Aldi's Business Strategy: Analysis, Audit, and Implementation Plan

This report provides a comprehensive analysis of Aldi's business strategy, covering various aspects from formulation to implementation. It begins by assessing how Aldi's missions, visions, objectives, goals, and core competencies inform its strategic planning. The report analyzes factors Aldi considers while formulating its strategy and evaluates the effectiveness of techniques like the BCG matrix and PIMS. An organizational audit, including a SWOT analysis, and an environmental audit, encompassing both micro and macro environments (PESTLE), are conducted to determine Aldi's current strategic position. The significance of stakeholder analysis in formulating new strategies is assessed, leading to the presentation of a new strategy for Aldi, including market analysis and growth considerations. Finally, the report delves into strategic implementation, assessing roles, responsibilities, resource requirements, and the use of SMART targets to achieve strategic objectives. This document is available on Desklib, where students can find a wealth of solved assignments and study resources.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
a) Provide an assessment of the extent to which Aldi’s missions, visions, objectives, goals,
core competencies inform strategic planning..............................................................................1
(b)Analyse the factors to be considered by Aldi while formulating its strategy.........................4
(c) Evaluate the effectiveness of techniques used when developing strategic business plans.. . .5
(d)Carry out an organizational audit for ALDI and provide an analysis of their current strategic
position........................................................................................................................................7
(e)Carry out an environmental audit for ALDI showing both micro and macro environment....9
(f) Assess the significance of stakeholder analysis for ALDI when formulating new strategy.
Explain why stakeholder analysis is important when formulating a new strategy and support
the answer with justifiable reasons............................................................................................12
(g) Using the research and information collected about ALDI, present a new strategy ALDI
can follow..................................................................................................................................14
(a) Identify a market (new or existing) and analyze the appropriateness of suitable strategy for
ALDI in relation to substantive growth, limited growth or retrenchment. You will need to
make a case for at least one of the three strategies mentioned..................................................16
Part 3 – Strategic Implementation.................................................................................................18
(a)Assessment of roles and responsibilities involved in implementation of strategy................18
(b) Provide an analysis of the resource requirements for the implementation of the strategy.. 18
(c) Evaluate how the use of SMART targets (give examples) can contribute to achieving the
strategic objectives.....................................................................................................................19
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................22

LIST OF TABLES
Table 1: SWOT of Aldi...................................................................................................................8

LIST OF FIGURES
Figure 1: Strategic planning cycle...................................................................................................1
Figure 2: Organisational objective planning....................................................................................3
Figure 3: PESTLE analysis..............................................................................................................4
Figure 4: BCG matrix......................................................................................................................5
Figure 5: SWOT analysis of Aldi....................................................................................................8
Figure 6: Pestle factors....................................................................................................................9
Figure 7: Stakeholder analysis.......................................................................................................13

INTRODUCTION
What an organisation currently has in terms of position, value, sales and core competencies, what
the organisation wants to have in future, these are the questions that are really important to
analyse while planning the strategy and its implementation. Business strategy is something that
indicates the path to the organisation for achieving its goals and an appropriate strategy and its
proper implementation gives a strong position to the company in terms of market and name. In
this assignment the all related aspects regarding formulation, evaluation and implementation of
strategy is considered with the help of case study of Aldi.
1

Part 1 evaluating the strategy
a) Provide an assessment of the extent to which Aldi’s missions, visions, objectives, goals, core
competencies inform strategic planning.
Figure 1: Strategic planning cycle
(Source: Framework for strategic planning, 2018)
Strategic planning – it is the process of searching out the future with its current resources and
the planning of those resources in the way so these can be utilized in appropriate and correct
manner to achieve the final goal of the organisation with growth.
Mission – mission statement provides the reason behind the existence of the company with the
purpose of the company. It can be defined as overall purpose of having current capabilities of the
company with the help of those capabilities the company serves as Aldi’s mission statement is
just one liner as “Spent a little, Live a lot”, but it shows its capability to serve more with fewer
prices (Christopher, 2016).
Vision – Aldi’s vision statement as ‘Top quality at incredibly low prices- Guaranteed” puts
emphasis on its promise to offer the good quality in low price in future with surety it can be
1

defined that the vision statement is the reflection of the company’s future intention in simple
words it defines what an organisation is intending to be in its future with its future capabilities.
The vision statement must be effective in terms of giving clear picture about company’s
intention.
Core competencies – these are the expertise of the company which distinguishes this company
from other companies. It differentiates the company’s capabilities or functioning from the other
organisations. Core competencies can be the most powerful reason to be successful in the market
for any company (Eisingerich et.al.2016). In case of Aldi its simplicity with the price strategy
makes its competitive over its competitors. Aldi mainly works on three principles and these
principles are its core competencies;
1. Simple structure
2. Low cost strategy
3. Commitment
Objectives – these are the short term missions of the company or it can be defined as directions
on which company can move for reaching its final goal or targets. Aldi has main objective its
growth and expansion which has some small short term missions that have to be achieved such
as;
 To work for huge savings
 To provide excellent quality
 Outstanding value offering
 Providing super special buy
 Explore buy with confidence thing
Goals – usually goals are similar to the objectives but the goals are made for long term.
2

Figure 2: Organisational objective planning
(Source: Organisational core elements, 2018)
Aldi’s main goal is to expand with its core values so Aldi makes its long term and short term
goals in order to achieve its final goal.
From above discussion it is clear that Aldi works on strategy planning according to two ideas
such as;
 Market oriented
 Sales oriented
Its market oriented strategy provides it a competency and ideas for development and expansion
according to the market and its sales oriented strategy makes it valuable and gives direction
towards the betterment of its products and services. As its vision, mission, goals, objectives and
core competencies are set according to its sales and market oriented strategy and provide a
framework for its growth strategy (Gassmann et.al. 2016). Aldi is really wants to expand its
market share as well as its stores in UK and other countries along with its discounted price with
better quality guarantee so its mission , vision, goals, objectives are really th reflection of its
strategy planning.
3

(b)Analyse the factors to be considered by Aldi while formulating its strategy.
Competition – it is very important factor while formulating any strategy as the completion gives
idea about the limitation of the efforts which an organisation is going to put. In other words for
future direction it is really important to know the completion level at existing market and new
market as well and then accordingly strategy will be formulated (Grünig and Kühn, 2015).
Customers – it is very crucial factor that needs to be considered because every organisation
ultimately works for the customer satisfaction so their choice and needs must be analysed while
formulating the new strategy (Grant, 2016).
Competitive advantage – Aldi’s competitive advantage such as its low pricing policy,
simplicity and efficient staff are very influence factors while formulating the strategy as the
strategy will be planned according to the skill level of its employee and the resources and
qualities which Aldi has.
PEST- these are the various factors which collectively represent the macro environment and
very important to be considered while making a new strategy for Aldi. It includes;
Figure 3: PESTLE analysis
 Political
 Economical
4

 Social
 Technological
These are very important factors as the variations in these affect the business in very broad
manner.
(c) Evaluate the effectiveness of techniques used when developing strategic business plans.
BCG matrix and PIMS are very effective techniques while framing or developing the strategies.
These techniques help to analyse the organisational situation and according to that strategy can
be developed.
BCG matrix;
Figure 4: BCG matrix
(Source: Framework for selection market strategy, 2018)
BCG growth matrix is defined as process to place the products and stock keeping units of the
company under four categories;
5

Stars – this sign denotes the situation of market growth or the sign of high product market share.
Apart from that this sign shows the investment idea of the money towards the product as it is the
development situation (Whitehead, 2015).
Question mark – this sign shows the situation of low market share of the products and market
growth is high. This position gives need to check or control the entire operations as it is the loss
situation.
Dogs – this situation denotes the low market share and also low market growth, in this situation a
company should opt for new scope for existing.
Cash cows – when the market share is high but the market growth is low for the product so it can
be work as revenue generation ideas.
Advantages of BCG matrix;
 Easy and simple technique as application
 Provides clarification of every states
 Products can be categorised under the every kind of categories
 It provides investment and divestment ideas according to product categorisation
according to the four headings that are easy to understand (Jenkins and Williamson,
2015).
Disadvantages of BCG;
 It does not consider the smaller companies growth in growing market.
 It gives assumption of the accuracy which can be inaccurate sometimes.
 It is more dependent on the market share and growth and less consideration is given to
product development and other market scope.
PIMS – personal information management system as its name suggests it is an information
system in the form of database which possess the information and data which is collected
through several companies whether it is government or non government. In Aldi PIMS is used to
obtain information regarding the effectiveness of some strategic view to support its strategy
analysis (Kletti and Deisenroth, 2018).
Advantages of PIMS;
6

 It helps to provide detail evaluation of various factors which gives contribution and
estimating their impacts on current scenario.
 It provides statistical data and facts
 It is helpful to understand different perspective with different result for different
companies.
Disadvantages of PIMS;
 It provides historical evidence.
 The past situation of market and its factors influence cannot be considered as same as in
the current situation.
(d)Carry out an organizational audit for ALDI and provide an analysis of their current strategic
position.
Organisational audit is the internal and external analysis and internal analysis is known as SWOT
that helps to assess the Strengths, Weakness, Opportunities and Threats for the organisation.
SWOT for Aldi;
7