Exploring Resource Allocation in Diverse Businesses

The assignment focuses on understanding different business strategy tools such as the BCG Matrix, which helps companies analyze their product portfolios to allocate resources effectively among growth opportunities. The SPACE Model is explored as a strategic tool for assessing a company's internal strengths and external positioning against competitors. SWOT Analysis is discussed in terms of its utility in identifying strategic directions by evaluating strengths, weaknesses, opportunities, and threats. Additionally, the assignment looks at market share trends in UK grocery retail companies to understand competitive dynamics. By examining resource allocation strategies used by companies with significant market shares, insights into achieving sustainable growth through strategic planning are provided.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Mission, vision, objectives, goals, core competencies to inform strategic planning............1
1.2 Factors that consider when formulating strategic planning..................................................2
1.3 Effectiveness of techniques used when businesses develop their strategic plans.................3
2.1 Organisational audit for ALDI to analyse their current strategic position............................4
2.2 Porter’s 5 Forces analysis for environmental audit of ALDI................................................6
2.3 Significance of stakeholder analysis for ALDI to formulate new strategy...........................7
2.4 New strategy for ALDI.........................................................................................................8
TASK 2..........................................................................................................................................11
3.1 Suitable strategy for ALDI for market entry, substantive growth, limited growth or
retrenchment..............................................................................................................................11
3.2 Justification of one of the strategies for market entry and growth.....................................12
TASK 3..........................................................................................................................................12
4.1 Roles and responsibilities of personnel which are involved with implementation of
strategy......................................................................................................................................12
4.2 Resources required for implementation of strategy............................................................12
4.3 Use of SMART targets to achieve strategic objectives.......................................................13
CONLUSION................................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Organisational objectives are highly futuristic and it can not possible for organisations to
attain them with out using of business strategy. It is a written document which contains a long
term plan to promote sales and increase scope of trade in new markets. It provides a path to
managers to determine their working procedures and productivity to achieve business targets.
Generally a business strategy contains objectives, time frame and strategy to achieve these pre
determined targets in deadline (Cinquini and Tenucci, 2010). This report is based on ALDI
which is 5th largest grocery retail company of UK. This report is containing details up on
mission, vision role to inform strategic planning and factors which influence in strategic plans
formulation. Different techniques which can be used by ALDI to investigate it's internal and
external environment to implement a new strategy. Report is having different market entry
strategies and proper justification to use it. At last it focusing on people which are responsible for
perfect implementation strategy in organisation and resources which are required for this strategy
execution. SMART objectives can help to increase effectiveness of business strategy.
TASK 1
1.1 Mission, vision, objectives, goals, core competencies to inform strategic planning
An organisation can't draft a strategy with out using theses above given elements, these
are required to attain success in its target market. As ALDI is a huge structured company so it is
essential for them to use these all components in their business strategy. Assessment is given
below mentioned points:
Mission: It elaborates the set of actions which will be taken the company to attain his vision and
goals in the set deadline. It is a short term objective of a company which can help to organisation
to adjust their performance. It is a kind of summary for attaining goals and vision in the
determined time. As ALDI is having a mission to provide a better quality products in market and
provide it in cheaper prices. By this organisation wants to increase their customers data base in
faster manner. Many companies are working in this sector so it is essential for them to increase
their performance in which mission statement useful.
Visions: Vision is a way by which an organisation can run their business activities. It is a long
term view of company for them selves (Teece, 2010). Vision statement shows the future
position, ideal image and expectancies to obtain future goals of the company. Aldi is not having
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any specifics vision statement according to their mission they want to be market leader in a few
upcoming years. Each and every organisation is having a vision to increase market share and to
reach on a respectable position in their market. Vision statement helps to company to enhance
their performance according to their vision and to implement their vision in actual conditions.
Objectives: It is a part of organisation which can help to measure their performance, these are
specifics as compare to the goals. Objectives can be achieved and goals are created by the
company. Aldi can measure it's performance according to it's objectives. As Aldi is having an
objective to increase their market share and want to achieve third largest grocery retailer in next
three years so by this company can increase their market position in upcoming three years.
Goals: These are short statement which help to determine organisation performance for a short
time of period (Astrachan, 2010). It set the direction of the company to performa on them and
move forward on a determined path. Aldi is using short term goals to attain their objective in a
particular time period. Sustainable economic growth is the goal of the company and growth
which can be maintained by the Aldi for a time which can help to them to move on and on. By
this, Aldi can increase their market share which it's final objective. By this they can adjust in
their plans.
Core competencies: As company is working in grocery retail sector and in this their core features
are helping a lot to make a better service for their targeted customers. Core competency of the
company to make sale better quality products on lesser prices in the grocery market. Company is
targetting to their customers by providing products and services as per needs of customers.
These all factors supports to the company in the strategic planning, measuring own performance
against the objectives which can help to them to make changes in the planning.
1.2 Factors that consider when formulating strategic planning
As ALDI an international company so it is essential for them to formulate business
strategy in a better manner so they have to make a proper analysis of those factors which can
decrease values of implementation in actual conditions. Here some of the factors which have to
be considered by company in formulation strategic plans:
Communication: It is an required element for organisation to implement business plan in actual
conditions. As they are having many teams so it is essential for higher management to make a
proper communication in between team members which are involved in this strategic plan. So
they have to establish a proper communication plan before implementing strategy in actual
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condition by which they can make a proper coordination in acts of their team by which they can
easily attain their targets.
Consumers needs: This is the main element why organisation is working so it is essential for the
people which are involved in the strategy formulation. All strategic planning is made against the
customers needs which is the main aim of the company by which they can make profits. As Aldi
is focusing of those consumer market which are having a need of the better quality products in
lesser prices so all of their planning has to be developed according to their budgets.
Involved employees: Maximum times strategic plan formulation is highly influenced by people
which are included in this procedure. So it is essential for higher management of ALDI to use
those employees which are highly experienced and expert to make a better strategy as per the
needs of cited business entity to attain it's business objectives.
Market competition: This is the main element which is in the core of the company while making
strategic planning, according to market rivalries marketing and sales strategies are determined.
Innovation: It is factor which highly impact on strategy formulation, it is required for Aldi to
add innovative changes in their business strategy by which they can get respectable market
position and attain their organisational objective in time (Meskendahl, 2010). Innovation factor
can help to company to make a better strategic plan which is different from other companies and
by which they can increase market position.
Management: It is required for company to make a proper management in strategy formulation
by which they can make a better plan. Management helps to company to get exact organisational
statics on which company can make a better strategy for a bright a future. So it is essential for
leaders of Aldi to make an interfere in this process to manage focus on strategic planning on their
targets.
1.3 Effectiveness of techniques used when businesses develop their strategic plans
It is required for any company to use an effective technique which can help to them to
make a proper business analysis and identify what are the needs of of organisation and barriers to
get success in target market. As they are working competitive environment so it is essential for
them to use effective techniques which are given below presented points to explain effectiveness
and usefulness of these:
BCG Matrix: It is a Matrix which can help to company to identify which of their units are not
working properly (Chang and Chuang, 2011). According to this Matrix ALDI can classify their
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units in these categories which are Star, Question mark, Cash Cows and Dogs. As Aldi is having
more than 300 stores in whole UK so they can categorized their different stores in these
categories.
Sources: (http://www.netmba.com/strategy/matrix/bcg/) Dogs: In this, those business units which has a low market share and growth rate can be
covered in this. Star units: These are those which are having high growth rate and market share. So this
one can be used by company to make a list of those stores which are having a strong grip
in market and large customer database. Cash Cows: Units which are having a high market growth and share, which generating
revenues equal to their invested resources. Question mark: It denotes for those outlets which are new in market and having a need
of more investment in them to increase their market share. But these outlets are not
having a high market share so they does not generate much return on their investment.
SPACE Matrix: It can be used by company to evaluate effectiveness and core value of strategic
plan. Also it can be used by from an organisation before and after formulation of a strategic plan
(Woodcock, Green and Starkey, 2011). This matrix includes four main key factors which are
industry attractiveness, environmental stability, competitive advantage and financial strength.
These four elements can help to Aldi to make a balance in internal and external factors.
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Illustration 1: BCG Matrix, 2017.

Sources: (http://www.differentiateyourbusiness.co.uk/space-analysis-strategic-position-and-
action-evaluation-matrix)
2.1 Organisational audit for ALDI to analyse their current strategic position
Current strategic position of a company can be determined by its organisational audit. It
plays an important role in every business enterprise because it evaluates firm's various strong
points, weak points, future possibilities and also its menace (Parnell and et. al., 2012). Managers
can examine their establishment through SWOT analysis. ALDI have miscellaneous strengths,
weaknesses, opportunities and threats which can help in its organisational audit, these are
following as under :
Strengths : There are various strong points of above mentioned organisation which are :
 It is a well known company in Germany as it has strong base and great corporate image
in the mind of customers.
 In recent times, it is becoming well recognized company at international level due to its
high quality products.
 This company is famous for its simplex organisational structure and unique style of
operating business activities.
 It provides high qualified products to its customers at lower prices than its competitors.
 It exercise cost effective techniques to produce its goods and services.
 It maintain its standard by continuous testing and sampling of its products.
Weaknesses : These are discussed below :
 This company have few range of goods which creates barrier of product differentiation.
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Illustration 2: SPACE Analysis Matrix, 2017.

 Lack of technological support make it less attractive than its competitors.
 There are very few members who are highly skilled which is a huge advantage for this
organisation.
 It does not spend enough on promotional activities which can reduce healthy relationship
with customers.
 It is still considered as small brand as compare to its competitors.
 Because of its manual system, efficiency of its daily activities get reduced.
 As it is a small company, other organisations refuse to associate with it.
 It have owned create brands which decrease its borrow ability in market place.
Opportunities : future possibilities of this company is as follow :
 It can give competition to its competitors through investing in promotional activities.
 This company can expand its business at international level which can enhance its
profitability and productivity (Hoejmose, Brammer and Millington, 2013).
 Through diversify its products it can earn extra financial profit than its contenders.
 With the help of innovative and new strategies it can manage standard of its product
quality.
 High penetration in market can also enhance its performance.
Threats : Menace of this organisations are :
 Globalisation is the big barrier of this enterprise because it increase number of
competitors in market place.
 Different and unique strategies of competitors reduce its organisational position.
 Its contenders are getting succeed due to high usage of technology.
Therefore, these are the some elements which helps in organisational audit of ALDI and
also analyse its strategic position in market place.
2.2 Porter’s 5 Forces analysis for environmental audit of ALDI
Through analysing various internal and external factor of business, company can evaluate
its environmental audit. Generally it means all those micro and macro elements which can affect
the performance of enterprise (Nordqvist and Melin, 2010). There are various components of
environment which can influence ALDI and those are given below :
Internal factors : It is also known as micro factors of business which affects the
functioning of a company internally. Growth of a company is influenced by its internal
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components such as customer, suppliers, competitors, public and employees. In business
organisation, it is necessary to focus on customer satisfaction because every enterprise is
established to fulfil needs and demands of consumers. Growth of any company lies upon buying
behaviour of its clients, because the more customer will buy firm will get more profit. Besides
this, business managers should be aware about different policies and plans of their customers
because they are the main element by which organisations get affected, also gratifying general
public can help companies to achieve higher success.
External factors : These are the elements which influence company's growth and
development externally. Enterprises do not have command over them or they can not be
changed, firms have to follow them at any cost. It includes various demographic, economic,
natural, political, social and technological forces (Verreynne and Meyer, 2010). When business
managers take decisions regarding organisation then they to consider these factors. Companies
are mostly affected by political aspects like different rules, regulations and policies of
government. These policies determines the interest rate, inflation rate and tax rate which directly
or indirectly effects organisational operations. Besides this technological support, economic
situation, natural resources and social welfare also influence business enterprises.
Above mentioned components are the main factor of business environment. Along with
this, there are also porters five forces which help ALDI company in environmental audit, these
forces are as under :
 Bargaining power of customers : in recent times, all organisations are becoming
customer oriented because business enterprises are established to satisfied its consumers
(Reinhardt and Stavins, 2010). The most important capability of clients is that they can
put companies under pressure through their negotiation power.
 Bargaining power of suppliers : they are also considered as provider of organisations
because they provide various inputs like ram materials, components, labour and other
services. So it can be said that companies are highly depended upon their suppliers and
their negotiation power.
 New entities : Every new establishment requires high investment of capital and
technological support. Mostly new entities are not able to acquire high financial resources
so they should preplan and arrange various sources of finance so that they can operate
their daily business activities.
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 Threat of substitutes : In this firms have to evaluate various alternatives of their
product. Same goods and services can impact a negative effects on organisational
performance and also can switch customers to different substitutes of product.
 Competitors rivalry : While auditing environment business managers have to analyse
effective strategies and plans of competitor firm, Through this companies can change or
renovate their existing policies to compete its competitors in market place.
Hence, with the help of above mentioned points ALDI can evaluate its business
environment and also can improve its current positioning. Also by analysing environmental
factors company can get competitive advantage in market place.
2.3 Significance of stakeholder analysis for ALDI to formulate new strategy
Stakeholders are the key person of a organisation which influence its future success and
failure and these are Employees, suppliers, customers, competitors and share holder.
Stakeholder investigation is a portion of SWOT analysis and it plays an important role in
enhancing efficiency of business firm (Hsieh and Chen, 2011). It is also known as participant
mapping and it provide various benefits like it provides different opinions of powerful
individuals, reduces the chance of conflict, creates good command on inside and outside of the
the company etc. They have major role in making new strategies and important decisions. In
other words, stakeholder have immense function in the process of strategy formulation. ALDI
make its efforts to satisfy its different participants and it have to understand that it require
stakeholders at the time making new schemes. Company needs participant mapping to know that
how it would make satisfy its stakeholders. It helps in identifying core competencies of workers
because growth and development of company is totally depend upon potentiality and capacity of
workers. With the help of this analysis organisation can know about the different skills and
abilities of workers towards new strategies, it also helps in decision making. Furthermore, it also
includes the study customer mind set, through this firm can identify needs, demands and
preferences of consumers (Oltra and Luisa Flor, 2010). Participant mapping help company to
determine previous and recent market trends in appropriate way. This analysis also make
shareholder clear to invest in new scheme because through this they can investigate future
growth and benefits of using new strategies. It also increase confidence level of business
mangers and board members, also it scans different policies, rules and regulation of government
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which can effect future performance of company. At last, it can be said that there is a huge
significance of stakeholder analysis while making new strategies.
2.4 New strategy for ALDI
A business strategy can help to organisation to increase their market share and sales. Here
Aldi wants to increase their market scope and turnover so they have to use a new business
strategy. Here a new business strategy is given in below mentioned points:
Current Strategic Position of Aldi: Mentioned organisation is working superbly and in recent 12
weeks they has a increase of 19.8% in their sales which shows their determination towards to
their objectives. Other rivalry organisation are having very less growth as compare to Aldi in last
weeks, so this company is having a mission to increase their market share so by this growth they
can attain their objectives easily.
Path of Aldi: As the company is working grocery retail so they are having a focus to provide a
better product to their customers as their needs. Aldi is a company who has many market
competitors as well as they are new in this market (Klettner, Clarke and Boersma, 2014). So they
has focus to provide products which can provide a full satisfaction on needs of customers. Cited
organisation is making regular development in products and services by which they are
increasing their effectiveness towards to their targeted customers which is a competitive
advantage for them. Cited business entity wants to grow their business in retaining markets and
as well as they wants to develop new markets also.
Action plan to get objectives: As company wants to increase their market share so this action
plan can help to them to get this target: Market analysis: As Aldi is having 6.9% market share currently so they are on 5th
position in grocery retail so they have to make more efforts to gain a better market
position (Pagani, 2013). Strategic objectives: They have to set small targets by which they can get their objectives
easily. So they have to set a target to get 10% market share in the year of 2017. step by
step process can help to them to achieve market leader position in next 4 years.
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Sources: (https://www.kantarworldpanel.com/en/grocery-market-share/great-britain)
 Products and services: Sales and marketing team has to make a proper analysis of their
customers which can help to them to identify what are the requirements of customers and
how they can full fill them. By this they can provide maximum customer satisfaction and
also by this they can increase their sales and market share.
 Promotions: Aldi has to use new promotional activities in market like: competition and
other activities to add new customers with company (Cinquini and Tenucci, 2010). Also
they have to use social media to encourage people to buy their products.
This strategy can help to company to attain a better market position and market share in next four
years.
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Illustration 3: Market Share of Grocery Retail Companies UK, 2017.