Strategic Management Plan for Aldi: PESTEL, SWOT, and Porter's Five Forces Analysis

This report provides a strategic management plan for Aldi, including PESTEL, SWOT, and Porter's Five Forces analysis. It evaluates the impact of macro and internal environment on the business strategies of Aldi. It also identifies the existing or potential competitive advantage of the organisation and devises the right strategies and tactical objectives for the purpose of attainment of strategic objectives.

Strategic Management
Plan

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
PART A...........................................................................................................................................1
1. Analysation of detailed analysis that considers PESTEL and SWOT analysis along with
evaluation of resources and capabilities of the organisation.......................................................1
2. Analysis and critical evaluation of competitive environment using Porter’s five forces
model...........................................................................................................................................5
3. Identification and justification of the organisation existing or potential competitive
advantage.....................................................................................................................................7
4. Devise the right strategies and tactical objectives for purpose of attainment of strategic
objectives.....................................................................................................................................7
PART B...........................................................................................................................................8
1. Critical evaluation of different types of strategic directions available to the organisation.....8
2. Justification and recommendation of the growth strategies..................................................10
3. Evaluation of ways and means by which chosen strategies can be monitored to get success
...................................................................................................................................................11
CONCLUSION 150.......................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic planning is one of the management activities which is used for purpose of setting
priorities, focus on resources and energy in order to work for purpose of attainment of common
goals of company (Agwu, 2018). This project report includes analysation of Aldi is German
company which was identified in the year 1946 by Karl and Theo Albrecht. It has around 11,235
stores in different location and operating 20 countries. This project report includes analysation of
impact and influence of the macro environment on an organisation and its business strategies. It
also analyses the internal environment and capability of given organisation along with using
appropriate framework. It evaluates and apply outcomes of using porter five forces model.
Moreover, it applies range of theories, concepts, models and other in order to ensure strategic
planning for given organisation.
MAIN BODY
PART A
1. Analysation of detailed analysis that considers PESTEL and SWOT analysis along with
evaluation of resources and capabilities of the organisation
PESTEL analysis: PESTEL analysis is one of macro environment factors that create a
threat for business. It is one of the tools used by businesses in order to identify factors that create
threat and opportunities for business. This tool is used by businesses to identify factors like
regulation of government, legal legislation, advancement of technology, economic condition,
climate condition and cultural influence. Explanation of these factors in the context of the
company is mentioned below:
Political Factor: It is one of factors that consists different types of rules and regulations
made by firm for business who are operating in that country. UK is one of the developed
countries where there is political stability which provide an opportunity for the business of Aldi.
During the period of covid-19 out break, government of UK has imposed different regulations on
businesses that create threat for them and also increase cost of business of Aldi (Barbosa,
Castañeda-Ayarza and Ferreira, 2020). Brexit has also created challenge for business of Aldi as
government of the UK also made changes in rules during that period. It also created problem for
business o Aldi and does not allow them to operate business in effective manner.
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Economic Factor: Economic condition is also considered as one of important component in
business. UK is one of developed country which has good economic condition which create
opportunity for business of Aldi. Due to this, the income of people is increase which allow them
to buy products from this business. There is also increase in inflation rate in UK due to which
people spending money on food item are decreased.
Social Factor: Social factors are another important factor for business which consist of
demographic, culture influence and belief of people live in that country. Aldi is one of
organisation which has strongest distribution channel in order to fulfil needs of customer. It helps
to provide equal distribution of products in all over country (Bhattacharyya, 2020). Aldi is a
business that create employment opportunity in that country and also fulfilling social
responsibilities. There is increasing health consciousness among people living in the UK which
creates a threat for the business of Aldi as due to this, people do not like to invest in the food
retailing business.
Technological Factor: Technological factors are another important factor for business which
allow them to get competitive advantage in an organisation. UK is one of developed country
which has different advance and upgrade technological tools. Aldi is one of large organisation
which has access to upgrade and advance technological tool which allow them to gain
competitive advantage in marketplace. Aldi is using automated warehouse and different software
which helps them to do more work in less time. It provide them opportunity in market but
increasing use of technology is also create threat for business as sometimes machines stop
working which create negative impact over productivity and operation of firm.
Environmental Factor: Environmental factors are another important factors which consists
environmental condition, climate condition, pollution and other things. There is increasing
awareness of environment among people of UK which create both opportunity and threat for
business. Due to this, there is an emerging ban over use of plastic bags and packaging (Chungyas
and Trinidad, 2022). In order to use another packaging bag, cost of firm also increased. Avoiding
use of plastic bags also create opportunity for business of Aldi as it helps them for purpose of
improving their brand image.
Legal Factor: Legal factors are another important factors for business which consist of laws and
legislation of UK. It is essential for business of Aldi to consider different laws and legislation in
their business while operating in UK or any other country. Following of these laws and
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legislation provide opportunity for business of Aldi as it improve image of company in minds of
customers and regulatory authorities. It will also helps business to reduce interferences of
regulatory authorities in business. Legal factors like copy right create a threat for business of
Aldi as selling of other brand in their organisation create benefits to their business and business
cannot sell other products by their name.
SWOT analysis
SWOT analysis is one of internal external analysis which is used in business for purpose
of identifying threat and opportunities in business. It is a factors which assist business to identify
strength to take sssss of opportunities in business and also helps business to identify weakness in
business in order to overcome threat (D’Cruz, 2018). Explanation of SWOT analysis in context
of Aldi is mentioned below:
Strength Weakness
 Aldi is one of organisation which
provide and service at discounts and
lower prices. This prices is less in
compare to products sold in normal
retail stores that provide success to
business.
 Aldi is getting customer support as it is
offering wide range of choice to
customers in affordable prices which
create strength for business.
 It offers great savings to its customers
as it is offering product a lower prices
which provide saving to business of
Aldi.
 It is an organisation that offer products
at lower prices as a result firm will get
less margin which will reduce the
profitability level of the business.
 Aldi is a business that is getting poor
employee satisfaction as in order to get
success in market, this business require
higher level of productivity which will
increase burden of job over employees.
It will results in poor employee
satisfaction (Dzhamaldinova, Privalov
and Menshikova, 2021).
Opportunity Threat
 Brand marketing is one of opportunity
for business which helps business of
Aldi to attract large number of
audience. It provide higher quality of
 There is increasing competition in
marketplaces which create threat for
business. It will create negative impact
over profitability and marketing share
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products to business which allow them
to increase demand of customers.
 Due to pandemic situation, preferences
of customers also changed. It create
opportunity for business for Aldi as
customers are ready to pay premium
prices to customers.
of business.
 Increasing growth of e-commerce also
create threat for super market stores. It
also create threat for business of Aldi
and does not allow business to increase
its marketing share.
VRIO analysis: VRIO analysis is one of the important analyses which is used by the
business for purpose of analysing internal resources and the advantage of the business in
order to gain a competitive edge. It is an internal analysis that is used by businesses for
purpose of identification of four components including value, imitability, organisation and
rarity (GARAVANDALA, 2020). Aldi is one of large and successful organisation which has
different resources like human resources, financial resources, technological resources and
others which provide them competitive advantage in marketplace. Explanation of different
types of resources used in Aldi is mentioned below:
Resources Value Rare Imitability Organized
Financial Yes - - -
Technological Yes Yes - -
Human resource Yes Yes Yes -
Organisation Yes Yes Yes Yes
Valuable resources: Valuable resources are those resources which add values to firm in
order to create opportunity for them and also to helps firm to defend against threat. There are
different resources posses by Aldi which create values for them (Halachmi, 2019). Explanation
of some of these resources in context of company are mentioned below:
 Aldi is one of organisation which strong financial resources which allow them to expands
its operation.
 It also has human resources who has skills and capability to provide values to firm. These
employees are tech savvy who knows how to use technology.
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 Aldi has advance technological resources which offer convenience to customers and
create values for business.
 Aldi also has strong strategic framework which create opportunity for business in order to
provide them competitive advantage in market.
Rare resources: Rare resources are those resources which can be posses by only some firm
and cannot be acquired by other business. Aldi has different rare resources in their organisation
which helps business in different manner (Heath, 2018). Explanation of sone of these resources
in context of company is mentioned below:
 Aldi has advanced and upgraded technological resources which cannot be possessed by
others. Automated warehouse of Aldi is one of example of technological resources of
company.
 Aldi has skilled and tech savvy employees who work really hard for purpose of
attainment of goals and objectives of firm.
 Aldi has rare organisational resources which helps firm to develop new strategies in firm
to compete with others.
Imitability resources: There are some inimitable resources that cannot be copied by other
firms (Konovalova and et. al., 2018). These resources provide opportunity to firm in market and
explanation of these factors in business are mentioned below:
 Aldi has employees of diverse skills which helps them in order to differentiate its
products from others. It also helps firm in order to protect their resources from others.
 Aldi also has inimitable organisational resources which does not allow others to copying
their strategies.
Organised resources: It is one of resources which are organised in systematics manner that
create advantage for firm. Explanation of some of organised resources are mentioned below:
 Aldi posses some outlet which cannot be copied by other organisation in their
organisation.
2. Analysis and critical evaluation of competitive environment using Porter’s five forces model
Porters five forces model is a model which is used by the firm in order to analyse the
competitiveness of the industry. This model consists of different factors which helps the firm for
purpose of analysing the positive and negative impact of these factors on the business.
Explanation of some of these factors over the business of Aldi is mentioned below:
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Industry Rivalry: There are number of competitors present in business which create
threat for business. Competitors are one which create negative impact over business operation
and does not allow business to expand its operation. Aldi is one of business which is focusing on
low cost which helps them to offer products and service of company in lower prices (Kozhevina
and et. al., 2020). It provides competitive advantage to business and also helps firm to compete
with different marketing players. There are numbers of strong marketing players are present in
this industry which creates threat for business. Some of these competitors includes ASDA,
Morrisons, Sainsbury and others. All these competitors create negative impact over the
marketing position of the company. Therefore, there is a moderate threat of this factors to
business.
Threat of new entrants: New entrants also create threats for the business as these come
with new ideas and strategy in industry in order to compete with existing firm. It also increase
competitiveness in industry and therefore, there it create threat for business. Aldi is operating in
supermarket industry that require huge funds to start a business. It make it difficult for small
business to enter in this industry. Therefore, there is less threat of this factor in business.
Threat of substitute: Substitute products are those products which can be replace with the
products offered by company. These substitute products are threat for business as when there is
increase in prices, customer shift to these substitute products. There are different types of small
convenience stores are these in different country which are substitute of Aldi stores (Kryvych
and Goncharenko, 2020). Customers can buy products from these stores which create threat for
business. Therefore, there is more moderate threat of this factors to business.
Bargaining power of suppliers: Suppliers are those people who provide raw material and
other supporting products to businesses. Aldi is one of the big marketing players in the
supermarket industry which create an advantage for the business as it has developed its own
brand image in the market. It decreases the bargaining power of support as suppliers do not want
to lose big supermarket due to bargain. As a result, different brands make a good relationship
with Aldi. Therefore, there is less threat of this factor to the business of Aldi.
Bargaining power of buyers: Customers also has a different requirement in business
which create a problem for them. The bargaining power of customers crates a threat for business
as customers are prices sensitive. The switching cost of customers in this industry is also very
low therefore, there is a high threat of bargaining power of customers to a business.
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3. Identification and justification of the organisation existing or potential competitive advantage
Position of firm in industry helps them to identify profitability of firm and allow firm to
develop different strategies. In order to gain competitive advantage, business can adopt Porter’s
generic strategies. It is important for business in order to get success in marketplace (Kushkhova
and Petrova, 2019.). For this, business can cost advantage, differentiation or focus strategies.
Explanation of some of these strategies in context of Aldi is mentioned below:
Cost leadership: It is one of strategy which is adopted by firm for purpose of gain
competitive advantage. In this, focus of firm is on reducing cost of company of company and
also to be on low cost producer. On basis of it, firm can sell its products and services to
customers in lower prices. Adoption of this strategy in Aldi helps them to gain competitive
advantage. In order to reduce cost of company, business can be economies of scale.
Differentiation: It is another strategy which is used by business in their organisation for
purpose of differentiating their products from those of competitors. It create opportunity for
business in order to take advantage of differentiation. In order to adopt this strategy. Managers of
Aldi also needs to invest over research and development activities.
Focus strategy: It is another strategy which can be adopted by business in which focus of
business is over specific niche in marketplace. Use of these strategies provide competitive
advantage to business and for this, business needs to invest over cost focus and also over
differentiation focus (McCrann, 2018).
On basis of above discussion, it can be recommended to business of Aldi to focus on
differentiation as it helps them to overcome of competition in market. It is also important for
business in order to compete in market and gain competitive advantage in market. For this,
business can improve existing products and can also invest in research and development
activities which allow them to produce new products.
4. Devise the right strategies and tactical objectives for purpose of attainment of strategic
objectives
There are different types of strategies to be adopted by business in order to attain tactical
objectives of the firm. Aldi needs to develop strategies which assist them to overcome of
different threat that occur in marketplaces. There are different strategic objectives of Aldi which
helps them to get success in marketplace place (Mongkol, 2021). It also helps business in order
to move in specific direction and these objectives of company are mentioned below:
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 To overcome of competition factor present in market.
 To increase marketing share of firm
 To increase profitability of firm.
In order to attain the above strategic objectives, business needs to attain different strategies.
Some of these strategies adopted by firm are mentioned below:
 Differentiation is one of strategy which is important for businesses which helps
businesses to make differentiation in their products and service that allow them to attract
the number of customers towards their business.
 Adoption of new marketing strategies which assist firm in order to increase number of
customers towards their business. It is also important for business for informing customer
about new and existing products (Oladele-Emmanuel, Rejeb and Redlich, 2018).
 Innovation is another strategy which is used by business for purpose of introducing new
ides in market which helps business for purpose of fulfilling the requirement of business.
 Retaining existing customers is another strategy which will provide opportunity to
business of Aldi as it helps them to reduce cost of company as retaining existing
customers is cheaper in compare to attracting new customers.
PART B
1. Critical evaluation of different types of strategic directions available to the organisation
Strategic direction can be described as foundational action and ideas which provide
assistance to getting consistency over specific period of time. It helps an organisation to attain its
vision and also helps them to attain overall goals of organisational strategies. It helps in uniting
different strategies of company and also helps them to get stability in the future period of time.
Strategic direction of Aldi helps them to identify objectives of company and also helps them to
determine resources required by them. It helps them to identify needs of business in order to
operate in market which is essential for success. There are different types of strategic direction
which can be adopted by firm like Aldi. Explanation of these strategic direction are mentioned
below:
Mission: Mission is one of the important terms which helps to develop the purpose of the
company and also explains the existence of the organisation. Aldi is using the mission as a guide
in order to meet the goals and objectives of the firm (our, Zadeh and Zadeh, 2018). Mission of
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Aldi is to set standards for food retailing and also for purpose of expanding of marketing
position. It reflects that the purpose of the company is on differentiating its organization from
others by improving the standards of products of the company.
Culture: Culture can be described as the attitude of a company as well as its behaviour
within an organisation. It is one of the strongest components which make it difficult for
accepting changes in order to provide shape to strategic direction to company. Culture of Aldi is
accepting differences among employees and also adopt changes in business.
Vision: Vision of the company is highlighting the hope of the organisation and also helps
them to attain the success of the organisation in the future period of time. It provide strategic
direction to the business of Aldi along with the mission of the company. The vision of Aldi is to
make sustainability more affordable for business and also to allow customers to access to higher
quality products.
Values: values can be referred to as fundamental beliefs and principles which provide
direction to the company about what is wrong and right for them (Silin, Dvoryadkina and
Antipin, 2018). Aldi is focusing on adopting the right approach to their organisation which
motivates the employees to focus on the common goals of the business and also to increase
fairness and countability towards organisation.
Ideology: Ideology can be described as the belief that helps to define the purpose of the
company. It explains ways in which a business wants to conduct its operation, employees,
industry and clients. Aldi is using this ideology as a strategic direction that can be attained with
stable policies.
Principles: Principles can be described as guidelines as well as rules which provide
future strategies as well as decision making for the direction of the company. Aldi is one of
company which is focusing on providing right products to customers at the right price. It also
respect to privacy of customers by protecting their data with company and protecting from third-
party access.
Grand strategy: It is one of long term strategy which consists approaches and tool a
person can find. Aldi’s grand strategy is focusing on differentiating its products and services
from others which provide them success and growth.
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2. Justification and recommendation of the growth strategies
In order to ensure growth in business, an organisation needs to adopt growth strategies in
business. For this, they can adopt Ansoff growth strategies which was introduced by H. Igor
Ansoff in the year 1957. It is one of strategy in which business to plan and evaluate different
growth initiatives in business. Explanation of different growth strategies in context of Aldi is
mentioned below:
Market penetration: It is one of strategy which is adopted by the business for the purpose
getting growth. It is considered as less risky strategy which provides an opportunity for business.
In this strategy, business is sell existing products and service in existing market (Williams,
2021). In this strategy, to increase marketing share, business of Aldi needs to increase marketing
efforts, decrease process of products in order to attract numbers of customers and also for
acquiring competitors in the marketplace.
Market development: It is a strategy that consists less risk in business and also business
does not needs to invest on research and development activities. It is a strategy that allows Aldi
to depended on existing products and service and also helps them to make efforts to enter into
different market. For adoption of this strategy, Aldi needs to enter into new countries, domestic
market and others which allow them to increase the marketing share of the business.
Product development: It is another strategy in which businesses provide new products
and services into existing products and services. For the development of new products and
services, Aldi needs to invest in research and development activities that allow them to produce
products according to the requirement of customers (Wills, 2020).
Diversification strategy: It is a strategy that consists of higher risk in business in which
both products and market are new for business. It is a strategy that consists of higher risk in the
marketplace. It is a strategy that provides huge rewards to businesses by offering them revenue
opportunities by reducing the dependability of the firm on a single product.
From above mentioned discussion, it can be interpreted that Aldi is one of the successful
organisations which should focus on product development as it allows them to diversify its
product portfolio. It is also important for business in order to reduce risk present in the operation
of the firm and also to provide
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3. Evaluation of ways and means by which chosen strategies can be monitored to get success
There are different ways in which strategies of business can be monitored and evaluated.
These strategies help business in order to control the results of strategies. It is also important for
business in order to make improvements in strategies and also helps them to increase efficiency.
Explanations of some of the ways adopted by Aldi to monitor strategies are mentioned below:
 Choose the right metrics: It is one strategy in which a business needs to choose metrics
in careful manner monitoring metrics in a careful manner which helps the business to
track the performance of the business in an effective manner. It is a metric that will
devise tasks which make it easier for businesses to monitor progress.
 Tie to strategic objectives: It is one of strategy in business to tie business metrics with
the strategic objectives of the firm. Business metrics are in form of profit, cash flow and
revenue of the firm. It assists businesses for purpose of tracking metrics in an effective
manner.
 Keep it simple: It is essential for businesses in order to track performance by providing
proper training to the team and also for maintaining and updating data in an effective
manner.
 Maintaining up to date data: It is one of the components which helps businesses to
maintain up-to-date data in business by providing them with proper feedback for a
business.
CONCLUSION 150
From above mentioned project report, it can be concluded that strategic planning is one of
important activity in business. It order to ensure strategic planning, there are different tools used
by business in order to identify different factors in business. Some of different tool used by
business for purpose of identification of threat. These includes different internal and external tool
used by business which assist them for identify threat and opportunity. In order to overcome of
threat of business, firm can develop different strategies which assist them to overcome of
problem.
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