Comprehensive Business Strategy Report: ALDI's Strategic Framework

This report provides a comprehensive analysis of ALDI's business strategy. It begins with an introduction to the importance of strategic planning and an overview of ALDI's mission, vision, aims, objectives, goals, and core competencies. The report then analyzes the internal and external factors that ALDI must consider when formulating its strategic plans, including stakeholders, political, economic, social, and technological factors, as well as competitors. The report also explores the usefulness of techniques like the BCG growth matrix and PIMS in developing strategic plans. Furthermore, it examines ALDI's current strategic position, including customer analysis, competitor analysis, and an environmental audit. The report applies Porter's Five Forces analysis to ALDI's microenvironment and emphasizes the significance of stakeholder analysis for the company. Finally, the report discusses the strategies that ALDI can follow to maintain its competitive advantage, including the roles and responsibilities of personnel, required resources, and the contribution of SMART targets to achieve objectives.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
1.1 Competencies inform strategic planning..........................................................................1
1.2 Analyse the factors to be considered by Aldi when formulating their strategic plans. ...2
1.3 Usefulness of techniques used when businesses develop their strategic plans................3
2.1 Analysis of the current strategic position of ALDI..........................................................4
2.2 Environmental audit for ALDI using Porter's 5 forces analysis.......................................4
2.3 Significance of stakeholder analysis for ALDI................................................................5
2.4 Strategies that ALDI can follow.......................................................................................6
Part 2................................................................................................................................................1
3.1 Appropriateness of a suitable strategy..............................................................................1
3.2 Justification.......................................................................................................................1
4.1 The roles and responsibilities of personnel needed to implement the strategy................2
4.2 resources that are required for implementation a new strategy for ALDI........................2
4.3 Contribution of SMART targets to achieve objectives in ALDI......................................3
CONCLUSION................................................................................................................................4

INTRODUCTION
Making strategy in any business is essential today. This way, a company or an
organisation can plan their business in a better way. This report will cover the business strategic
plans of Aldi. It will also cover a detailed analysis about its organisational and environmental
audits. By this, the current as well as future business plan will also be discussed. It has become a
successful organisation over the years (Scholes, 2015). This report will also include Porter's 5
forces analysis to show its micro and macro environment.
Part-1
1.1 Competencies inform strategic planning.
1.ALDI's Missions:
ALDI is very focused and cleared about its missions and objectives it need to achieve.
Some of them are:
 To provide good quality services to its customers at affordable prices. It stands up to the
line “ Spend a little, live a lot”
 Providing a healthy working environment for the employees and giving them job
security.
2. ALDI's Vision:
ALDI's whole and sole vision is to maintain a statement in the retail world. In order to
attain its vision, the cited firm follows a minimum pricing policy (Johnson, 2016). With this
policy, it can attain it's objective of targeting a large group of niche customers who spend low.
These will increase their share in the market.
3. Aims and objectives:
The main aim of the firm is to retain its competent and skilled workforce. In order to
attain this objective, the cited company provide motivation to its existing employees, creates
various strategies to improve the efficiency of the employees.
4. Goals:
The goal of the cited organisation is to be efficient in fulfilling the demands of the
customers as well as it's employees. Another role or goal is to behave responsibly towards its
employees as well the offerings made by the organisation to its customers.
5. Core competencies:
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The core competency of the ALDI store its innovative techniques (Armstrong and et. al.
2015). It spends a large amount on research and development, in order to provide good quality
products to its customers.
This factors have deeply affected the better handling of the different operations that helps
in the effective development of and effective and strategic business plan that will help the cited
firm to gain a better productivity and profitability by achieving its business goals. Also, it will
help in the significant handling of the better handling of the various operations to provide the
customer with proper satisfaction level.
1.2 Analyse the factors to be considered by Aldi when formulating their strategic plans.
Formulating a strategic plans is of utmost important for any organisation to achieve its
goals and objectives. ALDI is a retail store which also needs to formulate different strategies in
order to attain it's prescribed objectives. The cited firm has to consider many internal and
external factors to formulate a strategic framework.
INTERNAL FACTORS:
These are those factors which operates within the organisation and affects the decisions
regarding formulating of new strategies for the firm (Sia, Soh and Weill, 2016). The major
internal factors for the mentioned organisation are its Stakeholders. Stakeholders for the firm
includes its employees, customers, creditors, etc. ALDI must ensure the well-being of these
stakeholders while formulating its growth related strategies.
EXTERNAL FACTORS:
These include those factors which operates outside the organisation and affects the strategic
plans of the any firm (Cascio, 2018. Managing human resources). The external factors which
may affect the decision making of the cited company includes the following:
1. Political Factors:
Political factors include the tax structure of the Government of the concerned country in
which the cited firm operates. It highly affects the firm's pricing policy. For example, the
political and governmental policies will affect the ALDI to a greater extent.
2. Economic Factors:
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These factors are related to the economic issues prevailing in the country. A situation of
inflation or recession in Australia, may affect the strategic policies of the mentioned firm i.e.,
ALDI related to its product launching a product or it's pricing policies related to that firm. Such
conditions will decrease the economic growth and will impact the overall operations of the
company.
3. Social Factors:
The social factors include the society (Hammond and et. al. 2015). Society, for the
organisation means it's customers. Since, ALDI is a retail store, the behaviour of customers
highly affects the concerned firm's growth strategies.
4. Technical factors:
The mentioned firm has to keep itself updated about the new technology and trends prevailing
in the market. Aldi is one of ther major and leading firm to use the technical tools and
advancements, to gain better productivity and profitability. It provides the cited firm with an
effective competitive advantage and better market position.
5. Competitors:
The retail sore has a number of competitors prevailing in the market. The firm has to
keep a record of their pricing and strategies and accordingly, generate a strategic policy covering
their loopholes.
1.3 Usefulness of techniques used when businesses develop their strategic plans
Business planning is very important for growth of any company. To plan a business,
companies like Aldi use several techniques (Akter and et. al. 2016). On using these techniques
properly and effectively, the organisations can ensure to implement the plan and get the desired
results. There are various techniques to develop business plans. Some of them are discussed
below:
BCG Growth matrix- This is also known as growth-share matrix. It is a tool for corporate
planning which is used to make brand portfolio of any firm. The growth-share matrix uses
relative market shares and factors like growth rate to evaluate whether the brand has a potential
to grow and it gives further suggestions to improve to invest (Klettner, Clarke and Boersma,
2014). Aldi, which is a large organisation also uses BCG growth matrix to know the current
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position of its brands and how to improve them (Buckley, Burton and Mirza, 2016). By this
technique, it can be evaluated that which brand of the firm is doing great and which has to be
eliminated due to its poor growth or giving losses to the company. This way, the firm will get to
know in which brand they should invest more to have huge profits.
Profit Impact of Market Strategy (PIMS) technique: It is a powerful technique which is used
worldwide. PIMS is a large scale study, which is made to analyse the actions and their effect on
businesses. This is basically a database of strategies which generates benchmarks and also
identify which strategy will be at a winning streak. Many firms like Aldi uses this tool to provide
help to their managers so that they can understand the business environment and react
accordingly (Amran and et. al. 2016). The technique guides strategic thinking and measurement
by providing a set of derived data.
2.1 Analysis of the current strategic position of ALDI
An organisational audit is an independent activity which is designed to improve
operations in any organisation. It can also be said that it is an approach to assist a company to
improve the operations by determining its strengths and weaknesses. This will include
customers, competitors and environmental audit of ALDI. Customers of ALDI can be defined as
the buyers who purchase about all the outputs of the organisation. It seeks for the loyal
customers by knowing the needs and demands of its buyers (Pisano, 2015). The company
believes in increasing quality by enhancing the efficiency and also minimising the cost so that
more customers can be added to its firms. Though ALDI is a leading organisation with 10000
stores in 18 countries, but it also has many competitors like LIDI which is also growing very
strong. In this way, ALDI is making strategies to lessen the competition with LIDI by increasing
brand's qualities and being more productive so that it can retain its position in the market. There
is also an environmental audit for this organisation which is offering key variables that can offer
responses that are actionable. In 2005 to 2008, there was a big global recession which caused
customers to buy less expensive products but of high quality. ALDI took that as an advantage
and make available high quality food products to customers and currently, it is also trying to
lessen its prices without compromising with its quality so that it can attract more customers to
buy products. It is a global brand which operates with two large supermarket chains in various
countries. It contributes highly to the economy of many countries. Also, it provides various job
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opportunities to people. By this, it helps greatly to increase its position as well as to improve
economy.
2.2 Environmental audit for ALDI using Porter's 5 forces analysis
ALDI offers a value for money experience of shopping to its customers. It puts focus to
save money in recession so that it can give products with reasonable rates to its customers. It
also reduces its cost for branding of its stores and also technology. This is the internal
environment of ALDI. The external environment of any organisation is made up of two elements
which are micro and macro. In which macro views the environment of business widely. This is
the micro environmental analysis of ALDI using Porter's 5 forces analysis:
New entrant’s threat: - Due to competitive environment and entry cost, this threat for ALDI is
low as of now because it requires high cost to establishment in this market. Tesco, which is a
large retailer could be its threat but it is declining due to unethical practices, and to abuse the
power.
Suppliers power of bargaining:- suppliers have lower powers of bargaining as compared to
supermarkets. Suppliers are less likely to give discounts on prices of various products due to
getting larger orders from other large competitors. Whereas ALDI operates in 500 stores so it
has its own right to bargaining.
Buyer's bargaining power:- ALDI is not offering any loyalty schemes so that there can be no
additional incentives for return (Shimizu and Tamura, 2015). So customers can easily choose
within supermarkets from which they can get higher available items, easy access and various
offers. In this scenario, ALDI is not doing so well to attract more buyers.
Rivalry in firms:- In this sector there is intense rivalry with related to cost. Many of the brands
offer similar prices of their rivals to be in competition. This leads them to do various marketing
campaigns so that they can get more market shares. ALDI focuses to maintain its low prices on
products due to which it is a risk for it because other competitors are also trying best to come at
ALDI's price point.
2.3 Significance of stakeholder analysis for ALDI
A stakeholder of a company or organization is the person who has interest in business's
success. The main reason for the success and growth in ALDI's business is the focus of it on its
stakeholders to meet their needs. This supermarket chain works dynamically and also puts focus
on quality and the value of products. It ensures to provide low priced products and the savings
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must be passed to its customers. By this, it built a strong bond with consumers and also with its
suppliers. Its employees are always being supported in need throughout their job time. It also
promotes strong and long-term relationship with its workers too. Thus, ALDI ensures to give
support its stakeholders which gives huge growth to it (Gans, 2017). Government is also a
stakeholder of this organization. As it is large retailer, government also gets benefited by
generating more revenues and profit with the profit of ALDI. Its suppliers also has an important
role for the growth of this food market chain. ALDI is offering best prices to them to get
maximum profits for both of them
Importance of stakeholder analysis: The stakeholder analysis gives a broad idea to the company
how to generate more profits and get direction for the overall growth of its business. By this
analysis of ALDI, it evaluates its market position in all terms. When it formulates strategies for
the organization, all the stakeholders give their contribution to promote its business further.
Justification: it can be understand by an example. For instance, ALDI is opening new stores in a
country. Then it needs to start recruiting employees for which it will need funds. If it has no
funds in that particular time, ALDI can take favour regarding this from its investors. Here the
stakeholder analysis is needed, so that investors will provide funds to the organization. That is
why this analysis is very important for every company like ALDI.
2.4 Strategies that ALDI can follow
I.Current position of ALDI:- I t is a Germany based retail organization. The main aim of this
supermarket chain is to provide maximum savings to the customers on products by giving low
priced and high quality products to them. Competitive pricing is the key strategy of ALDI. As its
branded products are giving less profit, it has decided to sell the products which are of high
quality like any branded product. Thus, it will balance the sales of this retailer chain and will
retain profits. Its mission is not only towards achieving high profits but also it ensures to give
customer satisfaction which makes it more valuable with respect of other retailers.
II.Competitive advantage and its ongoing direction:- On the point of competition, it has
probably low for big organizations like ALDI because to achieve success in this field, the other
retailers have to focus on various aspects like satisfaction of customers, employees, investors,
managers etc. and also it demands time to time evaluation on the factors like environmental,
economic and so on. Though, Tesco can give competition to ALDI but it has different values
which majorly focuses on customer satisfaction. So, it attracts more customers and thus it can
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add more profits to the organization. For now, ALDI is planning its promotional strategies which
includes social media marketing, emails and also relation with public and media. It is also doing
promotions on television by advertising its products.
III.Strategic objectives, goals and actions:- For future, it has some strategies and goals to
achieve Which will lead the organization to a new height. It has although become a very large
supermarket chain in many countries, but it has plans to grow further. Some of them are like
advertising and promoting itself on social media. It will give it new recognition among people
and more customers will be added in great numbers in the future. Also, it is doing branding for
the first time in its 20 years journey. It will take the organization to new levels and also it is
important to give some newness to it.
Part 2
3.1 Appropriateness of a suitable strategy
As the leading retail company of the market, Aldi requires a suitable strategy to sustain
its market position in UK as well as in the global market. The cited firm can use the suitable
measures to improve the quality of the services and the products that are been provided by the
company to its customers on the wider scale (Baraibar‐Diez, Odriozola and Fernández Sánchez,
2017). Besides this, some new strategy can be adopted by the business organisation in order to
gain a suitable idea about the various sort of the business organisation. The Aldi can opt for the
business strategy of product differentiation or the price skimming that will aid the company to
sustain in the market in a better way. The product differentiation will help the Aldi by providing
a better competitive advantage and give the chances to adopt better improvement of the services
or technology.
On the other hand, the Price skimming strategy will help the cited firm to quickly recover
the production and marketing expenses of the services or product by keeping a high price in
initial stage. It will help the cited business to gain a better productivity that will lead to the
substantive growth. It adds to the financial reserve of the company and provides the cited firm
with the suitable technical measures to improve the work quality. Even in the case of limited
growth, this two strategies will assist Aldi by giving it a sustainability on financial and technical
level. Even in the case of retrenchment, these strategies will help the cited firm to back off or
stop the less required or unwanted expenses, top provide the financial stability to the firm. In the
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case of retrenchment, Aldi will look after the futile expenses that lead to the exhaustion of the
resources of the company.
3.2 Justification
For the better growth in the market, Aldi can opt for the price skimming strategy that will
help the cited firm to gain better productivity and profitability that will aid to meet their
operational requirements. In the initial stage, the approach of price skimming includes placing of
high prices on the new products or the services that is exponential in nature and making the
customers to purchase it. Besides this, it will help the company to recover all the financial and
other expenses that will lead the firm to gain better sustainability in the market. Apart from this,
the implementation of the new strategy will assist the company to increase the overall
operational capacity of the business organisation that will help the company to gain better
market growth and sustainability.
Although, the high price of the new launched product can affect the sales of the products
or the services and may give rise to the higher level of competition in the market from the rivals
or the near competitors. But, as Aldi is one of the leading retailer in the market with a large base
of loyal customers, there are the chances to opt for the better sales that will help the firm to cover
up its operational costs that supports the company to meet the requirements of the customers as
well as its organisational operations. The technical advancement will lead to the better execution
of the organisational activities that helps the company to meet the requirements of the
organisation in a better way. Besides this, the recovering of the financial investment for this
strategy will also help the organisation to meet the requirements of the organisation in a better
way.
Part 3
4.1 The roles and responsibilities of personnel needed to implement the strategy
This requires a person who can take lead on other personnel and also able to divide the
work in employees keeping in mind their roles and responsibilities in organization
(Gumusluoglu and Acur, 2016). The employees who are working in ALDI have also further
responsibilities to focus on strategic implementation. The CEO of ALDI needs to communicate
the whole strategic plan to other employees. The personnel who are involved to implement the
strategies are required to maintain records properly. It is important to also avoid legal issues. To
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make the implementation successful, proper monitoring is needed. It means by taking an
overview in specific time gap. It encourages the overall strategic planning but it also requires
some corrective actions.
Some major roles and responsibilities are as follows:
 To look after the effective handling of the various operations and meeting the
requirements of the company.
 Proper implementation of the various policies and laws to maintain the ethicalness and
efficiency of the firm.
 Effective monitoring of the different operations that will help in the better handling of
different business operations.
 Maintenance of the various records and reports for better security and productivity.
4.2 resources that are required for implementation a new strategy for ALDI
Three resources that are required for the implementation of new strategies which are: Human resources: In order to do successful implementation of strategies ALDI should
consider human resources. The performance of any company very much on HR. ALDI
needs HR who is technically skilled and also can give good productivity. Financial resources: ALDI needs sufficient finance to easily implement its strategies. It
can be done by two ways- by debt and by equity. Instead of debt, equity should be taken
into consideration because it contains minimum interest on principles so that ALDI can
be financially less dependent on others in order to get its strategies implemented.
 Resource of time and material: There is always a specific time limit to perform any task.
ALDI also needs to make implementations by a chosen in a chosen deadline, so that it
can complete all the other work easily at correct time. It also requires materials like high
quality equipments and machines to complete its implementations efficiently and
effective manner. It should inspect all machines and materials in a certain period so that
if a correction is needed, it can be done in time.
4.3 Contribution of SMART targets to achieve objectives in ALDI
In most organizations like ALDI, the business strategies are generally designed on the
basis of SMART targets. Because, by this, they become very easy to achieve by calculations.
These targets help to overview implementations and also what are their scopes. For example, a
particular attribute which is designed to know the specific benefits which can be achieve by
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company. There are only compound goals that are difficult to achieve because of their
unpredicted nature. The goals and also targets of any company should be specified. The SMART
target means:
Specific- It is easy to understand and also achieve specific targets instead of general targets. So
all the targets are to be specified like people involvement, time estimation etc.
Measurable:There should be a proper guideline to measure the target to be completed also it can
measure the progress as well.
Attainable:ALDI needs to set targets and goals which are attainable so that they can be easily
achieved. The employees must feel that they are given the targets that are attainable and
achievable.
Relevant: Relevance is needed to achieve targets as soon as possible. These targets should be
based on capacity and also on the willingness which are very important in order to achieve
objectives in ALDI.
Timely: Organizations should set some specific time in order to complete its goals in certain
period. If a particular task completed in a given time it would be benificial for ALDI to perform
several other tasks.
CONCLUSION
Thus, from the report it can be concluded that the suitable business strategy is very essential for
the better growth of the organisation in the market. Various strategic plans along with the
mission and vision of the company have been discussed. Different techniques like BCG growth
matrix and organisation audit have been conducted including the micro and macro factors of the
company. Also, new market strategy has been proposed along with various strategies for
trenchant and substantive growth. Besides this, the roles and responsibilities of the various
personnel involved in the implementation have been taken into consideration. Apart from this,
the SMART assessment of the targets of Aldi is been carried out for the better understanding of
organisational objectives.
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