Business Strategy Report: ALDI's Strategic Planning and Analysis

This report provides a comprehensive analysis of ALDI's business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of strategic planning elements such as vision, mission, goals, objectives, and core competencies. The report then delves into the factors involved in formulating strategic plans, including employee engagement, resource management, and communication. Various planning techniques, including the BCG matrix and Ansoff matrix, are explored. Furthermore, the report conducts an organizational audit using SWOT analysis and an environmental audit using Porter's Five Forces. Stakeholder analysis and the development of a new strategy for ALDI are also discussed. The report examines alternative strategies for growth, including market entry and expansion. Finally, it addresses the roles and responsibilities in strategy implementation, resource requirements, and the use of SMART objectives for strategic planning. The report concludes with a summary of findings and recommendations for ALDI's future strategic direction.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1 ...........................................................................................................................................3
1.1 Strategic planning for business organisation ........................................................................3
1.2 Factors involved while formulating strategic plans .............................................................4
1.3 Various planning techniques ................................................................................................5
TASK 2 ...........................................................................................................................................7
2.1 Organisational audit for business organisations....................................................................7
2.2 Environmental audit of company .........................................................................................9
2.3 Stakeholders analysis .........................................................................................................10
2.4 Develop a new strategy for company .................................................................................11
TASK 3 .........................................................................................................................................12
3.1 Alternative strategies relating to substantive and limited growth ......................................12
3.2 Strategies for market entry and growth ..............................................................................13
TASK 4 .........................................................................................................................................14
4.1 Roles and responsibilities of who is involved in implementation of strategies .................14
4.2 Resource require to implementing a new strategy .............................................................14
4.3 How to use SMART targets ...............................................................................................15
CONCLUSION .............................................................................................................................16
REFERENCES .............................................................................................................................17

INTRODUCTION
Business strategy is an essential part of every business organisation as it assists in
achieving the set goals and objectives. Managers develop strategies and policies in order to
ensure the future market growth and success of enterprise. Business strategy is a kind of
management plan which supports in increasing the organisational performance and productivity
as well. This is the way of achieving goals from competitive market as without having an
effective business strategy, managers cannot compete with external environment. ALDI is the
chosen organisation in this present report which has over 10000 stores of retail products in global
market. Its annual turnover is more than €50 billion. The report involves mission, vision, goals,
objectives and core competencies of cited organisation which are necessary for strategic planning
of business organisation. Along with this, BCG matrix is used as a planning technique which is
helpful to develop strategic plans and policies. In order to analyse the current position of
company, SWOT analysis is done whereas Porter's 5 forces model is used for environmental
audit. It is necessary for Aldi to do strategic evaluation which is helpful to monitor the future
growth of company. At last, SMART objectives are used that contribute in the strategic planning
of ALDI.
TASK 1
1.1 Strategic planning for business organisation
Strategy refers to long term planning which is able to set the goals and objectives of
company. The concept of strategic planning determines organisational strategy and resource
allocation for achieving desired aim from target market. it is also helpful in describe the current
as well as future position of the company in target market.
. Strategic planning involves some major elements as without them, it is impossible to make
plans. These are: Vision – It relates with a particular picture of business organisation which encompasses
with where it is and where it wants to reach in the future. Without having specific vision,
no company can survive in the market. For instance- ALDI's vision is to increase
customer satisfaction level by providing them high quality products and services.

 Mission – It is the basic aim of ALDI that relates with the reason why organisation exists
in the global market and what it does to attain the vision. Mission statement is a very
important task for every business organisation which is inspire employees as they can for
it. ALDI's mission is to be the world's best and biggest supermarket retailer.
Organisation is focusing to produce high quality food products it give an adequate
standard to ALDI in potential market. Goals – It is contextual planning in order to achieve target. For instance, top management
of ALDI decides goals and employees need to follow the same. It can be explained with
the way by which a company is going to achieve its mission. Main aim of ALDI Ltd. is to
make profit through increased sales. For that purpose, they always innovate the products
and make them more qualitative for enhancing the shopping experience of customers. Objectives are totally differ from goals. Every business organisation set some objectives
to sell its more products and services than its competitors. It can be developed to
improve any service or creating any new ones. ALDI focus on how to become
successful in grocery market by sales orientation and marketing mix.
 Core Competencies are helpful to differentiate the organisation from its rivals. If
company has competitiveness as it is capable to penetrate its potential market. ALDI has
many core competencies i.e. skills, resources, activities etc. through which it can secure
competitive advantage in market.
1.2 Factors involved while formulating strategic plans
Strategic planning plays a vital role in order to make a successful business organisation.
It is done to start a new company, for creating a new department, new product development or
any other undertaking which affects the organisation's future. Below mentioned some factors
which put their impact on strategic planning of ALDI Ltd. are as follows: - Engagement – The key element of strategic planning process is to engage with all staff
members throughout company. If the firm is not able to get together of its employees as
it cannot be established cooperation and coordination among working activities. Staff
engagement is helpful to generate extra input and build their commitment to the strategic
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plan. . In ALDI, it is necessary to include employees in strategic development to compete
with the external market. Company resources – It is essential for company to develop a plan or having an idea that
will help it to achieve growth and success in the competitive market. Resources of
business organisation are as- like capital, personnel, raw materials, space requirements,
vendor relationship etc. Apart from this, if organisation does not have any resources to
create a plan then it would stall its progress. Resources are another important factor of
strategic planning which can put high impact on the firm because they are responsible to
complete projects and tasks.
 Communication – There is a significant role of communication in strategic planning.
Without having effective communication, manager cannot work properly. The process of
strategic development becomes successful when top to bottom approach of
communication is taken. ALDI follows top down communication in which senior
management will discuss the strategic plan from employees and they will convey the
information of project management . Communication also generates innovation,which is
also impact on strategic planning of company. Business organisations have to develop
their strategies to make an innovative and new product. Sometimes, companies are not
able to find skilled and innovative employees which affect its production capabilities.
Apart from this, project management is also a big task in strategic planning which
encompasses that managers have to plan all their working activities and complete them
on time.
 Needs and wants of customers – Managers of ALDI limited also involves needs and
wants of customers while developing the strategic plan of the company. If they can
recognise customers expectations as they can produce accordingly; this will help
company to achieve the competitive advantage.
 Future direction of competition- Managers needs to define the future direction of the
company; it will help them to manage all work and tasks accordingly. Through which
they can easily develop their strategies and policies in order to achieve the benefits of
target market.
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Contents of strategic plan -
A strategic plan is roadmap to grow a business entity. It needs some contents, such as –
executive summary of the strategic plan, elevator pitch, mission statement of the company.
Along with this, it also requires the determination of best opportunities for company in order to
pursue to achieve goals and objectives. Key performance indicators are also requires in strategic
plan that involves number of customers and visitors who are connected with company.
1.3 Various planning techniques
Strategic planning is the process of business organisation which is used in formulating,
planning and resource allocation. There are divergent techniques of strategic planning such as-
PIMS and BCG matrix. PIMS is considered to evaluate the results and actions of business project
and assignment. It is also helpful for the managers as they can understand as well as react
towards external business environment. Apart from this, ALDI Ltd. also uses BCG matrix as its
strategic planning technique. It shows a direct relationship between cash generators of the
market share. In this organisation, the Boston Consulting Group's product portfolio (BCG)
matrix is designed in order to ensure long term strategic planning. In other words, such matrix is
also beneficial for company by reviewing its portfolio of products so that managers can easily
decide where to invest. BCG matrix is separated into four parts which are as follows:-
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(Source: Strategic planning techniques, 2017) Dogs – It involves such products that are with low market share or low market growth. If
products are classified as dogs; they always show that company is having weak market
share. Such products are making loss or a very low profit for business organisation. It is
suggested to the managers of Aldi in this situation that they should focus on developing a
new product rather than wasting their time on keeping such products alive. Cash Cows – Products are with high market share and low growth of market. Cash cows
don't need the same level of support as before. Such products are the leaders of
marketplace and generate more cash for company then they consume. Aldi in this
situation is advised to invest in cash cows in order to maintain the existing level of
productivity. Question marks – Products that are with high market growth with low market share.
Such products consume a lot of cash but bring little in return. In this situation, Aldi is
suggested to invest only if product has potential market growth.
 Stars – In this, High market growth and high market share of products. Monopolies
products are known as stars. It is really beneficial for ALDI to invest in stars.
There are four assumptions which underpin the BCG matrix such as: -
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Illustration 1: BCG matrix

 If ALDI wants to achieve market share so that it has to invest in a competitive advantage;
company also has to focus on marketing investment in order to expand market share.
 The best opportunities in order to build a great market position generally occur at the
time of market's growth period
 Due to the impact of economics of scale, market shares are helpful to generate cash for
company.
 Cash surplus is most likely to be generated during the maturity stage of product life cycle.
ANSOFF matrix – It involves four strategies such as- market penetration, market development,
product development and diversification. Market penetration is the name given to a growth
strategy, where the business focuses on selling its existing products into markets. Market
development the strategy in which companies sell their products into new market with an aim of
enhancing their market share. Apart from this, product development strategy is helpful in order
to develop or introduce a new product into existing market of the firm. It require modification or
transformation current products. Diversification involves when companies sell their new
products into new markets; the strategy tends to be more risky.
SPACE matrix - The strategic position and action evaluation matrix is used in the beginning of
the exercise in order to predict the overall key themes of the strategic plan in the company.
SPACE matrix also can be used in order to evaluate the individual strategic options.
TASK 2
2.1 Organisational audit for business organisations
Organisational audit is useful for business organisations in order to evaluate their current
strategic position in the potential market. For that, managers apply SWOT analysis to monitor
their strengths, weaknesses, opportunities and threats. Along with this, it is helpful for business
as they can comprehend their strengths and develop the brand in global market. This is also
useful to recognize the weaknesses of company. It will help firm in the future to avoid risk and
uncertainties in market. Below mentioned is the SWOT analysis of ALDI Ltd.:
 STRENGTHS
 Strong base in UK for many years and
WEAKNESSES
 Limited products range could be a
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having a strong brand image of
products and services.
 Increasing reputation of business
organisation by providing quality
products and services. .
 Wide range of own branded products
and services which helps to gain
market targets.
 Higher buying power and cost control
of its products.
 Regular testing of products and samples
by managers in stores; it will be helpful
to maintain the standards of company in
competitive market.
 High buying power and cost control of
its products.
 Having good and cordial relationship
with customers and suppliers.
 Well trained working staff.
 Limited number of quality products and
services at a relatively low price than
competitors.
 Organisational culture is well framed
and the unique operational systems.
weakness in terms of lack of production
differentiation.
 Limited utilization of technology in
activities and operations as compared
with rivals.
 Less advertising and promotion.
 Depending on few well trained staff.
 Low brand name loyalty.
OPPORTUNITIES
 Capitalized on lowest cost positioning.
 Spending more on advertisements
which will attract many customers.
 Diversification methods can be carried
THREATS
 Globalization will attract more
competitors in the future.
 Due to the limited usage of technology,
rivals are moving forward effectively.
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out as competitors for earning more
profits.
 Increased market penetration.
 Regulate new systems to manage the
quality standards and values.
 Number of divergent strategies are
carried out by the competitors.
ALDI can use benchmarking with the help of value chain analysis; it is strategic tool which is
used in order to evaluate internal activities of the firm. Value chain analysis is the process where
a firm identifies its primary activities, that adds values in the final products of the company. The
maim aim of this analysis is to recognisance the valuable activities which could be improved for
providing competitive advantage to company.
2.2 Environmental audit of company
Environmental audit relates with evaluation of external business environment of
company. There are many external factors of the company which impact on its future
performance and growth, such as – competitors, suppliers and customers. Macro environmental
analysis is conducted to understand the impact of all external factors. Competitors of ALDI are -
TESCO, WALMART, LIDI, ASDA, WAITROSE, MORRISONS etc. ALDI Ltd. is using
Porter's 5 forces model for its environmental audit. There are mentioned below some factors
which are involved 5 forces model: -
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(Source: Environmental audit, 2017) Threats of new entrants – A company's power is affected by the force of new entries. In
UK, threats of new entrants could be very high in the grocery market. In supermarkets, it
is very much easy to copy competitor's strategy and implement it for the betterment of
another organisation. TESCO, WALMART, SAISNBURRY, LIDI etc. are the main
rivals of ALDI; therefore organisation have to prepared for the competition which is rise
due to the new entrants to the market. Along with this, the strategy of low price products
with high quality; ALDI has obtained more market share in recent years. Threats of substitution – Competitors of ALDI, likewise. TESCO or ASDA are provided
same substitute for their products. This can be drives a low price of retail and grocery
products in both companies; through the same both are not able to achieve their profits.
Along with this, if customers are not satisfied with the products of one company as they
can switch towards another similar brand or substitute (Montgomery, 2011). In potential
market, customers perception is also changed due to high prices. ALDI follows the
concept of “low price with good quality'; it also impact on people's mind about this
company. Bargaining power of suppliers – it could be considered as low in retail industry because
there are numerous suppliers in market of one product. In addition, global chain of
retailers like ALDI; its customers could go for the suppliers which have cheapest price.
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Illustration 2: Porter's 5 forces model

 Bargaining power of customers - There are moderate number of buyers are available in
market and they having the option of another substitute with low price. Therefore
customers can easily influence to switch from one brand to another.
 Competitors rivalry – It is very high in the supermarket industry. ALDI gives higher
discounts in order to gain maximum market share while it enters the UK supermarket
industry. Along with this, there could be more competitors in global market which have
effective marketing strategies; this will also affect organisation's growth and success
(Bharadwaj and et. al., 2013).
PESTLE analysis of ALDI: -
 Political factors – It involves government rules and regulations which impact on growth
and success of the company. The UK government of UK has recently changed, a new
government may impose new laws and legislations, tax implications and market
condition that effect market reputation of ALDI Ltd.
 Economical factors – As the UK economy moves out of recession, there could be a
change in buying behaviour from low cost stores back to mainstream supermarkets. This
will also impact on market share of the company; ALDI Ltd, may need to consider how
to compete in these conditions, if at all.
 Social factors – Discounted retail chains could be met with a degree of social sigma, as
the economy rises individuals may want to shop at more expensive leading names such as
, TESCO, SAISNBURRY, WAITROSE etc. this will be affected growth and success of
ALDI Ltd.
 Technological factors – Technological infrastructures are a key factor of the supply chain
of the modern business. ALDI needs to adopt online and mobile shopping to access to
large number of customers.
 Legal factors – Government of UK has developed various new laws and legislations
towards import and export policy of the company.
 Environmental factors – ALDI Ltd. needs to focuses on eco friendly products and
services in order to protect environment from pollution.
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