Strategic Analysis of ALDI: Market Entry and Growth Strategies

This report provides a comprehensive analysis of ALDI's business strategy. It begins by examining ALDI's mission, vision, objectives, goals, and core competencies, highlighting how these elements contribute to its strategic planning. The report then explores factors crucial for formulating strategic plans, including employee engagement, communication, innovation, project management, and organizational culture. A significant portion of the report is dedicated to organizational and environmental audits, employing SWOT analysis and Porter's Five Forces model to assess ALDI's current strategic position within the competitive landscape. The report also delves into the usefulness of techniques like BCG matrix and PIMS in developing strategic plans. Furthermore, it identifies market entry and growth strategies for ALDI and outlines the roles and responsibilities of employees in strategy implementation, resource requirements, and SMART targets. In conclusion, the report offers insights into ALDI's strategic planning, market analysis, and future growth prospects.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
a) Mission, vision, objectives, goals, core competencies of ALDI in strategic planning...........1
c) The factors that Aldi will consider while formulating their strategic.....................................2
plans...........................................................................................................................................2
(d) Usefulness of different techniques that are used to develop strategic plans.........................3
(e) Organisational audit for assessing current strategic position ...............................................4
(f) Environmental audit for ALDI with micro and macro environment.....................................5
(g) Significance of stakeholders for the organisation with formulating new strategy................7
(h) New strategy for ALDI .........................................................................................................8
TASK 2............................................................................................................................................9
(a) Identify market and analysis suitable strategy for ALDI.......................................................9
(b) Justification of one strategy for market entry and growth...................................................10
TASK 3..........................................................................................................................................11
(a) Assessment of the roles and responsibility of employees that involved for implementation
of strategy..................................................................................................................................11
(b) Analysis of resource requirement for implementation of strategy......................................12
(c) SMART targets to achieve strategic position......................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

Illustration Index
Illustration 1: Porter's five forces model..........................................................................................6
Illustration 2: New strategy elements..............................................................................................8
Illustration 3: SMART objective...................................................................................................13

INTRODUCTION
Aldi is well known supermarket with over 10,000 stores in different countries. Aldi
believed in the concept that good quality products can also be made available at low prices. Aldi
was founded in 1913 and it has achieved continuous growth by establishing a unique position in
Germany (ALDI, 2017). The main motive of Aldi is to fulfil basic needs of customers of best
quality at lower price.
This report tries to analyse the mission, vision, objectives, goals and core competencies
of ALDI. It explains the factors that need to be considered while forming strategic plans for Aldi.
This report will introduce a new or existing market that can be analysed to provide substantial
growth within the organization. It will provide details about roles and responsibilities of each and
every person involved in implementation of staregic planning at Aldi. This report will analyse
the need of resources that are to be used in implementation of strategy and the concept of smart
can be used for meeting the strategic objective (De Massis and Kotlar, 2014).
TASK 1
a) Mission, vision, objectives, goals, core competencies of ALDI in strategic planning
Mission of Aldi
This statement defines the main motive of organization for being in the market or in
business and to sustain in the market in the same position for the upcoming time period. Mission
of Aldi is to provide its customers best quality products at much lower prices than its
competitors. They do not believe in the concept of providing great quality products at higher
prices (Papke-Shields and Boyer-Wright, 2017). In strategic planning, the mission of Aldi can be
used for producing qualityproducts at affordable prices.
Vision of Aldi
This statement focuses on where an organization wants to reach in future. Aldi have a
clear philosophy of business and various assisting guidelines. It believes in the concept of
providing great quality at lower cost. Aldi make use of 5 ideas to be clear with their goals like
savings are huge, quality is excellent and provide special buys (Rees and Smith, 2017.).
Organization of Aldi is a mixture of both market oriented and sales oriented organization. In
strategic planning, the vision of Aldi can focus on the ideas to enchance the sales of its products
in the market.
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Objective of Aldi
This will define the motive of Aldi organization. This will play an important role in
forming organization’s policies and determining the requirement of resources for the
organization. The main objective of Aldi is to enhance the share of market across various
countries. They also want that product should be of good quality in comparison with Heinz and
Fairy liquid. The objective of Aldi can be used in strategic planning by exploring and enhancing
the grocery market of Aldi across various countries (Banihabib,Hashemi and Shabestari, 2017).
Goals of Aldi
These goals are strategic implementation that is established by Aldi to outline the outcomes that
are expected and to assist the employees in their efforts and hard work. Aldi provide consistency,
simplicity and responsibility in the market place. In strategic planning, the goal of Aldi will be to
enchance the talent and skills of the employees so that they can increase the productivity of the
organization.
Core competencies of Aldi in strategic planning
The core competency of Aldi is its main attention on the prices. There are various, measures that
Aldi takes to ensure the same. They are as follows-: Strategy based on cost leadership- Aldi produces a less number of products, that are of
good quality and provide them at competitive price. They gain the status of leadership on
the basis of price that is provided to their customers.
 Paying attention on their own brand- Aldi try to focus on their own brands so that they
are not dependent on other brands in the market. They neglect high marketing price that
are related with national brands and to fix their own price, product policies (Van den
Berg and Russo, 2017).
c) The factors that Aldi will consider while formulating their strategic
plans
Various factors that Aldi consider while forming the strategic plans are as follows-:
Engagement
Planning of strategy is not an event but a process. An important factor in this process is
involvement of staff at all levels in the organization. Staff involvement at Aldi will take place by
providing an extra input and guiding the staff and assisting them in thei task. It is essential to
engaged the employees in strategic plans as employees input will give knowledge about internal
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problems, challenges and opportunities which are not fully understood. Input from employees
will help Aldi to grow rapidly in the market (Al Shobaki, Amuna and Naser, 2017).
Communication
Strategic planning is beneficial if the top and bottom up interaction approach is used. It
was started in Aldi by informing the employees regarding the strategic plan that will be taking
place. The employees working at Aldi can give their valuable inputs through focussed groups
meetings etc. with respect to their ideas for the growth of organization.
Innovation
Various strategic plans at Aldi may involve development of new product and services.
This lead to the innovation at Aldi. Many organization like Aldi ask their employees to be more
innovative in their ideas this will enhance the performance in the market and will lead to increase
in productivity.
Project management
The two factors are related to project management once the strategic plan is made. One is
to recognize the project that are needed to ensure success in execution of every strategy. Another
is to make sure that high priority project must have proper resources to make sure that they are
completed on time. This will need the full support and involvement of employees in the projects.
Culture
The culture of organization is dependent on employees’ attitudes, beliefs and their
behaviour at workplace (Wheelen and Hunger, 2017). The culture of Aldi is unique and diverse.
Employees working at Aldi thinks that the change is important and it is everyone's responsibility
to bring that change in the organization. This will lead Aldi to grow its market across boundaries
of UK.
(d) Usefulness of different techniques that are used to develop strategic plans
In order to develop strategic plan, effectiveness can be generated at workplace for
business development (Ready, Hill and Thomas, 2014). ALDI operate successfully to enhance
their profitability and quality of products that make positive impact on customer. In this context,
following certain techniques that used for developing strategic plans in business:
BCG matrix: BCG matrix is designed as the product portfolio that contain different factors and
elements. It includes following elements that assists to develop strategic plan:
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 Stars: Stars defines as growth of the organisation that can bring profitable outcomes in
ALDI. It assists to enhance high amount of cash that is required to operate more functions
and accomplish strong market share and high growth rate. When portfolio of diversified
organisation has stars, it will ensure cash generation in the future (Wheelen and Hunger,
2017). Cash cows: It exhibits return on assets that make high market growth rate. Therefore, it
assists to generate more cash which required to organisation to satisfy their customer in
successful manner (Pham, Pham and Pham, 2016). It provides cash that assists to ALDI
to cover their administrative costs within the organisation. In research and development
program, it assists to provide services to the corporate debt and pay dividend to
shareholders as well. Dogs: Dogs perceives low market share and growth rate that generate and consumer large
amount of cash. It also tied up with little potential to diversify the business and its
operations (Dobni, Klassen and Nelson, 2015).
 Question mark: Question mark rapidly growing and enhance customer base within the
enterprise. Due to low market share, they have not generated more cash. It is also known
as the problem child in ALDI which has the potential to gain high market share.
PIMS: It is classified as Profit Impact of Marketing Strategy which enhances competitive
advantages in business. It regulates different rules and regulations within the market. This
strategy defines long term objectives performance for strategic business unit in major retail
industry. It includes analysis of quality, pricing, vertical integration and innovation (McDowell,
Aaron and Harris, 2014).
(e) Organisational audit for assessing current strategic position
In order to analysis strategic position, ALDI is required to meet with its objectives and
goals in successful manner. In this context, SWOT analysis is conducted within the enterprise
which is explained under here:
Table 1: SWOT analysis
Strength Weaknesses
 ALDI Has efficient stores and
employees that operate successfully
 The selected enterprise never adopted
to take payment through credit cards.
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operations in business.
 The company has high brand value and
large extended network of several
branches (de Fátima Teles and de
Sousa, 2014) .
 Further, the company continues
expanding its operations and functions
in new market so that it helps to
enhance customer base.
 Due to low skilled staff members,
ALDI is not able to deal with large
number of customers during rush hours.
 Low advertisement and store promotion
hamper performance of the organisation
(Wheelen and Hunger, 2017).
Opportunities Threats
 With the help of high investment, in
advertisements the chosen business can
easily enhance profits through beat
competition.
 ALDI has also opportunity to expand
its operations to growing economies in
different areas such as Africa, Asia, etc.
 Aldi has several competitors, involved
in same business.
 Technology also creating operational
complexities (Sarstedt, Ringle and Hair,
2014).
 Due to changes in customer habits and
preferences, threats also occur for the
organisation.
(f) Environmental audit for ALDI with micro and macro environment
In respect to analysis external audit, ALDI need to identify impact of micro and macro
within the enterprise. With the help of Porter's five forced model, micro and macro environment
can be assessed in market.
Porter five forces model
ALDI offers different types of products and services at minimum rate and effective
quality. Stores of the organisation and its customers continuously increasing with passage of time
(Papagiannakis, Voudouris and Lioukas, 2014). Competitive rivalry (High): Due to low cost and effective product quality, competitors
performances can be impact highly within the enterprise (De Massis and Kotlar, 2014).
Entery of new competitors such as Lidl, Netto, Kwiksave, etc, can create threat to ALDI.
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 Threat of new entry (Medium): The chosen organisation has many competitors exist such
as TESCO, ASDA, etc. Therefore, they have to face high competition of market due to
existence of these supermarket firms (Lipitakis and Phillips, 2016). Due to existing firms
competition, ALDI need to determines high quality and unique features in products and
services. Threat of substitutes (High): There is high threat of various substitute products existing in
market. ALDI have no special products and services so that it can be found at different
stores. Thus, it reduces customer base due to availability of same products in different
organisation (Ready, Hill and Thomas, 2014). Buyer power (Medium): In retail sector of business, there is intense competition. Thus,
ALDI need to offers price that is quite high as per customer choice to choose from the
other store. In addition to this, customer can also exercise their power to keep price
according to product value (Pham, Pham and Pham, 2016).
 Supplier power (Low): Suppliers of the country not easily agree with pricing of ALDI so
that the organisation need to switch another supplier chain.
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Illustration 1: Porter's five forces model
Source: (Porter’s Five Forces of Competitive Position Analysis, 2017)

(g) Significance of stakeholders for the organisation with formulating new strategy
Stakeholders play very important to formulate new strategy and marketing plan in
successful aspect. Stakeholders analysis consists review and considerations of the impact on
business performance of ALDI. The chosen organisation need to understand interest of each
person and strategy as well to address business practices in environment (Dobni, Klassen and
Nelson, 2015). In respect to understand significance, following elements need to be classified in
business practices:
 Marketing strategies: When the selected enterprise develop marketing strategies, they
have to give careful consideration towards customers. In this aspect, each stakeholder
required to being honest, transparent and fair in communication with each other
(McDowell, Aaron and Harris, 2014). In addition to this, proper interaction also needed
at workplace towards customers that is basic expectations of buyers. Conducting market
research is very important part of ALDI for their marketing techniques to learn about
needs and motives. Product development and promotion largely influence through
research findings to create significant credence to customer in stakeholder analysis (de
Fátima Teles and de Sousa, 2014) .
 Motivating employees: In order to analysis role, employee of the enterprise also helps in
satisfying customer and production as well. Long term consideration includes turnover
and morale to satisfy each person within the enterprise. ALDI required to understand
needs and interest of stakeholder within the organisation. It assists to motivate people for
accomplish goals and objectives of the chosen firm. Further, the organisation also
required to monitor employment laws that is related to hiring, promotions and fair
practices which helps to meet with legal obligations and remove non discrimination from
the workplace (Sarstedt, Ringle and Hair, 2014).
 Corporate citizenship: In addition to this, another significant can be demonstrate as
corporate citizenship which helps to balancing basic social and community
responsibilities with profits. In this way, leaders of ALDI required to operate honesty and
integrity to create favourable image. Being actively involved in community events also
helpful to become entrenched as integral members of communities (Papagiannakis,
Voudouris and Lioukas, 2014).
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(h) New strategy for ALDI
In respect to implement new strategy, ALDI can determine their focus on differentiation.
In this way, customer satisfaction is the most important aspect which created through using
criteria of customer when they buying product and services. The company charging
differentiated products over the competitor's product. Main target of the chosen enterprise is to
focus on middle class (Williams, 2014).
Mission of ALDI
ALDI is the only retailer who provide grocery products at low price. Their mission is to
make successful attributes yo commit and build efficiency at each level in term of construction,
distribution, etc. (Grant, 2016).
Vision of ALDI
The chosen enterprise has vision to shows successful operations which can be reinvented
to maximize quality of products and services.
Value of ALDI
Value of the organisation is depends on consistency, simplicity and responsibility.
Consistency leads to reliability which assists to make consistent operations to deal with product,
price, people and many aspects in day to day operations (De Massis and Kotlar, 2014).
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Illustration 2: New strategy elements

TASK 2
(a) Identify market and analysis suitable strategy for ALDI
In order to develop market and profits, there are different types of strategies exist that
assists to make effective results within the organisation. They are as follows:
Market entry strategy:
Market entry strategy for ALDI has various options to enter different market to operate
their functions and operations. With the help of development programs, there are several
operations can be grows to make positive results (Wheelen and Hunger, 2017). With the help of
following strategies, operations can be established in different areas:
 Merger: Merger is the effective strategy which assists to chosen organisation to merge
their operations with other organisation. In this way, profitable outcomes can be made
with demonstrate several elements such as people, resources, etc. (Lipitakis and Phillips,
2016). Acquisition: Acquisition is the another important strategy which can be determines
through acquire one enterprise by another organisation. This will be helpful to make
profitable results in business environment of ALDI.
 Strategic alliance: Strategic alliance considered when two or more than two enterprises
operate functions jointly with using liabilities and assets. It aids to enhance business
results and outcomes within the selected enterprise (Ready, Hill and Thomas, 2014).
Substantive growth:
It is the another suitable strategy to ALDI in respect to grow their operations and
functions with effective performances. In this aspect, following elements can be implemented at
workplace of the chosen enterprise: Related diversification: When ALDI diversify their operations and functions in existing
line of goods, it can be define as related diversification. Unrelated diversification: Unrelated diversification can be determines as operate new
function and apart from existing line. In this aspect, the chosen enterprise will easily
accomplish their goals and objectives to meet with targets and outcomes (Pham, Pham
and Pham, 2016).
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