Business Strategy Report: ALDI's Strategic Plan and Recommendations

This report provides a comprehensive analysis of ALDI's business strategy, starting with an introduction to strategic planning and its components, including mission, vision, objectives, goals, and core competencies. It examines the factors ALDI must consider when formulating its strategic plans, such as competitive advantages, internal and external factors, stakeholders, political and technological influences, and competitors. The report then delves into the usefulness of techniques like the BCG matrix and SPACE matrix in developing strategic plans, followed by an organizational and environmental audit using SWOT and Porter's Five Forces. It also includes a stakeholder analysis and proposes a new strategy for ALDI, justifying the chosen market growth and entry strategy. The report concludes by outlining the roles and responsibilities for implementing the new strategy, resource requirements, and the contribution of smart targets in achieving strategic objectives.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Aldi's mission, vision, objectives, goals and core competencies that inform strategic
planning..................................................................................................................................1
1.2 Factors which Aldi has to consider when formulating their strategic plans.....................2
1.3 Usefulness of techniques used when businesses develop their strategic plans................3
TASK 2............................................................................................................................................5
2.1 Organisational audit for ALDI.........................................................................................5
2.2 Environmental audit for ALDI.........................................................................................6
2.3 Importance of stakeholder analysis..................................................................................8
2.4 Proposing a new strategy for ALDI..................................................................................9
TASK 3............................................................................................................................................9
3.1 Appropriateness of suitable strategy for ALDI................................................................9
3.2 Justification for the chosen market growth and entry strategy.......................................10
TASK 4..........................................................................................................................................11
4.1 Roles and responsibilities of personnel for the implementation of new strategy...........11
4.2 Resource requirements for the implementation of strategy............................................12
4.3 Way in which smart targets can contribute in achieving the strategic objectives..........13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
“Strategy is simply resource allocation (Jack Welch). When you strip away all the noise,
that's what it comes down to. Plan of action means making clear cut choices about how to
compete. You cannot be everything to everybody, no matter what the size of your business
organisation or how deep its sack- Jack Welch”. Hence, a company must have a strong strategy
in order to contribute to the success of business. In the present report, ALDI has been chosen that
is the chain of supermarkets which is operating internationally. This research is all about ALDI’s
strategic plans and procedures which are being followed in order to have proper functioning of
company. This study consists of a complete guideline about ALDI’s operations, its mission,
vision, core competencies as well as goals and objectives. Along with that, the way in which it
makes strategy to overcome various threats is also being described here. Also, there are
suggestions for a new strategy which Aldi can implement to become stronger in its operations.
TASK 1
1.1 Aldi's mission, vision, objectives, goals and core competencies that inform strategic planning
Strategic planning consists of plans and procedures which company makes to achieve the
targets which are set for gaining success in business. It consists of firm's various statements such
as mission, vision, goals and core competencies. It is the information which is necessary for all
employees who are working with company so that they can have a proper direction to perform
their actions (Anitsal, Anitsal and Girard, 2012). Aldi is an international company which also
having these core values on which it operates and strategies- for same are listed below:
Vision
Company aims to build an environment which provides high quality products at low cost.
For this, ALDI has obtained various strategies to cut down the cost by reusing and recycling
policy. Company forecasts itself as promoting sustainability and development by utilising
resources fully (Hall, 2015).
Mission
ALDI's main purpose is to provide grocery products related to food and daily utilities to
each and every customer with high quality. It aims to reach people across the globe by providing
best services to customers (Hougard, 2012).
Goals and Objectives
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Its primary target is to become a number 1 company in grocery market by providing the
best services. It focuses on profit but also works for society's development so that things could be
improved and developed (Brandes, and Brandes, 2015).
Core Competency
There is high competition present in the market for Aldi like Sainsbury’s, Tesco,
Morrison's, etc. Hence, company needs to deal with it so it have made some Unique policies so
that it can have differentiated services from its competitors (Eggers, Batsche and Kuperstein,
2013).
Simultaneously, while developing strategies for company, these are to be taken into
account so as to have sound and strong hold over the business and direction in which firm is
moving.
1.2 Factors which Aldi has to consider when formulating their strategic plans
Aldi, the grocery giant, has to consider many factors in order to have a strategy which is
suitable for its operations (Asghari and Aissa, 2010). There are elements which affect the
operations of business directly and indirectly. These elements are to be considered while
formulating strategies. These are listed as follows:
Competitive advantage
The company have to form some strategies which have been different from its
competitors like- it aims at making people aware of recycling the products and services which is
a competitive advantage. This can be used by the firm for further development of strategies.
Internal factors
These factors consist of internal structures, plans and procedures according to which the
strategies have to be formed. ALDI has some core values which have to be considered while
formation of strategy.
External Factors
These are outside the business but these elements affects business's operations for e.g.-
political conditions, legal conditions and other factors in PESTEL are considered in external
factors while formulation of strategy for ALDI.
Stakeholders
Stakeholders are the core people of business who are directly responsible for business
operations. They are the people who are associated with business hence, they contribute in
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decisions making which must be accordance with their consent (Astrachan, 2010). While
strategy implementation it is important to consult with them.
Political factors
A country's structure and its native people also affect the business (Brandes and Brandes,
2012). They are influenced by legal bodies operating in it and hence, these are also needed to be
analysed while making a strategy for the same.
Technological factors
There is constant development in this factor which has to be acknowledged in order to
have a plan which meets the requirements of current scenario.
Competitors
There is a huge threat to company by its substituents and competition so it have to assess
rivalries strategies in order to make their own so as to have core competency to have an edge
over them (Champoux, Durgee and McGlynn, 2012). .
1.3 Usefulness of techniques used when businesses develop their strategic plans
BCG (Boston Consulting Group) is a portfolio matrix which is basically used by business
strategist to have the best strategies for their business (Chen and et. al., 2010). This matrix helps
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in assessing the factors according to business requirements that results in the formulation of an
effective strategy. It provides assistance to business about where to invest and where not to.
There are four quadrants in this which are listed as below:
DOGS
These products have low market share as well as their growth is also low. Hence, they
can be retrenched from company so as to save the cost of production for them. For example-
Supply services of the company.
QUESTION MARK
There is a chance for some products either to develop or fail as they have high growth
rate but low market share (Cheng, 2013). Company can put a risk to sale them as they may rise
in market as well as they may fail to rise which might increase revenue. For example- Clothes
range of company is considered under this.
STARS
These products are always acceptable in the market with having high market share as
well as growth. These are the best products of company contributing to it on a large scale. For
examples- FMCG products.
CASH COWS
These products require a cash injection or a push so that they can work in the market as
they have low growth but high share. For example- Wine and liquor products of ALDI.
On the basis of above description, ALDI can choose a strategy to sale various products in
which it is dealing and this analysis will help company to have the best decision regarding
offerings which have to be retained in business and which is to be withdrawn.
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SPACE (Strategic Position and Action Evaluation) matrix is generally used to develop
strategic choice for business (Ellickson, Misra and Nair, 2012). It consists of various factors
which are classified as internal and external like environment stability, industry attractiveness,
competitive advantage, financial strength, etc. After analysation of these factors, there comes a
strategy for aggressive, competitive defensive and conservative posture. With the help of this,
ALDI can make an appropriate strategy for its operations that could help it to have success in the
market. This is a well-known and mostly used strategy for businesses who aim at the formation
of long term strategies so that they can earn more revenue.
ALDI needs to adopt competitive advantage strategy which will help it to overcome the
competitors in market and attain a more superior position than it is on as of now.
TASK 2
2.1 Organisational audit for ALDI
Audit refers to analysation of factors that are associated with business and related to
them, strategies are evaluated so that problems can be rectified (Eppstein and et. al., 2011).
ALDI is a grocery company having its presence worldwide and hence, for its organisational
audit, SWOT analysis technique can be used which is as below:
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Strengths
 Maintenance of quality in products
 Pricing of product is affordable.
 Having presence worldwide A positive brand image
Weaknesses
 In comparison with competitors, it has
small share.
 ALDI has less number of chains.
 Needs to work on developing a global
impact
 It is sometimes classified as a cheap
brand in the market by people
Opportunities
 It can have budget control strategies
which are there in the market.
 It can expand its business in more
locations globally. Developing country would be a great
opportunity for company.
Threats
 The major threat is of competition and
substituents.
 It is not providing a complete shopping
experience to the customers.
 This can be affected by other
competencies.
Current strategy of ALDI is that it provides a huge range of products which are of very
low price and it have a competitive advantage that it promotes recycling of products and
services. Hence, the company is at a very good path to grow and excel its business further in
order to develop and grow.
2.2 Environmental audit for ALDI
Micro and macro factors are considered in the environmental audit. These include
customers, suppliers, employees, government and shareholders and they affect the decision
making of business. A reference for this by conducting various environmental factors analysis
for ALDI have been given below:
Customers They are the key people of a business who buy
its offered products and services (Gielens,
Helsen and Dekimpe, 2012). It is necessary for
company to access the needs and wants of
these people so that products could be
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produced accordingly to maximise profit.
Employees These people of organisation are responsible
for operations and execution of various
functions. These people are involved in the
decision making of a business for various
problems which might rise in organisational
context.
Suppliers They are the people who supply goods and
services of company to final consumers and
firm has to maintain a proper relationship with
them.
Government Rules, policies and legal procedures which are
made by government have to be followed in
business which affect its operations.
Shareholders They are the people who directly invest in its
operations (Gklaveris, 2016). Funds are
provided by these people and they play a keen
role in initiating the plans into actions.
Macro factors consists of all the factors of economy as a whole which impacts business.
These includes social, technological, socio cultural, legal and political (Grant, 2016). Porter's
five forces model would be best to justify macro factors for ALDI. They are not controllable by
firm and a justification to them is given below:
Bargaining power of supplier The potential suppliers of ALDI will set the
prices of goods according to their demand and
their monopoly which will impact the final
good prices of company. Hence, this would
impact company's operation directly. It can be
high, medium and low depending on the
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quality of product.
Bargaining power of buyer The potential consumers of good can have the
power to negotiate with company as there
demand is in large number and company will
have to modify its operations according to it.
As the buyers aims to buy products at low
prices so they tend to bargain for high products
to be set at low prices.
Threat of new entrants Their are many new business in grocery are
coming up which have new strategy and an
ability to capture market which will be a threat
to Aldi as it can loose its customers.
Threat of substitutes There are many substitutes of grocer in UK's
market and they are TESCO, Morrisons,
ASDA, Sansburys etc. which can be chosen
over by consumer other than ALDI this could
impact revenue of company.
Threat from rivalry There are competition available in market for
which ALDI have to make appropriate strategy
so that it can deal with it properly so as to have
a lead over market by capturing maximum
share.
2.3 Importance of stakeholder analysis
Stakeholders are the people who are associated with the company directly of indirectly
they are classified as internal and external. Internal stakeholders consists of owners, employees,
managers etc. External consists of customers, shareholders, government etc. Further they are
classified as: Primary stakeholders(Owners, Customers) Secondary stakeholders(Employees, Managers)
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 Tertiary stakeholders(Public authorities)
Stakeholder analysis is very important and this can be justified by Mendelow's matrix
which classifies them into various categories. This matrix helps to have a result of impact that
stakeholders will have on particular strategy (MacGregor, 2010). Justification for the boxes
shown in this matrix is given as below:
Box A- Minimum effort
Least interested with least power which makes them to be open to influence. They are
more concerned to go with the regular change as they don't pay much attention to what is going
in organisation. They are general public who are not associated with ALDI and are leat interested
in its operations as they have no power in company.
Box B- Keep informed
They are to be informed from time to time despite the fact that they have low interest but
their power is very high in context with business (Meskendahl, 2010). This will help in retention
of these players so that the don't shift to substitutes. Customers of company have to be informed
about new strategies and schemes of it as they have power for regulating operations of business.
Box C- Keep satisfied
They are to be satisfied as they have interest in business but they have least power. These
people are needed to be satisfies from time to time in order to have a proper enhancement of
power. Employees of the company have to be addressed here as they have high interested but a
limited power as they have to do what administration tells them to do.
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Box D- Key Players/Participation
They are the people who are main players in the organisation and they are necessary to be
informed as they have high power as well high interest in business of a company. The
stakeholders, main member of board and CEO comes under this category and they have power as
well as interest in business and its operations.
Hence, above justification helps in identification of various stakeholders and there role as
well as companies role towards them according to their interest and power (Moon, 2010). This
will help ALDI in taking appropriate decisions while formulating strategy in order to satisfy and
maintain its people for a long period of time with it.
2.4 Proposing a new strategy for ALDI
Currently ALDI is operating at various locations its main objective is to provide goods
and services at best quality with lower price. Company is having a strong presence in various
market internationally which tells its global presence. The company is recognizing to have many
competitors like- TESCO, SANSBURY'S, MORRISONS etc. so it wants to head over a
direction which will help it to attain leading position in market by capturing maximum share.
ALDI will get there by the following way:
Strategy:
Aldi is at 5th position in UK so it wants to be at the top which can be done by adopting
competitive strategies for differentiation by lowering price of products in order to penetrate in
market (Aldi becomes UK's fifth largest supermarket, 2017).
Objectives
Main objective of organization is to gain maximum number of share in market by
obtaining success through competitive advantage of price and CSR activities in enterprise.
Actions
Communication of plan of action for reduction in price by minimising wastage in a
proper manner will assist troupe to have manpower which will know what to do and where to go.
Hence, company can make strategy regarding pricing of product which will help it to
attain the position which it want to attain in market of its sector. As more and more customers
will be attracted by low prices which will help company to capture maximum share in market.
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