Business Strategy Report: ALDI's Mission, Factors, and Audit Analysis

This report provides a comprehensive analysis of ALDI's business strategy. It begins with an introduction to business strategy and its importance, followed by an assessment of ALDI's mission, vision, goals, and core competency. The report delves into internal and external factor analysis, including political, technological, economic, and social factors, and how ALDI addresses them. Various strategic plan evaluation techniques, such as the BCG matrix, are discussed. The report also includes an organizational audit and analysis of ALDI's current strategic situation, including strengths, weaknesses, opportunities, and threats. Market identification and the appropriateness of different strategies are examined, along with the justification for a chosen market entry and growth strategy. The report concludes with a discussion of the roles and responsibilities of personnel, resource requirements, and the evaluation of SMART objectives to achieve strategic objectives, offering a detailed overview of ALDI's strategic approach.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
A) Assessment for ALDI mission, vision, goals and core competency......................................1
B) &C) Factors analysis while dealing with various situation....................................................2
D) Use of various techniques in terms of strategic plan evaluation..........................................3
E) Organisational audit and analysis on current strategic situation............................................5
F) Environmental audit for ALDI ..............................................................................................6
G) Analysis of stakeholders........................................................................................................8
H) New strategy formulation .....................................................................................................9
TASK 2..........................................................................................................................................10
I) Identification of market and appropriateness of suitable strategy.........................................10
J) Justification for one strategy for market entry and growth...................................................11
TASK 3..........................................................................................................................................12
K) Roles and responsibility of personnel in implementation of strategy..................................12
L) Resource requirement for implementation of strategy.........................................................12
M) Evaluation of SMART objectives to achieve strategic objectives......................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Every business entity have to formulate some scheme on which all task and project have
to get done in an effective manner. These are some policies and guidelines which provide a
framework of execution of operations. Thus, this factor increase the number chances of success
and long term survival. These formulation of vision, goals and targets are said to be business
strategy (Ackermann and Audretsch, 2013). This factor is much essential for any business
concern in executing all task in an appropriate manner. Present report is based on ALDI which is
a grocery retail outlet at UK, but its birthplace is Germany. By 2016, company opened there 550
retail outlets over there as they expand their business so much. In this assignment various terms
and methods are evaluated in which at first mission, vision and goals are described which
consider as strategic planning procedure. Also, an organisation have to carry out an
environmental audit which is necessary for them in identifying number of competitors.
Moreover, by preparing a strategic plan company have to choose either one of a best alternative
from all of them and implement it to achieve all targets in an effective manner. This also help
them in passing out all barriers.
TASK 1
A) Assessment for ALDI mission, vision, goals and core competency
Every organisation settle some guidelines first and then they work on them. This leads to
create a scope and path on which all task get done. While formulating appropriate approach on
time it leas to make survival easy and creates healthy environment at workplace. Some major
things which are included while formulating strategies are mission, vision, goals and core
competency (Acquaah, 2013). These are consider under creating a effective framework for
getting all things done in a systematic manner. ALDI is one of a largest grocery store at UK, who
provide quality products to their customers. Hence, decision makers of cited company formulate
a plan in which all of their mission and vision as well as goals are described. Core competency is
a term which signifies a company working and product which is different from others. Hence,
cited entity mission and vision are as follow:
Vision: This is a written statement which signifies about that in next few years where a company
want to see themselves. According to ALDI vision, they just want to introduce something new
and revolutionary at keen competitive market. This factor is so helpful for them in increasing
1

their profitability (Armstrong and et. al., 2015). As this their profitability get rises and their
strength at market get improved.
Mission: Mission is statement which provides a guideline in support to vision which is formulate
by a firm in making their long term survival easy and targets get achieve in minimum time
period. As per the mission of ALDI, “Providing top quality products at low price”. This help
them in getting their customer interest and take their faith towards company.
Objectives: These can be of two types: Short term objectives and Long term objective. But the
main reason behind their formulation is for long term survival. These are general guidelines
which a company have to follow and the purpose of these formulation is to provide a proper
target for their employees.
Goals: According to this concept context, a context cited firm want to become leading retail
outlet in all over the world (Bentley, Omer and Sharp, 2013). This is consider as their goal or
target which management want to attain in most possible manner.
Core competency: This term is signifies as such sort of strategy which completely differentiate
an organisation from others. Hence, as per ALDI context, their USP is sell out their products at
low range. Hence, their core competency can play a important role in increasing their
profitability.
B) &C) Factors analysis while dealing with various situation
While preparing or dealing with any situation any individual or organisation have to set
up a plan. This is consider as planning procedure of a company which support in examine all
such irrelevant fact which might affect working and employees. Analysis of all internal and
external factor is must because with the help of them an appropriate strategy is formulate.
Internal factor include all employees, directors and all such bodies which help in increase
productivity and output. According to ALDI context, they have good market growth as compared
to others. Company all over market share get rises with 19.8% heights where as major
competitors only grew with 1.6%. hence, company have to use effective approach to maintain
this form of growth. Thus, this is a only way for making their growth and development easy. For
this management have to first analyse factors external factors because they are not in control and
then have to work on internal issues. A brief description of these factor in company's context are
as follow:
2

Internal factors: All such elements which are related to any business entity internally are refer to
as internal factor. These are termed as labours, suppliers, who help in making working operations
effective (Bharadwaj and et. al., 2013). They all are belong to make survival of a firm easy by
attain all targets on time and in an ethical manner. According to given firm perspective, if
management do not satisfy their employees then it leads to create situation like strikes etc.
Hence, this lead to create a negative image of an organisation in front of their customers and
their profit range get decline. Also, conflict between suppliers and management tend to destroy
brand image.
External factors: Such elements which provide harm to an organisation externally are come
under external factor. They are just not in control of each and every segment and come at any
time without any information. Thus these factors are political, technological, economical and
social. A basic linkage between these terms and company is as below so that decision makers can
formulate an effective plan to overcome from them (Blackburn, Hart and Wainwrigh, 2013).
1. Political: Firstly firm have to identify such countries where government have stability in
nature. If the regions where they set up new firm do not have political order then it leads
to affect their working so much. Hence, management have to find out such environment
which is suitable for their working.
2. Technological: As per grocery store have to upgrade their technology according to course
of time. Hence, as per new technology they have to use such system which help them in
gathering all relevant information which assist them in manage their inventory.
3. Economical: Organisation have to fix their prices according to economic situation of a
company. If in any country have high inflation rate then they have to formulate strategies
according to that particular issue.
4. Social: Organisation have to set such prices and use techniques which do not provide
harm to society. Like grocery store have to sale only such products which are helpful for
society and boycott those products which are really harmful for environment and society.
D) Use of various techniques in terms of strategic plan evaluation
Strategies are very helpful in accomplishing all task and projects in a systematic manner.
This help in increase the chances of making a project successful and leads to create a positive
brand image in terms of customers. Hence, in this context there are various number of techniques
3

are use by a firm in executing all of their strategies in an effective manner. Various number of
tools and methods are: BCG matrix, SWOT analysis.
BCG matrix have two axes in which one of them is relative market share and other one is
market growth rate. These assets are divide into four groups which are: Dog, Cow, Star,
Question mark (Grover and Kohli, 2013). It is also described as growth-share matrix. A proper
description about these aspects are as follow which ALDA have to take into their account before
launching a new product at new market.
1. Dog: This is such type of business environment in which the market share is low and the
a growth of market is also less as compared to another. Thus this form is market is less
able to generate more and more profit and consumption of product are also less. Hence
this form of industry have less potential to generate more and more cash. As per this
statement I;e, this market place is define as cash trap. According to this context, company
have to identify new market for their new product because this type of market is not
applicable for them (Haley and Haley, 2013).
2. Cow: This form of market is able to generate more cash and have good growth and
developed nature. As these sort of market are helpful for all industries who want to set
their business and earn more and more revenue for business. Hence, ALDA is already
have set up market at UK and they have to identify such form of market which help them
in generate more and more profit than any other. Thus cow have good market share and
4

less growth. And for this company have to use appropriate marketing strategies through
which they can attract their number of customers (Jocovic and et. al., 2014).
3. Star: High market share with high growth rate. These type of products are able to earn
more and more profit than any other else. These products to not need so much promotion
than the products which are in cash cow. Cited firm have to apply this strategy in their
plan because as per this they do not need to focus more and more on such products which
already have good growth and developed rate (Khalili Shavarini and et. al., 2013).
4. Question mark: Good market growth but have less market share. So for this company
have to invest more and more in new market through which their working and operation
become effective in nature. Company can use this technique as per considering once that
they have less market share and for this they need a new market for investment.
E) Organisational audit and analysis on current strategic situation
Firms have to identify all of their risk and opportunities by making a fair audit by
analysing all financial statement. There are majorly two main essentials of an audit which are
internal and external. Internal examination is used to identify all such irrelevant things which
affect business internally. Along with these inspection of financial records and statement is also
come under this category. With the help of this management become able to identify all of their
risk and governance which might affect their working and operations.
Internal audit help in formulating such type of strategies through which risk get minimise
internally and whole work get done in an effective manner. For this context, business have to
measure their strength, weakness, opportunities and threats.
Strength: According to cited firm context, their brand image is good in terms of their users. They
provide good quality products on appropriate prices which help them in increase their market
share. As thus, this is a main reason behind their success as compared to other companies.
Weakness: ALDI do not have large impact on other countries as compared to UK and Germany.
They have large number of outlets over there which means that they only target users of Britain
and Germany. Moreover as compared to other grocery stores they have still small brand name
just because their business expansion is only limited to some number of countries.
Opportunities: As per they have limited number of market then it plays as a role of opportunity
for them. Opportunity as they can generate more and more profit than others and their expansion
5

is become possible by opening their outlets all over UK. Hence, this help them in increase their
market share and they get more and more amount from shares from competitive market.
Threats: As their expansion is taking place so rapidly this might create a fear of business shut
down to other countries so, it might get possible that other rivalries can merge their business and
start operating their work (Klettner, Clarke and Boersma, 2014). This is one of a major threat for
an organisation because if such sort of act get done then it leads to provide more quality products
than presented company.
F) Environmental audit for ALDI
Environment is that factor in which business is operating their activities. Hence, this
analysis is based on those factors which are not in control of a firm. ALDI have to analyse all of
their aspects by identify that what kind of circumstances they lead to face if management do not
prepare themselves for any harmful situation (Li and Tan, 2013). Hence for this decision makers
have to formulate a strategic plan for this perspective. This thing get done by using porter five
forces analysis through which authority have to prepare a plan on which all work work can get
done. With help of this model, company can analyse the nature of competition in industry.
Every market is different in nature and working operation also vary from each other. Like
their size is different which means their sales revenue is different in nature. Also their
distribution channel is vary form each other in which product distribution to target customer get
define. Hence, this basic difference get understand with the help of using Porter five force model.
The basic five major factor of porter are as follow:
1. Threat of new entry into market
2. Bargaining power of suppliers
3. Bargaining power of customers
4. Threat of substitute product
5. Degree of competitive rivalry
6

(Sources: Porter five forces, 2016)
Threat of new entry: This is one of major threat for any organisation who working at global
level. Hence, an organisation have to formulate such type of strategies from which their working
do not get affected so much because if new any new organisation will enter into market then it
leads to divide their share. ALDI have good market share at UK, thus their working do not get
affected so much but merger and acquisition of various number of firms and making a new firm
will lead to affect their working (Mithas, Tafti and Mitchell, 2013).
Bargaining power of suppliers: This force analyse that how much potential a supplier have to
sell their product at high prices which in turn to lower profitability. Hence, this completely
depend on number of suppliers, if they are low in number than their power is high or vice versa.
Cited firm have large number of suppliers because they deal with high range of products at
reasonable prices. Thus, their profit margin is high and business do not get affected by any sort
of suppliers power (Pagani, 2013).
Bargaining power of customers: This forces signifies that when a customer purchase in bulk the
power of purchasing become low because if they have more choices of available products by
different number of other companies then it leads to increase their bargaining power. According
to cited organisation context, number of competitors are high in market so bargaining power of
customers are high. Hence, they have to formulate their strategies according to customers choice
and on basis of other entities.
7
Illustration 1: Porter five forces, 2016

Threat of substitute product:It become easy for a user to switch from one product to another. As
per given firm context, they are providing large varieties of product to their users. Now, if they
introduce any new product which is substitute of other one, then it leads to remain their existing
stock unsold. This lead to increase the chances of loss and company not become able to generate
high profit. Hence, for this management have to conduct a survey (Scholes, 2015).
Degree of competitive rivalry: Rivalry is one when degree of competition is high. If there are
only few number of sellers at keen competitive market then degree of competition is low or vice
versa. At high competitive market the whole decision is related with advertisement etc. ALDI
have high degree of competition because number of competitive enterprises are high.
G) Analysis of stakeholders
Stakeholders are one who help an organisation in operating all projects in a significant
manner. They are the real ones who lead to invest in business and govern a business firm to
make their work in a systematic manner. Hence, management have to take them into
consideration while formulating strategies for their entity. If they do not get satisfied from any of
decision makers scheme, then it is a major duty of authority to change them and make them
accordance to neutral. There are mainly two types of stakeholders: internal and external (Slack,
2015).
Stakeholder planning or analysis is a process which helps an organisation to get and win
support from others. It helps them in ensure success from others where others get failed. There
are three main forms of stakeholders which are:
1. Primary
2. Secondary
3. Key stakeholders
With this proper analytical approach company become able to conduct a proper analysis
on their number of stakeholders and thus their benefit is must for achieving all targets in a
significant manner.
 Stakeholders interest
 Mechanism to influence other stakeholders
 Potential risk
 Key people to be informed about the project during execution phrase
 Negative stakeholders and their effect on any business segment
8

These are some of major points which an organisation have to take in to account while
preparing any strategy about their stakeholders. Also they have to use some other steps before
preparing any new modification in their business which provide benefit to their internal and
external stakeholders in the context of ALDI is as follow:
1. For internal stakeholders which are employees, management have to take effective steps
from which they get motivated and their output become effective in nature.
2. Also they have to provide them incentives for their better productivity and appropriate
outcome. This also assist them in encouraging all internal stakeholders (Smith, 2013).
3. Take government regulations into consideration before formulating any new strategy.
Thus change in law might affect their working.
4. Pay tax on time through which their brand image do not get spoil and use ethical manner
of working also.
5. Work in favour of society by charity and several other techniques which also support
them in creating a high brand image in front of others.
6. Make effective relation with suppliers through which they supply all products on time.
This work only get done by paying them on time.
Hence, management have to make proper strategies for their stakeholders from which
their interest get fulfil and they can attain large number of investment as well as customers. This
thing only get done when ALDI authority provide quality products to their users without harming
their interest.
H) New strategy formulation
Strategy provide framework on which all work get done in an effective manner. ALDI
have good market growth which get examine by their increasing market share. All these plans
are come under mission, vision and goals and their revision is must so that each and every
employee get aware about them. Thus, this lead to work them in more appropriate manner and
their working become smooth in nature. As per cited firm context their strategic plan which aid
them in making their operation easy are as follow:
1. Market share of ALDI is high as compared to others (Smith2013). Their grip on customer
is good and appropriate through which their profit earning capacity is become high. Their
mission and vision signifies that their working is completely for their customers. Where
rivalries work on providing only luxury products ALDI focus on each and every group of
9