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Organizational Strategy and Leadership Assignment

   

Added on  2021-05-27

17 Pages5512 Words67 Views
Student’s Last Name1Organizational Strategy and LeadershipBy (Name)CourseProfessorUniversityDate

Student’s Last Name2IntroductionIn the economic activities, consumption plays a primary role. Consumption in many developed nations takes almost 60% of their Gross Domestic Product, of which, retailing industry is considered the most essential industry. As a result of enhanced employment, growth in the economy, and considerable tax regulations, retailing sector has had the opportunity of developing in a serene and pleasant environment. Planet Retail, a Retail Consultancy Firm, observes that the retail industry across the globe has had considerable fast growth, leading to increase in sales. Despite the good environment that facilitates the development of the retail industry, intensity in competitiveness has become stronger than before. Most of the large supermarket retailing organizations which include WA-Mart and Carrefour have intensified their competition with the intention of expanding and dominating the domestic and overseas market. To achieve these, the two have ensured that each of their strategies is implemented effectively. However, Aldi International is a hard-discount retail organization that is smaller and simple compared to Carrefour or even Wal-Mart. This size is in regard to the items sold and the store occupancy of these organizations. Nonetheless, in this competitive environment, Aldi has had the opportunity to survive in the retailing market and has been considered to one of the reputable retailer firms that have the capability of contending with bigger retail corporations (Agarwal and Braguinsky, 2015, pp.382). Aldi International is a hard-discount retail organization that was started back in 1946 by Theo and Karl Albrecht, Germany. Over the years, this retail firm has developed rapidly characterized by its low prices on retail items (Vaccaro, et al, 2012, pp.33). By 2003, Aldi International had developed and became among the world’s biggest retail corporations, having over 700 stores across the globe. Additionally, it created an annualturnover of around 36.2 billion Euros by end of the same year. In 2001, Aldi’s first retail store was opened in Sydney, Australia (Battistella, Biotto and De Toni, 2012, pp.720). After reaping huge benefits from the sores, by 2010 Aldi had opened 72 extra retail stores in Australia. To-date, Aldi has immensely grown and opened over 500 retail stores in Australia. Hence, this essay will address the generic business strategy,

Student’s Last Name3organization culture, and Aldi International’s formal organizational structure which have had great influence on its success in Australia. Aldi’s Business StrategyStrategic management has been the continuing initiative where businesses applyit while establishing their visions and to carry an analysis of their internal and external environment. This facilitates firms to select and adopt one or more strategy with the aim of creating customer value, while at the same time benefiting other stakeholders. Every organization is tasked with the mandate of setting its own corporate strategy that defines the organization’s operations and the organization’s future goals (Belias and Koustelios, 2014, pp.311). An essential part of an organization’s corporate strategy is the business strategy. For a business to gain competitiveness, it is important that the managers develop and implement an effective business strategy. By doing so, the organization enjoys the opportunity of promoting its products within the market as well s facilitating the firm to occupy a large market share. Aldi International’s business strategycan be regarded to be very simple but effective (Bharadwaj, El Sawy, Pavlou, and Venkatraman, 2013, pp.924). The primary business at Aldi is to minimize costs as muchas possible. Despite that Wal-Mart and Aldi are the most known retail firms that have gained a competitive advantage as a result of their cost reduction strategy, the two are very different based on the criteria which they implement the cost reduction strategy. Aldi is characterized by enhanced operations and management’s efficiency based on the cost-reduction principle. The organization’ retail stores across the globe are featured by decoration and simple designs that aim at minimizing cost (Bock, et al, 2012, pp.283). The organization’s cost-saving technique is reflected through various ways as illustrated: first, with a comparison to Wal-Mart, Aldi’s stores occupy a maximum of 750 square meters which to a large extent minimizes the rent as well as water and electricity consumption’s expenses. Additionally, the organization has a limited number of high-quality products that are sold in all stores across the world thus saving on costs incurred on shelves (Bolton,Brunnermeier and Veldkamp, 2012, pp.523). Typically, Aldi’s stores sell around 700 products. This may be deemed to be less but it is able to satisfy customers’ daily necessities. This grocery structure greatly

Student’s Last Name4saves on logistic cost and facilitates Aldi to enjoy the absolute benefit of negotiating withits suppliers in regards to product’s quality and price. Nonetheless, Aldi has an efficient employee strategy. Usually, the organization hires four or five workers within a single store compared to 15 workers who are employed at a standard supermarket (Brandes and Brandes, 2012, pp.127). Regardless that the organization pays a lot to its workers, it has significantly lowered employee cost. Aldi also uses a simple promotion method compared to Carrefour and Wal-Mart. The organization does not carry out advertising orpublic relations. Instead, Aldi is of the view that these costs should be saved and benefitthe clients. This is because the expenses incurred during public relations are all paid by the clients. Good quality assurance is another business that is associated with Aldi International. The primary characteristics of Aldi store are its strong-discount. However, this reduced pricing does not mean sacrificing on product’s quality (Buller andMcEvoy, 2012, pp.49). On the contrary, the organization has persisted in availing clients with products that are of the same quality to goods found in other retail stores, but at a reduced price. Also, the company has got brands that it owns, that range from cookies and diapers. On these own brands, Aldi ensures that there is strict adherence to quality.While purchasing goods from its suppliers, the organization recommends its own qualityrequirements and makes use of a third inspection firm besides its own inspectors (Tannenbaum, Weschler and Massarik, 2013, pp.141). The role of these third company is to conduct strict and thorough inspections of the products to ensure that they meet Aldi’s quality requirements. In instances where unqualified commodities are detected in the inspection process, Aldi does not cooperate with the supplier but rather seeks to findproducts that adhere to its requirement. The organization’s business strategy is also based on the idea of client orientation. Nonetheless, the organization focuses on the clients’ needs and pays all its attention to these customers, aimed at enhancing and developing clients’ loyalty. The organization considers the customer’s perspective and thus avails the clients with practical advantages (Butler, 2015, pp.112). The organization does not apply the promotion means such as “trying or wholesale” that are considered to give the clients

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