Business Strategy of ALDI: A Comprehensive Analysis

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Business Strategy of ALDI
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
a. Give an assessment of visions, missions, objectives and goals to inform strategic planning
(AC1.1)............................................................................................................................................3
c. Analyze the factors to develop the strategic plans (AC 1.2)........................................................4
d. Evaluate the usefulness of methods while increasing the strategic plans (AC1.3).....................5
e. An organisational audit to analyse the recent strategic position (AC 2.1)...................................7
f. Execute an environmental audit to assess the macro and micro environment (AC2.2)...............8
g. Importance of stakeholder analysis for Aldi to formulate new strategy (AC 2.3)....................10
h. A new strategy for ALDI (AC 2.4)............................................................................................12
Task 2.............................................................................................................................................13
a. Recognise a market to sustainable growth, retrenchment or limited growth (AC 3.1).............13
b. Give a justification of the strategies (AC 3.2)...........................................................................14
Conclusion.....................................................................................................................................14
References......................................................................................................................................16

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Introduction
This report will mention the business strategy adopted and built by ALDI to make the market
successful over other retail sectors. Within task 1, the business strategy of ALDI will describe
the mission, core competencies and visions of the retail sector. To formulate the strategic plans,
several factors will analyse in this task. Besides, this task also will provide a new strategy plan
for ALDI that it can follow to get the competitive advantage within the marketplace. In the task
2, the application of proper strategy will be given in respect to ALDI.
Task 1
a. Give an assessment of visions, missions, objectives and goals to inform strategic planning
(AC1.1)
Mission: The mission is the document that works like a guide for the company and discusses
about the overall objective of the company. It also gives the proper direction that would be
helpful for company to reach out the target in competitive marketplace. In case of ALDI, their
mission declaration is “Spend a little, Live a lot”. It may be a “one liner” but it carried out a set
of values. The mission statement is working like efficient tool that supports the company to take
decision based on recent situation. It is also a distinct framework, which identifies boundaries for
the company’s activities (Skordili, 2013).
Vision: Vision statement is the crucial target that company always wants to attain in future.
Besides, it may define the position of company in competitive market. In case of vision, several
companies use the latest technology in such a way, so that it may be capable to add reputation
towards a company over others (Morgan, 2012). ALDI is also developing their business
operations to become famous over other sectors within market. It is the future statement of mind
that company desire to reach in upcoming years. Moreover, it works like an inspiration for the
company.
Objectives: In any organisation, objectives are the particular aspect that company may like to
attain in future. An objective may be specific with the situation but it has the proper path to
follow at the similar time (Chen et al., 2012). Objectives are also estimated and calculated at the

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similar time. Objectives may also recognise as equipment or tool that cover all the business
activities and planning for a company. Further, it also supports the company to make the policies
and analyse the performance of workers. Objectives are mainly short-term goals that may reach
in short time.
Goals: Goals are becoming the business model for the companies that comprises with large
range of innovation and development (Bharadwaj et al., 2013). Goals are boarder in case of any
business operations. They are also estimated as general principles that company wants to attain
in long-term. It actually represents the whole vision of company.
Core competencies: Core competencies are the particular factor that may work in favour of the
company’s products and services. It also supports a company to gain the competitive edge over
competitors in any global market. It may be utilized by the company to develop the business
activities. It also focuses to provide flexible working hours for the workers, as they easily deliver
their best performances.
c. Analyze the factors to develop the strategic plans (AC 1.2)
As per the data of Kantar Worldpanel, it has found that Tesco, ASDA, Morrison and Sainsbury
have developed their market share about 1.6%. In case of ALDI, the company has grown rapidly
in last three months and it was about 19.8%. Strategic planning is the effective tool in this case.
It creates a vision for the company that ALDI will try to attain. Five factors are needed to
formulate the strategic plans for ALDI (Amit and Zott, 2012).
Engagement- It has found that only 25% employee utilize a strategic plan to develop the
significant strategic decisions within company. In case of ALDI, employee engagement is the
key element to develop the strategic plans and all levels of staff must involve in the development
process (Aldi.us, 2019). Employee’s engagement gives an extra boost and supports the company
to develop their plan for future (Connor and Lande, 2012). It is the essential aspect for company
to engage the workers in the strategic planning and give a direction to enlarge their production in
upcoming years. In ALDI, the senior management may not execute the strategic plans, but the
employees would carry out the plans in a systematic manner.

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Communication- Communication is the vital aspect in case of developing the strategic plans. A
proper communication approach must be considered by ALDI to make the planning processes.
All levels of workers must communicate with each other and share their views. It shows how
they would like to engage in the planning process. They will give input towards the strategic
plans through focus groups, meeting and surveys (Parnell et al., 2012). The HR management will
also share their views with employees about the strategic planning.
Innovation- In ALDI, strategic plans comprise of different activities to deliver a new product or
make recent item for the company. Therefore, innovation should be necessary for ALDI to
enlarge the market share (Aldi.us, 2019). Lack of innovation may direct towards the failure. The
HR management should make the strategies that require innovation. Therefore, all workers are to
be more innovative towards the product development. They make the innovative strategies for
the product and service.
Project management- It has revealed that most of the employees do not recognise their
company’s strategies. Project management is another significant aspect to enlarge the market
share for company (Blackburn et al., 2013). There are two elements connected towards the
project management. One is to recognise the projects, which are needed to make sure within the
execution of every activity. Another is to make a prioritization of all the projects towards ensure
the highest production for the company. Thus, high level of employee’s involvement is necessary
to recognize the aspects of project management. Employees must enlarge their commitment level
to make sure that the strategic plans will successfully execute.
Culture- Organisation culture is one of the significant factors that hold the beliefs, behaviours,
values and beliefs of its workers. Culture is exceptional and different for the company’s prospect.
Change is essential to understand the value of organisation culture. Leadership style leaves a
huge effect on business operations and organisational culture (Oestreicher-Singer and
Zalmanson, 2013). Proper leaders would be necessary to control their workers and business
operations. Thus, cultural aspects are necessary to assess the strategic plans.
d. Evaluate the usefulness of methods while increasing the strategic plans (AC1.3)
To evaluate the usefulness of techniques, BCG matrix will be taken by ALDI to develop the
strategic plans. BCG matrix is a portfolio that may design to support the long-term strategic

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planning of a company. In case of Aldi, it supports their business to assess the opportunities by
reviewing the portfolio of the products and company decides how to develop the products based
on recent situation (Pagani, 2013). This is also recognised as the “share matrix”. Besides, this
matrix will divide in four quadrants based on the market analysis.
Dogs: In ALDI, these are the products with low market share or growth rate.
Problem child: By delivering these products, the company may gain the highest growth in
market but market share is very low.
Stars: In this case, products are accessible in terms of higher level of market share with high
growth rate.
Cash Cows: Products are available in the market with low development rate but high market
share.
To utilize the BCG matrix, retail sectors like ALDI may easily show their portfolio of the
products or services. Thus, company must be relevant in terms of larger business operations with
multiple markets and services. Their HR management should also utilize this matrix to boost the
leads and sales of the product.
Dog products: Generally, marketing advice is to focus for reducing any dogs from the collection
of products as they are draining the resources. In case of ALDI, the company currently reduces
the wastage products from the factories (Mithas et al., 2013). Their management tries to adopt
the latest technology in their production. Premium-priced range of the retail products are
removed by company in recent time.
Problem child: In ALDI, these products are often needed important investment to place them
within the star quadrant. It has found that Aldi has refused to estimate the food items and now,
company has over 500 grocery stores around the UK. Like a major supermarket, the company
has followed the portfolio of their products, which contain low market share and high expansion
rate.

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Stars: ALDI has quality market leaders, who are always ready to investment in the company’s
products to attain sustainability. They actually have more ROI than other categories of products
(Klettner et al., 2014).
Cash Cows: It is actually well established products in the market. With High share of market and
low increase in the products, the company has succeeded to retain the string supporters.
Thus, BCG matrix will be necessary to evaluate the strategic plans for ALDI. The main purpose
of this analysis is to support the company for understanding that which products should be
invested in market and which ones must be divested. In recent time, ALDI is in Stars stage where
the market share is huge but the market growth is relatively low. Strategic plans should develop
to acquire high market.
On the other hand, PIMS (Profit Improvement of Market strategy) is another effective tool in
terms of strategic planning. It gives a scientific and factual tool for the strategic planning. To
make the activity of brand successful, ALDI adapts PIMS that will give the comprehensive
mission for the company. The selected tool for the company is to develop their products
universalized (Spender, 2014). Further, it is mainly distinct as the database format and this
exceptional activity is adopted by the company to formulate their strategic plans. It also gives the
safety and comfort to their consumers while utilizing the products. PIMS database is the
document, as it may focus the company’s marketing activities. By using this tool, the company
will retain the bright future and exploit the future situation in upcoming years.
e. An organisational audit to analyse the recent strategic position (AC 2.1)
Value chain analysis
To analyse the recent strategic position, value chain analysis is the effective tool to attain the
probable resources of competitive market. In the external market, ALDI may not be successful to
trade the activities. Value chain approach recommends that an organisation may estimate their
marketing movements as economical source. This activity may also play as the barrier for
company while they are approaching to an emerging market. In an emerging market, they face
several challenges with their marketing activities (Bocken et al., 2014). Through the value chain,
the company may recognise their internal and external linkages between their marketing

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activities. Internal linkages are the interconnections among activities in terms of similar
organisational units and exterior linkages, which are the connection among business units of
different companies.
In recent market, ALDI has the strategic development module for their marketing activities, as
their HR management may strive to the international market. This will be accessed through a
new packaging solution that may support the business development of ALDI (Lusch and Vargo,
2014). However, the company has clear business philosophy along with number of principles.
Value chain may optimize the finance, items and information flow. The developed information
may support the company to recognise and use latest opportunities and reduce the external risk
factors. The constant Value chain analysis may result to fill the gaps, which could affect the
overall production of company.
In ALDI, the effective completion of value chain analysis may develop the product flow and
material resources. The listed management also develops as ALDI may reduce the delays by
tracking the movements of supply chain (Cascio, 2015). It also supports the company to develop
the relation with customers. Value chain analysis and its implementation may emphasize and
take away the bottlenecks of the information flow. Effective and promotional activities adopted
by Aldi within several channels that support the company to enlarge their business reputation in
the market.
f. Execute an environmental audit to assess the macro and microenvironment (AC2.2)
SWOT analysis
Strengths ALDI offers several discounts in their products as the company
survives in the competitive market. Major customers are likely
to go in their stores for the fresh items and the prices of products
are significantly low than their competitors. Discounts in the
stores often develop a better network for the company that may
be their vital parameters in food retailing (Higgins et al., 2015).
Customers desire to buy the products from Aldi as the company
offers the items at affordable costs and they prefer to purchase

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most of their daily items.
Weakness The company needs to produce high levels of products in order to
survive in the marketplace. Workers often work in the several shifts
and paid less money by the company. It makes a lot of
dissatisfaction between employees and the attrition is very high.
Discounts in the products thrive on short margins and mainly depend
on the sales quantity.
Opportunities Needs of customers are increasing day by day and they are willingly
to pay more money for the quality products and services. Therefore,
the company has several opportunities to develop the products based
on customer’s needs and they attain a better place in the market
(Woerner and Wixom, 2015).
Threats Aldi faces a lot of competition from the retail sectors like Tesco,
Wal-Mart.
Table 1: SWOT analysis
(Source: Learner)
Pestel analysis
Political factors In every country, political agents have the higher level of
authority and major companies have to maintain their
relation with the parties to attain more profit in the
marketplace. It has found that governments of several
countries have inspired retailers to enlarge the
employment. In case of Aldi, the company has to hire
skillful employees from different nations to promote the
products and business functions (Pisano, 2015).
Economical factors In recession time, buying behaviour of customers is changing
and they desire to buy the item in lowest price. The company
may consider such situation in future. Thus, their management

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has to adopt the economical strategy to deal with this
problem. Aldi has to deliver the quality products in cheaper
price.
Social factors Several retailers like Tesco, Asda have provided huge range
of products containing non-fooding products and other things
that may attract more customers. Thus, it has huge impact on
the overall production of company (Matt et al, 2015).
Technological factors It is the necessary components to develop the business
functions in market. Technology creates the opportunity for
the business to build their manufactured goods more
proficient. It would also enlarge the productivity and
processes of that corporation.
Environmental factors It also plays a very important role in the trade process of Aldi.
Their HR management must ensure that the company may not
create harmful products for the environment.
Legal factors To access the laws and regulations, the company has signed
several deals with governments. It makes a way for the
company that they may not face any problems in upcoming
years. For having the retailing sector, company has to follow
the values of food superiority.
Table 2: Pestel analysis
(Source: Learner)
g. Importance of stakeholder analysis for Aldi to formulate new strategy (AC 2.3)
Stakeholders Nature Roles Impact
Managers Internal Administration of
Aldi mainly takes the
responsibility for the
product sales
High

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CEO and managers Internal They are holding the
high position of
company and take
significant decisions
based on the recent
situation of company.
In case of launching
the products and
develop the business
model, they give their
important verdicts.
Medium
Employees and staff Internal Employees are the
most significant
aspect for company.
Employees are
supported to
manufacture the
products and sales
them accordingly to
their manager’s rules.
They mainly perform
according to the
protocols of their
leaders. They share
their innovative ideas
to better development
of company.
Medium
Suppliers External Suppliers are also
necessary factor for
better development of
company. Packaging,
Medium

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supply the resources
and chemicals are
needed to
manufacture the
products.
Customers External Customers are
enlarging the overall
productivity of
company. In case of
Aldi, company always
maintain the demands
and necessities. They
purchase the items
and support the
company to enlarge
the revenue
generation.
High
Table 3: Stakeholder analysis
(Source: learner)
In case of Aldi, stakeholders are playing a vital role to decide the success of the company. It also
categorizes in terms of internal and external based on their roles in the company. However, the
company must ensure that while communicating any marketing message, company may take an
honest approach.
h. A new strategy for ALDI (AC 2.4)
Using the information and research composed about ALDI, a new-fangled strategy may develop
for the company. A marketing strategy is the vital tool to clarify the company’s aim and
determine how the company is going to attain it while approaching a new marketplace. The