Aldi's Business Strategy: Market and Competitive Analysis Report

This report provides a comprehensive analysis of Aldi's business strategy, focusing on its market position and competitive environment. It applies the Ansoff Matrix to evaluate Aldi's market penetration, product development, market development, and diversification strategies. Furthermore, the report utilizes Porter's Five Forces framework to assess the intensity of competition within the retail industry, examining the bargaining power of customers and suppliers, the threat of new entrants and substitute products, and the competitive rivalry among existing players. The analysis also explores Aldi's resources, evaluating their value, rarity, imitability, and implications for the company. The report concludes by highlighting Aldi's strengths and weaknesses and suggesting strategic recommendations for enhancing its competitive advantage.

Environmental and Competitive Analysis of Aldi
Aldi Ansoff matrix
Market penetration: In this strategy company focuses on selling
existing products in existing market. For that Aldi requires focusing on
marketing activities.
Product development: Main focus of company is on product as
company requires focusing on introducing new product to an existing
market for attracting customers.
Market development: In this strategy, company focuses on market and
Aldi can enter in new market by using existing products. It is being used
for increasing market share.
Diversification: It is quite tough and risky strategy in which company
enters in new market with new product (Loredana, 2017).
Among all of these strategies Aldi is focusing on market development or
with existing products it wants to enter in new market. It wants to
increase market share and by making an effective strategy it can
accomplish its goals.
Resources Valuable Rare Imitabilit
y
Resource
s
Implications
Employees Yes Yes No yes Improve brand
image
Customers
’ loyalty
Yes Yes Yes Yes Help in
increasing
sales
Global
presence
Yes Yes Yes Yes Help in
competitive
advantages
Brand
image
Yes Yes Yes Yes Help in
competitive
advantages
Supply Yes Yes No No Sustained
Porter’s five forces analysis
Porter’s 5 forces Intensity Description
Bargaining power
of customers
High As it is stated that competition among existing players are tough
and high as for becoming the market leader they reduces their
prices. Customers in this fierce competition have options to switch
shop. Intense competition and efforts for attracting customers give
great bargaining power to customers (Mukherjee, 2018).
Bargaining power
of suppliers
Low Retail industry has a lot of suppliers as they are always ready to
supply. Companies have a lot of options and they can switch
suppliers. Suppliers do not have options so; this it is low intensity
of power.
Threats of new
entrants
medium This force has medium intensity because for establishment
business in retail industry requires heavy investment.. Also people
require skills and capabilities for competing existing players and
ALDI is well known retailer. Making customers aware about
effectiveness, influencing them and attracting them is quite tough.
So, it has medium intense force.
Threats of
substitute products
High Products that are being sold by Aldi is not unique as local
supermarkets can also sell exact same products. Most of the
products are of brand that can be sold everywhere. For becoming
marketing leader they need to invest in marketing and promotional
activities.
Competitive
rivalry
High Competition in retail industry is high as there are several well
known retailers in the market who provides products at almost
same prices. Wal-Mart, Woolworth, Tesco are some big players
that are increasing competition.
REFERENCES
Mukherjee, I., 2018. Applying Porter’s Five Force Framework in Emerging Markets
—Issues and Recommendations. In Strategic Marketing Issues in Emerging