Comprehensive Analysis of ALDI's Business Strategy and Growth

This report provides a comprehensive analysis of ALDI's business strategy, examining its vision, mission, goals, and core competencies. It delves into the factors considered in various business situations, including internal and external factors, and explores the employment of different strategic planning techniques, such as the BCG matrix. The report includes an organizational audit, investigating ALDI's current strategic condition, including its strengths, weaknesses, opportunities, and threats. Furthermore, the report examines market opportunities, strategies for market entry and growth, and the roles and duties of personnel in implementing the strategy. It also evaluates the use of SMART objectives to achieve strategic goals. The report concludes with an overview of ALDI's strategic planning and its impact on the company's growth and development, focusing on its expansion within the grocery market, particularly in the UK.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
A) Categorization for ALDI vision, mission, goals and core competency.................................1
B) & C) Factors considered while dealing with various situation..............................................2
D) Employment of different techniques which are useful in strategic plans.............................3
E) Organisational audit and investigation on current strategic condition...................................5
F) Evaluating Environmental audit for ALDI ...........................................................................6
G) Investigating of stakeholders.................................................................................................7
H) New strategy preparation for ALDI.......................................................................................8
TASK 2 ..........................................................................................................................................1
I) Identity of market opportunities to evaluate effective strategy...............................................1
J) Explanation of strategy for market entry and growth ............................................................1
TASK 3............................................................................................................................................2
K) Key Roles and duty of personnel in implementation of strategy...........................................2
L) Requirement for execution of strategy...................................................................................2
M) Evaluation of SMART objectives to attain strategic objectives...........................................3
CONCLUSION................................................................................................................................3

INTRODUCTION
Each business is focusing on adopting plans and policies so that all the activities can be
executed in a planned way. Various strategies are formulated so that business can carry out its
operations effectually. All these factors are useful in achieving the success and growth of firms
so that they can be retain there business for long durations. (Ackermann and Audretsch, 2013).
ALDI is the largest growing company which is executing its operations in grocery products, it
also opened its business in Germany which was initially its domestic place. They had adopted
effective strategies to expand there business by opening more than 500 stores which are dealing
in grocery products close to UK. Strategic process consist of vision, mission, goals and
objectives, environment audits are useful in analysing the competitors who can affect the
business operations. This report contains the study about Growth and development of firms,
environmental audit and focus on implementing all the strategies in planned ways.
TASK 1
TASK 1
A) Extent to which ALDI’s vision, mission, goals and core competencies inform strategic
planning
Each and every business formulates their own plans and strategies so that they can run all
their business activities in a planned way. This is useful in developing a track in which all
operations are to be carried out. Healthy environment can be generated for employees if plans
and policies are framed in an effective way in order to satisfy employees. The strategies are
framed by analysing company’s vision, goals, objectives and core competencies. This is useful in
executing all business operation effectually. ALDI is dealing in grocery items and they are
focusing on expanding their business all over UK. They aim to provide qualitative food products
to customers at economical prices. Authorities have the main responsibilities of formulating
plans and policies so that their vision and mission objectives can be achieved. The core
competencies define adopting those strategies which can differentiate their products from others
by adding new features.
The mission, vision, objectives and core competencies of ALDI are described as:
Vision: This is the vital statement for all businesses and it describes future state where
company seed itself in the forthcoming time. This is beneficial in analysing the future work
positions. ALDI is majorly focusing on expanding their business operations by adding new
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features in products. This is useful in gaining competitive advantage from their rivalry firms.
Thus, there profit shares will be increased in order to achieve largest strengths at the market
place.
Mission: This statement is beneficial as they support the vision statement which is
formulated by business. This results in the achievement of business targets within desired
timeframe so that it can run operations for long duration. The products which are supplied to
customers should have quality and they should be offered at reasonable prices. This is an
attractive strategy which is used to increase the footfall of customers by providing them the best
and effective products.
Objectives: The objectives refer to long and short term statements of firms. The main
aim of these objectives are linked with existence of business for long term duration at market
place. These can also be evaluated as plans and policies which are framed by the firm in order to
run their operations in an effective way.
Goals: These are described as the aim of company. Main goal of ALDI is to become the
leader by expanding business dealing in grocery products in the UK. These goals are beneficial
in achieving targets in the desired way as expected by the firm.
Core Competencies: This strategy is useful in achieving competitive advantages by
adding new features in their product range. This can be achieved if they keep the prices of their
products economic so that people can easily purchase them. This helps in achieving a large
amount of profits for business operations.
B) & C) Factors considered while dealing with various situations
Business should formulate the plans and strategies so that they can execute all business
activities in an effective way. If there is any difficulty faced while performing these activities
then plans can be used in order to resolve them. The strategies are framed by evaluating all the
factors that affect business operations. Effective strategies should be formulated by ALDI in
order to achieve high growth in the market place. All the factors which are operating outside the
business can be controlled but there should be focus on controlling the internal factors which are
evaluated as follows:
Internal Factors: All the elements which are having their operation at insider business is
known as internal factors. It includes workers, customers, supplier, business man who are
working in order to execute different business operations. This is beneficial as all the targets are
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achieved in desired time frames and it increases work efficiency. If the selected firms are not
able to fulfil the demands of there employees they can can go for strikes, lockout and ghauros.
This results in developing bad image of firms thus there profit ratios also declines. This can also
create conflicts which results in destroying there brand image.
External Factors: All the elements which are operating outside the business are are
harmful for business operations are called as external factors. These factors are uncontrollable
and they can have their presence at any time without proper information. These factors consist of
economical, technological, political and social aspects. These factors can be solved if the firms
plans to adopt effective strategies for solving them.
Political: The main objectives of business is linked with identification of those places
where is no political influence so that there business activities can be carried out in planned
ways. If the firms plans to execute there business in those places where the is unstable
government structure than it will directly influence there business activities. Thus the best places
should be analysed in which business can achieve growth and development.
Technological: Company should adopt technologies in order to add new features in their
products according to needs and demands of customers. Thus, those strategies should be selected
which are helpful in executing all the business operations in planned ways.
Economical: The prices of goods should be changed according to demand and supply
factor in economy. In the situation of inflation and deflation, firms have to plan different
strategies which are beneficial at that time in order to effectively handle all economic situations.
Social: There should be focus by ALDI in adopting those technologies which does not
harm the aspects of society. The tools and techniques should be environment friendly. They are
also focusing on producing those goods which are useful for the people of society.
D) Employment of different techniques which are useful in strategic plans
If the business focuses on implementing effective strategies than it helps in achievement
of business goals and objectives. This results in achieving success for firms and good images of
firms is created in minds of customers. Various methods can be used by the selected organisation
in order to carry out their businesses operations in desired ways.
BCG Matrix is used by ALDI which are further evaluated as:
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In BCG Matrix there are two axis one reflects about market growth and the other reflects
about the market shares. They are grouped into four areas which are named as Dog, Cow,
Question Mark and Star. This is also known as growth share matrix. These strategies can be
beneficial whenever the firms wants to add new features in there products and create awareness
about it.
DOG: The activities are operating in those business environment where both the
elements such as market growth and shares are very low. This decrease their profit shares as they
are not able to sell the products as expected in market areas. This particular situation is called as
Cash Trap (Johnson and et. al., 2013). This problems if the firms focuses on adopting those
markets where the products can be solved in large numbers in order to raise there market shares.
Dog business should be divested from the market place.
Cow: These factors are operating in good environment as they have high growth and
development and they can generate large amount of cash. These are the most suitable factors for
those business who wants to enlarge there business activities and earn high revenues. ALDI was
successful in expanding the business activities all around UK thus they can adopt these Cow
businesses in order to grow. These operations have lower growth but there market shares are
high. ALDI can use good marketing strategies in order to increase footfalls of customers.
Star: These are the most suitable business as they are having higher market shares and
growth in economy. Thus can earn huge profits by their business operations. They had an
advantage that the cost incurred on advertisement is saved as people of the economy are aware
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Illustration 1: BCG Matrix

about their goods and services. ALDI had adopted these star business as they are not focused
about those goods which have already attained growth stage. These activities of business should
be retained for long time durations.
Question Mark: These business are also described as problem child. They are operating
in those environment where the market related growth are higher but there shares are extremely
low. The selected firms have to invest large sum of money in establishment of brand-new
markets so that business operations can be carried out in effective and planned ways. This is very
useful methods when new markets are to be captured as the market shares are less.
E) Organisational audit and investigation on current strategic condition
Organisational audits are helpful in analysing all the opportunities and risk that will affect
business operations. The main components of audit consist of external and internal audit. The
internal audits are beneficial in identifying all those factors which are affecting business
activities which are operating at insider level. The Records are maintained and kept effectively
which are dealing with financial aspects. This is useful for management so that they can easily
analyse all the risk factors which are affecting business operations and restraint their growth and
development.
Internal audits are effective tools which are used by management in order to identify all
the risk by formulating plans and policies so that their business activities can be processed out in
effectual ways (Khalili Shavarini and et. al., 2013). This can be analysed by knowing their
strengths weakness, opportunities and threats which affect there business activities.
Strength: The main strengths of selected firms is that they had made good images about
their products in the minds of their clients which helps in increasing there profit shares. They are
offering good quality goods to all there users at very reasonable prices. This is the strategy used
by them in order to increase footfalls. This the main reason behind growth and success of ALDI.
Weakness: The selected firm had captured large markets in countries like UK and
Germany but they fail to do so in other countries. The larger market implies that they had to
target all the users of Great Britain and Germany. They were successful in expanding the
business operations to some countries but the are still having there operations at smaller levels if
comparison are made with the other stores who are dealing in grocery products.
Opportunities: The selected business is executing there business operations at limited
number of market and this is an opportunity for them. This results in expanding there activities
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all around UK and they will be earn large profit ratios and revenues. There shares in the market
will be expanded rapidly and this will help in achievement of competitive advantages for firms.
Threats: The activities of ALDI are expanding rapidly but this can be a big drawback for
the other smeller level firms as there business will be in the condition to shut down. So business
of rivalry party can take the benefit that they can merger there activities so that they can operate
as a single unit and there business will grow. Thai is the biggest threat because if they agree to
merge than there main focus will be adopting those strategies which are used by ALDI in order
to expand there business.
F) Evaluating Environmental audit for ALDI
Environment in business is described as the term where the business operations are
executed in effective ways. All these factors are not under the control of any person. There can
be any situations at any time in the business so firms had to prepare themselves in order to fight
with those aspects. This can be easily achieved if plans and strategies are formulated in the
decision making procedure (Klettner, Clarke and Boersma, 2014). Potters Five Force Model is
helpful in executing plans in order to carry out business activities in effective ways. This can also
be beneficial in achievement of competitive advantages.
The plans and procedures in which activities will be carried out are different from other
business. Thus there profit ratios and revenues are also different. Various distribution channels
are adopted so that they can sell the goods to their targeted customers.
The components of Potters five force models are evaluated as:
(Source: Potters five force models, 2017)
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Illustration 2: Potters five force models

Threat of new entrance: This is the major drawbacks for all the business who are
operating at global levels. The selected business had to focus on development of plans and
strategies which will not affect their business activities. If new business wants to enter the market
than they will disturb there activities and affect there profit and revenues ratios. ALDI is leader
in grocery products at UK and they have high growth rates thus there business operations are not
affected. There business can be affected if there is acquisition or merger between two business.
Bargaining power of buyer: This is refereed to as the powers of the customers when are
are purchasing the amount in bulk quantity so the suppliers will give them some benefits as they
are clearing their stokes (Klettner, Clarke and Boersma, 2014). The bargaining power of buyers
implies that the clients have more choice available and if he is not satisfied with the product than
they can switch from it and will use the substitute products. Large number of suppliers are
beneficial for customers as they have more choices if they are not satisfied with the prices. Thus
these strategies are more valuable to customers.
Bargaining power of Supplier: The position of suppliers becomes strong when there are
new products accessible at the market places. This is valuable for suppliers as they will sell the
products at the prices which is most suitable. The customers had to buy the products at those
monetary value which are offered by them because there is no substitute available for that. ALDI
is having large group of clients who are selling grocery products at very economical or less
prices. This results in achievement of high profit shares and there business activities are not
affected by suppliers powers.
Threats of substitutes: If there are substitutes available in the economy than it results in
offering more choices to customers as they can easily move from one product towards another. If
new products are available in the market than people will purchase them and the old stock will
be left unsold. This is directly affect sales volume of firms.
Competitive Rivalry: If there are large number of sellers dealing in the same products
than it will affect sales as there will be more competition among the sellers. They had to heavily
invest in advertisement of the products so that people can know about their products and they can
purchase them.
G) Investigating of stakeholders
The stakeholders are described as the persons who are helpful in caring out the business
operations in effective ways. These persons are helpful the firms to achieve growth and
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development. They main aim is to execute all the working in organised ways so that they can
achieve good results for business. They are the vital aspects for firms thus management should
ensure that they participate in the decision making process in order gain success.
Stakeholders are classified into two categories as external and internal business. The
process which is linked with stakeholder analysis is helpful for business as they are getting
support from other which results in attaining success.
There are mainly three types of stakeholders who are operating in business environment
which are called as:
 Primary & Secondary Stakeholder
 Key Holders.
This is beneficial in identification of the stakeholders who are operating in the economy so that
results can be achieved in planned ways.
There are various advantageous of stakeholder who are working at ALDI are evaluated as:
 In internal stakeholder employees and customers are working and they are motivating
employees in order to achieve good results so that they can achieve success (Li and Tan,
2013).
 If the selected firms wants to increase productivity than they had to give rewards and
incentives to there employees.
 Brand Images can be maintained by paying taxes in desired time intervals.
H) New strategy preparation for ALDI
The new strategies for selected business can be framed by developing plans and policies
which are useful in achieving good results.
The market shares of ALDI are higher wile comparison are made with other enterprise.
They are able to high profit shares. They are mainly focusing on developing Quality products
according to needs and wants of customers.
They are establishing those business strategy which can easily expand there business
operations. They are mostly using those strategy which attracts customers as keeping low prices
of their products.
New and innovative products can be designed by adding new features in the existing
products.
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New stores can be developed in those areas where the demands are high which results in
achieving higher profit ratios.
TASK 2
I) Identity of market opportunities to evaluate effective strategy
Every business is focused on identifying those areas where growth and success can be
easily achieved. Marketing surveys are useful in evaluating growth of firms.
Example: The companies who have achieved success in there business in UK are trying to
expand there activities all around the world in order to achieve growth.
The approaches which can be used by ALDI are described as:
Substantive growth: This strategy is useful when one business is acquiring the ownership
of other business. They are mostly used by those firms which are at growth stage. Thus they can
easily explore their business activities in effective ways.
Limited growth: These strategies are focusing on providing effective services to their
clients rather than working for achieving profit. They are focusing on providing high quality
goods to clients are very economical prices. Thus there main objectives is to satisfy necessity and
wants of there customers (Mithas, Tafti and Mitchell, 2013.).
Retrenchment: This strategy is not used by every firm as they are not able to achieve
success and development. The position of industries is not effective at market places thus they
are not able to earn large profit volumes.
J) Explanation of strategy for market entry and growth
Growth and success of firms are playing vital role at business organisation. Various plans
and policies are adopted by firms in order to operates its tasks in effectual ways. Various tools
can be used by firms so that they can achieve growth at market place. The tools which are useful
in generating large amount of profits are used by selected firms so that they can easily expand
there business operations. They are currently having their operations of grocery stores in UK but
now they are trying to expand it around the world in order to achieve large profit shares. Best
strategies are useful in gaining competitive advantage (Montgomery, 2011). ALDI is following
substantive growth strategies so that they can easily expand there business operations by adding
new feature in there products. This helps in achievement of higher profits. If the firms achieve
success than they can acquire with other business which results in easily expanding the business
operations. The management departments have the responsibilities to analyse all the internal and
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the external factors which are affecting business operations and they they should reach at a
discussion in order to achieve growth for long durations.
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