Analysis of Aldi's Strategic Management: Course ABC, Semester 2

This report provides a comprehensive strategic management analysis of Aldi, a UK-based supermarket chain. It examines Aldi's strategic approach, including deliberate and emergent strategies, and offers recommendations for future development. The report analyzes the macro-environmental and industry issues Aldi has faced, evaluating the effectiveness of its responses and identifying their impact on future strategy. It applies Porter's Value Chain framework to assess Aldi's strategic capabilities, utilizing the VRIO framework to evaluate the sustainability of its competitive advantage. Furthermore, the report analyzes Aldi's previous strategies using Porter's Generic Strategy framework and the Ansoff Matrix, assessing their appropriateness for the future and evaluating Aldi's approach to internationalization. The analysis covers various aspects, including political, economic, social, technological, legal, and environmental factors (PESTLE), to understand the external environment's influence on Aldi's operations. Overall, the report provides a detailed assessment of Aldi's strategic position and offers insights into its past performance and future prospects.

Strategic
Management

Table of Contents
Executive Summary.........................................................................................................................3
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Formulation to strategy that has adopted. Extent in which balance has appropriate and
recommend and how believe that balance should be changed for future. To promote
development what supports are required to balance of organisational strategies and plans........3
2. Major macro environmental and industry issues that Aldi has faced in the past. Evaluate
Aldi’s responses to the major macro environmental and industry issues. How effective have
those outcome been? Identify impact of major macro environmental issues that faces a firm to
be reflected in company's future strategy....................................................................................5
3. Porter’s Value Chain framework to analyse Aldi’s strategic ability. What connection in
Value Chain does Aldi manage particularly well? With the help of VRIO framework to assess
sustainability of Aldi’s strategic capacity....................................................................................7
4. Analyse Aldi’s previous strategies using Porter’s Generic Strategy framework, and Ansoff
Matrix. To what extent are these strategies appropriate for the future. Analyse the approach to
internationalisation that Aldi has adopted and assess the extent to which that approach has
been appropriate...........................................................................................................................9
Ansoff matrix of Aldi:...................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

Executive Summary
From this report, it has been summarize that strategic management provides and whole
direction for developing their plan and policies that should be designed their goals and objectives
to implement their allocation of resources. It is also help to achieve gain a sustainable
competitive advantage. Selected organisation is Aldi stores is a supermarket firm that was
established in UK with over 10000 stores in 20 countries. It is a family owned supermarket
business an estimated turnover is 50 billion. This firm adopted strategic management which help
them to face adverse situation and achieve their business goals and objectives.
INTRODUCTION
It is a ongoing procedures that planning, designing and assist all necessities of an
enterprise (Barney, 2020). They provide overall direction of business to develop various plans
and policies of firm to achieve an organisational objectives. The purpose of this management is
to help firm to meet its goals and objectives and the allows to take decision making. Within Aldi,
it is a supermarket firm was established in Britain on 5th April 1990 using completely owned
English registered company of Aldi stores Ltd. In an organisation, strategic management reflect
their procedures in an enterprise as well as to see external factors that may impact the
organisation functions. It include to set up their goals and objectives, analyse competitor actions
and strategies and review structure of firm. In this report, various topics are covered such as to
analyse emergent approaches strategy formulation, impact on macro environmental issue facing
a firm that reflect strategy, porters value chain, VRIO framework, critically evaluate porters
generic and Ansoff matrix.
MAIN BODY
1. Formulation to strategy that has adopted. Extent in which balance has appropriate and
recommend and how believe that balance should be changed for future. To promote
development what supports are required to balance of organisational strategies and plans
Deliberate Strategies: The concept of this strategy is a procedures of thinking,
budgeting and designing a set of strategy points (Baum and Auerbach, 2017). Deliberate
strategy employed a large enterprises that can established within their markets and that results
matches the supposed course of action. Within Aldi Ltd. it helps to achieve their business
objectives in a certain manner and helping expected outcomes. It is critical that every employee

in organisation to understand what strategy is so that they must successfully complete their
activities for implementation.
Emergent Strategies: According to this strategy, it is a continuous process for testing
and learning from unplanned actions within an enterprise. It is an action that create finished time
in firm for a specific goals and missions. In case of Aldi Ltd, it is important for organisation to
provide what customers want instead of what business assuming customers wanted.
Strategy like innovation is an repetitive procedures because direction will emerge and
reshape their assumptions. This is the act to managed between deliberate and emergent approach.
Recommendations:
 Aldi needs to raise their diversity for its service in order to capture various group of
customers in UK (Berisha Qehaja, Kutllovci and Shiroka Pula, 2017). So that number
of customers are attract through discounted offers ought to be are extended whether it is
middle class or high class.
 There is need for firm to start new project into another sectors in UK retail industry and
they can be earned through research in respect to enable the firm can identify best way to
diversify their segments. In future aspects of firm that customers prefer discounts a a way of savings and Aldi firm
can increased its competitiveness so that they can opened more stores across entire UK.
Support that are required to promote their development of organisational strategies and plans:
To development of organizational strategies and plan is a complex procedures that is
required and those leaders who have time and effort for the selection of resources so that ongoing
firm can feel confident about future plans.
 It ensures that plans are aligned with organizational mission, vision and goals.
 Build and develop their effective leadership team They can communicate their strategies and plans with employees
Changes in organisational strategies:
Plan carefully: Managing of organisational strategies they should be plan carefully and
effectively if they have change a team (Brui, 2018). They have a clear plan that covers a
minimum when, how and why these changes taking place.
Be transparent: These organizational changes will involve a level of confidentiality of
management team or definite individuals. It is a major change for employees and helpful to be

clear even if they get all the details and share all upfront pieces towards helps to staff to get more
comfortable.
Communicate: In organizational strategies they can communicate between manager and
employees and takes time to explain what is happening with the change. Clutch their team
meetings, makes questions, and invitation their reports to come and see finished their concerns in
an condition.
2. Major macro environmental and industry issues that Aldi has faced in the past. Evaluate Aldi’s
responses to the major macro environmental and industry issues. How effective have those
outcome been? Identify impact of major macro environmental issues that faces a firm to be
reflected in company's future strategy
Issues that are faced by business:
Forecasting demand and products: The main problem is that there are many people
who have forecast their future demand and do not have advanced coverage instrument to allow
estimate their how many items the should sell in a month or a year. The response in this to
forecast their demand in right and proper way so that they can accurate reporting instrument can
make it easier to target sales and estimate how many item are sold and what item are produce in
future.
Addition in ROI ( Return on investment): Manufacturer should want to increase their
ROI and it would usually raise their sales or price of some products (Dmitrieva, Ilinova and
Kraslawski, 2017). This is not an effective way to increased ROI especially when economic
conditions are not so good, purchasing power of consumer have reduced. In response to this,
many ways to improve their ROI such as increased their sales in right way, to update their
strategies of marketing and cost have decreased.
Managing sales leads: Another facing issue is to manage and high status sales, most of
people leads in same way but it does not right way to leads and improve their sales.
Manufacturer finding out difficult situation to identify potential leads so that they can focus on
unfortunate opportunity and remember to follow up with high expected lead. With response to
this issues are they understand their potential lead better through customer base. It must have a
system that makes easy to keep those data and manage to track potential information.
Controlling inventory: To control their inventory is one of main issues in firm because
tracking of goods and services is a time consuming procedures by help of software. Checking

inventory is very wasteful and inclined errors that can lead to inaccuracy, shortage of inventory
and sometimes overstock as well as unknown damages. The response of this issue unneeded
purchase of raw materials that has impact to customer satisfaction, maintain a good stock
management are also necessary. Barcode scanners can used to speed up pursuit process and
managers need to ensure that all the inventory are tracked and all finished goods are ready to
delivered to users.
Pestle analysis of Aldi Ltd:
Political: These factors is all bout what government intervene in economy related to
changes in laws and regulations and political stability (Ethiraj, Gambardella and Helfat, 2018).
Within Aldi Ltd, they start a new legislation that have a major impact in organization and various
legal policies they can followed in UK and non attachment to these legislation may result into
income and losses can damage firm image. Tax can be increase had a great impact of Aldi
because it raise a product's price.
Economic: Economic factors include growth of economy, interest rates and exchange
rates so that these factors can influence direct or indirect impact on a firm. It is also affects
customers purchasing power and way firms prices of goods and services. In case of Aldi Ltd, it
has a greater impact on disposable income in UK and consumer were shrinking their budgets.
Other major impact on price war with supermarket and these organisation have a huge capacity
to sell up their products.
Social: It can towards dimensions of environment for characteristics, traditions, norms
and customs within which firm's operates. It include population, age, attitudes, distribution level
and lifestyle of customers. With relation to Aldi Ltd, it is very especially important for marketer
for target their customers and managers uses to identify impact on sales of goods and services.
Technological: According to this factors, it may affect operation of industry and
technology changes in level of innovation, R&D and amount that market possesses. These
factors may influence decisions to enter certain industries or launch various products. With
context to Aldi Ltd, it is the major impact of technology, use of debit card or credit card in UK
means shopping price of customer have been increased. Sometimes changes in innovation and
technology that has adopted by firms for customers.
Legal: These type of factor include more particular laws and regulation such as
discrimination law, safety law, consumer protection law and patent law. Firm must to know what

is legal or what is not. Within Aldi Ltd, they can import goods and services in UK from other
country so thy must follow their rules and regulations for testing goods and check to ensure that
there is a license for labelling food or give off foods. Every country have their own rules and
regulation and public must follow its rules.
Environmental: These factor include raising of scarcity of materials, pollution, carbon
footprint to set by governments (Durand, Grant and Madsen, 2017). Environmental aspects
include climate, weather condition which may especially affect tourism, farming and agriculture.
In case of Aldi Ltd, it is develop to reduce the carbon footprint and affect how firms operate and
what type of product they offer. This has led to most of firms getting more involved in corporate
social responsibility and sustainability for success.
3. Porter’s Value Chain framework to analyse Aldi’s strategic ability. What connection in Value
Chain does Aldi manage particularly well? With the help of VRIO framework to assess
sustainability of Aldi’s strategic capacity
Porters value chain framework
It is a collection of activities that firm performed to act a value for its customers and
added value in which leads to competitive reward (Lak, Gheitasi and Timothy, 2020). They
focus on method and activities with customers and interact how customers gain competitive
advantages by performing important strategies. The main goal is to produce their products in
such a way that have a larger value in organisation for creating their products. With relation to
Aldi Ltd, it helps a firm to understand how to add value something and how can it sell a product
or service for more cost than value that's why it can generate profit. To deliver a company's
products and increase efficiency used to create a repetitive activities of product or service.
Primary Activities of value chain:
Inbound logistics: Activities that are associated with internal system such as receiving,
storing, warehousing and stock management. To bring a raw material from origin to firm and it
can be enhanced by improving quality of raw material as well as optimising cost of incoming
provision. In case of Aldi Ltd, it can purchase a bulk of material to manufacture their product or
service in its own brand name and decreased cost and broaden a competitive advantage in front
of its competitors.
Operations: They can convert raw material into finished goods and customer can
increased in step if product are manufactured in right manner and meet its quality of standards. It

include various activities which are named as packaging, assemble and servicing. Within Aldi
Ltd, they have an own brands and they can get back from its customers again with no
compromising quality and services they bring offer.
Outbound logistics: According to this logistics, various activities are required to collect,
store and distribute their output (Li, 2018). If outbound logistics are carried out in time with
optimum cost of products delivered to end customer with minimum effect for quality of product.
With context to Aldi Ltd, it is affiliated to how goods and services are produced ready to buyers
and end users. This firm has own outbound logistics like own transport to reach their product to
consumer.
Service: It is said to be that enhancing their physical product characteristics through after
sales services, installation and repairing systems. In case of Aldi Ltd, it is essential for each and
every organisation to provide their services to customers and if no one will buy their product
then brand will loose their market share eventually.
Support Activities:
Firm infrastructure: These activities consist of general management, finance, legal and
exterior affairs in which support operational functional prospect of value chain (Lasserre,
2017). Without firm infrastructure, there is a lack of government direction then firm faces a big
obstacle that will help to maintain facilities of firm.
Human Resource management: Activities are included in HRM involved in hiring,
recruiting, selection, training and development. They choose right people at a right place in right
position can make a difference between firm and HR department is most important for enterprise
to support their activity. With relation to Aldi Ltd, firm considered all activities to recruit and
retain employees, improve and increase enterprise. They would not be able to maintain a healthy
workplace and cultural environment.
Technology Development: According to this activities, it mean to develop their new
product or different about their product. It is concerned with equipment related to hardware and
software used by firm to transform input into outputs. In case of Aldi Ltd, they can identify to
product differentiation and if product does not keep modify according to as per new technology
then firm can rely on technology so that they can improve business communication and financial
record keeping.
VRIO Framework:

VRIO framework consist of internal resources of firm and capabilities to achieve a
competitive advantage (Pazouki, Jozi and Ziari, 2017). With context to Aldi Ltd, it is designed
to help enterprise to protect their resources and capabilities to improve long term competitive
advantage.
Valuable: According to this, value defined that there must be a clarify whether it is a
firm attempts to achievement of changes in technology, demographic changes, legal and political
conditions. The first and foremost question in framework is if a firm can added a resource value
to exploit their opportunities against threats. In case of Aldi Ltd, if valuable help organisations
to raise perceived customer value and increase discrimination to the price of product. If resources
can't meet this conditions then it leads to competitive advantage and review their resources
according to internal and external conditions can make them useless.
Rare: When a firm has valuable resources or capability that is unique for a set of
potential customers and enterprise capabilities must have both supply and continuity over time.
In context to Aldi Ltd, there is a situation where few firms have use same resources and same
capability leads to competitive equivalence. Losing their resources would hurt enterprise because
they are necessary for staying in market.
Imitable: In VRIO framework, if a firm with valuable or rare resources and capabilities
to make a difficult to re-create its products and services by another firms (Phillips and Moutinho,
2018). A competitive advantage is increase when imitability becomes difficult. In case of Aldi
Ltd, if firm has valuable resources, rare and imitate then they achieve sustainable and
competitive advantage. Sometimes it is hard for another firms for getting access to resources and
imitative innovative firm strategy.
4. Analyse Aldi’s previous strategies using Porter’s Generic Strategy framework, and Ansoff
Matrix. To what extent are these strategies appropriate for the future. Analyse the
approach to internationalisation that Aldi has adopted and assess the extent to which that
approach has been appropriate
Porters generic strategy of Aldi:
The term porters generic defines a framework that firm identify how they can pursue a
competitive advantages (Schilling and Shankar, 2019) . There are three/ four porters generic
strategies which are named as cost leadership, differentiation, cost and differentiation focus. An

organizations position in industry whether is firm profitability and productivity is below or
ordinary in long run in which they can gain a competitive advantage.
Cost leadership strategy: It is generally consists of attempt to gain a market share by
attractive of cost or restricted consumers. The aim of organisation is to become a low cost
producer that will aim to provide a unnecessary cost so that this strategy can prioritise reduction
all overheads. It depends on structure of an industry and a firm can achieve their sustainable
competitive advantage and overall leadership then it will be on average entertainer of an industry
and provide a bid prices. With relation to Aldi, it is helpful to reduce cost of operations in
grocery store and Aldi buys a low prices on skirts, build cheap storage and shows items on
platform. These stores have stocks about 700 products which are named as milk, vegetables,
fruits while a supermarket have range in 25000 to 30000 products.
Differentiation strategy: In this strategy, price is important factor and they develop
product attractiveness and to engage customers (Sedevich-Fons, 2018). A firm generally target
their larger markets and focus on differentiation on a wider scale within that industry. In case of
Aldi, they can provide customers to get a good quality products and get good salary package.
Firm pay a price of store assistant is $19.10 per hour and bonus are compared with industry
award and other incentives also.
Cost focus: They seek a target segment to develop a lower cost advantage but only seek
to control within small market segment. Their products are genera;y basic and similar to average
market products that will be acceptable to a sufficient number of customers in respect to make a
profits in a firm. With context to Aldi, they uses focus strategy in terms of cost and
differentiation and offers a best value to employees. This type of focus is low cost adopted for
needs on niche market at lowest possible price.
Ansoff matrix of Aldi:
It is an expansion grid that a firm used to tools and analyse various plans for growth and
product strategy (Somov, 2018). It consists of four grid segment such as market penetration,
product development, market development and diversification. It allows managers to summarise
the expected growth and analyse risk that is connected with each one.
Market penetration: It involves promotive growth sales with current customer inferior
which include all those activities are enhancing their market share and to focus on existing
market. In this, they determine existing product or exiting market in firm. In case of Aldi, this

strategy adopts requires lower prices and they used different type of marketing and identify
various promotional activities to push their sale in market. This strategy are associated with
penetration strategy to raising their sales by lowering prices. It helps Aldi to improve their
customer base that market become saturated point.
Product development: It is the second growth strategies in Ansoff matrix this involves
development of new products innovative products but existing market. Target existing customer
with new products need time efforts and resources of a firm. With relation to Aldi, it allows firm
to protection their risks and compensate losses incurred in one product line gain received from
others. There are three formulation in terms of new product development are as follows:
 Firstly, they offers new products with current product lines.
 Secondly, to offer a new products that reflect purchasing behaviour of current customers.
Market development: It is all about selling more existing product with new markets and
this strategy consists of explore and enter new markets. In case of Aldi, they uses market
development for successful enter into new market this will impact a brand behind this affordable
prices, strong brand name and value they expand their value chain through this strategy that
could support distribution growth.
Diversification: It determine new market and new products are developed that is related
or unrelated to firm existing offerin (Stamevski, Stamevska and Stankovska, 2018). With context
to Aldi, it is helpful or supported to cost leadership and existing infrastructure to explore new
product opportunities in new markets. It is applied to acquire profitability business after
analysing various market trends and many of customer expectations.
CONCLUSION
As per the above information, it can be concluded that strategic management is analysing,
designing, and meet all long term goals and objectives. In this report, various approaches to
strategy formulation that has adopted by firm, recommend the transformation in future and
support that are required in organisational strategies and plans, assess macro environmental
factors and industry issues that would be reflect in future, porters value chain and VRIO
framework to asses the firm capability and porters generic strategies, Ansoff matrix and firm
adopted internationalisation approaches which has suitable.

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