Strategic Analysis and Recommendations for ALDI's Business Strategy

This report provides a comprehensive analysis of ALDI's business strategy, encompassing its mission, vision, goals, objectives, and core competencies. It examines the internal and external factors influencing strategic planning, including political, economic, social, and technological elements. The report delves into organizational and environmental audits, stakeholder analysis, and the development of a new strategy for ALDI. Furthermore, it identifies appropriate strategies for market entry and growth, justifying the chosen approach. The report also assesses the roles and responsibilities of personnel, analyzes resource requirements, and explores the use of SMART objectives to achieve strategic goals. Techniques such as the BCG matrix and SPACE matrix are discussed, providing valuable insights into ALDI's market position and strategic options. The analysis concludes with a review of how ALDI can maintain its competitive advantage in the grocery retail sector.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 ALDI's mission, vision, goals & objectives and core competencies................................1
1.2 Analysing factors that have to be consider while formulating strategic plan...................2
1.3 Usefulness of techniques while developing strategic plan...............................................3
TASK 2............................................................................................................................................5
2.1 Organisational audit for Aldi............................................................................................5
2.2 Environmental audit for ALDI.........................................................................................6
2.3 Stakeholder analysis.........................................................................................................7
2.4 New strategy for ALDI.....................................................................................................8
TASK 3............................................................................................................................................9
3.1 Identification of market analyse appropriateness of suitable strategy..............................9
3.2 Justification for the chosen strategy for market entry and growth of ALDI..................10
TASK 4..........................................................................................................................................10
4.1 Assessing roles and responsibilities of personnel for the implementation of strategy...10
4.2 Analysis of resource requirement for strategy implementation.....................................11
4.3 Way in which use of SMART objectives can contribute to achieve strategic objectives11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
.......................................................................................................................................................14

INTRODUCTION
Each and every organisation has to develop some plan for their business so that they can
attain their set objectives in an effective and efficient manner. Manager of company have to
provide some adequate framework so that employee can complete their work more appropriately.
If a firm’s business strategy is effective then they can compete with their competitors in the
marketplace that will lead to increase their profits. With the help of this, goodwill of firm in the
market would get improved as well (Ackermann and Audretsch, 2013). It will assist the firm in
their growth as well as development. Enterprise has to formulate strategies properly so that they
can attain their desired goals and targets within stipulated time frame. This report is based on
ALDI which is a grocery retail outlet in the UK. They have almost 550 stores in all over the
world. In this assignment, there is a description of mission, vision, objectives as well as core
competencies of firm.
TASK 1
1.1 ALDI's mission, vision, goals & objectives and core competencies
ALDI is a supermarket chain which is situated in UK and they are providing their
services all over the world. They have almost 10,000 stores in approx 18 nations. It is essential
for each firm to set some guidelines first for their business and they work on them. It assists them
to accomplish their work more effectively and efficiently. Along with this, it is essential for the
manager of ALDI to develop a healthy work environment in premises so that workers can do
their work appropriately and attain the desired goals and objectives in an effectual manner
(Acquaah, 2013). The vision, mission, goals and objectives as well as core competencies of
ALDI are like:
Vision It is like a written statement of company which is related with their
association that in coming years where they want to see themselves. Director
of ALDI wants to develop something unique as well as revolutionary
techniques so that they can take competitive advantages form their rivals. As
result to, it will assist them to improve their revenues and additionally their
market strength is get enhanced. ALDI wants to expand their business in all
over the world.
Mission It serves as a guideline for organisation which will help them to survive for
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longer duration in the marketplace. Along with this, they can achieve their
desirable goals within a specific time period. Company wants to fulfil needs
of their customers timely. Additionally, they want to increase their profits.
They provide goods and service at less prices, thus they can attract more
clients towards them and their distribution system is also effective so that
they easily accomplish demands of each and every sort of buyers.
Objectives It may be for short and long term both but most of the firms want to survive
for long term in market (Armstrong and et. al., 2015). Thus, it is essential
for them to develop an effective plan for their association so that they can
accomplish demands of clients and increase the profits.
Goals It is necessary for enterprise to set their goals which are appropriate as well
as that can be achieved within stipulated time span. Along with this, goals
must be measurable so that it can be measured with setted objectives in an
effective manner.
Core
competencies
ALDI's strategies are totally different from other organisation, which assist
them to take advantages from their competitors in marketplace. Along with
this, it will help them to increase their profits and goodwill in market. They
provide their products and services to clients at affordable prices (Bentley,
Omer and Sharp, 2013).
1.2 Analysing factors that have to be consider while formulating strategic plan
While preparing an effective strategy for company, manager has to determine internal as
well as external factors so that they can develop the plan more appropriately. In context of ALDI,
they have an adequate market growth in comparison to other firms. Market share of organisation
has increased by 19.8% whereas major rivals grew only up to 1.6%. Thus, it is essential for the
enterprise to maintain it properly. There are some factors that have to be considered while
formulating strategic plan. These are mentioned as beneath:
Internal factors: Factors which are related to business entity internally are known as
internal factors. These all are termed as suppliers as well as labours who assist in running the
operations more effectively. It will help company in their survival as well as accomplish targets
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with time period. If managers in ALDI become unable to satisfy the needs and wants of their
workers then they may do strikes, lockouts and so forth. As a result, it may influence their
profits. Additionally, if there are conflicts amongst suppliers as well as management then it can
put a huge impact on their brand image.
External factors: Elements which can affect an enterprise externally are considered as
external factors. They are unpredictable and out of control (Bharadwaj and et. al., 2013). It may
comprise of factors like political, economic, social and technological. All these elements can
affect business decision making process either positively or negatively. They are explained as
follows: Political: It is essential for each and every kind of organisation to determine those
countries whose government is much stable in nature. If ALDI is going to set up their
business in a new country then it will be affected by their political environment. Thus, it
is necessary for the firm to determine political nature so that their working would not get
influenced. Economical: Management has to fix value of their products and services as per the
economic position of nation as it determines the spending power of people. If the
inflation rate is high in nation then they need to develop strategic accordingly (Blackburn,
Hart and Wainwrigh, 2013). Social: It is needed for an enterprise to use those tools and techniques in their business
which never be harmful for society. Such as they have to reduce wastage, so that they can
reduce wastage and protect environment.
 Technological: ALDI has to update their techniques according to time so that they can
collect essential data and information effectively which will aid them to manage their
stock.
There are some other factors which can also affect business while formulating strategies, are
mentioned as below:
 It is essential for company to accomplish needs and wants of their customers as per their
demands, so that they can improve their profits.
 If they want to take competitive advantage from their rivals, then it is must for them to
maintain quality of their products and services. Along with this, prices must be
affordable, thus people can easily purchase goods.
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 They have to utilize resources properly, so that they can develop innovative products for
their purchasers.
There are some other factors which are described as beneath:
 It is essential for manager of company to determine needs and wants of their clients, so
that they can easily accomplish their demands within period of time.
 They have to identify their competitors, thus they can develop strategies to compete with
their competitors.
 They require essential resources, hence they can easily create new or unique items for
their buyers.
 Stakeholders are very necessary for each and every sort of organisation as they cater fund
to firm for their expansion.
1.3 Usefulness of techniques while developing strategic plan
Manager of ALDI has to develop an effective strategy for their business so that they can
accomplish their targets as well as goals in an appropriate manner. It will assist them in their
growth and development and additionally, improve their brand image in the marketplace.
Organisation can use various tools and techniques while making strategies for business such as
BCG matrix. It is explained as below:
(Source: BCG matrix, 2017)
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Illustration 1: BCG matrix

BCG matrix is divided into four units which includes dogs, cash cows, stars and question
mark. All these are discussed as below: Dogs: According to this, market share of organisation is very low as well as market
growth is less in comparison to other firm. As a result, they are very not much able to
generate maximum revenue for their enterprise. Along with this, consumption of their
items and services are also very low. Thus, company is not able to generate cash for them
and they have to determine a new market for their new goods so that they can increase
their profits. Cash Cows: This type of market can easily generate cash as well as organisation has high
growth (Grover and Kohli, 2013). Thus, this form of market is very much helpful for
each and every type of enterprise whose main aim is to earn more profits for them. In
context of ALDI, market of their business is too wide and thus, they can easily enhance
their revenues. Hence, it can be said that cash cows have less growth but high market
share. Along with this, if organisation wants to attract more customers towards them then
they can develop effective strategies. Star: Market share as well as growth rate of firm is too high in this stage. They can easily
increase their income in comparison to other firms. There is no need for the promotion of
their goods and services as under stars, goodwill of organisation is already very high. It is
not essential for company here to pay much attention to their items as they are already
developed in the marketplace.
 Question mark: As per this phase, growth is high but share of market is comparatively
low. Thus, in this situation, company needs more investment in their business so that they
can perform their activities more effectively as well as efficiently (Haley and Haley,
2013).
SPACE matrix: With assistance of this, manager of ALDI can easily examine business's strategic
position which is related with four dimensions:
 Industry attractiveness
 Environmental stability
 Competitive advantages
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 Financial strength
By combining all of these it give wide direction which is associated with strategic:
 Aggressive
 Conservative
 Defensive
 Competitive
There are some benefits of using these matrix in business, which are mentioned as below:
 It is very easy and use and understand.
 Manager of ALDI can easily determine their position in the market.
 It will assist them in their growth as well as development.
 These can help employer to take competitive benefits from their rivals.
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Illustration 2: SPACE matrix

TASK 2
2.1 Organisational audit for Aldi
It is necessary for each and every type of firm to determine risks as well as opportunities
by conducting organisational audit. There are two major factors which must be taken into
consideration i.e. external and internal. Internal examination is utilized by association so that
they can identify unwanted things which may affect business. It is also related with investigation
of financial statements so that manager can know about the risk and take decision accordingly.
For organisational audit, ALDI can conduct SWOT analysis which is mentioned as below:
STRENGTHS WEAKNESSES
 Brand image of organisation is very
good which will assist them to increase
their profits (Jocovic and et. al., 2014).
 Company offers high quality products
and services to their customers at a
reasonable price.
 Market share of ALDI is likewise high
as compared to their competitors.
 19.8% Market growth rate is higher
against their competitors which is the
key strength for them.
 Organisation do not provide large
impact on other nations.
 In some countries, people are not very
much familiar with this brand name.
 They use less innovative techniques in
their products and services.
OPPORTUNITIES THREATS
 As their market share is very much high
so they can easily launch new items for
their customers to increase their profits.
 They can use online sites to sell their
products to customers and thus, they
can attract many new consumers
towards them.
 Other organisations are continuously
expanding their business so, ALDI also
needs to increase market to take
competitive advantages from their
rivals (Khalili Shavarini and et. al.,
2013).
 Company is introducing new products
to their buyers which may affect its
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profits.
Value chain analysis of the ALDI
Inbound logistics: ALDI is having their own suppliers which helps to them to sale out their
products in their targeted markets. They provides products on the time and creating changes in
their products according to demands.
Operations: ALDI is having their own logistics department which transport their products in to
their various superstores.
Outbound Logistics: Their retail outlets and online sales are two channel where from they
conduct their business activities.
Marketing and sales: ALDI is using print, electronic and social media as well to advertise their
products in their targeted markets.
Service: As they are working in the grocery so they are providing home delivery services to their
regular clients.
2.2 Environmental audit for ALDI
External factors are totally uncontrollable for organisation. Therefore, it is essential for
them to develop strategies according to this. For this, manager of ALDI uses porter's five model
which will also assist them in their decision making process. There are five important elements
of it which are mentioned as below:
 Threat of new entrants: Presently, grocery markets have converted into supermarket
kind of business. Capital is no longer an issue for the new entrants which local retailers
take as an opportunity. Even distribution for new entrants is difficult as proper
distribution system is followed over there. Grocery market is price sensitive and hence, it
provides considerable retaliation to new entrants (Klettner, Clarke and Boersma, 2014).
New entrants to the market with larger product range possess threat to companies like
ALDI. Market policies support the new entries as they offer job opportunities.
 Bargaining power of the supplier: ALDI supermarket has an advantage of negotiating
better promotional prices from suppliers than small individual chain. ALDI faces greater
threat by companies that bring their products from other countries at lower prices. The
profit margin of suppliers has been reduced by competitive rivalry in grocery market.
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 Bargaining power of Customers: Competitive rivalry has been given with more
bargaining power to the buyers. To ensure lesser lose of customer base ALDI have to
continuously customise its services to fulfil customer needs. Customers have drifted
towards supermarkets where they could find other items at the same place and hence,
giving them more power of bargaining.
 Threats of substitute: Unavailability of product variety in a single store and options
present in the other supermarket may lead to substitution. Smaller chains with better
distribution system possess a threat of substitution for the local market. Various online
grocery delivery systems have emerged as a source of substituting the retail stores. ALDI
does not provide additional loyalty schemes so that customer would return to the same
stores on regular basis. Market needs change at a very high speed and so, if not
continuously evaluated, companies like ALDI can be substituted by other firms who are
fore runners on plans (Li and Tan, 2013).
 Rivalry among the existing firms: This sector is subjected to greater rivalry with focus
on cost. The fierce rivalry has led to large marketing campaigns. This burdens company
like ALDI to have cost cutting even after aggressive marketing advertisement. Even after
the growth of grocery market and raised consumptions the existing firms due to rivalry
the profit margins have reduced considerably.
PESTEL analysis: It is described as below:
 Political factor: As ALDI has their company in various nations, thus this element can
affect them either positively or negatively. Along with this, condition of market, taxes,
new laws and so forth can influence their business.
 Economical factor: If there is alterations in exchange rates then it may affect business of
cited company. Along with this, if market is in favour of organisation then they can easily
improve their profits and reputation at commercial centre.
 Socio cultural factor: It is must for organisation to provide best quality of items to people
so that they can accomplish their needs and wants in an effective manner.
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