Business Strategy Analysis of ALDI - BUS300 Module Report

This report presents a comprehensive analysis of ALDI's business strategy, encompassing its goals, mission, objectives, and core competencies. It explores factors crucial for strategic planning, including market position, customer demand, and competitive advantages. The report delves into the usefulness of techniques like the Ansoff Matrix and organizational and environmental audits, including a SWOT analysis. It also examines the significance of stakeholders in framing a new strategy and the roles and responsibilities of personnel in strategy implementation, highlighting the resources required and the contribution of SMART targets. The report provides insights into ALDI's approach to the retail industry and its strategies for market penetration, development, and diversification.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1.1 The way goals, mission, objectives and core competencies of ALDI inform strategic
planning..................................................................................................................................1
1.2 Factors to be considered by Aldi when formulating their strategic plans........................2
1.3 Usefulness of techniques used when business develops their strategic plans..................3
2.1 Organisational audit for ALDI.........................................................................................4
2.2 Environmental audit of ALDI..........................................................................................5
2.3 Significance of stakeholders in framing a new strategy...................................................6
2.4 Presentation of new strategy for company.......................................................................7
3.1 Analysis of appropriateness of alternative strategy linked with Aldi ..............................7
3.2 Justification of suitable strategy for business...................................................................8
PART 3............................................................................................................................................8
4.1 Roles and responsibilities of personnel engaged in implementation of strategy..............8
4.2 Important resources required for executing strategies......................................................9
4.3 Contribution of SMART targets in achieving the strategic objectives...........................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy refers to determine the action plan which is used by each and every
organisation of smoothly run their business activities and functions for attaining desired aim and
targets. It helps in improving the entire performance and turnover of entity. Along with this, such
strategies can assist in making accurate decisions for various departments which are liable to
perform these particular tasks in the given time period. The project is based on ALDI which is a
popular supermarket organisation and there are around 10000 stores established in different
countries (Acquaah, 2013). In this assignment, the goals, mission, objectives, vision and core
competencies of ADLI have been discussed. Along with this, various factors which can be
considered at the time of designing and preparing plans is described here. It also defines some
roles and responsibilities for implementing the strategies. Some resources also required for
strategy and this will explain about SMART for achieving goals and objectives.
PART 1
1.1 The way goals, mission, objectives and core competencies of ALDI inform strategic planning
The policy which can help in gaining different aim and targets of organisation in effective
way that is known as business strategy. In simple words, it defines that direction which is
required to be followed by manpower so the company vision and mission can be achieved in
proper style. Each and every corporation designs certain mission, objectives, goals, aims and
targets so that they can easily perform their work in the same direction and focus on attaining all
set targets of the firm. Along with this, ALDI has been formulated and developed certain motive
and objectives for deal with organisation. In an organisation, strategic planning manages all
management practices which are used for setting priorities, concentrate on energy and present
resources with maintaining business operations and functions for employee’s benefits and
another shareholders are works together for achieving common targets and goals (Astrachan,
2010). The main motive for making such strategies for help in recognising its major priorities
and also reach the requirements of their business. Planning should be flexible and distinct for
executing certain programmes within an organisation. It can be observed that strategic planning,
analysis and measurement are essential for such ventures so it is important for creating outcome
that are based on accountability system in the company. The strategic terminologies and in the
context of ALDI that are described as follows:
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It is the internal part of venture by which they easily motivate their personnel for working
together in the team for achieving vision of an organisation. The main objective of company is to
make proper improvement in business operations and its functions which are explained in the
structure of corporation values, tradition, mission, vision and policies.
The major key mission statement of ALDI that are discussed as under:
Mission-
 The company consider in creating and developing the ability in competition market area
by serving sustainable and superior values of the stakeholders (Bharadwaj and et. al.,
2013).
 The aim of the firm is to supply and deliver best consumer level of partnership for
increasing effectiveness of best controlling business operations and functions in better
manner.
 The major mission of ALDI is to develop values for their customers to get the credibility
and create group desired buyers.
Vision
 The main aim is to generate effective supply chain channels for properly delivering
systems within an organisation.
 They also willing to make growth value in economy rate of United Kingdom.
 For making innovative and update technology so customer prefer their product rather
than other competitors brands.
Goals
 ALDI try to refine and maintain corporation governance for making correct or accurate
accountability.
 They attempts for developing multiple drivers of growth for formulating superior
business profile and capacity.
Objectives- Main objective of ALDI is to describe the major key elements of making effective
strategies where they are focused on customers and their performance which can create values
for their business partners. The main objective of company is to gain maximum profitability for
increasing sales at large market place and enhancing good reputation.
Core competencies
 The fidelity of serving competitive edges within the market place.
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 The expert functions and technological knowledge.
 Cost pricing of different goods and services
 For self reviewing the whole business processing
1.2 Factors to be considered by Aldi when formulating their strategic plans
An organisation should explore and understand their external and internal aspects which
formulates the business that are related to the policies and plans. Internal factors are those that
are connected with business operations and its major functions so such facts are totally linked
with external functioning of firm. Therefore, it is essential for understand the company
sustainability and attaining desired goals and targets for higher management. Such factors
comprise certain limitations and benefits which can be analysed effectively and make proper
strategy for reaching with long term objectives (Campbell, Edgar and Stonehouse, 2011). There
are different factors which are needed to be considered by ALDI at the time of designing their
strategic planning included some advantages and disadvantages are described as under:
Basis Advantages Disadvantages
Internal The qualified and disciplined
employees can assist in
completing all business targets
and goals in proper manner.
At some time, personnels does
not satisfy all company
principles and they perform
strikes for such thing. This can
completely harm the brand
image.
External In this, technological factor
fall under the external aspects
and contributes for increasing
production.
It will get outdated on daily
basis and thus management has
been make separate reports for
maintaining balance.
There are different factors for formulating strategic planning that are as follows:
 Market position- It is necessary for Aldi is to analyse the place where they easily
attracting large number of customers and increasing their sale price. Also examine the
entire market location for gaining attention of different type of customers.
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 Customer demand- For making strategic planning, it is essential for company is to
analyse the customer demand and needs in proper manner.
 Competitive advantage- This is important for Aldi firm is to gain competitive advantage
for getting high income and revenue by selling various goods and services.
1.3 Usefulness of techniques used when business develops their strategic plans
There are various number of appropriate techniques which can be proofed for helpful in
designing effective business strategy. For such effective planning, it is essential for adopting
certain methods and techniques which can help in achieving required goals and targets. Some of
the different approaches are identified which assist in creating and making business policies such
as SPACE, Ansoff Matrix and Boston Matrix.
It can be considered to be useful while taking entry in the new market place and desire
for gaining attention of customers towards their company’s products and services. Such
techniques and method are presented four strategies for attaining successful growth to the
business. In this, Ansoff matrix model is helpful for developing and evaluating their strategic
planning. Ansoff matrix is reviewed as an effective method for dealing with business growth and
existing course for the future time period. There are various factors which directly help in
exploring the market place that are as under:
Market penetration- This refers to improve current production for the present market
place through different methods. By doing this, ALDI has to update its pricing strategy, sales
promotional activities, etc. (Gandolfi and Hansson, 2010). According to this, they are required to
concentrate on customers and marketplace.
Market development- In this company, firm sells their products and services in new
market locations. They does not required for developing their production for use best suitable
policies which can easily make new consumers.
Product development- This strategy is used when an organisation is developing their
current goods and services in the present market area. It can be done by increasing values and
serving best attribute services to their desired buyers in an effective manner.
Diversification- This strategy is used when an enterprise can lead the present products at
new market place. In this context, all customers and also commodities are new in features.
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2.1 Organisational audit for ALDI
ALDI was segmented into two single teams or groups in the year 1960. Then they will
become Aldi Nord which headquarter is based in Essen and Aldi Sud whose headquarter is
situated in Mulheim. It can be noted that after the name of ALDI was coined in 1962. It was
launched in Great Britain on 5th April 1990. It can be analysed that they will comprises with 550
more stores which open in the year of 2006. Still, it is a small player in Great Britain where they
have less than 3.6% shares of food market (Gollakota, Gupta and Bork, 2010). Thus, company’s
management needs to understand certain advantages and disadvantages of their business so that
they can easily adopt such strategies for improving themselves. By using this, they can use
SWOT analysis and conduct organisational audit. SWOT analysis of Aldi for designing an
effective business plan includes:
Strengths:
 They also deliver different products at reasonable prices in comparison to other
competitor brands.
 Take strong position in Germany with having 2500 storesProviding the best quality of
goods to their usersOperating in more than 15 countries at international level
Weaknesses:
 Mainly small players in Great Britain
 They are yet small in relation with other brands
Opportunities:
 They need to do investment in different promotional activities and functions.
 Expand their growth of nation economy in Asia, Africa etc.
Threats:
 Competition is increasing on regular basis.
 The private company labelling are establishing good image
2.2 Environmental audit of ALDI
Porter's five force model analysis of ALDI which is a grocery sector this entire process
include threat from new companies entrance in business market, bargaining power of suppliers
and buyers, threats of substitutes. Instead of these they also have rivalry among the existing
firms. All these are properly explained as below:
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Threat of new Entrants- From this factor, ALDI is not suffering at high level because
there are many companies in the market which are perfectly established and having their string
brand image and name in market (Jocovic, and et. al., 2014). Same the respective company also
have so that there will be no effect from the new companies entrance in same sector. Instead of
this but there are some barriers also which affect are entry cost, capital required for establishing.
So it is conclude that there is low effect of new entrance.
Industry Rivalry- cost is the best advantage in competitive industry ALDI keep their
fixed cost of product low so that customer purchase their products more and more which don't
affect the same company. In this factor competitor compete with each other on the basis of cost
mainly. TESCO, ASDA, Sainsbury and Morrison's are the major competitor of given company.
Every sector have competition same as supermarket have also have because of number of
companies and some small convenience stores are also entering in market which effect business
of others.
Threats of substitute- small conveniences stores are opening near to everyone houses
which are the substitute of ALDI because people purchase day to day necessity things from these
stores. Given company have threat that customer can easily shift their buying preferences to
substitutes available in market. This is affecting at moderate level to ALDI. If customers get
product near to them then they will easily move to these stores. This will directly affect business
of ALDI.
Bargaining power of Suppliers- big market and companies having some advantages in
competitive market because of their brand name and image, these all factors decrease bargaining
power of suppliers because they don't want to lose out such large supermarkets (Köseoglu and et.
al., 2013). There are some more companies which supply same products so that supplier not do
too much negotiation. Thus, ALDI don't have that much bargaining power. Many choices
customers have this tie respective company to bargain and sale products according to customer
demand and also fluctuate price as per them.
Bargaining power of Buyers- Customers having various choices in supermarket to if
ALDI don't negotiate price of product and services according to customers then they will switch
to other company. These issues may occur when customers are price sensitive or quality of
product and if respective buyer prefers quality over price. ALDI is suffering from this thing
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because customers having power of bargaining if given company don't decrease price then they
will easily switch to other supermarket because of choice in this sector.
Above mention are porter's five model which effect ALDI some at high level and others
at low level. So given company have to take care of all these factors.
2.3 Significance of stakeholders in framing a new strategy
Stakeholders are those authorities who contributes mainly in an organisation for
development and making growth. The government bodies who are responsible for smoothly run
the business activities which are treated as stakeholders of an entity. Therefore, management
represent their shareholders according to the need and requirements for taking proper actions.
ALDI has been identified their aim of stakeholders and separate them according to their priorities
for taking decisions in proper manner.
The company run their working in organised manner where manager’s desires for
increasing their market share in effective way. The business is reduces in current years, so they
should make accurate strategies for deal with different situation and condition. While designing
action plan, government should involve each and every stakeholders in their account and have to
take important steps for the requirements (Martin and Rice, 2010). ALDI mainly categorised
their stakeholders in three categories that includes internal shareholders, external shareholders
and connected shareholders.
While doing Stakeholder procedures, Aldi can use Mendelow's matrix so it will assist in
setting their priorities in proper manner. Such matrix has been divided into four boxes that are
described as under:
 Box A- Minimum effort- Such business partners present in organisation for losing their
interest and it can directly impacted.
 Box B- Keep informed- It is very curious in nature but have not power for do anything.
 Box C- Keep satisfied- People need to be satisfied so they want to lose their interest.
 Box D- Key players- They are key players and make changes the power of stopping any
policies in the case of dissatisfied.
Role of different stakeholders- in an organisation, stakeholders are termed as investor whose
main action determine the result or outcome of their business and help in making appropriate
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decisions. Stakeholder assist in making proper investment in their business activities and its
major functions. They also spend money for producing products and services for the firm.
2.4 Presentation of new strategy for company
According to the opportunities of the Aldi, company managers should need to design
accurate strategies where they can preserve their positioning within the market at large market
place. An organisation can do investment for earning large amount of income in various nations
where stores are not present. They can easily expand their business operation and create strong
customers. Along with this, it can help in accomplishing and gaining more market share.
They required for new outlets and have to do accurate modification in their present
products and services according to the demand of common people. For doing this, diversification
for completing productivity that is essential (Montgomery, 2011). Along with this, they required
for maintain stable market share for last few years and its market share has been reducing badly.
So, it is necessary for use new strategy where they can produce innovative and new goods and
services for achieving desired goals. It can be done for use new market development growth.
Strategy- Aldi strategy is to set the target till 2020, they will make effective strategies for process
the aim and it is became one of the successful business in particular sector.
Tactics- Also aldi will promote their firm by doing different advertisement publicity for using
various sources such as television, radio, newspapaer, print media etc. by this they are attracting
large number of customers.
Target market- This is depict as customer which mainly focus to their organisation. The firm has
to eliminate that areas where less number of buyers are come. ALDI focus on those areas where
large number of customers are come and also divide them according to their requirements.
 Psycho graphic- Basis on living standard of individual.
 Demographic- Basis on age, gender, caste, religion.
 Geographic- Mainly focus on mist populated cities and metro cities people.
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PART 2
3.1 Analysis of appropriateness of alternative strategy linked with Aldi
Aldi is retailer multinational industry as it has strong market image among competitors.
This firm is oldest in the market place and there are numbers of items selling by Aldi group
(Teece, 2010). They focus on adopting several strategies for developing the business and create
good relations with customers. Company is trying to build strong goodwill at global level so that
they prepare some planning for strategies which is as follows:
Alternative
strategies
Options Explanation
Market entry
strategies
Aldi has an option for dealing and
offering several products and
services at new market place.
It is helpful for the firm as they can
target new place or potential
customers as well as attracts them,
towards goods and services through
innovative ideas creativity.
Substantive growth Food sector is totally new for Aldi
company as they could merge the
business with another company in
various sector.
Company have wishes to expand
their business in various areas as
well as they have opportunities to
adopt substantive growth and they
can employ for increasing
productivity or profitability.
Retrenchment Company can manage the entire
condition, effectiveness and
conserving strategies for selling
goods and services.
It can be beneficial for the
organisation in the critical
situations which will support in
achieving goals or meet
expectations level.
3.2 Justification of suitable strategy for business
From the current position of the Aldi company, it can be analysed that there should be
effective marketing strategies. So it is helpful in making decisions regarding new market entry
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and also develop the business by expansions at other locations. It can be done through the
culture, demands and needs of customers for the purpose of surviving in new market. They can
produce new innovative ideas and creativity in products and services for attracting huge audience
towards organisation and they can generate higher revenues or profits (Tsamenyi, Sahadev and
Qiao, 2011). It can be create more conflicts or barrier while expanding the business so it is not
easy to move customers or attracts them towards organisation, it can be done effectively by
conducting survey or research process so that more information will be received regarding
customers, market trends and competitors. Therefore, Aldi is working hard for achieving success.
Flexible: It is must be required to have flexibility and dynamic of business environment
as Aldi can be feasible for adopting various kinds of changes and new techniques within the firm
in effective manner.
Reliable: It also another important aspect which consider liabilities using various
planning and budgeting in better manner. Company set appropriate parameters for achieving
goals or objectives.
PART 3
4.1 Roles and responsibilities of personnel engaged in implementation of strategy
To implement any changes or modifications in strategies and policies should be done
with involvement of employees because they have to adopt that and work on them to attain
desired profits or benefits of organisation. Workers who are involved in several aspects of
executing new strategies have different roles and responsibilities related to their working criteria.
Some of these aspects are given below: Top administration: - This term is defined as to prepare a blue print of planning and
execution of particular policies or technologies properly having all the details about
activities or procedures to conduct them in a correct way and avoid issues while applying.
All methods should be done in proper sequence which needed blueprint of plan. Centre level:- This level includes the middle level superiors like team leaders, mangers or
supervisors to assign desirable processes or activities to desired workers according to
the4ir expertise field to attain better performance from them (Peteraf, Gamble and
Thompson Jr, 2014). All the information about changes or modifications must be render
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