Business Strategy Report: Aldi's Strategic Analysis and Market Entry

This report offers a comprehensive analysis of Aldi's business strategy, encompassing its mission, vision, objectives, and core competencies. It delves into the factors Aldi must consider when formulating strategic plans, including SWOT and PESTLE analyses, and evaluates the effectiveness of various strategic development techniques, such as the BCG matrix. The report conducts both organizational and environmental audits, examining the micro and macro environments, and emphasizes the significance of stakeholder analysis in strategy development. Furthermore, it proposes a new strategy for Aldi, considering market entry and growth, and assesses resource requirements and the use of SMART targets for successful implementation. The report concludes with an evaluation of the roles and responsibilities associated with the proposed strategy.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 .........................................................................................................................................1
1.1 Assessment of Aldi’s missions, visions, objectives, goals, core competencies .............1
1.2 Analyse the factors that Aldi will have to be consider when formulating their strategic
plans........................................................................................................................................3
1.3 Evaluate the worth or usefulness of techniques used by businesses develop their strategies
................................................................................................................................................5
2.1 Carry out an organisational audit for ALDI ....................................................................7
2.2 Carry out an environmental audit for ALDI showing both micro and macro environment. 8
2.3 The significance of stake holder’s analysis while preparing new strategies....................9
2.4 Using the research and information collected about ALDI, present a new strategy......10
TASK 2 .........................................................................................................................................11
3.1 Identify a market and analyse the appropriateness of suitable strategy for ALDI.........11
3.2 Provide a justification of one of the strategies for market entry and growth ................13
TASK 3 .......................................................................................................................................14
4.1 Provide an assessment of the roles and responsibilities.................................................14
4.2 Provide an analysis of the resource requirements for the implementation of the strategy 15
4.3 Evaluate how the use of SMART targets can contribute to achieving the strategic......15
CONCLUSION .............................................................................................................................16
REFERENCES .............................................................................................................................17

INTRODUCTION
Strategy management refers to formulating, interpreting, analysing the major goals taken
by top management. So that policies and plans should be formulating in better way. It provides
way to firm in order achieve their goals and aims. There are many different kind of resources
which are available to firm (Ackermann and Audretsch, 2013). Enterprise need to allocate these
resources properly. Strategic management provides framework so that firm can take decision in
most complex situation. By this concept company can control and control the performance to get
success.
The company which taken into consideration for this particular project is Aldi. Aldi is
famous super chain market in UK. The market share of company is rising by the recent years.
The firm able to earn good profit. There are many competitor of Aldi in UK market such as
Tesco, Aldi, Asda, Sainsbury and other. The main motive of company is to provide good quality
of products in cheaper prices (Acquaah, 2011).
In this report company vision, mission, objectives, core competency are mention. The
various factors which Aldi need to considered while formulating their strategies are discussing.
The tools which are used to develop these strategies are describe in this project. In this
assignment the external and internal audit of organisation has been done.
TASK 1
1.1 Assessment of Aldi’s missions, visions, objectives, goals, core competencies
Vision:
It is statement in which company shows where they want to reach and where they see
themselves in future. It is long term plans. It identifies the growth of business and benefit of
stake holders. Every company having its own vision. The vision of Aldi is as follow.
 To become one of the best retailer in UK and other parts of EU
 To provide a low cost product to its customers.
 To become one of the leading retailer in UK and other parts of the world.
The basic purpose of Aldi is to satisfying the needs and wants of customers at market
place. As a large business enterprises Aldi is concern on gaining attention of large number of
people towards their offered products and services. This statement is effective in respect to create
reflection of the present situation that the company have attained at market area.
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Mission:
It is refers guild lines which help enterprise to achieve aims and vision. It is statement. Mission
follow vision. By this company decided how firm need to operate to achieve their final goals.
Business unit need to commit all the promises which they did with their stakeholders. The
mission of Aldi is as follow. The essential mission statement of firm is “To save money and
provide excellent products and services in the longer run to its customers.” this can be considered
as the most effective factor of firm which is designed by firm in respect to gain desired targets in
appropriate manner.
Goals and objectives:
Goals and objectives are returns which firm want to get and achieve in particular point of
time. Goals are prepared for longer period. Objectives can have prepared for shorter and longer
term both. Objectives provide support to achieve goals. Goals refers to plans which brings wider
scope for business unit (Acquaah, 2013). Following are the goals and objectives of Aldi.
 ALDI wants to increase their presence in other countries.
 ALDI main aim is to increase market share by 5 percent in the next few years.
 ALDI also created trust and brand loyalty in an effective manner.
These are some predetermined statements which are designed by the business
organisation in order to moving forwards towards right direction. This plays vast role in carry out
all business in significant manner. It is required for each business organisation to make
significant efforts in order to attaining organisational goals in systematic manner.
Core competencies:
Core competency is a concept by which company get advantage from their competitors.
The firm is having USP which other competitor are not having. This concept is having vital role
in business operation. Every is specialised in producing products in their own way. There are
many products and services which are producing in the market by different countries. So its very
important that enterprise bring new innovation everyday so that they can lead in market place
and customer prefer their products rather than competitor goods. Core competency help firm to
build brand loyalty and get advantage in terms of prices, size, quality and other factors. By this
business can grow and get success.
Aldi is having core competency because they are providing large range of products and
their quality of products are also high. The organisation is good at understanding customers’
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needs and wants and producing goods accordingly. Aldi is a popular retail company and widely
concern on satisfying the needs and wants of customers who are willing to consuming offered
products and services of firm. The basic purpose of business is to exploring their business and its
activities at large scale through offering high quality and variety of goods and services than their
rivals.
Business plans are effective as these are helpful in implementing all business activity in
well planned manner. It involves various activities in which some are described as below:
Business plan:
BASIS TIME DURATION
Different action that are connected with
research and development function.
25 to 45 Days
Important Aims and objectives 26 Days
Current position of firm at market place. 20 to 25 Days
Written documents designed by Retail firm. 22 Days
Effective evolution of plan and policies. 18 Days
Rewriting of business plans. 30 Days
1.2 Analyse the factors that Aldi will have to be consider when formulating their strategic plans
There are different types of factors which company need to considered while making and
formulating strategy plans. While formulating there are issues which need to be address. These
factors are having large impact on strategic planning. There are steps that are useful to formulate
strategic planning (Annabi and McGann, 2013). These steps are given below.
 The first effective tools in strategic planning is SWOT analysis. This tools helps to
identify company to know their strength and weakness. By this firm can do internal
audit. SWOT refers to strength, weakness, opportunities, threats. By this business unit
helps to know who are the competitor in market which are selling same kind of products
and opportunities which enterprise is having for their future aspect.
 The next is PESTLE model which can be used to formulate strategy planning. By
enterprise know about external factors which affects business. The external audit can be
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done by this model. In this all external factors such as political, social, economic,
technological, legal and environment are mention. This factors can have positive and
negative impact on business operation (Astrachan, 2010).
 The third stage where both SWOT and PESTLE are taken into consideration. This help
to identify the current position of market and challenges which are faced by enterprises.
 In final stage the budget need to prepare and tools which are going to use to implement
the plans.
There are various kind of challenges which company is facing while making strategic
planning. By this company progress can be decreases. So these factors need to address properly.
There are internal and external factor. Internal factor refers to those which are under control of
organisation. These took inside the enterprise such as structure of enterprise, employees
behaviour, shareholders, leadership styles, management etc. by this firm success and failure can
be decided. On the other hand, there are external factors which also have great impact on
business unit. These are not controllable by the firm. Regarding to this firm made different
various policies and plans. These includes nature, climate, legal rules and regulation, economic
conditions and others. In context to case Aldi is also facing many challenges related to external
environs (Azar, 2011). For example, inflation in which prices of product and services are
increases and demand goes down. There are many other rules and regulations govern by
government of particular country by this business unit need to change their standards and
policies. Social factors related to values, belief and norms of the people which influence their
buying behaviour by this demand and supply fluctuate.
Business firm need to look after environmental factors they have to produce their goods
and services in a manner by which there is no harm on environs. All goods should be produce in
eco-friendly manner. By this way they can overcome by these challenges and get success.
There are various factors that are needs to be considered by Aldi in order to formulating strategic
plan, in which some elements are described as below:
Future Targets: Each business organisation is concern on creating some future targets which are
required by firm to attain them in efficient manner as to reaching at higher position at market
place. These are valuable in accumulating final output and result at work place.
Financial aspects: This can be considered as the most effective elements as it helps in
implementing organisational activities into proper action. It is necessary for firm to maintain
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proper flow of funds and capital as each and every activity are based on some cost, so this is the
most essential part of strategic plan. As a large business organisation Aldi has huge amount of
capital in respect to organise all activities in effective and efficient manner.
Customers: These can be considered as the king of market as each and every activity of firm are
based on the new and changing needs and wants of customers at market place. These are
essential factor as organisations are concern on producing goods and services as per the neds and
wants of targeted market which helps in maximising organisational performance.
Communication: It is important for each and every sort of organisation to implement an open
conversation session within company which create value in sharing data and information at work
place. This also helps in resolving the issues and conflicts that are arises at work place though
conducting an effective communication process among different department of firm.
1.3 Evaluate the worth or usefulness of techniques used by businesses develop their strategies
Business unit use different kind of techniques so that they can formed and develop their
strategy effectively. There are advantage and disadvantage of these model. In this report the
suitable technique which is adopted is BCG matrix. In this model there are four different kind of
situation which Aldi is facing (Bharadwaj and et. al, 2013). Following is the BCG model of Aldi.
 Stars: This is the first kind kind of situation which firm can be face that is starts. In this
firm is having large market share and large market growth. Enterprise need to take
appropriate decision to sustain in market for longer run.
 Question mark: In this situation firm products are having large growth but the market is
not high. It can indicate risk for company as they can lose whole market share. So Aldi
need to try to introduce new product in market to increase market share.
 Cows: This situation reflects high market share but low growth. In this firm is earning
good revenues and they need to concentrate on product growth by investing on it.
 Dog: In this situation both market share and growth is low. The product of company is
not earning any profits. In this situation firm need diversify their business in which new
product can be offered to new market.
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Following are the few of advantage and disadvantage of BCG matrix.
Advantage:
 It helps firm to understand when they need to invest
 BCG is simple model to follow
 It can help firm to take decision regarding future
 By this enterprise can know when they need to focus on new business
Disadvantage:
 The success of company is not only depending upon market share and growth even other
factors are also there (Boies, Lvina and Martens, 2011).
 By this model it is difficult to find data about market share and growth
 There is situation in dogs are earning more money than Cows.
 Sometimes products in low market share are earning good amount of profits The term market is not clearly defined in this model
Ansoff matrix
Market penetration This is one of the most and suitable approach in order to increase
customer base and revenue in an effective manner. ALDI required to
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relaunch its product in a regular basis with the key modification. It
will lead to increase customer satiation.
Market development There is various emerging market such as India and China which can
provide enough opportunity to maintain its market share and position
in the market.
Product development ALDI required to conduct market survey and introduced new
product in the market which can provide sustainable growth in the
longer run.
Diversification In this approach top management needs to identity new scope of
their business which helps to maintain their market share as
compared to its competitors.
2.1 Carry out an organisational audit for ALDI
In this company audit the internal factors which are occur inside the firm. This audit can
be conducted by SWOT analysis. This model help enterprise to know about their strength,
weakness, opportunities and threats. By this Aldi can know their position in market. By this Aldi
can take their major decisions. Following is the SWOT analysis of Aldi.
Strength  ALDI have more than 2500 store across UK which provide competitive
position in the market.
 ALDI have an effective supply chain management which help
minimise operational cost.
 This enterprise also operates their business in other countries such as
Germany, France, Denmark, India, China and so on.
 As the company is having large number of customers who are regularly
buying the products and services of firm and creating vale in
companies growth and profit. This is the major strength of firm.
Weakness  ALDI is not large as compare to other firms.
 The product quality is not good as compare to other business
organization.
 As a large super market chain company is having large number of
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competition at market place, this can be evaluated as the major
weakness of firm.
 As the company has their outlets and stores in limited areas so they are
not able to satisfying the needs and wants of customers who are
belongs to different geographical area.
Opportunities  There is various emerging market in Asia which can provide long term
growth to them.
 The firm is required to diversify their business in to the other sectors in
order to sustain their market share.
 Aldi is concern on expanding their business activities at large scale
which helps in creating various job opportunities for people.
Threats  The global economic slowdown having a negative impact on the
growth of ALDI in the longer run.
 Values of rough materials is enhanced that has a huge impact on
revenues of company.
 High competition cause low productivity and performance at market
place.
These are some of the strengths and weakness of firm that they need to look after
properly and take action accordingly (Chang and Graham, 2012). Aldi can take advantage of
their strength while making any decision and make policies so that weakness can properly
address on time.
Company has their own standard and according to this they follows some rules and
regulation in order to attaining higher position at market place. Aldi is concern on applying the
method of benchmarking as it is effective in adoption of various strategies that are used by rivals
in respect to providing high range of competition at market place. Company is widely applying
the policies of their rivals in respect to attaining higher competitive advantage.
2.2 Carry out an environmental audit for ALDI showing both micro and macro environment
Environment audit can be done by firm to know and have better understanding about
external factors which may have great influence on business. When company is launching new
product or expanding its market they need to look after these factors. This report porters five
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force model has been used to conduct external environment audit. Porter five force model of Aldi
as follows.
 Threats of new entrants: There are many competitor and player in grocery industry. So
this factor is very important to considered (Firnkorn and Müller, 2012). In this one player
can easily copy the products and also adopt same strategy as their competitors are
following. Aldi is having competitor in UK market like walmart, Tesco, Asda and others.
In UK there are obligation by which new entrance cannot take place.
 Threats of substitutions: The threat of substitution is very high as customer can find same
products easily (Gandolfi and Hansson, 2010). Customer shift to other brands if they are
not getting products in Aldi. Aldi is having Advantage because consumers are having
mindset that Aldi is providing good quality of products in lower prices. By this switching
cost can be lower.
 Bargaining power of supplier: The bargaining power of suppliers are low because Aldi is
one of the famous and well known company. There are many suppliers available to
provide good quality of raw material to these companies. Aldi is having number options
by which they get their material in cheaper prices.
 Bargaining power of buyers: As there switching cost is high the bargaining power of
buyer is moderate. Buyer can go for any brand according to their needs and wants. There
are many grocery retails in UK. Where buyer get number of products which are available
with the companies. In this Aldi is having an advantage because many customers are
brand loyal because they think this brand can provide them goods in good quality and in
lesser prices.
 Competitive rivalry: As there are many competitors in the market like Sainsbury, Tesco,
Asda and others. Because of this competitive rivalry is very high in this sector. There are
many other companies those who provide same kind of products. So Aldi need to
promote and advertise its product more so that they can generate awareness among
customers about their goods (Gollakota, Gupta and Bork, 2010).
2.3 The significance of stake holder’s analysis while preparing new strategies
Stakeholders are important part of an organisation. Every enterprise ensure that they
satisfied their stake holders because they can determine company success and failure.
Stakeholder includes employees, customers, government, suppliers, media and others. In this to
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analyse stake holders stake holders matrix has been discussed. By this firm can identify the
important members which support in business activities. Following are the importance of stake
holder analysis while formulating new strategy.
 Important opinion can be get by stake holders.
 Stake holder can provide powerful support to company.
 Communication can help to understand stake holder nature and their requirements
 By this company can observe the reaction of people for their company.
Following are steps which need to be followed to conduct stakeholder analysis.
 Step 1: In this business find out the persons those who are very important and because
of them business get affected.
 Steps 2: Next step company find out the interest, power and their influence on business
activities. Aldi prepare stake holders grid to have better understanding. High power and
interest stakeholders make great efforts to promote the product. These stake holders are
satisfied with the strategies of company. The stake holders those who having low
interest they get bored early with firm (Haley, Haley and Tan, 2011). Low power and
high interest stake holders need to inform regularly as they can help firm. The stake
holders those who are having low interest and low power they do not influence on
business and make minimum efforts.
 Step 3: It is final step where company try to develop good understanding about stake
holders by choosing the most important stake holders. Firm can take feedbacks and
support for these stakeholders.
By this it can said that every stake holder is having their own importance. According to
this firm formulate different strategies and plans. Different stake holders are having their own
roles and responsibility in firm. These are pillars of business organisation. If business unit
manage these stake holders properly they can get success in their strategy plan.
2.4 Using the research and information collected about ALDI, present a new strategy
Aldi needs to increase their product range because they are only selling their own brands
product. Because of this the sales comes down. So Aldi decided to sell other local brands also so
that various range of products and services can be avail by company. The firm wants to expand
their business and gain competitive advantage for this they are doing new market development.
In which they are trying to sell old products in new markets. Aldi is trying to reduce their
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