Strategic Analysis of Business Strategy

This assignment delves into the multifaceted world of business strategy, drawing insights from prominent scholars such as Michael E. Porter, Jay B. Barney, and Henry Mintzberg. Students will explore key theories like resource-based view (RBV), dynamic capabilities approach, and the five forces model. The assignment will also analyze case studies to apply these theoretical frameworks in practical scenarios, making it an engaging and informative learning experience.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 ALDI's Missions, visions, objectives, goals and core competencies....................................1
1.2 Factors which ALDI should consider when formulating strategic plans..............................2
1.3 Importance or usefulness of techniques used while formulating strategic plans..................3
2.1 Organisational audit of ALDI...............................................................................................4
2.2 Environmental audit of ALDI...............................................................................................5
2.3 Importance of stakeholder analysis.......................................................................................6
2.4 New strategy which ALDI can follow..................................................................................7
TASK 2............................................................................................................................................8
3.1 Identify a market strategy with its appropriateness...............................................................8
3.2 Justification of the strategy...................................................................................................8
TASK 3............................................................................................................................................9
4.1 Roles and responsibilities of personnel involved in implementation of strategy..................9
4.2 Resource required for implementation of strategy................................................................9
4.3 Contribution of SMART targets in achieving strategic objectives.....................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy refers to those elements or activities perform by a company for
achieving its set goals or end results. It is called long term planning of business activities and
include the duration of 3 to 5 years. It provides opportunity to business manager to plan future
activities of enterprise and to utilise all business resources in an optimum or effective way. It
helps in decreasing the cost of production process and increase the efficiency of business
activities. ALDI firm deals in variety of grocery products and is one of the leading retailer in
grocery market is taken under this report for studying. How vision, mission core competencies
or objectives of firm affect the strategic planning is given under this report. For making an
effective strategic plan manager can do the organisational or environmental audit of the firm.
TASK 1
1.1 ALDI's mission, vision, objectives, goals and core competencies
Strategy is a process or a sequence of steps which are used by firms for achieving their
objectives, mission, vision or core competencies. Strategies help the business firms in achieving
their long success. ALDI can achieve success or can better accomplish its goals by making or
using an effective business strategy. It is one of the fastest growing or leading retailer in the UK.
Business strategy provides a framework to the firm for executing all its business activities or
operations. It helps the firm in achieving its goals, vision or mission. Vision: Vision is that state or position which firm wants to achieve in the future. It tells
the basic idea of owner of company what he want to achieve. Vision statement of ALDI
says that firm wants to make or deliver something qualitative or innovative from its rivals
to achieve number one position in the retail sector. Mission: Mission statement of firm tells about the main objective of firm. It includes the
goals which company wants to fulfil for attaining its vision. It provides direction to the
activities of workers and at the same time, motivate them. Mission of ALDI is to deliver
high quality products at affordable prices so that everyone can buy the same. Mission of
the firm helps or guide managers in doing strategic planning.
 Goals: Goals refer to the desire of organisation and its specific long terms targets. These
are made according to the vision or mission of firm. Following are the main goals of
ALDI:
◦ To grow its business activities in the UK and other countries
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◦ To achieve first position in the retail sector
◦ To make its physical presence more effective
◦ To fulfil its CSR (Corporate social responsibilities) Objectives: Objectives are the main aim for which business undertake its commercial
activities. Objectives can be for short or long term both.
 Core competencies: Core competencies are the capabilities of firm which help in gaining
advantage over their rivals.
Vision or mission of firms help or guide manager in making strategic plans for the organisation.
Strategic plans guides the enterprise in setting its priorities or main goals.
1.2 Factors which ALDI should consider when formulating strategic plans
Strategic plan is that written document that helps the firm or guide manager in setting
priorities of organisation along with focusing on main goals and analysing the skills and
resources required for achieving the same. Optimum utilisation of resources can be done through
this which decreases the overall cost of final product. Following are the main factors which
should be considered by ALDI while formulating or developing strategic plans: Needs of consumers: It is one of the important factors which should be analysed by
ALDI before making strategic plan. Needs or wants of customers should be analysed by
the firm for making or delivering required products to them. Satisfaction of customers
help business to grow at a higher growth rate. So, it is essential for firm to analyse
different needs or wants of customers and should try to add features in product to satisfy
them. Future goals or direction: Future state where company wants to go also affect the
strategic plans. Analysis of policies or strategies adopted by competitors of firm should
also be done by ALDI as this is one of the factors which largely affect business activities
of firm. All this helps organisation in increasing the number of its profits by increasing
the efficiency of business operations.
 Competitive advantage: Strategic plans are made by the enterprises for gaining
competitive advantage. ALDI also needs a plan to get a competitive advantage in the
market. Firm wants to create or generate large number of profits than its competitor
LIDL. Strategic plan helps or use by firms to take better decisions than rivals.
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1.3 Importance or usefulness of techniques used while formulating strategic plans
Strategies are used by firms for making a sequence of activities for achieving business
objectives. Effective strategies help in increasing the success chance of business operations.
Following strategies can be used by ALDI for developing their strategic plans.
PEST: This technique is used by firms to understand the macro or external factors of business
environment. It includes the following elements: Political factors: Policies, rules or regulations developed by government affect the
business activities. At present, political environment of UK is not stable due to elections
there. This affect the authorities and firms are not able to perform their operations in an
effective way. Economic: Due to Brexit, economy of UK is still on recovering phase. Rate of recession
is very high over there. Increasing spending power of British consumer increasing the
money flow in market. Social: Lifestyle and social rules of the society affect business activities in various ways.
It is the responsibility of business to fulfil the needs of public while avoiding social
issues.
 Technology: For achieving success, it is very important for ALDI to use technology that
exists in the market. It increases the profitability of firm and provides benefit in the long
run.
BCG matrix: This is another tool which can be used by ALDI. Dogs, cash cows, star or question
marks are the basic elements of this matrix. Dogs: Products having low market share or growth rate come under this category.
Company should try to identify products falling in this category and should try to
eliminate from its product line so that loss of the firm can be minimised. Cash cows: Products having higher market share but lower growth rate falls in this
category. Products of this category contribute a lot in the profits of firm. Stars: Products of the firm having high market share or growth rate falls in this category.
Huge amount or resources of the fund is invested in this and these types of products
generate higher profits for the firm.
 Question mark: Products having high growth rate or lower market share falls under this
category.
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2.1 Organisational audit of ALDI
For exploiting all opportunities exist in the business environment or to face al the threats
it is very important for ALDI to identify or analyse all risks exist in the business environment.
Both micro and macro environmental factors can be identify by the marketer for planning future
activities (Astrachan, 2010). For this following tools can be used by ALDI:
 SWOT analysis: This analysis help give manager in identifying strengths, weakness,
opportunities or threats of business enterprise. Strengths and weakness of the firm are
internal while opportunities and threats are the external factors which affect the activities
of business.
Strengths
Strengths are that qualities or capabilities of firm which make it different from its rivals.
Following are the main strength of ALDI:
 Lower price of high quality products.
 Lower operating cost
 Serve in more than 50 countries
 Discounted stores
Weakness
Weakness are the lack of skills of a firm and negatively affect the business operations.
Weakness of ALDI can be understood by the following points:
 Company presence is not effective, compare to its competitors.
 ALDI consider as producing lower quality goods.
Opportunities
 Company can execute its operation in countries having strong economy like Africa or
Asia.
 Firm can can the mentality of people by doing advertising or by using public relations in
an effective way.
Threats
 Less diversity increase the risk of business operations.
 Various brands of ALDI are not popular
 Fails to deliver full shopping experience to large number of customers.
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 Benchmarking: This technique can be used by ALDI to serve its customers with better
quality products at low prices (Auzair, 2011). Firm can use or can set a standard for
making quality products. When it comes about sales than ALDI ranks in 10th number
form its rivals. In this situation, ALDI can set TESCO as its benchmark which is creating
larger amount of sales every year.. At present firm's strategic position is very clear as
company is penetrating the market by delivering quality or innovative products with large
number of discount offer for attracting large number of customers.
Firm capture a market share of 1.9% in 2011 and by 2013 this market share is increased
by 3% and at present market share of ALDI is 5% which shows the company's potential of grow
and earn large number of profits.
2.2 Environmental audit of ALDI
Environment is that situation or place in which business enterprise undertake various
business operations. It is very important for an enterprise to analyse its environment and factors
exist in it (Burlton, 2010). It helps company in better deciding or planning its future activities.
When an enterprise identify or analyse all factors exist in the environment than this process is
known as the environmental audit. Basically there are two type of factors: Internal factors: It includes the factors exist in the environment and are controllable by
firm. Employees, customers, suppliers all come under this. It affect the policies or
strategies of firm. Analysis of these factors is necessary for for making strategic plan for
business.
 External environment: these are the factors largely affect the business activities and are
nit controllable by firm. It is very important for manager of ALDI to use a flexible or
effective approach to control theses factors.
Theses factors of business environment can be analysed by firm by using the following models: Porter five force analysis: This model helps manager in identifying or evaluating the
factors exist in the micro environment (Campbell, Edgar and Stonehouse, 2011).
Following are the main points of this model: Bargaining power of consumers: Current market of UK is led by TESCO and ALDI is
far behind from this. Bargaining power of suppliers: At present, in retail sector it is very easy for a
manufacturer to change the supplier for getting quality products at lower prices.
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 Threat of new entrants: For enter into retail sector it is very essential to have large
amount of resources or funds, which make the new entry difficult in this sector. Threat of substitute: TESCO and LIDL are the main competitors of ALDI and both firms
are able to provide full shopping experience to its customers. Rivalry: Intense competition exist in the market makes survival or growth of firms
difficult. PESTLE analysis: This model is used by firms for analysing the impact of external
factor on business activities. Environmental: In UK and other countries government is trying or making efforts for
saving the climate which is affecting the production process of ALDI. Social: Theses are the factors arise due to the difference in thinking or opinion of people.
All these factors affect the diversification of firms.
 Legal: Changes like Brexit, when take place affect the operations of business.
It is very important or essential for ALDI to keep analysing the environmental factors to make
better or effective strategic plans for the business.
2.3 Importance of stakeholder analysis
Stakeholders are the one having interest in business activities of a firm and invest
amount in firm's activities or product for gain profit (Casadesus-Masanell and Ricart, 2010). It is
very important for ALDI to satisfy its stakeholders as they provide a support to the business.
Stakeholders can be of many types, in ALDI stakeholders helps in managing business activities
and achieve smoothness in it. Customers: Customers are the end used of the company's product. For better satisfying
the needs and to get their support it is very necessary for ALDI to make products in order
to satisfy their needs. Employees: Employees are the one who undertake business activities and make products
for large number of customers. It also include that workers who b perform various type of
duties in the stores of ALDI. They work as defined or stated by company to serve
customers in an effective way. Suppliers: Suppliers are the one who provide or deliver raw material to firm for making
final products (Chang and Chuang, 2011). It is very essential for ALDI to find a supplier
who deliver quality raw material in low prices.
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 Government: Government who make final policies for the business also invest in
business activities.
 Investors: These are the one who provide funds or other resources for business activities
for getting higher returns on their investments.
2.4 New strategy which ALDI can follow
Strategy is the sequence of steps or activities design by business for achieve end results.
Manager of company should have art to decide all business activities in a way so that
business results can be maximised. There are three levels in a firm: Strategic: It is one of the top most level or top authority which make final policies
regarding the operations of business. Functional: Middle level of the firm comes under this which implement the strategies or
policies made by the top manager.
 Operational: This is the lower level f a firm, execution of policies take place in this level.
This can be better understand by the following example: Top management of ALDI
decide to expand its business operations in north zone of UK (Cinquini and Tenucci,
2010). Departmental heads will provide support to implement this strategy and lower
level of employees will execute the whole plan.
ALDI needs new strategy for increase the share of its captured market for this following
steps can be followed by the firm: Where the company is: minimum cost concept is used by ALDI at present for
implementing its activities but this is not beneficial for the firm in long run. By identifying what is more important: It is important for a firm to use a strategy to beat
the leaders of market for increasing their profits and positive brand image. By defining, needs to be achieved: At present it is important for firm to get a stable
market share and high growth rate. Accountability: Managers of operational level,
 Review: This responsibility remains in the hand of managers of different department.
Substantive growth strategy can be used by ALDI in this firm can merge with other super
market chains of UK market (Dong-Hun, 2010). Firm can use its resources for achieving higher
growth rate in future.
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TASK 2
3.1 Identify a market strategy with its appropriateness
At present, ALDI is operating in various areas of UK market with its discounted
products. Market of UK has high growth potential and has chance of earning higher returns than
anywhere. There are large number of strategies which can be used by ALDI to further grow in
the market. Substantive growth: Under this strategy firm merge or acquire other firms dealing in
same sector for getting high rate of growth and to better serve the large number of
customers. This strategy can be used by ALDI this strategy helps in maintaining the
horizontal or vertical integration. This provide opportunity to firm to execute commercial
operations with more suppliers. Limited growth: This strategy is used by firm having limited sources for expanding and
this is not applicable in the case of ALDI as firm has huge resources for expansion.
 Retrenchment: This strategy is used by organisations having limited resources for
executing the business activities.
Substantive strategy will used by ALDI for executing its operations.
3.2 Justification of the strategy
Reason behind choosing the substantive growth strategy for ALDI is that firm has large
number of resources or funds which can be used by company integrate with other firms or will
help firm in expanding its activities on both horizontal or vertical basis. Company has more than
55 stores in UK with 5% of market share (Eccles and Krzus, 2010). For increasing the current
market share or better satisfy the needs of customers firm need to explore its activities for which
it is necessary to acquire with other suppliers or with other retailing companies.
Attractive approach can be used by firm to attract or influence large number of customers
towards its product. Different sales offer can be used by the company. By using all its resources
in an effective way firm can increase its market share.
TASK 3
4.1 Roles and responsibilities of personnel involved in implementation of strategy
Managers of company have the responsibility of implementing any policy in the
enterprise. Employees or workers of they enterprise play an important role during the
implementation of any strategy (Hahn, Kolk and Winn, 2010). Managers provide guidance or
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assist lower level managers for completing any task according to the strategy. Following roles
and responsibilities should be fulfil by the managers of ALDI:
 It is the responsibility of manager to identify the trend exist in they market and than doing
necessary changes for achieving set objectives.
 Communicate all the necessary data with other employees.
 Motivate workers to accept the changes an d fulfil their duties.
Fulfilment of all theses roles and responsibilities by managers is necessary for smooth
functioning of business activities. Along with the managers employees of the enterprise also play
an important role for implementation of strategy, encouragement or support of workers can be
get by proper motivating the workers.
4.2 Resource required for implementation of strategy
ALDI has to use some resources in order to implement a new strategy so that all business
operations can be performed effectively. Sometimes, these resources can be differing from one
strategy to another. So, it is the responsibility of manager to choose some appropriate resources
so that goals can be achieved. Some of these resources are like: Raw material: It is the basic requirements which is used by Aldi in order to manufacture
products and services for customers (Haley, Haley and Tan, 2011). By using these, they
will be able to offer more quality services at flexible prices. So, in this way overall
expenses are get reduced to some extent and profitability can be achieved. Human resources: These are an important assets of the firm who help them in achieving
their specified goals and objectives. All the employees should be creative and innovative
so that they can lead an enterprise towards success. The manager has to keep motivating
their staff members so that their performance can be improved.
 Financial resources: These resources are related to cost, capital, buying the machinery,
salary of staff members and so on (Higgins, Omer and Phillips, 2015). The higher
authorities have to manage these resources in more effective manner so that new strategy
can be formulated appropriately. On the basis of these, a business organization will be
able to achieve sustainability at the marketplace.
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4.3 Contribution of SMART targets in achieving strategic objectives
For achieving better success it is very necessary for the managers of ALDI to understand
importance or effectiveness of SMART objectives or targets. SMART gaols of ALDI includes
the following:
 Firm wants to increase its market share by 2% in next six months
 There is a need to increase the sale of firm by 40% in next one year
 Theses is a need to bring down the cost of operations by 30% in next 12 months.
All these are the main SMART targets set by the managers of ALDI for achieving end results or
goals with proper implementing all activities of business.
CONCLUSION
From the above information it can be concluded that making an effective business
strategy by collecting relevant information is very important for a firm like ALDI. It helps
business enterprise in deciding the an optimum sequence of its activities. For making better
strategic plans for the future operations of firm it is very necessary that manager should have a
detailed understanding of its vision, mission, core competencies and goals. By considering some
factors in mind manager of firm can do better strategic planning. It is very necessary for ALDI to
identify the factors exist in the business environment and at the same evaluate its affect on
various commercial operations. In the present scenario, it is very necessary for an enterprise to
have an understanding of all activities or strategies of its competitor. This help company in better
deciding its business actions and to gain competitive advantage.
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