Strategic Analysis of ALDI's Success

This assignment requires a strategic analysis of ALDI's success. Students must examine the company's competitive position by applying Porter's Five Forces model. Additionally, they need to identify and analyze key elements of ALDI's new strategy, including SMART objectives, for sustained growth and market leadership in the discount supermarket sector.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
A. Mission, vision, objectives, goals and core competencies of ALDI's strategic planning..3
B. The factors which are considered by ALDI while formulating the strategic plan ............4
C. Usefulness of different techniques that are used to develop strategic plans......................5
D. Audit for assessing the current strategic position..............................................................6
E. Environmental audit for ALDI with micro and macro environment ................................7
F. Importance of stakeholders for ALDI in the formulation of new strategy ........................9
G. New strategic plan for ALDI ............................................................................................9
TASK 2 .........................................................................................................................................10
A. Analysis of market and suitable strategy for the cited organisation................................10
B. Justification of strategy....................................................................................................11
TASK 3 .........................................................................................................................................11
A. Roles and responsibilities of the employees in the implementation of organisation strategy
..............................................................................................................................................11
B. Requirement of resources for implementing organisational strategy .............................12
C. SMART objectives to achieve strategic position ............................................................13
CONCLUSION .............................................................................................................................14
REFERENCES .............................................................................................................................15

INTRODUCTION
Aldi is one of the leading supermarket chain in the UK which has over 10000 stores all
around the world. The company focuses and believes in offering high quality products and
services to the customers at a reasonable price. This report will identify and analyse the various
business strategies used by Aldi in order to sustain the market position and achieve its goals or
objectives. The report will also examine and determine new as well as current market responsible
for the development and growth of the organisation. Furthermore, the factors that needs to be
considered while developing a business strategy will be also discussed in the following report
along with the implementation of an effective business strategy. The concept of SMART
objective will be also explained in this report.
TASK 1
A. Mission, vision, objectives, goals and core competencies of ALDI's strategic planning.
Mission – The mission of ALDI is to achieve a leading position in the global market by
defeating the competitors such as Sainsbury and Tesco. ALDI has an aim to become people's
first preference or choice in terms of supermarkets. The company is ensuring that the prices and
quality of their products are satisfactory to the customers. The mission of ALDI can be
explained as to provide high quality products at low prices achieving the satisfaction of their
customer in local as well as global market (Dobni, Klassen and Nelson, 2015).
Vision – The vision of ALDI can be determined by their concept of offering high quality
products at lower prices. The vision of ALDI is clear and simple, high saving, good quality and
increased number of customers and high sales. The organisation is an impressive mixture of sales
oriented and market oriented company which is very beneficial for the fulfilling the vision of
their business.
Objective of ALDI – The objective defines the main motive or goal of a business or
organisation. The objective of an organisation plays a very important role in designing and
developing organisation's policies as well as business activities such as determining availability
of resources etc. The main goal or objective of ALDI is to achieve a high market share and
generate higher profits as compared to their competitors within the industry. Objective of the
organisation helps it to design and develop effective business strategies to sustain as well as
develop their business in a highly competitive market.

Goals – The outcomes of each and every strategic plan are the goals of an organisation such as
ALDI, within the strategic planning goal of ALDI is to increase the talent and skill of their
human resources or employees in order to enhance their productivity which will ultimately lead
towards high profitability. The goals of ALDI higher realistic and achieved in a time period with
high effectiveness and efficiency (ALDI. 2017).
Core competencies of ALDI in strategic planning – The core competencies of ALDI is to offer
high quality products at low prices. In order to ensure these core competencies the organisation
focus on various elements as described below -
1. Strategy based on the cost leadership – In order achieve the cost leadership in the market
ALDI focus on producing high quality products at lower cost so that they can offer them
to the customers at relatively low prices.
2. Building a good brand – ALDI try to focus on developing effective and impressive brand
image in the marketplace. In order to sustain in a highly competitive market or industry
ALDI try to build healthy and strong relationship with their customers which helps in
creating a good brand image in the market or industry.
B. The factors which are considered by ALDI while formulating the strategic plan
There are various factors that ALDI consider while formulating their strategic plans,
these factors are as described below -
 Engagement – Planning of strategy is a process nor does an event, this process require
involvement of each and every individual working at various levels or departments of the
organisation. The involvement of every employee within the ALDI is very essential for
making or developing effective plans or strategies related to the business operations. The
contribution of every employees is very beneficial for developing most effective strategy,
different employees have various ideas and knowledge which is very helpful for the
business planning.
 Project Management – There are two factors with regards to the project management
after the development of strategic plan. The first factor is to value the project which is
required to make sure the success in execution of each and every strategy. The other
factor is to ensure the allocation of resources in various projects should be according to
the priority of projects or tasks.

 Culture – The culture of every organisation or company is dependent on the attitude,
beliefs and behaviour of the employees at their workplace. The organisation culture
within ALDI is diverse and unique, the employees working in ALDI are effective and
adopt the changes required according to the strategic plans. They are also responsible and
flexible in their working styles or culture (Papke-Shields and Boyer-Wright, 2017).
 Communication – The communication is one of the most important process which is
used in order to develop effective organisational strategies or plans for the success of the
business. ALDI focus on practising. The change in ideas and knowledge among various
levels of an organisation is very important, so that each and every aspect or area of the
organisation can be considered while forming a strategy or plan.
 Innovation – The various strategic plans within the ALDI involve growth and
development of many new products and services. This results to the introduction or
development of innovation in the business activities and operation.
C. Usefulness of different techniques that are used to develop strategic plans
Keeping in mind the end goal to create key arrangement, adequacy can be produced at
working environment for business improvement. ALDI work effectively to improve their benefit
and nature of items that have constructive outcome on client. In this specific circumstance,
following certain procedures that utilized for creating key designs in business:
BCG framework: BCG grid is outlined as the item portfolio that contains diverse elements and
components. It incorporates following components that help to create vital arrangement:
1. Stars: Stars characterizes as development of the association that can acquire gainful
results ALDI. It helps to upgrade high measure of money that is required to work more
capacities and achieve solid piece of the pie and high development rate. At the point
when arrangement of enhanced association has stars, it will guarantee trade age out the
future.
2. Cash cows - It shows return on resources that make high market development rate. In this
way, it helps to produce more money which required to association to fulfil their client in
fruitful way. It gives money that helps to ALDI to take care of their authoritative
expenses inside the association. In innovative work program, it helps to give
administrations to the corporate obligation and pay profit to investors too.

3. Dogs: Dogs sees low piece of the pie and development rate that create and purchaser
expansive measure of money. It additionally tied up with minimal potential to enhance
the business and its activities (Massis and Kotlar, 2014).
4. Question mark: Question stamp quickly developing and improve client base inside the
venture. Because of low piece of the pie, they have not created more money. It is
otherwise called the issue kid in ALDI which can increase high piece of the overall
industry.
PIMS – It is called as Profit impact of Marketing Strategy which raises the competitive
advantages for the business. It helps in regulating the various rules and regulations in the
business activities or operations. This strategy helps in defining long terms goals and objectives
as well as performance for strategic business unit within the retail sector. It consists analysis of
pricing, quality, innovation and vertical integration.
D. Audit for assessing the current strategic position.
In order to analyse the current strategic position it is important to identify and determine
the goals and objectives of ALDI. The factors of affecting these objectives and activities which
helps to achieve them can be describes with the help of SWOT analysis.
Strengths
 ALDI has a huge number of stores across many countries which are offering a wide range
of products and services to their customers. This helps in successfully achieving the
organisational objectives of the business (Papagiannakis,Voudouris and Lioukas, 2014).
 The high brand value and brand image in the market along with the large supple and
distribution network which helps the company to provide effective services to their
customers.
 The continuous growing customer base in also a major strength of ALDI, the
development and expansion of the organisation helps the company to attract new
customers.
Weaknesses
 The stores of ALDI do not provide diverse modes of payment. This is a major weakness
for the organisation.

 Lack of skills and talent is also a weakness, with the increase in number of stores ALDI is
not able to develop more effective human resources. The company is not able to manage
and deal with huge numbers of customers without effective teams of employees.
 Low level promotions and advertisement methods also negatively affect the performance
of the organisation.
Opportunities
 The easy availability of financial resources or investments the selected organisation can
increase the productivity and profitability of the business easily. This can also help them
to sustain their impressive position within the competitive market.
 ALDI also has a great opportunity to grow and expand their business in various countries
as well as developing economies such as Asia in order to increase the market share at a
global level (Fátima and Sousa, 2014).
Threats
 The chosen organisation has a huge number of competitors which are involved within the
same business and services that can be a major thereat for the ALDI.
 Development of technologies can also be a major issue or threat for the selected
organisation, the competitors can adopt new technologies in order to increase the
productivity which can affect the position of ALDI within the marketplace.
E. Environmental audit for ALDI with micro and macro environment
There are various other factors in the business environment which have a great impact on
the function and performance of a business or organisation. These are the micro and macro
environment factors which are affecting business operation of the chosen organisation. In order
to identify these elements the Porters-five-forces model can be applied as below -
Porter's five forces model

Illustration 1: Porter's five forces model
Source: (Porter’s Five Forces of Competitive Position Analysis, 2017)
 (High) Competitive rivalry – Due to the high competition level, effective product quality
and low cost can help the competitors to improve their performance which can negatively
impact the profitability of ALDI in the market (McDowell, Aaron and Harris 2014).
 (Medium) Threats of new entry –ALDI has a huge number of competitors in the market
such as ASDA, Sainsbury, Tesco etc. Due to these competitors, ALDI has a major threat
of losing its market position or share. It is really important for ALDI to focus on the
quality of its products along with the effectiveness of the prices they offer to the
customers.
 (High) Threats of the substitutes – The substitutes are another threat to the chosen
organisation, the various organisations try to produce and offer same products as the
ALDI which is a major factor that can affect the profitability and market share of the
selected organisation. This is a highly affecting factor within the business environment
that can affect the performance of ALDI(Porter’s Five Forces of Competitive Position
Analysis, 2017.)

 (Medium) Purchasing power of the Buyers – There is intense competition within the
retail sector or industry, there are a lot of competitors as well as substitute products
available in the market. The purchasing power of the buyer can affect the performance of
ALDI if the customers shift to the substitutes due to low price.
 (Low) Supply power – The supply chain is also a factor that can affect the performance
of the business within ALDI. It helps in the supply of goods and services which is a
major factor affective the performance of the organisation (Halal, 2015).

F. Importance of stakeholders for ALDI in the formulation of new strategy
The stakeholders play an essential role in formulation of a new business strategy within
the business operations. In order to understand the importance of stakeholders the following
elements needs to be analysed -
 Marketing strategies – The strategies which are developed needs to be promoted in
order to spread the awareness among the stakeholders such as customers, suppliers etc.
The marketing strategies should be effective and attract the stakeholders to develop a
strong relationship with the company.
 Motivating the employees – In order to implement a new strategy it is important for the
selected organisation to identify the needs and interests of the stakeholders such as the
employees. It is important to consider the interest of the employees as they are an
essential part of the business who needs to adopt the strategy and perform accordingly.
 Corporate citizenship – The other importance of stakeholders is to develop corporate
citizenship which helps the organisation to balance the corporate social responsibilities.
This helps in building a good brand image and value in the marketplace.
G. New strategic plan for ALDI
A new strategy or plan for ALDI can be focusing on differentiation, the company can
plan to differentiate itself from the competitors. The cited firm can target the middle class people
with the help of new products at low prices. Elements of the new strategy are as described below
-

 Mission – The new mission of ALDI should be offering new products at low prices to
attract the middle class people in the market.
 Vision – The vision with respect to the new strategy is to be the leading supermarket in
the retail industry with customers forms every segment or class.
 Value – The value of organisation is related to the simplicity, consistency and
responsibility. Each and every strategies should be implemented considering the values of
the organisation (Grant, 2016).
TASK 2
A. Analysis of market and suitable strategy for the cited organisation.
There are various strategies that can be used in order to improve the performance of the
business within a market place, key strategies which can be used by ALDI are as described
below -
Market entry strategy – The cited firm uses various types of strategies and plan enter into
different markets, with the help of various plans and activities ALDI enter into different markets
these plans are as described below -
 Merger: It is a beneficial strategy which helps an organisation to merge various business
activities with other businesses. Using this plan the company can achieve profitable
results.
 Acquisition: It is another important strategy which refers to acquiring other company or
business. This helps in increasing the profit of the overall organisation or firm.
Illustration 2: Elements of new strategy
Source: (Strategic analysis,, 2017)

 Strategic alliance – Strategic alliances are two or more organisations working together in
order to achieve individual goals. This helps in enhancing the business outcomes and
results as well as achieving a good brand value (Lipitakis and Phillips, 2016).
Substantive growth – Another effective strategy of ALDI to achieve growth and development is
the substantive growth. The various elements of this strategy are as described below -
 Related diversification – When the organisation diversifies their functions and operations
in exiting line of goods it is referred as related diversification.
 Unrelated diversification – It refers to adopt and implement new functions or organisation
operations other than the existing line.
B. Justification of strategy
The main objective of ALDI is to improve the quality of the products and services which
can help to achieve good performance as well as results within the market. The ALDI can adopt
and implement substantive growth strategy in order to achieve development and generate
revenue from various business activities. Diversifying the functions and products can help to
attract new customers from different segments, areas and class. The cited organisation can
effectively increase its profitability by offering unique and wide range of products to their
customers at low prices. Diversification products can help the organisation to enter in to various
markets which leads to growth and expansion of the organisation.
TASK 3
A. Roles and responsibilities of the employees in the implementation of organisation strategy
The employees are the main component of an organisation or business, it is important
that the employees understand and adopt the strategy developed by the ALDI. The various roles
and responsibilities of the employees in the implementation of a strategy are as follows -
1. Technical expert – The technical team needs to change or adopt new technologies
according to the strategy which is developed and implemented within the business
operations (Banihabib, Hashemi and Shabestari, 2017).
2. Team work – It is important for the employees to work in a team, in order to achieve the
goals and objective effectively and efficiently it is important to work in team. The
employees work together within ALDI to improve overall performance of the firm.
3. Managing – The employees at each and every level or department of the cited
organisation performs their respective tasks as well as functions to maintain the flow of

the business operations. It assists to manage and maintain the business activities to
achieve organisational goals or objectives.
B. Requirement of resources for implementing organisational strategy
In regard to actualize methodology, ALDI required different kinds of assets that help to
upgrade benefits and income. It helps to achieve objectives and goals in fruitful way with
developing viable outcomes too. New procedure can be creates with following components:
 Human resource: Human asset imperative part to make victories in business. There are
different sorts of representatives exist who perform diverse exercises and activities to
achieve destinations and objectives of ALDI. This procedure makes creating results of
activities and results that help to achieve more benefits and income inside the firm. Also,
a few people see diverse assessment and thought for same item and administrations inside
the venture. In this manner, it is an open door for the association to create benefits and
income through taking perspectives from different individuals. Human asset required to
create benefits through offer plans to accomplish compelling and effective objectives.
This is on account of, the picked endeavour share parts and duties as indicated by intrigue
territory and capability in the association (Al Shobaki, Amuna and Naser, 2017).
 Money related assets: Financial assets are required to create activities and exhibitions in a
few territories. It is the most ideal approach to improve benefits and income through
execute greater speculation. In this viewpoint, general benefits can be discovered to draw
in more clients. ALDI expected this to upgrade activity in same line at better place to pull
in more clients inside the association. Fund asset otherwise called column to define
compelling outcomes with creating effective tasks. It helps to upgrade more benefits and
income through conveying a few exercises inside the special unit. As results, it will be
useful to achieve general development in compelling way.
 Time and material assets: In regard to grow new system, ALDI required to perform
capacities and tasks with successful time and material too. Further, the association
additionally expected to set time for every action inside the business condition. It is the
most ideal approach to improve benefits and income to develop business activities. It is
likewise creates results and exhibitions to develop fruitful business tasks in the venture.
With the assistance of successful time and material, every action done in critical way.

Henceforth, benefits will be achieve at picked business condition through conveying
different activities.
C. SMART objectives to achieve strategic position
 Specific – ALDI will focus on increasing the customers services score by 14 points with
the use of effective customer service surveys
 Measurable – It may be measured with the help of sales record.
 Achievable – The objectives achievable by conducting important market study and
research.
 Relevant – The objectives are relevant as per the vision of ALDI
 Time bound – The cited company may take a complete financial year to achieve this goal
or target.
Illustration 3: SMART objective
Source:(SMART objective, 2017)
CONCLUSION
The above report concluded that business strategy is responsible for the growth and
development of an organisation such as the ALDI. This report identified and described the
mission, vision, objectives, goals and core competencies that asst the chosen organisation to
develop effective organisational strategy. The report also determined various factors affecting the

business functions and performance of ALDI with the help of SWOT and PESTLE analysis.
Furthermore, the report identified new strategy that can be implemented by the cited organisation
in order to achieve growth and development in the market.

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