Business Strategy Report: Aldi's Objectives, Strategies, and Analysis

This report offers a comprehensive analysis of Aldi's business strategy. It begins with an assessment of Aldi's objectives, mission, vision, goals, and core competencies, followed by an examination of factors the company needs to consider when designing its plans. The report then delves into organizational and environmental audits, emphasizing the importance of stakeholders in strategy formation and presenting a new strategic approach. The analysis includes an evaluation of alternative strategies, justification of the chosen strategy, and a discussion of roles, responsibilities, and resource requirements for strategy execution, including the use of SMART targets to achieve strategic objectives. The report concludes with a review of the effectiveness of various business strategy tools and techniques, such as the Ansoff Matrix, and their application to Aldi's growth and market positioning.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1.1 Assessment of objectives, mission, vision, goals, core competencies of Aldi.................1
1.2 Factors need to consider by Aldi .....................................................................................3
1.3 Effectiveness of techniques..............................................................................................4
TASK 2............................................................................................................................................5
2.1 Organisational audit for Aldi ...........................................................................................5
2.2 Environmental audit of Aldi.............................................................................................6
2.3 Importance of stakeholders while forming new strategy.................................................7
2.4 Presentation of new strategy for the firm.........................................................................8
TASK 3............................................................................................................................................9
3.1 Analysation of appropriateness of alternative strategy linked with Aldi ........................9
3.2 Justification of the strategy which is correct for business .............................................10
TASK 4 .........................................................................................................................................11
4.1 Roles and responsibilities of personnel who are engaged in execution of strategy.......11
4.2 Essential resources needed for executing strategies.......................................................12
4.3 How the use of SMART targets can contribute to achieving the strategic....................12
objectives.............................................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy simply refers to the plan of action that is is being used by each and
every organisation for running their commercial activities effectively in order to attain their aims
and objectives. This aids in improving overall performance and turn over the venture. In addition
to this, these strategies also assist enterprises in evaluating decisions of various departments
which are liable to perform specific tasks within in certain time frame (Acquaah, 2013). The
present report is based on the Aldi. It is famous as the popular brand of two leading international
discount supermarket consisting of around more than 10,000 stores in eighteen nations. This is
dealing with retail sector and offering products such as food, beverages, domestic or house hold
items, sanitary articles, etc. They are earning combined turnover of approx. €50 billion or more
than this. This chain was developed or established by two brothers that are Karl and Theo
Albrecht in the year of 1946. In this project, the mission, goals, visions, objectives and core
competencies of Aldi has been described. Apart from this, different factors that can be
considered by them at the time of designing plans is also explained clearly.
PART 1
1.1 Assessment of objectives, mission, vision, goals, core competencies of Aldi
A scheme that helps in acquiring several aims and objectives of company in an effectual
way is called business strategy. It simply refers to a path or way which is needed to be followed
by work – forces so that mission and vision can be accomplished in efficacious style. Every
corporation designs some mission, vision, objectives, aims and goals so that they perform their
work in the same direction and concentrate to attain all those pre – determined targets. Like this,
Aldi has also formulated some of its aims and objectives (Astrachan, 2010). Strategic planning
at Aldi is a corporation – al management exercise that is being used for setting priorities,
focussing on energy and existed resources, strengthening the operations and ensuring that
workers and other shareholders are working towards a mutual goal. The primary purpose behind
making strategies is to aid in identifying its priorities and to meet the requirements of its
electorate. This planning should be flexible and crisp but yet serve as a guide in the execution of
different programs. This is to be noted that strategic planning, implementation, observation and
analysation is very necessary for this venture as it is fundamental for developing results on the
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basis of accountability system in firm. The strategical terminologies and context of Aldi are
stated below:
Mission: This is an intrinsic section of venture as it encourages the personnel’s for working
together as a group and achieving the vision of enterprise. This normally defines the captious
ambitions and performance objectives of a firm regarding the improvement and is explained
within structure of corporation tradition, values, policies and vision.
Key mission statement of Aldi are mentioned below:
 They are believing in creating the capabilities of their company in an international
competitive atmosphere by offering sustainable and superior value to their stakeholders.
 They also aim to supply best level consumer partnership by increasing effectiveness of
best operational control and system (Bharadwaj and et. al., 2013).
Vision:
 They wish to make growing value in economy of United Kingdom.
 They also aim to generate efficacious supply chain network for strengthening delivery
system.
Goals:
 Aldi's attempts for creating multiple drivers of growth by formulating superior business
portfolio and capableness.
 They also try to refine and strengthen their corporate governance by creating
accountability (Campbell, Edgar and Stonehouse, 2011).
Objectives:
 Objective of Aldi describes the outline for meeting their key outcomes of making
themselves as a client focused and effective performance oriented venture that would
create values for their business partners.
Core competencies:
 Expertness in functional and technological knowledge
 Their fidelity of offering competitive edges in marketplace.
 The core competency of Aldi is its strict concentration on Costing or price. There are
different strategic measures that is used by them for ensuring the same. For example, they
are considering follows elements:
◦ Cost leadership strategy
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◦ Focussing on own brand
◦ Low labour cost
 They do not consist of human resource management department but yet famous as
employer of choice.
 They also share its success to their work – forces. For example, it was first company in
retail industry that provides maternity leaves from April 2008 to their personnel’s.
1.2 Factors need to consider by Aldi
Company should explore and analyse their internal and external factors prior to formulate
its business related schemes. Interior elements are those which are associated with commercial
operations internally and external one are those facets that are linked with outside business.
Thus, it is important to understand for the sustainability of enterprise and attainment of goals by
higher management. These factors comprise of some benefits and limitations that should be
analysed properly as this assists in making their strategic scheme for achieving their long term
ambitions. Some of those factors that requires to be considered by Aldi while designing their
strategical plans along with their pros and cons are stated below:
Basis Advantages Disadvantages
Internal A well-educated and trained
worker would help in
completing all business goals
effectively (Gandolfi and
Hansson, 2010).
Sometimes, personnel’s do not
get satisfy by the principles of
venture and they perform
strikes for this. This
completely damages on the
brand image.
External Technological aspects fall
under exterior factor and
contributes in increasing
production.
This get outdated on regular
basis and hence management
has to make a separate account
for this by maintaining
adequate balance.
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Ansoff matrix simply defined as a strategical marketing tool which helps the firm to link
their marketing strategies with its generic strategy for better future growth of the organisation.
They have mainly 4 growth concepts which are market development, market penetration, product
development and diversification.
1.3 Effectiveness of techniques
There are numerous of suitable tools that is proved to be assistful in designing proper
business strategy. For each satisfactory plan, it is necessary to adopt a technique via which firm
can reach their goals. Different approaches are recognised that helps while making business
scheme that are: SPACE, Boston Matrix, Ansoff Matrix.
These are considered to be helpful in taking entry into new marketplace and seeking
attention of large number of users towards their corporation. As from them, Ansoff matrix is
viewed as an effective tool during dealing with business growth and course of present as well as
future. This method is representing four strategies in order to attain growth. Aldi needs to move
into each and every quadrant and act according to this.
Market penetration refers to improve current productions at the existing market location
by using various techniques. In order to apply this strategy Aldi needs to enhance or maintain
their market sharing of current offerings. For attaining this, they have to utilise combination of
competitive marking strategies. They can also upgrade its price strategy, sales promotion of
business, etc. In accordance to this, they need to focus on clients and market as well.
Market development strategy is one wherein firm should sell their goods or services in
new marketing place. Here, they do not need to develop their production but have to utilise
suitable scheme via which they can make new consumers (Gollakota, Gupta and Bork, 2010).
For doing the same, Aldi could start their business in new geographical markets. For example,
exporting goods to a new nation. Additionally, they can utilise new distribution channels. For
instant, migrating from selling through retail to sell merchandises via mail order or e-
commercial techniques.
Product development growth plan is used when an enterprise is going to develop its
product in current marketplace. This can be done by adding more values and offering best quality
services to their potential customers.
Diversification on the other hand is utilised when an organisation would lead to present
new goods at new market. In this aspect, every client as well as products are new. This is risky
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scheme as firm needs to move into a market in which they have no experience. So, Aldi should
not use this.
TASK 2
2.1 Organisational audit for Aldi
The business of cited firm was segmented into two individual groups in the year of 1960.
After this they become Aldi Nord whose headquarter is located in Essen and Aldi Sud having its
headquarter in close to Mulheim. This is to be noted that after this the name Aldi was coined in
1962. Aldi was launched in Great Britain on 5th April 1990. This has been examined that they
also comprise of 550 stores by the year of 2006. But it is still a small player in Great Britain as
they are having less than 3.6 % shares of grocery. Therefore, management of this firm requires to
evaluate the pros and cons of their business so that they can adopt futher strategies in order to
improve themselves. For this, they can use SWOT analysis and conduct organisational audit.
Below is the swot analysation of Aldi for designing more adequate business plan:
Strength:
 It claims for serving supreme quality of products to their consumers. For example, they
are offering goods with double guarantee. If clients get not satisfied by productions
provided by them, then they can replace that item and also receive money in the form of
refunds.
 They also supply goods at affordable prices in comparison to other brands. For instance,
they are providing food stuffs and various other domestic items at lower prices in relation
to Tesco, Asda and many more.
 Strong position in Germany having 2500 stores. This has been observed that German
grocer newly announced an aggressive United State. They are aiming to establish over
650 stores in five years.
 Operating in more than 15 nations internationally. For example, some of the key
countries wherein Aldi is doing business are France, Germany, Hungary, Ireland,
Slovenia, Spain, Switzerland, Great Britain, United States, China, Australia, Austria,
Belgium, Denmark, Luxembourg, Netherlands, Poland, Portugal, etc.
Weakness:
 But they are yet small in relation to other brands.
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 Sometimes allegedly stated as a store with low and cheap quality goods.
 Smaller player in Great Britain.
Opportunities:
 Requires to do investment more in promotional activities for beating rivalries (Peteraf,,
Gamble and Thompson, 2014).
 Enlarging into growing economies such as Asia, Africa, etc.
Threats:
 Competitors are increasing day on day like Lidl, Tesco, Sainsbury, Asda, etc.
 Its private label branding are being tossed away by other established brands. For
example, companies like Sainsbury, Lidl, Tesco has been occupying clients of UK.
Porters five force model can be used to analyse the present competition level for the referred
enterprise:
Bargaining power of buyers – The referred enterprise is dealing in a sector that has
immense producers. It develops the power of different customers much to bargain with the
producers. If they do not find the products worth they easily switch to another brand.
Threat of substitute – As there are close substitutes present in the market it is a threat
for Aldi as any mistake by them can lead to change in the demand by clients.
Threat of new entrant – Growth of retail sector is taking place which attracts more
people to join this business. It creates high pressure on Aldi as it increases competition for the
referred enterprise.
Bargaining power of supplier – Aldi deals in range of products and in order to meet the
continuous demands of clients it needs to have continuity in supply. This way the power in hands
of suppliers further increases and hence makes them powerful.
2.2 Environmental audit of Aldi
Business environment of the venture is not constant and are changing according to the
time. For this, Aldi should determine exterior factors and all those relevant prospects that is
going to influence whole performance and business of company. This methodology is proved to
be very helpful in order to design strategical plans wherein firm is going to set its priorities and
those factors that assist them in accomplishing all ambitions (Jocovic and et. al., 2014). Thus,
Aldi has to conduct extrinsic analysation whereby they would identify those elements that
adversely effects on their operational activities. For doing the same, they can take help of Porter
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five forces analysis. This is considered as effective technique for determining level and structure
of rivalry in the current retail industry. As this is very common sector, so most of other
companies are starting their business and are providing same products and services; leading to
increment in large competition. Thus, competitive rivalries are very high for Aldi.
Besides this, firm has a threat of many new organisations into this industry and for this
administration has to design proper customer base that would not migrate to others. Threats of
substitute is also very high as goods supplied by Aldi is not different and unique in nature. All
the another giant supermarkets and retailers are selling exact identical services or products.
Additionally, other actors in this sector is concentrating more on advertisement, price
minimisation and marketing. Thus, substitution is very easy (Gollakota, Gupta and Bork, 2010).
Bargaining power of Aldi is also so high because this industry of retail is revolving
around the prices of goods and clients prefers those which have lower cost. Therefore, their
competitors are trying to reduce their selling price and this is providing great bargaining power
to the buyers. Thus, there is no situation where Aldi can increase prices of its production.
On the other hand, bargaining power of suppliers is quite low as large number of
suppliers are present in retail industry and are ready to supply the similar goods or even at low
prices to large retailers like Aldi.
2.3 Importance of stakeholders while forming new strategy
Stakeholders are those body who contributes an enterprise in their growth and
development. Every user, workers, legal bodies who are responsible for running business
activities are treated as stakeholders of a venture (Köseoglu and et. al., 2013). Thus, management
has to map their shareholders as per the demand and conduct proper action for them. Aldi has to
recognise their main stakeholders and segment them as per their priorities in order to take
adequate decisions for their interest.
Aldi is running its work in a well organised style wherein manager’s desires for
increasing their market sharing. But as their business is declining in current years; so for this
they should make proper strategies for overcoming from this situation and making themselves
stable. In this context, firm is preparing a new business scheme for operating and running their
company. Therefore, at the designing plan of action, authorisation has to involve each and every
stakeholder in their account and should take essential steps for the same. For this intention, Aldi
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has to divide their stakeholder into three categories that are : Internal shareholders, Connected
stakeholders and External stakeholders.
For doing stakeholder mapping, Aldi can take use of Mendelow's matrix as this helps
them in setting their priorities. This matrix has been divided into four boxes which is stated
below:
 Box A – Minimum effort: These business partners existed in Aldi are losing their interest
and due to this they get impacted.
 Box B – Keep informed: They are very curious in nature but do not have any power to do
anything.
 Box C – Keep satisfied : These people requires to be keep satisfied so that they would not
lose their interest (Martin and Rice, 2010).
 Box D – Key players: They are key players and can change or even have the power of
stopping any scheme in case of dis – satisfaction. Thus, it is important to inform them
before implementation of strategies and tell them about its benefits also.
Illustration 1: Stakeholder mapping, 2017
(Source : Stakeholder mapping, 2017)
Examples of stakeholders such as customers, employees and they are very important as whole
business of Aldi depends on these elements.
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2.4 Presentation of new strategy for the firm
As per the opportunities of the Aldi, managers must have to design proper strategies via
which they can sustain their positioning in market for a long time period. Here enterprise can do
investment of large sum of revenue in the different other nations where their stores are not yet
present. By this way, they can easily expand their business and create a strong user base as well.
In addition to this, it will also aids in attaining more market shares (Peteraf, Gamble and
Thompson Jr, 2014).
Therefore, they need to set new outlets and should do appropriate modification in their
existing goods and services as per the demands of civilians. From the last few days, thy have not
generated any innovative production. Thus, for this, diversification for complete productivity is
necessary. Apart from this, as they are having stable market but from past few years, their market
sharing has been declining poorly (Montgomery, 2011). Therefore, it is mandatory to use a new
strategy wherein they can produce new and innovative products and services having new range.
This can be done by utilising new market development growth scheme.
Where are we now?
Mission statement of Aldi :
 They are desiring for creating the abilities of their firm in some global competitive
surroundings by providing superior value to their stakeholders.
 They also aim to offer best level consumers partnership by enhancing effectiveness of
best operational control and system.
Vision :
 They want to grow value in economy of UK.
 They also aim to make effective supply chain system for updating delivery system.
Where are we going?
 Aldi is gaining competitive advantages by offering low costs products in relation to their
competitors like Tesco, Sainsbury, etc.
 They are also expanding their business in other regions where they are not present.
How will we get there?
Aldi would attained above mentioned goals by framing some aims and objectives that are
mentioned below :
Strategic objectives, goals and action items:
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 Their goal should be designing of innovative products at affordable prices so that they
can gain competitive benefits.
 They need to hire more skilled and qualified personnel’s in order to produce best quality
goods and services.
 They require to invest more in advertisement activities in order to seek attention of large
number of consumers.
TASK 3
3.1 Analysation of appropriateness of alternative strategy linked with Aldi
Aldi is considered as one of the oldest retail firm around the world. They are having good
growth in marketplace. Now, they want to represent themselves as one of the popular retailer and
earn large sum of money from this. Thus, management has to prepare an alternate strategy which
is described below:
Alternative strategy Option Explanation
Market entry strategy There is an option for Aldi
whereby they can deal with
new market place by offering
more and more services or
productions (Scholes, 2015).
This is going to be quite
helpful for the business
wherein corporation could
target new marketplace and
attain benefits of new
consumers from their
innovative goods or services.
Substantive growth For Aldi as food sector or
industry is totally new ; hence
they could also merge their
business with another
companies (Peteraf, Gamble
and Thompson, 2014).
As company wishes to expand
themselves in new area and
thereby they have chance to
adopt substantive growth
wherein Aldi can employ
others as a base for making
large amount of profitability.
Limited growth Strategy Management can use their
currencies or money for doing
As this is considered as other
option that can be used by
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