Strategic Planning for Aldi: Environmental Analysis and New Strategy Proposal

Running head: STRATEGIC PLANNING
Strategic Planning
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Executive summary
This report highlights the environmental analysis of Aldi, one of the major discount chain stores,
operating in Europe, Australia, USA and China, and proposes a new strategy for the company to
expand its market. Through SWOT, PESTLE, Porter’s five forces and Porter’s generic strategies,
it has been suggested that Aldi should adopt differentiation strategy to increase its market share.
The report also presents the new strategic planning with revised mission, vision and objectives
along with the schedule for implementation and monitoring and evaluation plan. Stakeholder
analysis for Aldi was also performed to highlight the demands and expectations of the
stakeholders and how to involve them in the new strategy for the benefit of the company. The
change of organizational structure for adopting the new plan and evaluation framework were
suggested to effective implementation of the new strategy.

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Table of Contents
Introduction......................................................................................................................................4
LO 1: External environment affecting Aldi.....................................................................................4
AC. 1.1 Importance of external factors affecting Aldi................................................................4
AC. 1.2 Analysis of needs and expectations of stakeholders of an organisation........................5
AC. 1.3 Major changes in external environment affecting strategy............................................8
LO 2: Review of existing business plans and strategies of Aldi...................................................11
AC. 2.1 Tools to analyse the effects of current business plans.................................................11
AC. 2.2 Current business strategies/model: Review of current market position.......................14
AC. 2.3 Competitive strengths and weaknesses of Aldi’s current business strategies..............15
LO 3: Options for strategic planning.............................................................................................17
AC. 3.1 Modelling tools to develop strategic options for Aldi.................................................17
AC. 3.2 Comparative activity from organizations and future strategy......................................19
AC. 3.3 Basis of future organisational strategy.........................................................................20
LO 4: Strategy plan for Aldi’s environment..................................................................................21
AC 4.1 Suitable structure for strategy plan...............................................................................21
AC. 4.2 Criteria for reviewing potential options.......................................................................23
AC. 4.3 Agreed strategy plan with resource implications.........................................................26
LO 5: Examination of factors affecting an organisational strategy plan.......................................27
AC. 5.1 Comparison of the core values with current business objectives of Aldi....................27

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AC. 5.2 New mission and vision statement for Aldi.................................................................28
AC. 5.3 Agreed future management objectives of Aldi aligned with mission and vision........29
AC 5.4 Measures to evaluate the strategy plan of Aldi.............................................................29
LO 6: Strategy plan implementation for Aldi................................................................................31
AC. 6.1 Schedule for implementing the strategy.......................................................................31
AC. 6.2 Dissemination processes to gain commitment from stakeholders of Aldi...................33
AC. 6.3 Monitoring and evaluation system...............................................................................34
Conclusion.....................................................................................................................................37
References......................................................................................................................................39

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Introduction
Aldi is one of the biggest discount supermarket chains in the world. Across various
countries in the Europe, China, Australia and USA, Aldi is a major supermarket, catering to a
large market share. It is a brand of two German supermarket discount stores. In the year of 2017,
the company earned €30,453 million gross revenue (Statista.com 2018). The stores were
established in Germany in 1913. It was split into two parts, Aldi Nord and Aldi Süd in the year
1960. Currently it operates in 19 countries with more than 10000 locations and almost 1.5
million employees (Aldi.com 2018). The report will highlight the environment analysis of Aldi
to recommend on strategic planning. The external environment analysis and its relevance for the
company’s growth strategy, stakeholder analysis, market position analysis, strategic modelling
based on the core values for Aldi will be discussed in this report to develop a competitive
organizational strategy for the company. The report will also recommend key factors for
constructing a strategy plan for Aldi that would include the stakeholders and develop monitoring
and evolution systems to implement the strategic plans for it.
LO 1: External environment affecting Aldi
AC. 1.1 Importance of external factors affecting Aldi
External environment refers to the exogenous factors that affect the operations of any
business. Various external factors, such as, the economy and political condition of a nation,
social status, technological changes, legal regulations, and environmental factors influence the
business operations of any organization significantly. These factors are important as they control
the business performance from external sources (Gollay et al. 2016). These also influence the

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industry trends and requirements, which the organizations need to adopt for sustaining in the
industry. In case of Aldi, the political and economic stability of the nations in which it operates
affect its business operations and profitability. Economic growth indicates that people have more
disposable income, which they can spend on the retail market. Technological changes will have
an impact if Aldi cannot introduce convenient shopping methods, like websites and mobile apps,
and home delivery system, similar to its rivals in the retail industry. The legal and environmental
regulations are also important as those allow it to operate if it applies sustainable practices in the
respective locations.
AC. 1.2 Analysis of needs and expectations of stakeholders of an organisation
According to Jensen (2017), stakeholders of an organisation are those independent people
who take interest in an organization and affect and are also affected by the organizational
performance. Directors, creditors, owners or shareholders, employees, unions, suppliers,
government and customers are the stakeholders of any organization, including Aldi. To meet the
needs and expectations of the stakeholders of Aldi, the stakeholder analysis is performed.
The stakeholder analysis involves the stages of identifying the stakeholders of Aldi,
documenting their needs and expectations, assessing their interest and influence, managing the
expectations, taking appropriate actions and finally, reviewing the status (Missonier and
Loufrani-Fedida 2014). Similar to any other business, Aldi has both the internal and external
stakeholders.

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Figure 1: Stakeholder analysis framework
(Source: Jensen 2017)
Internal stakeholder analysis
 Employees: The employees of Aldi need and expect monetary benefit from the company
and thus, they expect a profitable business for Aldi.
 Owners: Like the employees, they also want to establish a sustainable market position
for Aldi with a profitable position.
 Managers: They are also employees of Aldi and thus, need and expect monetary benefit.
External stakeholder analysis
 Customers: They want ultimate value for money from high quality products. Hence, they
are more concerned about the organizational performance regarding the quality of
products and services and price of that.

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 Government: They need and expect Aldi to pay for the taxes timely and the rules and
regulations regarding pollution and environment protection.
 Society: The society wants Aldi to take care of the living environment and also
contribute significantly to develop the community. This gives rise to the initiatives under
corporate social responsibility. The society also wants as well as expects employment
opportunity from Aldi.
 Suppliers: They need prompt and fair payments from Aldi as per the terms of contract.
They do not expect delay in payments or too much squeezing on the deals. Aldi has both
local and international suppliers and both expect Aldi to maintain the terms of business.
 Creditors: They provide credit to the business and thus, they need the return from it in
due time. They also expect the company to have a profitable business, so that they can
repay the loans with interests. If Aldi faces loss for a long time, they could be a loan
defaulter, which is not expected to the creditors.
 Shareholders: The share prices of the company increases with a better performance,
which increases the returns on shares. Thus, the shareholders expect a good dividend,
which is a portion of the profit of Aldi, and as a result, they also want Aldi to earn profit.
From the analysis, it can be said, that stakeholders can influence the strategies of Aldi.
For example, to fulfill the society’s and government’s expectation, Aldi takes welfare initiatives
for the society under CSR activities. Based on the need of the society, the programs are planned
and undertaken.