Supermarket Competitive Analysis

This assignment tasks students with analyzing the competitive environment of major supermarkets. Using Porter's Five Forces model, students will assess the level of competition, bargaining power of suppliers and buyers, threat of new entrants, and availability of substitutes in the supermarket industry. The analysis should shed light on the key strategic challenges and opportunities facing supermarkets today.

BUSINESS STRATERGY

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1.1 Assessment of goals, objectives etc. of ALDI......................................................................1
1.2 Factors to be considered while formulating strategy............................................................2
1.3 Effective methods and techniques.........................................................................................4
2.1 Organisation audit.................................................................................................................5
2.2 Environmental audit..............................................................................................................6
2.3 Significance of stakeholders for forming new strategy.........................................................7
2.4 Presentation of new strategy for the company......................................................................7
PART 2............................................................................................................................................8
3.1 Analysation of appropriateness of alternative strategy linked with Aldi..............................8
3.2 Justification of the strategy which is correct for business.....................................................8
PART 3............................................................................................................................................9
4.1 Roles and responsibilities of personnel who can engaged in implementation of strategy....9
4.2 Important resources required for executing strategies........................................................10
4.3 How use of SMART targets can be contribute for achieving strategic objectives.............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategies are the code of conduct which are being followed in order to achieve the desired
results. different strategies have their own way of implementing and therefore it is required that
before bringing the work into action strategies are properly communicated as this will further
raise the possibilities of achieving results with minimum deviations (Gollakota, Gupta and
Bork,2010). ALDI is a global discount supermarket having its chains in different parts of the
world. There are a number of departments under this same stores and therefore it is required that
proper planning is done for each one of them so that turnovers of every different year is
maintained. In the following report evaluation of various strategies will be done for which
mission vision and goals of Aldi will be discussed in detail. Thereafter, factors to be considered
while formulating the plans will also be highlighted. Various techniques will be highlighted like
BCG matrix which are helpful in examining the effectiveness of distinct plans.
PART 1
1.1 Assessment of goals, objectives etc. of ALDI
Plans that help in accomplishing the desired goals and targets is known as business
strategy. Before practically starting on work every enterprise construct its mission and vision and
keeping same in mind the strategies are formulated. ALDI in order to develop design plans in a
manner that maximum return on investment is achieved. Various strategical terminologies in
context of Aldi are discussed below:
Mission – It is the statement that describe the actual objective of the organisation. Aldi
aims at bringing improvement in the quality of services and maximising the quality of services.
The mission statement of referred organisation is to develop self-abilities so that quality
standards are maintained and stakeholders are kept happy (Woodcock, Green and Starkey, 2011).
Vision – The referred organisation keep control over its total supply chain so that they can
ensure timely delivery of products. Bringing development in the economy of UK is also ensured.
Goals – ALDI is working to facilitate multiple drivers so that development in the long run
is ensured.
Objectives – The core objective of referred organisation is to create working atmosphere
where maximum output is produced at minimum cost.
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Core Competencies – Competitive working staff and skilled employees help organisation
in taking advantage of all the available resources. Expert technology and advanced resources also
add more capacity to the referred organisation.
The above discussion shows how mission vision and other important areas are different
for Aldi. As they are formulated at initial stages it helps management in determining the most
effective and suitable strategy for the organisation that can help in reducing the gap between
expected and actual result. Strategies when designed according to the requirements of a
particular business than they become more efficient.
1.2 Factors to be considered while formulating strategy
In order to carry out the different operations of the organisation various factors need to be
considered among which few are present within the work place and some other that are their
outside the business boundaries (Tsamenyi Sahadev and Qiao, 2011). Distinct factors have their
own impact on the operations and accordingly need to be maintained. Those factors that are
present within the business has major and direct influence on the business and those which are
present outside has indirect impact. All the factors have their own positives and negatives and
hence while framing the strategies these factors need to be considered. The positives and
negatives of each factors are discussed below in detail:
Basis Advantage Disadvantage
Internal More skilled and dedicated
work force helps in achieving
the set targets and objectives
in the best possible manner.
In case of any personal
issue like conflict among
the working staff or any
other act which can disturb
the smooth function has its
direct impact on the results
of business and adversely
affect the brand image.
Change in the cost of
labour also has indirect
impact on the profitability
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of business as costly work
force increases pressure on
the business to reduce the
profit margin.
External There is continuous change in
the business surroundings.
There are times when
advancement in technology is
observed and by adopting to
same better output can be
produced at reduced cost
(Teece, 2010).
Continuous change in the
technology brings pressure
on management to remain
updated and in order to
compete with the other
companies much
investment need to be done
on the procurement of
machinery which further
raise the total cost of the
firm.
Figure 1 Ansoff Matrix, 2018
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In order to do effective business in long run Ansoff Matrix plays an important role. It
helps in formulating effective strategies for different areas like maintenance of product
innovation, development of same and creating a profitable market for a new product. It is an
expansion grid that assist in identifying risk associated with different areas of the new
commodity.
Market Position – It involves ways through which the referred organisation can place its
product in the market and can achieve the competitive advantage.
Customer demand – This helps in identifying the requirements of different customers so
that accordingly same can be made available to them which helps in earning more returns.
After identifying the ways through which development can be done missions visions and
objectives are set for the organisation as whole which raises the total results of the firm.
1.3 Effective methods and techniques
There are diverse number of appropriate procedures that can encourages their assistance in
outlining and confining methodology for business (Scholes, 2015). For powerful arranging, it is
vital for picking a few procedures and techniques that will be useful in having required targets
and objectives. Some different methodologies are resolved that help with making and
surrounding strategies of business. They resemble SPACE, Ansoff Matrix and Boston Matrix.
It can be resolved to be helpful at time of making section in the new market zone and wish for
having considerations of purchasers towards their company's item and administrations.
Alongside it, ANSOFF MATRIX is knowns as a powerful and sound system keeping in mind the
end goal to manages business development and present course for the future time. These
techniques and methods are spoken to four noteworthy systems to achieve effective development
to the firm. There are a few factors that gives help in regard to investigate whole market territory
that are nitty gritty as-
Market entrance - It is suggesting in improving existing creation for the present market
territory through various procedures. Through performing it, ALDI needs to update their
estimating technique, exercises of offers advancements and so on in understanding of it, they are
expected to cantered around clients and commercial centre.
Market improvement in the firm, organization offers their products and enterprises in the
new commercial centres. They are not required for building up their generation with a specific
end goal to utilize fitting strategies that can make new purchasers in powerful way.
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Item improvement this methodology is utilized an organization are confining their present item
and administrations at the present commercial centre. It will be done through boosting esteems
and offering best quality products and ventures of their wished clients in adequate way.
Enhancement- This technique is utilized when organization is driving with current item at the
new market. In this respects, every one of the purchasers and products are concocted new
highlights as well.
2.1 Organisation audit
In order to formulate various strategies this is very important that management is well
aware about the distinct strong and weak areas of business (Montgomery, 2011). This way
deviations in expected results are minimised and also corrective actions are taken so that
negative results are minimised. SWOT analysis is an effective tool through which internal factors
are evaluated which further helps in doing future planning.
Strength of ALDI Company- Internal factor of the organisation.
The major strength of the referred organisation is that it offers quality products and
operates in over 15 countries worldwide. The Operating costs is low which makes the prices of
the products economic. It is growing rapidly with a rise of 12% in market share. Aldi has strong
distribution channel covering majority of the market which is due to strong suppliers of raw
material (Martin and Rice, 2010.). It has expertise in working in new markets and has strong
brand portfolio. Lastly the strong part with the referred enterprise is that it has achieved success
in merger and acquisitions.
Weakness of ALDI Company- Internal factor of the organisation.
The areas which need improvement fall under this category. The financial planning is not
done properly and efficiently in Aldi. The profitability ratio of referred enterprise is below the
industry average. Limited successful in other segments except their core branch. Attrition rate is
high in work force and technologies require more investments which raises cost of the
organisation. Still it is relatively small as compared to other brands in the market and also has
less impact globally.
Opportunities of ALDI Company- External factor of the organisation.
Opening of new market with new technology to capture new customers and increase market
share. Aldi is enabling credit at lower rate to customers. Market development will lead to
dilution of competitors and will increase its competitiveness. Investment in making affective
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advertisement can lead to beat competition and also expanding in other countries which are
economic.
Threats of ALDI Company- External factor of the organisation.
High level of competition from leading supermarket brands like- Woolworth and Coles.
Risks can be associated with the suppliers. New technology made by the competitors could be a
serious threat to ALDI (Peteraf, Gamble and Thompson, 2014). Increased number of players in
the market which impacts on stability of the company. New regulation of the environment can
impact the profitability of the company. Laws and policies of different country can be a threat to
the market of ALDI.
2.2 Environmental audit
Porter's five force model or tool through which environmental audit of ALDI organisation is
done and because of this audit this organisation will able to find about competition in their
industry and it also helps in finding about company's profitability potential (Martin and Rice,
2010).
Competitive or Industry Rivalry: In today's modern technology world, cost of products
and services with the same intention of quality is the main reason behind any firm to compete
other ones. And cost is the among one good advantage for ALDI firm because this organisation
follows one simple rule or policy that is provide products and services at low fixed cost with
maintaining the quality.
Threats of New Entry: This is the main reason behind to downgrade the existing firm
though using latest technology or equipment’s with highly skilled work labour. This ALDI firms
will feel strong competition in today's entrepreneurship environment.
Threats of Substitutions: Nowadays door to door delivery of services started through small
business and from entrepreneurs. This is now another challenged faced by existing big firms. To
encounter this collaboration of two same or different organisation is the best way to stay and
compete in this competitive socio-economic world.
Bargaining Power of Suppliers: To decrease the price of products or services from
suppliers, switching from one to another supplier is best way of reducing the price in today's
entrepreneurs and competitive world with the same intention of quality (Peteraf, Gamble and
Thompson, 2014).
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Bargaining Power of Buyers: In today's technology world, buyers are so smart they always
search first about products and find the best low price for required product with same quality. To
encounter this situation, ALDI has to look around all possible markets for promotions and
displaying details about its products.
2.3 Significance of stakeholders for forming new strategy
Stakeholders are those members of regime either individual or group of members who
passionately contribute their work with full of dedication to organisation for achieving
future growth specially in the sector of social and economic.
ALDI has identified and deliver their tasks according the stakeholders responsibilities for
achieving viable returns from this technology market environment and also for enhancing
their economic growth. ALDI broadly categorised its shareholders into three categories such
as: internal shareholders, external shareholders and connected shareholders.
ALDI follow Mendelow's Matrix for stakeholder’s procedures for returns from stakeholders in a
very effective manner according to their responsibilities.
This Mendelow's Matrix will be broadly categorised into four parts which are discussed below:
Box A- Minimum Effort: These business partners or members have lack of intention to
give their best towards company to achieve economic growth.
Box B- Keep Informed: These members of stakeholders have keen interest in improving or
giving suggestions but they have lack of power to do or express their work.
Box C- Keep Satisfied: Aim behind to satisfy stakeholders is not to take profit from their
interest.
Box D- Keep Participation: They are the one who drives management powers and they
also have power to stop running management’s strategy if others are not satisfied with
existing strategy or policies. They are the one who delivers and share the strategy with
others and convey them in detail about the policy or strategy. They discuss threats or issues
with other stakeholders and find solutions also for betterment of their firm or organisation.
2.4 Presentation of new strategy for the company
As per the discussion this has been evaluated that the refereed organisation needs to give
emphasis on the strategies so that it can achieve the competitive advantage. Investment strategies
needs to be reformulated so that maximum returns are achieved by the management on the total;
investment made by the same (Köseoglu and et. al., 2013). More emphasis needs to be given on
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customer interaction as this further assist in raising the total sales along with the development in
relation with customers. Business strategy is all about designing effective schemes for attaining
company goals in a defined time frame. In fact, numerous of strategies are identified which plays
a very eminent role in enhancing the performance of an association by assisting employees
towards corrective path. Therefore, market growth is one of the most useful scheme that is
adopted by an enterprise for dealing with current situation in order to fulfil the needs or demand
of distinct clients. However, its all about analysing the market for understanding the need of
various consumers belongs from different age groups like; kids, youngsters, adolescents and old
age people. In fact this strategy is very beneficial for company success because it helps in
classifying the market into different segments in order to identify the need or requirement of
several group of consumers.
(Source:- Major supermarkets, 2016)
According to above graphical representation it has been identified that ALDI is not
having much more share in current marketplace due to which they need to make changes in their
business strategy for enhancing their performance. Along with this, it is also essential to
implement useful activities for assisting employees towards corrective path. Thus, main mission
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Illustration 1: Major supermarkets

of an enterprise is to establish their positive image at marketplace by gaining trust or loyalty of
various clients.
PART 2
3.1 Analysation of appropriateness of alternative strategy linked with Aldi
Aldi is a big brand and having a good market image. A number of market strategies is
used by the management that helps the administration in developing a strong bond with the
market. Planning associated with distinct strategies are as follows:
Alternative strategy Option Explantation
Market entry strategies The refereed enterprise has an
alternative to provide its
products in market by using
distinct sources.
By exploring new market and
medium more customers can
be reached at the same time
and higher revenues can be
earned (Jocovic and et. al.,
2014).
Substantive growth By entering into new segments
like food it can enhance its
total market share.
When new products are made
available in the market it helps
in enhancing the sales and
goodwill of organisation in the
industry.
All the above information shows that number of strategies are identified at marketplace
which helps an enterprise in improving the standard of an association. In fact, these schemes are
useful in identifying the current needs of distinct consumers in order to design goods as per their
choice or preferences. Although, growth schemes are trying to understand current position of an
association at marketplace for making changes at workplace.
3.2 Justification of the strategy which is correct for business
Different strategies have distinct problems associated with them as there is difficulty in
implementing few and on the other hand few of them require skilled work force. Proper research
and survey must be done so that management can reach to such decision which is acceptable by
all. Strategy which is easy to implement practice and carry out should be practised and it should
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be ensure that all the required resources are made available so that no difficulty is faced by the
work force during the course of action (Gandolfi and Hansson, 2010). Proper training should also
be provided to all those associated with the same so that they can contribute in the
accomplishment of organisation goals. For Aldi substantive growth can be beneficial as by
entering into different sectors it can expand its scope and hence this will increase the total
revenues of the business.
Market growth is one of the useful scheme that is used by selected firm for enhancing
their current performance by satisfying the needs or demand of clients. Along with this, it aids in
segregating market into various parts for designing goods as per their need or requirement in
order to control chances of wastage. Hence, this strategy is useful for company success and
development due to its effectiveness towards their customers. Moreover, societal member is seen
as most indispensable asset because products are finally consumed by them only. Therefore,
identifying clients requirement is necessary for growth of an association in a defined time frame.
PART 3
4.1 Roles and responsibilities of personnel who can engaged in implementation of strategy
For whatsoever modifications required in existing strategies and policies should must
involve ground level employees for implementing in a better way than previous. Because in the
last they are the peoples of organisation who adopt and implement these policies and strategies to
achieve company's desired vision and mission.
Employees of organisation who are involved in executing new or existing strategies have
different roles and responsibilities with respect to their working criteria. Some of these aspects
are discussed here:
Top Administration: This group of peoples of an organisation is primal for preparation
and maintenance of blue print for executing policies and strategies which have all prerequisite
details in proper sequence about procedures which is required for implementation of policies.
Centre Level: This group represents intermediate superiors like team leaders,
supervisors, departments head and managers. The members of this group play important role
because they are the one who convey the company vision and mission with policies to
organisation employees. They are the one who motivate and give their support to the employees
of an organisation (Campbell, Edgar and Stonehouse, 2011). All the desired information about
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modification in company's policies or strategies must be share with employees who work under
them, so that employees will work in correct way for achieving company's desires vision and
targets for company socio-economic growth.
Experts / Agents: Regarding the implementation and finding bugs in new or existing
policies and strategies, internal or external experts are necessary part for implementing policies
in a smoother way. This group of peoples will also help in identifying and give solutions of these
threats which occur in future.
Workers at Ground Level: They are the one who finally adopt and implement
company's policies or strategies. This group of employees are the essential and crucial part of an
organisation for achieving company desired targets with socio-economic growth.
4.2 Important resources required for executing strategies
For executing new or existing strategy within organisation with creativity by using
modern equipment’s and technologies in a very efficient and effective way will always require or
need financial support, raw material, skilled labour, experts with supervisors and team leadership
with strong decision making skills.
In today's modern competitive world, changing in technology happens rapidly because of new
entrepreneurs and their courage. Because of that methodology of adopting policies and strategies
will also transforms rapidly and frequently.
Human Resources: It known fact that for any organisation, human manpower is a
keystone. Without manpower no new or existing policies, machinery, equipment’s, technology
and strategies will able to be implements in a smoother way. Human manpower is essential part
of an organisation for implementing, creating, developing strategies or policies and also helps in
finding bugs in their existing policies and strategy (Bharadwaj and et.al., 2013).
Financial Resources: Without capital funding no organisation either government or
private, small-business or new start-up will not be able to run or function in smooth and effective
way. The prerequisite things within organisation for modification or any new changes is financial
assistance to a firm within time.
Raw Material: raw material is termed as a commodity which is an essential for every
organisation in this globe. Raw material is always required for implementing, creating and
developing strategies and policies. Without availability of raw material, market will always
return huge loss for organisation in terms of social, economic and customer-relationship.
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Time Bound: Each and every organisation have their vision and mission or targets which
has deadline or time duration for each and every task of it. Time is one of the most important part
or function of each and every firm in this competitive socio-economic world
4.3 How use of SMART targets can be contribute for achieving strategic objectives
This SMART methodology was given by Peter Drucker's who is founder of modern
management for creating, developing and achieving company's desirables goals and targets
which is followed by ALDI organisation in a very structured manner of actionable plan.
SMART is referred for the 5 elements of specific, measurable, attainable or achievable, relevant,
and time-bound goals (Astrachan, 2010).
Specific: This ALDI organisation has a very specific goals and missions by adopting and
implementing unique methodology for achieving desirable targets in time bond.
Mission and vision of ALDI must be understanding and understood by each and every employee
of it. For each task ALDI group has a specific methodology by using modern equipment’s.
Measurable: A vision and mission without measurable outcome is like a swimmer
without water. To know the harsh reality of ALDI organisation, measurable output report must
be there and it helps in betterment for future of company specially in this technological upgraded
and competitive market place.
Attainable: This ALDI organisation has a goal which is achievable and has a desired
output. ALDI Organisation has a one good thing in it that is it sets its goals by using skills and by
proper methodology not just by hypothetically. Attainable goal with time bound will motivate
employees and members of an organisation.
Relevant: ALDI has a relevant and achievable goals and targets. And these goals and targets are
set and adopt by following proper methodology. Path or way of achieving desired and relevant
goal will be known by ALDI firm and it helps for future return from market by minimising input
cost and raw material and maximising output.
Time-Bound / Time-Based: This is the speciality of ALDI firm that its goal and targets
all are relevant, attainable and time based (Acquaah, 2013). A time based goal always helps an
ALDI to focus on their employees efforts towards achieving goals and it also helps in achieving
market values with good socio-economic market place. ALDI firm had set a time bound for each
realistic task which is achievable in a given time.
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CONCLUSION
From the above discussion this has been summarised that to achieve the organisation goals
and objective proper strategy formulation is of great help. Before reaching to the final plan
management should take care of various strategic tools that act as a guideline to construct valid
plans. SWOT analysis, porters five force model etc. are the different tools that provide the
required information to parties responsible for strategy implementation.
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REFERENCES
Books and Journals
Gollakota, K., Gupta, V and Bork, J.T., 2010. Reaching customers at the base of the pyramid—a
two‐stage business strategy. Thunderbird International Business Review. 52(5). pp.355-
367.
Woodcock, N., Green, A and Starkey, M., 2011. Social CRM as a business strategy. Journal of
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Tsamenyi, M., Sahadev, S and Qiao, Z.S., 2011. The relationship between business strategy,
management control systems and performance: Evidence from China. Advances in
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Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning.
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Scholes, M.S., 2015. Taxes and business strategy. Prentice Hall.
Montgomery, C.A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Martin, N and Rice, J., 2010. Analysing emission intensive firms as regulatory stakeholders: a
role for adaptable business strategy. Business Strategy and the Environment. 19(1).
pp.64-75.
Peteraf, M., Gamble, J and Thompson Jr, A., 2014. Essentials of strategic management: The
quest for competitive advantage. McGraw-Hill Education.
Köseoglu, M. A., and et. al., 2013. Linkages among business strategy, uncertainty and
performance in the hospitality industry: Evidence from an emerging economy.
International Journal of Hospitality Management. 34. pp.81-91.
Jocovic, M., and et. al., 2014. Modern business strategy Customer Relationship Management in
the area of civil engineering. In Applied Mechanics and Materials (Vol. 678, pp. 644-
647). Trans Tech Publications.
Gandolfi, F and Hansson, M., 2010. Reduction-in-force (RIF)–New developments and a brief
historical analysis of a business strategy. Journal of Management & Organization.
16(05). pp.727-743.
Campbell, D., Edgar, D and Stonehouse, G., 2011. Business strategy: an introduction. Palgrave
Macmillan.
Bharadwaj, A., and et. al., 2013. Digital business strategy: toward a next generation of insights.
Astrachan, J. H., 2010. Strategy in family business: Toward a multidimensional research agenda.
Journal of Family Business Strategy. 1(1). pp.6-14.
Acquaah, M., 2013. Management control systems, business strategy and performance: A
comparative analysis of family and non-family businesses in a transition economy in
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Online
Porter's five force model [Online] available through
:<https://www.strategicmanagementinsight.com/tools/porters-five-forces.html>.
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