Business Strategy Analysis for Aldi Supermarket Chain

This assignment delves into the strategic analysis of Aldi supermarket chain, focusing on its missions, visions, strategic planning, stakeholder analysis, growth strategies, and implementation tactics. It evaluates the impact of macro and micro factors, resource requirements, and SMART targets for achieving strategic objectives.

Business Strategy
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Table of Contents
Introduction................................................................................................................................4
Part 1..........................................................................................................................................5
a) Provide an assessment of the extent to which Aldi’s missions, visions, objectives, goals,
core competencies inform strategic planning. (AC1.1).........................................................5
b) Analyse the factors to be considered by Aldi when formulating their strategic plans.
(AC 1.2)..................................................................................................................................7
c) Using evidence to support your answer evaluate the worth or usefulness of techniques
used when businesses develop their strategic plans. You are encouraged to use techniques
such as BCG growth matrix, SPACE or PIMS to enhance your answer. (AC1.3)................8
d) Carry out an organisational audit for ALDI and provide an analysis of their current
strategic position. (AC 2.1)..................................................................................................10
e) Carry out an environmental audit for ALDI showing both micro and macro
environment. You are advised to use Porter’s 5 Forces analysis to answer this task. (AC
2.2).......................................................................................................................................11
f) Assess the significance of stakeholder analysis for ALDI when formulating a new
strategy. You will explain why stakeholder analysis is important when formulating a new
strategy and support your answer with justifiable reasons. (AC 2.3)..................................13
g) Using the research and information collected about ALDI, present a new strategy ALDI
can follow. (AC 2.4).............................................................................................................15
Part 2........................................................................................................................................17
a) Identify a market (new or existing) and analyse the appropriateness of suitable strategy
for ALDI in relation to substantive growth, limited growth or retrenchment. You will need
to make a case for at least one of the three strategies mentioned. (AC 3.1)........................17
b) Provide a justification of one of the strategies for market entry and growth that you have
discussed in 3.1. You will need supporting evidence to your opinion or rational. (AC 3.2)
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..............................................................................................................................................18
Part 3........................................................................................................................................19
a) Provide an assessment of the roles and responsibilities of personnel who are involved in
the implementation of the strategy. (AC 4.1).......................................................................19
b) Provide an analysis of the resource requirements for the implementation of the strategy.
(AC 4.2)................................................................................................................................20
c) Evaluate how the use of SMART targets (give examples) can contribute to achieving the
strategic objectives. (AC 4.3)...............................................................................................21
Conclusion................................................................................................................................22
References................................................................................................................................23
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Introduction
This assignment includes the case study of the Aldi a supermarket chain for which the
different evaluation and analysis is done. The vision, mission and the objective that informs
the strategic planning is discussed in this assignment. After that there is the discussion of the
strategic plans, current strategy micro and macro factors affect this company is analysed in
this assignment. Further significance of stakeholder analysis and a new strategy that Aldi can
follow is discussed in this assignment. The Aldi follows the growth strategy is investigated in
this assignment. After that, there is the evaluation of the roles and the responsibly of the
strategy makers for the business of the Aldi. The resources that required in the strategy
making is also discussed. Finally, there is the analysis of the SMART target approach that
would help this organisation in achieving targets.
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Part 1
a) Provide an assessment of the extent to which Aldi’s missions, visions, objectives,
goals, core competencies inform strategic planning. (AC1.1)
The growth and development of the Aldi in the UK and in other parts of the world are due to
its excellent business strategies that are followed by this company in gaining the good sales
and high profits in the area served by this company.
Mission
Aldi mission is to provide the products that are available in its supermarkets at economical
prices that would help this company in getting a large number of customers. The mission is
getting fulfilled with this business strategy (ALDI, 2018).
The mission of this company is to encourage the employees of this organisation to encourage
the employees to do merchandising and distribution in the planned manner that would help
this company providing good services to customers.
Vision
The vision of this company is to provide the long-term savings and follow that business
model that enables this company to provide its customers that are fulfilled by this company
by providing the economical price products even in a recession and high inflation (ALDI,
2018).
Objective
Great quality at best prices
It is the objective of this company to provide good quality to its customers. This enables this
company to get a good number of customers. This is the business strategy that is fulfilling
company gaols (ALDI, 2018).
Fair and honest product offers
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The products offered to customers are at reasonable prices, there are different offers that are
provided by this company. The offers are fairly provided with no discrimination to the
customers (ALDI, 2018).
Responsibility for employee, customers and all stakeholders
Aldi used to provide the services to its customers with full of responsibility. Aldi used to
maintain the good organisational behaviour for its employees and follow good practices for
its stakeholders. This is the part of its business strategy that helps in attaining goals archived
(Ramdhani, et. al., 2017).
Core Competencies - Efficient business process
The employees, leaders, managers and partners of this organisation work by following the
effective policies that that help this organisation to work in an efficient manner. This is the
business strategy that helps this organisation to achieve great success.
From the above information, it is assessed that core competency, objectives, goals, visions
missions all are the business strategy of Aldi that help this organisation in gaining is business
expand all over the world (ALDI, 2018).
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b) Analyse the factors to be considered by Aldi when formulating their strategic plans.
(AC 1.2)
The factors that are considered by Aldi in the formation of the strategic plans are: -
1. Engagement
Aldi enables its staff to engage fully involved in the business process that is involved in the
development and the growth of this organisation. This would encourage and motivate the
staff and if the staff had genuine exact information about their work then they will perform
well for their organisation.
2. Communication
Bottom-up and the top-down approach is used to be followed in this organisation for forming
the good communication among the employees of the organisation. If there is good
communication there would be good coordination among the employees of the organisation
(Ramdhani, et. al., 2017).
3. Culture
The good organisation behaviour used to be followed in this organisation. Managers used soft
skills to communicate with the employees of the organisation. In this way sustainability in
this organisation is maintained.
4. Project Management
This company used to develop those projects that ensure the success of the business strategies
that are part of this company project. The projects usually include the high priorities for this
organisation that would enable this company in achieving goals.
5. Innovation
This organisation used to develop the different strategies, form the new team, restructures the
organisation gain that helps this organisation in getting the different outputs from these
practices (Ramdhani, et. al., 2017).
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c) Using evidence to support your answer evaluate the worth or usefulness of techniques
used when businesses develop their strategic plans. You are encouraged to use
techniques such as BCG growth matrix, SPACE or PIMS to enhance your answer.
(AC1.3)
BCG growth matrix
It is the chart that is used to analyse their business unit. This is the analysis that is used by the
organisations to know the actual performance and position of the company that helps the
company to make business strategies. The factors on which evaluation are done are: -
Cash cows
It is the factor that denotes that the company has the good market share in the slow-growing
industry (Net MBA, 2018).
Customer Retention
It is the factor that denotes low market share in the mature industry.
(Figure: BCG Growth Matrix)
(Source: Net MBA, 2018)
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Question marks
It is the factor that denotes the company position has the low market share in a high growth
market.
Stars
It is the factor that shows the particular company is having the high market share in the high
growing industry (Net MBA, 2018).
Usefulness of evidence
Aldi was launched in the UK in 1990. The UK supermarkets are the high growth industry. In
the high growth industry, this company enters the market with no market share. This
company uses the BCG growth matrix that enables this company to know about the
performance and the position of this company in the UK market. In the UK markets, the
giants were present already like the Tesco and Sainsbury. Even after that this company makes
the different strategies, goals and uses this growth matrix to grow its market share in the UK
market (European CEO, 2018).
A question mark is a factor that shows the actual position of this company in the starting of
this company in the UK. After that, this company grows and develop in this country and the
position of this company becomes good with the help of the business strategies and this
position evaluation matrix. Cash Cow is the factor that shows this company position in the
UK thereafter (European CEO, 2018).
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d) Carry out an organisational audit for ALDI and provide an analysis of their current
strategic position. (AC 2.1)
The organisational audit for this company can be understood well with the help of the
following: -
Strength Weakness
 Used to promote itself to serve high
quality of products to its customers at
affordable prices (Mbaskool, 2017).
 Operation cost maintained to be low
by this company.
 Operating in more than 15 countries.
 Approximately 8000 stores in all over
the world.
 This company is still having the low
share as compared to Tesco and the
Sainsbury.
 Limited range of products are sold by
this company
 This company y used to spend less on
the advertising (Mbaskool, 2017).
 This company allegedly regarded as
low cost and cheap cost stores.
Opportunities Threats
 Investment can be increased in
advertising that helps in increasing the
market share and targeting customers.
 African and Asian markets can be
targeted.
 This company not able to cater the
customers that are looking for the complete
shopping experiences.
 High level of completion from the
Asda, Ldli (Mbaskool, 2017).
This company has the good market position at present but this company has to more focus on
its strengths and threats. More focusing on the strength would make this company image
better than before. This would also help this company to make the business strategies that
would help this company to overcome the different threats that are with this company.
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e) Carry out an environmental audit for ALDI showing both micro and macro
environment. You are advised to use Porter’s 5 Forces analysis to answer this task. (AC
2.2)
Micro external environment
In this external analysis of the market for the Aldi, there is the discussion of the porter five
model that enables this company to evaluate its current position in the market and current
competition and helps in making the good strategies for this organisation.
Porter 5 Forces
In this model there are the factors that help this model in analysing current competition for
the Aldi is: -
Threat of New Entrants
It is the threat of this company that there are the new entreats that are coming in the British
supermarkets. This company operates relatively small stores in the UK so the other
companies can come in the British supermarkets and take its position (Blackburn, et. al.,
2013).
Threat of substitutes
It is the threat of this company that Asda can take its position in the British supermarkets as
this company has a high customer base (European CEO, 2018).
Bargaining power of customers
The customers used to move on those supermarkets that offer products on the prices that are
less than Aldi (Nielsen, 2018).
Bargaining power of suppliers
Supermarkets have high bargaining power as compared to the supplier. The good scale of
buying power is also the situation with this company in the UK.
Industry rivalry
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This company used to operate the low level fixed prices on the products but there are the
other supermarket chains that offer the products the low prices like Asda.
Macro
These are the factors that affect this company at the large level that are as follows: -
Political
UK government is providing the ease of business to the companies that are operating their
business in the UK. This helps companies in making more investment (Blackburn, et. al.,
2013).
Economical
The UK is out of recession now so the customers can move to high-cost mainstream
supermarkets from the low-cost product providers.
Social
The buying behaviour of the customers is that they want all the products at one roof but this
supermarket used to provide the limited products as compared to Tesco and the Sainsbury
(Shabanova, et. al., 2015).
Technological
Aldi not used to provides the online shopping while its competitors used to provide the online
shopping to its customers.
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f) Assess the significance of stakeholder analysis for ALDI when formulating a new
strategy. You will explain why stakeholder analysis is important when formulating a
new strategy and support your answer with justifiable reasons. (AC 2.3)
Stakeholder analysis is the analysis that provides the analysis for the organisation on the basis
of the four factors that are as follows: -
Keep satisfied
The stakeholders of the company should be satisfied form the company if they are not
satisfied then the steps are taken by the company to make them satisfy.
Manage closely
In this factor it is checked that stakeholders of the company are working closely or working
with the coordination or not (Barnes, et. al., 2016).
Monitor
It is monitored that the policies and the operations in which the stakeholders are involved are
followed by them in the correct way or not. It is checked by the organisation that the relations
between the employees of the organisation are well maintained.
Keep informed
It is very important that the employees of the organisation should be informed about the
methods and the policies that are involved by this organisation for the development and the
growth.
Importance of the Stakeholder analysis
Facilitate Marketing Strategies planning
With the analysis of the stakeholder analysis, the planning of the marketing strategies can be
done in an easy way. The genuine information that is provided by the stakeholders can be
used in the marketing for this company (Barnes, et. al., 2016).
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Motivating Employees
The issues and the problems of the employees can be analysed with the help of the
stakeholder analysis and the leaders and the managers of the Aldi used to motivate the
employees of the organisation.
Conflicts can be avoided
With this analysis, the different conflicts can be avoided that used to arise between different
stakeholders in the Aldi.
Forming Partnerships
Good collaborations can be formed between the manufacturer supplier and the Aldi that is
provided by the analysis of the stakeholders as the problems can be solved with this analysis.
The good product can be provided to the customer end with this partnership (Koryak, et. al.,
2015).
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g) Using the research and information collected about ALDI, present a new strategy
ALDI can follow. (AC 2.4)
ALDI, a leading retail company in the United Kingdom that is presently operating in
18countries and owns more than 10,000stores for performing its function of selling grocery,
lifestyle, and household products to the public. The company has the vision of providing a
high quality of products to its customers at the lowest possible prices so to that high value to
the money of customers can be given by the company. The company has the mission of
maximising its market and profits so that top position among the competitors can be
acquired. For achieving the objectives, ALDI performs its functions based on three core
values that are consistency, simplicity, and responsibility (Aldi, 2018). With the help of these
values, ALDI believes to achieve its objectives more effectively and appropriately as
consistency helps the company to keep on moving towards lowering down the cost. The
value of simplicity helps to develop good relationships with the employees and customers
that facilitates and supports the performance of ALDI and the value of responsibility towards
the society makes the company develop good insight that helps to attract more customers and
expand its market conveniently (Aldi, 2018).
The company is rapidly moving toward achieving its targets and the competitive advantages
such as quality products, cost leadership, product differentiation, and international presence
support the fast run of ALDI. With the help of quality products and low-cost production, the
customers are induced to purchase the products produced by ALDI that results in increasing
market proportion acquired by the company (Mbaskool, 2017). The competitive advantage or
strength of cost leadership enables ALDI to drive the price in the market that enables the
company to provide a huge discount to the customers and earn profits out of it because of
low-cost production. Moreover, the good company’s reputation and insight among the public
enables the company to easily expand its market in growing economies such as Asia and
Africa. This shows that the company is moving on the path of success and achieving its
desired objectives.
To achieve the desired objectives of market expansion, huge profits, and competitive position
in the market, ALDI is suggested to make some changes in its existing plan that increases the
ease in achieving the objectives. The new strategies that are designed for ALDI are as
follows:
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1. ALDI is suggested to change its advertisement strategy and use the technological
facility available so that wide awareness can be created among the individuals present over
the internet that eventually results in growing demand and facilitates the market expansion
process of ALDI (Mbaskool, 2017).
2. The company is suggested to divide the various functions of the organisation such as
sales, production, and marketing so that the activities can be outsourced to different countries
considering the minimum cost of operations. This along with low cost of operations helps
ALDI to develop a good reputation as increasing the welfare of the society by providing
employment opportunities (Businesscasestudies, 2018).
3. With the growing demand, ALDI can take the decision of setting up new production
units and sales stores in countries holding potential demand that strengthens the root of the
company in the market and enables to maximise its sales.
Objective: Market Expansion Roadmap
(Source: Author)
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Part 2
a) Identify a market (new or existing) and analyse the appropriateness of suitable
strategy for ALDI in relation to substantive growth, limited growth or retrenchment.
You will need to make a case for at least one of the three strategies mentioned. (AC 3.1)
In the British market, Aldi came in 1990 and after that year each year, this company had
shown a growth that is exponentially increasing in the figures. This is the situation that shows
that Aldi has Substantive growth in the British supermarket.
The appropriateness of this strategy can be understood as: -
Exponential Growth
This is a strategy that is followed by the Aldi in the UK that helps this organisation to achieve
the exponential growth. Growth is one of the most important variables in the business that
analyses the success.
Competition
This is the strategy that helps Aldi to compete with the giants of the supermarkets that were
already present in the British supermarkets (Nielsen, 2018).
Wealth Creation
This is the strategy that creates the wealth in the society as it enriches the businesses that are
operated in the society. It does not enrich the wealth of the employees as much but enriches
the wealth of the Aldi.
Priorities
Goals can be set on the basis of the different priorities that helped this organisation in
achieving the goals in the limited time period.
This company has grown well from 1990 to now in the UK. This company has a good share
of the market that is 6.8% in the UK and the growth rate is very high for this company in the
UK (Nielsen, 2018).
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b) Provide a justification of one of the strategies for market entry and growth that you
have discussed in 3.1. You will need supporting evidence to your opinion or rational.
(AC 3.2)
It is clearly justified that this company uses the substantive strategy for the growth in the
British market that helped this company in the forming of the good customer base in the
British supermarkets.
In 1990 when this company was started in the UK has no share in the UK market. This
company was much unknown among the customers of the UK. But with the following of the
substantive strategy this company grows well time to time.
(Figure: growth of supermarkets in the UK in 2015)
(Source: The Guardian, 2018)
This can be understood from the fact that in the year of 2015 this company has shown the
good growth rate in the British supermarket industry. The growth rate of this company by
2015 becomes more than 19.8%. This is the remarkable growth that this company had shown
in the year of 2015 in the supermarket industry of Britain (The Guardian, 2018).
It can be justified with the figures that are made available in this question that the substantive
strategy helped a lot to this company is growing in an efficient manner.
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Part 3
a) Provide an assessment of the roles and responsibilities of personnel who are involved
in the implementation of the strategy. (AC 4.1)
The chief executive the managers and the high-level employee of the organisation used to
make the strategies for the Aldi and the suggestions from the low-level employees is also
taken there can be the different roles and responsibilities that are as follows: -
Forecasting Outcomes
The objective for which the strategy is making its outcome is being forecast by the strategy
maker to the other employee of the Aldi.
Altering the Structure
There can be the restructuring of the organisation due to the demands of the market that
would help this organisation in achieving the success and growth (Koryak, et. al., 2015).
Communicating Directions
There can be the different directions that are necessary for implementing the strategy as it
requires the involvement of all the employees of the Aldi.
Cultivating Culture
The organisational culture is also cultivated by the high-level employee to make the
strategies fruitful and gaining the sustainability (Koryak, et. al., 2015).
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b) Provide an analysis of the resource requirements for the implementation of the
strategy. (AC 4.2)
Following are the resources that can be included in the implementation of strategy: -
Financial Resources
There can be the inclusion of the different financial resources that would be helpful for Aldi
in getting the successful implementation of the strategy. It is checked that the company have
enough funds to implement the particular strategy. It is checked that implementation of
strategy would not make the condition of the company bad in financial perspectives.
Environmental issues and trends
There are the different environmental laws that have to be followed by the business. It is
checked that implementation of strategy would not violate the law (Woodard, et. al., 2012).
Human Resources
The hiring of the new employees that can be helpful for the implementation of the strategy is
done by the Aldi.
Physical Resources
The inclusion of the different physical resources that would be helpful for the implementation
of the strategy is analysed like the storing space of the products (Woodard, et. al., 2012).
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c) Evaluate how the use of SMART targets (give examples) can contribute to achieving
the strategic objectives. (AC 4.3)
It is the strategic objective of the Aldi that this company wants to expand its business and
wants to grow the market share more than 7% in the UK in the upcoming three years so the
following is the Smart target plan that would help Aldi to achieve the desired targets
Specific
The targets of the Aldi should be specific in nature. This provides the clear vision of this
company that would be helpful for this organisation to grow in the British Supermarket.
Measurable
The goals of the organisation can be a measure that they are associated with the
organisational context of the Aldi or not. If not then the restructuring of the objectives used to
be done (Lawlor, 2012).
Achievable
The goal of this organisation is designed in this way that is achievable. This brings the
effectiveness of the goals achieving process by the organisation. If the goal is not achieved
then it is not good news for Aldi so the goals are set in the way so that they can be achieved.
Relevant
The goals should be relevant in nature. The goals should be designed in the way that the
geniuses of the gaols can be incurred in the organisational context.
Time-bound
There should be the deadlines that should be set by the organisation that would help this
organisation in achieving the goals of the organisation (Lawlor, 2012).
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Conclusion
It can be concluded from the assignment that strategy plays a vital role in the organisational
growth and the development. There are strategic plans that helped Aldi in development and
the Growth in the British supermarket industry. The macro and the micro factors are having
the positive as well as the negative impact on this organisation. It is quite significant to do an
analysis of the stakeholder for the sustainability of the Aldi. The substantive growth strategy
helped this company in making the remarkable growth rate in the British industry of the
supermarket. The strategy maker plays a vital role in achieving the growth goals for this
organisation in Britain. With the analysis of the resources required in the implementation of
the business strategy helped this organisation in gaining the success. The future targets of the
Aldi can be achieved with a SMART approach.
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