Aldi's Business Strategy

This project provides a comprehensive analysis of Aldi's business strategy, examining its mission, vision, objectives, goals, and core competencies. It delves into the factors considered during strategic planning, evaluates the effectiveness of techniques using the BCG matrix, and conducts a SWOT and PESTLE analysis to assess Aldi's current strategic position. The project also explores stakeholder analysis, presents new strategies for the company, and justifies the use of licensing as a market entry mode. Finally, it outlines the roles and responsibilities of personnel during strategy implementation, analyzes resource requirements, and evaluates the contribution of SMART targets to achieving strategic objectives.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
a. Explaining the Aldi's mission, vision, objectives, goals, core competencies inform strategic
planning.......................................................................................................................................1
b. Analysing the factors to be considered by Aldi when formulating their strategic plans........2
c. Evaluating the worth or usefulness of techniques by using BCG growth matrix...................4
d. Organised audit for ALDI and providing and analysis of their current strategic position......5
e. Carrying out the audit for ALDI showing both micro environment by using porters five
forces ..........................................................................................................................................6
f. Assessing the stakeholder analysis for ALDI in order to formulate the new strategies..........7
g. Presenting the new strategies that company adopts. ..............................................................9
PART 2............................................................................................................................................9
a. Identifying a new market growth and analyses the effectiveness of suitable strategy for
ALDI in relation to retrenchment................................................................................................9
b. Justification of one of the chosen market entry mode.............................................................9
PART 3..........................................................................................................................................10
a. Identifying the roles and responsibilities of personnel while implementing the strategy.....10
b. Analysis resources requirements for the implementation of the strategy.............................11
c. Evaluating how the SMART targets can contribute to achieving the strategic objectives. . 12
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................13

INTRODUCTION
Business strategy is a core substance of the enterprise growth, having a good enterprise
strategy take the enterprise into new or higher level. In other words, business organisation
strategy is the business map that represents the whole picture of business and all activities the
vision and goals of the company. Present study has been based on Concern strategy of Aldi's
which is common or known supermarket chain with having 10,000 stores in across 18 countries.
Aldi's separated their two groups in 1960, that later become Aldi Nord, headquarter in Essen and
Aldi Sud.
However, present report explain the company vision, mission and future goals for
enhancement along with the effectiveness of technologies. Further, report also take consideration
on the analysation of company strategic position by supporting different theories and models.
Therefore, the whole study presents the strategic business growth and also recommended the
future development plans as well.
PART 1
a. Explaining the Aldi's mission, vision, objectives, goals, core competencies inform strategic
planning.
Strategic planning : Strategic planning is the organizational process that defines the
direction, resources allocation in order to meet out the desired goals for determining the direction
of the organization (Akter and et.al., 2016). In order to determine the company actual or current
situation. For that vision, mission, goals and objectives of the company much needed to know.
Strategic planning involves some components that helps to meet the results such as given below:
Mission : Mission is a kind of basic aim of the company. It helps to maintain the
employee morale or enthusiasm. Such as Aldi mission is to provide home consume products at
different varieties in within the range as well. Its mission is to give the best quality products to
the consumers.
Vision : Vision define the company wishing to achieve in future or give a minor outline
what company actually wants. Vision has been created for long term for a future, for which
organisation prepare the overall strategic planning.
Goals : Goal is something that man desires, and it is an end result and a specific target. It
is the main step to achieve the targets of an organization (Anderson and Sutherland, 2015). Goal
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is the final place where the company wants to achieve. Such as Aldi wants to become more
internationally famous and get the brand popularity.
Objectives: objectives is far different from goals. Goals shows the destination where
company wants to go. Besides, objectives are the measurable tool of the company progress.
Core Competencies: Core competencies shows the strength of the company which
different from other brands. For insurance company, core competencies are customer service,
claim processing and underwriting of the customers' acquisition.
b. Analysing the factors to be considered by Aldi when formulating their strategic plans.
SWOT (Internal factors)
Strength : Aldi is popular supermarket chain which provides quality products along with
affordable prices. In the 12 weeks coming up the 21st of May. Aldi sales rose by 19.8% in
comparison to the big four supermarkets of the UK (Bryson, 2018). Asda, Tesco, Morrisons and
Sainsbury's. In 2017 Aldi awarded by best supermarket of the year. In order to that ALDI needs
to focus on the affecting factors that much required for sustaining the business goals.
Weaknesses: Despite from all the good things company also having some weak points
that might affect the strategic decision making approach for the business development. The
major weaknesses of the company are low growth due to high competition in the market. Still lag
behind from top four supermarket chains. Company requires regaining its position and try to
build the competitive strategy in order to beat the level competition in the market.
Opportunity: Opportunity is the chance that helps company to re sustain or built up the
strong image in the market. It helps to full fill the market demand and grab the customer interest
towards the brand by adopting new technologies, new product development, expansion etc. such
as Aldi plan to make the 4000 jobs in the UK.
Threat: Threat is the another factor that affect the company in different manner. Threat
is the chances of uncertainties that affect the company in direct or direct manner (Buckley,
Burton and Mirza eds., 2016). As per the 2017 reports it indicates that Asda are currently
considering a takeover bid on the British discount chain B&W. As in impact of system
leadership and goals in order to meet out the results and growth. In order to overcome from
threats company should ned to acquire new product development or innovation.
PESTLE (External factors)
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Political: Political factors majorly influenced by demographic factors, politics, policies
changes etc. all such factors affect the business policies and decision making approach, before
preparing the strategic plan company should need to analyse the external factors that might affect
the company situational planning. In UK such factors involve high levels of conflict and political
vulnerability across the globe currently threaten the sustainable for foreign firms who may be
stigmatised based on their country of origin.
Economical: Economic factors highly get affected by economic conditions of the
country. Such as after the Brexit prices goes rise in the UK retail market. This situation worked
well for Aldi with shoppers turn to discounters, resulting in Aldi growing its fastest rate in over
two years. In 2017 the rate of grocery store increased by 3.8% including market expansion and
demand of the products as well.
Social: Social factor of the business environment get influenced by customer preferences,
demand, wants, etc. but as per the analysis Aldi currently the highest paying supermarket in
across the UK after giving 3000 staff members a pay rise in a bid to overtake fellow German
discount (Cassidy, 2016). Overall, in order to plan strategic management company should need
to be considered the social factor. Also, they should need to acquire effective learning growth in
order to meet out the best goals and objectives results and growth.
Technological: In modern era supermarket has been increasingly engaged with new
technologies and growth. Through it gained the company reputation and grab the customer
attention. This is the external factor which might be the opportunity for the company. In order to
plan the strategic planning company should have considered the new technologies and growth
and development.
Legal: Legal factor highly affect the business in highly manner. In supermarket it has
been frequently affected by scandals concerning the content of food products with perhaps the
most infamous of these scandals being the horsemeat scandal that affected the companies.
Environmental: Environmental factors affect the business due to dynamic environment
and uncertain market situation. Aldi or other supermarket chain helps environment or the for the
country development. Aldi should need to focus on the green sustainability in other words, they
more focus on the product packaging which is must be not harmful.
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c. Evaluating the worth or usefulness of techniques by using BCG growth matrix.
In modern era technologies are the most important aspect of the business that gives the
positive impact on the overall development process to get the best deal out of (Chhabra and
Kiran, 2015). Technologies has been playing the most important role to make planning,
controlling and monitoring. In other words, technologies have been given high contribution in
growing business efficiency and also improved management decision making through different
quantitative techniques. Here below it explains the usefulness of techniques by supporting BCG
matrix.
Dog: Dogs are the mark of low market share and a low growth opportunity for the
businesses. This situation arises in the situation of weaker internal or external position of the
business. The marketing advice have been given in this situation is to remove unwanted activity
from the product portfolio.
In this situation Aldi can use technology to grow in the market and gain the attention by
customers (Eriksson and et.al., 2015). Such as they provide company application, company
website, online delivery system, online buying selling. All these kinds of services can help
company to retain growth.
Question marks: This mark represents the low market share in high growth market. In
this case company cannot invest much amount due to low market share. This mark is also known
as problem child. In other words, it helps to represent the market opportunity and leading
challenging task. In this marks company required to gain its market position by lot of investment
to get the position.
Star Products : Star product can be define the situation where the company want to
target the high situational context goals and objectives (How to use the BCG Matrix Model,
2018). Start relates to the good market share growth but on the same side it also consumes large
amount of cash. But on the growing time due to it will become the cash cow when the market
growth rate decline.
In this context Aldi can invest on the technologies in order to generate the high growth
for the company market share so that it will get the good rate of return.
Cash Cow Products : As a leader mature market, cash cows exhibit a return on assets
that is greater than the market growth rate, thus generate more cash they consume (Ginter,
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Duncan and Swayne, 2018). Cash cows, seen in the lower left quadrant are typically leading
products in market that are mature.
d. Organised audit for ALDI and providing and analysis of their current strategic position.
Ansoff's Matrix Model Analysis
Ansoff matrix model compressed the marketing activities and also develop the marketing
opportunities that grow the company growth. The main purpose of this model is to measure the
market opportunities or through company can also create the position of new product
development.
Market Penetration: This strategy of the model can help company to increase the
growth of existing product. This is the low cost or low risk strategy in which company not need
to invest huge amount on the other new activity. Such as Aldi regain the existing products
through advertising, use of loyalty scheme, sales and price promotion, mergers and acquisition
etc.
New Product development: This strategy involves new product range, variety to the
same customer target market (Grimmer, 2019). This market application involves high risk which
might be accepting or not accepted from the market. Such as Aldi planning to open wide
segment for the employees. For this development company should have good image or
reputation in the market. Aldi can adopt this strategy to produce the new product development in
to the best development practice, besides, in NDP company can also add some more valuable
elements to make the existing product new.
Market development : In order to make the strategic position and growth market
development is the potential market strategy. The main purpose of this strategy is to launch the
product to new target customers, like Aldi invest 35 million in a new online wine delivery
service to the buyers. This is the most beneficial strategy for the company to get the high
customer attention and high volume sale (Grönroos, 2016). This strategy can be implemented
through setting new target market or by increasing sales or distribution channels. This can help
Aldi to prepare the productive and challenging strategic plan.
Diversification : Diversification growth is the another productive strategy that company
could adopt which likely to be a more risky and challenging. In this strategy company launch
new product into the distinct market which might be in the another country. Diversification is the
fruitful strategy of they have that potential qualities to beat the other international products.
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e. Carrying out the audit for ALDI showing both micro environment by using porters five forces
VRIO (Micro analysis)
This is the analytical framework which is used for gaining the competitive advantage for
the company. This model consists some elements that describes the company micro environment.
Value : value defines the values providing by the company to its customers to gain
customer loyalty and faith. Company values might be most profitable tool through they easily
beat the competitions in the market (Higgins, Omer and Phillips, 2015). Such as Aldi is the
popular supermarket chain and known for its cheaper rate products to gain competitive
advantage.
Rarity : Does company scarce resources or capabilities that hardly find in the market,
this means it helps to control the effective management task and long term opportunity. Rarity
shows the company USP that makes differ from other brand. Rarity is the high competitive tool
that helps company to get the high volume sales and opportunity to gain future opportunities.
Aldi is an exclusive brand, tested again and again to meet the other competitors. ALDI USP is
that they sell Product or services at affordable prices along with high quality products which is
barely found in other brands.
Imitability: This element defines that does company offering products which is difficult
to find other substitute to compete with other offerings. So in terms of ALDI which is grocery
super market so this very common that supermarket product can easily find out in other
supermarket as well (Hsieh, Ma and Novoselov, 2019).
Organization : Organisation is the element which defines that at what range company
management system, procedure, culture is effective. In other words, this element defines the
importance of company internal environment. Without the support of organisation, it will be
difficult to accomplish the set aims and objectives. Aldi hires dedication employees for the
company better performance
Porters Five forces (Macro analysis)
Bargaining Powers of buyers (High): As compare to other market division supermarket
customers having high power of bargaining due to low switching costs associated with shopping
among the low priced supermarket such as Asda, Tesco. This situation occurs when the product
or services are most common and having range of substitutes.
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Bargaining power of Suppliers (Low): Due to availability of huge suppliers'
supermarket power of supplier bargaining is low and most effective and challenging different
opportunity and task. Besides, in this context suppliers have fear to lose their business contracts
with such a big supermarket to other suppliers.
Threat of new entry/Barriers to entry (High): In UK good supermarket threat of new
entries are highly common to due to relative ease with which any firm with can enter food
retailing.
Threat of substitutes (Low) : Threat of substitute good or services in the supermarket is
low for food items because food substitute would be products that consumers would eat that
don't come from grocery retailers.
Competitive Rivalry (High): Competition in the UK food retail industry is high. This
level of competition has been rise due to price wars, massive discounting etc. in order to get out
of this level of competition, Aldi should have to launch new services or products in order to
regain the market opportunity (.Juma, Minja and Mageto, 2016). Besides, it also helps to re
sustain the market again in the global market.
f. Assessing the stakeholder analysis for ALDI in order to formulate the new strategies
Stakeholder Analysis
Stakeholder analysis is an important technique for stakeholder identification & analysing
their needs. The main purpose of this observation is to evaluate the business growth and
advantageous results. There are four types of stakeholder to which company needs to be focused
on
Primary Stakeholder : Primary stakeholder are the most important stakeholder for the
company which directly affected to the company functions either in positive or negative manner.
Such stakeholder are customers, employees.
Secondary Stakeholder : Secondary stakeholder are least affected group of people such
as intermediaries, mediators, distributors, suppliers etc, who affect the company in indirect
manner.
Tertiary Stakeholders : This group of stakeholders are the least affect the company and
its functions.
Key stakeholders : These kinds of stakeholders influence and play an important role
which can be influenced by other groups.
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Keep Satisfied : Keep satisfied stakeholders are always happy with the product or
services offer by the company (Stakeholder Maps-Keep the important people happy, 2018).
Satisfied stakeholder are high power and interested people which is beneficial for the company to
take the advantage results (Leonidou and et.al., 2015). Keep satisfied stakeholders are Board of
directors, owners, shareholders.
Engage closely and influence actively : Closely engaged people are customers and
employees who get touch with the company in order to sell or buy a product. These kinds of
stakeholder sometimes not happy due to lack of resources and satisfactory level.
Monitor (Minimum effort) : This stakeholder people require proper monitoring to
which company requires paying personal attention such as suppliers. Suppliers of the company
should need to be satisfied and happy.
Keep Informed : Keep informed stakeholder is government which required to be
informed about what actually currently business do. In other words, it also helps to define the
best challenging efforts and goals.
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Illustration 1: Stakeholders Analysis Map
(Source : Stakeholder Maps-Keep the important people happy, 2018)

Overall stakeholder analysis is the most important factor that company required that
makes the effective working outcomes and long term challenges in order to meet out the results
that also helps to define the effective management goals.
g. Presenting the new strategies that company adopts.
Aldi is a popular supermarket chain in UK who is famous for its cheap price with top
quality products. ALDI is the fastest growing supermarket chain which has been increasing in
rapid manner. Its mission is to provide product or services at cheap rates along with good market
opportunity. Apart from that, in order to develop the market share or adopt new strategies
company requires launching some new effective productive services and growth in order to
fulfilled the company aim and objectives (Morden, 2016).
PART 2
a. Identifying a new market growth and analyses the effectiveness of suitable strategy for ALDI
in relation to retrenchment.
Franchising : This is the most effective market entry strategy for business expansion.
Franchising is the well known and effective route to enter in international market. ALDI can give
franchise to other part of the world. This is very strong brand recognition mode of entry strategy.
Licensing : Licensing is a relatively sophisticated arrangements where a firm transfers
the rights to the use of a product. This strategy is fruitful or most effectiveness if the purchaser of
the company already having good brand image in that market. Licensing can adopted by the
company in order to meet out the result and goals.
Joint Venture : Joint venture is a kind of partnership that involves the creation of a third
independently managed company (Ochieng, 2018). Under this process two companies get
merged to form a third company products. Joint venture can adopted by the company in order to
expand the business at international level.
Exporting : Exporting is the common method to sell its own company products to
foreign market. In this process company supply its products through distributors into foreign
market.
b. Justification of one of the chosen market entry mode.
Licensing basically a transfer related entry mode to international market. This is the most
attractive method for entering a target market if a company already has good brand identity in the
market. It also involves limited costs and provides the companies with regular income from
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overseas. Overall, This is the recommended strategy that company could adapt to expand the
business. Here it explains the reason why company should need to take licensing strategy:
 It helps to enter a market that has restrictions on foreign companies.
 Aldi can move into the different market.
 Licensor company capital is not tied up in the foreign operations.
PART 3
a. Identifying the roles and responsibilities of personnel while implementing the strategy.
In order to implement the strategic plan or business plan organisation required employees
support to implement it in productive manner. Strategic implementation requires full support or
attention of all employees working in ALDI. There are explaining some roles and responsibilities
while implementing the strategy (Olson and et.al., 2018).
Change management Team
 Employees who belongs to this department is responsible to formulate strategies. Instead
of operating in a hoc manner.
 Employees in change management also develops a plan which is based on strategy work
and follows a roadmap, etc.
 Employees also responsible to support the roles and resources to guide person
responsibility for enabling success with other roles.
Managers and Supervisors
 Managers are responsible to ensure weather work is going as per the plan or not. Besides,
manager of ALDI also ned to make sure the proper utilization of resources in order to get
the best outcome results and goals.
 Supervisors or managers are very close to the action in which they evaluate each and
individual work and their performance towards the strategic plan.
 Managers and supervisors also communicate the plan or any other information directly to
the employees to minimize risk and incarcerates.
 Supervisors support employees behaviours and work provides training and development
session if it is required (Scholes, 2015).
Project team
 The project team is tasked with managing the technical side of the change. Project team
responsible to support team in technical side of the change.
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 Team responsible to give direction and management, the technical side of the project will
not move forward.
 Project team responsible to take review or feedback from the employees in order to
correct some steps.
Senior leaders
 Senior leaders play a most important role in implementing the strategic plan. Leaders are
the persons who motivate, make people confident and give full support to them.
 Leaders provides knowledge, training, tools and coaching to employees if they need.
Overall above roles and responsibilities of personal helps to implement the plan into
productive manner. In other words, it also helps to make the long term challenge and make the
high profitable growth outcomes.
b. Analysis resources requirements for the implementation of the strategy.
Human Resource : Human resource is the most vital requirement in order to perform
any work within the organization. Without ALDI cannot be performed any work or plan in
systematic manner. Even technologies also controlled or managing by human resource. In other
words, to implement the strategic plan (Stoian, Rialp and Dimitratos, 2017). ALDI required
talented employees, managers, leaders, shareholder, investors etc. all these are the types of
personalities works for company.
Technical Resource : Technical resource resolves the technical issues related to
computer, hardware or software issues. In other words, nowadays organisation highly based on
techniques who control the overall system of the company. The best advantage of this
component is that it is cost effective and also accomplish the work within limited time. Technical
resources are highly profitable a necessary tool for the organisation to search target customers, to
retain customers, to get competitors position, market research etc.
Financial Resource : Financial resources are the main support of the company which
should be required for implementing the strategic plan. Financial resources is required to
purchase raw material, full fill company requirements etc. Financial manager is the responsible
person who manage the financial requirement and make sure to accomplish the all requirements
of the company (Thompson, Strickland and Gamble, 2015). Financial resources has to be
according to the need and wants of the all deportments and goals.
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c. Evaluating how the SMART targets can contribute to achieving the strategic objectives.
SMART Objectives
Specific: Objectives must always be specific or clear that helps to easily understandable
to other employees and customers. Such as Aldi next objective is to increase sales profit 25% by
2022.
Measurable: In order to achieve the set market objective Company should ensure that
target is to be measurable or achievable. Otherwise, vogue objectives sometimes create
confusion among the employees.
Acceptable : Set objectives must be encouraging or profitable for the company growth.
In order to that, ALDI must need to ensure the proper balance between the resources or goals.
Realistic: Objectives has to base on practical situation in order to achieve the sales
volume so that it helps to keep the market position more challenging and developing (Yeh,
2016).
Time: Time play a most significant role in order to achieve the SMART objectives.
Objective must have a clear starting and ending date ((Stoian, Rialp and Dimitratos, 2017)).
CONCLUSION
As per the above discussion in the report it has been concluded that business strategy has
consists different range of aspects that company should need to be considered while planning for
new strategic plan. Study discussed about the micro and macro environment factors by
supporting PESTLE, VRIO and SWOT model. Overall, study explained about the stakeholder
analysis of the company in order to evaluate the current strategic position. Study also mentioned
the best market entry strategy that should company needs to acquired. Overall study explained
the deep understanding of strategic plan by explained the roles and responsibilities of employees
and what are the resources required for implementing the strategic plan.
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