Business Strategies of Aldi - Report

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1 Mission, vision, objectives, goals and core competencies of Aldi...................................1
1.2 Factors considered by Aldi while formulating their strategic plans.................................3
1.3 Usefulness of BCG matrix in developing strategic planning...........................................4
TASK 2............................................................................................................................................7
2.1 Organisational audit of Aldi.............................................................................................7
2.2 Environmental audit of Aldi...........................................................................................10
2.4 New strategy formation for Aldi....................................................................................13
TASK 3..........................................................................................................................................15
3.1 Analyse the appropriateness of suitable strategy for ALDI...........................................15
3.2 Justification of one of the selected strategy....................................................................17
TASK 4..........................................................................................................................................19
4.1 Role of personnel who will be charged to implement strategy......................................19
4.2 Resource requirement for the implementation of strategy.............................................19
4.3 Contribution of smart target in implementing strategy..................................................20
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................23

INTRODUCTION
“Business strategy can be simply defined as a means by which settled aims and objectives
can be attained. This covers a time period of approximately 4 to 5 years as this is a long term
goal” (Casadesus-Masanell and Ricart, 2010)1. There are namely two types of strategies that is
competitive strategy and common strategy. Competitive strategy means offering goods or
services at lower cost in comparison to their competitors. While the common goals are making
marketing growth, increasing their selling rate of goods, etc. The present report is based on the
business strategies of Aldi. In this project, mission, vision, objectives, goals and core
competencies of Aldi are explained. The impact of macro factors like political, economic, social,
technological, environmental and legal are determined. Additionally, the strength, weaknesses,
threat and opportunities of the corporate are explained.
TASK 1
1.1 Mission, vision, objectives, goals and core competencies of Aldi
Aldi is a common branding international discount super market chain. It has more than
ten thousand stores in approximately eighteen nations. The estimated turnover of company is
around more than 50 billion Euro. The products manufactured by corporate are food, beverages,
house hold goods, sanitary articles, etc. Aldi is considered as the minimum price grocery leader
of the nation. They started their journey of business in the year of 1946, when Karl and Theo
Albert had taken control of the grocery store of their mother. They are serving in a large area
such as Australia, Belgium, France, Germany, United State, etc. Mission is nothing but a set of
task via which company wants to fulfil the expectation of stakeholders. It helps in recognising
how business of organisation is going on, attracting users, producing different goods or services
and those goods or services to their customers (Chang and Chuang, 2011). Mission statement of
Aldi are revealing the strategic planning that are listed below:
Mission of ALDI
Aldi wants to become valuable in the eyses of their customers by gaining their trust. This also
wishes to increase their market share.
1 Casadesus-Masanell and Ricart, 2010 - From Strategy to Business Models and onto Tactics
1

On the contrary, vision statement is explaining the future expectation of organisation. It
assists in identifying actual or expectable benefits and enlargement of firm. The vision statement
of Aldi is written below:
Vision statement of ALDI
The vision statement of Aldi to become highly developed by creating innovative products or
services. They wants to expand their business globally. They also wants to show faithfulness in
front of their users, employees and stakeholders.
Goals and objectives are very general aim that firm want to achieve within in a specific
period of time. Objectives are short term plans while goals are long term scheme of enterprise.
Goals and objectives of Aldi are defined below:
 To enlarge their business internationally
 To enhance their retailing or selling services
 To become most prosperous retailer or manufacturer
Core competencies are nothing but special abilities and qualities that assists in making
business more significant in comparison to their competitors. The major competitors of Aldi are
Lidl and IceLand. The core competencies of Aldi are improving their business skills and working
more effective than their competitors.
The importance of mission statements, vision, goals, objectives and core competences to
the strategic planning of Aldi are following:
 Mission statement describes the roles and purpose of the Aldi. This shows how company
is going to serve their stakeholders and make their company extra ordinary or unique.
 Vision statement is a tool that determines the processes of how Aldi can attain their goals
and objectives. So, it is more important for the organisation.
 Goals and objectives are very essential part of Aldi as it determines what enterprise wants
to achieve in future. It must be real, specific, measurable, attainable, etc.
 Core competences are nothing but achieving competitive advantages by making unique
product in comparison to their competitors. This is also important as it shows the
direction of moving the industry.
1.2 Factors considered by Aldi while formulating their strategic plans
2

There are following factors that are taking under consideration by Aldi while formulating
its strategic plans:
 Future of competition: While making their strategical planning, Aldi have to set in their
mind about the competitive environment as there are different companies. They have to
think about the present as well as future based competition. Fast changing and highly
competitive business world requires foreseeing the actions of competitors (Cinquini and
Tenucci, 2010). So, Aldi must be able to offer products at a lower price and same or
better quality compered to their competitors. This will make possible to stand this
corporate in the international market.
 Customer needs: While making strategies, enterprise should consider the needs or
demands of their customers. “The products offered must match the demand” (Cinquini
and Tenucci, 2010)2. Neglecting customer needs can lead to significant losses for the
company. For this organisation have to conduct surveys where they focus on life style,
culture, tradition, etc. of their users or local people. After understanding the demand of
population, the products or services will be sold with greater success. That is why taking
into account customer’s needs is very important part of strategic planning.
 Competitive advantages: Company can carry surveys to determine the positioning of
their competitors. They should focus on their goods and determine any weakness of them.
By this way they can take advantages of their competitors and earn more profits because
when they offer the same product having additional features at lower price then large
number of customers will prefer their goods. This will raise the turnover of enterprise and
make it more popular brand.
 Resources to meet needs: Company should also think about resources or raw materials
that will meet their needs. These resources should be easily available and have lower
prices. It is a crucial element of strategic planning. Without resources to meet the needs
future success of the company is impossible. These resources can be financial, human
resource, time etc.
 Stakeholders: Enterprise should also focus on making relationship with potential
stakeholders. Aldi have internal and external stakeholders. Internal are its employees and
2 Cinquini and Tenucci, p 55, 2010 - Financial Accounting: Development Paths and Alignment to
Management
3

the company must take into account the importance of them. As stakeholders they will
make grate efforts in order to achieve company’s goals, so Aldi can be benefited from
internal stakeholders. External are these stakeholders who invest in the business and have
part of it. Reliable external stakeholders are crucial for the business success. Aldi must
pay attention on their stakeholders when formulating their strategic plans.
 Internal and external environment: Aldi should also consider the impact of internal
and external environment on their performances. For example, political, economic,
social, technological, environmental and legal factors totally influence the company
(Eccles and Krzus, 2010). Like taxes imposition by government is sometimes very high
that affects negatively the enterprise as most of revenue goes on paying on these taxes
only. Additionally, the strength, weaknesses, threats and opportunities are also considered
while making strategies of company.
1.3 Usefulness of BCG matrix in developing strategic planning
BCG matrix are used in Aldi in order to make strategic planning. This is commonly used
to represent the brand portfolio of organisation on a quadrant having the relative market share on
horizontal axis and market growth on vertical axis. Relative market share is used in evaluating
business functions. If corporation has high market share, then they get high cash returns. If there
is higher marketing growing rate, then it results in high earning. But this takes large sum of
revenue as their investment. There are four quadrants according to which enterprises are
categorised:
 Dogs: These type of industry consist of low market share in relation to their competitors
and they are operating in a market that grow slowly. They are not having much potential
as they create less amount of cash returns.
 Cash cows: Such type of organisation are brands that earn more profits and generate
more cash (Hahn, Kolk and Winn, 2010). The revenue that are created from cows are
used as an investment in the star group to assist their growth. They are generally large
enterprises that are having the capability to develop innovative products.
 Stars: They are those firms that are operating in a high growing industry and are
maintaining high share in market (Haley, Haley and Tan, 2011). They are both cash
creator or consumer. They are special units in which firm have to invest revenue as they
are commonly expected to interchange into cash cows.
4