Business Strategy Analysis of Aldi: A Comprehensive SWOT, VRIO, and Porter's Five Forces Evaluation

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UNIT 32 BUSINESS STRATEGY
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Table of Contents
PART A................................................................................................................................7
Analyse the impact and influence which SWOT has on your chosen organisation and its business strategies
......................................................................................................................................10
Analyse strategic capabilities of your chosen organisation by using the VRIO framework......................12
Produce an industry analysis for your chosen organisation using Porter’s Five Forces model..................14
M1 Critically analyse the macro environment to determine and inform strategic management decisions.. . .15
M2 Critically evaluate the internal environment to assess strengths and weaknesses of an organisation’s
internal capabilities, structure, and skill set using The McKinsey 7-S Framework................................16
D1 Critique and interpret information and data applying environmental and competitive analysis to produce a
set of valid strategic directions, objectives and tactical actions........................................................17
PART B..............................................................................................................................18
Evaluation of the different types of strategic directions available to the organization............................18
Justify and recommend the most appropriate growth platform and strategies......................................18
M3 Devise appropriate strategies to improve competitive edge and market position based on the outcomes.
......................................................................................................................................19
M4 Produce a strategic management plan that has tangible and tactical strategic priorities and objectives.. 20
Conclusion...........................................................................................................................21
References...........................................................................................................................22
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Introduction
In this report, it analyse the concept of business strategy in which it explains the different factors. It also
evaluates the different models of Aldi organisations with their capabilities. It also helps to understand the
meaning of strategy and role of organisation with their mission and vision. The strategic capabilities are also
discussed with the VRIO model. The different models and strategies are also discussed to analyse the impact of
organisations and also provides the solutions for the organisations.
NAME OF YOUR ORGANISATION
Aldi has selected for the business strategy, it is the chain of supermarkets that has a turnover of €50 million.
LOGO
Figure: Logo
Source: campaignlive.co.uk, 2017
SLOGAN
Aldi introduce the new slogan that is “Biggest ever ad push”
The definition and meaning of strategy
It is the plan that helps to attain the different goals under the conditions of uncertainty. It is the method that
brings the future such as a solution to the problem. Strategy involves the setting of goals and identifies the
actions to accomplish the goals and also mobilise the resources to implement the actions.
Strategic intent and different strategic direction
It is the high-level statement of means by which Aldi will achieve its vision. It is the declaration of design for
creating desirable expectations. It is the vision of the company that Aldi wants to achieve in the long term.
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Strategic direction consists of central forces that propel the business towards the goals and objectives. Strategic
direction consists of mission, strategies, values, tactics that contribute towards the accomplishment.
Strategic Context
It is the high-level plan and policies that help to achieve the goals under the different conditions. It includes the
different elements such as tactics, objectives, mission etc. It is important as the resources are provided to attain
the accomplishment and that can be in limited form. It involves the goals and that identifies the activities and
resources are mobilising to attain the goals. It can emerge as a pattern of actions as the business can adapt
according to the environment. It also includes the different models such as PESTLE that determine the external
factors and SWOT that determines the internal factors of the organisations(Schuhmacher, et. al., 2018).
What are planning techniques?
It is the responsibility of business that can be overlooked by the firms with the limited time and resources.
There are different techniques used by the Aldi such as SPACE, BCG that ensures the employees and
stakeholders achieve towards the goals and objective(Chereau and Meschi, 2018).
Identify some planning techniques
 BCG (Boston Consulting Group) Growth Share Matrix
 SPACE (Strategic Position and Action Evaluation) Matrix
 The Directional Policy Matrix (DPM)
 Profit Impact of Market Strategies (PIMS
BCG (Boston Consulting Group) Growth Share Matrix
It is the tool of planning that can be used graphically for the services and products of Aldi. These techniques
derived into four factors that are dogs, Question marks, Stars, cash cows.
 Dogs: It depicts the low market growth rate and low share of market that neither generates nor
consumes the cash.
 Question marks: This factor is growing rapidly and consumes the more cash as they have the low
market shares and does not generate the cash.
 Stars: It generates the more cash as they have the high rate of market share and they consume a large
amount of cash due to the high rate of growth.
 Cash cows: These are recognised as the leaders in mature market, they exhibit the return on the assets
which is greater than the growth rate of market(Cascio, 2018).
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SPACE (Strategic Position and Action Evaluation) Matrix
It is the analytical technique that can be used in planning and strategic management. It allows to create an idea
for the strategy of business. It accesses the internal and external environment that allows the appropriate
strategy. The internal environment describes the two criteria that are:
 Competitive advantage: It can be influenced by different factors such as product lifecycle, customer
loyalty, product quality etc.
 Financial strength: It is affected by the debt ratio, return on investment, inventory turnover etc.
External environment is based on the criteria such as:
 Environmental stability: This factor can be affected by the inflation rate, the price of different products,
demand, and supply of the products.
 Industry Attractiveness: It is affected by different factors such as financial stability, utilisation of
resources, labor productivity(Martinsuo and Hoverfält, 2018).
The Directional Policy Matrix (DPM)
It is known as Mckinsey matrix and a way of prioritizing and categorizing opportunities. It includes the
different strategic decisions such as:
 Double or quit: It is the potential major for the future.
 Growth: It is the market that focuses on the resources.
 Custodial: It does not commit and resources as a cash cow.
 Cash generator: It can use as the expansion and growth.
 Phased withdrawal: In this, the cash can be moved to SBU’s with high potential.
 Divest: The assets can be liquidated in a frequent manner.
 Leader: In this, it focuses on the resources.
 Try harder: It can be vulnerable for the long period of time.
Profit Impact of Market Strategies (PIMS)
It is the long-term and comprehensive study of the strategic business units. PIMS is the collection of
statistically documented that is drawn from the business and helps to understand the various types of strategies
in business environments. The PIMS helps to identify the quality of product, lower costs, and capital
investments.
Business organisation
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It is the supermarket chains that have a turnover of €50 million. It serves the different products such as foods,
Sanitary Articles, Household goods, beverage. It operates in France, Denmark, Spain, Britain etc. Aldi stores
display the different items at various prices that include the different items. It sells the custom branded products
with different name of brands such as Grandessa and fit & Active.
Aldi was founded by the two brothers Theo and Karl in 1964 and took over the store of mother Essen’s that has
been operated from 1913. In 1962, he introduces the Aldi.
Mission
The mission should be precise and clear that represents the purpose of existence. It has the statement of “Spend
a little, live a lot” It supports the beliefs and values. It provides the low-quality products to the poor who are not
capable to purchase.
Vision/strategic intent
Vision and strategic intent are related to the mission and also have the future time. Visions are intended states
of the organisations in future. For example, Moscow is interested in the big picture and not with details; they
are concerned with the future of business.
Goal
The goal of Aldi is to provide better quality products at the fair and best price. It also provides the responsibility
towards the employees, community, and partners etc.
Objectives
 Aldi provides the job opportunities to all over world.
 To increase the market share and also provide the high-quality products and value for clients.
Core competencies
The core competency of Aldi is an emphasis on price. There are different measures that are taken by Aldi such
as cost leadership strategy in which there is a number of services and goods that offers the high quality at
competitive pricing. They also emphasise on their own brands in order to remain independent and also enable
them to avoid the high cost of marketing that is in relation to the national brands and set their own product,
prices and policies.
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