Supermarket Chain Efficiency Analysis

This assignment involves a comprehensive analysis of German discount supermarket chain, Aldi. Students are required to examine Aldi's unique business model, focusing on its efficiency-driven approach. The assignment should also compare Aldi's strategies with those of its main competitor, Walmart. Additionally, students may explore the geospatial database integration used by Aldi and discuss how it contributes to its overall efficiency. The analysis should be based on the provided sources.

Integration of business function

Table of Contents
INTRODUCTION...........................................................................................................................3
1.Choice of organisation.........................................................................................................3
2.Role of business functions and Changes of strategy and strategic direction in Aldi..........3
3.How leadership, times frame and changes have influenced the Aldi. ................................5
4.Concept, theories and models of Leadership used by Aldi.................................................8
5. Applications of STEEP Model in Aldi...............................................................................9
6. The Stakeholder Theory. .................................................................................................11
7.Organizational culture of Aldi and specific concept and theories used in Aldi................13
CONCLUSION.............................................................................................................................14
REFERENCES .............................................................................................................................15

INTRODUCTION
Working if the organisation is highly affected by the internal and external forces of the
environment within which business conducts its operations. Business integration is the strategy
of co-occurring the cultures and objectives of business along with the information technology.
Business integration is use to analyse the functions of the business absorbed by information
technology and it also helps in increasing customer services , sales and helps in providing a
better work environment. This assignment is based on the style and strategies of leadership,
STEEP model analysis, porters five forces model and SWOT analysis. It also lay emphasis on
the role of business functions.
1.Choice of organisation.
Aldi, is the leading global supermarket chains with approximately 10,000 stores in 18
countries. Its estimated turnover per year is around €50 billion. Its headquarters is in Germany.
Food and household articles are served by Aldi to their customers. It was founded in 1913, and
in 1946 it is split into two parts, Aldi Nord and Aldi Sud. According to some reports its revenue
in 2010 was €53 billion billion. It operated around 8000 stores across the world. Some business
practices followed by Aldi is unique for other counties, one of them is that Aldi does not accept
credit cards.
2.Role of business functions and Changes of strategy and strategic direction in Aldi.
Oraganisations like Aldi, perform various types of business functios in order to regulate
their business activities. Marketing, Human Resource activities are some of the business
functions that are very important for the firms (Chatterjee, 2017).
Financial outcomes of Aldi, as per some reports Aldi is one of the largest supermarket in
the Europe, and its profit sharing ratio are very high as compared tot he other giant super
markets. It is the largest retailer in the Europe, and consider as a excellent global retailing
industry. In early 1990, 3000 stores are operated and established by the Aldi.
Aldi has seen huge success globally , Aldi provides stocks ot the brands only to increse
its own discounts (Butler, 2015).
As per the reports of the 2017, The UK department of Aldi announced a third
consecutive year of failing profits as the German, discounter are enable to maintain the low
prices of the product. Grocery chain has seen a loss of 17%, £211.3 m in the year to 31
December 2016, from 255.6m the year before, despite a 13.5 % leap in sales to 8.74 bn. The

company reported that its operation are failing because of its lower pricing policies and
structures. The owners of the Aldi mentioned that they do anything to keep heir prices low as
compared to the other super market.
Aldi claims that their prices are 15.2 % cheaper than Asda. The Aldi group of industries
mentioned that they want to open approximately 70 new stores next year for increasing their
financial outcomes.
Aldi has present record sales and a planned £300m investment to refresh it stores in UK.
As on December 2015, the sales of German Aldi was more than £7.7bn. The discount of the
Aldi has fall up-to 15.2 % in pre-tax profit. Aldi also unveiled a £300m revamp of its stores,
with many of the changes being made in response to a survey of 50,000 customers. The store of
the Aldi has very simple layout and their products are of competitively low prices. The company
has seen a rapid growth, ant in 1950 it owns 13 stores and than in 1961, it owns 300 stores in
Germany. The strategies applied by the Aldi helps in establishing the rapid growth in the market
According to the reports, efficiency of the Aldi to perform in the market is currently very high.
The current strategies used by Aldi is, human resource practices, recruitment and selction
process, development and training and strategic human resource management.
Changes in strategy and strategic direction in Aldi during 2007-2017
According to some reports of 2017, the founder of the Aldi, Theo Albrecht and Karl
Albrecht Sr, and their leadership style helps the organisation to achieve high rate of success
across the world. Thee two brothers are founder and managers of the Aldi. It was introduced in
1913.In 1960 the business was split into two separate parts and later divided into Aldi Nord and
Aldi Sud. The name Aldi was come into light in 1962. Since 1966, in Germany Aldi was being
separated financially and legally. Since last 10 years Aldi's Germany operations consist of Aldi
Nord's with around 2,500 stores in Western, eastern and northern Germany (Gielens, 2018).
In 2017 both the operations of Aldi comprise of 1,600 stores in United States. The Aldi
Nord group currently consists of 35 independent branches with around 2,500 stores. And Aldi
Sud comprises 31 companies with 1,600 stores.
Reports presented in December 2002, states that Forsa identified that 95% formal
workers, 88% white collar workers, 84% government workers, and 80% self employed are
regular customers of Aldi in Germany.

Since last 10 years over 8,000 stores are operated by Aldi across the world. First store of
Aldi Sud was opened in 2005 in Switzerland, and in Hungary in 2007. Since 2008, Aldi Sud has
estimated investment of around €800m in Greece until fall in profits in 2010.
In Great Britain, Aldi was launched in 5 April 1990, in 2013, 300th store of Aldi was
opened in Britain and in 2017 it has around 600 stores over there. But grocery share of Aldi in
Britain in 2011 is less than 3.6%.
In Sydney, Aldi first store was opened in 2001, and since than it is rapidly growing their
maintaining market share of 12.6% approximately as per the reports of 2016.
In 2016 confirmation was given by Aldi managers regarding its opening in China.
Structure of Aldi (2007-2017)
As per the reports, it was stated that integrated and vertically integrated structure
followed by Aldi has given it huge round of success. This structures promotes collective decision
making and to achieve success across the world. Aldi stores are very famous because of their
lower pricing strategies. Vertically integrated structure provides various benefits to the
organisation such as raw materials, warehouses, distribution panel etc., this will help in ensuring
flexibility (Greenwood, 2014).
It important for the organisation to maintain unique and effective organizational
structures in order to conduct effective business practices in the market, just like Aldi. Various
measures are use by Aldi to met the fluctuating needs of their consumers.
Aldi offers high quality products to their customers at very affordable cost, their central
aim to manage the price of their products in order to maintain their competitive advantage.
The vertically integrated business structure helps Aldi in maintaining its effective control
in the market. Under the leadership of Theo Albrecht and Karl Albrecht Sr, the organizational
structure of the Aldi was effectively coordinated to perform various kinds of activities or their
departments and analyze the flow of effective responsibilities between the market. The
functional team of the Aldi consist of more than 300 professionals and they are well aware about
the needs of the customer (Voigt, 2017).
3.How leadership, times frame and changes have influenced the Aldi.
The role of the leader in Aldi is very crucial, they are the one who leads the organisation
to achieve the desired goals and objectives of the firm. There are various techniques, theories,

models and concepts of leadership are available in order to assess the services provided by the
organisation (Belizón,2016).
Leadership style followed by the business associates has very serious impact on the
performance of the organisation. In both small and large business leadership is the important
function. The main role of leaders is to provide clear vision of the organizational workings to the
employees and resolve the conflicts and disputes occurring between the members of the
organisation. In Aldi, leaders plays very important role in increasing sale and profit sharing ratio.
They asses the whole working criteria of the stores in order to provide best quality services to
their customers (King, 2015). In Aldi, there are various practices of leadership: Modeling way,
Inspiring the shared vision, process challenging, inspiring others, motivating employees, enable
other to act in a desired manner, encourage the satisfaction level of the workers (Brown, 2014).
Organizations like Aldi, are highly influenced by the leadership styles followed by the various
leaders. They are the one who lead the organisation in the desired manner by guiding employees
and setting objectives for them. The business philosophy of Aldi is very clear and has number of
guiding principles. Business practices followed by Aldi is comprise of: Large savings, standard
of quality, outstanding value, effective buying offers, confidence buyers (Bryman, 2015).
There are various models of leadership which are used by Aldi to ensure their effective
working in the competitive market. The leaders of the cited organisation are highly skilled and
they are very sufficient in applying appropriate leadership style, according to the demand of the
situation. Generally models of leadership is a guidance that is use to suggest specific leadership
behavior according to the environmental requirements or situations. There are various models of
leadership:
Autocratic Leadership: It the technique in which all the decisions are conducted by
organizational heads and there is very less and no involvement of any other employees in the
decision making process.
Democratic Leadership: It is a leadership of mutual respect, where decisions are taken
with consent of each and every member of the organisation.
Strategic Leadership: In this technique strategies are made according to the situation and
the requirement of the organisation.
Some of the various styles of leadership is: Visionary, Coaching, Affiliative and Democratic.

Time frame is the specified time or period in which occurrence of any event takes places.
It can also be schedule which has to occur. Impact of time frame highly affect the working of the
organisation. It helps in creating set of activities which has to completed in allotted time so that
organisation can work effectively and efficiently.
In Aldi, there members, workers, leaders and managers are well aware of the importance
of the time frame. They are sufficient enough to provide goods ad services to their customer on
the desired time.
For the industries like Aldi, it is very important to associate the time management
techniques in order to satisfy their customers so that organisations can maintain their sustainable
position in the market. It the most constructive policy of the organisation to make time
management their priority. It helps in achieving the goals and objectives on the assigned time
(Gagnier, 2016.).
Time management activities also helps in making optimum utilization of the resources.
Whenever changes takes place in the organisation it have both negative and positive
impact on its working. While practising business functions in the environment it is impossible to
avoid changes. Adopting organisational changes is quite difficult for some individuals in
comparison to the others. Some of the benefits of the organisational changes are:
New Opportunities: Whenever changes occurred in the organisation it helps in retaining
the new opportunities to the business. It helps in setting new goals and objectives for the
organisation which can be achieved more efficiently by applying changes in business practices.
Innovation: Changes helps in enhancing creativity and inner ability of the organisational
members. It motivates the employees to develop their interpersonal and technical skills.
Innovations make huge difference in the success of the small business organisations.
Increasing efficiency: Changes in the organisation helps in enhancing the efficiency of
the employees in order to make them work according to the requirements.
Establishing attitude: In some cases organisational changes can have positive impact on
the employees and the workers working in an organisation.
Whenever changes occurred in the organisation, it comes with various impact, some are
negative and some are positive. It the responsibility of organisational managers and leaders to
provide proper assessment and knowledge of changes to their employees so that they can have
clear goals and objectives (Henson, 2017).

4.Concept, theories and models of Leadership used by Aldi.
The successful organisations is the one, which follow different types of leadership style
and not stick to one concept, just like Aldi. Managers and Leader of Aldi are well aware about
the fact that every situation requires different leadership quality. Aldi not follows any specific or
particular style of leadership, they keep on varying it according to the situation.
Concept of leadership is different for all the people. According to some authors leaders
can be made with high willpower and desires and some says that it is the interpersonal born
skills of an individual. The concept of leadership is very broad and it is hard to define. Every
leaders I different and their way of leading the individuals also vary from each other. It is the
process of influencing or manipulating the individuals in order to make them do the desired task
in appropriate manner. They are the one who guides the objectives of the employees so that they
all can work together in order to achieve the organisational goals. Their are various roles played
by the leader in an organisation. Sometimes leaders act as a politician, monitor, controller,
manipulator and teacher. These are some of the roles played by him while operating business
functions in the organisation. Any organisation can run successfully if their leaders are highly
motivated and dedicated towards the gaols and objectives of the oragnisation. They are the one
who guides the working of the employees so that they can work in the desired manner.
Some of the most influential theories related to leadership are:
Great Man Theory(1840s): Thomas Carlyle was behind the development of the Great
Man Theory of Leadership. He stated that a person with rights skills and personalities encompass
the abilities to become a successful leader. According to him, intelligence, interpersonal skills,
technical skills, honesty, wisdom and decision making abilities are essential for a leader.
Trait Theory(1930's – 1940's): This theory revolves around evaluating mental, physical
and social traits of the human being in order to identify his leadership capabilities. In his theory
he stated that this characteristics are vary crucial for practising leadership effectively.
Behavioural Theory(1940s-1950s): This theory is based on the psychology of the human
being. The way individual reacts on the different situations. It lay emphasis on various factors
that affect well being of human beings working in an organisation. He states that external and
internal forces of the environment shape the actions of the individuals. It is very important for
the organisations to study the behaviour of the individuals in different situations and their way of
reacting or handling various kinds of circumstances(Wortmann, 2015).

Contingency theory(1960s): It is also known as situational approach, this theory states
that every situation requires new pattern of leadership and there is no as such technique which
can applicable on each ad every situation. Their is no universally applicable theory available
which can be used to manage the operations of the oragnisation. It is important for the leaders to
identify new methods for solving problems or handling situations. He states that style of
management is depend upon the situation and circumstances. This theory implies that in every
situation it is important to apply best suitable leadership technique in order to present the best
suitable solution for handling the situation.
Models of leadership:
Strategic Leadership: In this technique strategies are made according to the situation and
the requirement of the organisation. This technique states that in every situation requires new
method of conducting leadership practices.
Democratic Leadership: It is a leadership of mutual respect, where decisions are taken
with consent of each and every member of the organisation.
Autocratic Leadership: It the technique in which all the decisions are conducted by
organizational heads and there is very less and no involvement of any other employees in the
decision making process.
Cross Culture Leadership: This leadership technique is applicable to the leaders who
work in the newly globalized market. It helps the leaders in functioning leadership practices
across the several regions of the business.
5. Applications of STEEP Model in Aldi.

Figure 1: STEEP Model
Source: Bryman and Bensoussan (2015)
STEEP Model is use to analyze the external factors of the organisation like Aldi.
Considering external factors is the important aspect of any business organisation before
implementing any decision (Sakaguchi,2017). Evaluation of the market is very crucial before
implementing decisions, it helps in presenting best suitable business applications. The STEEP
analysis is based on tools of five elements:
Social: Social elements of external environment are use analyze the social aspects of the
Aldi. Key tools of social elements are: demography, caste, culture, race, religion, education and
status. Whenever changes in social environment occurs it creates impact on the strategic working
of the organisation.
Technological: The working of some industries revolves around the technological
advancements in such situations it is necessary for them to evaluate the modern methods of
practicing business into their organisation. It will help them in measuring and monitoring
functions of the business effectively. Technological advancements has provide various benefits
to the Aldi.
Economic: The impact of the economic environment on the functions of the business is
considered as the most influential one. It helps in assessing the competitive advantages to the

organisation so that business can function in different circumstances effectively. The economical
and financial structure of Aldi is very strong.
Ecological: Variations occurs in physical and biological environment that created impact
on companies also. Aldi, required resources to produce goods and ecological environment plays
very vital role in operation of business applications efficiently.
Political: For operating functions of the business in a country or a region it is very
crucial for the heads of the Aldi, to evaluate its political backgrounds of the country. Political
environment can create barriers for the organisation so it is very important for them to
understand its importance (Schaltegger, 2017).
Under three circumstances STEEP analysis is applicable in Aldi:
Times of Uncertainty in Aldi: As the changes occurred in the price or features of the
product , some members of organisation may feel unsure about the implications of the business
in such situations organizational heads should use STEEP analysis to examine the strategies of
the market. It will help in gaining accurate information of the market before implementing new
business policies.
Information overload period in Aldi: There are certain situations when organisation
have so many extra information and details related to their plans and policies in such cases it
become critical for them to choose the best option from all the available choice. In such cases
STEEP analysis is turn out to be very beneficial in figuring the best solution which can help in
increasing the productivity of the business. It also helps in acquiring the data which is relevant
and required in formation of the decision (Sakaguchi, 2017).
Disorganization: There are situations when firms are confused about the external
working environment of the business. STEEP analysis helps in figuring the clear environmental
picture of the business which helps the organisation to function its practices efficiently.
STEEP analysis is a strategic management method used for analyzing the external
environment of the business. There are various factors which affect the working of the STEEP
analysis (Rahimi, 2016).
6. The Stakeholder Theory.
It is a theory which is based on organizational management and ethics of business. It
helps in addressing the morals and values that helps in managing the organisations like Aldi.
This theory was established by Ian Mitroff in 1983. In company there are various external and

internal stakeholders. Internal stakeholders of an organisation are: employees, manager and
owners. External stakeholders of an organisation are suppliers, society, government, creditors
and shareholders (Linke, 2014). Stakeholder theory is a theory of organizational management.
The strategies integrated with stakeholder is based on both resources and market. This theory is
not only applicable in business fields but it is also used in CSR ( Corporate Social
Responsibility). Stakeholder theory is evolving rapidly in the functions of the business
organizations(Malyzhenkov, 2017).
Figure 2: Stakeholder analysis
7. Theory, concept and model of organisational culture.
The values and cultures of the organisation on which its basic ethics are depends is
considered as a organisational structure. According to some authors organisational structure is
based on the values, believes and the principles on which working of the organisational members
is based (Wortmann, 2015). It is system of shared assumptions,values and beliefs which helps in

governing the behaviour of the individuals in the organisation. Organizational cultures are of
four types: Clan culture, androcracy culture, market culture and hierarchy culture. Its main
function is to provide identity to the individuals in order to enhance their teamwork and
establishment of the organisational provinces. It helps in analysing the beliefs, values, traditions
and ideologies of the individual so that they can work together in the desired manner (Rahimi,
2016).
Clan oriented culture: This are the family like cultures which is based on mentoring or
respecting or doing tasks jointly.
Adhocracy oriented cultures: These are the dynamic cultures of the oragnisation which
lay emphasis on taking risks and doing tasks firstly.
Market: These are the result oriented cultures which creates emphasis on the
achievements of the goals and focus on competition.
Hierarchy: These are well structured cultures and controlled with the full focus on the
efficiency (Rao, 2014).
7.Organizational culture of Aldi and specific concept and theories used in Aldi.
Organizational behavior and the organizational culture are two interrelated concept.
Study of the organization revolves round the most important aspect of it, in order to make
desirable changes in the organization. Culture can be defined as the set of beliefs, traditions,
values of the organizations combined with that of individuals. In this, organization culture of
Aldi is being analyzed.
In Aldi the organizational culture is termed as values and beliefs of unique social
psychological environment of the organization which can bring vast changes in its working. In
Aldi, organizational culture is maintained by leadership, rituals various kind of stories and
languages, proper reward system and attraction selection attrition.
The culture of the Aldi is very diversified as they respect all the traditions and
whereabouts of their employees in order to keep them motivated and satisfied.
The managers and leader of Aldi follow democratic leadership styles in most of the
situations in order to share decision making process and participate leadership management in
the organization. This style is followed by them in order to involve each member of the

organization in decision making process. This helps them to innovate their stores, and also helps
in developing creative goods and services.
Aldi is one of the top leading supermarket chain based on Germany, so it is very
important for them to involve their employees in their daily flow of working to ensure
appropriate services to their customer. This is the reason behind their following of democratic
leadership style.
This type pf leadership style is followed by Aldi in order to bring more involvement of
their employees in the decision making process.
Aldi is so popular across the world because of the specific concepts and methods used
by the organization. Their main aim or methodology is to keep the price of their products and
services low in order to provide savings to their consumers. The main concept of strategy
followed by Aldi is to keep their prices low as compared to the Walmart, in order to maintain
their competitive advantage in the market.
CONCLUSION
From the above assignment it can be concluded that business integration is the strategy
which is used to combine the information technology with the cultures and traditions of the
business in order to establish the rapid successive growth and development of the business in
competitive grounds. It has also been seen that strategies and policies followed by the Aldi is
very remarkable and it provides rapid growth and development to the firm.

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