Business Strategy of Aldi organisation : Assignment
Added on 2020-09-17
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BUSINESS STRATEGY
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31.1 Elements of strategic planning in a business organisation...............................................31.2 Factors that ALDI needs to consider when formulating their strategic plans..................41.3 Planning tools and techniques of strategic planning........................................................5TASK 2............................................................................................................................................72.1 Organisational audit of company......................................................................................72.2 Environmental audit of company.....................................................................................82.3 Significance of stakeholder analysis when formulating a new strategy.........................102.4 Presenting a new strategy that ALDI can follow............................................................11TASK 3..........................................................................................................................................123.1 Appropriateness of suitable strategy..............................................................................123.2 Strategies for market growth and entry..........................................................................13TASK 4..........................................................................................................................................134.1 Roles and responsibilities of the personnel for the implementation of strategy.............134.2 Resource requirements for the implementation of strategy............................................144.3 Way in which SMART targets can contribute to achieve strategic objectives..............14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
INTRODUCTIONBusiness strategy can be defined as a long term planning which helps in achieving thegoals and objectives of company. Strategies reflect on the firm's strength, resources,vulnerabilities, and opportunities as well. It can be succeed only when they lead to businessgrowth and a strong financial performance. ALDI is the chosen organisation in this presentreport which is one of the largest dealers of retail products and services. Along with this, reportintroduces goals, mission, vision, objectives and core competencies of the firm. The presentreport is discussed organisational and environmental audit which can be done through SWOTanalysis and Porters-five-forces model. Stakeholder’s analysis is also discussed in this report, itis important for developing and formulating a new strategy to the growth and development ofbusiness organisation (Woodcock, Green and Starkey, 2011). Apart from this, productdevelopment strategy and market growth strategies are also described in this report.. At last,different types of resources which are required in strategic planning and significance of SMARTtargets are also explained briefly. TASK 1 1.1 Elements of strategic planning in a business organisation Strategic planning is the process that is used for deciding future aim and targets ofcompany. In encompasses with organisational policies, resource allocation and direction ofactivities which are utilized in the business strategy planning. Along with this, in order todetermine the direction of company, strategic planning is helpful to understand the currentsituation of business entity in marketplace. Below mentioned some components of strategicplanning are as follows: -Goals– Goals can be served as the guidelines for action. They provides parameters forstrategic planning, resources allocation and identifying development opportunities.Organisational goals are created to achieve a desired state of profit and success. Alongwith this, goals will reflect the interest of an individual in the business organisation(Chang and Chuang, 2011). There are two types of operative and official goals. Forexample- the main goal of ALDI is to become more productive and profitable incomparison to other retail organisations.
Objectives – Objectives are different from goals as they is concerned with measuring theprogress which is required in order to reach the targets. On the other hand, objectives arethe basic steps for achieving goals. In other words, objectives are more easier and specificto measure than goals. It can be served as the basis for making policies and monitoringperformance. For example- the main objective of ALDI limited is to offer high qualityproducts and services to customers. Vision – It depicts what an organisation wants to accomplish in the future. It is all aboutthe long term growth and success of company in the target market. For instance – by thenext 10 years, vision of ALDI limited is to become the leader in retail industry of UK byadding innovation and creativity in products and services offered. Mission – Mission can define the current situation and purpose of existence of businessorganisation (Ackermann and Audretsch, 2013) In ALDI limited, the mission statementshould be short and capable to express the company's purpose towards its existence. Forexample – mission of ALDI is to offer customers with the best products in an innovativeway as compared with their competitors. Core competencies – it is consists with the main strength of the company. Corecompetencies allows an organisation to expand into new end market and it also provide asignificant benefit to customers. It is all about what a company does better over itsrivals. For example- core competencies of ALDI limited are like firm has highlyexperienced staff, strong marketing strategies, higher level of customer satisfaction, etc. 1.2 Factors that ALDI needs to consider when formulating their strategic plans Every organisation set its own goals, objectives, vision, mission and core competenciesduring strategic planning. . But there are some issues and challenges are being faced by themanagers of ALDI limited at the time of strategic planning. Some of them are like: -Time– It is one of the major factors which put a direct impact on strategic planningprocess. It is because; more time is required to understand the overall condition of marketas well as potential customers and competitors. Time factor also impact onorganisational growth and development. For example- in May 2017, sales of ALDIlimited was 19.8%, according to this, company has to adopt effective strategies andpoliciestoincreasesales.This will help companies to achieve their sales targets in minimum time period.
Resources – Resource allocation is the fundamental part of strategy execution. Strategiesare developed or planned to grow and succeed but if companies does not have properresources for strategic planning, so as it can stall progress of firms. In ALDI limited, it isessential for managers to evaluate resources while creating any strategies and policies.There are three types of resources – such as- human, financial, physical andtechnological. For example-- if ALDI have proper and effective resources as it can easilycompete with its rivals in the competitive market. Economic condition – If the financial position of company is not stable than it cannotachieve its aim and targets effectually. Generally, companies are faced economic crisis;this will put a huge impact on their market position and profitability as well. Economiccondition of UK plays a vital role in the growth and success of business organisations(Pagani, 2013). For example: if people have low level of income as they cannot purchasebranded and value added products Due to this, sales will be decreased and companycannot achieve its goals and objectives. Customer’s tastes and preferences – Buyers are the key factor for growth and success ofcompany. Therefore, it is the duty of commercial enterprises to understand and cope upwith changing customer’s preferences and choices. Due to dynamic changes incustomers’ needs and demands, the strategic directions of ALDI limited would also getaffected. Now, ALDI has covered the 3.6 % market share so as it needs to develop itsproducts and services. This will support to extend the market area of the company. Competitive advantage is defined as when the company is able to create its profits adcompared with the competitors by still offering less prices products to customers. This will helpin providing better benefits to customers and it can achieve its goals and objectives incompetitive market. ADLI has included various effective pricing strategies in order to competewith its competitor. It also focuses on customer satisfaction for brining many buyers; for that itcharges premium prices from them to cover the production cost. ALDI is offered brand item andalso gives regular discounts of products. The company has adopted the cost leadership strategy inwhich the firm produces the product at the lowest cost over the market.
1.3 Planning tools and techniques of strategic planning Strategic planning is the process of implementing, formulating, planning and allocatingresources. There are various tools and techniques of strategic planning such as BCG matrix andPIMS. ALDI limited is more likely to engage with the production of large number of goods. It isthe responsibility of organisation to determine and decide the products in which they should haveto invest. In other words, company needs to allocate its investment over each and every product.In order to make things easier, BCG matrix is a suitable tool for this purpose (Spender, 2014).The matrix is helpful to monitor the financial performance or the business portfolio of product intarget market. BCG matrix is categorised into four segments which are as follows: (Source – Strategic planning tools and techniques, 2017)Cash cows – It consists with maturity stage of product life cycle as it covers large marketshare. In this, sales of product becomes constant or there is no increase or decrease in thegross sales. Cash cows need little investments and the cash generated is again invested inanother business units or projects. ALDI limited has to implement new products and usesdiversification for increasing its sales. For example – Marmite and Hellmanns are thecow products of ALDI Ltd. Illustration 1: BCG matrix
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