Strategic Management of Aldi: Approaches and Strategies

Strategic
management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK1 ............................................................................................................................................3
Different emergent approaches and strategy formulation of Aldi in order to maintain balance:
.....................................................................................................................................................3
TASK2 ............................................................................................................................................5
Impact of macro environment on the organisational activities and its responses.......................5
TASK 3............................................................................................................................................8
Aldi strategic capabilities using Porter's Value Chain Model and VRIO model........................8
TASK4...........................................................................................................................................11
Porter's generic Strategies and Ansoff Matrix of Aldi:.............................................................11
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Strategic management is the referred as the continuous process of planning whole
organisational goals and objectives, monitor functions and activities and evaluate all
organisation's needs to attain objectives in effective and efficient manner. There are various
changes are happened in the environment, so organisation regular formulate effective strategies
in order to ensure success. Generally strategic management is the process of managing
organisational resources effectively in order to achieve defined goals and objectives within time
period. It involves the various activities such as setting effective goals and objectives, analyse all
internal as well as external factors of competitive environment, develop various strategies and
ensure that these strategies are properly implemented in the organization. In this report the
chosen organisation is Aldi that is discount supermarket chain. Respective organisation is
established in the 1946 by the Karl and Theo Albrecht, headquarter situated in Essen, Germany.
The organisation run 10,000 stores in almost 20 countries. In this report various strategic
approaches of Aldi is discussed. Micro environmental factors that affect the Aldi's operations and
functions are evaluated. Porter's values chain framework, VRIO model, porter's generic
strategies and Ansoff matrix is being covered in the project report.
TASK1
Different emergent approaches and strategy formulation of Aldi in order to maintain balance:
In the situation of recession min Britain, local people change their purchasing and
shopping habits, they spent less on the purchasing goods respectively. So Aldi provide the better
quality products at affordable prices to the customers, but it is perceived by Britain people that
low price products do not contain quality(Allison, 2019) . Organisation target the lower segment
of customers in the past by according to situation, it emerges approaches and formulates
effective strategies in order to maintain balance within organization. It conduct various research
to develop high quality products at low price. By doing this, organisation is able to enhance
customer base and satisfy them by products. Aldi improves its strategies as well as creates loyal
customers to capture potential market.

In order to maintain balance in cost, the organisation adopt the lean working approach in
operations. Respective approach is most effective and efficient that is able to minimise the cost
of operation process. By maintaining cost organisation can achieve the high profitability goals.
Lean working system approach: Lean working is the approach that facilitates
organisation to decrease the waste from the manufacturing operations and increase the
productivity as well(Ateba and Prinsloo, 2019) . By adopting the lean manufacturing approach,
Aldi can eliminate the waste material and steps of production that does not providing any value
to the product. The respective approach facilitates the continuous improvement, decrease the rate
of waste as well as maintain better relation with suppliers. There are various types of waste are
included in the lean working such as waste due to the change customers demand, wast due to the
effectiveness allocation of resources.
Hence, lean production approach eliminates all waste process and production in order to
enhance the value of product. Aldi manage and create balance between the operating cost,
productivity and profitability by implementing lean working system. Some elements are
discussed that maintain balance in the organization are:
Continuous Improvement: Aldi involve its employees in different activities in order to
improve overall quality of them(Balaman, 2016). Effective ans skilled employees facilitates the
organisation to take sustainable competitive advantages. Respective organisation implement
various improvement strategies to attain defined goals.
Time based management: Time management is very important for the organisation to
accomplish all activities in defined manner. Aldi provides various training and development
programme to make employees skilled. Time management save cost and efforts to complete
operations.
Just in time: Aldi adopts the just in time strategy to maintain balance. It produced the
products when these are order by the customers, it saves the time and do not need to store
products.
Total Quality Management: Quality management is very important aspect for the
organisation to maintain balance within organization. Aldi main focus is depends upon the
providing better quality products and services to customers in order to satisfy their needs and
demands. That leads the company towards the success.

It is recommended that in order to gain sustainable competitive advantages Aldi should
maintain the balance in the various organisational aspects such as cost of operation as well as
profitability. Respective organisation focus on the cost leadership and differentiation to increase
the market share and provide differentiated products and services and low price to customers.
Market penetration and market development is also used by the organisation to increase the sales
at different markets or in existing market (Barney, 2017). Here are some strategies and
approaches are discussed below that facilitates the organisation to maintain balance within
organisation. These approaches are following:
Cost leadership: In the cost leadership approach, Aldi control the cost of production of
products and services and provide low process and provide low priced products then its
competitors. This strategy facilitates the organisation to increase the market share. Quality
products at low price attract customers towards the organisation and enhance sales then their
respective competitors.
Differentiation strategy: In order to maintain balance in the competitive market,
organisation adopt the differentiation strategy. Through this strategy, Aldi provides differentiated
products then its competitors that contains various qualities. Organisation launched new line
products according to demand of customers. Aldi target the new market segment and provide
differentiated products in it. This strategy will facilitates Aldi to take competitive advantages by
providing differentiated products and services.
Store layout: Current store layout of Aldi is not well structured, it is untidy and messed
up with large amount of materials (Barney, 2020). It is necessary for the organisation to improve
it effectively.
Proper space is being maintained between various product line. So customers can easily find
their required product and enhance their satisfaction as well as increase growth.
All these strategies and approaches facilitates the Aldi to maintain the balance between
organisation and help to achieve all determined goals and objectives in effective manner.
SWOT analysis of Aldi:
As Aldi is the discount supermarket group that is owned by the Einkauf GMBH. It is
various face various internal as well as external factors that affect the business activities and
functions. SWOT analysis of organisation is discussed below:

Strengths: There are various factors that are related to the internal environment of
organistion and strghten the business position and help to achieve all defined goals and
objectives within time period. Aldi has strong ecosystem, effective proving strategies, savings,
good product mix and high level of customer support that facilitate the organisation to lead it
towards success.
Weakness: Weakness are the internal insufficiencies that effect the business and these
are the areas that required improvement. These weaknesses that are faced by Aldi are low
margin, poor employee satisfaction as well as ineffective penetration of high income groups.
Aldi improve them by implementing effective strategies.
Opportunities: Opportunities are the external factors that enhance the performance level
of organisation and provide various competitive advantages. Opportunities of Aldi is that the
brand is well known in the market and it become the preference of customers that enhance
various factors to develop the business and grow in competitive environment.
Threats: Threats are those factors that limits the organisational success. External threats
of Aldi are its competitors that provide the similar products in the market and various others that
affect the organisation performance.
TASK2
Impact of macro environment on the organisational activities and its responses
Macro environment is referred as the all conditions that are exist in the whole economy
rather than in the particular sector and region. Macro environment includes various factors such
as gross domestic production, employment, inflation and monetary as well as fiscal policies.
Macro environment is related to the external environment and affects it performance and
respective activities. PASTLE analysis is discussed below:
PASTLE analysis of Aldi:
Factors Description
Political factors There are various political factors that affect
the performance of Aldi organisation in various
manners. These factors are government
policies, rules, regulations, political stability
and instability, trade and tax policies as well as