Business Strategy Analysis of Aldi: A Comprehensive Report

This report provides a comprehensive analysis of Aldi's business strategy. It begins with an introduction to business strategy and then delves into Aldi's mission, vision, objectives, goals, and core competencies. The report examines the factors Aldi considers when formulating its strategic plans, in...Read More

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1 Mission, vision, objectives, goals and core competencies of Aldi...................................1
1.2 Factors considered by Aldi while formulating their strategic plans.................................3
1.3 Usefulness of BCG matrix in developing strategic planning...........................................4
TASK 2............................................................................................................................................7
2.1 Organisational audit of Aldi.............................................................................................7
2.2 Environmental audit of Aldi...........................................................................................10
2.4 New strategy formation for Aldi....................................................................................13
TASK 3..........................................................................................................................................15
3.1 Analyse the appropriateness of suitable strategy for ALDI...........................................15
3.2 Justification of one of the selected strategy....................................................................17
TASK 4..........................................................................................................................................19
4.1 Role of personnel who will be charged to implement strategy......................................19
4.2 Resource requirement for the implementation of strategy.............................................19
4.3 Contribution of smart target in implementing strategy..................................................20
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................23

INTRODUCTION
“Business strategy can be simply defined as a means by which settled aims and objectives
can be attained. This covers a time period of approximately 4 to 5 years as this is a long term
goal” (Casadesus-Masanell and Ricart, 2010)1. There are namely two types of strategies that is
competitive strategy and common strategy. Competitive strategy means offering goods or
services at lower cost in comparison to their competitors. While the common goals are making
marketing growth, increasing their selling rate of goods, etc. The present report is based on the
business strategies of Aldi. In this project, mission, vision, objectives, goals and core
competencies of Aldi are explained. The impact of macro factors like political, economic, social,
technological, environmental and legal are determined. Additionally, the strength, weaknesses,
threat and opportunities of the corporate are explained.
TASK 1
1.1 Mission, vision, objectives, goals and core competencies of Aldi
Aldi is a common branding international discount super market chain. It has more than
ten thousand stores in approximately eighteen nations. The estimated turnover of company is
around more than 50 billion Euro. The products manufactured by corporate are food, beverages,
house hold goods, sanitary articles, etc. Aldi is considered as the minimum price grocery leader
of the nation. They started their journey of business in the year of 1946, when Karl and Theo
Albert had taken control of the grocery store of their mother. They are serving in a large area
such as Australia, Belgium, France, Germany, United State, etc. Mission is nothing but a set of
task via which company wants to fulfil the expectation of stakeholders. It helps in recognising
how business of organisation is going on, attracting users, producing different goods or services
and those goods or services to their customers (Chang and Chuang, 2011). Mission statement of
Aldi are revealing the strategic planning that are listed below:
Mission of ALDI
Aldi wants to become valuable in the eyses of their customers by gaining their trust. This also
wishes to increase their market share.
1 Casadesus-Masanell and Ricart, 2010 - From Strategy to Business Models and onto Tactics
1

On the contrary, vision statement is explaining the future expectation of organisation. It
assists in identifying actual or expectable benefits and enlargement of firm. The vision statement
of Aldi is written below:
Vision statement of ALDI
The vision statement of Aldi to become highly developed by creating innovative products or
services. They wants to expand their business globally. They also wants to show faithfulness in
front of their users, employees and stakeholders.
Goals and objectives are very general aim that firm want to achieve within in a specific
period of time. Objectives are short term plans while goals are long term scheme of enterprise.
Goals and objectives of Aldi are defined below:
 To enlarge their business internationally
 To enhance their retailing or selling services
 To become most prosperous retailer or manufacturer
Core competencies are nothing but special abilities and qualities that assists in making
business more significant in comparison to their competitors. The major competitors of Aldi are
Lidl and IceLand. The core competencies of Aldi are improving their business skills and working
more effective than their competitors.
The importance of mission statements, vision, goals, objectives and core competences to
the strategic planning of Aldi are following:
 Mission statement describes the roles and purpose of the Aldi. This shows how company
is going to serve their stakeholders and make their company extra ordinary or unique.
 Vision statement is a tool that determines the processes of how Aldi can attain their goals
and objectives. So, it is more important for the organisation.
 Goals and objectives are very essential part of Aldi as it determines what enterprise wants
to achieve in future. It must be real, specific, measurable, attainable, etc.
 Core competences are nothing but achieving competitive advantages by making unique
product in comparison to their competitors. This is also important as it shows the
direction of moving the industry.
1.2 Factors considered by Aldi while formulating their strategic plans
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There are following factors that are taking under consideration by Aldi while formulating
its strategic plans:
 Future of competition: While making their strategical planning, Aldi have to set in their
mind about the competitive environment as there are different companies. They have to
think about the present as well as future based competition. Fast changing and highly
competitive business world requires foreseeing the actions of competitors (Cinquini and
Tenucci, 2010). So, Aldi must be able to offer products at a lower price and same or
better quality compered to their competitors. This will make possible to stand this
corporate in the international market.
 Customer needs: While making strategies, enterprise should consider the needs or
demands of their customers. “The products offered must match the demand” (Cinquini
and Tenucci, 2010)2. Neglecting customer needs can lead to significant losses for the
company. For this organisation have to conduct surveys where they focus on life style,
culture, tradition, etc. of their users or local people. After understanding the demand of
population, the products or services will be sold with greater success. That is why taking
into account customer’s needs is very important part of strategic planning.
 Competitive advantages: Company can carry surveys to determine the positioning of
their competitors. They should focus on their goods and determine any weakness of them.
By this way they can take advantages of their competitors and earn more profits because
when they offer the same product having additional features at lower price then large
number of customers will prefer their goods. This will raise the turnover of enterprise and
make it more popular brand.
 Resources to meet needs: Company should also think about resources or raw materials
that will meet their needs. These resources should be easily available and have lower
prices. It is a crucial element of strategic planning. Without resources to meet the needs
future success of the company is impossible. These resources can be financial, human
resource, time etc.
 Stakeholders: Enterprise should also focus on making relationship with potential
stakeholders. Aldi have internal and external stakeholders. Internal are its employees and
2 Cinquini and Tenucci, p 55, 2010 - Financial Accounting: Development Paths and Alignment to
Management
3

the company must take into account the importance of them. As stakeholders they will
make grate efforts in order to achieve company’s goals, so Aldi can be benefited from
internal stakeholders. External are these stakeholders who invest in the business and have
part of it. Reliable external stakeholders are crucial for the business success. Aldi must
pay attention on their stakeholders when formulating their strategic plans.
 Internal and external environment: Aldi should also consider the impact of internal
and external environment on their performances. For example, political, economic,
social, technological, environmental and legal factors totally influence the company
(Eccles and Krzus, 2010). Like taxes imposition by government is sometimes very high
that affects negatively the enterprise as most of revenue goes on paying on these taxes
only. Additionally, the strength, weaknesses, threats and opportunities are also considered
while making strategies of company.
1.3 Usefulness of BCG matrix in developing strategic planning
BCG matrix are used in Aldi in order to make strategic planning. This is commonly used
to represent the brand portfolio of organisation on a quadrant having the relative market share on
horizontal axis and market growth on vertical axis. Relative market share is used in evaluating
business functions. If corporation has high market share, then they get high cash returns. If there
is higher marketing growing rate, then it results in high earning. But this takes large sum of
revenue as their investment. There are four quadrants according to which enterprises are
categorised:
 Dogs: These type of industry consist of low market share in relation to their competitors
and they are operating in a market that grow slowly. They are not having much potential
as they create less amount of cash returns.
 Cash cows: Such type of organisation are brands that earn more profits and generate
more cash (Hahn, Kolk and Winn, 2010). The revenue that are created from cows are
used as an investment in the star group to assist their growth. They are generally large
enterprises that are having the capability to develop innovative products.
 Stars: They are those firms that are operating in a high growing industry and are
maintaining high share in market (Haley, Haley and Tan, 2011). They are both cash
creator or consumer. They are special units in which firm have to invest revenue as they
are commonly expected to interchange into cash cows.
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 Question marks: They are those corporates that needed more focus as they hold a very
low sharing in market in a fast expanding market because they consume a large sum of
money and creates losses. But they have the capabilities to gain high market share and
become a star that can be converted into cash cows in future.
Benefits of BCG Matrix are listed below:
 They are simpler to perform;
 It assists in understanding the strategic positioning of business functioning;
 It is a better beginning stage for moreover complete analysis.
Limitation of this techniques are listed below:
 Enterprise can only be categorised into four types. So, it is puzzling to categorise
a small business unit that are falling in the middle one.
 It does not describe the term market.
 Additionally, it does not involve other external factors that may influence the
market.
5

The PIMs ( Profit impact of marketing strategy) is an strategy that are developing
probability and competitive performances. This is described below:
 Probability influencer: This was initially launched by General Electric in the year of
1960. This states that different strategic variables such as promotional activities, capital
investment, quality of goods, innovation and pricing are working well and impacting the
probability of the corporate environment.
 Market leadership & quality: This yields economical scales that are reducing the
operating cost. Market leadership assist in producing loyal consumers that allows
corporation to make expensive products and produce higher gross benefit margins. It also
determines that quality of goods are closely related to probability because good quality
product satisfies the users that aids in driving market share.
6
Source 1:
Difference Between BCG and GE Matrices, 2017

 Advertising and profitability: PIMS data states that advertisement, separated from the
customer and trade promotion has a greater impact on the detected quality of products
and the market sharing. These are the main factors that are responsible of producing
benefit.
 Implications for small business: Most small business owners determines that probability
is very important for any type of business whether it is small or good. So, small corporate
also have to use all tactics to improve their market sharing. This is not necessary to use
more advertising techniques as one can earn profit by producing good quality product
also.
SPACE Matrix BCG Matrix
It stands for Strategic Position and Action
Evaluation matrix.
It stands for Boston Consulting Group matrix.
This is a useful tool for developing and
reviewing strategies of a company.
While BCG matrix is used for the purpose of
evaluating strategic positioning of the business
brand portfolio and its potential.
This gives four key issues that are used for
balancing external and internal factors.
While this classifies portfolio of business into
four categorises on the basis of attractiveness
and competitive position.
This states external factors as industry
attractiveness and environmental stability.
While the internal factors as competitive
advantage and financial strength.
On the contrary, this matrix classifies
organisation as cash cows, Poor dogs, stars and
question mark.
TASK 2
2.1 Organisational audit of Aldi
In order to perform organisational audit, Aldi have to do SWOT analysis. This is nothing
but identification of strength, weaknesses, threats and opportunities of corporate that is explained
below in detail:
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 Strength: Aldi has a strong base in the Germany as it is very popular brand over there.
They reputation is increasing day on day and they are gaining fame internationally.
They generate their own brand products so they have control on them and they manage
the quality on regular basis. They offer limited number of quality based goods at lower
prices in comparison to their competitors. It aids them in gaining cost efficiency
(Higgins, Omer and Phillips, 2015). They employ skilled workers that are experience
holders and also provide them good training in order to produce quality based services.
They secure third position in the Germany even they are not making so much
investment in advertisement. They have a loyal relationship with their users as well as
distributors. Additionally, they are contributing a large sum of money in research of
those products that are of lesser demand and replace those by those one that has high
demand.
 Weaknesses: Aldi is producing a limited range of products and this considered as their
weakness because it causes lack of product differentiation. They also use manual system
for the process of manufacturing or regular activities. This reduces the level of
efficiency and consumes more time (Hsieh and Chen, 2011). They use technology in
rare situations and they have a limited usage of this in relation to their competitors. They
have a low number of staffs but are skilled. While depending on few number of workers
is count as their imperfection.
 Opportunities: They can expand their business in other markets like house branding,
many of Aldi costumer will buy goods for their homes. If they invest more on
promotional activities, this will attract large number of users. They can also use
technology in implementing new system in order to maintain the standards of quality.
 Threats: Competitors are rising in day by day. This is shown as a threat for them.
Additionally, less use of technology is lowering their performance.
Bowman's Strategic Clock is a model that explains or highlight the options for strategic
positioning. The goal of the clock is to elaborate that a business will have different choices of set
the positioning of products. This is based on two dimensions only that is price and perceived
value. The strategic clock will look like this:
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 Low price and low value added: The goods are not distinguished and the users
realize a very little value contempt of minimum price. The only way to be
competitive is to produce cheap and best products.
 Low price: A strategy should be used where cost of goods should be very low.
This will assist in keeping high profits and gaining competitive advantages.
 Hybrid: This states that some of the elements should be of lower prices but some
of them should of high prices. This can be very effective positioning strategy. The
aim is to attract users by showing them there is good added value via the
combination of affordable costs and acceptable products differentiation.
 Differentiation: Aim of this strategy is to provide customers the advanced level of
perceived added value. Branding plays a major role here.
 Focussed differentiation: This positioning strategy are used by luxurious brands
which have the aim to attain high prices by extremely targeted partition,
advertisement and distributions.
 Risky high margins: According to this strategy, organisation sets high prices to
their products without offering any additional benefits. This is very risky as
sometime people purchase the highly cost goods but sometimes they get
alternative of this and do not purchase any products from them.
 Monopoly pricing: In this situation, there is only one business that is offering the
goods or services. The monopolists do not require to show concern about what
values are getting by users from their goods as there is only choice of purchasing
or not.
 Loss of market share: This is a formula for making disaster in any competitive
market. Standard price of products should be settled that will attract a large
number of customers.
The current strategic position of Aldi are listed below:
 Aldi has now reached at fifth largest grocer in the UK market. It has increased its market
share to 6.2 % in comparison from the last three months. The market share of their
competitor like Tesco has 27.8 % , Sainsbury's has approx 16.0 % , etc.
 They are effectively providing online services which is the greatest strength of Aldi.
9

 Aldi is doing lean production . They are doing this to minimise the quantity of resources.
This involves elimination of waste and hence less labour, materials and time is needed in
this.
2.2 Environmental audit of Aldi
Environmental audit consists of following analysis:
Macro Environment: There are a lot of factors in U.K. marketplace that is essential for ALDI to
consider. They have been brought through Macro environment study with PESTLE analysis.
Pestle analysis consist of following factors:
 Political Factors: ALDI, short for “Albrecht Discount” is running in globe l level with
the stores in all U.K. There are many government factors, legislation process and other
political affairs which can differently affect the company.
 Technical Factors: E-shopping which has become the nerve of the society is effectively
provided by ALDI. The key component of supply change is intelligent management of
technical infrastructure. ALDI don't provide Point of sale system and check out facilities
and sicked into traditional conveyor belt approach with no self - service option.
 Economic Factor: As UK economy are moving out of recession, the buying behaviours
of consumers are changed and comes out from low cost retail store to independent flow
supermarket. During the time of financial stress, users selects inexpensive food suppliers.
This created ideal market for Aldi in UK and also contributed in its growth. Taxation
rate will be imposed by different government and causes a negative impact on the
turnover of corporate as most of the revenue goes on paying such taxes only.
 Social Factors: Change in Purchasing behaviour due to new more offering brands like
Asda. Tesco, Sainsbury etc. Changing in marketing habits and new business strategy
which needed to be adopted by Aldi.
Micro Analysis: Micro analysis complete with Porter's Five factors is explained below:
 The bargaining power of suppliers- Low: Supermarket can push Aldi for offers and
discount while it less believe in offers and special discount however the company still run
approx. 500 stores I the market which has great deal of buying power and its own
conditions (Martin and Rice, 2010). Suppliers might favouring larger orders from the
10

vaster or larger competitor. Hence, they are not willing to offer discount to the Aldi
chain. Howerver, they are operating a chain of approx 500 stores.
 Threat of New Entrance-Low: There is low threat of entrance because of the
competitive environment and cost entry. Example – organisation enters in declined
period, due to bad finical management and abuse of power. This might lead to
opportunity of merge ring or acquisition of the brand. ALDI handles relatively small
stores and their number of stores is limited. Therefore, offering bigger stores can increase
product price. The threats of new entrants is comparatively very low due to the costing
of entry and the competitive environment. Aldi are remaining agile to change the trends.
Corporation is operating in small number of stores and therefore they are not capable of
providing large number of goods.
 The Bargaining Power of Buyer- High: Buyers are allowed to choose their favoured
supermarket to utilize very easily acc. To their convenience of access, offers and
availability. ALDI don't will to give additional schemes so the incentive probability is
lesser.
 Rivalry among existing Firms- High: Any brands offers the same prices and quality to
manage the price competition activity. Aggressive market campaigns led by fierce rivalry
try to hold market share in their sides to win markets (Meskendahl, 2010). This increase
more competitions among the competitors and increase the cost of advertising 7,500 in all
over the world for the Aldi. Its stores do not show the products on shelves but shows it on
pallets in order to cut the cost and time. Aldi are operating on a minimum level of fixed
costs so that they can deliver low cost goods. But their competitors are doing the same so
this presents a risk for them if they are not capable of advertising about such activities.
 Threats to substitute: When a new goods or services are fulfilling the similar basic
requirements in a different way, then industrial profitableness suffers a lot as there are
several corporates like Tesco, Sainsbury's,etc. that are manufacturing the same products
as Aldi. This causes a lot of competition for the corporation. For example, video
conference can be used as a substitute for travel. The threats of substitute are broad if it
provides a fascinating price- performance trade off in comparison to the products of
enterprise.
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2.3 Stakeholder analysis for Aldi
Stakeholder analysis is a process of consistently assembling and recognising qualitative
information in order to determine whose curiosity should be taken into account when company is
going to develop or implement a policy or program. It is very important that is used by ALDI to
get support from others. It aids in assuring that their project is getting success while other are
losing this. This is also used to determine the key people of ALDI who are investing in their
business of company. Mendelow's matrix is used for doing stakeholder analysis. It consists of
four boxes that are described below:
 Box A- Minimum effort: Such stakeholders that are present in Aldi are losing their
interest and because of this they got influenced.
 Box B- Keep informed: They are curious one but do not have any power.
 Box C- Keep satisfied: They are kept completely satisfied so that they do not lose
interest.
 Box D- Key players: They are main stakeholders of the company that can make
alteration and having the power to stop any plan when they not get satisfied by them.
The benefits of stakeholder analysis are listed below:
 Stakeholder analysis is very important as this aids in determining about the key
stakeholders for the ALDI who are playing a vital role in decision making.
 Stakeholders can effectively guaranteed about the resources which help Aldi to make
their decisions correctly.
 This also assist in increasing transparency within the organisation and make the process
of decision making very well.
 It also aids in building trust of consumers that ultimately aids in increasing consensus for
the Aldi.
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2.4 New strategy formation for Aldi
While making new strategy, it is very important to know where the company exist in
present and their determining their mission, vision and value. Here Aldi exist at third position in
Germany. Their mission is to acquire the first position in the retailing sector of all over the
world. Their vision is to provide cheap product but of high quality (Montgomery, 2011). And the
value of corporate is to be perfect in the eyes of consumers and government by doing fair
activities. They can also examine productivity of their competitors having the notion to identify
their weaknesses and make use that in their company as a strong approach. As organisation
wanted to be at first position they have to make new strategies, so Ansoff's matrix can be used to
create a new marketing strategy for Aldi. This matrix provide four alternate strategies based on
the new or existing product. This is described below:
 Marketing penetration: This shows that organisation have to make increment in their
market share in the present market sector. This can be done by making new consumers in
the existing marketplace.
 Product development: This states that enterprise needs to develop new products or
services having wide range of varieties for the present marketplace (Nordqvist and Melin,
2010). Here products can be improved by thinking about how these fresh products will
13
Source 2: Stakeholder Analysis, Project Management, templates and
advice, 2017

give satisfaction to the consumers and by also performing better in relation to their
competitors.
 Market development: This is the process of finding new location for marketing in place
of current location. Conduction of survey and little more segmenting of market will
definitely assist in recognising new users for new marketplace.
 Diversification: This states the migration or movement of new productions or services at
newer locations of market at similar time when current is operating. This is risky as going
away from past without learning will make current activities more vulnerable to risk.
The TWOS- TOWS analysis is a tool that is used to create, compare and select strategies. It is
different from SWOT analysis. The four TWOS analysis are explained below:
 Strength/ Opportunity (SO): Here the strength is used in order to work for several
opportunities of future. The current strength of Aldi is their market position in the
Germany. Due to large set of loyal customer base who can provide positive feedback they
have the opportunity to add more customers in their list.
 Weakness/ Opportunity (ST): Here finding of options should be done that will assist in
overcoming from weaknesses and after that taking advantages of opportunities. So, here
the mitigation of weakness is done to exploit the opportunities. The competition is
increasing day by day and hence they can stop there large customer base to shuffle their
choices and chose its rivals by increasing the product range under same roof.
 Strength/ Threat (ST): Exploitation of strength is necessary so that threats can be
overcome or minimised. Large revenue can be used to lower down the prices of product
and win the price war and hence can attract more number of customers to their stores.
Stores at number of places provides access to large number of customers and hence can
help company to reduce the threat of competitors capturing the larger market share.
Weakness/ Threat (WT): The final option is to use weakness to overcome a threat. By using this
strategy, company tries to minimise their weakness so that threats can be avoided. Use of
technology in various purposes can save their production time and maintain the supply and
demand chain which can provide them an edge over others. It can increase its product so as to
attract customers and restrict them from going to some other place.
They are offering best quality and branded products to their consumers. This makes a
loyal relationship between them and their users. But there are some weaknesses of Aldi are also
14

present. The competition is increases day by day. Due to this, they are not receiving as much
profit as same products and services are offering by their competitors like Tesco, Sainsbury's,
etc. On the contrary, there are also several opportunities of the company. They can expand their
business in different other countries. They can make partners to those people who are located
globally. By this way they can spread their business and earn more profit. Aldi can use their
strength and turn that into opportunities. They can use their loyal relationship of their users and
make more by doing mouth advertisement. This will not cost a single penny for the organisation.
They have to minimize their weakness and turn that in to strength. This can be done by making
high quality and unique products in comparison to their challengers. By this way they can turn
their threats into opportunities.
TASK 3
3.1 Analyse the appropriateness of suitable strategy for ALDI
There are different types of strategies that are substantive growth, limited growth or
retrenchment. For substantive growth of firm, Aldi have to consider the following strategies:
 Franchising: This is most suitable strategy where by corporate can made franchise
agreement with the heads of several outlets within USA and those who are external to
the country. In order to recognise the essential growth, enterprise can issue more
number of franchise without important first investment fund.
 Merger or Acquisition: This is done by enterprises that requires effective solution for
special market. These mergers are equal when the size of venture is equal and if they
have identical business. Whereas acquisition is done by the corporates which are
stronger in terms of economic conditions.
 Organic growth: This indicates the actual development apart from the merger or
acquisition. This also states that management have uses other strategies for the
process of growth or not. Aldi uses its interior resources for its expansion policy. This
can only be achieved by incrementing sales.
 Substantive growth: This growth of corporates is apart from organic growth. This
consist of two types of integration that is horizontal and vertical integration.
 Horizontal integration: Aldi can also merge with another companies in the similar
industry and can easily acquire large number of market share than before (Oltra and
15

Luisa Flor, 2010). The competitive ability of the integrated enterprise can also assist
in promoting essential growth. This integration enhances the monopolistic quality of a
firm.
 Vertical integration: As venture totally depends on the supplier of products, vertical
integration may increase the growing of firm. In this method, just in time can be taken
as an essential success factor of the organisation. Hence, this aids in assuring the JIT
and substantive growth of firm.
 Limited growth strategy: Limited growth strategies are listed below:
▪ Do Nothing Alternative: Here, corporate should not make any strategical
modification in the limited growing environment. Operations can be carry on
normally. This strategy targets to keep on present share of market.
▪ Product development: Under this strategy, Aldi can alter their current product
so that they can enhance market penetration (Parnell, 2010).
▪ Innovation: This needed a revolutionary modification in the business to
continue its market share.
▪ Combination strategies: Enterprise can precede more than one strategy in
this restricted growth premises.
▪ Market development: Here the new market place is decided for the current
products.
▪ Product development: In this company have to create new products for the
same market place. This consist of thinking about how their new goods will
fulfil the need of customers.
▪ Market penetration: This means company have to develop new market place
▪ for the existed products or services.
Disinvestment Strategy:
▪ Retrenchment: This is done to minimize the unnecessary costing. Venture
uses this to minimise their scale and areas of business activities. Things that
forces this are market reduction, economic concavity, poor competition.
▪ Aldi should use franchising strategy as this is suitable for this.
Aldi should use franchising strategy as this is suitable for this company. Company sells a
large products from there own shops and by choosing the method of franchising it can reach to
16

more number of customers through their smaller shops. Specific product based shops can be
franchised so as to cover a large market share. Franchising will reduce the costing on employee
salary as ALDI is famous for giving higher salaries to workers. This saving can be utilized in
investing on bringing more products in the same stores.
3.2 Justification of one of the selected strategy
Market growth as well as strategy both are much important for company as they want to
increase their revenue. There are some methodologies which are totally related with success as
well as development of an enterprise. Manager of ALDI can develop some plans for their
business, which will assist them in their survival of market. Cited firm wants to expand their
business worldwide. An effective strategy will aid to take advantages from their competitors.
Therefore, association can use substantive growth approach, it will help to introduce
themselves in other countries. Along with this, for above stated purpose they can take help of
other micro companies. As result to, there profit will get increased as well as can take long term
advantages.
When their business is successfully set up by using merger strategy, then they can utilize
approach which is related with limited growth. It will only support them, after they appropriately
settled their organisation in other countries (Verbeke, 2013). Along with this, it is essential for
company to determine each and every factors which can affect their business decision making.
Hence, substantive growth strategy is much appropriate as well as adequate for them.
ALDI continuously improve their products so that they can attract more clients towards
them. It will assist them to improve effectiveness of products and as result to they can improve
their products and in addition enhance their reputation at marketplace.
Aldi can use franchising as their appropriate strategy as firm is experiencing substantive
growth in their industry. The expansion of marketing is going on day by day. Organisation needs
to enhance the retail store and boost up their money. Hence, without making any first
investment , franchising can resolve the issues (Peteraf, Gamble and Thompson Jr, 2014).
Corporate can also assures their interest by collecting royalties and meeting the need of
consumers. Franchising also includes the risk of quality insurance. So, monitor capabilities of
Aldi have to increase to solve this issue.
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The new strategy selected here is by the aid of Ansoff's matrix. This provides four
another alternate market plans which is suitable for the organisation. The justification of all of
them are described below:
 Market penetration: With the help of this, enterprise can enhance their market
sharing within their current market location. This can be made possible by selling
more and more goods to the users.
 Product development: New products or services are created for the current
market. Venture can develop new goods by thinking about how they will fulfil the
demands of their customers.
 Market development: This states that new market should be created by the
enterprise. Owner of corporate will select the market by conducting a long survey
and recognising the demand of consumers.
 Diversification: As firm is moving their market in a new area when their market is
existed in past place simultaneously. This is quite risky as they are moving away from their
historical performances.
Following methods can also be used while making strategical decisions:
 Suitability: This deals with overall rationale of the strategy. The main point is
consider here that is whether the current strategy is addressing the issues that are
underlined by the strategical position of company. Some of the tools to include
suitability are described below:
 Feasibility: This shows concern about the resources which are needed to execute the
strategies. These resources involves funding, customers, time and data. Tools that are
used in evaluating feasibility consist of cash flow analysis and resource deployment
analysis.
 Acceptability: This concerns with the expectations of the recognised stakeholders
that gives wished performance results. Tools used to evaluate this are What – if
analysis and stakeholder mapping.
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TASK 4
4.1 Role of personnel who will be charged to implement strategy
The top or higher level of management plays the vital role of implementing strategies.
They are responsible for setting long term goal and strategy and also they define those how those
strategies are getting implemented. They analyse the work of middle level workers and give
them target to implement such strategies. Middle level management are carrying the strategical
view of the high level management (Reich and Benbasat, 2013). They are making the middle
term schemes having the intention to achieve long term strategies that are made by top
management. They analyse the working of lower level management. The employees of lower
level also play an important in the implementation of strategy. They are responsible of setting
operations of firm in such a way so that it assists the strategies and objectives set by middle level
workers. Consultant plays a vital role in implementation of strategies. They are someone who
gives advice to the company about which plan is or which is not. They are very skilled people
and have an experience in this field. Individual have to do work according to that strategies.
They should start working in that respect in order to enforce the strategical planning.
Role of individual are listed below:
 It is important to understand the role of experienced personnel in implementing such
strategies within organisation. ALDI should give priority to old employees.
 The personnel must know reason behind the strategy, it helps in dealing with the
customers in appropriate manner.
4.2 Resource requirement for the implementation of strategy
While implementing the strategy there are requirement of some resources. The several
types of resource needed are listed below:
 Financial Resource: The implementation of strategy involves a budget that will reflect
how much revenue is needed to execute the strategy in specific time period. This
financial resources are needed to assist in completing all the tasks of the strategies
implementation.
 Human resource: This is an important resource that is needed to enforce strategies as
different types of strategy needs different skills (Scholes, 2015). So, the recruitment of
skilled workers is done in order to implement strategies more effectively. They are also
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needed to gain competencies or competitive advantages. If any fresh resources are hired,
then it is the responsibility of human resource management to arrange training and
development programmes for them so that they can contribute in strategy formation as
well as implementation.
 Organisational resources: The structure of organisation also matters in the execution of
strategies. This organisational construction required to keep accordant or consistent with
the strategy (Schrader, Freimann and Seuring, 2012). This is advised that it is an
important resource that matters most while implementing a strategy.
 Environmental resource: Environment of enterprise have to be supportive to the
strategies. The demand of customers, their life style, taste and there are a lot of things that
matters while enforcing any strategy.
 Time and material resource: In order to implement a strategy, specific amount of time
is required. Aldi should use technology while manufacturing goods or services. This will
assist them in completing their project before allocated deadline.
 Physical resources: This includes tactual items that are essential and availability of those
for business is needed in order to better functioning of corporate. For example, building,
materials, manufacturing instruments, office furniture, etc.
 IT resource: This type of resources assists in doing all information and technology related
work. For example, computers, C.P.U., routers, printers, etc.
4.3 Contribution of smart target in implementing strategy
Smart target means the objectives or goals of organisation should be specific, measurable,
realistic and achievable, need limited time. Smart target means the objectives or goals of
organisation should be specific, measurable, realistic and achievable, need limited time. Smart
target should be made in order to implement the strategy more efficiently. The contribution of
those are listed below:
 Target must be specific in nature and must be informed to all members of corporate so
that labour should in common direction. It should not be same as all labours will get
wasted if will be same in nature.
 It must be measurable according to the defined objectives. It assists in recognising the
standard of quality. If this is not so then no errors can be determined and as a result no
improvement can be done so that those faults can be decreases.
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 Aims and objectives should be attained with in a specific period of time. If this is not
achieved with in a limited interval of time, then company will lose trust of their clients
and they will not give them any project to do from next time (Woodcock, Green and
Starkey, 2011). But if they complete their order before time then large number of users
gets attracted towards their corporate and their selling will be increased.
 Goals must be realistic in nature as if it is imaginary then no one cannot achieve this.
Due to this all efforts will go in vain. Hence, it must be practical so that employees of
organisation can achieve this in specific period of time.
The advantages of setting SMART goals are listed below:
 Clearer focus: This helps in properly focusing on the settled target that the corporate
want to achieve.
 Use of resources: There are very few resources available that have to be optimally
used. This is done by setting priorities and performing according to this.
 Effective use of time: By setting time management, venture can effectively do the
right thing at right time without wasting it in doing something else.
Disadvantages of smart target are listed below:
 Less importance to other tasks
 Less execution and more procrastination
 More pressure and stress
 Different people give their different views
CONCLUSION
From the above based report, it has been concluded that business strategy is nothing but
planning that are formulated to achieve the aims and objectives of corporation. Aldi uses
different methods to make their strategies like they perform organisational audit in which they
determine their strength, weaknesses, threats and opportunities. Additionally, they perform
environmental audit where they recognise the impact of macro as well as micro environment on
the business. Macro factors are nothing but some external factors that impacts on the working of
firm like political, legal, environmental, technological, social and economic. For analysing micro
factors, they use porter five forces.
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