Aldi's Business Strategy: Analysis, Planning, and Implementation

This report provides a comprehensive analysis of Aldi's business strategy, focusing on strategic planning and implementation within the competitive supermarket industry. It assesses the alignment of Aldi's mission, vision, objectives, goals, and core competencies with its strategic planning processes. The report examines key factors Aldi considers when formulating strategic plans, evaluates the effectiveness of various strategic planning techniques, and conducts both organizational and environmental audits to determine Aldi's current strategic position. Furthermore, it highlights the significance of stakeholder analysis in shaping Aldi's strategic decisions. The report identifies potential market opportunities for Aldi, analyzes appropriate growth strategies, and justifies a specific market entry and growth strategy. Finally, it assesses the roles and responsibilities of personnel involved in strategy implementation and analyzes the resource requirements necessary for successful execution.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
a.) An assessment of the extent to which Aldi’s missions, visions, objectives, goals, core.......3
competencies inform strategic planning. ....................................................................................3
b.) Analysis of the factors to be considered by Aldi when formulating their strategic plans.....4
c.) To evaluate the worth or usefulness of techniques used while planning the strategy for any
business ......................................................................................................................................5
d.) An organisational audit for ALDI to provide an analysis of their current strategic position
.....................................................................................................................................................6
e.)An environmental audit for ALDI showing both micro and macro environment..................7
f.) Significance of stakeholder analysis for ALDI when formulating new strategy...................9
a.) Identification of a market (new or existing) and analysis of the appropriateness of suitable
strategy for ALDI in relation.....................................................................................................10
to substantive growth, limited growth or retrenchment...........................................................10
b.) Justification of one of the strategies for market entry and growth .....................................11
TASK 3..........................................................................................................................................12
a.) An assessment of the roles and responsibilities of personnel involved in the....................12
implementation of the strategy .................................................................................................12
2.) Analysis of the resource requirements for the implementation of the strategy...................13
REFERENCES..............................................................................................................................14

INTRODUCTION
It is essential for each and every organisation to formulate business strategy to survive
successfully in this competitive environment. Strategy can be defined as a planning and
execution of the decisions taken by the managers to achieve the objectives. It is really needed to
create a competitive advantage. It is a kind of long term plan for a business. With the help of
strategic management it can be easily carried out. Company's top management is there to plan all
these on behalf of the owner. It is a significant factor which leaves a good impression on the
customers . This will really help to explore the business. To explain the importance of this , an
instance of ALDI company is taken which is one of the leading discount supermarket chain
based in Germany. In this report it is bring into the focus that strategic planning is very important
to beat the rivals.
PART 1
a.) An assessment of the extent to which Aldi’s missions, visions, objectives, goals, core
competencies inform strategic planning.
Every company has to set some vision to achieve a particular goal . This helps a company
to become successful. Similarly , ALDI has also set business particulars to outburst in the
market.
MISSION: ALDI is a German based supermarket store for food,beverages,sanitary
articles,household goods etc. with 10,366 number of locations. The mission of this company is to
expand its business at alarming rate and hence it has come out with its new ranges like: ALDI
talk, ALDI liquor, Diskont etc.In this way it has set mission to open many more store to keep its
customers satisfied.
VISION: It has some set ethics to attract the customers. The company has a vision to
make the products affordable for general customers along with the quality. It has a policy to
invest less in advertisement and this price saving will go on to the customers. The company
offers various discount schemes to keep the individuals happy. The company focus on five
important aspects (Armstrong,and et.al., 2015). They are: quality, special employees,savings,
values and confidence.

Objectives and goals: The company aims at covering more and more areas to expand its
business and try to introduce new ranges of products which is not known by any other one else.
This is to maximize its profit share by attracting more number of stakeholders.
Core competencies: These are the strategies which helps to lead the company in any
market place. ALDI has its strict focus on pricing policy which is very advantageous for
consumers. Focus on its brand, small store size , minimal marketing policies are the other factors
which keeps the company at the top level.
From the above we can say that all these factors play a vital role to implement successful
business strategy.
b.) Analysis of the factors to be considered by Aldi when formulating their strategic plans
Strategy should be planned in a systematic manner to achieve the competitive advantage.
The company has to consider various factors to come at the top in today's scenario. The various
factors that the ALDI company has to consider while making its strategy are as follows:
 It has to be product oriented also along with keeping in mind the needs of customers.
 It also has to consider the production processes so as to save the cost and increase
efficiency because price is important factor for any customer.
 The company also has to be market oriented. It has to consider the needs of market or the
conditions prevailing in market . It has to plan the production in such a way so that it will
put an impact of competition in the market with the help of innovations.
 It has to increase the range of the products for the ease of customers so that the
individuals get many things at one store only. ALDI has also done something related to
this .For example it has introduced many health and beauty products , stationary, soft
tools etc. ( Slack,2015).It has to put more emphasis over new ranges to increase its sales.
 Place is also one of the factor which decides the sales. It should be located at such a place
which is more accessible to the individuals. The company has to take care of it while
opening any store.
 Employees consideration towards price saving is an important factor for the growth of
this company. This cost saving policy is important to offer less prices to the customers.
This should always be kept in mind. For example: by investing less in advertisement.
 Focus on cost and differentiation are the important factors to be considered while making
any strategy.

All these factors helps the company to rise in the today's competitive era.
c.) To evaluate the worth or usefulness of techniques used while planning the strategy for any
business
Various kinds of tools and techniques are used by business organisation to plan the
strategy for profit maximization (Armstrong,and et.al., 2015.) These tools help them to analyse
the further steps to be taken to achieve the goal. Some of the techniques are described below:
1.)BCG growth matrix: It is a model which is based on the observations that business is
categorised in different ways depending upon the combination of market growth and market
share relative to the competitor.
Four categories are depicted above which can be explained as:
 Dogs: They have low market share and growth rate and hence are cash trappers.
 Question mark: They consume large cash but because of low market share they do not
obtain more cash. This means has has a potential to rise up .
 Stars: They generate more cash but consumption is also very high . Hence, reach up to
the break even point and has chances to become successful.
 Cash cows: They generate more cash relative to the consumption . Hence , most
successful.
ALDI is using this analysis to come to the conclusion that where it is now and what can be done
more to increase its profit.
2.) SPACE: The strategic position and action evaluation matrix is used to evaluate the
particular strategic plan. External ( industry attractiveness and stability) and

internal( competitive advantage and financial strength) factors are taken into account for
this.
The above diagram shows that company is in a very stable position. ALDI is using the same by
taking into account various factors such as return on sale,market share, growth potential, interest
rates etc. to analyse the position.
Accordingly the steps are to be taken to enhance the profitability.
3.)PIMS:Profit impact of market strategy is an another important criteria to be considered while
planning for any business. It helps an individual to understand the kinds of strategy to be
implemented according to the prevailing environment (Slack,2015). For example: quality,
pricing, innovation, advertising etc. It pays focus over relationship between decision taken and
results achieved.
ALDI is also implementing the same and is introducing much more innovations today in
its products. This helps the company to decide which strategy has to be strengthen out to get a
particular result.
d.) An organisational audit for ALDI to provide an analysis of their current strategic position
Any audit done for an organisation to have an idea of its strength and weakness in present
competitive advantage is refereed as organisational audit.
To analyse the current position of the company the SWOT analysis report is given below:
STRENGTHS:
 It serves top quality products along with affordable price.
 It has 2500 stores in Germany , along with 8000 stores in Europe and other countries
having a network in 15 different countries worldwide.

 It has low operating cost.
WEAKNESSES
 It is a small brand in comparison to the others.
 Its global impact is very less.
 Sometimes it is said to be a brand of cheap and low quality items.
 It has limited range of products.
OPPORTUNITIES
 It can advertise more to gain global impact.
 It can spread its channel around Africa and Asia to gain economically.
THREATS
 It is not a complete shopping store due to limited range of products.
 It has risk of competition with large supermarket chains. For example: Woolworths,etc.
From the above analysis ALDI can make its strategy accordingly to beat the competitors by
making it a complete store (Armstrong, and et.al., 2015).This can be done by introducing all kind
of ranges.
e.)An environmental audit for ALDI showing both micro and macro environment
Both internal and external environmental factors affect the business organisation in
varied way. To have an account for these is very important to plan business strategy. For the
same Porter's five forces analysis is done for ALDI company which is a tool for finding out the
competition that the organisation is facing (Porter, and et.al., 2015).

These are the forces which affects any organisation. These are explained below:
 Industry rivalry: There are many competitors of ALDI who are providing the same
products. Large super chain markets such as Woolworths are its biggest competitors.
Hence, we can say that industry rivalry is high.
 Threat of new entrants: Large organisations are mostly affected by this. Being a small
brand selling its own home grown fresh products, it is not susceptible to this. So, we can
say that threat of new entrants is medium for this (Birkinshaw, 2014).
 Bargaining power of suppliers: Suppliers always look for retailers with more number of
orders and also provides discount to them. Since it is small organisation, supplier in no
way affect it . Hence , we can say that bargaining power of suppliers is low.
 Bargaining powers of buyer:Since the stores are located very close to each other, buyer
can easily switch from one store to another. This gives them a large bargaining power.
 Threat of substitutes: The products of the company are not that unique and also with less
emphasis on advertisement any other company or product can take its place. So, threat of
substitutes for ALDI is very high.
Considering the above analysis report, ALDI can frame such policies to innovate its production
to sustain the competition. Also,it has to put more emphasis on store locations in a particular
area.
f.) Significance of stakeholder analysis for ALDI when formulating new strategy
Stakeholders are the persons or any other organisations who has some interest in the
business. They are affected by company's actions and decision. They are known to be as the
resources for any business. Creditors, directors, employees, suppliers, government owners are

various examples of it. Customers form a important part of ALDI stakeholders. It is very
important for any company to take the decisions according to the need of stakeholders. The
company who is having good communication with the stakeholders can survive well in the
market. ALDI focuses much on stakeholders (Goleman, 2017). IT aims at providing the services
to the customer at low price and good quality. Hence, it has gained attention of many customers.
Looking at this hike , stakeholders invest in this company.
The company has maintained high value relationship with the suppliers , customers and
also the employees. Employees consideration is taken into account while taking any decision. It
has also maintained the strong relationship within the community in which it is operating . In this
way ALDI ensures the support of stakeholders.
Looking at the trend of stakeholders the customers attitude changes. If there are more
number of stakeholders more customers will be there and vice-versa. They both are related to
each other.
From above we can say that stakeholders are the important part of any organisation.
Company has to form strategy in such a way so as to provide the benefits to the stakeholders and
ultimately the profit maximization for the company.
g.) Using the research and information collected about ALDI, a new strategy that ALDI can
follow is as described below:
From above we can conclude that ALDI provides quality product at affordable rates. It
has large number of store in 15 different countries worldwide along with 2500 stores in
Germany.
Its mission now is to serve as many countries as possible , so it is expanding at alarming
rate . The company want to have an image globally and to serve the customers in the best
possible way.
Vision of the company is to provide quality product with low cost, enhance the
confidence of the customers and to become a stable organisation (Bocken, and et.al., 2014) .
For this the company has maintained high value relationships with the customers,
employees, stakeholders etc. The company wants to save the cost incurred in advertisement and
to pass the same to the customers benefit.

Company now wants to explore itself in Africa and Asia. It is now trying to beat its large
super chain market competitors by stocking its store by wide ranges of products ,such as, cakes,
chocolates etc (Grant, 2016). This helps the customer to have maximum products from one
place only. The company is doing advancement to attract more number of customers by taking
innovative steps, such as, packaging, gift hampers ,etc. In this way the organisation is
proceeding.
This can be possible if employees work out in an efficient way with the help of new
technologies, advertising using less money, well defined infrastructure etc. It has to recruit new
employees to have some up gradation. The company has to maintain strong relations with the
customers to have maximum benefit. The managers should have a continuous communication
with the customers to get their feedback. Providing online services will help a lot to make a
market.
In this way a company can have exponential growth.
PART 2
a.) Identification of a market (new or existing) and analysis of the appropriateness of suitable
strategy for ALDI in relation
to substantive growth, limited growth or retrenchment
Market is a place of exchange of goods. For ALDI the existing market is its sore
located at various places worldwide and new market is created by exploring the business. This
can be done with the help of new store openings. Online service providing can also help to
increase the customers (Bocken, N.M., and et.al., 2014). Africa and Asia are the other
geographical region to get benefit.
Substantive growth : The key goal of any business is its growth. This strategy aims at
gaining considerable growth in any business. With the help of adding more funds to the project
in present , wealth gain in the future will be high (Drucker, 2017). This plan help to meet the
today's competitive requirement. For this one has to choose the key priorities to achieve the goal.
This helps to gain a
exponential growth in any business.
Limited growth: This means the growth on an average rate. This kind of strategy will not
help to beat the rivals. Growth rate is less in this , that is, only 20% relative to the 50% of the

competitors and hence, attract less customers. If competitors are able to dominate the company,
then this limited growth will turn into the negative growth.
Retrenchment: This type of strategy is used to reduce the size of the tasks or productions
to become more financially stable (Reim, and et.al., 2015). It aims at turnaround, divestment and
liquidation. This is also not suitable to meet the competitive environment prevailing at this time.
After having an overall picture of ALDI company , substantive growth strategy will be
most appropriate for the survival of the firm.
We have seen that the company is considered as a small brand. With the help of
exponential growth strategy, more fund will be added to expand the business by introducing new
products into it. Though it will increase complexity but wealth creation will be more.
In this way we can say that to sustain in this competitive environment company has to
choose substantive growth strategy.
b.) Justification of one of the strategies for market entry and growth
As discussed above, the manager can choose among any of the three strategies ,that is,
substantive growth , limited growth and retrenchment according to the advantage to keep intact
with the competitors.
Substantial growth strategy will help in achieving the exponential growth with the help of
more investment. It helps to survive well in the market of competitors(Sia,and et.al., 2016).
Wealth creation will be more , though the responsibilities will increase.
Limited growth ,though easy, will not lead to a competitive environment . Thus , it is not
suitable for ALDI. Similarly, retrenchment strategy will not solve the purpose of ALDI as it is in
the need to widen its product ranges.
To conclude we can say that for market entry and growth of ALDI company, substantive
growth strategy is most suitable. By deciding the priority one can expand the business at a
particular location to have more customers and hence more wealth creation. This strategy will
lead to put more hard work to achieve the target. This way ALDI can develop with a range to
survive in this competitive era.

TASK 3
a.) An assessment of the roles and responsibilities of personnel involved in the
implementation of the strategy
Business strategy is very important for any organisation to function in an organised way.
But its implementation is an important task to benefit any organisation.
This requires a man who can take lead on other staff and furthermore ready to partition the work
in representatives remembering their parts and obligations in association. The representatives
who are working in Aldi have likewise advance obligations to centre around key usage. The
Chief executive officer of the organisation needs to convey the entire key arrangement to
different representatives. The work force who are included to execute the procedures are required
to keep up records appropriately. It is vital to likewise evade lawful issues. To make the
execution fruitful, legitimate checking is required. It implies by requiring an outline in particular
investment hole. It energizes the general key arranging however it likewise requires some
restorative activities. The better the implementation of all the effective strategies on the business
it will help to bring more correct outcomes in the context of firms growth and development.
The whole organisational hierarchy is responsible for this (Reim, and et.al., 2015).
Everyone has to work in collaboration to attain the objectives. For this the leader has to work in
an effective way .
Various roles and responsibilities of the personnel are as follows:
 They must have a clear vision of the things to be done.
 For this the proper communication among the members is mandatory.
 They have to work in a team to achieve the objectives.
 One must have to maintain good relationship with the employees to work in an effective
way.
 The manager should have to share every aspects with the individuals so as to avoid any
confusion and misunderstanding.
 New innovative team should be there to achieve the goal which can be possible with the
help of effective recruitment (Johnson, 2014).
 The managers should have to analyse which approach is best suitable for them.

 One has to keep in mind several factors prevailing in the business , that is, market
penetration, market development,suppliers, buyers, threats, opportunities , so as to take
suitable steps to have maximum advantage.
2.) Analysis of the resource requirements for the implementation of the strategy
To have an effective implementation of strategy , resources should be of sound nature.
Managers are at the top to allocate the resources to achieve the goal.
The most effective way to evaluate the resources is by functional areas, that is, finance ,human
resources, marketing,research and development etc. (Williams, and et.al., 2018).
This means the evaluation of number of employees required to achieve a particular goal,
or the no. of machines required and hence the investment incurred in it.
One can have a knowledge of number of units to be produced and accordingly the man
power , machine or raw material requirement for the same to attain the objective.

c.) To evaluate the use of SMART targets to achievethe strategic objectives.
It gives guidance for setting and implementing objectives. Objectives are considered to
be SMART if they are specific,measurable, achievable,real and timely . Planned objectives are
relatively easy to achieve because of the structured policies related with them. It is very
important for every business to set and achieve objectives. In Aldi, various plans and policies are
conducted by the managers for ensuring successful growth and development of the company.
SMART objective for Aldi
Specific It is straightforward and furthermore
accomplish particular focuses rather than
general targets. So every one of the objectives
are to be determined like individuals inclusion,
time estimation and so on. The organization
aldi will increase its sales in the upcoming 1
years.
Measurable By 3 % the company will increase its sales and
in the upcoming years it will measure its
performance, if in the 1 year the target will not
be achieved then the company will make
strategies.
Achievable Their will be 3 % increase in the sales for the
coming next 2 years.
Real Based on the resources they had there is
possibility that this target will be achieve by
Aldi.
Time This objective will be achieved in the next
year. Organizations should set some particular
time so as to finish its objectives in certain
period. In the event that a specific undertaking
finished in a given time it would be beneficial

for Aldi to play out a few different
assignments.
CONCLUSION
From the above report it can be concluded that strategic planning is very important for
any organisation to survive in this competitive era. Managers should have a proper knowledge of
market place to decide the steps to be taken to beat the other organisations. One has to do a
proper audit of the firm to analyse the requirement of the business. According to the needs of
customers one has to plan the production so as to bind the customers with them. Proper planning
and implementation of strategy will help to maintain the respective standard.
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