Unit 7 Business Strategy Assignment _ Aldi (GC0412)

Contents

Introduction.

Task 1 Strategic planning.

An assessment of the extent to which Aldi’s mission, vision, objectives, goals, core competencies inform strategic planning  (1.1)

Analysis of the factors that Aldi will have to consider when formulating their strategic plan (1.2)

Evaluation of the worth of the techniques used when a business develops strategic plans (1.3)

An organizational audit for ALDI and their current strategic position (2.1)

Analysis of environmental audit for Aldi showing both micro and macro environment (2.2)

Significance of stakeholder’s analysis for Aldi when formulating new strategy (2.3)

A new strategy for Aldi based on the collected information that Aldi can follow (2.4)

Task 2 – Strategic Evaluation and Choice.

3.1 Identification of a market and appropriateness of suitable strategy for Aldi in relation to substantive growth, limited growth, and retrenchment

3.2 Justification of strategy for market entry and growth of Aldi

Task 3 – Strategic Implementation.

4.1 Assessment of the roles and responsibilities of personnel who will be charged with the implementation of the strategy.

4.2 An analysis of the resources required for the implementation of the strategy.

4.3 Evaluation of how SMART targets can contribute to achieving strategic objectives.

Conclusion.

References.

Introduction

Business strategy refers to the ways by which business activities and operations are done to achieve the organizational ultimate goals and objectives. The business strategy includes both short-term and long-term planning. The success of the business organization relies on the strategies that have been planned by the business organization. Strategies are taken based on the situation and performance of the business. In this assignment, the overall business strategies of Aldi have been analyzed. Aldi is the fastest growing and leading supermarket chain shop in England. To have sustainable growth what strategy needs to be followed has been described throughout the report.

Task 1 Strategic planning

a. An assessment of the extent to which Aldi’s mission, vision, objectives, goals, core competencies inform strategic planning (1.1)

Aldi’s mission is to deliver value to the customers with its quality products at a fair price. Moreover, its vision is to enrich everyone’s living. On the contrary, its goal and objectives are to increase the market share in the retail industry globally. Its core competency is creating efficiency in all levels of its business from the storehouse to its every outlet where products are displayed (Aldi.co.uk, 2017).

The mission, vision, goals, and objectives are related to the business strategy of Aldi. They indicate that Aldi is using a planned strategy. To achieve its mission and vision it always tries to promote its value and quality of its products. According to KANTAR world panels data, Aldi’s current market share is 6.9% which indicates that it is going towards achieving its goal and objectives. Aldi is using a cost leadership strategy and as a result, it has been able to deliver products at affordable prices. Following cost leadership strategy it collects its products from various places and firms where the quality products are available at a cheaper rate. Even it has its own dairy farms.

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Aldi considers transportation cost and to reduce transportation freight cost, it collects products from the regions of each outlet. This is how it can manage products at a lower cost. Moreover, it is following the customer relationship strategy maintaining a good relationship with the customers that will help to retain existing customers and attract more new customers. On the other hand, it recruits 85% of managers and directors internally from the company. As a result, they are highly experienced with the working environment and full of business knowledge.  Their current planned strategies support their objective of increasing market share to be achieved.

c.Analysis of the factors that Aldi will have to consider when formulating their strategic plan (1.2)

While formulating its strategic plan Aldi should consider a number of factors that have been addressed as follows. The first factor that needs to be considered is to fulfill the needs of customers. To understand the existing needs, Aldi has to conduct excessive market research. According to the research findings, it should make available all sorts of needy products to the customers. Currently, Aldi has 700 stores in the UK while the number of stores in Lidl is 600, and Tesco has almost 1500 stores in the UK. So, it should deliver quality and fresh products to its customers through an available number of stores (Eshun, 2015).  The next factor which needs to be considered is a competitive advantage. In the strategic plan of Aldi, the management needs to think about the competitive advantage by analyzing the strategies and unique competencies of its competitors. At present efficient business operation and 2% or 3%, the cheaper price is the competitive advantage of Aldi. But in terms of consumer spending, Tesco and Asda are in the leading position.

On the total consumer spending, 29.1% goes to Tesco and 16.8% to Asda while customer spending to Aldi is only 4.8%. Aldi can take a competitive advantage by using a cost leadership strategy (Hansen and Smith, 2015). Innovation is another important factor to be considered in the strategic plan. In the strategic plan, Aldi can include new products and new services. For example, Aldi can provide its product through innovative different packages. It can put a direct chatting option on its website to collect feedback from customers. The last factor is the anticipation of the future. The management can anticipate future economic growth; the future generates sales and the impact of the future inflationary effect on the business organization.

d. Evaluation of the worth of the techniques used when a business develops strategic plans (1.3)

To make the strategic plan more viable and effective a couple of techniques need to be used while developing a strategic plan. Among them, the BCG matrix and SPACE analysis are more effective that Aldi can use while developing strategic plans. The effectiveness and impact of those techniques have been portrayed as follows: There are four elements of the BCG matrix which are stars, question mark, cash cow, and dog. These four components show different combinations of market share and growth rate of a company. In the strategic planning of Aldi, the manager can use this technique to have a higher market share and growth rate……………

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