................................................................14
A) Identifying market and choosing best strategy................................................................14
B) Justification of choosing substantive growth strategies..................................................14
TASK 3..........................................................................................................................................15
A) The roles and responsibilities of personnel involved in strategy implementation..........15
B) The resources requirements for implementing strategy..................................................16
C) The use of SMART targets and its contribution in strategic objectives..........................16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
A business strategy refers to the element which is used by organisation as to set out its
targets and goals that it needs to achieve in long term. It is called as long term business planning
and it typically covers a duration of about 3-5 years. It is very important for an organisation to
formulate a business strategy as to provide a framework to its employees so that they can achieve
all individual and organisational goals in a limited period of time. It is very important for a
company in concern of execution of all task in a well defined manner (Astrachan, 2010). This
report is based on ALDI which is a multinational company and have discounted stores that sales
grocery and general merchandise. In this project various terms and techniques are used as to
evaluate vision, mission and other core competencies of firm. Also it will be analysed as to how
it can adopt different strategies for achieving desired level of growth. This report will assist in
identifying ways in which business strategy aids in achieving high level of growth for company.
TASK 1
a) Assessment of ALDI missions, visions, objectives, goals, core competencies
Business strategy is a component which is used by ALDI as to set out mission, vision,
goals and core competencies. It is a way of deriving long term path which will lead to
achievement of targets. ALDI is one of the fastest growing retail chain in United Kingdom
(Auzair, 2011). That is why it needs to specify as what is required to be achieved by company in
a set period of time. A business strategy will assist in providing a stable framework which can be
used to complete all task in a systematic manner. It also provide a mission, vision statement
which are later combined to be used for formulating goals, purpose and values of organisation.
 Vision: This is a statement which defines about the position where company sees itself in
future. It states about the basic idea and desire of promoter of company as what is
required to be achieved (Burlton, 2010). ALDI vision statement stated that, they just want
to introduce something that is new, different, qualitative and enhances company chances
of achieving competitive advantage over its competitors.
 Mission: It is a statement that seen to state about aim of organisation and what does it do
to achieve it. Basically it states about the path that will be used by organisation to attain
its vision. It inspires employee of company and provide direction to them. ALDI mission
statement is, “It wants to provide citizens a way of participation in developing an
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environment for enhancing standard of living while attaining all business goals and
objectives.
 Goals: They represents actual desires of company and specifies the long term targets.
Goals are prepared in accordance to vision and mission statement (Campbell, Edgar and
Stonehouse, 2011). ALDI goals are as follows:
◦ To grow further in United Kingdom and world
◦ To achieve the top position in global retailing sector
◦ To establish physical presence in more countries
◦ To fulfil its corporate responsibilities
 Objectives: These are used by company to to measure the level of progress that has been
achieved by it while working to attain its end goals.
 Core competencies: These are the capabilities which company possess and they assist in
gaining competitive advantage over others.
Strategic planning is done on the basis of the set goals and objectives of organisation.
ALDI has derived strategic plans as to achieve its short, medium and long term goals
(Casadesus-Masanell and Ricart, 2010). Basically by using strategic planning company is able to
prioritise its objectives in a way that they lead to achievement of all final goals. Strategic
planning is a very basic process of an organisation which is used for defining strategy, direction
and decision making regarding allocation of resources to various functions. It assist in extending
control mechanism for guiding the implementation process. The managers need to understand
the importance of strategic planning as it will assist them in preparing for uncertain future.
B & C) The factors that ALDI needs to consider while formulating strategic plans
Strategic plan refers to a document that is used for prioritising, focusing and
strengthening various task and skills as to achieve goals and objectives. Basically strategic
planning is done for managing all organisational activities while focusing its energy in same
direction. It aims to manage all resources and utilise them at optimum level. There are few
factors which ALDI needs to analyse:
 Future direction of competition: The strategic plan will assist organisation in setting a
path for its managers and employees (Chang and Chuang, 2011). So that they can use it
as a framework and achieve all their goals and objectives. The strategic plan will be made
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after analysing competitors plans and policies which are aimed at increasing market share
and growth.
◦ Example: Tesco aims to offer discounts via its stores as to attract customers, which
will be strategically approached
 Needs of customers: This is the most important factor which has to be analysed and
implemented. ALDI has to look at the need of consumers so that it can provide them the
required products and services. If customers are not happy then business wont grow. That
is why it is very important for company to ensure that its consumers needs is properly
analysed and all services are provided to them as to boost their satisfaction.
◦ Example: Consumers needs are ever changing, currently they want higher quality
goods at cheap rates.
 Gaining and maintaining competitive advantage: ALDI needs a strategic plan so that it
can effectively achieve competitive advantage over its competitors and gain huge sum of
profits (Cinquini and Tenucci, 2012). Strategic plan will assist in enhancing organisation
ability to cope up with situation and overcome issues.
◦ Example: Improving efficiency via inducting more attendee's will assist in catering
more consumers.
 Corporate level integration and communication of business plans: Any changes or
strategy has to be integrated into business process and also communicated to all
managerial levels. ALDI management has to ensure that employees do not have
confusion regarding any policy and process and it is completely integrated into
organisation.
◦ Example: Integration of organisation strutrure with business process.
D) Different planning techniques
Strategies are used for accomplishing task in an un-interrupted manner and systematic
way. They assist in boosting chances of comnpleting a task with a higher reate of success (Dong-
Hun, 2010). There are various tsrategies which can be used by ALDI for strategic planning: PEST: It is an analyses which assist in boosting understanding of all macro factors. It
includes four factors:
◦ Political: Currently United Kingdom polictical environment is unstable due to Brexit
and also the mixed result of elections. This is why the government and authorities are
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not able to perform all their functions in a proper manner which is not good for
business.
◦ Economic: The economy is still in recovering phase and impact of Brexist and
recession is still there (Eccles and Krzus, 2010). The British consumer is starting to
spend more money which is leading to higher level of flow of money in market.
◦ Social: Due to migration of people from war zones, there is social conflict and
business has to cater to the needs of all people while also avoid any controversy.
◦ Technology: This is a most dynamic factor as big technological changes are taking
place in the market which needs to be adopted by company. It increases the cost and
affects profitability but it is required in long run.
 BCG matrix: It is a matrix that is based on two axis (relative market share and market
growth rate) (Hahn, Kolk and Winn, 2010). It carries four groups which are: dogs, Csah
cows, Star, Question mark. It is also called as growth share matrix. It is as follows:
◦ Dog: This is an environment where market share is very low and also have less
market share. These are the products which have to phased out so that they do not
cause more losses to company.
◦ Cash Cows: These are the products which have lower growth rate but higher level of
market share (Haley, Haley and Tan, 2011). They are werll established and contribute
most in company profits without huge investments.
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◦ Stars: These are the products which have huge market share and growth rate . They
are the one which consumes huge sum of resources and give equal or higher level of
returns.
▪ ALDI currently is a star company as it invest huge chunk of money into its
process and also has a higher level of growth rate. The company has acheived a
growth rate of more than 17% in terms of sales in 2016 itself, which is a evidence
of it being a star performer and company.
◦ Question mark: These are the products which are new trend in market as they have
high growth rate and lower market share (Higgins, Omer and Phillips, 2015). These
are considered to consume huge some of respurces and if they fail they become dog.
E) Organisational Audit for ALDI
ALDI has to identify all risk and threats that exist in its environment as to ensure that
they are able to exploit all of their oppourtunities and strengths in proper manner. There are two
types of environment which has to audited by company in order to identify all factors. There are
various tools availaible which can be used to do organisational auditing of ALDI:
 SWOT analysis: It is an analysis which assist in assessing internal and external
environment and find out business strength, weakness, oppourtunities and threats (Hsieh
and Chen, 2011). ALDI can use it as a tool to do organisational audit:
Strength
 Serving top quality products
 Affordable pricing
 Well established in germany
 Operating cost is very low
 Established presence in more than 15
countries
Weakness
 It is still a small brand than its
competitors
 Less impactful due to competitors on
global stage
 Considered as a store as a cheap and
lower quality products
Opportunities
 Need to change people mentality by
using effective advertising and public
relations
 Scope of expansion in Asia and Africa
Threats
 It is not a one stop shopping place
 Less diversified that is why carries
higher level of risk
 Smaller brands established by ALDI
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are much weaker.
 Benchmarking: ALDI can use this technique as to ideolise a company that is much bigger
and serve products which are of higher quality (Liedtka, 2010). For benchmarking
company can use any standard for example in current scnerio it isw based on sales of all
retailers in United Kingdom:
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As it can be seen ALDI ranks 10th in market when it comes sales. It can take Tesco as a
benchmark which it has to breach in long run (Martin and Rice, 2010). The current strategic
7
Source 1: Top 10 Retailers in UK, 2016

position of company is very clear, they are penetrating market by providing various types of
discounts and other offers as to attract big number of consumers.
There are certain advantages as well as disadvantages of Benchmarking that are stated
below in the table:
ADVANTAGES DISADVANTAGES
 It assist in lowering labour cost
 Enhance product quality
 Boost sales and profits
 It does not assist in solving major
issues.
 Limited use
 Only compares numbers
ALDI held just 1.9% of market share in 2011, by 2013 they were able to capture more
than 3 % and currenlty hold 5 % of market share in UK which shows that companyy have huge
potential to grow in market and earn profits (Meskendahl, 2010). Also last year ALDI and its
competitor LIDl both registered a sales growth rate of more than 17% which states about change
in perception of consumers.
As mentioned in above image ALDi has registered growth a higher growth rate and the
only competitor its have is LIDI which is in the same category.
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Source 2: Sales growth, 2016

F) An environmental analysis for ALDI
Environment is a factor that have direct impact on an organisation functioning and
working. This is why it is very important for a company to keep on analysing and assing its
environment so that it can control or manage required changes (Montgomery, 2011). As stated
above, when an organsiation analyses all factors present in its micro and macrio environment for
assinsg their potential impact on its working, it is known as environmental audit. As mentioned
in defination, there are two types of factors which have to managed by organisation:
 Internal factors: These are the controllable elements which can be manupulated by
company by its strategies and polcies.
 External factors: These are the uncontrollable factors which have to be managed by
company by changing its approaches towards activities.
There are many way these two factors can be analysed but the best way to analyse these
model are
 Porter five forces model (Micro): It is a model which states about the competition that
exist in the micro environment of company (Nordqvist and Melin, 2010). It is as follows:
◦ Bargaining power of consumers: Currently UK market is led by Tesco and ALDI is
far bgehind in the list.
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◦ Bargaining power of suppliers: Currently in retailling sector it is easy to shift to
different suppliers for the purpose of getting better product quality at a reasonable
price (Oltra and Luisa Flor, 2010).
◦ Threat of new entrant: Retailling sector requires huge investment and credit ability
which makes new entry very difficult in market.
◦ Threat of subsitute: There are many subsituite to ALDI such as TESCO and other
brands which provide one stop shopping and small retail shops.
◦ Rivarly: There is intense competition going on in the industry which makes survival
and growth difficult.
There are certain advantages and disadvantages of these methods:
ADVANTAGES DISADVANTAGES
 It assist in gaining knowledge regarding
various forces existing in environment.
 Aims to provide competitive advantage
 There is huge cost involved in process
 Every changing dynamic are
unpredictable
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Source 3: Porter's Five Forces Model, 2013

 PESTEL analysis (Macro): This is the best tool to analyse the extrernal market. Basically
there are three factor which needs to be analysed currently, Legal, Environmental and
Social. As these issues are most trending.
◦ Legal: There are changes which will take place once Brexit will be complete like it
will be difficult for ALDI to stay in UK as it is a EU company.
◦ Environmental: There are many new treaties being signed by countries for saving
climate. Paris accord is a latest one which states about how carbon emmisiion needs
to be controlled.
◦ Social: These are the issues which are taking place in the society due to migration and
difference in opinion (Parnell, 2014). It will impact business as there is diversification
of demand which has to be catered by ALDI.
ADVANTAGES DISADVANTAGES
 It is a cost efficient method
 A better understanding can be
developed.
 Assist in exploiting opportunities.
 The dynamics are ever changing and
hence they can be analysed in a proper
manner.
 It do not covers factors which are
complicated and presents a simple list.
Company has to keep on assessing the environment as to ensure proper policy updating
and implementation.
G) The significance of stakeholder analysis
Stakeholders are the individuals who have some interest and also hs invested into it.
There are different types of stakeholders which exist in ALDI that needs to be manged by
company management as to ensure smooth processing and functioning. Every person or party
that have any interest into the business process and its functioning is called stakeholders. They
assist organisation with their funds but also limits it in doing certain type of activities which are
considered as exploitative. They are enumerated below:
 Customers: They are the end user of products which are sold by company. It is very
important for organisation to maintain their level of satisfaction as to boost its own sales.
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 Employees: These people are the one who work in the stores of ALDI (Gamble and
Thompson Jr, 2014). They act in a manner as defined in polices of company and achieve
all targets.
 Suppliers: They provide material which can be put on shelves of stores. It is very
essential to find a supplier who provide good quality of goods at lower prices.
 Government: It is the final authority whose policies can impact business functionality and
operational capabilities.
 Investors: They are the one who provides funds and other resources to company in
expectation of higher returns.
These are the stakeholders which have to be managed by ALDI managers (Reich and
Benbasat, 2013). They need to conduct stakeholder analysis as to ensure proper management:
KEEP SATISFIED
(most interested, most power)
These people needs to be fully satisfied
because they are fully engaged in the activities
of the business.
 Shareholders
 Employee's
MANAGE CLOSELY
(less interested, more power)
These people are to be continuously satisfied
but the satisfaction must be at a level the
person should not be bored.
 Suppliers
 Government
MONITOR
(more interest, less power)
These people are to be informed about the
adequate information and should be assured
that there is no major issues arising.
 Customers
 Financiers
KEEP INFORMED
(less interested, less power)
Just need to be informed but do not irritate
them by continuous messages.
 Local Community
Stakeholders analysis is very important for the company as to ensure that the satisfaction
of these individuals and parties is at par with requirement and they assist organisation in growth
instead of bringing it down.
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H) New strategy for ALDI
Strategy refers to an plan of action which has been designed as to achieve set short and
long term goals and objectives (Scholes, 2015). It is an art of of directing all efforts into one
direction. It is very important as to attain the vision and mission of company. Different strategy
is used at various levels of organisation. There are three levels in company:
 Strategic: It is the top management which prepares policies and plans for whole
organisation.
 Functional: This is a level which implements the strategies and policies after dividing
them into smaller objectives and goals.
 Operational: This is the level where strategy execution takes place.
For example, ALDI will top management will prepare a market expansion strategy where
company will start establishing new stores into UK northern region. This plan will be
implemented by the departmental heads working at functional level after they have divided it
into smaller parts (Schrader, Freimann and Seuring, 2012). The lower level employees will start
executing this plan by executing it.
ALDI needs new strategy for boosting its growth in United Kingdom market. It needs to
follow a process:
 Determining where company is: Currently ALDI is using minimum cost concept which
attract customers but its is not feasible for company in long run.
 Identifying what is important: A strategy to beat market leaders and increase profit
margin as well as brand image.
 Defining what needs to be achieved: Stable market share, brand image and a high growth
rate.
 Accountability: Managers at operational level.
 Review: Top management and middle level managers are responsible for this.
The company needs gto open more discount stores in UK as it is still limited in its reach
that is why it needs to adopt substantive growth strategy in the market where it will be allowed to
merge and acquire the market chains which are working in the United kingdom market
(Woodcock, Green and Starkey, 2011). The company is much larger on global front and it can
use its resources easily for higher rate o0f growth. It can merge with LIDI or acquire stores of
Morrisons as to increase their presence and establish themselves in market in a proper manner.
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TASK 2
A) Identifying market and choosing best strategy
ALDI is currently operating and growing in the United Kingdom market which is
attracted by the discounts given by its stores. The market has huge potential and returns on
investment are much better than anywhere else. There are different strategies which can beb used
by company to grow in market:
 Substantive growth: This is a strategy which is used by company as to register high level
growth as they acquire or merge with other companies which are serving in same sector.
This is the policy which will be used by ALDI (Oltra and Luisa Flor, 2010). It will
conduct horizontal or vertical integration where it will acquire company which work in
its same sector and also the suppliers.
◦ ALDI needs to use this strategy as this will enable it in acquiring as well as merging
with other entities as to grow its business further. Substantive growth is achieved
when organisation exploit all the factors. ALDI can merge with Lidi as to increase
market share or it can acquire a supplier as to reduce cost.
 Limited growth: This is strategy is used when company have limited resources which is
not the case for ALDI.
 Retrenchment: This is a strategy which is used when company do not have resources to
keep on functioning.
B) Justification of choosing substantive growth strategies
The strategy was chosen for few reasons. ALDI have huge amount of resources available
which it can use to integrate companies on horizontal as well as vertical basis. Currently
company have more than 550 stores in UK and it have market share of mere 5%. for increasing
market share and consumer base it needs to acquire more suppliers and other retailing companies
which are smaller in size.
To justify choosing substantive growth strategy, company needs to analyse it with a
market perspective. It needs to check whether the strategy is suitable with company vision and
mission. Currently, ALDI is in expansion mode which states that it has to use substantive growth
strategy as to ensure that it is able to gain more market share in United Kingdom. Also company
has to analyse its feasibility, it can be checked with the aid of various methods such as financial
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analysis and costing (Parnell, 2014). If the cost of merging as well as acquiring is too high then
it will not be feasible for company to go for substantive strategy but currently it is investing huge
amount which makes it the best choice.
The strategy will also be accepted by all stakeholders as they know that it will boost their
profits in future and assure better return. It will also assist in enhancing organisation image in
market that eill bring more support for this strategy from other external parties.
TASK 3
A) The roles and responsibilities of personnel involved in strategy implementation
Managers have the responsibility of implementing a policy. They have to assist and guide
lower level employees in executing the task which are stated in the strategy. There are certain
roles and responsibilities which have to be fulfilled by manager:
 Identification of market trends and making changes in the process for smooth
implementation
 Communicating all required information to all employees
 Motivating workers as to adapt change quickly
 Delegating all roles and responsibilities betweens subordinates
Responsibilities of Top management: They are involved and responsible for making plan
as well as policies which can be followed by all the employees as to achieve organisational goals
and objectives.
Responsibility of Employees: They need to execute each and every task in a efficent
manner so that they assist organisation in realising its targets.
Responsibility of Middle management: They are responsible for the implementation of
plans as well as polices formulated by 5top management.
These are some of the responsibilities which needs to be fulfilled by manager in the
process of strategy implementation so that organisation can achieve its goals with efficiency and
effectiveness.
B) The resources requirements for implementing strategy
Resources are most important for keeping up the functioning and implementing all
strategies in a proper manner (Reich and Benbasat, 2013). ALDI is a grocery and general
15

merchandise store which needs people and financial resources as well as products to put into
shelves. The resources required are explained below: Human resources: It needs human resources as to fulfil the task of assisting customers in
their shopping. Also they are important to keep the functioning of other departments
running as per requirement. For substantive strategy, company will need more people as
to attend customers in their new stores around the country. Finances: This is the source which keep on running all the functions in organisation.
There is hug financial requirement for ALDI as it need to expand in future. For merging
as well as acquiring organisation needs financial resources that will ensure that all
function as well as operations are running smooth.
 Products: These are the items which are put into shelves of stores and sold to consumer.
Company needs to ensure that it have all products which are required to fulfil the
requirement of consumers. Company needs to makes sure that all products are available
to consumers as per their regional demands. Also it needs to ensure that all shelf's are
filled and they are managed by the employees working as attendants.
These are the resources which are required in strategy implementation in ALDI.
C) The use of SMART targets and its contribution in strategic objectives
ALDI management needs to understand the importance of setting SMART targets and
objectives as to ensure that all of the goals are realistic and achievable in the set period of time
(Martin and Rice, 2010). The SMART targets set by management of ALDI are :
 It needs to gain 2% market share in next 12 months
 There is a requirement of boosting sales by 40% this year
 There is a need to bring down the operational cost by 30% in next 12 months
These are some of the targets set by ALDI management to ensure proper achievement of
goals and also the strategy will be implemented in a manner which align with the vision and
mission. These targets are set on the basis of SMART concept which states that all the goals need
to be specific, measurable, accurate, reliable and time bound so that it is easy for people to
understand and achieve them. As for substantive strategy, the goals are set for enlarging
company scope and size within 12 months and they will be set every year.
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CONCLUSION
Concluding this report it can be stated that ALDI needs to keep on updating its strategies
as to ensure that its mission, goals and objectives are achieved in a efficient and effective
manner. These days companies are using all the tools as to enhance their market share and
profitability which has to be used by ALDI too. There are many factors which needs to be
analysed by managers as they may impact strategy of company.
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