Strategic Planning and Analysis for Aldi: A Business Strategy Report

This report provides a comprehensive analysis of Aldi's business strategy, starting with an introduction to business strategy and its importance. It delves into Aldi's vision, mission, goals, objectives, and core competencies, examining how these elements inform strategic planning. The report explores factors crucial for formulating strategic plans and the usefulness of techniques such as BCG and SPACE matrices. It includes an organizational audit using SWOT analysis and an environmental audit using Porter's Five Forces. The analysis continues with a new strategy presentation, an analysis of its appropriateness, and a justification for the most suitable strategy. The report concludes by outlining the roles and responsibilities in strategy implementation, the required resources, and how SMART targets contribute to achieving strategic objectives. The content is well-structured, offering insights into Aldi's strategic approach and market position.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1.1 Extent to which Aldi’s goals, objectives, core competencies, vision and mission inform
strategic planning ...................................................................................................................1
1.2 Factors to be considered when formulating strategic plans..............................................2
1.3 Usefulness of techniques used when business develops their strategic plans..................3
2.1 Organisational audit..........................................................................................................5
2.2 Environmental audit.........................................................................................................6
2.3 Significance of stakeholder analysis when formulating a new strategy ..........................8
2.4 Presentation of new strategy for company.......................................................................9
PART 2..........................................................................................................................................11
3.1 Analysis of appropriateness of suitable strategy for Aldi .............................................11
3.2 Justification of the most suitable strategy for business..................................................11
PART 3..........................................................................................................................................12
4.1 Roles and responsibilities of personnel who are engaged in implementation of strategy12
4.2 Important resources required for executing the strategies..............................................13
4.3 The way use of SMART targets contribute in achieving strategic objectives...............13
CONCLUSION..............................................................................................................................14
REFERENCES .............................................................................................................................16

INTRODUCTION
Business strategy entails a course of action which are taken in order to attain measurable
and specific goals. While formulating any business strategy, management is required to prepare
an action plan so as to smoothly run all activities and functions. It enhances the sales and
profitability level of firm and thus, appropriate decisions can be made (Ackermann and
Audretsch, 2013). Present assignment is based on ALDI that is one of the leading and growing
retailing organisations across world. It has over 10000 stores in several countries. The main
motive of ALDI Ltd. is to provide healthy and value added products and services to customers to
retain their interest for long period of time. The report is going to be describe vision, mission,
goals and objectives of the business organisation and the extent to which they inform strategic
planning. Readers will also come to know about certain factors which are involved in strategic
planning. Furthermore, organisational and environmental audit will also be conducted for
developing new business strategies and policies.
PART 1
1.1 Extent to which Aldi’s goals, objectives, core competencies, vision and mission inform
strategic planning
A business strategy consists to provide directions or guidance to manpower for
accomplishment of vision and mission statement of the company. While preparing any business
strategy, it is essential for managers of ALDI Ltd. to determine mission, vision, goals and
objectives of company which they want to attain in the future. Basically, strategic planning
encompasses with all management approaches that help in setting priorities, resource allocation
as well as in maintaining business operations towards employee benefits (Annabi and McGann,
2013). The aim of strategic planning is to fulfil resource requirements of an organisation and
make its activities more effective as well as compatible with external environment. It should be
distinct and flexible so that future outcomes can be attained in a better manner. Below described
are the vision, mission, goals, objectives and core competencies of ALDI Ltd.: Vision statement – It explains future outlook of a company which signifies potential
growth and advantages of a company. The vision statement of ALDI Ltd. is to create
imperative distribution channels which are enable for fast delivery of goodies at
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workplace; this can driven up production level. In this manner, organisation will be
capable to make higher contribution in increasing economy condition of UK. Mission statement – It is associated with firm's desires so as to meet the expectations of
stakeholders. Mission identifies the ways through which a business will run; it also
involves number of customers, range as well as quality of goods and services, etc. The
mission statement of ALDI is to reduce complexity for customers' benefits by providing
them high quality and standard products. Goals – It refers to common guidelines which an association wants to attain within
minimum time period. The main goals of ALDI Ltd. are to deal with an effective
corporate governance in order to increase accountability. It attempts for evolving various
drivers of growth as an attractive business profile can be made (Auzair, 2011). Objectives – Objectives are those stages which help in achieving the set goals. The prime
objective of ALDI Ltd. is to determine different factors which are getting involved in
decision making process of strategic planning.
 Core competencies – It states with certain special skills and abilities that aids a business
to compete with its rivals. Core competencies can also boost up the brand image in
customers' eyes to win their trust of faith.
1.2 Factors to be considered when formulating strategic plans
It is fundamental for every business organisation to determine certain major factors which
are related with its strategic planning. Basically, strategic planning is the process of by which a
company will identify its strategy towards grow and diversify in target market. It is also liable
for resource allocation for pursuing strategies and policies and render guidance for
implementation of a business strategy. There are defined major factors which must include in
strategic planning, like -
Internal factors: These are some factors which are necessary for the development and
growth of the organisation. They play vital role in success of any firm. Strong internal factors
help the organisation in fulfilling the objectives in effective and efficient manner (Azar, 2011).
There are as follows: Values and Ethical system: The organisation should have strong value and ethical
system for proper functioning of the organisation. Today many people from different
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culture works in an organisation, if the value system of the organisation is effective then
the employees will feel motivated and energetic and will produce better outputs. Human Resource: Strong Human Resource or the quality of people is very important for
the success of the organisation. Highly qualified and skilled employees produce great
outputs to the organisation (Bharadwaj and et. al., 2013). The management of the HR
should be done in effective manner so that it pay attention to every employee properly.
 Top Management: If the firm wants to lead in the market, it should have a strong top
management because all the important decisions are taken by the top management and
their decisions leads to the success of the organisation.
External Factors: These are some of the factors which plays a vital role in the success
and growth of the organisation. They are as follows: Technological: There are continuous advancement in the technology every day and it is
important for ALDI Ltd., to adopt them to remain well updated in the market. Political: Political include the forces which are in power. These forces effects the
working of the organisation.
 Economy: The economy of the country mostly affects the organisation condition due to
fluctuations like: terrorist attack, currency of the country, political party in power etc.
1.3 Usefulness of techniques used when business develops their strategic plans
Several tools and techniques are used in strategic planning process so as to create an
effective and innovative business strategy. In this relation, it is necessary for management to
analyse certain ways of that are assistive in attaining goals and objectives of the company
(Bucolo and Matthews, 2011). Different approaches like BCG and SPACE matrix can be
acquired by ALDI Ltd., for creating business strategies and policies.
BCG matrix of ALDI Ltd.:
It is known as business portfolio analysis tool which provides graphical representation of
a corporate association which consists with market share as well as industry growth. BCG matrix
is a two dimensional analysis which is used by management evaluating its potentials. Boston
Consulting group matrix is classified into four parts is stated as under: -
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(Source: THE BOSTON CONSULTING GROUP (BCG) MATRIX, 2018)
 Stars – It involves such products which have huge market share and fast growth rate.
They can generate vast amount of cash for ALDI Ltd., as if its management make higher
investments in them. A star unit can business successful cash cows as per the industry
mature. Cash Cows – It represents those units which are having large market share in slow
growing industry. Such products needs lower investments and create high cash. When
cash cow products can lose their appeal then business entities, like ALDI Ltd., must
pursued a retrenchment policy (Kalyani and Sahoo, 2011). Question marks – These business units have low relative share of market in situated in
high growth industry. Question mark requires vast capital so as to cope as well as
accomplish market share of ALDI Ltd. Generally it includes new products and services
that have an effective business prospective. Dogs – These goods entails low market share in low growth market industry,Dogs cannot
create cash and not needed much amount of cash. Due to their low market share, such
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Illustration 1: BCG matrix

business units are liable for cost disadvantages. In order to improve dog products, ALDI
can use retrenchment strategies.
SPACE matrix of ALDI Ltd.:
The strategic position and action evaluation matrix aids to examine the wisdom and sense
in a specific strategic plan. It can be used to review a firm's strategy so as to make essential
changes (Köseoglu and et. al., 2013). It also helps ALDI Ltd., in predicting all the themes and
establish a balance between internal and external factors.
External factors
 Industry attractiveness Environmental stability
Internal factors
 Competitive advantage
 Financial strength
2.1 Organisational audit
An organisational audit defines to analyse all those factors or components which can
affect working activities or functional area of an organisation in direct and indirect manner. The
functional area of ALDI is classified into two parts, and now the firm is trying to expand its
business in Essen so as to become ALDI Nord and ALDI Sud whose headquarter is in Mulheim.
Furthermore, operating in several nations, still the firm is a small player of Great Britain by
having a low market share, i.e. 3.6%. Thus, in order to extend market share management is
required to manipulate internal analysis; it also assists in decisional activities of the firm.
Organisational audit can be done through SWOT analysis of the company.
SWOT analysis of ALDI Ltd., is defined as under: -
Strengths
 The major strength of the company is it flourish at global level, there are so many people
are well known about the brand and its products as well (Matzler and et. al., 2013). The
faster growth of ALDI has been when its combined market share raised by 12%; it led
there were over 1.1 million people visited the store.
 In 12 weeks the market share of the ALDI Ltd., increases by 19.8 % which were higher
than its other competitors, such as- ASDA, Tesco, Morrison's and Sainsburry; whose
turnover merely grew by 1.6%.
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 The market reputation of ALDI is imperative because it emphasis on providing
qualitative products and services at cheaper prices so lower income people can easily
consume it.
Weaknesses
 Instead of giving discounts on its offerings ALDI is still increasing rates of groceries, it
reduces customer’s interest towards company.
 There is yet not so good relations with grocery brands (Meskendahl, 2010). ALDI has intimated with higher ontogeny in 2017, but still it is not able to compete with
British supermarkets, like Tesco have 28% market share, Asda has 15.1%, Sainsbury has
16%, and Morrison's has 10.6% market share in retailing industry of UK.
Opportunities
 The firm has named and famed over the globe, it remains superior by providing higher
qualitative and value added products to target audiences.
 ALDI plans is to generate 5000 jobs in UK by opening it’s another retailing stores in UK
as well as other nations. It helps in rendering higher market growth to the company at
international level. The company has entered in E-commerce market which expand its sales and profitability
in a certain time period.
Threats
 Threat of competitors and environmental changes
 Threat of new entrants in supermarket chain of UK.
2.2 Environmental audit
While conducting an environmental audit, firm will examine all those factors which can
affect its market position or reputation. In this sense, Porter's 5 forces model analysis is used by
ALDI for its environmental audit; it encompasses threat of substitutes, bargaining power of
customers, competitor’s rivalry, bargaining power of suppliers and threat of new entrants (Mitra
and Bhardwaj, 2010). Brief description of all these elements is stated as under: -
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(Source: Porter's Five Forces, 2013) Bargaining power of customers – Buyers have different choices in supermarket, there
are so many stores are easily available for them (Porter's Five Forces, 2013). Some
retailing stores are not negotiate their prices then it affect their market positions; these
issues occurred when buyers want qualitative goods. If ALDI reduces its prices; it results
customers can easily consume them and cannot switch for other association. Bargaining power of suppliers – In this competitive era, there are several suppliers of a
product are easily available cause of their brand image. Such aspects can eliminates the
bargaining power of suppliers as they don't want to suffer with lower profitability. In
UK's retailing market, these are various suppliers of grocery products, hence ALDI does
not have large bargaining power. Threats of new entrants – The leading industry, i.e. ALDI is not miserable with threat of
new entrants because several firms are already actively involved in providing grocery
products and services to customers. Thus, business of ALDI cannot be affect with entries. Threats of substitutes – These are several small supermarket stores are implementing
which are known as ALDI's substitutes. The firm has a threat of customers' interest as it
cannot be shift to other companies.
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Illustration 2: Environmental audit

 Competitor’s rivalry – It is essential for business organisations to keep fixed cost of their
goods as they customers' can easily purchase and they can gain high competitive edge
(Schaltegger and Wagner, 2011).
2.3 Significance of stakeholder analysis when formulating a new strategy
Stakeholders are those people or authorities which supports in completion of all business
activities and task in an effective manner. They should also be involved in decision making
process of the firm so that appropriate conclusions can be made. There are several types of
stakeholders of ALDI, like – government, customers, employees, management, society etc.
ALDI conducts a stakeholder’s analysis so as to fulfil stakeholders' needs and wants in an
effective manner. It is necessary for companies to recognise needs and wants of all stakeholders
of the firm. In such manner, stakeholder’s analysis should be conducted; it can be done through
Mendelow's matrix so as to set all precedences properly. There is defined Mendelow's matrix of
ALDI Ltd., is stated as under: -
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(Source: Stakeholder analysis in project management, 2017) Box A: Minimum efforts – These business partners present in company and lose their
interest in it; it directly affect the firm sales and profitability. Box B: Keep informed – Such stakeholders are very willing or curious by nature but
management does not give them any power (Stakeholder analysis in project management,
2017). Box C: Keep satisfied - Individuals must be satisfied as they cannot lose their interest.
 Box D: Key players – Such people are liable to make any changes or modifications
within organisation. They also have power to decline any policy.
2.4 Presentation of new strategy for company
As ALDI Ltd., have great market opportunities in UK, thus its managers are required to
frame effective strategies and policies. It assists in preserving its market position among target
audiences at large scale. Business organisation should make investments so as to earn higher
sales revenue and profitability (Slater, Olson and Finnegan, 2011). Management is required to
prepare a new business strategy so as to accomplish higher growth and development. ALDI can
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Illustration 3: Stakeholders' analysis

acquire a Porters generic strategy for expand itself in global market, which is briefly described as
under: -
(Source: Porter's Generic Competitive Strategies, 2016)
 Cost leadership – In this, organisation set outs low cost procedures within industry. Cost
advantage sources are depend upon on the organisational structure; it may also
encompasses chase economics of scale. Cost differentiations – In this firms want to be unique by following some dimensions that
highly valued to customers. Managers selected more than one attributes that is perceived
by several buyers. Cost focus – It has two variants, like – firm seeks a cost advantage in their target
segments and another one is differentiation; in this firm seeks to differentiate itself from
target market (Porter's Generic Competitive Strategies, 2016).
 Differentiation – Firm tries to be novel or unique in a specific industry so as to gain high
competitive advantages.
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Illustration 4: Porter's generic strategy