Detailed Business Strategy Report: Aldi's Strategic Planning Framework

This report provides a comprehensive analysis of Aldi's business strategy, encompassing its mission, vision, objectives, and goals, and how these elements inform strategic planning. It delves into the factors Aldi considers when formulating its strategic plans, the usefulness of techniques like BCG mat...Read More

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
a) Aldi's mission, visions, objectives, goals and core competencies inform strategic planning. 1
b) Factors to be considered by Aldi when formulating their strategic plans..............................2
c) Usefulness of techniques for developing strategic plans........................................................3
d) Organizational audit for Aldi..................................................................................................5
e) environmental audit for Aldi...................................................................................................5
f) Significance of stakeholder analysis for Aldi..........................................................................6
g) New strategy for Aldi.............................................................................................................7
PART 2............................................................................................................................................8
a) Identify market and appropriateness of strategy.....................................................................8
b) Justification of the strategies for market entry........................................................................9
PART 3............................................................................................................................................9
a) Roles and responsibilities of personnel who are involved with the implementation of the
strategy........................................................................................................................................9
b) Analysis of the resource requirement for the implementation of the strategy......................10
c) Use of SMART targets can contribute to achieving the strategic objectives........................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
.......................................................................................................................................................14

INTRODUCTION
Business strategy is refers to the course of action which help business organization to
attain particular goals and objectives in appropriate time frame. Thus, it is important for
company develop an effective strategy in order to accomplish long term targets (Business
Strategy, 2015). As it also includes organizational mission, vision, objectives and business plan
that directly contribute in enhancing the positive brand image of the company at market place.
With the assistance of strategic evaluation company can easily evaluate their strength in order to
capture future opportunities. Along with this, it also help business organization to attain
competitive advantage by satisfying customers needs and wants. Present report is based on Aldi,
is the leading brand of discount supermarket chain which deals in household goods, food and
beverage. It serve their services in over the world. Report discussed about Aldi vision, mission
and objectives that implement at the time of making strategic planning. Organisational and
environmental audit of Aldi is also mentioned in this report. Along with this, significance of
stakeholder analysis is also cover in this project. At last, use of SMART target is discussed that
help in attaining strategic objectives in appropriate way.
PART 1
a) Aldi's mission, visions, objectives, goals and core competencies inform strategic planning
Strategic planning consider as an management planning that help in setting priorities,
focus on energy and resources with the aim of accomplishing long term goals and objectives.
Mainly, it define the strategy or direction that support manager of the company to making
appropriate decisions. Along with this, it also includes employees roles and responsibilities
which may assist in attaining its common goals within the appropriate time frame. Thus, it is
important duty of Aldi manager to formulate an appropriate strategies so that they can easily
increase the chances of attaining positive outcomes. For attaining the same, manager also
responsible for including factors such as environmental audit, stakeholders, organization audit
and more while formulating strategies (Klettner, Clarke and Boersma, 2014). By this company
can easily attain various opportunities and achieve better success at market place. In this context,
mission, vision, goals and objectives is also implement while formulating the strategies within
the company. All these can be understood by following points:
1

Mission: It is a formal summary that provide fundamental purpose of business
organization. By this, company can easily accomplish their targets. Along with this, it also
provide information related with the organisation segment in order to serve quality products and
services (Chu, KrishnaKumar and Khosla, 2014). In this context, the main mission of Aldi is to
established their competitive image by servicing quality services to its target customers. For this,
Aldi includes high quality of grocery products which support them to satisfy their customers at
market place. Mission of company is helpful in successful planning.
Vision: It is crucial for business organization to determine is objectives. This type of
statement is not limited because it support company to attain long term goals and objectives.
With the assistance of this, company can easily attain success at market place. The main vision
of Aldi is to provide high quality product at low prices to capture larger market share form its
rivals. It directly contribute in establishing competitive image at market place. Under this,
strategic planning is helpful in determination of strategies.
Objectives: It can be short term and long term goals that help business organization to
attain their specific goals. In this context, the main objective of Aldi is to become a leading
company to attain loyal customers. For this company needs to serve best quality services to their
customers as per their needs and wants. If the objectives will be defined in a proper manner then
it will help in allocating resources in strategic planning.
Core competencies: It is related with the specific feature and activity of the company that
make differentiate from others. It directly impact on the entire planning process of the strategies.
By this organization can easily enhance their productivity level at market place. As the core
competency of Aldi is its professional and specialist employees who help business organization
to achieve its set goals and objectives in appropriate time frame. Availability of highly skilled
employees help in creation of positive working environment where they work with less wastage
and optimum utilisation of resources
b) Factors to be considered by Aldi when formulating their strategic plans
Strategic planning play vital role in making an effective plan that support business
organization to accomplish their predetermined targets. Mainly, it consider as a process of
implementing as well as formulating set of policies which directly contribute in making effective
decision making (Mellat-Parast and et.al., 2015). Apart from this, there are some factors that can
2

be consider by Aldi at the time of formulating strategic plans to attain positive outcomes. All
these are as follows:
Competition: It is related with the external factors that directly impact on the business
activities. Mainly, it is evaluated by undertaking effective marketing research which may
contribute in enhancing the chances of attaining competitive advantage from its rivals. In this
context, Aldi needs to effectively implement as well as adopt appropriate policies that assist in
reducing the competition in market place (Torrent-Sellens, 2015). With the assistance of this,
company easily capture larger market share from its rivals by serving best quality products to its
target customers.
Organization culture: It is one of the important and internal factors that directly impact
on the entire activities of the company. As Aldi is famous and multinational company which
includes number of employees from different culture and background. Thus, it is important for
manager of Aldi to provide equal opportunities to the employees so that they can easily perform
their task and activities as well.
Technological factors: This factor is also important for business organization because it
provide support in production activities of the company. Thus, it is important for manager of
Aldi to determine all the requirements of technology within the business activities. By this,
company can easily improve their efficiency level and at the same time also contribute in making
appropriate strategy. This will directly contributes in enhance the efficiency level of the company
at market place.
Determine internal environment: It is important for Aldi to determine their strength and
weakness before formulating strategic plan. By this company analyse their actual position at
market and at the same time also tries to enhance their productivity by capturing future
opportunities.
All these are important factors that can be consider by Aldi at the time of implementing
as well as formulating strategic plans. It provide better support to business organization to
established their competitive position at market place.
c) Usefulness of techniques for developing strategic plans
Development of strategic plan is important for company to attain their long term goals
and objectives. For this, number of techniques can be used by business organization as per
specific requirements. With the assistance of this, firm can easily increase their productivity level
3

(Buckley and Ghauri, 2015). In this, context, manager of Aldi use BCG matrix and PIMS with
the aim of effectively executing business activities. These can be understood by following points:
BCG matrix: It is one of the effective matrix that directly contribute in formulating long
term strategic planning for accomplishing set goals and objectives. Mainly it includes four
categories hat used by Aldi:
 Stars: This section define the information about the products of Aldi. In this products
have high growth rate and market share (Martinez-Simarro, Devece and Llopis-Albert,
2015). Thus, company needs to huge fund for attaining long term sustainability at market
place. By this company easily improve their market share.
 Cash cows: Under this, products of Aldi have high market share and low growth rate. In
this company easily attain opportunities for enhancing their profitability level by
capturing higher market share from its rivals.
 Dog: It is one of the important aspect for business organization which includes low
growth rate and market share of products. Under this, Aldi requires to set low product
price so that they can easily increase their profitability at market place.
 Questions Marks: Under this products of Aldi have low market share and high growth
rate. In this, company easily expand their business activities and market share at
marketplace and also enhance their productivity level as well. This will contribute in
attaining success at market.
Advantage of BCG matrix of Aldi:
The main advantage of using this matrix is to evaluate the balance in current portfolio of
the company. It also help in attaining future opportunities to attain success in market place.
Disadvantages of BCG matrix of Aldi:
The main drawback of this matrix is that its high market share that only success of
company at market place.
PIMS: It refer to the profit impact of market strategy which assist in attaining
competitive advantage from rivals (Yuliansyah, Rammal and Rose, 2016). With the help of this,
Aldi can easily make effective marketing strategies which help in attaining long term goals and
objectives. It consider six principle that help is formulating the strategies within the business
organization:
 Strategic movement
4

 Allocation of budget
 Production process structure
 Competitive position
 Result operating
 Business environment characteristics
All these are important areas for the business organization to enhance market share of the
company. Along with this, by using this, Aldi can easily retain in market for longer period of
time.
d) Organizational audit for Aldi
Organizational audit is related with the strength and weakness of the company. With the
help of this, company can easily evaluate their current position at market place (Grant, 2016).
For this, company use SWOT analysis to determine their strength, weakness, threat and
opportunities. It also contribute in enhancing their market share at market place.
Strengths:
 Positive brand image is major strength of the company.
 Aldi serve quality products at affordable cost. Loyal customer base is also a major strength for Aldi.
Weaknesses:
 Low margin is major weakness of the company which reduce profitability level. Poor employee satisfaction is also a weakness for Aldi.
Opportunities:
 Company expand their operational activities in another countries. Aldi requires more fund for marketing tools so that they can easily enhance their
productivity level.
Threats:
 Number of competitors is consider major threat for Aldi.
 Change in Government rules and regulation is also a threat.
e) environmental audit for Aldi
Environmental audit is basically an management tool that is used by the organisations
to measure the effects of certain activities on the environment against set criteria or standards. It
5

is a general term that can reflect various types of evaluations intended to identify environmental
compliance and management system implication gaps, along with related corrective actions
(Giacomin, 2014). Environmental auditing used to investigation, understanding and
identification of the strategies and activities which are used and performed by ALDI.
Porter's Five Force Analysis
This model is developed by Michael Porter to analyse the competitive environment of the
company.
The threat of new entry- Capital investment and the requirement of large establishment
raise the entry of new barriers in the company (Teh and Corbitt, 2015). For Aldi, new t6hreats
can be their competitor companies such Tesco, Walmart and others which can provide products
and services as a competitor products. For example, potato chips is an product of Aldi and a
another company also manufacture this products then this is a threat for the company.
Supplier power- The supplier of the company have a low bargaining power because there
are existence of many suppliers in the grocery retail industry and the supplier are fearful to lose
their business contracts with this kind of big super market to other suppliers. Aldi make
improvement in its profit by purchasing products at possible prices by suppliers.
Buyer power- The customer of Aldi have high bargaining power cause of switching
supermarkets like Tesco, Asda and others. Now these days, there are various supermarket and
grocery store and they provide the products at low priced and provide wide choice in products so
they help in increasing the buyers bargaining power.
Threat of substitute- The grocery market is very low for food items because there are
various substitute products in the market which are capable to satisfied the need of the Aldi's
customers. There are various substitute products in the market for the company's products and
these product compete the company's products. Aldi can stop this threat by doing innovation in
its products.
Competitive rivalry- There are various competitive grocery store and supermarket in the
UK which compete Aldi such as Tesco, Saainsbury, Asda and other or they create competition
for the company and its products. They provide substitute products of Aldi. For satisfying the
customers needs and wants the competitors also used better quality raw material so that they
compete the company.
6

f) Significance of stakeholder analysis for Aldi
Stakeholder analysis:
It is a technique which is used by a company for identification of the stakeholder and
analysing their needs. It is a key part of stakeholder management and a process of systematically
gathering or analysing qualitative information.
Process of stakeholder analysis
The business strategy of Aldi is based on customer orentation concept and the company
focus on the needs and wants of the customers. of To explained the stakeholder analysis Aldi
follow three steps such as:
Step 1: Identify your stakeholder- A stakeholder is a person or organisation who can be
positively or negatively affected or affected the company's actions (Zamberi Ahmad, 2014).
There are various types of stake holders such as primary stakeholders, are those ultimately
affected by organisation's action positively or negatively. Secondary stakeholders, are the
intermediaries and a person or organisation who directly affected by the company. Key
stakeholders, who can also belong to the primary and secondary stakeholders. For example,
when the company release new products and sees their profit and therefore stock price rise. Main
stakeholder of the company are customers and the employees of the company are also very
important for the organisation. .
Step 2: Prioritize your stakeholder- In this step the company give the priority to its
stakeholders according the needs and interest (Hart, Sharma and Halme, 2016). The company
can map out its stakeholder and classify them according their power over their work. If Aldi give
priorities to its customer it is beneficial for it because customers is a big part of stakeholder for
Aldi and they provide money for the company to keep running. They buy goods and pay money
that the company used to pay staff and give the company a profit.
Step 3: Understand Your key stakeholder- For understating its stakeholders, the company
can discover the interest of the stakeholder towards the company's project. The company
understand the stakeholders financial and emotional interest, information which they want from
the company and providing support to them. The key stakeholder of the company are customers
and employees and they are important for the company because they help the company to run the
business of it.
7

g) New strategy for Aldi
Providing an organisation with a common purpose, goals and set of actions to reach the
goal ensures that everyone in the company working for the same outcome and that time and
resources are allocated to the same goals and objectives. Every new strategy is important for
ALDI, in decision making, more focused, more productive and more profitable. Aldi launch a
new product and for that new product it can adopt this strategy.
Porter's generic strategies
This strategy can be used by ALDI to determine the direction of the company. There are
four strategies which are given by Porter. They are following:
Cost Leadership- In this strategy the company increasing profit by reducing costs. ALDI
is a hard discounted store pursuing cost leadership strategy (Lueg, 2015). This company buys
low price land mostly on city outskirts, builds cheap warehouse and it does not provide free
shopping bag and encourage its customers to bring their own bags or purchase new shopping
bag. If the company use low price strategy, it can retain its customers and satisfied them with
affordable pricing strategy. ALDI maintained its position as the UK's fastest growing grocer
amid by its better cost leadership.
Differentiation- By using this strategy ALDI, the customers of the company, get good
quality product and the employees get good salary package. It make changes in its products and
prices by using pricing and other strategies according the customers demands and needs which
differentiate it from other company (Hernández-Perlines, Moreno-García and Yañez-Araque,
2016). By making and doing differentiation in its pricing strategies and product differentiation
the company create efficiency, clarity and clear orientation for its customers.
Cost focus- In it a company focus on cost advantages in its target segments. The
company target a niche market and offer the lowest possible price. By focusing on its pricing
strategies it achieve its future goals.
Differentiation focus- The company target a niche market where there are little
competition and product and services has unique features. It is very important for the company
that the product remains unique that stay in competition. Focusing on the customers needs and
demands or making strategies for them, the company provide products according their needs and
achieve its future objectives.
8

By using cost leadership it can provide its products at a better pricing without any loss in
its business. By using approach the company can offer a limited number of good quality products
at a low price.It can provide product at affordable price and the customer are loyal for it. By this
it can create netter relationship with its existing customers and others.
PART 2
a) Identify market and appropriateness of strategy
It is important for every business organization determine the market and strategies with
the purpose of enhancing their market share. With the assistance of this, company can easily
capture larger market share from its rivals. In context of this, Aldi is famous multinational
organization provide best quality products to its customers for attaining their higher satisfaction
level. For attaining success at market place, Aldi expand their business in Asia with the aim of
enhancing their market share. By this they can easily established their positive brand image and
at the time also tries to increase profitability level by serving quality products. For this, Aldi use
substantive growth strategy through which firm tries to capture larger market share in Asia.
Mainly, this type of strategy help business organization two ways. In first way, company
collaborate with clients in same area to increase market share profitability as well (Schaltegger,
Hansen and Lüdeke-Freund, 2016). On the other side, implement new technology which help
them in expanding their operational activities in another countries. Both are more effective that
provide future opportunities to the Aldi sustain in market for longer period of time. For attaining
the same, company needs to make their products more unique and popular in front of customers.
This will help in enhancing the brand image at market place and at the same time also create
strong customers base.
b) Justification of the strategies for market entry
For attaining success at market place, it is important for business organization to use
effective strategy through which they can easily capture larger market share from its rivals. As
Aldi adopt Substantive growth strategy with the aim of expanding their business in Asia market.
In this company needs to serve quality products and services to its target customers according to
their needs and wants (Karami, Sahebalzamani and Sarabi, 2015). By this company can easily
established their competitive position at market place. In this, Aldi offer their products by using
online software in which they easily reach target customers. It also help Aldi to enhance their
9

sales and profitability level at Asia market. Furthermore, by using this platform, company also
grab future opportunities to attain higher success at market place. In context of this, by using
online method company easily influence customers towards its offering. This will assist in
developing positive relation with all the customers and suppliers as well. It may contribute in
establishing competitive image at market place as compare to its rivals.
PART 3
a) Roles and responsibilities of personnel who are involved with the implementation of the
strategy
Strategy implementation is play vital role in improving overall performance of the
company. For attaining success, it is important for Aldi to effectively implement the strategies as
per requirement. In this number of personnel like manager, employees, engineers and many more
play important role in supporting in formulating strategies. This will directly contribute in
achieving positive outcomes within the organisation. It also contribute in attaining competitive
advantage from its rival and at the same time also enhance larger market share from its rivals.
In this context, all the personnel contribute in different ways and also also have specific function
in implementing strategies. By this, they can easily make successful policies that directly
contribute in enhancing positive brand image. Strategic implementation plays a critical role in
the success of an organization (Halal, 2015). This address the who, when ,where and how to
reach the desired goals and objectives of a company. This concentrates on whole organization.
Implementation refers for assigning the tasks to the individuals which will help to achieve the
organizations goals. As there are some important roles and responsibilities play by different
personnel within the organization:
1. Manager – A manager plays an important role in implementation of the strategy in Aldi,
as they are owner of their team and act as the link between organizational level and their
direct reports. The main role of a manager is to involve the employees while
implementing the strategy. It is the responsibility of a manager to gather the useful
information which are effectively further used in strategy implementation.
2. Employees – The main role of employees is to follow the strategy made by the managers.
When the changes occur in business environment, strategic implementation need the
work and attention of employees and managers at all levels within an organization.
10

Employees must have the knowledge and understanding of their responsibilities during
the implementation of strategy (López-Cabarcos, Göttling-Oliveira-Monteiro and
Vázquez-Rodríguez, 2015). The achievement of goals is all depend upon the skills of the
employees. They can make the communication open while implementation of strategy.
3. Engineers – The Engineers acts as technical representative leading direct interaction with
the employees of Aldi. The responsibility of engineers is to attain the objectives and
goals according to the plans. Such engineers have the responsibility to update the skills of
the employees using new tools and technologies. It helps in carried out activities
according of new policies as well as strategies.
b) Analysis of the resource requirement for the implementation of the strategy
While implementing the strategies resource requirement analysis is good for an
organization. As this help the team in organization to make the implementation plans for the
strategies according to the available resources. ALDI need to analyse resource requirement for
each and every step they take for the future benefits, by which they come to know about the
updates which are needed for success of strategies.
Physical resources- The resources which are related to machinery are know as physical
resources. ALDI need to analyse these because if they make any strategies for further
enhancement and they nit have much physical power to accomplish work with desire then
company may face a big loss.
Human resources- These are the most important resources for any organisation. For
accomplishing any strategy man power is mandatory. ALDI also need to check before any
strategic implementation that they have sufficient man power or not. If they don't do that this can
cost as failure of strategy.
Financial resources- This come on top for implementing strategies. No strategy can be
implemented without financial support. ALDI also need to verify that for apply new strategies
they must have sufficient fund.
Technological factor- This is one of the major factor which can decide whether the
strategy get success or get fail. ALDI have to analyse the technologies required to accomplish
strategy. Then the required technologies get introduced in the system otherwise implementation
can meet to failure.
11

c) Use of SMART targets can contribute to achieving the strategic objectives
SMART target is one of the important aspect which contribute in attaining organizational
strategic objectives in appropriate way (Moseley III, 2017). Mainly, it is related with the
company target that help Aldi management to effectively accomplish their target in allotted time
frame. Specific: Under this, Aldi needs to determine clear and specified goals which help in
providing better direction to the manager. By this company can increase their benefits.
For example, Aldi offer quality services to capture market share by 12%. Measurable: This stage define that all the goals of company should be measurable which
directly contribute in increasing the efficiency level of the company. For example, Aldi
set their objectives to increase their sale by 15% in one year. Acceptable: It define that all the targets should be acceptable for the company and its
stakeholder as well. With the assistance of this, Aldi can easily enhance their market
share at market place. Relevant: Under this, Aldi should set objectives which should be relevant with its goals.
By this company improve their performance level at market place and at the same time
also established their positive brand image.
 Time bound: This target is also important for Aldi in which company should be set their
objectives in order to attain in enough time frame. For example, Aldi set target to
increase market share in upcoming 5 months by serving quality services.
CONCLUSION
From the above mentioned report, it has been concluded that business strategy play vital
role in business organization to attain long term goals and objectives. In this manager is
responsible for determining mission, vision, core competencies and objectives at the time of
formulating strategic plan. This will contribute in enhancing the chances of attaining success at
market place. Along with this, number of issues are also faced by the company while preparing
the strategies. Issues are related with the environmental audit, stakeholders and many more. So
that manager needs to effectively develop the strategic plan to capture future opportunities in
market. Apart from this, SWOT analysis is consider as an important aspect through which
business organization easily evaluate their actual positive at market place. At last implementation
12

of Porter's five forces model is also help in determining the impact of micro and macro
environment which may contribute in reducing the negative impact on the strategic planning.
13

REFERENCES
Books and journals
Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability:
Empirical insights into the development, leadership and implementation of responsible
business strategy. Journal of Business Ethics. 122(1). pp.145-165.
Chu, M. T., KrishnaKumar, P. and Khosla, R., 2014. Mapping knowledge sharing traits to
business strategy in knowledge based organisation. Journal of Intelligent
Manufacturing. 25(1). pp.55-65.
Mellat-Parast, M. and et.al., 2015. Linking business strategy to service failures and financial
performance: Empirical evidence from the US domestic airline industry. Journal of
Operations Management. 38. pp.14-24.
Torrent-Sellens, J., 2015. Knowledge products and network externalities: Implications for the
business strategy. Journal of the Knowledge Economy. 6(1). pp.138-156.
Moseley III, G. B., 2017. Managing health care business strategy. Jones & Bartlett Learning.
Buckley, P. J. and Ghauri, P. eds., 2015. International business strategy: theory and practice.
Routledge.
Martinez-Simarro, D., Devece, C. and Llopis-Albert, C., 2015. How information systems
strategy moderates the relationship between business strategy and performance. Journal
of Business Research. 68(7). pp.1592-1594.
Yuliansyah, Y., Rammal, H. G. and Rose, E., 2016. Business strategy and performance in
Indonesia’s service sector. Journal of Asia Business Studies. 10(2). pp.164-182.
Grant, R. M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Giacomin, J., 2014. What is human centred design?. The Design Journal. 17(4). pp.606-623.
Teh, D. and Corbitt, B., 2015. Building sustainability strategy in business. Journal of Business
Strategy. 36(6). pp.39-46.
Zamberi Ahmad, S., 2014. Small and medium enterprises’ internationalisation and business
strategy: some evidence from firms located in an emerging market. Journal of Asia
Business Studies. 8(2). pp.168-186.
Hart, S., Sharma, S. and Halme, M., 2016. Poverty, business strategy, and sustainable
development.
Lueg, R., 2015. Strategy maps: the essential link between the balanced scorecard and
action. Journal of Business Strategy. 36(2). pp.34-40.
Hernández-Perlines, F., Moreno-García, J. and Yañez-Araque, B., 2016. The mediating role of
competitive strategy in international entrepreneurial orientation. Journal of Business
Research. 69(11). pp.5383-5389.
Schaltegger, S., Hansen, E. G. and Lüdeke-Freund, F., 2016. Business models for sustainability:
Origins, present research, and future avenues.
Karami, A., Sahebalzamani, S. and Sarabi, B., 2015. The Influence of HR Practices on Business
Strategy and Firm Performance: The Case of Banking Industry in Iran. IUP Journal of
Management Research. 14(1).
Halal, W. E., 2015. Business strategy for the technology revolution: competing at the edge of
creative destruction. Journal of the Knowledge Economy. 6(1). pp.31-47.
López-Cabarcos, M. Á., Göttling-Oliveira-Monteiro, S. and Vázquez-Rodríguez, P., 2015.
Organizational capabilities and profitability: The mediating role of business
strategy. SAGE Open. 5(4). p.2158244015616852.
14

Online
Business Strategy. 2015. [Online]. Available Through:
<http://finsburyfoods.co.uk/who-we-are/business-strategy/> .
15