Business Strategy Report: ALDI's Strategic Position and Growth

This report provides a comprehensive analysis of ALDI's business strategy, starting with an examination of its mission, vision, goals, and core competencies. It delves into the factors influencing strategic planning, including internal and external environments, and evaluates these factors using techniques such as SWOT analysis and BCG matrix. The report conducts organizational and environmental audits, assessing ALDI's current strategic position and the micro and macro environmental factors affecting its operations. Furthermore, it explores the significance of stakeholder analysis in formulating new strategies and proposes a new strategic direction for ALDI. The report also examines strategies for sustainable growth, market entry, and growth justification, along with the roles and responsibilities of personnel and the resources required for strategy implementation, including SMART targets. The report provides a detailed overview of ALDI's strategic landscape.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................1
1.1 Assessment for ALDI mission, vision, goals and core competency................................1
1.2Analyse the factors while dealing with several situations.................................................2
1.3 Various techniques in term of strategic plan evaluation..................................................3
TASK 2............................................................................................................................................5
2.1 Organisational Audit for Aldi and provide an analysis of their current strategic position.5
2.2 Environmental audit for ALDI showing both micro and macro environment.................6
2.3 Significance of stakeholder analysis for ALDI when formulating new strategy.............7
2.4 Research and information collected about ALDI, present a new strategy ALDI can follow.
................................................................................................................................................8
TASK 3............................................................................................................................................9
3.1 Aldi strategy for sustainable growth, limited growth or retrenchment............................9
3.2 Justify the strategies of market entry and growth...........................................................10
TASK 4..........................................................................................................................................11
4.1 Roles and Responsibilities of personnel.........................................................................11
4.2 Resource required for the implementation of the strategy.............................................11
4.3 SMART Target ..............................................................................................................12
CONCLUSION.............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy means to formulate, implement and evaluate the decisions related to
functional activities of an organisation which help in achieving the long and short term goals or
objectives. The business strategy creates direction for the organisation as per which it has run the
business (Ackermann and Audretsch, 2013). It helps company to evaluate the clear goals to
business. Aldi is a food retail industry which is a highly popular market. The firm provides high
quality products to their customers at lower price rate. This assessment will be discussing about
vision, mission, goals and objectives of the firm. After that will be developed an effective
strategy, with the help of that systematically will be achieve sustainable objectives of the firm.
For properly analyse and evaluate major factors and issues, BCG matrix will be used in this
research project as well as SWOT will be adopt for determine current position and status of
ALDI.

TASK 1
1.1 Extent to which ALDI’s mission, vision, objectives, goals and core competencies inform
strategic planning
All organisations set their own long and short term objectives and goals, which
wants to be effectively achieve in future, with the help of smart techniques and methods. While
developing strategies and approaches in ALDI. It helps to develop a healthy environment at
workplace. Most of the organisations are already set their mission, vision, goals and core
competency (Acquaah, 2013). These are assists to develop an appropriate framework for
achieving set targets in a systematic way. Along with this, ALDI is one of the largest grocery
stores in UK that supply better and effective quality of products and goods to customers as per
their requirements. Employers of this company will be formulate an effective plan, in which has
to be mention their mission and vision. Core competency refers to, identify company's working
system and product's quality, with the assist of this easily differentiate from others. Hence, there
will be describe company's mission and vision in appropriate manner:
Vision: It refers to long term goals of ALDI, which employers want to achieve in the
future. According to ALDI's vision, employers of this enterprise wants to be introduce new and
innovative product at competitive marketplace. This concept plays important role in any kind of
organisation because with the help of this company will effectively improve profitability in
appropriate manner (Armstrong and et. al., 2011).
Mission: Mission is a concept which aids to provide guidelines and directions to achieve
the vision of ALDI. As per mission of this company, wants to be provide better quality of
products and services to customers. It assists to set brand image in external environment and take
consumer's faith towards company and their services.
Objectives: These are mainly two types in nature such as long and short term objectives.
Behind setting these objectives by the organisation is the major target, to survive for long time
period in market place with high number of competition. To effectively achieve all company's
objectives, smart methods and techniques will be used in organisation. (Bentley, Omer and
Sharp, 2013).

Goals: On the basis of this concept, this company have major goal is want to become a
leading and largest retail company in all over the world. This is carried out as their goals which
wants to be achieve as soon possible.
Core competency: This is an effective statement which assists to identify actual working
system and product's quality. With the help of this, effectively differentiate from others. Hence,
in the context of ALDI company, sell their products at low cost with better quality. This
company's of core competency plays an important role in increasing profitability.
1.2 Analysing the factors to be considered while formulating strategic plans
For effectively dealing with different situations of company, so have to be develop a plan.
In the plan should be clarify and mention all necessary things in effective manner. This can be
consider as an planning process, which assists to examine important facts in appropriate manner,
that might be affecting on business's working environment. This is the reason; it is essential to
identify and evaluate all major factors and issues as with the help of this, strategy can be
formulated easily and effectively. Factors are mainly divided into two parts such as internal and
external (Bharadwaj and et. al., 2013). Internals factors include employees, directors, company's
objectives and so more. ALDI has high market growth as compared with others. This
organisation of market share increase with 19.8%, whereas their competitors only raise 1.6%. In
this situation, employers of the ALDI company have to be use appropriate approach and strategy.
This assists to improve growth level of enterprise in effective manner. There will be explain
different internal factors which are all stated under follows:
 Internal factors: These factors are mainly related with internal environment of
organisation. It includes employees, employers, objectives, goals and so more. As per the
context of ALDI, if management does not understand employee’s needs and their
problems then it can lead to critical situations like strikes. These types of situations
negatively impact on organisation as well as create a negative image in the front of their
customers.
 External factors: There will be discussing about different types of external
factors, which all are directly impacting on organisation firm. It includes political,
technological, economic and social factors. A basic linkage among these factors and
company, will be explain under following, with the help of this company will effectively
formulate a better plan.

 Political: For effectively managing and controlling all business firms, government of the
country regulates some rules and regulations which have to be followed by the firms.
Basically, management has to be find out suitable and effective working environment.
 Technological: According to cited company, have to be upgrade and modify their
existing technologies. Basically, in the organisation should be used new and innovative
technologies for completing task. With the help of them systematically achieve
company's goals and objectives in appropriate manner. (Blackburn, Hart and Wainwright,
2013).
 Economical: Managers of ALDI should be set products and goods pricing as per their
country's economical condition. If in a particular country has exchange rate is high, then
they have to be formulate strategies and approach according to the specific issue.
 Social: It should be considered, organisation's services and products should not be
harmful for society. For example: ALDI sells grocery products to customers that should
be boycott harmful products and goods from company. Along with this, all these factors
are influence on organisation and their working system, that's why all factors should be
properly evaluate and analyse in effective manner.
1.3 Various techniques in term of strategic plan evaluation
Strategies plays important role in organisation, which assists to accomplish goals and
objectives of cited firm in effective manner. This helps to improve working capabilities of
employees and leads to create healthy and positive image in external market place and customer's
mind. Basically, in this concept has includes mainly two methods such as BCG matrix and
SWOT analysis.
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Illustration 1: BCG Matrix
(Source: Using the BCG matrix for effective portfolio management, 2017)
BCG matrix involves two axis in which one is related to market share and another one is
growth rate. In this method, different types of products and goods are divided into four parts such
as star, cash cow, dogs and question mark.
 Star: These types of products have high market share and growth rate. Also, these kinds
of goods are more able to earn higher profit as compared with others. These products do
not need to conduct any promotional activities as they already set an effective brand
image in the external market place.
 Cash cow: These products and goods have high market share but low growth rate. For
earning higher profit from the market, then should be spend fund in these goods. But
there are less chances to get high growth rates. Hence, in case of ALDI, this is already set
an effective image marketplace. There employers can effectively identify several form of
market for earn profit.
 Dog: These types of goods of organisation have low market share and growth rate as
compared with others. Thus, in this situation, company is not able to earn profit from the
market. Hence, in context of this, firm should identify new market to launch their
products.
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 Question mark: These types of products have less market share but high growth rate as
compared with others. Due to this, company should invest fund in these kinds of market
as there are high number of chances to earn profit (rover and Kohli, 2013).
TASK 2
2.1 Organisational audit for Aldi and analysis of their current strategic position
Organisational audit is a process which is created to assist an organisation in developing
its activities or operations by identifying the strengths and weaknesses of company to achieve its
target. It helps the firm to create its objectives by bringing a systematic approach and developing
effectiveness to manage risk and control governance process. Company has a positive brand
image among customers for its quality, price and service. The present internal, economic and
financial position of the organisation are quite good. Main aim is to provide quality services to
all class of people in the society. They only invest their money in huge amount for the product
development. Their main objective is to attain organisational goals in an effective manner.
SWOT analysis of AldiSwot analysis is the study of organisation’s strengths, weaknesses,
opportunities and threats. For ALDI, it is given as below:
Strengths (S) -. The company serves top class products to their customers at low prices.
They have a strong presence in Germany with over 2500 stores at low operating costs.
Weaknesses (W) - The Aldi relatively still small to their competitors brands. They have
a few chain stores in international market which having an adverse impact on the profit.
Sometime, employees of the business entity provides the low quality products and services to the
consumers which having an adverse impact of the brand image of the firm in the competitive
market.
Opportunities (O) - Opportunities is time or set situation that make possible to do
something and achieve something which they want. The company need to invest in high income
profit. They need to increase their promotional activities which help to attract a large number of
customers. Company can expand in international market to gain more growth and success.
Threats (T) - The threat is a intention to create damages as well as inflict pain, hostile
action on someone for doing something. The industry can may cater the shoppers who are
looking for a “ complete shopping experience”. The Aldi private label brands which can
establish other brands for competition (Haley and Haley, 2013).
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2.2 Environmental audit for ALDI showing both micro and macro environment
The environmental audit is a tool for measuring the effect of various activities on
environment against set criteria or standard. There are majorly two factors in the environment i.e.
Macro and Micro.
Macro environment- It is the condition which exists in large number of society. It
involves the Gross domestic Product(GDP), inflation, employment and monetary or fiscal policy
and this having an impact on an economy. Macro environment includes many some which affect
the business. Some of the factors in macro environment affecting ALDI are:
1. Demographic- This includes culture, region, education, ethics and household lifestyle
which segment the market in different categories.
2. Economic- In this environment, company must match this factor with the production and
customer satisfaction. It directly put an impact on organisation’s production and customer
decision.
3. Technology- The technology should be upgraded and firm should use the latest one
which increases the productivity otherwise, it directly affects the smooth functioning of
business activities.
4. Social and culture- The organisation should scan social environment and then they have
to adopt new culture and fashion with the choice of the customer. They can introduce
new product.
Micro Environment- It is the environment which exist for an individual person. There
are some factors :
1. Customer- The market is make for the customer and fulfil their needs and wants for their
expectation. Managers of Aldi have to do proper market research and identify the needs
and wants and on the basis of that they have to provide services so that they can provide
satisfaction and fulfil their demand so that they can attract large number of consumers.
2. Supplier- They supply products and item to the organisation with best quality and
quantity which attract more customers. They have to take material for making the
products and services which will aid in attaining their goals and objectives.
3. Competitors- The competitor are those who produce same or similar type of products.
Manager of Aldi have to identify the strategies which the competitors is using and
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according to that they have to make strategy so that they can attain their targets among
their rivalries.
4. Public- The public means general people and company try to satisfy the public need and
complete their demand.
5. Intermediaries- They are middle person between company and consumer who give
products to the final customer (Jocovic and et. al., 2014).
PORTERS FIVE FORCES MODEL
1. Rivalry of competitors- The competitors are those who produce or make same type of
products and compete with similar company. Aldi offers minimum price product with
high quality. Their competitors are Netto, lidl, BI-LO and Kwiksave.
2. Threat of new entry- The company has many competitors like TESCO, ASDA, Save-A-
Lot, Penny market and Dia. They face competition with other existing companies. The
ALDI face threat of the entry in a new market.
3. Threat of substitution- They does not have any different product or service, that cannot
found in other market. The company's product are easily available in other shops. ALDI
can introduce different type of product for eliminating the threat of substitution.
4. Buyer power- The company face intense competition in retail world and ALDI offers
high price and consumer has the choice to choose from other store.
5. Supplier power- If the supplier cannot satisfy the price of the company, then they can
switch to the other supplier whose rate are minimum. ALDI can reduce their price for the
retention of the suppliers.
2.3 Significance of stakeholder analysis for ALDI when formulating new strategy
Stakeholder is a person with an interest or concern in something and he/she affected by
the company action and policies. The stakeholder analysis is important for business to evaluate
their strategy, policies and formulation. The Aldi need to understand the interest of their
stakeholder and how strategies are evaluated. The company gain support from influential
stakeholder and make successful project under their guidance. They should communicate with
stakeholder daily and early for making decision (Khalili Shavarini and et. al., 2013). They can
make better strategy and decision. There are some types of stakeholder they are describe below:
1. Suppliers-The supplier may become stakeholder because they want to confirm that both
of the items they want are delivered. They are the external stakeholder of the company.
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2. Creditors- The creditor may be stakeholder because organisation take loan to the bank
and banks hate doing is losing money and borrow money to cover their loss.
3. Government- The aldi wants to have significant shareholding which is owned by the
government. They may be stakeholder of private company because company want to
stable job and tax rate which are maintained by them. They are also external stakeholders
of the company.
4. Customer- Customer are the external stakeholders. They are also one of the type of
stakeholders which shows their interest in ensuring they get best customer service in the
future by the company if required.
2.4 Research and information collected about ALDI, present a new strategy ALDI can follow.
ALDI is the common brand of two leading global supermarket chains with over 10,000
stores cover 18 countries and its combine turnover of more than 50 billion. Their store are
located in Germany and it is founded by Karl and Theo Albrecht in 1946 which operates since
1913. In the month of October 2013, Aldi opened the 300 store in Great Britain (Klettner, Clarke
and Boersma, 2014).
VISION
The vision is the statement by which the qualities of an object constitute its appearance
which are perceived. The manifestation of an organisation. The vision of Aldi is to achieve mid
term objectives but in effective manner. Their long term vision is to facilitate the process of
economic transition and future development.
MISSION
The mission is an important for every organisation for the achievement of target goal. It
is a task or job that company must be achieve. The Aldi mission is to provide Bi H citizens the
participation in creation of environment for development of open society with independent
citizens.
VALUE
The value defines something which held to deserve the importance, usefulness and
essential of an organisation. The core value of Aldi are simplicity, consistency and responsibility.
For example Aldi stores are simple in designing and all stores are very similar or same which
create consistency
Strategic Planning of Aldi
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1.Analysis of the current state- The organisation can analyse the external and internal
environment. They adopt swot analysis to evaluate the organisation strength, weakness ,
opportunity and threat. The company should carefully analyse the external environment factors
such as power of supplier. power of buyer and entry of new competitors. In the current time
period, Aldi grow fast day by day and their sale rise by 19.8%. Its market share is grew by 1.6%
in this year which increase sale price and customers.
2. Defining the future state- The organisation vision and mission describes their future
action and objectives. After defined the mission and vision, then also formulate the strategy to
achieve a target market The Aldi's profit grew by 27.3 million in October month and they can
cover their last year loss which is 12.5 million (Li and Tan, 2013).
3.Determination of objectives and strategies- The organisation should set their
objectives that will help them in future planning and make new strategies. The main objective of
Aldi is to provide high standard service to their customers and enhance their profit. The company
can achieve a low payroll to sale turnover ratio with such staffing level which create low prices.
4.Implementing and Evaluation- The implementation and evaluation of product
through different set of organisation activities. The Aldi should implement the new policies and
strategies in the market for the higher growth. The company introduce new product labelled
“Differentiated Goods” which is unique in shape ,size and structure.
TASK 3
3.1 Identification of market entry strategy and its appropriateness with the use of case
The marketing strategies are suitable for Aldi because it has a marketplace where
discount price attract more customers. The company gives advertisement in newspaper, online
and television which increase their promotional activity. The advertisement create confidence
and an emotional connection among the target customers which helps in achieving the goal.
Sustainable growth
Sustainable growth is the growth rate which are maintained without developing other
significant economic problem, especially in future period. It is based on future action and
responsibility which make profit in the organisation. The sustainable growth rate is maximum
when Aldi increase their financial leverage and grew profit without borrow any money from the
other organisation. This growth is important for the company to increase profit without taking
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