Aldi's Strategic Planning: Business Strategy, Analysis, and Growth

This report provides a comprehensive analysis of Aldi's business strategy, focusing on strategic planning, implementation, and growth. It examines the impact of mission, vision, and objectives on Aldi's strategic planning, along with key factors such as stakeholder identification, environmental analysis (internal and external), and competitive advantage. Techniques like the BCG growth matrix are evaluated for their worth in developing business plans. The report includes an organizational audit using SWOT analysis to determine Aldi's current strategic position and an environmental audit using Porter's Five Forces. It also discusses suitable growth strategies, resource requirements, and the use of SMART targets. The analysis aims to provide insights into how Aldi can maintain and enhance its market position through effective strategic planning and execution. Desklib provides a platform for students to access similar solved assignments and past papers.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Mission, vision and objective can affect the strategic planning of Aldi..........................1
1.2 Factors that are taken into consideration while formulating strategies for Aldi..............2
1.3 Worth of techniques that are used in developing business plan. .....................................3
2.1 Organisational audit for ALDI to determine its current strategic position.......................5
2.2. Environmental audit for internal as well as external environment..................................6
Aldi needs to consider the above mentioned internal and external analysis in order to be aware
about the internal as well as external factors which can affect company's overall performance.
................................................................................................................................................8
2.3 Impact of stakeholder analysis while formulating new strategy......................................8
2.4 New strategy for Aldi.......................................................................................................9
TASK 2..........................................................................................................................................10
3.1 Suitable strategy for Aldi in respect of substantive growth, limited growth or
retrenchment.........................................................................................................................10
3.2 Explanation of the strategy for growth and market entry in context of Aldi.................11
TASK 3..........................................................................................................................................12
4.1 Responsibility that is associated with personnel involved in implementation of strategy.12
4.2 Resource requirements in the implementation of new strategy......................................13
4.3 Use of SMART targets in achieving the strategic objective..........................................14
CONCLUSION .............................................................................................................................15
.......................................................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy can be considered as the most important parameter upon which the
success of an organisation depends. Different organisation follows different strategies depending
upon their objectives. They can adopt various methods, techniques, tools to formulate and
implement these business strategies. It is the core responsibility of top management to decide the
most suitable strategy for their organisation and thus they try to achieve tremendous level of
success in the market (Tan, 2010). This can only be done by estimating current and previous
performance of the company and on the basis of this a new sound strategy can be made. In
context of this report, Aldi is known as the most famous brand in the field of supermarkets. They
are currently having 10,000 stores in 18 different countries. As far as their turnover is concerned
about, they have achieved more than 50billion$ of turnover in the recent year. This group was
further divided into two parts. First is known as Aldi Nord and second one is the Aldi Sud. This
report is having focus on various aspect of strategies that are made in context of different
organisation. A company's mission, vision and objective indicate about their planning.
TASK 1
1.1 Mission, vision and objective can affect the strategic planning of Aldi.
There are many factors that can be associated with an organisation which indicates about
their main strategies. Different companies can use a set of formats in context of formulating and
implementing these strategies. As far as Aldi is concerned, their main mission, vision, objective,
goal and core competencies indicate about their strategic planning. Given below is the brief
discussion about the different factors that directly help in determining the business planning of
Aldi:
Mission: Aldi's main mission lies between the idea of expanding their business in most of
the countries. They have already been ruling the market but in the coming future with the help of
their strong strategy, they will surely cover some more areas of market (Morris, 2012). They are
also focusing on improving their consumer services in order to maintain a strong customer
relationship. They are also trying to improve the quality of all the products that are being offered
in their supermarkets. Best mission plan will affect the strategic plan of the company by
following ways:
A) Efficiency of work done performed by the company increases.
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B) Mentioned company can attain feasible results.
Vision: This can be considered as the way by which an organisation makes their planning
in future perspective.
Objectives and goal- This can be defined as making a basic idea upon which a business
can be run. Aldi has a very strong objective of their company . They are trying to provide quality
products and services to the customers.
Core competencies- They are leading the market in the area of supermarkets. Their
quality of products and services plays a vital role in increasing their market shares (London and
Hart, 2010). It is found in a survey that Aldi have actually made a very strong impression of their
brand in the market. Customers are becoming addicted towards this brand. This further indicates
a better expansion of their business in the future.
On the basis of above, it can be concluded that mission, vision, goal objective and core
competencies of Aldi actually shape the main strategies for their organisation.
1.2 Factors that are taken into consideration while formulating strategies for Aldi.
There are many factors that plays vital role in making the strategies for Aldi. As it is a
well-known fact that different companies have different strategies. This is because strategies
depend upon the core objective of the company. In this regard, there are many elements that can
affect the strategic planning in context of above mentioned company. Given below are some of
the factors:
Identification of stakeholder- These are the key factors that plays a vital role in the
organisation. Actions taken by Aldi will directly affect their customer, shareholders, suppliers.
Therefore, any planning cannot be done by above mentioned company in which they do not give
attention to their main factors, that is their stakeholders (Firnkorn and Müller 2012). Therefore,
strategic planning should be done by giving full consideration to their stakeholders.
Evaluate internal as well as external environmental- There can be some crucial methods
or concepts that are very popular in the analyses of internal as well as external environment. For
internal analysis, Aldi should conduct their SWOT investigation that is represented by strengths,
weaknesses, opportunities and threats. On the other side, external analysis can be done upon
many concepts such as PESTLE. This will surely help the company to formulate a sound
strategy.
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Political- Mentioned company have to consider the government polices in order to run all
its business operations successfully.
Economic- Tax rates, Fiscal policies, stability in economic conditions and many more
needs to be considered by the company
Social- Taste and preferences, trends and culture must be taken into account to know set
objective of the company.
Technological- Company needs to follow latest trends in order to attain the level of
sustainability.
Determining competitive advantage- This can be evaluated by seeing the competitive
strength of the mentioned organisation. It is basically an idea where a company can introduce
unique products or services which are certainly not found in their competitors. These factors has
to be considered while formulating strategy for Aldi.
Formulating smart goals- It is important for the company to set a SMART goal. This
concept indicates the feasibility about any goal (Markus and Loebbecke, 2013). Therefore,
organisation should set those missions, or target that can be practically achieved.
From the above basis, it can be concluded that there are many crucial factors that help in
determining the strategic plan of the organisation
1.3 Worth of techniques that are used in developing business plan.
There are many techniques that can be used in developing any business idea. These
methods actually plays a very major role in setting up of any strategic plan. In context of Aldi, it
has always been observed that their strategic plan includes the evaluation of the possible
techniques that would further help the company to determine their strategic plans indicates all the
techniques that are helpful in determining their strategic plan.(Li, Zhou and Si, 2010). Given
below are the major techniques that would be helpful in estimating the strategic plan for the
mentioned company.
BCG growth matrix-
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This concept has been known by various names such as Boston box, product portfolio matrix and
BCG matrix. This method has a very significant role in determining in setting up of any business
strategy. Aldi has used this technique in order to make an excellent strategy for their business
(Bahensky, Ward and Li, 2011). This concept is based upon four major factors that is cash cows,
dogs, question mark and stars that is clearly shown above in the picture. Given below is the brief
description about these factors.
o Stars- This can be considered as the organisation which have dominance in the
market. They are enjoying the stability of their business in the market place. They
have high market share and relatively maximum profit margin. Their growth rate
is also very high and they can expand their business in the coming future.
o Question mark- This indicates the position of company where it is having low
market shares in respect of high- growth market. These are also known as
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Illustration 1: BCG Matrix, 2017.

problem children. “Question mark” has potential to gain market shares and
become Stars.
o Dogs- Organisation under this head can be called as Pets. They have very low
market share in a slow growing industry (Scurlock, Dexter and Galati, 2011).
They normally do not have sufficient amount of money to run their business.
o Cash cows- Organisation who falls under this category has high market share in a
very slow growing economy. There is no use of investing money in the slow
growing market.
On the basis of above discussion it can be concluded that the major techniques used by
Aldi must affect its entire organisation in order to improve overall efficiency of the work
performed by mentioned company.
2.1 Organisational audit for ALDI to determine its current strategic position.
For estimating organisational audit in context of above mentioned company, there has to
be evaluation of SWOT analysis to serve the same purpose (Phongpetra and Johri, 2011). Given
below is the brief discussion upon SWOT analysis of Aldi which will further be helpful in
determining their current strategic position.
Strengths
1. They are serving top quality products- This is the only reason Aldi has maximum
number of market share.
2. Affordable prices- All the products that are being offered by the company are quite
affordable and competitive that is why most of the customer wants to visit their supermarkets.
Weaknesses
1. Not fully developed brand- This company needs to focus upon their advertising
policies. They should invest more on advertising. This is how new customers will get awareness
about their products with the help of advertisement.
2. Not completely expanding their market chain- They are trying their level best to
expand in the market but still they are lagging somewhere and thus there is still lot of scope in
this through which Aldi can actually reach up to larger market segment.
Opportunities
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1. Improve their advertising- Aldi needs to improve their marketing advertisement so
that the chances of attracting more customer can be increases (Alsoboa and Aldehayyat, 2013).
In this way, cited company can actually maximize their customer.
2. They need to invest in the growing economy- It is one of the biggest opportunity for
the company to invest into those economies which are fast growing.
Threats
1. High level of competition: This can be considered as the most serious threat for the the
company. As above-mentioned organisation needs to face and develop strategies for facing
competition in the market.
2. Government policies: A company cannot expand until and unless it abide by several
government policies.
From the above discussed SWOT analysis, the current strategic position of Aldi can be
estimated (Liu and Wang, 2010). This is because SWOT analysis helps in determining the
company's core strengths, their weaknesses, prevailing strategies and possible threats. On the
basis of this, above mentioned company. can actually evaluate their current performance in
respect of strategic position.
2.2. Environmental audit for internal as well as external environment.
Porter's five force model can be implemented as the framework with the help of which
level of market competition can be determined (Gonzalo, 2013). This is also very helpful in
determining and developing the business strategy.
Competitive rivalry- This is basically concerned about determining the number of
competitors and their strengths and weaknesses.
Suppliers power- This is very important for any organisation to have a good relationship
with their suppliers. This is because suppliers are responsible for providing resources to the
company. They have power to affect the overall output of any company.
Buyer’s power- As Aldi or any other company can be easily affected by the power of any
consumer. All the price that is set by the company should be based upon the customer
preferences and their ability and willingness to pay. That is the reason, company should give full
attention to the demand and needs of customers.
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Threat of substitution: Aldi needs to make sure that no other competitor can come up
with a substitute products (Rugimbana, 2010). They need to be confident about their product and
services in such manner that no other company can take up their position in the market.
Threat of new entry: Apart from substitution, the company should also ensure that no
other new entry can become more popular than their own brand.
In context of internal and external environment analysis, models like SWOT analysis and
PESTLE can be used. Given below is the brief discussion about the PESTLE analysis of Aldi in
order to evaluate external environment.
Political- Aldi needs to consider all the political factors such as government policies and
norms made by several political parties in order to sustain and even survive in the market.
Economic: There are many elements that can be involved in economic factor such as
interest rate, inflation rate, wage rate ,consumption and expenditure patterns and so on (Park and
Kincade, 2011). above mentioned company needs to consider these factors.
Social: This indicates the lifestyles, taste and preferences of the customers. Business
should evaluate these factors so that they can make products and services as per the demand of
customer.
Technological: Various aspects of technological changes can make all the task associated
with company very easy. Therefore, use of new technology should be there.
Legal: Aldi needs to consider all the legal factors so that they can make process of their
organisation so easily.
Environmental- Products should be made so that they should not be harmful for the
environment. Products should be eco- friendly. Their production process and packaging must not
pose threat to environment.
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Aldi needs to consider the above mentioned internal and external analysis in order to be aware
about the internal as well as external factors which can affect company's overall
performance.
2.3 Impact of stakeholder analysis while formulating new strategy.
It is necessary for Aldi to make stakeholder’s analysis in order to formulate new
strategies. It will help to the organisation to analyse and allotting responsibilities of stakeholders
which can help to them to develop business. Use of this concept can be seen in conflicts
resolution, business administration and project management. It can be considered as the process
where the impact of decision can be seen upon relevant parties.
1. Interest of stakeholder- One of the very important advantage of stakeholder analysis is
that mentioned company can actually find out the interest of stakeholder.
2. Analyse the support strength of stakeholders: This will help to identify the strength of
stakeholder to support to attain the business objectives by which strategy formulator can
determine the number of stakeholders according to their needs.
3. Evaluation of potential risk- Company will be able to evaluate all the risks associated
with the company (Ramakrishnan, Jones and Sidorova, 2012). On the basis of this, they
can alter their prevailing strategies.
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Illustration 2: Stakeholder analysis, 2017.

4. Negative stakeholders- With the help of stakeholder analysis, organisation can find the
most suitable customers and suppliers for their organisation. Suppliers should provide all
the important raw material for the company.Better formulation: It will help to determine
better strategies and planning for the organisation to attain organisational objectives, it
supports to put similar work pressure to all of their stakeholders.
On the basis of above discussion, benefits of stakeholder analysis in respect of Aldi, it
can be concluded that stakeholder analysis plays a vital role in formulating the new strategies.
This is because this technique helps the company to find out basic factors which plays a vital role
in setting up of any new strategies.
Stakeholder analysis is important so that companies can choose, evaluate, monitor the
best and potential stakeholder for the mentioned company.
2.4 New strategy for Aldi.
On the basis of current position of Aldi in the market, it is suggested to make even a
sounder strategy for the company (Rasila, Alho and Nenonen, 2010). This can be achieved by
fully evaluating the current factors upon which the company is working. Given below is the new
strategy to analyse the current business environment of the company;
Step 1 Evaluating current condition of company.
Under this step, a basic assumption has been made to evaluate the current rank of the
company in the market. This can be done by reviewing their mission, vision, goal, objective and
core competencies. Their current strategic position is good but still there is a lot of scope to make
new and better strategy. This step is very important because until and unless a company is not
aware about their current position, they would not be able to set any new targets.
Step 2 Evaluating competitive advantages.
In this step, this step will be followed by the company after deciding the objective of their
company. Company actually evaluate their competitive advantage. On the basis of this, they can
make more effective strategies and they can achieve tremendous level of success in the market.
Company make a rough sketch of where they are going. This can be considered as determining
the state where company wishes to go in future
Step 3 Implementation of strategy.
This is the last step under new strategy formulation. Under this, company find ways by which the
objective behind new strategy can be achieved (Wang and Ghose, 2011). For this purpose,
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company needs to set the new objective, goals and mission. For achieving this they can also
adopt many techniques and tools.
A strategy is here for the ALDI to develop their market and expand their market share in market;
Objective: company is having an objective to improve their market share by 3% in this year.
Strategy: ALDI will target to accomplish this objective at the end of the financial year 2017-18
so they will improve their promotions of those products which are having less demands by
providing discount, cash back and gift on the purchase by consumers.
Tactic: Aldi will use print, electronic and social media these three can be supportive in the
promotions of listed products which can help to the company to attain their objectives. Company
will promote their discount schemes, cash back offers and attractive gifts on the purchase of less
demands products for a particular time period which can help to the organisation to improve their
sales of products to finally achieve their objectives.
Target market: This strategy will target to that market which has enough purchase power to buy
products which can help to the company to increase sales.
Implementation of strategy: this strategy will be implemented by the marketing and sales
managers which can help to the company to improve their sales. Monitoring and evaluation is
also done by the marketing manager.
TASK 2
3.1 Suitable strategy for Aldi in respect of substantive growth, limited growth or retrenchment.
It is important for Aldi to find the appropriateness of strategy in respect of limited
growth, substantive growth and retrenchment. Given below is the basic idea behind growth
strategy for the above-mentioned company.
Substantive growth- These strategies are those which supports to resolve a problem to it's
root cause. This strategy work on the over all company which can help to the ALDI to improve
their market share with their sales and brand image. Under this strategy, there are basically two
idea that is associated with it. One is that company can actually introduce a vast range of
products to the customers and they can also expand their market in different locations. Aldi has
to use substantive growth strategy which can help to them to make a better change in their
position in their targeted market. Market expansion in other product is a direct way which can
help to the organisation to improve their sales and market share.
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