Global Business: ALDI's Nigerian Market Expansion Strategy Report

This report provides a comprehensive analysis of ALDI's internationalization strategy, specifically focusing on its potential expansion into Nigeria. It begins with an overview of the European Economic Community (EEC) and the reasons and challenges associated with multinational corporations (MNCs) going international. The report then delves into an individual analysis of ALDI's domestic market, followed by an examination of strategies for internationalizing, including an analysis of the Nigerian market environment and potential modes of entry. The report also explores the required leadership qualities for successful international business operations. Key aspects include market analysis, country environment evaluation, entry strategies, and leadership requirements for ALDI's expansion plans. The report concludes with a reflective essay and references to support the findings.

GLOBAL BUSINESS

Table of Contents
INDIVIDUAL NOTES 1.................................................................................................................3
The European Economic Community (EEC)..............................................................................3
INDIVIDUAL NOTES 2.................................................................................................................3
Reason for MNC to internationalise and challenges encountered by them................................3
INDIVIDUAL REPORT.................................................................................................................7
Introduction.................................................................................................................................7
Analysis of domestic market.......................................................................................................7
Strategy for internationalising.....................................................................................................8
Country environment analysis....................................................................................................8
Mode of entry..............................................................................................................................9
Leadership qualities..................................................................................................................10
INDIVIDUAL REFLECTIVE ESSAY.........................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INDIVIDUAL NOTES 1
The European Economic Community (EEC)
The EEC is a regional company which aims at bringing the economic integration among
all the member states of EEC. This community was created by the Treaty of Rome in the year
1957 by Jean Monnet. The main aim of this was to protect the peace and the liberty of laying
down of foundation within the ever closer union of the people of Europe.
Pros
 The major advantage of EEC is that this is a union and here only single currency is used
that is Euro. All the trading and transaction are undertaken in single currency only. Thus,
this ensures that all the transaction is assessed using the single measuring system.
 Another advantage is that the member states have free movement within the whole
community that is any member country can trade with any of the other country without
any restrictions.
 In addition to this another important advantage is that all the underdeveloped member
countries will get help and this will assist the underdeveloped countries to develop in
better and advance countries.
Cons
 The major drawback of the EEC is that there is high cost of membership within the EEC
and this limits the member to enter in the EEC.
 Another disadvantage is that as there is single currency then this creates problem as it
may not be possible that all the countries has single and same currency only. Thus, this
will create problem in the management of the working of EEC.
 Another drawback of EEC was that there are many problems with the policies of EEC.
This is majorly because of the reason that there are many different countries and it is not
necessary that all the countries will comply with the policies being prepared by EEC.
INDIVIDUAL NOTES 2
Reason for MNC to internationalise and challenges encountered by them
Reasons for internationalisation
In the words of Peng (2016) multinational corporation is the company which runs its
operation in country other than the home country as well. The MNC generally have its office and

branch and operations in the different countries and the head office in the home country only.
The current business environment is very competitive wherein most of the companies are dealing
in homogeneous goods and services and because of this the competition is very high. In addition
to this because of concept of globalization the companies can trade with any of the other country
and because of this reason as well the competition is increasing to a great extent.
On the other side Ferraro and Briody (2017) states that internationalisation is very
essential for the companies to survive in profitable manner in the highly competitive market
conditions. This is majorly because of the reason that when the international business is
undertaken then it assists the business in managing its operations in proper and good manner.
There are many different reason for which the company want to go for internationalisation and
the major reason is growth. This is particularly because of the reason that when the company
expand in the international market then they have more of the growth opportunities. Also, the
company gets access to the new market and this assist the company in managing the success and
growth of the company.
In against of this Adekola and Sergi (2016) argues that the major reason for the
companies going for internationalisation is for seeking the different opportunities for developing
the business with help of market diversification. This is basically because of the reason that when
the company goes in the new and other market then it might be possible that the company gets
access to more good and better market and the new consumers gets attracted towards the
working of the company.
In accordance with the thinking of Hakanen, Helander and Valkokari (2017) states that
another major reason for the internationalisation of the business is that it will help the company
in increasing its profit margin and growth rate. This is particularly because of the reason that
when the it may be possible that the products in which the company is dealing are more liked in
the other country. Thus, this will increase the sales of the company and all will add to the profits
of the company. Hence, internationalisation will help the company in growing its business to a
great extent and will also help company in increasing the number of consumers.
But in contrast to this Ronen and Shenkar (2017) criticizes that the major reason for the
companies to go for international trade is that this will assist the company to recruit new and
fresh talent. This is helpful for the business as this will assist the business in managing its
operations in more effective and efficient manner. Thus, this will increase the operational

efficiency of the business and company will enjoy more effective work. This is due to the reason
that every country has their own working style and pattern and this will assist the company in
learning new styles. Also, if the company will internationalise in more good and developed
country then this will ensure that the working culture of the company increases and it makes it
better.
Also, in addition to this Willcocks, Lacity and Craig (2017) states that another major
factor behind the company going for internationalisation is that this can also assist the company
in developing some new product and service or to innovate in the existing product as well. This
is majorly due to the reason that in the other country there might be some lack of product or
anything which can be a new product idea for the company. Also, it might be possible that the
country is having some lack of things and this can be a new business idea for the company. Thus,
this will help the company in analysing the new market trends and then develop its product and
services in accordance with those new trends going on in the market.
Challenges encountered at time of internationalising
As everything has both the positive and the negative aspect so the concept
internationalisation also has both the reason for doing internationalisation and with that there are
also some of the challenges for the company in the framework of internationalisation. In the
views of Bidault and et.al, (2018) the major challenge is that this form of doing the business is
very costly and expensive. This is particularly because of the reason that the company has to
make all the arrangement for starting up the business in the other country. Also, they have to hire
for the people and then provide them with salaries, arrange for the resources required and the
cost of managing the technology.
On the flip side Ductor and Leiva-Leon (2016) argues that the major challenge is lack of
knowledge of the other country. This is a major challenge because of the reason that when the
company enters into a new country then it is not possible that the company has proper and
complete knowledge relating to the working pattern of the new country. This is majorly because
of the reason that all the country has their own specific working style and pattern of rules and
regulations and laws. Thus, it is essential for the company to first research for all the regulations
and laws being followed in the new country and then to analyse that whether the company is able
to adapt to these changes or not.

In the words of Huo, Levchenko and Pandalai-Nayar (2019) articulates that the major
challenge for the company to internationalise is the competition within the market. The major
reason underlying this fact is that when the company operates at the global level then the
competition that is companies dealing in the same or homogeneous product and services are
more. Thus, this is a major challenge as the company will not be able to face the competition and
this competition also reduces the market share of the company and this will have a direct impact
over the working of the company and this will result in the decrease in the market share.
In contrast to this Hooper (2016) criticizes that the major challenge is the difference
between the culture of the countries. This is a challenge because of the fact that it may not be
possible that the all the countries have same culture and working pattern. Thus, it might be
possible that the consumer of one country not like the product of the other company coming and
operating in the other country. Thus, this creates a challenge as the consumer are not able to
adapt to the working of the company to a great extent. Also, it might be possible that the product
and services being manufactured by the company may not be of utility for the people living in
other countries and because of this they will not like it.
In addition to this Amankwah-Amoah (2016) articulates that the major challenge is the
economic condition of the country. This is a challenge because of the fact that it is not possible
that if one country is working in good and effective manner then the other country will also work
in the same manner. Thus, because of this reason some problems are being created within the
process of internationalisation. For instance, if the country goes in another country and at that
time the economic condition of the other country is of recession then the sales and growth of the
company will not be good. On the flip side if at the time of company entering in the new country
and that country is shaving the economic condition of boom period then the business will grow
and develop to a great extent.
On the other side Gooris and Peeters (2016) argues that the major challenge being faced
by the companies at time of internalisation is the communication barrier. This is a challenge
because of the reason that every country has their own specific language and way of
communicating with others. Thus, it is not possible that the company which is doing
internationalisation uses the same language and the same system of communicating with the
others. Thus, because of this fact there might be problem being faced by the companies in doing
the business at the international level.

INDIVIDUAL REPORT
Introduction
Internationalisation is referred to as the activity with which one company can enter into
another company but the head office of the company remains in the home country only. The
current report is based on company ALDI which wants to expand its operations in Nigeria. ALDI
is a multinational chain of supermarket with around 10000 stores all over the 20 different
countries. The company was founded by the two brothers that is Theo Albrecht and Karl
Albrecht in the year 1946. The present report will analyse the domestic market and the various
strategies which could be used by company for internationalising. Also, the environment analysis
of Nigeria will be done that whether it will be successful or not along with the ways in which the
company can enter the international market. In the end leadership qualities for the management
of the various activities of business will be outlined.
Analysis of domestic market
The domestic market is defined as the market wherein the company is currently operating
and the trading is done within that country only. Before entering into the international market it
is very essential for ALDI to first analyse the domestic market condition. This is essential
because of the fact that this will assist the company in analysing that what rates of labour,
resources and other business related material is present within the domestic country and at what
rates. Thus, this will assist ALDI in comparing all these things with the other country in which
company is expecting to enter. This will assist the company in analysing the fact that whether
entering in the other country will be helpful for ALDI to enter in Nigeria or not.
The current market in UK is highly competitive and there are many different companies
dealing in the field of supermarket. These companies are like Tesco, Morison, Sainsbury, IKEA
and many other different companies dealing in the same business. This is the major reason
behind the internationalisation of ALDI in other country as the domestic competition is very
high. Also, the political condition in Germany is not stable and there are frequent changes taking
place in the governmental structure (Tuleja, 2016). This frequent changes also creates problem
and difficulties in managing the business and due to this company is preferring to internalise the
business.

Strategy for internationalising
There are several different types of strategies which can be used by the companies at time
when they want to internationalise. The major types of strategies are as follows-
Multi- domestic strategy- this is the type of strategy which involves company sacrificing
the efficiency for focusing over the need of the local market worldwide. The aim of this type of
strategy is to meet the need and demand of the local market worldwide with help of
customisation of the goods and services in accordance to the requirement of consumers.
Global strategy- this is a type of strategy which provides similar type of goods and
services all over the globe in a standardised format. Here the goal of the business is to maximise
the working efficiency of the company in order to reduce the cost of the goods and services. The
cost will be decreased because of the fact that here the company will not produce the goods and
services as per individual requirement of the consumer and rather they produce for the whole
group of consumers (Brenner, 2018).
Transnational strategy- this is a type of strategy for internationalisation wherein the
company uses the combination of both the strategies that is global and the multi- domestic
strategy. Here the company tries to make a balance between both the strategy that is they focus
on the local requirements of the people and along with it makes some modification for the other
international market as well.
Out of the three it is recommended to ALDI to make use of the global strategy for the
internationalisation. This is due to the fact that when the company uses the global strategy then it
will cater to the need of the whole country and the other places as well. Thus, this will increase
the working efficiency of the company as well.
Country environment analysis
 Political Factor: This factor is not favourable in the nation as there is no political stability
this will force the company in changing the variety of the different type of the
organizational policy on regular basis.
 Economical Factor: This factor is not that favourable for the company as Nigeria is
developing country and promote free trade which will help the company in getting good
support (Cascio and Boudreau, 2016).

 Social Factor: This factor is very favourable as there is good sort of the need of the new
product in the market. As ALDI used to offer variety of different product it will help
them in overcoming the same.
 Technological Factor: Technological factor is not that favourable as it may increase the
cost of the company, as organization in real has to adopt the variety of the technology to
carry out different operation in the organization.
 Legal factor: This factor is also not that favourable in the organization, reason behind the
same is identified that there is good sort of change in the laws of UK and Nigeria. This
eventually force the company in the nation to bring the variety of the change in the policy
to overcome the different issue which is being faced in current scenario.
 Environmental Factor: There are variety of environmental factor which can be faced by
ALDI in Nigeria but as company generally uses recycled raw material in their packaging
it will help the ALDI in overcoming the variety of the different type of the issue related
to the Environmental factor
Mode of entry
There are various modes through which ALDI can enter into Nigeria and these are listed as
follows-
Merger and acquisition- this is a method of entering in new market by either merging with some
other similar company or by taking over some other company.
Advantages Disadvantages
The major advantage is that this provides
economies of scale.
The major drawback is that the cost of merging
and acquiring is very high for the company.
Another benefit is that the profit margin
increases as it merges with other company.
There is increase in unemployment as the two
companies merges with one another and this
reduces the common post in both the
companies.

Franchising- this is a method of entering in the international market with help of getting the
rights from a big company and continues their business in its original name only. Under this
method ALDI can hire some other country and give them the right to run the business under the
name of ALDI (Kokodey, Gnezdova and Lomachenko, 2018).
Advantages Disadvantages
The risk of new business is minimized as the
business is already well established.
The cost is higher for franchisor as they have to
pay the royalty.
No prior experience is required by the
franchisor as they have to continue with set
guidelines.
The franchisor have to follow all the rules and
guidelines being provided by the company.
Joint venture- this is another type of method of entering in the international market wherein the
company partners with other similar company for a specific purpose. As the purpose of the
company is attained the venture comes to an end.
Advantages Disadvantages
As the purpose is over the venture comes to an
end.
There might be clashes of culture are both the
countries have different cultures.
This pools the resources of both the business
and the expertise as well.
This is temporary as the purpose will be over
then the company will not exist.
In the end it is recommended to the company to go for merger and acquisition. This is due to the
fact that when the company merges with another company then they can have access to other
market easily. Also, the resources of the two company merges which creates synergy.
Leadership qualities
For global business it is essential for a leader to be sensitive to the cultural diversity. The
effective leader works on managing the things across varied culture in professional manner by
taking into consideration the cultural aspect. The leader shows the entrepreneurial perspective to
the team members which provides assistance in effectively managing the teams across different
cultures (Bird and Mendenhall, 2016). The leader is required to have knowledge about the
different cultures which provides assistance in effectively communicating and coordinating with
the team members and providing motivation to them so that employees feel energized and work

together as a one team all across various organizational departments. It is important for the leader
to have and showcase the entrepreneurial characteristics for effectively managing the teams
which also creates a sense of responsibility for the organization (Kouatli, 2016).
For effectively managing the teams remotely, it is important for the leader to possess the
characteristics off effective communication, openness, to be emphatic or the emotional
intelligence and the application of soft skills. The leader needs to have or prepare themselves to
acquire these qualities which results in appropriate management of the team remotely along with
ensuring that work is being done collaborative and with proper coordination. Thus, all the stated
qualities are very crucial for a leader to possess in order to effectively and appropriately manage
the global business along with meeting up with essential business and team requirements. All
these qualities, makes the effective leader with varied skills and knowledge.
INDIVIDUAL REFLECTIVE ESSAY
With the above whole study, I learnt that the internationalisation is very essential for the
success of the business. This is pertaining to the fact that if the company will not work in the
international market then it might be possible that the company does not grow to the level which
is required. With this study I learnt that for this the most essential thing is the effective leadership
as the leadership assist the company in providing guidance to the employees and the other people
within the business. This is due to the fact that if the leadership will be effective then the process
of internationalisation will be easier (Thanetsunthorn and Wuthisatian, 2016). This is due to the
fact that at time of internationalisation there are many different complications and tough
activities which need to be addressed. Thus, for this the effective leadership is very essential for
the successful implementation of the process of internationalisation. The process of
internationalisation is very tough and time consuming and for this there are many different
activities which will be undertaken to complete the process of internalisation. Thus, with this
study I was able to increase my knowledge base as this study helped me in undertaking a variety
of steps and activities. The first included the analysis of the domestic market is very essential to
be studied as this will help the person in knowing the fact that in what areas the company is
lacking and because of these reason there is a need for internationalising (Hacıoğlu, Dinçer and
Alayoğlu, 2017).
In addition to this I learnt that it is very difficult to analyse the country in which the
company can go and expand its market. This is particularly because of the reason that there are

many different countries and it is very difficult for the company to choose the appropriate
country in this they have to enter and expand the business and grow and develop. Also, I learnt
that with the help of the analysis of the environment it was seen that whether the chosen country
is suitable for expanding the business or not. This is due to the fact that with the analysis of the
environment of the industry with help of PESTLE analysis it was seen that the country is
favourable. This is only in the case that when all the external environment points are discussed
then only it can be analysed that if all the external factors like political, economic, social,
technological, legal and environmental are positive then the country is suitable for expanding the
business.
Even with this I learnt that in all these stages of internationalisation the most important
thing is time management. This is due to the fact that if all these activities will not be managed
on time then the whole process of internationalisation will not be undertaken in proper manner.
Also, in addition to this I learnt that the coordination is also an important skill which I learnt with
the whole study. This coordination is very essential as if all the activities will not be coordinated
then the whole study will not take place in the intended manner. Also, in addition to this I learnt
that for doing this study the researching skills also need to be good and effective. This is
particularly because of the reason that before entering in the new country if there will not be
proper knowledge relating to how to research for the country then the project will not be
successful. This is due to the fact that if the country will not be researched in proper manner then
it may be possible that the person is not able to analyse the fact that whether entering in the other
country is beneficial for the company or not. In addition to this I also analysed that my
communication skills also increased with help of this project. This is due to the fact that without
communication not a single work can be undertaken and this project helped in great manner in
increasing my communication skills. This is due to the reason that at every stage of analysis the
communication was required and this assisted me in working on my communication skills
(Brannen, Piekkari and Tietze, 2017).
CONCLUSION
In the end it is concluded for running the business in successful manner it is very
essential for the company to go for internationalisation. This is due to the fact that this assist the
company in improving the level of business. The report focused about the reason for ALDI to

expand in Nigeria along with different strategies which it can adopt. Also, the various market
entry route was discussed along with the leadership quality required.

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