Business Strategy Report: An Analysis of Aldi's Strategic Planning

This report provides a detailed analysis of Aldi's business strategy, examining its vision, objectives, mission, and core competencies to inform strategic planning. It assesses factors crucial for developing strategic plans, evaluates the effectiveness of techniques like the BCG matrix and SWOT analysis, and suggests new strategies for market entry and growth. The report includes an organizational and environmental audit of Aldi, stakeholder analysis, and explores the roles and responsibilities of stakeholders in strategy implementation. It identifies required resources, evaluates the use of SMART targets, and concludes with recommendations for achieving strategic objectives. The report covers topics such as the analysis of the appropriateness of suitable strategy for Aldi in terms of limited growth, substantive growth and justification about one of the strategy for market entry and growth.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
1.1 Providing an assessment of extent to which Aldi vision , objectives, mission , core
competencies inform strategic planning......................................................................................3
1.2 Analysing the factors that are to be considered when developing the strategic plan............4
1.3 Evaluating the effectiveness as well as usefulness of techniques that are used when
developing Strategic plans..........................................................................................................5
2.1 Organisational Audi of Aldi..................................................................................................6
2.2 Environmental audit For Aldi Company...............................................................................7
2.3 Importance of stakeholder analysis when developing strategy.............................................8
2.4 Suggesting the new strategy that can be adopted by ALDI company...................................8
PART 2............................................................................................................................................9
3.1 Analysing the appropriateness of suitable strategy for Aldi in terms of limited growth,
substantive growth......................................................................................................................9
3.2 Justification about on of the strategy for market entry and growth....................................10
PART 3 .........................................................................................................................................10
4.1 Assessment of the roles as well as responsibilities of stakeholders who are involved in
process of implementation of strategy......................................................................................10
4.2 Identifying the resources required for implementing strategy............................................11
4.3 Evaluating the way SMART targets can contribute to accomplish the strategic objectives
...................................................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Business strategy is refers to as long term plan that has been formulated by manager in an
organisation to support firm in accomplishing objectives and goals. These plan s or strategy are
designed considering the strength and weaknesses of a company. Strategies are based on
business performance. Business plan helps an enterprise in bringing positive as well as drastic
improvement in various system within an organisation. Strategies are developed with the
intention to direct firm towards achievement of success and fostering growth. It is especially
designed to provide appropriate as well as effective response to changing business environment.
The purpose of report is to develop the understanding about strategic management
procedure In context of Aldi company. It focuses on identifying the several factors that might
create hurdles in planning or implementing strategy in order to bring positive change at
workplace.
PART 1
1.1 Providing an assessment of extent to which Aldi vision , objectives, mission , core
competencies inform strategic planning
Aldi organisation is a most popular brand. It is recognised as discounted supermarket
chain. The cited venture has more than approximately 9999 stores worldwide. The Aldi company
has able to gain popularity as firm deliver good quality of products to its customer at reasonable
price. In 2013, Aldi has been awarded as grocer of the year. The reason for success and growth
of company is that, cited venture is committed to increasing its working efficiency level.
Business entity have focus on redeveloping and improving operational system. This strategy has
supported enterprise in improving the quality of products or services. It has provided
organisation an opportunity to develop and maintain healthy relationship with clients.
Mission statement of Aldi- Purpose of establishing the mission is to meet the business objectives.
The statement assist in determining the market size of an organisation in which company
operates and also support stakeholders by detailing the implementation of the strategies followed
by an enterprise. With this mission statement, manager in Aldi company can formulate strategic
plan which will help firm in achieving desired goals. The mission includes the statement with
clarifies the purpose and defines value of an organisation that an enterprise intends to provide to
its customer. It supports manager in creation of effective customer policies and identifying the
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way to attract new clients. The mission of organisation is to fulfil their commitment and provide
high satisfaction to clients. Cited venture mission is to become highly valued business and most
popular as well as favourite organisation among consumers. Other mission of Aldi is to offer
and provide customer with excellent as well as quality services.
Vision – Vision of an enterprise clarify the position that an organisation wants to achieve in near
future.. It is defined as the effective or appropriate action taken by an enterprise that will enable
the business entity in transforming several challenges into opportunities for their growth
through best use of resources. Several factors which are considered by manager before preparing
vision statement for the company are innovation, recognising new territories, providing support
to all the worker, assessing the commercial requirements etc. With the support of vision
statement Strategic planning of Aldi will get the factor or objectives to begin the procedure for
accomplishing the ultimate goal which is to achieve the leading position in market and among
other organisation dealing in same industry.
Objective-The purpose of Aldi company is to earn higher profit. The other objectives of cited
venture is to deliver quality products to customers at reasonable price and gain the client loyalty.
It has supported Human Resource Manager in Aldi in making several arrangements for
providing training to workforce. As this strategy will support enterprise in achieving business
goals.
Core competencies-Innovation strategy has supported company to increase sales and generate
high revenue. It is very important skills of organisation that assist business in gaining
competitive advantage. Core competencies supports manager in formation of competitive
strategy. It also supports manager in strategic planning as core competencies act as the real
drivers of the competitive nature of the market. Core competencies also improve the abilities of
the employees which benefit the customers.
Core value of company- Aldi core value is to increase efficiency. It follows certain principles
such as clear as well as service orientation, fairness, openness, honesty, friendliness and
customer focus. The organisation emphasizes on fulfilling their responsibility and meeting the
demands of customers.
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1.2 Analysing the factors that are to be considered when developing the strategic plan
There are several elements that are required to be considered by manager in Aldi
company when formulating the strategy or business plan. As this activity will support manager in
making appropriate and effective decisions. Some factors are :
Industry- The manager in cited venture need to focus on the scope of growth in which the
organisation is operating. It is important for management team in business entity to collect
information about the industry and get update about the trend in the industry. As this activity will
assist them in making effect plan or strategies. It will also aid organisation in identifying the
appropriate solution to the problems in environment and providing appropriate responses to
several forms of changes in industry that have direct effect on business activities.
Competition- This is another major factors that are crucial to be considered when developing
strategy or business plan. It is required by manager in cited venture to emphasize on the intensity
and level of competition in market. They should also analyse the competitors actions or
strategies. As this activity will support manager in planning appropriate tactics or plans to deal
with competition and recognising the suitable way to increase competitive strength.
Business structure-Manager in Aldi should execute internal as well as external analysis. As this
activity will support them in knowing about firm strength and weakness on the basis of with
effective strategy can be planned.
Resources- These are the essential elements that are required to be considered when formulating
plans or resources. As Lack of resources within an enterprise may create barriers in
implementation of plans. It is required by manager to allocate resources at the initial stage of
strategical planning. As this will support management team in ensuring the effective as well as
efficient utilisation of resources.
Consumer-These are the important people whose interest and needs are to be focused when
developing strategy. As this activity will assist firm in achieving business goals and objectives
(Skonieczny, Vagonova and Vilyanskiy, 2017)
1.3 Evaluating the effectiveness as well as usefulness of techniques that are used when
developing Strategic plans
Boston Group consultancy matrix is an appropriate and most useful tool that can be
adopted for determining the priorities of product portfolio of organisation. It assists manager in
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making important and major decision that has direct impact on business performance. BCG
matrix support business entity in knowing its position in market. It also aids firm in identifying
the performance gap and recognising the suitable solutions for improving the same. BCG growth
rate matrix support manager in formulating strategic business plans. The strategic organisational
plans are developed by considering the growth rate and current situation of the industry. It is
more concerned with analysing the scope of business growth in specific industry. BCG matrix
also assist manager in judging the attractiveness of market or industry. It assists manager in
making decision and planning the tactics for future. There are fours fields in BCG matrix in
context of Aldi company these are:
Stars: This factor in BCG matrix indicates high growth rate and market share. The cited venture
can gain high return or benefit by investing in such units.
Question mark symbol demonstrate low marker value but high growth rate.
Cash cow represents the slow growth of industry but favourable market share.
Dog is the symbol that indicates no growth of organisation or industry.
The another tool is Strategic planning and action Evaluation Matrix which assists
manager in recognising the strategy that re required to be developed. There are several types of
plans or strategies these are defensive, competitive, conservative , aggressive etc. This strategy
will support manager in recognising the competencies, competitiveness of company and
identifying the strength of industry (Sorescu,Warren and Ertekin, 2017)
2.1 Organisational Audi of Aldi
Swot analysis is the appropriate tool that can be used for analysing the strategic position
of Aldi organisation. This technique will assist manager in cited venture to recognise the internal
strength and weakness of firm.
Strength:The major strength of company is that
it provides good quality of product at
reasonable price to customers.
Organisation offers wide range and variety of
goods.
It has many stores at different location which
provides business entity a chance to reach wide
Weakness :
Aldi company does not have much popular
brand name.
Legal obligation due to storing of cheap and
low quality products.
Ineffective marking strategy
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numbers of consumers.
Cited Venture has effective operational
management system that allows enterprise to
keep control on the cash flow and reduce cost
of production.
The reputation of Aldi company in market is
that organisation is well known for providing
comparable quality to the leading brands at
reasonable prices than any of the brands
competitors,
The Image which according to the chief
executive of Aldi UK and Ireland demonstrate
a specific or specialised offering that marks
great impression in the mind of the British
customers.
Despite Aldi company is considered as a
discount retailer, organisation still had to
increase prices of certain products,
While Aldi company has experienced high
growth in last few years, organisation is still
far behind the big four British supermarkets in
terms of market share.
Opportunity:
The company has an opportunity to expand its
core business operation.
Enterprise has the potential to develop more
new products.
Organisation is required to make investment in
marketing and promotional activities. As this
activity will help firm in increasing sales and
generating more revenue.
The Aldi has an opportunity to enter into new
market as the organisation has high market
Threat :
Changes various elements in business
environment has direct impact on its business
operations.
Threat of entry of new firms in the industry.
Private label brands of ALDI can be misused
away by established brands.
Low market share
current success of Aldi in terms of growth may
be compromised by shoppers preferring
cheaper alternatives from ALidl or home
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growth. The cited business Venture has an
opportunity to develop and expand such
products, in order to expand its lines selling
such goods.
The business entity can adopt strategy similar
to that of its competitors like Tesco. As this
will help an enterprise in getting recognition in
the market.
brands.
2.2 Environmental audit For Aldi Company
Aldi is recognised as big organisation dealing in retail industry. As the company is
operating in Global environment, changes in internal a swell as external factors have great and
direct impact on business activities. Cited venture has to face stiff competition with other
companies dealing in same industry. The manager in an enterprise has adopted the strategy of
cost leadership that has provided firm an opportunity to increase its sales and profitability.
Competitive rivalry-
As the Aldi organisation is operating in such big retail industry, cited venture has to cope
up with the fierce and stiff competition. The big competitors in the industry are Tesco, Wall
mart, Woolworth etc. As the changes in competitors strategy and policies have direct effect on
the Aldi profitability and sales. Marketing campaigns are conducted by its competitors in order
to capture whole market share. The unique strategy that has been adopted by Aldi that is related
to reducing fixed cost has allowed firm to maintain its sustainability and performance in such
situation.
Threat of new Entry-There is less threat of entry of new organisation in the industry. As there are
already major and giant companies has established their position and has captured wide market.
It will be difficult for new companies to gain customer loyalty. The other reason for less threat
of new entry is that the cited venture is dealing in big retail industry which requires huge amount
of capital investment.
Bargaining power of sup[pliers-As there are many suppliers who are ready to supply raw
material to Aldi company due to its brand name and reputation in the market. So the bargaining
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power of supplier is low. In the context of Aldi , the cited venture has potential to force supplier
for discounts and demand for other additional benefits.
Bargaining power of suppliers-As there is large number of firm and increase in the intensity of
competition. Competitors or other organisation intends to attract customers through lowering the
prices of their product or services. This factors has provided customer high bargaining power.As
the retail outlet are located near to each other, so consumers doest not have to make much
initiatives to shift from one seller to other.
Threat of substitute: As the product offer by cited venture is not unique so there is high chances
of substitute product which can be developed or launch by its competitor in the market (Wheelen
and Hunger, 2017)
2.3 Importance of stakeholder analysis when developing strategy
Stakeholder plays crucial role in development as well as implementation of strategy or
plans within an enterprise. There are two types of stakeholders these are internal and external
people. These stakeholders have direct impact on the process of strategic planning. It also has
direct influence on manager or leader decision. Stakeholder mapping is the tool that can be used
by manager in cited venture for identifying the stakeholder those have significant role to play in
the process. Among various internal as well as external stakeholders, some people have higher
power to influence the strategic planning procedure. Stakeholder mapping is the technique that
can be applied by manager in cited venture for determining the power as well as influence of
stakeholder. It provides manager an opportunity to recognise the needs , interest , motive and
expectation of both internal and external stakeholders. This tool provides manager options
through which the demands and expectation of stakeholders can fulfilled. It also provides
organisation a chance to develop and maintain healthy relationship with stakeholders and gain
various benefits. Stakeholders analysis gives road map that clearly states the position and
expectation of the people associated with business activities (Pearson.Lopes, Scavarda ,
Hofmeister, Thomé and Vaccaro, 2017)In context of Aldi company values the experience of its
teams and offers a range of benefits to reward long service. Organisation provides various career
opportunities to workers and in return employees support firm in achieving success as well as
fostering growth.
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2.4 Suggesting the new strategy that can be adopted by Aldi company
As it has been identified from above analysis or organisational audit that the cited
business venture is performing well in the market. But due to some ineffective strategy
organisation has failed to gain popularity and position in the market. Company has sufficient
potential as well as strength that can support enterprise in increasing sustainability and gaining
competitive advantage in market. But still there are some areas that are required to be improved.
It has been recognised from above analysis that there are some new strategies that can be adopted
by Aldi. As this will assist business entity in accelerating its growth and achieving success. It
will also support organisation in reducing the adverse effect of changes in business environment
on business activity. These Plans will help business entity in overcoming weakness and
increasing competitive strength. Some new strategies are product development and market
penetration. Product development plans will provide cited venture a chance to attract more
number of customers by providing them new product. It will also assist business entity in
providing satisfaction to its clients. Marketing development or penetration strategy will support
Aldi in increasing the market share and value. It will also enable organisation to promote brand
or products or services. Market penetration strategy enables company to explore and capture
various business opportunities. By adopting this strategy, the Aldi can introduce existing
products into new marker and launch innovative goods into new market. Market development
and penetration strategy will assist business entity in achieving the market objectives (Baird K.
and Baird, 2017)
PART 2
3.1 Analysing the appropriateness of suitable strategy for Aldi in terms of limited growth,
substantive growth.
Market entry Strategy :
Organic growth: When an enterprise plans to develop its business in the same way that has been
already executed earlier , this is referred to as organic growth.
Merger:This strategy can be adopted by Aldi for fostering growth. Merger will help firm in
increasing competitive strength and gaining competitive advantage in the market.
Acquisition :It can be adopted by the cited venture for expanding business operation.
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Strategic alliance:This strategy provide Aldi an opportunity to share its resources, techniques,
business ideas as well as plans with other companies so that the common goals and objectives
can be achieved.
Substantive growth
Related diversification:The objective of the strategy is allowed cited venture to makes
diversification is product line .
Unrelated diversification:This strategy will support organisation in minimising the adverse
effect of changes in business environment on business activities. It will aid firm in reducing the
fear as well adverse impact of competition on business performance.
Vertical Integration:In this strategy two or more enterprise operating in same industry participate
in different stages of production. This plan support business entity in fulfilling the needs of
resources that are required to complete particular operations.
Limited Growth
Market penetration:The purpose of this strategy is to support business entity in increasing
market share and market value. These objectives can be accomplished by cited venture by
making modification in existing product and launching the same into present market in which
company is already have positioned their goods.
Market development: It is a plan that encourage organisation to enter into new market.
Product development:This strategy is concerned with creation of new products and bringing
improvement in quality of existing good. It provides company an opportunity to attract more
number of customer and increase sales as well as profitability.
Retrenchment
Turnaround :This strategy can be adopted by cited venture in order to improve business
performance. Turnaround plan can be applied or implemented by manager in organisation for
dealing with financial crisis (Bjerke and Renger, 2017)
3.2 Justification about on of the strategy for market entry and growth
The purpose of Aldi is to become successful and most popular retailer in the
industry .Other objective of cited venture is to increase is market share and enhance business
value. It is required by manager in Aldi company to adopt market and product development
strategy. As these plans will support organisation in achieving business goals and objectives.
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Aldi company can form strategic alliance with the companies dealing in same industries. As this
strategy will help firm in increasing competitive strength and gaining competitive advantage in
the market. It will also support cited venture in expanding its core business operations (Johnson,
2017)Manager in Aldi company is required to develop plan of action or strategy related to
product as well as market development. These strategies will help in increasing its market share .
On the other hand product development strategy will assist an enterprise in gaining customer
attraction and client loyalty. The manager in business entity can implement this strategy by
planning to develop innovative products and adding features in its existing commodity.
PART 3
4.1 Assessment of the roles as well as responsibilities of stakeholders who are involved in
process of implementation of strategy
It is essential for manager in an organisation to ensure the participation of both internal
and external stakeholder in the procedure. As this activity will help them in implementing
strategy or business plan in systematic and effective manner. Strategic implementation procedure
requires specialised skills, capabilities , experience and depth knowledge about business or
industry in which organisation is operating. Role of employees working at top level of
management is to make important decision related to implementation of strategy. It is the duty of
senior manager to conduct internal analysis and identify the financial performance of
business .Function of top level management is to analyse the data or information gathered by
marketing team. As this will assist senior manager in ensuring that their plan of operation is
acceptable by most of the stakeholders. The role of manager at business level within an
enterprise is to provide appropriate direction to employees involved in the process of strategic
implementation. The corporate manager is accountable for identifying the suitable market and
segment for gaining higher return on investment. Role of middle or functional level manager is
to execute or implement the strategy or plan.
External stakeholders such as investors, suppliers are accountable for providing the
essential resources that are required for implementing the strategy at workplace. Role of human
resource management team is to motivate workers to participate in the procedure.
Function of marketing team is to facilitate market research and help firm in analysing the
reaction of consumers or other external stakeholders about the strategy or company policies. The
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