Business Environment Analysis of Aldi: Functions and Macro Factors

This report provides a comprehensive analysis of Aldi's business environment, exploring both internal and external factors influencing its operations. It delves into the organizational functions within Aldi, such as design and production, finance, human resources, sales and marketing, administration, and research and development, highlighting their roles and objectives. The report further examines the impact of macro-environmental factors, including political, environmental, social, technological, legal, and economic considerations, on Aldi's strategic marketing strategy. It also conducts an internal and external analysis to identify the company's strengths and weaknesses, supported by PESTLE and SWOT analyses to enhance understanding of the macro environment's influence on decision-making. The analysis aims to provide a holistic view of Aldi's operational landscape and strategic positioning within its business environment.

BUSINESS AND
BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................4
P 3 ...............................................................................................................................................4
PART 2............................................................................................................................................6
P 4................................................................................................................................................6
P 5................................................................................................................................................8
P 6..............................................................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment consist external and internal factors that affect to the enterprises.
External factors are beyond the control of management whereas internal factors are those that
can be control by company (Aspara, Lamberg and Tikkanen, 2013). In this context, it will
consider various aspects that can be measure with outside the environment which create impact
on the firm operations. It includes social, political, environmental, technological and many more
factors that generate impact on the company transactions. It can be involves such as customers,
suppliers, competitors, market and social factors. In addition to this, it consists living persons,
natural resources and places which effect from the enterprise activities. Hence, sum of the total
factors is known as business environment. Here, Aldi taken as chosen enterprise which deal in
food and beverages products and services. It has wide supermarket in which they are make their
supply chain through business sell their products and services in different part of nation. It has
more than 10,000 stores in all over the 18 countries. The company started their operations from
1913 and incorporated as private retailer enterprise (Aldi, 2016).
Present report covers purpose of each enterprise and explains difference between their
types, purpose, size and scopes of the organization. Furthermore, it includes several
organizational functions and connect it with objectives and structures. In this aspect, it explains
organizational structure that can be create impact on interrelationship between its functions.
Moreover, it also covers positive and negative impact of the macro environment on the business
operations. In this report conduct, internal and external analysis to identify its strength and
weaknesses. In addition to this, it includes PESTLE and SWOT analysis which help to enhance
understanding of the impact of macro environment which can be affect to the decision-making of
the organization.
PART 1
P 1 and 2 Covered in ppt
P 3
Organisational functions consist key elements that can be divide into various aspects such
as marketing, accounts and production, etc. Each function can carry several profits for the
company which contain aims and objectives of the company (Bharadwaj, El Sawy and
Venkatraman, 2013). In order to make different activities Aldi can take following functions
within the enterprise:

 Design and production: First function of the organization contain design and production
within the business. In this aspect, Aldi achieve their communication in different key
activities of their enterprise. In starting time communication make effective design and
production within the company. It will assist to make clear objectives which can be make
in each function (Blackburn, Hart and Wainwright, 2013). The chosen enterprise need to
design their product very effective so that they can easily attract potential customers
through they will achieve high market share. For this, element the business need to
considered regular reviews which can be perform for each objectives of the company. Finance: Finance function consist manual and economical record that can be helpful to
develop business operations effectively. In this aspect, Aldi make their financial
statement for tax purposes and comply it with legal requirements. The information can be
used to produce management accounts through they are enables to make their plan and
review to business strategy (Bowersox, 2013). Finance department also considered
responsibilities for administering employees expenses and salaries. In addition to this,
enterprise also make their transactions through they can make payments of wages which
will need to take statutory deductions such as tax and employee contribution such as
pension and loan repayments. Human resources: Human resources function has responsibilities towards the
organization to make fair and equal treatment of recruitment, selection, training and
development program in the company. It also considered legislation that applicable to the
country which is based on it (Goss, 2015). It will assist to Aldi as they can maximise their
potential customers towards the business easily. Thus, they will easily achieve their
objectives which organization want to achieve. In addition to this, it considered
legislation that can be applicable towards the country in which company based. It
supports to the welfare of the human who are work within the enterprise. In addition to
this, it also compliant with UK data protection Act 1984. Sales and marketing: Marketing department of the Aldi identify satisfaction level of
customers towards their products and services. In this context, marketing part investigate
the whole market in which organization want to make their operations (Horkoff, Barone
and Mylopoulos, 2014). It finds what type of customers are exists in the marketplace and
what are their requirement from the products so that firm can make their goods

accordingly. Sales is responsible fundamental aspect which make high profits within the
company. It will assist to find consumers preferences through conduct market research.
As results, organization only make those products which are profitable for them. In
addition to this, sales department selling strategy that involve travelling sales
representatives. It can be done by the business on phone calls, interviews and mail shots
(Huang, Lai and Chen, 2013). Administration: Administration functions considered dealing with several tasks which
includes mail handling, dealing with enquiries/ complaints, catering and other computer
services. In this context, administration department of Aldi produce documents such as
forms, stationery and new later for the organization with maintaining organization
premises and equipments. Beside this, all functions are not recognised at high level
without consultation with senior management. As they cannot solve customers problems,
without taking super management opinion (Meyer and Peng, 2016).
 Research and development: Main aim of research and development is to enhance
business profits with improving quality of existing products and services. In this context,
Aldi create new production methods and create effective processes. This will assist to
reduce cost and increase profitability to take place ahead from the competition. Hence,
cited firm can easily achieve their objectives through operating effective transactions
(Organization functions, 2016). It will lead to the allocation of specific portion of the
company budget for research and development of the company functions (Möller, 2013).
PART 2
P 4
In order to take business operations, there are various factors can be considered which
can be generate impact on the functions. These factors are beyond the control of enterprise
management but they are influence to the decisions of the firm. Thus, following macro factors
considered within the Aldi operations when creating a strategic marketing strategy:
 Political factors: Every government make their rules and regulations regarding business
operations (Moosmayer, Chong and Schuppar, 2013). In respect to this, they demonstrate
tax rate and other policies which need to be followed by the business so that they can
protect organization's employees. It creates positive impact on the Aldi operations in term
of maximising social benefits and minimising social cost. In addition to this, political

stability of the country is another factors that affects to the every activities of the
company. All enterprise effect this, greater and lesser level by government programs at
central, state and local bodies which make changes in the business program which create
results of shift in the political system (Myers, 2013). When government rise their tax
rates, business have to pay more taxes. Hence, it can create negative impact on the
business operations. Thus, cited firm not able to develop their transactions with different
countries.
 Environment factors: There are two types of environment take place such as internal
and external. In respect to considered internal environment competitors, suppliers and
customers that create impact on the company operations (Palo and Tähtinen, 2013). In
respect to make effect from internal aspect, Aldi have to provide effective working
environment to their employees so that they can enhance their productivity easily. In
addition to this, they should maintain their relations with their suppliers so that they will
get raw-material on time at low cost. Hence, it will create positive impact on the business
operations. On the other hand, if business not take responsibilities towards the
employees, they cannot achieve loyalty from their employees towards the business
operations. As results, it will generate negative impact on the enterprise (Reddick and
Roy, 2013).
 Social factors: Different countries follows distinctive culture and social system which
consist several structures and mobility, social roles, nature of the organization and
development of social institution. In this term, customers change their taste and
preferences so that Aldi have to make their products according to it. Hence, it will create
negative impact on the enterprise operations (Segatto, Inês Dallavalle de Pádua and
Pinheiro Martinelli, 2013). In addition to this, if cited firm make their products according
to market demand, it will create positive impact on the organization operations as they
will easily operate their function in the marketplace. It will assist to generate high profits
within the country environment. Beside this, when company ignoring to the customs,
traditions and tastes, etc. of the customers it will affect to the business environment
(Trkman, 2013).
 Technological factors: Technological environment consist those factors that can be
related with knowledge applied and the material or machine which can be used in making

production of the goods and services of the enterprise. Most important factors that can be
generate impact on Aldi operations is sources of technology just like company sources,
external sources and foreign sources, cost of technology, collaboration and transfer of
technology (Ward, 2016). It affects to the business operations in term of making strong
value, production and employment etc. Advance technology make products effective and
attractive so that it is beneficial for the organization as they can easily attract potential
customers and enhance their operations. On the other hand, it also generates negative
impact on the business operations in terms of making high cost on the productions. In
addition to this, organization require technical expertise for making their operations very
effective.
 Legal factors: Legal system play very important role within the organization (Yu,
Lumpkin and Brigham, 2012). In this context, government make their laws and
regulations which make complex to the cited firm. Aldi require knowledge regarding
business law so that they can maintain their transaction effective. However, legal
environment is more complex issue which is refereed as a public policy. Vast government
network consist laws and regulations, policy government bureaucracy which make high
impact on the company operations (Zeng, Li and Duan, 2012). It makes negative impact
on the company operations due to political stability which create civil war, changes in the
form and structure of the government administration. On the other hand, flexibility and
adaptability of law-constitutional amendments, their urgency and frequency and velocity
of public policies.
 Economic factors: This factor affect in business decisions especially in developing
countries. Business can directly have some economic changes such as interest rates which
can be affect to disposable income of the customers (Zhang, Huang and Liu, 2012). It
will affect to the Aldi's operations in term of economic conditions, policies and system
that is more important for the enterprise. It creates positive impact on the firm due to it
determine business trategy which make steps to develop the enterprise performances. In
respect to this, includes formulating, implementing and controlling of the economic
policies. Economic environment refers as nature and direction of the economy through
enterprise operate their functions (Segatto, Inês Dallavalle de Pádua and Pinheiro

Martinelli, 2013). It helps to develop the country, their finance, availability of economic
resources of the nation.
P 5
The organization has ability through they can examine their internal strength and
weaknesses. In order to make changes within the organization it is essential to identify internal
accessibility. It will assist to make high profits within the business environment so that company
easily maintain their cooperation which influence to organizational success. It possesses and
utilization of information about occasions, patterns, trends and relationship within the internal
and external part of the enterprise (Aspara, Lamberg and Tikkanen, 2013). In respect to this,
following description considered for internal and external environment of Aldi:
Internal analysis of environment
It is the first step in which organization observe internal organization environment. It includes
employees interaction with other workers, management, manager and shareholders, etc. In order
to take internal analysis interview and surveys can be used which assess the internal environment
which help to identifying strength and weaknesses of the enterprise. Aldi is more competitive
business and there are changes take place within the business environment. Thus, it is more
important to find its internal assessment which make their benefits for considered effective
management (Aspara, Lamberg and Tikkanen, 2013). Thus, it creates direct impact on the
company operations. In this context, internal factors considered which generally controllable by
the business. This factors can be alter and modified by the enterprise through they can make high
profits within the organization. In addition to this, it helps to make physical facilities and
organization transactions very effective which make effective functions as well. It includes value
system, mission, vision and objectives of the organization. Along with this, management
structure and nature also considered effective impact on the business performance which help to
achieve organizational objectives (Blackburn, Hart and Wainwright, 2013).
Values system considered as founders and affairs which are important for bearing on the
choice of the company. Vision is the ability which help to enhance thinking power and
imagination of Aldi for their objectives. In addition to this, mission is the medium through
objectives of the company achieve for enterprise growth. Structure of the company also influence
to the business decisions which make enterprise operations effective. It consists composition of
board of directors, influencing to the business decisions (Bowersox, 2013).

In order to take internal analysis, following strength and weaknesses can be measure by the cited
firm: Strength: Aldi has owing an established restaurant which is its strength. They are using
premium ingredients such as fresh minced beef, which are nearby the company. In
addition to this, they are also served late night delivery for food and drinks. It especially
helpful to make effective services for those people who are come from outside at night
(Goss, 2015).
 Weaknesses: Staffing of Aldi create negative impact on the company operations due to
strong economy. In this context, cited firm have to pay high salary and offer more
benefits to their employees so that they can maintain their cooperation within the
enterprise. In respect to this, chosen enterprise has not effective advertisement facility so
that it also create negative impact on the company operations. It will generate adverse
impact on the enterprise performances (Horkoff, Barone and Mylopoulos, 2014).
External analysis of environment
External environment play very crucial role within the organization because it supports to
long term plan of the company. It refers as the environment that can be influence to the
enterprise which is not controllable by business. Two types of external environment consist
within the enterprise such as micro and macro. In micro factors forces are directly bearing on the
operations of the company (Huang, Lai and Chen, 2013). It includes suppliers, customers, market
intermediaries, financiers and public. On the other hand, macro environment take place which is
remote control of the organization performances. It is very important facto of the organization
because company's adaptability is depends on these factors. It includes economic, social,
political, legal and technical aspects. Environment consists dynamic and its more essential to
find competitors of Aldi. In addition to this, cited firm also update the core competencies and
internal environment of the organization as per the external environment (Meyer and Peng,
2016). It is correlate with study that support to maximise the profit of the firm. In respect to this,
business serve immediate and industry environment, national environment and macro
environment. Examining of industry environment need make competitive structure of the firm
industry, and includes competitive position of the particular business and its rivals. It includes
analysis of macro environment which includes social, government, legal, technological and

international factors that support to organization in term of influencing the environment. It
determines opportunities and threats for the cited firm (Möller, 2013).
P 6
Internal and external analysis contains important aspect within the enterprise which
demonstrate strength and weaknesses of the company operations. As results, business can make
their transactions through they can achieve objectives easily. In this context, Aldi maker their
operations with considering economic advantage for their company. As results, the can attract
more customers easily. In addition to this, enterprise can involve various things through
organization can gain more through considering various aspects (Moosmayer, Chong and
Schuppar, 2013). In these regards, following strength, weaknesses, opportunities and threats
considered within the cited firm: Strength: Aldi provide safety food with good quality services which providing effective
services to the customers. In respect to this, they make sure their products are high rage
of quality which easily satisfy customers demand and requirements. In addition to this,
company has good pricing structure through firm can protect their employees easily
(Myers, 2013). It will promote to the environment of the company as they can serve
effective services to customers which make organisation healthy.
 Weaknesses: Further, weaknesses considered an idea through organization can easily
find their loopholes. In respect to this, Aldi can improve their operations for achieve high
profits within the company. Cited firm not providing effective training to their
employees so that it create negative impact on the company operations. In addition to
this, they are not getting consistent supplies that create negative results in the menu card
(Palo and Tähtinen, 2013). This is because, organization cannot serve those products for
which they have no raw material.
 Opportunities: With the help of opportunities chosen business can make their
operations at very high level so that they will easily achieve their objectives. In respect
to this, Aldi can generate more profits for their business which help them to make high
profits. In addition to this, they can plan for making products and services in different
part of the world. In respect to this, they can maximise their products which help them to
enhance their operations easily. Organization can make planning to create network for
developing their operations in various part of the country (Reddick and Roy, 2013). It

will assist to make effective relationship among various members so that they will
achieve their objectives. They can expand their market through opining more stores for
the company profits. In this aspect, business will sell some additional products such as
salad dressing and baked food which considered effective solutions for the company
operations.
 Threats: In UK there are various food business take place in the marketplace so that
Aldi has high competition. New entrance come continuously so that it also create threats
for the company (Segatto, Inês Dallavalle de Pádua and Pinheiro Martinelli, 2013).
Rising price for raw-material also threats for the organization because they have to pay
more for their products and services. Customers demand depends on services which
offered by business that give effective services. In addition to this, they have also
effective services which make effective transaction within the company.
PESTLE analysis
In order to considered PESTLE analysis on Aldi operations, different types factors create
impact on the company operations. In respect to this, following factors can be includes in the
cited firm:
 Political factors: Political factors can be create impact on the business operations. In UK
there are great pressure on the food market due to increasing in government stability
(Trkman, 2013). In the country government make different rules and regulations through
Aldi can create awareness among the people about the changing trends of the enterprise.
In respect to this, if government take place for healthy policy in the country, then it
encourages to business for protecting their employees towards the enterprise objectives.
 Economic factors: Economic factors considered very important element such as business
situation, incident and many more things which can be affect to the growth of the
organization (Ward, 2016). In this aspect, government release interest rates, inflation
rates and consumer spendings which create recession within the country. All these terms
can be create impact on the Aldi as they cannot make their operations so effective.
 Social factors: Social factors create impact on the firm operations due to changes in
customers demand and their taste preferences. In addition to this, it also changes from
country to country. Attitude of every customers is different so that it is very complex to

organization to make different products for each candidate (Yu, Lumpkin and Brigham,
2012). Mainly people prefer healthy food which cannot harm to their health. In addition
to this, it considered social and behavioural problems and trends which is also differs for
lifestyle of every individual.
 Technological factors: Technology is used to make competitive advantage within the
organization ahead from competitors brand. Aldi faces different technical issues which
are related to the production of the company. In respect to this, various organization take
place through making online delivery of products and services (Zeng, Li and Duan,
2012).
 Environment factors: According to environment factor, various aspects taken within the
enterprise which cannot harmful to the environment of the place. Due to government
policy and regulations, Aldi have to maintain their operations regarding safety of
environment, pollutions, human and health. In addition to this, global warming also take
place in which the production capacity of the organization is also affected. In this context,
performance can be measure which considered positive impact on the company
operations (Zhang, Huang and Liu, 2012).
 Legal factors: Legal factors consist company law, investment regulations and
environmental law that can be support to organization operations. In respect to this, it is
necessary to take rules and regulations for production, processing and marketing of the
company products and services. It will assist to make effective services within the
organization through business can support to enterprise functions. In respect to this, Aldi
ensure the safety of the business and workers so that it is beneficial for the company
operations (Horkoff, Barone and Mylopoulos, 2014).
CONCLUSION
From the above report it can e summarized that, organizational functions in very
important aspect which demonstrate objectives of the company. In respect to this, it considered
designing of products, financial management, human resource and sales and planning. This
element helps to achieve organizational objectives through considered all important aspects
within the organizational environment. Furthermore, it also includes internal and external
analysis through organization can measure their strength and weaknesses regarding their
business objectives. It will helpful to demonstrate all important things within the company so

that firm can enhance their strength and reduce weaknesses from their measurements. Moreover,
it also summarized that with the help of internal and external analysis cited enterprise can
conduct SWOT and PESTLE analysis for their business. In this aspect, they will able to make
profits for the firm which can be taken as improvements within the firm.

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