Business Strategy Concepts and Examples

This assignment delves into fundamental business strategy concepts, including SWOT analysis, the BCG matrix, and Porter's Five Forces. It uses real-world examples to illustrate how these frameworks are applied in practice. Students will gain a deeper understanding of how businesses develop and implement effective strategies for success.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Aldi's mission, vision, objectives, goals, core competencies................................................1
1.2 Analysis of factors before formulating strategy....................................................................2
1.3 Effectiveness of techniques to develop strategic plans.........................................................3
2.1 Organisational audit to analyse current strategic position....................................................4
2.2 Environmental audit of micro and macro environmental factors..........................................5
2.3 Assessment of importance of stakeholder analysis...............................................................6
2.4 New strategy for Aldi............................................................................................................7
TASK 2............................................................................................................................................8
3.1 Market entry, substantive, limited growth strategies............................................................8
3.2 Justification of market entry strategy for Aldi......................................................................9
TASK 3............................................................................................................................................9
4.1 Assessment of roles and responsibilities of charged people in implementation stage..........9
4.2 Analysis of resource requirement for organisation.............................................................10
4.3 Use of SMART targets to attain strategic objectives..........................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is a written document which supports to any organisation to attain it's
desired objectives in short time and long time period. It is a another name of business planning to
achieve their targets in a particular duration (De Massis and Kotlar, 2014). Mostly a business
strategy is focused on around 3-5 years by which it supports to organisation to maximise and
adjust their activities to attain their objectives any how. This report is having based up on ALDI
retail chain store and working grocery sector. Cited business entity has a huge competition in it's
market. This report will provide discussion on organisation's mission, vision, objectives, goals,
core competencies and element which has to be consider before formulating plans. Different
techniques will elaborate in this which help to develop strategic planning, after it will make
environmental and organisational. After it will provide a detailed strategy for company, different
strategies for market entry, substantive and limited growth. At last it will discuss roles and
responsibilities of those people which will have charge to implement it and use of SMART
targets to attain strategic objectives.
TASK 1
1.1 Aldi's mission, vision, objectives, goals, core competencies
Business planning is a set of actions by which an organisation can attain their desired
objectives in a particular time period (Morgan and Gomez-Mejia, 2014). Aldi is a company
which is having many stores in UK and they are having a huge market competition so they have
to make a better planning against their targets. Here is assessment of organisation mission,
vision, objectives, goals, and core competencies:
Mission: It provides a detail about current positioning of the company, where they are existing.
Aldi wants to provide low price grocery and they want to increase their market share in a short
time of period and they want to deliver maximum customer satisfaction within minimum prices.
Vision: It is view of organisation where they want to be go and take a particular market position.
As Aldi want to make a better position in the market so according to their vision for their future
they have to make a better action plan against it.
Objectives: It is a type of desired ends which company wants to attain after a particular time
duration (Palmer, Wright and Powers, 2015). Aldi is having desired objective to have a 10%
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market share in this year so according to this objective they have to make a better work in their
retail sector.
Goals: These are statement which helps to employees to work according to these and attain their
goals any how (Torrent-Sellens, 2015). Aldi has short time goals policy by which they can
maximise their beneficial elements for their customers.
Core Competencies: Each and every company is having some core competencies which makes a
differentiation in between company and their market rivalries. As Aldi is providing grocery
products on low price which makes them different from others.
These all factors helps to company to make a better change in their acts and also it
informs strategic planning of cited company for their better future (Hanks, 2015). All of these
mission, vision, goals and core competencies are futuristics and it creates a path for their
employees to make a better work for Aldi.
1.2 Analysis of factors before formulating strategy
Company's leaders and higher management are having a responsibility to draft a better
strategy for organisational betterment perspective but several factors makes a influence on
strategy formulation process. These factors are mentioned in below presented points:
Communication: It is an essential element in formulation because leaders, higher and lower level
managers makes a business strategy. So they have to make a proper communication in between
them to exchange important information among them to make changes and draft a strategy
according to organisational needs. Lower level managers knows strength and weakness of their
employees by which they can make suitable changes in their business activities.
Involved employees: People which are committed in business strategy formulation it make a huge
impact on success of planning in actual conditions. Mostly higher management, board of
directors and departmental managers are involved in this process which help to make a better
strategy (Chen and Jermias, 2014). If company does not involve their departmental managers
they can provide actual position of company and what are the requirements of company in front
of their seniors.
Management: It defines roles and responsibilities of employees in organisation, in business
strategy formulation it is essential to take information all management levels by which draft man
can make a better change in organisation.
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Innovation in business strategy: It is an essential element in business strategy it has to be
innovative by which company can make some changes from their past strategy (Carraher and
Paridon, 2015). By this they can make a important changes in their acts which can help to them
to make a better services for their targeted customers which finally encounter on their main
objectives. Business strategy highly inspired from company's past and by this company wants to
make a better future. If strategy formulators has make less innovative changes in business
strategy it can not be able to make effective changes in organisation position and progress.
These all factors makes a huge impact on strategy formulation so it is essential for Aldi
that they have to make a proper use of these factors by which they can increase effectiveness.
1.3 Effectiveness of techniques to develop strategic plans
Strategic plans having a need of use suitable techniques by which organisation can
increase chances to hit targets easily. As Aldi want to make betterment in their market position
and they want to increase their market share so they have to use appropriate tools and techniques
to make a better strategy (Pisano, 2015). Here is some of tools which can be used by organisation
for business strategy formulation:
BCG Matrix: As Aldi is having many stores so by using this matrix they can analyse which of
their super market is not working properly to provide better return on their investment. They
have approx 300 stores so they can make a proper analysis of their stores.
Sources: (http://www.netmba.com/strategy/matrix/bcg/)
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Illustration 1: BCG MAtrix, 2017.

Dogs: Those units which are not working properly according to invested amount which are not
generating appropriate profits. In this the growth rate and also the market share of product is low.
So, in context to it, company goods of company can not earn money at market place.
Cash Cows: Those super markets which are generating revenues according to their invested
amount are covered in this (Ibrahim, 2015). These stores are having a high market shok sirare
and growth. Under this, market share of product is high and its growth rate is low. So, it is
necessary for company to invest more money for capturing the large market for increasing the
growth.
Star Units: High market share and growth rate are consider in this section and Aldi is having
many of these types of stores. In this, the market share as well as growth rate of Aldi' s goods is
high. It generates high cash because at market place, company has a fast developing product.
Question Mark: Units which have potentials according to their high growth rate but it has a need
of more investment of resources to increase their market share. The market share of Aldi
company is high and the growth rate of its products is low.
So Aldi can make a list of supermarkets according to BCG Matrix to make sections
which are performing better or not.
SPACE Matrix: By using this company can evaluate their future plans on the basis of their
effectiveness on their future needs (Fréry and et. al., 2015). Aldi can use this matrix to evaluate
their action plans after it's implementation to analyse how much this was useful for company.
Space matrix covers four main elements which are financial strength, industry attractions,
environmental stability, competitive advantage. By this organisation can make a balance in those
factors which can make an impact on business strategy formulation and implementation.
2.1 Organisational audit to analyse current strategic position
Being a leading firm, Aldi tries to maintain its image in retail market. To gain
organisational objective, it must evaluate its current position and conduct an audit. One of major
methods to analyse strong and weak points of company is SWOT analysis. Aldi has its some
positive and negative features as followings.
 Strength-This business organisation has a well established image in retail, market which
makes it more string in comparison to other brand in same industry. It is recognised at
internal market as it provides best quality products to customers. It has simplex business
structure which is plus point for firm with different functions to run business (Woerner
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and Wixom, 2015). It always offers product with reasonable price so that most consumer
will prefer this brand in long term. It adopts all techniques which are cost effective and
help in maximise profit margin in future. Aldi tries to keep its standard up to mark and
lead on other companies in retail, industry.
 Weaknesses- Along with these above strong points, some weak sides of company which
can affect its business in a negative way. This firm provides comparatively short range of
products that might limit its market share in comparison to other companies. There is lack
of technological support which weaken manufacturing process. Company has
comparatively very less numbers of employees who are skilled and experience. In matter
of promotional activities, Aldi makes very less efforts to increase popularity of its
product among customers which is weakness of firm in term of expenses (Klettner,
Clarke and Boersma, 2014). In comparison to strong competitors like Tesco, this
organisation is smaller brand in retail sector. As it has increased its own crested brands so
there is less capability
 Opportunities- There are many opportunities available for Aldi in new filed to expand
its business. It can provide more diversity in product range and cover maximum target
market in retail sector at national as well as international level. It can use innovative and
new techniques which can help to attain organisational objectives.
 Threats-One of major threat of Aldi is that it it has to deal with international barriers in
host countries. For example, if company wants to operate its business in new country, it
will have to obey separate rules and regulations of that particular nation. Better business
strategies of competitors in same industry can reduce value of company in market.
2.2 Environmental audit of micro and macro environmental factors
As Aldi is one of leading brands in United Kingdom, it has to evaluate all internal and
external aspects which can affect its business (Drucker, 2014). Followings are some factors
which can hinder or uplift performance of company.
Internal factors-They are factors which have direct impact on functioning of business
organisation like Aldi as thy are directly connected to firm and its activities. If these are changed
then different processes of company will also be modified in negative or positive way. Some
major internal factors are suppliers of goods, customers, employees, public and competitors in
same industry. As consumer is key person for which every company sells its product as per his
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needs and demands (Slack, 2015). If customers changes his preference, choices and demands
then company will also make some changes in its product features so that maximum consumers
will buy its goods in future. So it needs to b considered by firm. On other hand, if suppliers
change its price of material to Aldi, the company also has to increase its final product price or it
will lead to less profit margin in future.
External factors-There are many elements which have indirect impact on business of Aldi as it
operates its functions within macro environment. The firm has to act according to these
components like political, environment, social, technological, economical and legal forces. As
modification in rules and regulation implied by government of country will force firm to run it
business according to it (Kourdi, 2015). As weather of place also affects company operations, it
has to be kept ion mind while starting new projects to improver existing performance.
Porters five force model-
Bargaining power of customers-The consumer can fluctuate whole market by changes in his
demand of particular product. So now a days, Aldi has to make sure that it provides product as
per consumer demand and choice so that they will not negotiate more to lower the price.
Bargaining power of supplier-If suppliers of raw material, labour and other components will
increase or decrease his offered price to company then it will directly affect their operational cost
and final price.
New entry-As there are new companies are starting their business with new strategies. This can
decrease Aldi reputation due to high level of competition.
Threat of substitute-As there are many similar product available for customers, more chances
to be replaced in future for customers.
Competitors rivalry-Number of competitors forces Aldi to make effective strategies to compete
with other rivals in market.
2.3 Assessment of importance of stakeholder analysis
Stakeholder are main persons of every business organisation like Aldi as they have
impact on crucial decisions regarding activities and tasks of company to achieve goals and
objectives in long term. Some of major people which are considered as stakeholders are
suppliers, competitors, employees and share holders (Majchrzak and et. al., 2014). These key
persons play a vital role in improving the existing performance of business organisation.
Shareholders take major decision about company to maximise its profit margin and revenue in
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future through various strategies. This analysis of stakeholders is called participants mapping in
which a detailed evaluation of roles and responsibilities is done. In standard meeting of
shareholders and employees, different opinions can be gained and effective strategies can be
made in future. Ultimately, company will be able to achieve its organisational goals of profit
maximisation and revenue generating in retail industry (Spender, 2014). An efficient analysis
will lead to reduction of risk and cresting a good command on activities and tasks of company.
Shareholders and employee are immense part of organisation which help in monitoring business
and its goals achievement process. If any deviation is found between desired and real gained
results, appropriate actions are taken by shareholders and higher management of company. This
analysis helps in improving profit quality and performance so that firm can satisfy its customers
and establish a good image in market. So company needs to consider all these persons as
stakeholders so that it can identify core competencies of workers and train them to perform
better in future. For more growth and development of firm, it has to consider decision of
shareholders as they are main owner of company. So this analysis makes sure to identify current
consumer perception, needs, demand and interest and customers its product as per their
requirement. Thus the analysis of stakeholders contributes in success of business organisation.
2.4 New strategy for Aldi
A business strategy which helps in increasing or expanding market share along with the
sales. Aldi business organisation makes a new product development strategy which is helpful in
enhancing the sales and productivity of business. From developing the new products, this
business organisation can enhance its growth and the market share. It is necessary for this
company is to produce new goods or services on the basis of customers requirement. From this
the sales will be increased. There are some steps included related to new product development
strategy:
Current strategy position of Aldi: By using appropriate strategy company can increase approx.
19.8% in sales which assist in attaining their goals and objectives. Aldi having a mission in
expanding market share which will aid in reaping targets.
Path of Aldi: Company having a high competitor as well as new in the competitive market.
They have to focus on providing full satisfaction to the consumer by fulfilling needs and wants.
They have to do proper developments in their products and services which will assist in doing
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their effectiveness to their target consumers and helps in attaining competitive advantage so that
success can be achieved.
Activity plan to get goals: As organization needs to build their market share of the overall
industry so this activity design can help to them to get this objective:
Market examination: As Aldi is having approx. 6.9% market share of the overall industry at
present so they are on fifth position in basic need retail so they have to put more efforts in
attaining their market share (Gamble and Thompson Jr, 2014).
Strategic objectives: They need to set small targets by which they can get their targets
effectively. So they need to set an objective to get 10% market share in the year of 2017. They
have to use step by step procedure which can help them in accomplish market leader position in
next 4 years.
Products and services: In company, sales as well as marketing team have to do proper analysis
as well as evaluation so that they can identify the needs and wants of consumers and have to
fulfil them. They have to provide proper satisfaction of consumers which will assist in increasing
their sales and generating more revenue.
Promotions: Aldi needs to utilize new promotional activities in market like rivalry and different
exercises to include new clients with organization (Armstrong and et. al., 2015). Additionally
they need to utilize online networking to encourage individuals to purchase their products.
New Product development strategy can helps an organization to accomplish a superior
market position and market share of the overall industry in next four years.
TASK 2
3.1 Market entry, substantive, limited growth strategies
Business strategies plays an important role in every organisation as it provides various
guidelines to achieve desired goals. Aldi can also enhance its performance with effective
utilisation of market strategies. There are various schemes but three of them are most important
which are market entry, substantive and limited growth strategies. Development of enterprise lies
upon fact that how effective its strategies are. With the help of effective schemes company can
increase its market shares, profitability, productivity and also provide satisfaction to its potential
customers (Scholes, 2015). Market entry strategy help firm to attract more customers, it includes
various approaches like franchising, joint venture, merger and acquisition through these methods
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company can establish its foundations. In initial stage company can start its business with
different techniques which are following as under:
Partnership: This is the most effective approach to start new enterprise. Through this
people can establish new business with help of some partner. In this individuals can go for those
organisation which already have strong goodwill in market place.
Franchisee: In this aspect organisation can give authorisation to other company to start
its franchisee. For example Aldi can give authority to other firms to work as its branch.
Direct export: In this, company start its business with its new structure, strategies and
fresh employees.
Licensing: Aldi company can give its name and fame to other companies by authorising
them legal license.
Furthermore, with the help of these techniques company can have substantial growth.
Organisation can enhance its growth by various activities such as improving efficiency and
effectiveness of employees because effective workers can contribute lot of efforts to achieve
organisational goals and objectives. Company can also produce resources instead of getting them
from outside. There is a huge interrelation betwixt business practices and substantial growth.
Firm can also enhance its performance by diversifying its product portfolio line.
On the other side limited growth strategy is also used when substantial growth is not
possible. In this scheme company re innovates its products and services to survive in
marketplace (De Massis and Kotlar, 2014). This kind of strategy is used when enterprise suffers
from various losses such as minimisation in profitability, market share and productivity.
3.2 Justification of market entry strategy for Aldi
To expand market shares and business Aldi can use various strategies. Organisation
should choose its scheme to consider that what it wants in future. All companies have different
structure and objectives, to fulfil those objectives firms choose different strategies. If Aldi go for
market entry scheme then it can select Partnership Model because it is very convenient strategy
to make profit (Morgan and Gomez-Mejia, 2014). In this, company can merge itself in other firm
which will help it in achieving strong goodwill of other company. Also it will enhance a huge
number of new customers. By doing partnership with other enterprise Aldi can higher success in
market place.
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If company choose substantial growth strategy then it can increase its efficiency and
effectiveness in work place. For this, company can increase its product portfolio line by which it
can enhance range of its products and services in market place. It will also help this organisation
in achieve competitive advantage.
TASK 3
4.1 Assessment of roles and responsibilities of charged people in implementation stage
As Aldi wants to increase their market share according to their business strategy so they
have to make a proper charge on their employees to make a successful implementation. So here
is a designations are given on which company mostly relies to make a successful
implementation:
Marketing Managers: As company wants to improve their market share so marketing managers
has to use a proper analysis of their targeted sector (Palmer, Wright and Powers, 2015). These
people are charged as a role of analyser to make an investigation by which they can get
informations and data to make a proper implementation in a particular market. These information
can help to supply department to make variation in their supply of products according to market
demands.
Sales Manager: Market share haves a high relevancy with sales managers so they has a huge
responsibility to make a proper implementation of strategy. They have to analyse sales of each
and every geo-graphical market to make a balance in supplies in every market to attain their
business objectives. So they are having many sales managers for each market and they have to
make a proper research in their market and be committed to increase their market share and
attain their objectives as soon as possible.
4.2 Analysis of resource requirement for organisation
To fulfil organisational goals and objectives it is necessary to have efficient and effective
resources. Various materials generally come together in work place. Resources are the
foundation of every business organisation. Mainly there are three essential resources of Aldi
company which are following as under:
Financial resources: To operate daily activities of company it needs large financial
resources. Without appropriate capital firm can not achieve its desired goals and objectives.
Mangers should make strategies to consider availability of finance because it is necessary to
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produce goods and services. Firm can get appropriate capital from various sources such as
shareholder's capital, bank loans, assistance from government and bank overdrafts (Torrent-
Sellens, 2015). Company can increase its financial position by making strong goodwill in
competitive market place. Also by making good relation with investors and lenders enterprise
can enhance its organisational capital.
Human resources: These are the most important resources of Aldi. Success of this
company is totally lies upon its manpower. If organisation wants to increase its efficiency and
effectiveness then it have to enhance efficiency and effectiveness of its human resources. To
enhance organisational performance firm requires well skilled employees who can work even in
dynamic nature of business.
Physical resources: Just like other factors company needs physical resources to deliver
its different strategies and also for production of its products and services. In simple words, these
are tangible and intangible items which are required for smooth functioning of organisation
(Hanks, 2015.). Generally physical resources involves production facilities, marketing facilities
and information technology.
4.3 Use of SMART targets to attain strategic objectives
It is essential for Aldi to make appropriate targets which can help to company to attain
their strategic objectives easily. Here is SMART objectives for organisation to attain strategic
objectives:
Specific: As organisation wants to be at 10% market share so it makes mind set of employees to
increase business activities.
Measurable: Figures can help to company to measure their performance according to targets.
Attainable: Unachievable targets can make a impact on employees motivation so these targets
has to be achievable to increase performance of people, as they are having 7.8% market share an
they want to be on 10% in this year so it can motivates their employees to improve their efforts.
Relevant: These targets has to be relevant with organisational objectives by which an
organisation can attain their strategic objectives (Chen and Jermias, 2014). Aldi want to improve
their market position which can be improve by appropriate targets which are having a high
relevancy with objectives. So as they are targetting that they will attain 10% market share at the
end of the year so it can help to attain their strategic objectives.
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Time bound: Time limits helps to maintain a consistency in business activities so it can help to
organisation to attain strategic objectives in a year for Aldi.
CONCLUSION
From the above report, it has been analysed that company having their own vision,
mission as well as values which manager of business entity have to achieve so that they can
attain their targets. Employees and managers of Aldi have to use appropriate techniques so that
they can develop their strategic plans. Along with this managers have to conduct their
organisational audit which will helps in maintaining strategic position. After that environmental
audit should be conducted whether it is internal and external by using Porter's Five force
analysis. For making the changes, managers have to make new and appropriate strategy which
will help in attaining goals and objectives. They have to use as well as appropriate strategy so so
that Aldi can attain growth in the competitive strategy. They have to adopt SMART objectives so
that they can give proper contribution which will assist in attaining targets along with the
objectives.
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