Introduction Business environment

Typically examples of internal factors are: financial resource like funding, investment opportunities and source of income; physical resources like company’s location, equipment, and facilities; human resource like employees, and volunteers; mission and objectives; organizational structure. The company has control over these factors and it’s important to recognize potential opportunities and threats outside company operations. ALDI operations are mainly based on the limited Assortment Concept - The high quality range of goods sold in the store was initially limited to a basic selection

Introduction
Business environment is a combination of internal and external factors that influence
a company’s operating situation.
Typically examples of internal factors are: financial resource like funding, investment
opportunities and source of income; physical resources like company’s location,
equipment, and facilities; human resource like employees, and volunteers; mission and
objectives; organizational structure. The company has control over these factors and it’s
important to recognize potential opportunities and threats outside company operations.
The external environment consists of a variety of factors outside your company that
you typically don’t have much control over. External environment is composed of micro
environment like customers, competitors, suppliers, society and macro environment like
demographic, economic, technological, political, cultural.
In accordance with assignment guidelines and specification I have decided to use
ALDI to base my study around, where applicable.
ALDI is a Private Limited Company, a German Based Discount Supermarket Chain.
Albrecht Discount is the full form of ALDI. The Supermarket Chain consists of two main
groups. ALDI NORD and ALDI Sud. However, both groups are independent in their
operations and work within the specific market grounds. The individual groups were
originally owned and managed by brothers Karl Albrecht and Theo Albrecht. The
company has transformed from a small business to one of the most successful and
valuable retail business chain with an annual estimated turnover of 53 billion Euros,
over 9,000 stores in 18 countries and around 100,000 employees around the world.
ALDI operations are mainly based on the limited Assortment Concept - The high quality
range of goods sold in the store was initially limited to a basic selection of goods to be
purchased in large quantity, sold at realistic prices and presented in simple way. At
ALDI, everything from building shop, selecting suppliers, locations and selling goods, is
done to make possible considerable savings with the discount always passed on to
customers in the end price.
Aldi opened its first UK store in Stechford, Birmingham, in 1990.
Aldi overtook Waitrose in 2015 and in February moved past the Co-op to become the
UK’s fifth-biggest grocer. It is now sitting on a market share of 6.9% – meaning £1 out of
every £14 spent in the UK on groceries goes into Aldi’s tills – while Lidl is also making
gains.
ALDI culture and value:

“- Ascetism and low profile
There is no place – anywhere in the hierarchy – for personal vanity. Extreme frugality is
a must. Waste is prohibited.
- Total customer orientation
Earning the trust of the customer means no tricks or sales ploys.
- Devotion to and passion for detail
Small wins count. The aim should be to achieve them daily.
- Simple systems
Implement the principle of simplicity and develop the courage to go for simple and rapid
solutions.
- Rigor in action
Resist daily temptations and stick steadfastly to good concept.”
(Brandes, 2004, p. 80)
The three main values of ALDI can be stated as following:
Customer orientation
Frugality
Simplicity
In the end, customer orientation is the final goal of ALDI, and thus should have all
priority. Brandes sees this as the most important thing a company should pay attention
to, for without customers there are no sales end there is no profit.
Common sense is one of the ways of working that goes together with simplicity. Also,
common sense offers the possibility to orientate yourself unto the customer instead of
things that only distract from it; things that are getting more and more complicated
without helping the customer and thus the company.
Frugality is the key principle that makes it possible that the customer gets what it wants
– a low price for high quality – and good profits for the company.
Simplicity is the second major value of the company:
“(…) ALDIs success story is a lesson in simplicity. Although customer orientation,
asceticism, rigor and discipline are essential ALDI features, simplicity is the company’s
real secret.” (Brandes, 2004, p.70)
This culture of simplicity has especially been developed by the founders of ALDI, and
found its way through the subsequent generations and levels of employees.

A clear and important manifestation of this principle is the small number of products,
700, that makes it all the more simple to keep the quality high and the prices low. Other
examples are the fact that few statistics are recorded, the clear targets and
responsibilities for employees, the small number of suppliers to stores and the sale
directly out of delivery boxes.
ALDI puts its attention on a few things, as simple as possible, and makes sure that
exactly that is done well.
P1. Explain different types and purposes of organisations; public, private and
voluntary sectors and legal structures.
The Public Sector is owned and run by the state (Government) for the people. People
pay taxes to the Government and this money is used to finance most of the public
sector. There are no shareholders in public corporations. Similar to the voluntary sector,
organizations in the public sector do not seek to generate a profit. Example of a Public
Service includes Schools, Hospitals, military, police. Some advantages of Public
Services are: charges low prices, provide essential facilities like education, health, free
or at reduced prices, ensures efficient control of industry, expert administrative services,
money can be made available for R&D, private monopoly which would cause high
prices is avoided, foreign denominations of the economy are avoided.
Disadvantages of Public Services: government must bear losses or this could lead to
higher taxation, consumers’ choice is restricted to the state if the business is a
monopoly, regulations may be passed to curb the progress of private business, lack of
competition may lead to inefficiency and higher prices, government interference, don’t
care attitude, political pressure, corruption and embezzlement of funds, foreign
investment may be discouraged due to fear of nationalization.
The Private Sector is usually comprised of organizations run by individuals and groups
who seek to generate and return a profit back to its owners. Organizations in the private
sector are usually free from government control and ownership.
The Private Limited Company is a company limited by shares, and this type of
company cannot be publicly traded. Is the most common type of UK and not only
incorporation service requested. Aldi is an example of private organization. The
advantages of a Private Limited Company include: protection from personal liability
to Limited company owners, legal entity (the company’s finances are separate from
owner’s finances), the Private Limited Company structure is suitable for profit or non-
profit, LTD companies may bring additional taxes benefits, and are subject to lower
corporation tax, LTD have an unlimited life, their existence does not cease with the
death of a director or shareholder. Private Limited Companies have a reliable legal
precedent to guide and direct the shareholders and directors or managers, added
credibility for Private Limited Companies, which can make it easier for a LTD to borrow
money, raise capital and achieve financing without personal risk.
Private Limited Companies have disadvantages also such as: LTD must hold
annual meetings and the shareholder and directors have specific formalities to observe,

LTD is more expensive to set up than a sole trader or partnership, LTD pay annual fees
and have periodic filing obligations, owners of the limited companies have less personal
control over the company compared to sole traders due to compliance issues.
To be a Charity an organization must have purposes all of which are exclusively
charitable. An example of charity organization in UK is British Heart Foundation. Like
other charity organizations they have some advantages and disadvantages. The main
advantages: do not normally have to pay income/corporation tax, can get special VAT
treatment in some circumstances, are able to raise funds from the public, grant-making
trust and local government more easily than non-charitable bodies, can formally
represent and help to meet the needs of the community. About the disadvantages we
can say that a charity must have exclusively charitable purpose, there are limits to the
extent of political or campaigning activities which a charity can take on, strict rules apply
to trading by charities, trustees are not allowed to receive financial benefits from the
charity which they manage unless this is specifically authorized by the governing
document of the charity or by The Charity Commission, trustees need to avoid any
situation where charitable and personal interests conflict, Charity law imposes certain
financial reporting obligations.
A part of a Private sector is sole trader as well. A sole trader or sole proprietor is a
business owned and controlled by one person who takes all the decisions, responsibility
and profits from the business they run. Many of the advantages are summed up under
the heading "control”: you have full control over daily and strategic decision making,
there's far less red tape and regulations than a Limited Company, you have no staff to
manage or pay, starting your business is quick and easy, all financial data is kept
private, no annual accounts to prepare as sole traders add income and expenses to
their tax return.
The negative aspects of operating on your own are that you have full personal liability
for any debts, it may be difficult to bid and accept larger contracts, there's no staff to
delegate to if you have an accident or fall ill, it's difficult to scale a business on your
own, you can't leverage buying power due to your small size, you have to buy-in
knowledge and expertise if you don't have it yourself. Example sole trader businesses
include electricians, gardeners, plumbers, decorators and plasterers. Ledgability LTD is
a sole trader example.
“(A) partnership is a collaboration among business, non-profit
organizations, and government in which risks, resources and skills are shared in
projects that
benefit each partner as well as the community” (Stratton, 1989).

Advantages of a partnership include that: two heads (or more) are better than one,
your business is easy to establish and start-up costs are low, more capital is available
for the business, you’ll have greater borrowing capacity, high-caliber employees can be
made partners, there is opportunity for income splitting, an advantage of particular
importance due to resultant tax savings, partners’ business affairs are private, there is
limited external regulation, it’s easy to change your legal structure later if circumstances
change.
Disadvantages of a partnership include that: the liability of the partners for the debts
of the business is unlimited, each partner is ‘jointly and severally’ liable for the
partnership’s debts; that is, each partner is liable for their share of the partnership debts
as well as being liable for all the debts, there is a risk of disagreements and friction
among partners and management, each partner is an agent of the partnership and is
liable for actions by other partners, if partners join or leave, you will probably have to
value all the partnership assets and this can be costly. An example of partnership is
John Lewis.

P2. Explain the size and scope of a range of different types of organizations.
With more than 30,000 employees in the UK and Ireland and plans to create another
35,000 more by 2020, people are the biggest and most brilliant ALDIs asset.
ALDI has a clear business philosophy and a number of guiding principles. It can be
summarized by following statement: "Top quality at incredibly low prices- guaranteed".
ALDI has got five main ideologies, to be precise 1) Huge savings, 2) excellent Quality,
3) Outstanding value, 4) Superb special buys and 5) Buy with confidence.
The mission statement of any enterprise must be clear and represent its purpose of
existence. It must stand for the ethical positions of an enterprise, image portrayed to the
public and more importantly products and services provided by the enterprise
(businessplans. org). ALDI stands up to its Mission Statement “Spend a little, Live a lot
“. This is a ‘one liner’ but supported by a set of values. The main mission of ALDI when
it started was to provide low quality goods to the poor who could not afford to shop
elsewhere and this is maintained even today. ALDI is also trying to provide
employments all over the world.
In return to the staff’s commitment, hard work, dedication and responsibilities, the
enterprise aims at providing more salary and also job security. It also aims to have
flexible working hours for employees for a perfect work and life balance.
The British Heart Foundation’s main focus is to fund cardiovascular research,
aiming to spend around £100 million a year funding scientists around the UK. They are
currently funding over 1000 research projects. Their mission is to win the fight against
cardiovascular disease. Their vision is a world in which people do not die prematurely or
suffer from cardiovascular disease.
Other activities include:
Information – BHF will provide information to help people reduce their own heart health
risk.
Campaigning – BHF will get government to establish policies that minimize the risk of
developing heart and circulatory disease
Support – offering advice to those with heart conditions via their website, information
booklets or heart helpline.

Lifesaving skills – the BHF currently offers free CPR kits to schools and is working with
the Department of Health to distribute defibrillators throughout England.
Ledgability Ltd provides bookkeeping services and is a local, friendly, family-run
business, with offices in Calne and Taunton. Their is a professional company,
established since 2002 and incorporated in December 2003. Their pride themselves on
putting the needs of their clients first and offer competitive rates.
They three key personnel ensure following services: bookkeeping, management
accounts, SME/Sole trader accounts, VAT returns, credit control, payroll, tax returns,
SME statutory returns/partnership tax returns.
The John Lewis Partnership's reputation is founded on the uniqueness of their
ownership structure and their commercial success. “Our purpose is 'the happiness of all
our members, through our worthwhile, satisfying employment in a successful business',
with success measured on our ability to sustain and enhance our position both as an
outstanding retailer and as a thriving example of employee ownership. With this in
mind, our strategy is based on three interdependent objectives Partners, customers and
profit.” (John Lewis)
Within John Lewis’ mission statement they aim to be a “thriving example of employee
ownership.” They treat their employees well and they reciprocate those feelings.
Potential employees will look through their store windows and see a thriving and
growing business, businesses that represent the same hustling and bustling in most
shops the week before Christmas.
Their strategy is underpinned by three Aims: increase advantage of Partners; realize
market potential; grow efficiently.
The John Lewis Partnership operated 49 John Lewis stores throughout England,
Wales and Scotland. The Oxford Street store, originally opened in 1864, is the largest
operated by the Partnership. 35 of the stores are traditional department stores and 12
are 'John Lewis at home'.

P3. Explain the relationship between different organisational functions and how
they link to organisational objectives and structure.
Aldi's structure is a flat one when defined in terms of span of control. The Managers
have a wide span of control, thus leading to a flat structure rather than a hierarchical
one. Aldi does not have separate planning, human resources, public relations or
marketing departments. Managers have clear specifications for goals, responsibilities
and authority. It is the manager's job to delegate these to the sub-ordinates in an
efficient and clear manner. Random checks and evaluation of performance and results
is done to maintain the culture and exercise authority.
Marketing is the lifeblood of any business. And whether your marketing department is
1 or 100 people, they'll have a few key responsibilities. The marketing department has
overall responsibility for growing revenue, increasing market share and contributing to
company growth and profitability.
Market research is a key responsibility for the marketing department. Research helps
the company identify market opportunities and gain a better understanding of customer

needs. It also helps them understand competitors’ strengths and weaknesses so they
can take action to protect business with existing customers or win business from weaker
competitors.
The marketing department works with Internal or external product development teams
to develop new products or improve existing ones. The department analyzes sales of
existing products and identifies gaps in the product range where there may be
opportunities for the company.
Marketing departments plan campaigns and develop communications material to
promote products and services to customers and prospects.
The marketing department can provide sales teams with high-quality leads by running
advertisements that include a reply mechanism, such as a coupon or telephone
number, or by encouraging visitors to the company website to register their details in
return for a free newsletter or special report. Marketing also prepares presentations for
the sales team and supplies them with stocks of promotional material to give to
customers and prospects.
In some companies, marketing departments are responsible for organizing events,
such as exhibitions, seminars, sales conferences or customer hospitality events.
The activities expected from a Finance department cover a wide range from basic
bookkeeping to providing information to assisting managers in making strategic
decisions. What to expect from your finance department will depend largely on factors
such as how much involvement the owner/manager has in the organization.
The finance department is also responsible for management of the organization’s cash
flow and ensuring there are enough funds available to meet the day-to-day payments.
This area also encompasses the credit and collections policies for the company’s
customers, to ensure the organization is paid on time, and that there is a payment policy
for the company’s suppliers.
The finance department is responsible for advising and sourcing longer term financing.
Financing may be obtained through bank or private lender debt or, in applicable firms,
share issues to private investors.
The finance department should be called upon to provide information to assist
managers in making key strategic decisions, such as which markets or projects to
pursue or the payback periods for large capital purchases. The finance department can
often contribute an objective perspective based on special financial assessment
techniques.
In Aldi’s case, like in some others, the finance department it’s considered a resource to
assist managers in the running of the business.
ALDI has realized that “people are the key to every success” (Working for ALDI 2011).
As a result of the same, there is an efficient Human Resource Management system
which focuses on delivery of an industry–leading training package. Furthermore, the

staffs are rendered highly motivated and the recruitment process accounts for the
selection of energetic and people with a ‘can-do’ attitude. In terms of the career
progression too, there is internal promotion which increases motivation within the
workplace.
ALDI has operated and maintained its core competence to keep prices low by relying
on their employees. HRM care about how to have the right people in the right positions
applying the best practices to achieve its goals.
P4. Identify the positive and negative impacts the macro environment has upon
business operations, supported by specific examples.
Macroeconomics is the study of whole economy which includes the study of complete
industry and economies, not just of a specified company. This involves the
phenomenon’s which are economy-wide, such as Gross National Product (GDP) and
how changes in the economic factors such as national income, unemployment, growth
rate and level of price affects it.
PESTLE Analysis is an analytical tool for strategic business planning.
PESTLE is a strategic framework for understanding external influences on a business.
There are many macro-environment factors that affect strategic planning: New laws,
tax changes, trade barriers, demographic change.
Macro-environment factors includes all the factors that influence an organization, but
are out of its direct control.
Macro-environment factors tend to have a long term impact.
PESTLE stands for "Political, Economic, Social, Technological, Legal and
Environmental" and is used for business and strategic planning, marketing planning,
organizational change, business and product development and research reports.
By understanding these external environments, organizations can maximize the
opportunities and minimize the threats to the organization.
Political
 High levels of conflict and political vulnerability across the globe currently
threaten the sustainability of foreign firms who may be stigmatized based on their
country of origin. The majority of Aldi stores are situated in Europe, as well as in
the U.S.A, Australia and China, which at present are all relatively free from
conflict, and thus threat to Aldi's operations from war is low (Aldi, 2017b).

 After Britain voted to leave the EU, uncertainty remains in the future of European
firms in the UK. While Aldi made a foreign direct investment into the UK, and thus
should not be affected as much as a firm with a joint venture or import/export
business model, the regulations and political relationships between the UK and
Germany specifically as one of the most influential countries in the Eurozone is
likely to present difficulties to Aldi's UK operations (Corking, 2016).
Economic
 As an effect of Brexit, prices have risen in the U.K. and the pound has dropped.
This has worked in Aldi's favor, with shoppers turn to discounters, resulting in
Aldi growing at its fastest rate in over two years, as a result of price rises in other
supermarkets since the vote for Brexit and the cost of imported goods being
pushed up (Butler, 2017b).
 Inflation in the grocery market rose to 2.9% in May, an increase from 2.6% the
month before, meaning that shoppers have to spend £27 extra for the same
goods over this period (Butler, 2017b). Given that Aldi is a discount supermarket,
this is favorable as customers will be seeking to find cheaper products.
 The overall growth for the grocery market as of May 2017 is 3.8% year on year,
indicating that as the market expands, demand will rise. Nonetheless, sales in
the grocery market had increased in total by just 0.2% as a consequence of food
price inflation (Butler, 2017b).
 The rise in inflation means that shoppers will likely be more aware of the need to
balance their household budgets, and thus will be more likely to eat at home as
opposed to in restaurants, meaning that supermarket sales in discounted
retailers such as Aldi could rise even further (Butler, 2017b).
 While the national living wage of the UK is set at just £7.20 an hour for workers
over the age of 25, Aldi announced in 2017 that it will increase its lowest hourly
wage in London to £9.75 an hour, beating the living wage and also meaning that
higher disposable income is available (Fleming, 2017).
Socio-Cultural

 Aldi is currently the highest paying supermarket in the UK after giving 3000 staff
members a pay rise in a bid to overtake fellow German discounter Lidl in-terms of
wages paid (Davies, 2017). Higher wages result in a better standard of living for
those being paid them, and thus allow workers to afford better food, healthcare
and exercise means, benefitting society (Card and Krueger, 2015).
 By 2020, Aldi aims to teach 1.2 million children in the UK healthy eating habits
through their Get Set to Eat Fresh Initiatives (Aldi, 2017a).
Technological
 Supermarkets are increasingly turning to technology to aid their service
propositions, with an increasing number of consumers expecting the efficient
self-service checkouts from grocery providers (Orel and Kara, 2017). Aldi are yet
to adopt such technology, and although notoriously quick and efficient in serving
consumers, long ques may deter consumers who wish to only buy a few products
and can't check out efficiently.
Environmental
 Aldi increasingly stock their products from local British producers and farmers,
helping to support local producers and ensure the sustainability of the local areas
that they operate in (Daily Record, 2017).
Legal
 In the past years, the supermarket industry of the U.K. 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
primarily Tesco (Rawlinson, 2017). In 2016, Aldi also found itself in legal disputes
as a result of misrepresenting its sales of herbs, with watchdogs finding olive
leaves in oregano products (Farrell, 2016).

P5. Conduct internal and external analysis of specific organisations in order to
identify strengths and weaknesses
SWOT analysis (strengths, weaknesses, opportunities and threats analysis) is a
framework for identifying and analyzing the internal and external factors that can have
an impact on the viability of a project, product, place or person.
Elements of a SWOT analysis
As its name states, a SWOT analysis examines four elements:
Strengths: Internal attributes and resources that support a successful outcome.
Weaknesses: Internal attributes and resources that work against a successful outcome.
Opportunities: External factors that the entity can capitalize on or use to its advantage.
Threats: External factors that could jeopardize the entity's success.
The ALDI is one of the leading companies in its industry. ALDI maintains its dominant
position in market by carefully analyzing and reviewing the SWOT analysis. SWOT
analysis a highly interactive process and requires effective coordination among various
departments within the organization such as – marketing, finance, operations,
management information systems and strategic planning.
The SWOT Analysis framework helps an organization to identify the internal strategic
factors such as -strengths and weaknesses, & external strategic factors such as -
opportunities and threats.
Strengths of ALDI
As one of the leading organizations in its industry, ALDI has numerous strengths that
enable it to thrive in the market place. These strengths not only help it to protect the
market share in existing markets but also help in penetrating new markets. Based on
Fern Fort University extensive research – some of the strengths of ALDI are –
 Strong distribution network – Over the years ALDI has built a reliable distribution
network that can reach majority of its potential market.
 Reliable suppliers – It has a strong base of reliable supplier of raw material thus
enabling the company to overcome any supply chain bottlenecks.
 Superb Performance in New Markets – ALDI has built expertise at entering new
markets and making success of them.

 Good Returns on Capital Expenditure – ALDI is relatively successful at execution
of new projects and generated good returns on capital expenditure by building
new revenue streams.
 Strong Free Cash Flow – ALDI has strong free cash flows that provide resources
in the hand of the company to expand into new projects.
 Strong Brand Portfolio – Over the years ALDI has invested in building a strong
brand portfolio. The SWOT analysis of ALDI just underlines this fact. This brand
portfolio can be extremely useful if the organization wants to expand into new
product categories.
 Automation of activities brought consistency of quality to ALDI products and has
enabled the company to scale up and scale down based on the demand
conditions in the market.
 Successful track record of integrating complimentary firms through mergers &
acquisition. It has successfully integrated number of technology companies in the
past few years to streamline its operations and to build a reliable supply chain.
Weakness of ALDI
 Weakness are the areas where ALDI can improve upon.
 The profitability ratio and Net Contribution % of ALDI are below the industry
average.
 Financial planning is not done properly and efficiently. The current asset ratio
and liquid asset ratios suggest that the company can use the cash more
efficiently than what it is doing at present.
 Limited success outside core business – Even though ALDI is one of the leading
organizations in its industry it has faced challenges in moving to other product
segments with its present culture.
 High attrition rate in work force – compare to other organizations in the industry
ALDI has a higher attrition rate and have to spend a lot more compare to its
competitors on training and development of its employees.
 Need more investment in new technologies. Given the scale of expansion and
different geographies the company is planning to expand into, ALDI needs to put
more money in technology to integrate the processes across the board. Right
now the investment in technologies is not at par with the vision of the company.

 Days inventory is high compare to the competitors – making the company raise
more capital to invest in the channel. This can impact the long term growth of
ALDI
 There are gaps in the product range sold by the company. This lack of choice
can give a new competitor a foothold in the market.
Opportunities for ALDI
 Organization’s core competencies can be a success in similar other products
field. A comparative example could be - GE healthcare research helped it in
developing better Oil drilling machines.
 New environmental policies – The new opportunities will create a level playing
field for all the players in the industry. It represents a great opportunity for ALDI
to drive home its advantage in new technology and gain market share in the new
product category.
 Opening up of new markets because of government agreement – the adoption of
new technology standard and government free trade agreement has provided
ALDI an opportunity to enter a new emerging market.
 Economic uptick and increase in customer spending, after years of recession and
slow growth rate in the industry, is an opportunity for ALDI to capture new
customers and increase its market share.
 Lower inflation rate – The low inflation rate brings more stability in the market,
enable credit at lower interest rate to the customers of ALDI.
 The market development will lead to dilution of competitor’s advantage and
enable ALDI to increase its competitiveness compare to the other competitors.
 The new technology provides an opportunity to ALDI to practices differentiated
pricing strategy in the new market. It will enable the firm to maintain its loyal
customers with great service and lure new customers through other value
oriented propositions.
 Government green drive also opens an opportunity for procurement of ALDI
products by the state as well as federal government contractors.
Threats ALDI

 Increasing trend toward isolationism in the American economy can lead to similar
reaction from other government thus negatively impacting the international sales.
 Rising pay level especially movements such as $15 an hour and increasing
prices in the China can lead to serious pressure on profitability of ALDI
 New technologies developed by the competitor or market disruptor could be a
serious threat to the industry in medium to long term future.
 Rising raw material can pose a threat to the ALDI profitability.
 Intense competition – Stable profitability has increased the number of players in
the industry over last two years which has put downward pressure on not only
profitability but also on overall sales.
 Liability laws in different countries are different and ALDI may be exposed to
various liability claims given change in policies in those markets.
 The demand of the highly profitable products is seasonal in nature and any
unlikely event during the peak season may impact the profitability of the company
in short to medium term.
 New environment regulations under Paris agreement (2016) could be a threat to
certain existing product categories.
P6 Interrelation of strength and weakness with external factors.
As Aldi is one of the famous company in United Kingdom and is one of the
leading retail store in the worldwide. Company have efficient managers and leaders
which can analyze company's strength, weakness, threats, opportunities and other
external factors. By knowing all these factors, they can easily formulate their activities
and strategies with better implementation of various tools and techniques. This help in
achieving ultimate targets and visions of company and desired success in future. It also
enhances company's profits and revenues by encouraging sales of products and
services. Inter – relation of some macro factors are given below:
Political Factors : These factors are concerned with rules and regulation of
United Kingdom, that are necessary for Aldi to follow in order to avoid illegal actions and
disputes. By following all political factors, company can easily make their company
stable and sound and can operate their work in smooth manner. By knowing all factors,
Aldi can develop its own framework and perform their business operations according to
that. Strength: As mentioned above in PESTEL Analysis, major of Aldi stores are
established in countries like Europe, U.S.A, Australia and China. They are non
war zone area and this provides them better stability to the company and they
can operate their activities smoothly.
 Weakness: These factors are crucial and play important role in stability and
smooth functioning of company. It become difficult for company to run their

business in foreign countries. If they fail to analyze political factors of foreign
country, then they won't be able to achieve political stability and will fail to run
their business in proper manner.
Economic factor: There are several elements that comes under economic
factors and they are inflation, exchange, interest, tax rates, etc. These factors have
greatly influenced the profitability of Aldi. Strength: As mentioned above, the Aldi was benefited after Brexit, as shoppers
turn to discounters, which resulted in growth of Aldi at faster rate. As there is
fluctuations in inflation rate and due to that profitability of Aldi increases and
decreases.
 Weakness: As company is operating in many countries and all have different
economic conditions. Marketers of Aldi need to study every economic factor
carefully in order to survive in that country, otherwise, it can affect the
profitability of company. As the profitability ratio and Net Contribution % of ALDI
are below the industry average. They can improve this by focusing on respective
area.

https://www.ukessays.com/essays/marketing/an-analysis-of-aldi-marketing-essay.php
https://www.theguardian.com/business/2017/may/11/aldi-plans-uk-supermarket-for-
every-30000-people
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