Business Development Report: Aldi's Romanian Market Entry Strategy

This report provides a comprehensive analysis of Aldi's business development strategy, specifically focusing on its planned entry into the Romanian grocery market. It begins with an introduction to business development and an overview of Aldi, highlighting its core values and strategic alignment. The report then explores Aldi's business development idea, including the rationale for entering the Romanian market and various entry modes such as franchising, licensing, and joint ventures, with a detailed SWOT analysis focusing on licensing. The report presents justification for Aldi's expansion into Romania, supported by facts and figures regarding market growth and competitor analysis. It also examines opportunity recognition and the new business development (NBD) process, breaking down each stage of the process. Furthermore, the report conducts an environmental analysis, exploring macro, meso, and micro environmental factors affecting Aldi's operations in Romania, and concludes with a summary of the findings.

Business
Development

Table of Contents
INTRODUCTION ...............................................................................................................................3
MAIN BODY.......................................................................................................................................3
Business development idea & Overview of company ...................................................................3
Justification: facts and figures.........................................................................................................5
BD process & evaluation.................................................................................................................8
Environmental analysis ...................................................................................................................9
CONCLUSION..................................................................................................................................18
REFERENCES...................................................................................................................................19
Books & Journal:...........................................................................................................................19

INTRODUCTION
Business development is defined as carrying out the activities with purpose of introducing
long-term value of business in market. Main purpose of developing business is that to provide
additional services products and new customers to increase the profitability. In this competitive era,
it is important to focus on development of business ideas so that goals as well as objective achieved
in proper manner. Aldi, a supermarket chain of two German families, headquartered in Essen,
Germany. It has over 20 stores in countries & is to be estimated with more than €50 billion. This
report comprises of business development idea, facts and figures. Opportunity recognition, SWOT
analysis, BD process & evaluation, PESTEL analysis, macro, meso and micro.
MAIN BODY
Business development idea & Overview of company
Aldi, which is supermarket chain located in Germany and carry out its operations
worldwide. It is focusing on development of business at global to access to new opportunities.
Enteprise main aim is to increase business efficiency by providing high quality of products.
Manager of firm make assure that appropriate products are being offered to customers with better
discounts & offers (Kumar and et. al., 2016). The level of competition in market of grocery &
retailing sector is increasing at rapid scale. Their core value includes consistency, simplicity and
responsibility. The main reason for success of company is their strategic alignment between
commercial & supply chain strategies which comprises of STP & also company deals with suppliers
with close relationship.
Business development idea
In international marketing, it is important to have business idea to carry out activities in
other countries. It is essential to be aware about every plan, strategies on basis of which it is easy
for enterprises to enter into international market. Business development idea is defined as creation
or initiating of new ideas to increase the effectiveness of business. It is a systematic process which
needs to be done in appropriate manner. Developing idea requires thinking & critical skills,
In context of Aldi, as their business development idea is to enter into Romania grocery market to
achieve goals. Also there are various types of modes of business development idea which are further
discussed as follows-

Franchising-
It is mode of entry into foreign country in which it refers to giving or allowing franchisee
against payment/ fees. It is used as entering into market for business purpose (Elijido-Ten, 2017).
Main benefits of this mode are that business activities are being carried out more efficiently as
because of different talent. Through this entry mode, it is easy to enter into international market.
Licensing-
It is to be viewed as method in which one firm allows other firm to supply, manufacture
product for a particular time period and payment. In international marketing, home country based
company allows with to host country firm with limited resources to produce or manufacture
product. In relevance of selected organisation, they uses licensing as mode of method to enter into
international market.
Joint venture-
It is another mode of market entry which refers to strategic arrangement between two
partners. Main aim of using this method is that it help in establishing of new business or access to
competitive advantage (Chen and et. al., 2017). In context of Aldi, they can opt this approach as
they are into strategic partnership with suppliers at larger scale.
Main reason for using licensing as mode of entry is further explained as follows-
SWOT- Licensing
Strength
 Main strength of this mode of entry is
that through licensing it is easy to
expand business & access to customers
at broader level in other country.
Weakness
 Adopting of this method leads to loosing
of intellectual property rights due to
which Aldi can lose their goodwill.
Opportunity
 They have opportunity of being making
new business criteria with other brands
too through licensing.
Threat
 As due to ongoing pandemic situations,
choosing of this method have big threat
because firm can face issues such as
environmental laws in different countries
can impact on business.
So, above discussed matter states that it is essential to focus on business development idea
as it assists in achieving of goals as well as objectives in proper manner. In international market,

entry into market is not easy & requires appropriate type of entry modes. Thus, chosen firm uses
licensing as entry method.
Justification: facts and figures
Aldi
According to European supermarket magazine, Aldi has been started carrying their
recruitment activities in Romania grocery market. They are too focusing on development of
business in Romania as country is considered as fastest growing grocery market for business
(Angeli and et. al., 2017). It is main reason why chosen entity is entering into market area of
Romania. Moreover, it is examined that market of chosen country is booming at rapid scale.

Picture showing retail sales in Romania (2015-2019)
From above shown picture, it depicts that food supermarket business is booming in country
due to high demand of customers & is great opportunity for foreign businesses to carry out their
activities. Further, in viewpoint of Aldi, as they operate more than 20 countries their cost structure
is also increasing. So, they are planning to develop their business expansion in more foreign
countries in order to increase their profit as well as sales revenue at higher scale. This has been too
analysed that they have started hiring people of Romania for their expansion of idea.
In context of given firm, they too have many competitors such as Sainsbury, Morrisons etc.
as they are entering into Romania, Mere is being considered as largest competitor of company
because both entities are focusing on providing of low cost products to their customers (Ansari,
2017). Also, company is following a aggressive expansion because of flexibility of market &
enhance productivity level. So, it is examined that it is crucial for selected company to gather or
collect relevant information so that it is easy to make business expansion in most efficient manner.
Opportunity recognition
According to National Institute of Statistics, Romania is being viewed as highest
recognized country for business as their food & retail sales increases by 6% in 2018 as compared to
2017. Also, retailers had a higher growth in turnover in 2017 & numbers are increasing at rapid
scale in country. So, in relation of chosen entity they have identified opportunity in Romania in
food retail which is beneficial for their future growth & development.

Manager of firm make assure that environment scanning is done in correct way so that it is
easy to achieve benefit in international market with reducing of uncertain situations. Furthermore,
another opportunity which has been recognised by Aldi is that discounts rates of foods in country
are flexible & changes from time to time depending upon demands of customers. So, entity can
offers discounts to customers in their own way.
Therefore stated paragraph shows that while developing business plan in other country it is
necessary to identify whether company can gain benefit or not. It assist in making of planning &
implementation at appropriate level.

BD process & evaluation
Business development idea process
NBD- New Business development process
The new business development idea process is systematic process which requires large range
of market information to establish new business. It is mostly used by enterprises when there is need
of introducing new business, products or service into market (Lee and Sohn, 2019). It is crucial for
entities to adapt this process as it assist in achieving of objectives efficiently. As shows in picture, it
comprises of several stages which are described below-
Explore & access ideas- It is a first stage in which ideas are identified and explored at
wider scale. Ideas are important in business without which it is not possible to achieve goal in
proper manner. So, in relation of Aldi, their business idea is to enter into Romania's grocery market
to expand their operations. Generation of idea first step which needs specific clarity & reason to
access to further stages.
Refine & access idea- In this second stage of process, chosen firm conduct a feasibility
study in which information is gathered for adopted business idea so that further planning is done

accordingly. By refining ideas eliminate the chances of risk. Revising idea is too necessary because
it makes it easy for entrepreneur & businesses to make decisions appropriately regarding selection
of idea.
Go/ on-go decision- This aspect reflects that decisions about given idea is revised again and
again. With this go- on go decision stage, correct type of resources are used for further process &
procedures. Moreover, brainstorming or group discussions can be adopted for making effect8ive
decisions during process.
Prepare and implement business plan- This is stage in which it reflects that final business
plan and blue out-print is being implemented with proper considerations. Business plan helps in
carrying adopted idea in most efficient manner. A high level of proper knowledge & expertise is
needed to make plan as without planning functions or operations cannot be carried out.
Business operation- In this aspect, it is last step of business development process in which
the ideas came into real into course of action. Business operation is to be done with appropriate
scanning of environment of market. In this, it comprises of marketing, advertising, management
etc. In reference of adopted firm, it will take to carry out business operations in Romania properly.
After analysing of discussed paragraph, it is examined that development process need to are
carried out in such a way that objectives are achieved. Further, everything is to be done with
appropriate type of decision making.
Evaluation
From discussed process of NBD, it is seen that when developing new product or service into
international or national market appropriate type of processes are to be followed so that set
objectives are achieved accordingly. Moreover, it is too seen that correct type of decisions are to be
carried out. NBD is beneficial process which needs proper information & analysis.
Environmental analysis
When entering into new foreign market, it is crucial to conduct environment analysis on
basis of which it is easy to make decisions for further process. It is time consuming process but
require appropriate type of field knowledge as it helps in achieving of competitive advantage.
Moreover, it is duty of manager to make ensure that decisions are carried out in correct way.
Meso Environment
Meso environment is defined as process in which depicts population size between micro &
macro levels. It is also to be known as medium systems which includes several factors which are
discussed below-

Organisations
This is factor in which it focusing on carrying out operations, functions & activities in
proper manner. Organisation has deeper impact on environment as because it assists in development
of economy, capital generation etc.
Communities
Communities are too crucial for environment too as they help in managing & maintaining
relationship between individuals. It is also analysed that communities comprises of social beliefs,
norms, guidelines, etc.
Political parties
Meso environment analysis also includes political parties in which it different type of
parties is involved & which has deep impact on external & internal analysis.
Ethnic groups-
These are those groups which identify every group on basis of shared beliefs, culture,
religion, social treatment etc. They have wider impact on entity because environment comprises of
with such type of groups.
MACRO Environment
There are various factors which affects the working of a business organisation internally and
externally. Management of a firm should consider both factors i.e. internal and external in order to
achieve their desired goals with effective utilisation of business resources. Macro environment
considers economic factors which affects an economy as a whole rather than a particular region or
sector. It includes GDP, employment, inflation and various fiscal policies adopted by government of
respective nation. Business enterprises uses various factors in order to deal with its external
environment as it has a huge impact on business workings directly or indirectly. Aldi uses PESTLE
analysis and Porters five forces to expand their retail business in Romania keeping in mind all the
macro environment that affects working of business.
PESTLE Analysis
This analysis includes various external factors that affect working of a business organisation
directly or indirectly. It is important for a business firm to cope up with dynamic environment of a
business. In viewpoint of selected corporation, this analysis helps in decision making process of the
workforce, it makes sure that decisions taken in general meetings of the company are effective
enough to carry its operational activities for boosting up their sales activities. It helps in reducing
the risks of uncertainties of a business environment and guides management to formulate better
strategies towards achievement of organisational goals efficiently. A deep study is been conducted

on following factors to ensure better performance of business activities and to avoid wastage of its
resources.
Political Factor: These are the factors which determine various products or services
launched by the company in market are favourable as per the policies and rules implemented by
government of respective country. These factors include tax policies, trade tariffs, fiscal policies and
many more. With context to given firm, it is a brand that is owned by German family and has
around 10,000 supermarket stores distributed in 20 countries. The company is already dominating
international market and has captured markets of Switzerland, Italy, UAE, Dubai (Lindgreen, Di
Benedetto and Kock, 2020). For future management has decided to establish their business in
Romania and for that this factor is important to be looked for it's management as it ensures various
policies implemented by business is favourable as per government policies of that region. This
factor have a negative impact on business as it increases business risks as well as uncertainties and
makes it difficult to a firm to implement business policies.
Economical Factor: This includes various determinant factors of an economy performance
that directly affects business environment and has its impact for long term. For instance rise in
inflation will force various companies to increase their prices of products and services as raw
material is also delivered to the firm at higher rates because of inflation effect (Murdock and
Varnes, 2018). With relation to Aldi Ltd., economical factors are been taken into consideration in
order to make effective decisions towards success of business plans. This factor has impact business
workings such as on interest rates, recession, taxes, inflation and many others.
Social Factor: It is also known as socio-cultural factors that includes demographic
conditions affecting business firm directly or indirectly. This includes growth of population, age
composition, health awareness and many more. In context to Aldi Ltd., the company has a strong
distribution channel which ensures desired distribution of its products all over the country. It also
helps in building up of good market presence of a company and increases customer loyalty towards
it's brand. This factor has impacts on cultural, regional and increases awareness of business firm
towards the society.
Technological Factor: This factors includes various innovations in technologies that helps
in making firm operating there business activities for a longer period of time. It helps a business
firm to conduct proper research and development for proper analysing its environment and be their
customers favourite for a longer period of time (Patnaik, 2017). In context to selected firm,
management of firm adopts various innovative technical strategies in order to capture market
customers demand. It helps to build good market presence as well as maintains loyalty of
companies customers towards respective brands.