ALDI's Business Strategy: Goals, Analysis, and Recommendations Report

This report provides a comprehensive analysis of ALDI's business strategy. It begins with an introduction outlining the importance of strategic planning for achieving desired results. The report then assesses ALDI's goals, objectives, mission, and vision, followed by an examination of factors to be considered while formulating strategy. Various techniques such as the BCG matrix and Ansoff Matrix are discussed. The report includes an organizational audit using SWOT analysis, and an environmental audit using Porter's Five Forces model to assess the competitive landscape. The roles and responsibilities for strategy implementation, required resources, and the use of SMART targets are also addressed. The report concludes with a summary of findings and recommendations for ALDI's strategic development.

BUSINESS STRATERGY

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1.1 Assessment of goals, objectives etc. of ALDI......................................................................1
1.2 Factors to be considered while formulating strategy............................................................2
1.3 Effective methods and techniques.........................................................................................4
2.1 Organisation audit.................................................................................................................5
2.2 Environmental audit..............................................................................................................6
2.3 Significance of stakeholders for forming new strategy.........................................................7
2.4 Presentation of new strategy for the company......................................................................7
PART 2............................................................................................................................................8
3.1 Analysation of appropriateness of alternative strategy linked with Aldi..............................8
3.2 Justification of the strategy which is correct for business.....................................................8
PART 3............................................................................................................................................9
4.1 Roles and responsibilities of personnel who can engaged in implementation of strategy....9
4.2 Important resources required for executing strategies........................................................10
4.3 How use of SMART targets can be contribute for achieving strategic objectives.............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategies are the code of conduct which are being followed in order to achieve the desired
results. different strategies have their own way of implementing and therefore it is required that
before bringing the work into action strategies are properly communicated as this will further
raise the possibilities of achieving results with minimum deviations (Gollakota, Gupta and
Bork,2010). ALDI is a global discount supermarket having its chains in different parts of the
world. There are a number of departments under this same stores and therefore it is required that
proper planning is done for each one of them so that turnovers of every different year is
maintained. In the following report evaluation of various strategies will be done for which
mission vision and goals of Aldi will be discussed in detail. Thereafter, factors to be considered
while formulating the plans will also be highlighted. Various techniques will be highlighted like
BCG matrix which are helpful in examining the effectiveness of distinct plans.
PART 1
1.1 Assessment of goals, objectives etc. of ALDI
Plans that help in accomplishing the desired goals and targets is known as business
strategy. Before practically starting on work every enterprise construct its mission and vision and
keeping same in mind the strategies are formulated. ALDI in order to develop design plans in a
manner that maximum return on investment is achieved. Various strategical terminologies in
context of Aldi are discussed below:
Mission – It is the statement that describe the actual objective of the organisation. Aldi
aims at bringing improvement in the quality of services and maximising the quality of services.
The mission statement of referred organisation is to develop self-abilities so that quality
standards are maintained and stakeholders are kept happy (Woodcock, Green and Starkey, 2011).
Vision – The referred organisation keep control over its total supply chain so that they can
ensure timely delivery of products. Bringing development in the economy of UK is also ensured.
Goals – ALDI is working to facilitate multiple drivers so that development in the long run
is ensured.
Objectives – The core objective of referred organisation is to create working atmosphere
where maximum output is produced at minimum cost.
1

Core Competencies – Competitive working staff and skilled employees help organisation
in taking advantage of all the available resources. Expert technology and advanced resources also
add more capacity to the referred organisation.
The above discussion shows how mission vision and other important areas are different
for Aldi. As they are formulated at initial stages it helps management in determining the most
effective and suitable strategy for the organisation that can help in reducing the gap between
expected and actual result. Strategies when designed according to the requirements of a
particular business than they become more efficient.
1.2 Factors to be considered while formulating strategy
In order to carry out the different operations of the organisation various factors need to be
considered among which few are present within the work place and some other that are their
outside the business boundaries (Tsamenyi Sahadev and Qiao, 2011). Distinct factors have their
own impact on the operations and accordingly need to be maintained. Those factors that are
present within the business has major and direct influence on the business and those which are
present outside has indirect impact. All the factors have their own positives and negatives and
hence while framing the strategies these factors need to be considered. The positives and
negatives of each factors are discussed below in detail:
Basis Advantage Disadvantage
Internal More skilled and dedicated
work force helps in achieving
the set targets and objectives
in the best possible manner.
In case of any personal
issue like conflict among
the working staff or any
other act which can disturb
the smooth function has its
direct impact on the results
of business and adversely
affect the brand image.
Change in the cost of
labour also has indirect
impact on the profitability
2

of business as costly work
force increases pressure on
the business to reduce the
profit margin.
External There is continuous change in
the business surroundings.
There are times when
advancement in technology is
observed and by adopting to
same better output can be
produced at reduced cost
(Teece, 2010).
Continuous change in the
technology brings pressure
on management to remain
updated and in order to
compete with the other
companies much
investment need to be done
on the procurement of
machinery which further
raise the total cost of the
firm.
Figure 1 Ansoff Matrix, 2018
3

In order to do effective business in long run Ansoff Matrix plays an important role. It
helps in formulating effective strategies for different areas like maintenance of product
innovation, development of same and creating a profitable market for a new product. It is an
expansion grid that assist in identifying risk associated with different areas of the new
commodity.
Market Position – It involves ways through which the referred organisation can place its
product in the market and can achieve the competitive advantage.
Customer demand – This helps in identifying the requirements of different customers so
that accordingly same can be made available to them which helps in earning more returns.
After identifying the ways through which development can be done missions visions and
objectives are set for the organisation as whole which raises the total results of the firm.
1.3 Effective methods and techniques
There are diverse number of appropriate procedures that can encourages their assistance in
outlining and confining methodology for business (Scholes, 2015). For powerful arranging, it is
vital for picking a few procedures and techniques that will be useful in having required targets
and objectives. Some different methodologies are resolved that help with making and
surrounding strategies of business. They resemble SPACE, Ansoff Matrix and Boston Matrix.
It can be resolved to be helpful at time of making section in the new market zone and wish for
having considerations of purchasers towards their company's item and administrations.
Alongside it, ANSOFF MATRIX is knowns as a powerful and sound system keeping in mind the
end goal to manages business development and present course for the future time. These
techniques and methods are spoken to four noteworthy systems to achieve effective development
to the firm. There are a few factors that gives help in regard to investigate whole market territory
that are nitty gritty as-
Market entrance - It is suggesting in improving existing creation for the present market
territory through various procedures. Through performing it, ALDI needs to update their
estimating technique, exercises of offers advancements and so on in understanding of it, they are
expected to cantered around clients and commercial centre.
Market improvement in the firm, organization offers their products and enterprises in the
new commercial centres. They are not required for building up their generation with a specific
end goal to utilize fitting strategies that can make new purchasers in powerful way.
4

Item improvement this methodology is utilized an organization are confining their present item
and administrations at the present commercial centre. It will be done through boosting esteems
and offering best quality products and ventures of their wished clients in adequate way.
Enhancement- This technique is utilized when organization is driving with current item at the
new market. In this respects, every one of the purchasers and products are concocted new
highlights as well.
2.1 Organisation audit
In order to formulate various strategies this is very important that management is well
aware about the distinct strong and weak areas of business (Montgomery, 2011). This way
deviations in expected results are minimised and also corrective actions are taken so that
negative results are minimised. SWOT analysis is an effective tool through which internal factors
are evaluated which further helps in doing future planning.
Strength of ALDI Company- Internal factor of the organisation.
The major strength of the referred organisation is that it offers quality products and
operates in over 15 countries worldwide. The Operating costs is low which makes the prices of
the products economic. It is growing rapidly with a rise of 12% in market share. Aldi has strong
distribution channel covering majority of the market which is due to strong suppliers of raw
material (Martin and Rice, 2010.). It has expertise in working in new markets and has strong
brand portfolio. Lastly the strong part with the referred enterprise is that it has achieved success
in merger and acquisitions.
Weakness of ALDI Company- Internal factor of the organisation.
The areas which need improvement fall under this category. The financial planning is not
done properly and efficiently in Aldi. The profitability ratio of referred enterprise is below the
industry average. Limited successful in other segments except their core branch. Attrition rate is
high in work force and technologies require more investments which raises cost of the
organisation. Still it is relatively small as compared to other brands in the market and also has
less impact globally.
Opportunities of ALDI Company- External factor of the organisation.
Opening of new market with new technology to capture new customers and increase market
share. Aldi is enabling credit at lower rate to customers. Market development will lead to
dilution of competitors and will increase its competitiveness. Investment in making affective
5

advertisement can lead to beat competition and also expanding in other countries which are
economic.
Threats of ALDI Company- External factor of the organisation.
High level of competition from leading supermarket brands like- Woolworth and Coles.
Risks can be associated with the suppliers. New technology made by the competitors could be a
serious threat to ALDI (Peteraf, Gamble and Thompson, 2014). Increased number of players in
the market which impacts on stability of the company. New regulation of the environment can
impact the profitability of the company. Laws and policies of different country can be a threat to
the market of ALDI.
2.2 Environmental audit
Porter's five force model or tool through which environmental audit of ALDI organisation is
done and because of this audit this organisation will able to find about competition in their
industry and it also helps in finding about company's profitability potential (Martin and Rice,
2010).
Competitive or Industry Rivalry: In today's modern technology world, cost of products
and services with the same intention of quality is the main reason behind any firm to compete
other ones. And cost is the among one good advantage for ALDI firm because this organisation
follows one simple rule or policy that is provide products and services at low fixed cost with
maintaining the quality.
Threats of New Entry: This is the main reason behind to downgrade the existing firm
though using latest technology or equipment’s with highly skilled work labour. This ALDI firms
will feel strong competition in today's entrepreneurship environment.
Threats of Substitutions: Nowadays door to door delivery of services started through small
business and from entrepreneurs. This is now another challenged faced by existing big firms. To
encounter this collaboration of two same or different organisation is the best way to stay and
compete in this competitive socio-economic world.
Bargaining Power of Suppliers: To decrease the price of products or services from
suppliers, switching from one to another supplier is best way of reducing the price in today's
entrepreneurs and competitive world with the same intention of quality (Peteraf, Gamble and
Thompson, 2014).
6

Bargaining Power of Buyers: In today's technology world, buyers are so smart they always
search first about products and find the best low price for required product with same quality. To
encounter this situation, ALDI has to look around all possible markets for promotions and
displaying details about its products.
2.3 Significance of stakeholders for forming new strategy
Stakeholders are those members of regime either individual or group of members who
passionately contribute their work with full of dedication to organisation for achieving
future growth specially in the sector of social and economic.
ALDI has identified and deliver their tasks according the stakeholders responsibilities for
achieving viable returns from this technology market environment and also for enhancing
their economic growth. ALDI broadly categorised its shareholders into three categories such
as: internal shareholders, external shareholders and connected shareholders.
ALDI follow Mendelow's Matrix for stakeholder’s procedures for returns from stakeholders in a
very effective manner according to their responsibilities.
This Mendelow's Matrix will be broadly categorised into four parts which are discussed below:
Box A- Minimum Effort: These business partners or members have lack of intention to
give their best towards company to achieve economic growth.
Box B- Keep Informed: These members of stakeholders have keen interest in improving or
giving suggestions but they have lack of power to do or express their work.
Box C- Keep Satisfied: Aim behind to satisfy stakeholders is not to take profit from their
interest.
Box D- Keep Participation: They are the one who drives management powers and they
also have power to stop running management’s strategy if others are not satisfied with
existing strategy or policies. They are the one who delivers and share the strategy with
others and convey them in detail about the policy or strategy. They discuss threats or issues
with other stakeholders and find solutions also for betterment of their firm or organisation.
2.4 Presentation of new strategy for the company
As per the discussion this has been evaluated that the refereed organisation needs to give
emphasis on the strategies so that it can achieve the competitive advantage. Investment strategies
needs to be reformulated so that maximum returns are achieved by the management on the total;
investment made by the same (Köseoglu and et. al., 2013). More emphasis needs to be given on
7

customer interaction as this further assist in raising the total sales along with the development in
relation with customers. Business strategy is all about designing effective schemes for attaining
company goals in a defined time frame. In fact, numerous of strategies are identified which plays
a very eminent role in enhancing the performance of an association by assisting employees
towards corrective path. Therefore, market growth is one of the most useful scheme that is
adopted by an enterprise for dealing with current situation in order to fulfil the needs or demand
of distinct clients. However, its all about analysing the market for understanding the need of
various consumers belongs from different age groups like; kids, youngsters, adolescents and old
age people. In fact this strategy is very beneficial for company success because it helps in
classifying the market into different segments in order to identify the need or requirement of
several group of consumers.
(Source:- Major supermarkets, 2016)
According to above graphical representation it has been identified that ALDI is not
having much more share in current marketplace due to which they need to make changes in their
business strategy for enhancing their performance. Along with this, it is also essential to
implement useful activities for assisting employees towards corrective path. Thus, main mission
8
Illustration 1: Major supermarkets

of an enterprise is to establish their positive image at marketplace by gaining trust or loyalty of
various clients.
PART 2
3.1 Analysation of appropriateness of alternative strategy linked with Aldi
Aldi is a big brand and having a good market image. A number of market strategies is
used by the management that helps the administration in developing a strong bond with the
market. Planning associated with distinct strategies are as follows:
Alternative strategy Option Explantation
Market entry strategies The refereed enterprise has an
alternative to provide its
products in market by using
distinct sources.
By exploring new market and
medium more customers can
be reached at the same time
and higher revenues can be
earned (Jocovic and et. al.,
2014).
Substantive growth By entering into new segments
like food it can enhance its
total market share.
When new products are made
available in the market it helps
in enhancing the sales and
goodwill of organisation in the
industry.
All the above information shows that number of strategies are identified at marketplace
which helps an enterprise in improving the standard of an association. In fact, these schemes are
useful in identifying the current needs of distinct consumers in order to design goods as per their
choice or preferences. Although, growth schemes are trying to understand current position of an
association at marketplace for making changes at workplace.
3.2 Justification of the strategy which is correct for business
Different strategies have distinct problems associated with them as there is difficulty in
implementing few and on the other hand few of them require skilled work force. Proper research
and survey must be done so that management can reach to such decision which is acceptable by
all. Strategy which is easy to implement practice and carry out should be practised and it should
9

be ensure that all the required resources are made available so that no difficulty is faced by the
work force during the course of action (Gandolfi and Hansson, 2010). Proper training should also
be provided to all those associated with the same so that they can contribute in the
accomplishment of organisation goals. For Aldi substantive growth can be beneficial as by
entering into different sectors it can expand its scope and hence this will increase the total
revenues of the business.
Market growth is one of the useful scheme that is used by selected firm for enhancing
their current performance by satisfying the needs or demand of clients. Along with this, it aids in
segregating market into various parts for designing goods as per their need or requirement in
order to control chances of wastage. Hence, this strategy is useful for company success and
development due to its effectiveness towards their customers. Moreover, societal member is seen
as most indispensable asset because products are finally consumed by them only. Therefore,
identifying clients requirement is necessary for growth of an association in a defined time frame.
PART 3
4.1 Roles and responsibilities of personnel who can engaged in implementation of strategy
For whatsoever modifications required in existing strategies and policies should must
involve ground level employees for implementing in a better way than previous. Because in the
last they are the peoples of organisation who adopt and implement these policies and strategies to
achieve company's desired vision and mission.
Employees of organisation who are involved in executing new or existing strategies have
different roles and responsibilities with respect to their working criteria. Some of these aspects
are discussed here:
Top Administration: This group of peoples of an organisation is primal for preparation
and maintenance of blue print for executing policies and strategies which have all prerequisite
details in proper sequence about procedures which is required for implementation of policies.
Centre Level: This group represents intermediate superiors like team leaders,
supervisors, departments head and managers. The members of this group play important role
because they are the one who convey the company vision and mission with policies to
organisation employees. They are the one who motivate and give their support to the employees
of an organisation (Campbell, Edgar and Stonehouse, 2011). All the desired information about
10