Business Strategy Report: Analysis of ALDI's Operations

This report provides a comprehensive analysis of ALDI's business strategy, examining its mission, vision, objectives, and goals within the UK grocery market. It delves into the classification of ALDI's core competencies, factors considered during strategic planning, and the different planning techniques employed, including PIMS and BCG matrix. The report conducts an organizational audit using SWOT analysis and environmental analysis, assessing the significance of stakeholder analysis when formulating new strategies. Furthermore, it explores potential new strategies for ALDI, identifies market opportunities for substantive growth, and justifies the selection of specific growth strategies. The report also outlines the roles and responsibilities of personnel involved in strategy implementation, details resource requirements, and discusses the use of SMART targets in achieving strategic objectives. Overall, the report offers valuable insights into ALDI's strategic approach and provides a framework for understanding its operations and future direction in the competitive retail landscape.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
A) Classification of ALDI mission, vision, objectives, goals, core competencies................1
B & C) Factors that ALDI consider at the time of formulating strategic plans.....................2
D) Different planning techniques used in developing strategic plans....................................4
E) Organizational Audit for ALDI.........................................................................................6
F) An environmental analysis for ALDI................................................................................8
G) The significance of stakeholder analysis for ALDI when formulating new strategy......11
H) New strategy for ALDI...................................................................................................12
TASK 2..........................................................................................................................................12
A) Identify market and analysis the appropriate of best strategy for ALDI in relation to
substantive growth................................................................................................................12
B) Justification of choosing substantive growth strategies..................................................13
TASK 3..........................................................................................................................................13
A) Roles and responsibilities of personnel who are involved with the strategy implementation
..............................................................................................................................................13
B) The resources requirements for the implementing of the strategy..................................14
C) Use of SMART targets can contribute to achieving the strategic objectives..................15
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy is an essential process of every firm in order to attain best targets and
objectives in appropriate fashion. It describe long term business planning and cover 3-5 year.
Basically business strategy is summary which involve plan and how to implement in
organization process to achieve its long term objectives. It provide best framework to employees
and workers so that they can attain individual targets in a less time period. It can increase the
chances of success at market place. Business strategy set mission, vision, goals and target of the
company in effective way (Sum, 2011). This factor is essential part of organization to executing
all the task of business which make effective results in best manner. This report is based on
ALDI, it is a grocery outlet in UK. This company opened their retail stores in Germany. In this
assignment various types of terms and techniques are define to measure the vision and vision of
the company. And it also discuss about the different strategies which is adopt by the company in
order to achieve high and desired goals and objectives. Moreover, they make effective strategic
plan to select best alternatives and implement in their business process which assist in getting
desirable targets.
TASK 1
A) Classification of ALDI mission, vision, objectives, goals, core competencies
Before start a new business every business set and define some guidelines and after that
they work on them effectively. This process describe the way and path in order to done all tasks.
Business strategy is a effective process to implement their process in organization. It is exploited
by the ALDI to set mission, vision, goals and objectives. ALDI is a big and fast growing retain
company which is provide quality of product to its customers to satisfy their needs and get higher
satisfaction level by them. A best business strategy provide stable position which is used by the
organization to done all task in effective manner.
Vision: It is a written evidence which define about the next some year where a organization want
to see itself. According to ALDI vision, they define new and radical at aggressive market. Vision
statement assist in increasing the profitability level of the company in marketplace. In this factor
organization define their mid term and long term goals (Sluyterman, 2013).
Mission: This factor define aim of the business organization. It is used by the ALDI in order to
achieve its vision. According to ALDI mission, they just wants to provide best quality of
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products and service at low cost to their customers in order to attain suitable goals and
objectives. This statement assist in getting customers loyalty and faith toward the company
which increase organization goodwill at marketplace.
Goals: It dine actual want of the company which may be long term targets. Goals are important
which is set by the ALDI to get mission and vision statement in effective manner. There are
some goals on the ALDI:
 Spread its business activities in UK and world.
 To get a strong position in retailing sector (Verbeke, 2013).
 To get physical identity of presence in various countries.
 To fulfil all its roles and responsibilities.
Objectives: It is used by the ALDI to describe and evaluate their progress level in marketplace.
These are short term and long term objectives. The main purpose of this factor to provide
framework which is used by the company to attain long term objectives in appropriate time
period (Segers and Inceoglu, 2012).
Core competencies: These are the quality or capability of firm helps in achieving its end results
in a better way. It play important role in business organization to increase their profitability level
at marketplace.
Strategic planning is more important for the organization to set goals and objectives in
effective way. ALDI make strategic plan which assist in attain short term and long term goals.
With the help of strategic plan company is capable to compete its competitors and achieve final
and best results.
B & C) Factors that ALDI consider at the time of formulating strategic plans
Every company make and formulate strategic plan. It is an important document which is
used for prioritising, focusing on different task and skills in order to attain best goals and
objectives (Ross and Blumenstein, 2013). Strategic planning define managing system to manage
all business activities to set effective process to attain quality of results. The main aim of this
planning is optimum use of resources. There are various factors of ALDI:
Future direction of competition: This factor of strategic plan define best path and way which is
used by the company to manage all employees and worker. It will be define after analysis the
competitors plans. It is future framework which is used by the ALDI in order to achieve
appropriate goals and objective and enhance their quality of performance in marketplace. In
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strategic planning it include policies and procedures which are focus on increasing market share
and growth level (Wesseling and et. al., 2015).
Need of customers: It is an important factors which is implement by the organization in order to
get higher satisfaction level. ALDI focus on customers demand and wants so that they can
provide quality of products and service which are required by them. If customers are not satisfy
company products and service so that they can not grow their business at market place. So that it
is very important that company have to analysis customers needs and provide best service to
them in order to boost up their satisfaction level.
Gaining and maintaining competitive advantage: ALDI has a important plan which assist in
achieve aggressive advantage of competitors in effective manner. The main aim of this factor to
get higher profits and productivity. Better strategic plan enhance the organization ability which
helps in resolve issue and cope up with harder condition (Reinhardt and Stavins, 2010).
Integration of corporate level and communication of organizational plans: In this process of
strategic plan, in company every changes are communicate with all managerial level which assist
in reducing the conflicts in business process. Management of ALDI has to define all
commination with their subordinates and employees so that they can not create any confusion
about the policies.
Ansoff's growth matrix: It is an effective strategy of marking planning which aid evaluating the
product as well as market growth in effective manner. This strategy is divided into four process
which are as follows: Market penetration: This strategy of Ansoff matrix is ore effective which is used by the
company to attain growth in the market. It tries to enhance the market share in current
market. For this Aldi provide their products and service to new customers in the existing
market. In this Aldi focus on their products and current market by undertaking various
reteaches in effective way. Market development: It show the existing products in new market. With the help of this
Aldi define their various customers segment and provide their products accordingly. It is
very risky strategy because kit target new market for their existing products and services. Product development: In this the company focus on establishing new products in existing
markets. This strategy is more effective for the business because in this the sited firm
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focus on customers needs and wants and provide them quality products to achieve
effective growth in the market.
 Diversification: This strategy define new products and new market. It is also more risky
for the company because both are new and they requires development in effective way so
that in this company define best ideas to gain profits.
Hence, Ansoff matrix is a communication tool which is used by the Aldi to get the
possible growth in the market.
D) Different planning techniques used in developing strategic plans
Strategies are essential for every organization which is used by the company to done all
the task in systematic way so that they can attain higher profitability level at marketplace. This
process of business organization helps in completing various task with higher success. It create
positive brand image of the company in customers mind. There are various strategies and
techniques which is used by the business organization for strategic planning in effective way:
PIMS (Profit Impact of Market Strategies): It is an effective as well as long term study that
effect the company performance of the Aldi. It aid in enhancing the overall profitability of the
cited company because this strategy evaluate the market share product quality and service quality
that offer by the company to its customers. After that company evaluate that how to use effective
strategy to earn profits in effective manner. This strategy aid in develop the brand image and also
capture the larger market share in effective way which contribute in overall success of the
company at the marketplace. It access the various strategies which influence the profitability of
the company. The main purpose of profit impact of market strategy is to define the relation as
well as interaction between market factors and profitability of the company that aid in enhancing
the performance of the company in effective manner.
BGC MATRIX: This matrix called Boston Consulting Group which have two axes that define
market share and market growth rate. It is effective process which is divide in four groups which
are: Dog, Cow, Star and Question mark. The another name of this matrix is market share matrix.
It are as follows:
 Dog: It calls as pets. These type of products are low growth and low market share. Less
market share are able to generate high profits. In this situation organization eliminate
costs which are unnecessary. When products stop to generate profits then company
should wind-up that product and produce new to attain high profits at marketplace.
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 Cash Cows: It define product have High market share and low market growth.
According to this situation company face low market growth but at the same time it
define high level market share which assist in generate lot of revenues at marketplace
(London and Hart, 2010).
 Stars: This factors define the high market growth and high market share. In this situation
it define lot of money which assist in taking best decision regarding the market growth.
 Question mark: It define high market growth and low market share. According to this
situation, the company involve risk because less market share define loss of the company.
It describe the new and innovative product which are produce by the company in order to
get best results.
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E) Organizational Audit for ALDI
ALDI have to define all risk and opportunities which is assist in making best
organizational audit to evaluate the financial statement. There are two main factors are which is
internal and external. This factors are helps in understanding the strategic position of the
company in effective manner. There are various tools which is used in order to do organizational
audit of ALDI:
SWOT analysis: it define company strength, weakness, opportunities and threats to done
organization audit which assist in attain higher success at marketplace. ALDI define best tools to
do audit:
Strength Weakness
 ALDI offer and provide top quality of
products to its customers
 They set affordable price of their
products
 ALDI having low operating cost.
 ALDI established in more than 15
countries at international market.
 It ha a better business strategy to
generate lot of revenues(Firnkorn and
Müller, 2012).
 ALDI is a small brand as compare to its
competitor (Godlevskaja van Iwaarden
and van der Wiele, 2011).
 They have high transport cost.
 ALDI depend on UK countries.
 Having lack of geographic changes.
 Some time they provide and offer cheap
quality of products.
Opportunities Threats
 It have opportunity to expand their
business in Asia and Africa.
 With the help of effective and best
advertising they just need to change in
customers mentality.
 ALDI capable to offer best quality of
products and service.
 They fostering home delivery service.
 ALDI have high competitive market.
 High level of risk is there because of
less diversification.
 Small brand is weak so that they reduce
their customers.
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Benchmarking: ALDI use this process to measure their performance. They offer and provide
high quality of services to its customers in order to enhance profitability in marketplace. For
example current scenario of sales of retailer in UK:
As in the above report ALDI having 10th rank in market. The current position of company
is to penetrate market by delivering products at discounts and with large number of attraction
offers.
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Firm acquiring a market share of 1.9% in 2011 and by 2013 firm increase its market
share by 3%. at present ALDI hold 5% market share in United Kingdom which display the
company's high potential of grow in market and gain large number of revenues. Last year firm
and its rival LIDL both registered a growth in its sales more than 18% which shows change in
the perception of consumers.
In above discuss in image that ALDI get higher growth rate of the market as compare to
its competitors LIDL which is dealing in same sector (Champoux and et.al., 2012).
F) An environmental analysis for ALDI
With the help of environment factors a business operate their activities in effective
manner. It is more important to every organization in order to increase its profitability and
performance at marketplace. It is a that factor which is not controllable by the organization
function. When an enterprise define and evaluate the all factors which are related to micro and
macro management. It is management tool which is define interaction with external process.
There are some factors of PESTEL which helps in increasing the understanding the overall micro
factors. It analysis define performance of the business activities which analysis of ALDI
company are as follows:
 Political: Firm have to identify those countries where government is stable. It assist in
attain success of business organization. ALDI have to follow all the new legislation, tax
and market condition which impose by the UK government. With the help of this cited
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organization easily formulate their business activities for attaining higher growth at
market place.
 Economic: Business define their product process according to the economic system.
Every country have inflation rate so that every organization formulate and implement
their strategy according to the specific situation. In this it is significant for the ALDI that
follow all the economic condition and maintain their business activities effectively
because it directly affect the purchasing power of the customers which impact on overall
profitability of the company at market place.
 Social: This factor related to the customers preference, choice and buying behaviour.
ALDI offer and provide best quality of products to its customers and they focus on
customers demand in order to increase the buying power which affect the company
performance in effective manner. This factor define effective process which can not
provide any injury and harm to society. ALDI produce that kind of products which is
healthy for the customers and and society. They offer low rate of products for example
ALDI provide best grocery products at sale which helpful for the society and eliminate
those products which are harmful for the customers and environment (Pugh and
Bourgeois III, 2011)
 Technology: It is more important factor which define technology process to organization.
ALDI upgrade their technology system in continuous basis. They use new and innovative
technologies to gather useful information in order to manage their inventory system. With
the help of new technology company provide best service to its customers and get
satisfaction level by them. ALDI have to used new technologies like online and mobile
shopping which helps in enhancing the customers interest towards the products and
services.
 Legal: In this factor, it include various rules and regulation which is related to the legal
components that evaluate the needs and wants of the company. While working time
period the company face legal issue and problem which is uncontrollable by the
company.
 Environmental: It is external factor which affect the business operation. The company
produce new and innovative products to attract large number of customers in order to
attain higher profitability (Burlton, 2015).
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There are best modules are which is analysis by the ALDI:
Porter five forces model (Micro): This model define about the competition which is related to
the micro environment of the business organization which are as follows:
 Bargaining power of consumers: In this factor the the customers have choice to choose
the market. ALDI offer and provide best quality of products and service at lower price to
its customer because the customers have right to increase their quality of service with
bargaining power. It is highest in the market because the customers make their choice as
per brand loyalty and in case of ADLI they does not offer loyalty scheme to their end
users so that they loose their profitability level at market place.
 Bargaining power of suppliers: Now days it is very easy to alteration which is define
effective and good products at reasonable price. ALDI have braining power in order to
increase purchasing power at marketplace in effective manner (Ang, 2011). It is also
low because all the super market have higher bargaining power as compare to suppliers.
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