Strategic Planning and Analysis: A Business Strategy Report on Aldi

This report provides a comprehensive analysis of Aldi's business strategy, examining its mission, vision, objectives, goals, and core competencies. It delves into factors crucial for formulating strategic plans, including the analysis of internal and external environments using tools like SWOT, PESTEL, and Porter's Five Forces. The report assesses the effectiveness of strategic planning techniques, such as the BCG matrix and PIMS, and conducts organizational and environmental audits of Aldi. It explores stakeholder analysis, proposes new strategies, and discusses the role and responsibilities of personnel involved in strategy implementation. Furthermore, the report estimates resource requirements and evaluates SMART targets for achieving strategic goals, concluding with an overview of Aldi's strategic positioning and future direction.

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Task 1.1 Mission, vision, objectives, goals and core competencies informing strategic
planning..................................................................................................................................1
Task 1.2 Factors to be considered while formulating strategic plans.....................................3
Task 1.3 Evaluating effectiveness of techniques used in strategic planning..........................4
Task 2.1 Organisational audit of Aldi....................................................................................6
Task 2.2 Environmental audit of Aldi....................................................................................7
Task 2.3 Significance of stakeholder analysis........................................................................9
Task 2.4 New strategy for Aldi............................................................................................11
TASK 2..........................................................................................................................................12
Task 3.1 Analysis of appropriateness of alternative strategy relating to the market entry,
substantive growth, limited growth or retrenchment for Aldi..............................................12
Task 3.2 Selection of strategy..............................................................................................13
TASK 3..........................................................................................................................................14
Task 4.1 Role and responsibilities of the personnels charged with implementation of strategies
..............................................................................................................................................14
Task 4.2 Estimation of resources required for implementation of new strategies...............15
Task 4.3 Evaluation of SMART target to achieve the strategy implementation..................16
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
The strategic management of an business is defined as formulation of plans and policies
and its implementation within an organisation for achieving desired goals and objectives. Top
level management is responsible for framing plans and policies and implement them on behalf of
the owners (Abdellatif, Amann and Jaussaud, 2010). Main objective behind preparation of
strategic plans is to increase organisations growth by achieving determined goals. For
development of effective business strategy it is necessary for management of organisation to
analyse internal and external environment by using tools such as SWOT analysis, PESTEL
analysis and Porters 5 force. The following assignment is based on Aldi business which is an
leading grocery store functioning within the economy of United Kingdom. Mission, vision,
objectives, goals and core competencies of Aldi is being studied significantly which supports in
strategic planning(Business Strategy, 2017). This report will help to understand different factors
which has to be considered while formulating strategic plans for cited organisation and
effectiveness of techniques used in preparation of plans is being evaluated in the context of Aldi.
The assignment will help to determine strategic position of cited business by organisational
audit. New strategies for Aldi and personal who have roles and responsibilities in
implementation is being described.
TASK 1
Task 1.1 Mission, vision, objectives, goals and core competencies informing strategic planning
Mission of Aldi: - It is an statement given by organisation which describes its set of
purpose in respect of operation by which it desire to meet expectations of stakeholders. This
supports in determining how organisation run, its customers, products and services offered and
its quality delivered to consumers.
Aldi's mission statement informing strategic planning is being stated as follows: -
 To provide wide range of products at affordable price.
 To increase its market share.
 To increase number of customers (Amit and Zott, 2012).
 To gain loyalty. To develop its brand image.
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Vision of Aldi: - It is another statement given by organisation which states its future
expectation. It describes its future path which has to be done in the future. It supports in
determining benefits and business growth.
Vision statement of Aldi: -
 To be high valued organisation by its customers, staff and shareholders.
 To serve its products and services at global level (Astrachan, 2010).
 To be innovative and modern organisation. To be high growth retailer.
Goals and objectives: - It is an general plan which business desires to achieve within a
specific time frame. Objectives of a organisation are stages to attain goals. The long term plans
of a company are referred to goals whereas short term plans are business objectives.
Goals and objectives of Aldi are described as follows: -
 To develop it retail business service.
 To be most successful retailer at global level.
 To increase its business growth. To provide high quality products and services at affordable price.
Core competencies: - The special skills and qualities of an business which helps to
distinguish an organisation from its competitors are known as core competencies. This supports
organisation to develop its brand image within its target market which increase number of
customers towards it. It is only an factor which enhances the profitability of an enterprise.
The main core competence of Aldi is its wide range of products and services at an
affordable cost which supports in attaining its purposes effectively.
The mission statement of organisation states set of business purposes while vision defines
future of organisation i.e. what they want to be in future and core competencies are special skills
which helps to differentiate organisation from its competitors within its target market. All these
in the context of Aldi is being stated above. These play vital role in formulating strategic plans
for business. Strategic planning is waste if it is not developed as per firm's vision and mission.
These statement helps to determine current and future objectives of Aldi and supports effectively
in strategic planning.
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Task 1.2 Factors to be considered while formulating strategic plans
The process which is formulated and implemented by top level management of an
organisation on a behalf of owners is known as strategic plans. It supports organisation in
allocation of resources which are necessary in attaining strategy effectively. The process of
planning act as an guideline in implementation of strategies framed within organisation
successfully (Bharadwaj and et.al., 2013). There are some factors which has to be considered
which preparing strategic plans for organisation. These factors are described as follows: -
Contents of strategic plans: - The strategic plans prepared by business for achieving
different purpose contains different elements which are stated as follows: -
Mission: - It is an statement which defines main purpose of business operation and its targets.
Values: - It states the principles of organisation according to which it works and its own
determined standards of behaviours.
Vision: - It defines the future of organisation i.e. what it wants to achieve in longer period.
Goals and objectives: - It is an general thing which an enterprise tries to achieve through its
operations. They must have SMART objectives i.e. specific, measurable, attainable, real and
timely.
Strategic goals: - This are defined as achievements that business will seek for the longer period.
Strategic objectives: - It is referred to short term objectives which they want to achieve in
present time. These are more tangible in nature.
Accountability Framework: - The significant strategic plan must officially the part of
organisations structure. This supports in effective strategic planning.
Competition: -
At the time of framing strategic planning it is important to analyse position of
competitors operating in similar market. An business cannot achieve success without analysing
level of competition in marketplace. Aldi must determine the strengths and weakness of its
competitors and it is also important to evaluate how its competitors fulfil needs and wants of
their customers (Boons and Lüdeke-Freund, 2013).
Strength and weakness: -
The SWOT analysis plays important role in framing strategic plans for an organisation. It
defines internal factors of business i.e. strengths and weaknesses, apart external factors which are
opportunities and threats. It is necessary to determine internal strengths of business and they
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must take necessary action to enhance it. Apart from this identification of weakness which
supports in determining factors declining the growth of organisation. It also supports in taking
necessary steps for eliminating of weaknesses determined. All this supports in preparation of
strategic plans which significantly supports in business growth.
The industry: -
At the time of strategic planning by top level management of organisation it is necessary
and most important to evaluate overall industry working in similar sector. In evaluation of
industry it is essential to consider elements such as size of market, new market entrants,
competitive profitability, past growth and threats in future. Activities of business are highly
impacted by change in these elements.
Needs of customers: - At the time of strategic planning it is important for business to
determines the customers requirement within its target market. The determination supports in
getting the knowledge about the actual need of consumers and their expectations in relation to
products and services. This will help in strategic planning for its operations accordingly and
assist in taking benefits of it.
Future direction of competition: - The Aldi is facing cut throat competition form Lidl.
The market share of Aldi is being recorded at 17.6 while Lidl's market share is 17.9 which
means there is only an difference .3 points which is too good. If the organisation follows above
mentioned factors it which effectively help in increasing it market share and supports in
competing with competitor.
Task 1.3 Evaluating effectiveness of techniques used in strategic planning
The Aldi retail company can use different techniques in development of strategic plans.
The main two techniques suggested for Aldi are described as follows: -
BCG growth share matrix: - This tools is designed in such a way which assist in development
of of organisations long term strategic plans. These tool is divided among four components
which derives market growth and relative market share. The four components of BCG matrix
are Stars, Cash cows, Dog and question mark. These are described as follows: -
1. Stars: - It represents the situation of a organisation which have a high market growth and
market share. As per this situation business needs high amount of capital in formulating
decision in order to survive in market of high growth (Campbell, Edgar and Stonehouse,
2011).
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2. Cash cow: - It states the situation where market growth is low and market share is high.
As per the situation business faces issue of low satable growth in a market. Apart from
these organisation have significant benefits of increased market share which supports in
generating high revenue (Carney and et.al., 2011).
3. Dog: - This situation is completely opposite of stars. It states the situation where both
market growth and market share is low. Under this condition organisation faces problem
of low profits out of products and services provided by it.
4. Question mark: - It is a situation which defines high growth of market with significant
decline in market share. At this condition organisation faces significant losses due low
market share.
Advantages of BCG matrix: -
 Helps organisation to understand when to make investment.
 Supports in determining when to disinvest.
 It is simple tool and easy to follow (Zott, Amit and Massa, 2011). Helps to make better decision for future.
Disadvantages of BCG matrix: -
 It faces difficulty in collection of data related to market growth and market share.
 Sometime low market share can define higher profitability.
 Sometime high market share may define less profitability.
 In this term market is not defined clearly.
PIMS: - It is referred to Profit impact of market strategy which supports in sustaining
competitive advantage by providing evidence to assist procedures and policies. This supports
Aldi in accomplishing and implementing procedures and policies.
PIMS strategy is based on certain facts which are as follows: -
 Type of organisation environment.
 Structure of production process.
 Competitive business position (Carroll and Shabana, 2010).
 Allocation of budget.
 Development of strategies.
Ansoff's matrix: - This strategy is also stated as Ansoff product and market growth matrix or
product market matrix. It is most effective tool used by organisations in strategic planning and
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marketing. The main use of following matrix is to develop marketing strategies along with
general strategies.
Market Penetration: - It is an significant strategy used by organisation with its existing products
in determined market place. It completely deals with how to sell existing goods in its target
market. This supports organisation in increasing its market share within launching new product
or developing new market.
Market Development: - It is another strategy which states start of existing business in new
market or geographic area. It helps organisation in increasing new customers towards its
products. This do not involves development of product it only focuses on expansion of business
in new market place.
Product Development: - It an another strategy which focuses on introduction of new products in
determined market. The strategy effectively supports Aldi in increasing more number of new
customers and assist in retaining interest of existing customers.
Diversification: - As per the following strategy complete new products and services are
introduced in new market. It directly supports organisation in its expansion and increase
profitability.
Task 2.1 Organisational audit of Aldi
The organisational audit of Aldi business is be conducted by using tool i.e. SWOT
analysis. It supports enterprise to identify it strengths and weaknesses which are internal factors,
also external factors i.e. opportunities and threats. This supports organisation in determining its
strategic position (Casadesus-Masanell and Ricart, 2010). The SWOT analysis of Aldi
organisation is being described as follows: -
Strength: - The main strength of cited business is that it gives guarantee of serving high
quality of products to its customers. Apart from this it posses significant strength of offering
products at lowest cost than its competitors operating in similar market place. It operates
approximately 25000 stores within economy of Germany. It have significant strength of keeping
cost of operation low to the possible level. Aldi functions in approx 15 countries world wide.
Weaknesses: - The main weakness Aldi faces is that it is relatively too small organisation
as compared to other. It have no impact at global level as it have very few stores. Sometimes,
Aldi do not maintain it quality of product offered to customers (Zott and Amit, 2010).
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Opportunities: - Aldi have great opportunities for expanding its business in new
developing countries which will support it in increasing its market share and help in earning
more profits out of its operation. It have great opportunity to spent more amount of funds on
business promotion which supports in developing brand image and increases number of
customers.
Threats: - Aldi faces biggest threat form its competitors working in same market place.
The decline in sale of its products and services adversely affects its profitability. It growth is on
risk position because of high unemployment.
By considering the internal and external factors of business with the helps of SWOT
analysis it is can be said that Aldi have significant competitive advantages in market place. By
facing highly competitive market cited organisation is effectively expanding its operation in new
international market. This supports enterprise in increasing new customers and high revenue
generation with developed brand image (Chen and et.al., 2010).
Benchmarking: - It is process of comparing business process and its level of performance with
its competitors. It typically supports in measuring quality, time and cost. It can be used by cited
firm by certain indicators such as cost per unit of measure and productivity per unit measure.
Value chain: - A set of activities which is performed by business in order to offer valuable
products. It is an significant process by which organisation tries to add values to its products and
services and it also includes production, marketing and after sale services. The Aldi can provide
extra services to its customers on purchase with after sale services it will effectively help in
adding values to its products and services,
Task 2.2 Environmental audit of Aldi
The Aldi organisation have used Porters 5 force analysis for conducting environmental
audit. It will support organisation in determining factors which impacts its operations. The
Porters 5 force analysis of Aldi is being described as follows: -
Threat to new Entrants: -
The threats form new entrants is too low for Aldi organisation. It is just because high
amount of capital is required to establish new business and there is high competition in business
market.
 The required cost in establishment of new brand in high competitive business
environment is too high. It also requires more funds in order to keep stock and inventory
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which directly reduces threat from new entrants for Aldi in the economy United Kingdom
(Gambardella and McGahan, 2010).
Threat of Substitute Products: -
The Aldi organisation is active in changing range of products as per variation in trends. It
changes products effectively by analysing changes new trends where business operates. Aldi
organisation is operates with small stores which directly limits range of products which are to be
offered. Substitutes products can be offered by large organisation operating in same economy
which increases threat of substitute products for Aldi.
The bargaining power of suppliers: -
The suppliers of Aldi have too low bargaining powers. The Aldi have purchases products
in bulk quantity which directly declines power suppliers in relation to cost of products and this
increases buying power of cited organisation (Woodcock, Green and Starkey, 2011).
The bargaining power of buyers: -
The buyers of products offered by Aldi is too high. It is just because of its competitors
offering similar products and services within same economy. It is also because Adli do not
provide loyalty schemes to its customers and do not provide extra benefits.
Rivalry among Existing Firms: -
Aldi face high rivalry from existing firm operating in same economy. Many of its
competitors offers same products at similar price level which directly increases rivalry for cited
business. It is also facing high rivalry because of effective promotional tools used by existing
firm (Gebauer and et.al., 2010).
Above Porters 5 force analysis supports in providing complete information about the
factors which affects functioning of Aldi.
PESTEL analysis: - Political Factor: - The cited firm operates at global level and its is highly impacted by
political conditions. The good political condition of country where it operates supports in
its effective performance. Apart for this Aldi's profitability is also affected by changes in
tax rates. Economic Factor: - It is related to demand and supply of products and services in the
market. The slow down in market have declined the profitability of Aldi and its is risky
for its operations.
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 Social Factor: - It is related to values, beliefs and preferences of individuals where Aldi
operates. Business operation as per following factors supports in success of business
while violating these may lead to shut down of firm. Technological Factor: - This factor have significant impact over organisation. Adaption
of technologies according to change supports in success for Aldi. It have started online
shopping website as per technological change. This assist in increasing customers for
products offered and leads to success. Environmental Factor: - It is important for business to conduct activities in ethical
manner. Its operation must not harm environment where it operates. These also have
positive and negative impact over Aldi.
 Legal Factor: - The legal rules and regulation by government of United Kingdom
directly influences performance level of Aldi.
Task 2.3 Significance of stakeholder analysis
The stakeholders are referred to individuals, organisation or group who have involvement
with business. Creditors, employees, directors, customers, suppliers, government all are defined
as stakeholders. Analysis of stakeholder is an effective tools to determine which individuals
support activities of organisation (Grant, 2016).
Importance of stakeholder analysis: -
 It helps in receiving effective suggestions from stakeholders.
 It enables in getting support from good stakeholders.
 It is important to check interest of all stake holders while implementing strategy for
business.
 It supports in determining roles and responsibilities of different stakeholders.
 It supports in analysing risk involved in new strategies of business.
The main stakeholders who have interest in Aldi and who can influence business
operations is being described as follows: -
Employee: - The employees of an organisation are main stakeholders. Aldi must ensure that
employees must be retained in business for longer time period. It is just because hiring of new
staff leads to incur high cost for business which directly increases operational cost. They must be
given proper training to gain competitive advantage (Welch and et.al., 2011).
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