BUSINESS STRATEGY ASSIGNMENT - Aldi Strategic Analysis

BUSINESS STRATEGY

Table of Contents
Introduction..............................................................................................................................................3
Part 1 – Evaluating the strategy...............................................................................................................4
a) Provide an assessment of the extent to which Aldi’s missions, visions, objectives, goals, core
competencies inform strategic planning. (AC1.1)...................................................................................4
b) Analyse the factors to be considered by Aldi when formulating their strategic plans. (AC 1.2)........5
c) Using evidence to support your answer evaluate the worth or usefulness of techniques used when
businesses develop their strategic plans (AC1.3)....................................................................................5
d) Carry out an organisational audit for ALDI and provide an analysis of their current strategic
position. (AC 2.1)....................................................................................................................................7
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)..................................................8
f) Assess the significance of stakeholder analysis for ALDI when formulating 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)..............................................................................................11
g) Using the research and information collected about ALDI, present a new strategy ALDI can follow.
(AC 2.4).................................................................................................................................................12
Part 2 – Making a strategic choice.........................................................................................................13
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. (AC 3.1)...........................................13
b) Provide a justification of one of the strategies for market entry and growth that you have discussed
in 3.1. You will need supportive evidence to your opinion or rational. (AC 3.2).................................14
Part 3 – Implementing the strategy........................................................................................................15
a) Provide an assessment of the roles and responsibilities of personnel who are involved with the
implementation of the strategy. (AC 4.1)..............................................................................................15
b) Provide an analysis of the resource requirements for the implementation of the strategy. (AC 4.2)16
c) Evaluate how the use of SMART targets (give examples) can contribute to achieving the strategic
objectives. (AC 4.3)...............................................................................................................................16
Conclusion.............................................................................................................................................18
Reference List........................................................................................................................................19

Introduction
In order to survive in the competitive environment, it is important for the business
organization to implement effective strategy. With the help of effective strategy, the
organization will be able to increase the market share. This assignment will be conducted by
considering Aldi. This assignment will also outline mission, vision and core competencies of
the organization. In addition to this, the assignment will also display the SWOT analysis of
Aldi. Moreover, the assignment will also provide the environmental audit to understand the
influence of macro environment on the organization. The assignment will also provide the
importance of the stakeholders for the organization. This assignment will also suggest an
appropriate strategy for the expansion of the business.
Background of the organization
Aldi is the amalgamation of two leading global discount supermarket chain and it operates in
more than 18 countries. In addition to this, combined turnover of the organization is
estimated to be more than 50billion. It is the German based organization. The organization
was founded in the year 1913. The main products provided by the organization include
beverages, food, household goods and sanitary articles. Apart from this, as per the reports of
the year 2015, there were more than 104000 working in Aldi Sud and 58179 employees
working in Aldi Nord.

Part 1 – Evaluating the strategy
a) Provide an assessment of the extent to which Aldi’s missions, visions, objectives,
goals, core competencies inform strategic planning. (AC1.1)
The tools of strategic planning helps the management of the company in indentifying the
internal strengths and weakness by analysing its opportunities and threats. In order to
compete in the competitive environment, the management of Aldi has focused to use the
strategic tools by aligning the existing mission, vision, goals and objectives of the
organization. This will help the organization in implementing effective strategy for the
business. Detail description of the company’s aim is as follows:
Mission: The mission of Aldi is to provide higher quality products at lower prices. In order to
achieve this, the company has focused on the cost leadership strategy, which will help in
making a strong financial base (Careers.aldi.us, 2018). Considering the mission statement
would enable a right direction to implement the strategic plans.
Vision: The vision of the company has enabled the UK shoppers to lead a richer lives for the
less. The company has also focused on setting up stores at most locations of the UK, which
would provide opportunity for the customers to buy higher quality products at lower costs.
The company also offers smarter ways for customers to shop.
Goal: The main goal of the company is to provide products that are essential for the
customers and at the same time, ensuring that these products are of the highest possible
quality with the guaranteed lower prices (Corporate Mission Statement 2018).
Objectives: The objectives of Aldi are as follows:
 To provide wide range of products of reliable quality
 To be considered as the organization showcasing openness and honesty
 To understand the quality that includes customers’ health and safety and assuming the
environmental and social responsibility throughout the supply chain (Corporate
Mission Statement 2018).

Core Competencies: The core competence of the company is its low pricing strategy. The
company provides higher quality products at lower prices, which helps it in attracting more
numbers customers.
b) Analyse the factors to be considered by Aldi when formulating their strategic plans.
(AC 1.2)
In order to formulate the strategic plans, the management of Aldi has considered conducting
Ansoff matrix such as market penetration, product development, market development and
diversification. Based on the strategy, the company has selected market development and
diversification. With these, the company will expand its business in new geographical area
and will provide new products (Yin, 2016). In order to formulate strategic plans, the
management should consider following factors, which are as follows:
Future direction of the competition: The Company should anticipate the future and they
should take actions to respond to the future events, so that they can change those events in its
favour.
Needs of customers: The management of the company should conduct the market research,
which will help in identifying the needs of the customers. The company should provide the
products that have more demand (Babin and Zikmund, 2015).
Gaining and maintaining competitive advantage: In order to gain the competitive
advantage, it is important for the company to provide higher quality products at affordable
prices. This will help the company to increase its customers’ base (Laszlo and
Zhexembayeva, 2017).
c) Using evidence to support your answer evaluate the worth or usefulness of techniques
used when businesses develop their strategic plans (AC1.3)
In order to analyse the internal and external factors of the business environment, the company
uses different tools. In order to analyse the effectiveness of tools used by the company, the
management has decided to conduct BCG matrix, which helps in determining the growth of
the company by evaluating four quadrant of the matrix.
Dogs: This is the decline stage of the company, as it indicates low market share and low
market growth rate. In order to operate the business, the company can collect fund through

debt funding and at the same time, the low dividend is provided to the shareholders (Bolisani
and Scarso, 2017).
Cash Cows: At this stage, the company has the low market growth rate and high market
share. As the market is not growing, the company can generate maximum revenue due to its
market share. The funding that can be used to fund the business can used from the retained
earnings of the business.
Stars: This quadrant indicates the growth stage of the company with high market share and
high market growth rate. The funds required for the business are procured by issuing the
equity shares (Shanbhag et al., 2016). At this stage, the main aim of the company is to reduce
the liability of the financial risks to protect nominal dividend of the company.
Question marks: This is the launching stage of the business as there is low market share and
high market growth rate. At this stage, the management of the company should implement
strategy to increase the market share of the business.
Figure 1: BCG Matrix
(Source: Bolisani and Scarso, 2017)
After the analysis of the BCG matrix, it has been identified that Aldi lies in the Star quadrant.
As per the report of the year 2017, it has been found that there was increase in the sales of the
company by margin of 13.7% but there was a decrease in the profits of the company
(theguardian.com , 2018). It is important for the company to focus on its strategic planning,
which will help in effective use of the resources. Additionally, the company should also
implement effective strategy, which will help in moving the Cash Cow quadrant, where the
company can generate more profits from the sale of its products. With the help of effective
strategy, the company will also be in a position to compete with its competitors. If the