Business Strategy and its Impact

This assignment delves into the critical concept of business strategy, examining its various elements and their influence on organizational performance. It analyzes Porter's Generic Strategies framework, providing insights into cost leadership, differentiation, and focus strategies. The assignment further explores the connection between business strategy, marketing, and sustainability through real-world examples and case studies, highlighting the importance of strategic alignment for achieving success in dynamic business environments.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
(a) The way mission, vision, objectives, goals and core competencies inform strategic
planning..................................................................................................................................1
(c) Factors needed to be considered during formulation of strategic plans............................2
(d) Usefulness of techniques during development of strategic plans.....................................3
(e) Organisational audit for ALDI and its strategic position..................................................4
(f) Environmental audit for ALDI..........................................................................................5
(g) Importance of stakeholder analysis for ALDI..................................................................6
(h) New strategy for ALDI.....................................................................................................6
TASK 2............................................................................................................................................7
(a) Appropriateness of suitable strategy for ALDI.................................................................7
(b) Justification of strategies for market entry and growth....................................................8
TASK 3............................................................................................................................................8
(a) Roles and responsibilities of personnel involved in strategy implementation..................8
(b) Resources required during implementation of strategy....................................................9
(c) Contribution of SMART targets in achieving strategic objectives...................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Business strategy is a process of deciding future actions of company for attaining the set
goals and objectives in an effective manner. This also indicates allocation of resources and funds
to every function of enterprise (Ackermann and Audretsch, 2013). Formulating an effective
strategic plan is essential for an enterprise as this guides the manager in taking business related
decision which contributes in development of firm (Business Strategy, 2015). Number of
elements are there which affect the process of strategic planning and examining those factors is
necessary for firms. With the help of this, company can offer quality products to its customers at
affordable prices. ALDI, a large and leading retailer in the grocery sector of UK is selected in
present study. Various elements which must be considered by the manager during process of
strategic planning and which affect this process are all given in this report. Further, importance
of stakeholder analysis and resources required to gain maximum benefits of strategy
implementation are all mentioned here.
TASK 1
(a) The way mission, vision, objectives, goals and core competencies inform strategic planning
Strategic planning is a process in which manager of firm takes various decisions such as
allocation of resources, deciding roles and responsibilities of firm, directing and supporting them
so that they can complete the assign task in a way that contributes in success and growth of
organisation. It comes under the responsibility of manager to formulate better policies and
strategies for business (Bharadwaj and et. al., 2013). Number of elements are there which affect
the process of strategic planning and considering those factors is necessary. Mission, vision, core
competencies and goals of firm should be considered by the manager as this affects strategic
plans of business. Mission: This indicates the future course of actions and decisions which are required to
be completed by firm. It highlights the market segments to which company offers
products and services. Aldi's mission is to achieve success and growth in market by
attaining high efficiency at every level of firm from manufacturing of products to its
distribution. Main focus of firm is to offer high quality products to its customers at
affordable prices.
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 Vision: This highlights the principles and philosophy of firm which are required to be
follow by employees. Vision of ALDI is to offer high quality products to its customers at
affordable prices- Guaranteed. This guides manager in taking the future actions of firm
and affecting strategic planning. Objectives: These are long as well as short term goals which are necessary to achieve for
attain growth of firm. Objective of ALDI is to become a leading brand in the grocery
sector of UK.
 Core competencies: This indicates the elements which support in effective completion of
business operations and at the same time provides competitive benefits to company
(Azar, 2011). Skilled employees are one of the biggest core competencies of ALDI.
Quality products at affordable prices is another competency of firm which focuses on
utilising all resources to achieve efficiency in the production process and all this affects
strategic planning.
(c) Factors needed to be considered during formulation of strategic plans
Strategic planning is the process of deciding future actions of company. Various elements
are there which affect the process of strategic planning. Some of them are internal elements and
others are external. Following are the factors which are required to be considered by the manager
of ALDI while formulating strategic plans for business: Organisational culture: This factor comes under the internal element as ALDI is
multinational firm so number of employees from different culture work in firm. This is
the element which gives shape to their behaviour and attitudes that affect their decision
at workplace. Competition: This is an external element which affects the decisions and actions taken
by an enterprise (Azar, 2011). Due to number of rivals such as TESCO, ASDA and
M&S, ALDI faces high competition in market. Due to this, company is required to use
aggressive strategies of promotion. This helps the firm in attracting a large number of
individuals towards its products and improves market share of organisation. Technological factor: In today's business environment, technology which firm uses for
production of its products largely affect its profit and market share. To manufacture
quality products and better satisfy the needs of its customers, firm requires using new
and effective technology.
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 Strengths and weaknesses: This is another important element which is required to be
considered by the manager while formulating strategic plans for business (Bucolo and
Matthews, 2011). This helps the manager in managing all actions of firm by which it can
better use its strengths and form a large customer base.
(d) Usefulness of techniques during development of strategic plans
Number of techniques are there which firm can use for developing its strategic plans. It is
very important that right technique should be used by company as this helps to formulate a better
plan for business. Following are the two major techniques which can be used by the manager of
ALDI.
BCG matrix: This matrix supports the manager in long term planning of organisation. It
matrix is divided into four parts: Stars: This part of matrix indicates those products of firm which have high growth rate
and large market share. These types of products require huge investment to maintain its
growth and market share. Dogs: This part of matrix indicates the products having low market share and growth
rate. This situation highlights that firm is required to cut down all its unnecessary costs. Cash cows: It is another segment of this matrix which indicates the products of firm
having low growth rate but high market share.
 Question marks: This part of BCG matrix indicate the products having high growth rate
but low market share. Firm generally faces loss in this situation.
Profit impact of market strategy (PIMS): One of the main features of this strategy is
that it helps firm in getting competitive advantage (Bucolo and MattMatzler, K. and et. al., 2013.
hews, 2011). This supports the firm in collecting relevant and useful information which helps
manager in taking better decisions. This strategy considers the following factors:
 Operating activities of enterprise
 Competitive position of business entity
 Strategic development
 Structure which firm adopts in its production process
 Nature of business environment
 Budget
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(e) Organisational audit for ALDI and its strategic position
Organisational audit is a process in which manager examines all business operations for
taking better decisions (Annabi and McGann, 2013). It helps the manager in collecting relevant
data about every function of company. SWOT analysis is a tool which can be used by the
manager of ALDI for this.
Strengths:
This section of SWOT analysis indicates the features and special qualities of firm which
provides competitive benefits to business. Following are the major strengths of ALDI:
 Operating cost of firm is low.
 Company offers better and quality products to its customers at affordable prices.
 Firm has around 8000 stores and operate in more than 15 countries Store layouts and locations.
Weaknesses:
 Sometimes, products of firm is regarded as cheap quality.
 Small as compared to other big brands Company fails to impact on global level due to small number of chain stores
Opportunities:
 Company can expand its activities in countries having growing economies like Africa and
Asia.
 Firm is required to invest more in its promotional activities.
 Focus of customer relationship improves the perception of customers.
 Use of technology in stores improve the shopping experience. Increase brand loyalty and awareness.
Threats:
 Biggest threat of firm is that it fails to provide a full shopping experience to customers
and fails to fulfil the requirement of shoppers.
 Variations in government subsidies, taxes and fuel prices.
 Large number of rivals offering lower prices
 Price sensitive customers
 Low brand loyalty
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(f) Environmental audit for ALDI
Environmental audit is a procedure in which manager first identifies and then examine
the elements existing in business environment (Auzair, 2011). One of the main benefits of this
analysis is that it helps manager in formulating better and effective plans for business. Porter's
five forces analysis can be used by the managers of ALDI. Extent of rivalry: Competition in retail industry is aggressive as number of players offer
same quality of products at lower price (Porter's Generic Strategy Assignment Help,
2017). Wal-Mart, Woolworth and Coles are the major rivals of ALDI. Firm operates with
a principle of minimise fixed cost. Competitive rivalry for ALDI is very high. Threats of new entrants: Threat of new player in retail industry is medium as this
requires huge amount of funds to be invested. Further, due to low cost, profits of
supermarkets is very low in this sector. Bargaining power of suppliers: Large number of suppliers are there in retail sector
which are ready to supply same products at identical or even in less price than market
share (Azar, 2011). Mainly, suppliers are not in the position to influence market activities
and prices of products. Bargaining power of buyers: Industry in which ALDI operates is the one in which every
seller put efforts to reduce final price of products. This provides a great bargaining power
to buyers. In all this, ALDI is not in the position to influence and increase prices of
products as bargaining power of buyers is very high.
 Threats of substitutes: Products of ALDI are not the unique one as other players also sell
the same. Goods offered by ALDI can be easily brought from any other retail store and
this increases the threat of substitution for firm.
(g) Importance of stakeholder analysis for ALDI
Stakeholders are known as the individuals which support and contribute in success of
firm either directly or indirectly. Suppliers, creditors, shareholders, employees, union,
government and community are known as major stakeholders of a company (Bharadwaj and et.
al., 2013). This analysis is carried out by organisation who support and provide their guidance in
completion of business activities. One of the main benefit of this analysis is that it helps manager
in formulate better and effective plans for business (Stakeholder Analysis, 2017). Significance of
stakeholder analysis can be understood by following points:
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 This help organisation in get opinions and information from stakeholders.
 This help enterprise in get support of powerful stakeholders.
 This guide manager in understand nature of stakeholders with help of effective
communication.
 This help organisation in estimate actions and reaction of employees about business
activities.
Stakeholder analysis is a step by step process and major steps include under this as follows: Step one: Under this, company identify the individuals involved in business operations
and get affected by the same. Step two: In this step, firm identify the power, influence and interest of stakeholders
(Bucolo and Matthews, 2011). Company do focus on the stakeholders with high power,
interest and influences as these are the one who largely affect the strategies and decisions
of firm.
 Step three: This is the last step of stakeholder analysis in which enterprise require to
develop understanding about the people that are more important for firm and then
manager collect their opinions and feedbacks for take future decisions.
(h) New strategy for ALDI
Number of activities and operations are execute by business enterprise. For achieve set
goals and objectives in an effective way it is very essential that right strategy should be use
business entity. Porter's generic model can be used by ALDI for this. Cost leadership: In this strategy, company do maximum efforts to become the low cost
producer. After that it is necessary for firm to identify the sources through which it can
get the cost advantage (Kalyani and Sahoo, 2011). Mainly two ways there for achieve the
same which is enhance market share with help of lower prices of product and increase
company's profits by reducing cost of business operations. Cost differentiation: Under this strategy firm produce products unique and more
attractive from its rivals. This require huge efforts in innovation and research. Further, it
is very essential that firm should have the ability to deliver better and quality products to
its customers. Cost focus: This strategy states that company focus more on niche markets by examine
the specific needs of customers of that market (Köseoglu and et. al., 2013). Company
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offer unique products to its customers and due to this enjoys a strong brand loyalty. This
segment is less attractive for new players.
 Differentiation: Under this, focus of firm remain on potential customers which purchase
different products and services.
TASK 2
(a) Appropriateness of suitable strategy for ALDI
ALDI is a multinational enterprise and operate in number of countries. Still firm does not
have a strong market share in Asia and Europe. Manager of firm decide to expand business
activities in Asia to generate more number of profits and to capture a larger market share. With
this firm can satisfy the needs of large number of customers and this will enhance the positive
image of brand.
For expand its business operations in Asia firm decided to go with the strategy of
substantive growth. Under this strategy company expand its business activities either
horizontally or vertically (Meskendahl, 2010). Company acquire other enterprises to interrelate
its operations and activities. All this enhance the profits of firm. In addition to this, this strategy
help firm in introduce new products and services in market. This strategy works in two ways first
it enhance collaboration with clients and second is provide areas to expand business activities.
All this help firm in manufacture quality products and serve more number of customers.
(b) Justification of strategies for market entry and growth
ALDI adopt the strategy called substantive growth. Main reason of firm behind choose
this strategy is to expand its business strategies in Asia by collaborate with business agents. This
provide an opportunity to firm to serve more number of customers which increase the number of
company's profits.
With this firm can grasp the market opportunities and can attain sustainability (Mitra and
Bhardwaj, 2010). With help of online marketing company can increase the sale of its products as
this help in attract large number of customers towards company' product. Further, this help firm
in create and maintain good relations with suppliers which also provide various benefits to firm.
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TASK 3
(a) Roles and responsibilities of personnel involved in strategy implementation
Staff members of firm are the one who play a big role in process of strategy
implementation. Without their support and actions a company cannot get benefits of strategy
implementation (Schaltegger and Wagner, 2011). Roles and responsibilities of personnel involve
in strategy implementation can be understood by the following points: Managers: Managers of firm are the one which play a significance role in strategy
implementation. These are the one who allocate resources, assign roles and
responsibilities, collect relevant information and motivate employees to work well.
Supervision of all activities is done by them. Employees: These are the one who perform all operations at workplace and support
enterprise to achieve its set goals and objectives (Slater, Olson and Finnegan, 2011).
These individuals manufacture products for target customers of firm. Right training
should be offer to them so they can perform their assign roles in an effective way. It
comes under the responsibility of employees to perform their duties in an effective way
so company can easily achieve its end goals.
 Engineers: These are known as the professional and technical experts which provide
their guidance to handle technical equipment at workplace. They help workers to
understand how a technology work so they can handle technical equipment in an
effective way.
(b) Resources required during implementation of strategy
Effective implementation of strategy is very essential for enterprise to get all its benefits.
For achieve this it is very important that firm should have all the resources required during
strategy implementation (Tsamenyi, Sahadev and Qiao, 2011). Lack of resources create obstacles
in process of strategy implementation and at the same time increase cost of business operations.
Major resources require to achieve strategy implementation are as follows: Physical resources: Major physical resources require during strategy implementation are
furniture, building and technology. It is very necessary that ALDI should have new and
updated technology for undertake its production process.
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 Human resources: These are known as the employees require to achieve effective
implementation of strategy. Skilled and capable workers ensure completion of business
activities in time.
 Financial resources: Funds are known as blood of an enterprise. A firm cannot survive
or cannot execute its activities without funds. So it is very essential that firm should have
adequate amount of funds (Valos and Bednall, 2010). Lack of this create delays in
business operations and raise many other issues.
(c) Contribution of SMART targets in achieving strategic objectives
Concept of SMART targets should be used by the manager of ALDI as this helps the firm
in attaining its set goals and objectives in an effective way. SMART indicate specific,
measurable, attainable and realistic as well as time bound objectives. One of the major benefits
of this is that it helps manager in examining the effectiveness of strategy used by firm and at the
same time, helps in completing business operations in stipulated period of time. Specific: This component indicates that final objective of firm should be specific. This
supports actions of manager and at the same time, guides him in taking right business
decision (Woerner and Wixom, 2015). All this helps the firm in getting maximum
benefits of strategy. Measurable: This factor highlights that final goal of firm should be measurable. This
helps the manager in examining effectiveness of strategy used. For example: ALDI wants
to enhance its market share by 2 % in coming 6 months. Attainable: According to this final gaols of firm should be acceptable at every level of
firm. Acceptance help firm in get support of all stakeholders. Realistic: This means that strategic objectives of firm should be that whose completion
add value in company's operations (Woerner and Wixom, 2015).
 Time bound: Under this, manager set time duration to achieve objectives and it will help
in save the time as well as cost of business. For example, ALDI wants to increase number
of its profits by 12% in coming one year.
CONCLUSION
From the given information, it can be concluded that by formulating a better strategy,
ALDI can achieve its set goals and objectives in an effective way. Various elements which affect
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the process of strategic planning should be considered by the manager. It is very important for
employees to perform their roles and responsibilities in an effective way. With this, firm can get
maximum benefits from the strategy implementation.
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Online
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<http://finsburyfoods.co.uk/who-we-are/business-strategy/>.
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<http://www.assignments4u.com/porters-generic-strategy-assignment-help/>.
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<https://knowhownonprofit.org/organisation/strategy/directionsetting/stakeholder>.
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