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Business Strategy - Aldi

University: UCKBC College London

  • Unit No: 9
  • Level: Diploma
  • Pages: 16
  • Words: 4000
  • Paper Type: Business Plan
  • Course Code:

    D/508/0491

  • Country: UK
  • Downloads: 0
Question :

The description is enumerated in order to understand and process of strategic planning by using various strategies.

  • Evaluation of various strategies and analysing them in order to make strategic plans.
  • Identification of the market so as to attain substantive growth within the marketplace.
  • Implementation of strategy for the major purpose to meet our objectives and goals of the business.
Answer :
Organization Selected : Aldi

INTRODUCTION

Business strategy are made by superiors and managers in order to perform their activities in proper order. It act as a road map to company according to which employees and other staff members perform their tasks (Acquaah, 2013). These are made with the purpose of achieving business goals and strategies and desired success for company. Aldi is one of the leading discounted supermarket which was established by brothers in 1946. It is Germany based company and operates in more than 18 countries with thousands of stores . This assignment will focus on vision, mission, goals of Aldi and various techniques used by them to analyse external environment. Analysis of appropriate market areas and strategies for growth of business. It also describes roles and responsibilities of personnels in implementation of strategy and analysis if resource requirements.

PART 1 – Evaluation of strategy

AC 1.1 Assess how business missions, visions, objectives, goals and core competencies inform strategic planning

Strategic management is a regular process which is established by superiors of organisation. They apply strategies in order to achieve set business vision and missions. It is an essential part for organisation as all its operation are performed according to strategies made by company. To make a strong position in market and to maintain its position, it is necessary to make effective corporative strategy (Astrachan, 2010). Aldi is a leading discounted supermarket and operate in more than 18 countries. Due to their effective strategies and management, they have achieved desired success in their business. Following are some crucial elements which help Aldi to achieve its success:

Mission: This is prepared by Aldi's managers in order to plan their business activities and tasks in proper order. It provides definite direction to company which help them to achieve its ultimate vision statement. Mission of Aldi is to provide affordable ad economic goods with high quality to its customers(Campbell, Edgar and Stonehouse, 2011). It is basically a shot statement or a paragraph which is made by company in order to describe purpose of company in concise manner. It also help employees to stay focused towards their task and also encourage them to produce innovative ideas in which company can achieve more profits and revenues.

Vision: It is an ultimate statement prepared by higher authorities. It reflects the future goals of company. Vision of Aldi is “to revolutionize the industry with unique business model”. According to this, company prepare their short term as well as long term mission and act in that direction.

Goals and objectives: They are important aspects of organisation, goal is basically defined as the purpose towards which the business is started whereas objectives are referred to more clear and measurable targets. Aldi's main aim is to increase its market share within United Kingdom grocery market.

Core competencies: These are referred to strengths or strategic advantage of an organisation and includes knowledge, skills and technical capacities that increases the efficiency of business operations. Core competence of Aldi is that, they mainly focuses on offering quality of products at low and affordable prices to its customer. Managers ensures easy, simple and efficient business operations so that they can offer low prices for products.

AC 1.2 Analysis of the factors which is to be considered while formulating strategic plans

There are many factors which are considered by managers of Aldi while formulating their strategies. They ensure that every strategies they make should be efficient so that they can help them in achieving their business goals and objectives. Following are some factors:

Resources: They are the essential part for carrying out any activity. Resources help company to carry out business activities or tasks in smooth manner. Managers should focus on their human capital, equipment, finance and technology and mange them wisely, so they don't have to face shortages of resources (Bharadwaj and et al, 2013). Aldi can develop best strategies with its available resources in specified time limit.

Environmental factors: It is crucial to consider all micro as well as macro environment in order to formulate effective strategies because it pose great effects on business success and profitability. Some of the external factors are political, legal, technological, economical, threats, opportunities, etc. Aldi is effective in measuring the impact of external factors and designs efficient strategy in accordance to these factors. This help them to revive tough situation and maintain its position against all odds.

Following is the Ansoff Matrix which describes the analysis of growth opportunities in market. It gives an idea about implication of growth through existing and new products in existing an new markets.

Ansoff matrix consider four main elements and are mentioned below:

  • Market penetration.
  • Product development.
  • Market development.
  • Diversification.

Market penetration: In this, Aldi focuses on selling existing products on existing market with the purpose of increasing market share, increase usage by existing customers, etc. In order to achieve the purpose, Aldi focus on pricing strategies, sales promotions, advertising, etc.

Product development: In this, company introduce new product in to existing market. Aldi focuses on developing new and unique product by applying new competencies and launch in existing market (Gandolfi and Hansson, 2010). Before developing new product, company focus on some crucial factors like, research on market as well as consumer needs, innovative ideas, pricing f products, etc.

Market development: In this, company focuses on selling existing products into new market. Aldi uses different ways in order to approach this strategy like, they finds out new geographical market and export their products to different countries, new product dimension or packaging, identifying new distribution channels, etc.

Diversification: Here company introduce new products into new markets. Aldi identifies different and new markets where they can sell their new products. For this they have to identify the scope of growth in new markets, trends, risk, opportunities before launching new products in market.

AC 1.3 Evaluate the effectiveness of techniques used when developing strategic business plans

For developing effective strategic business plans, following techniques can be used:

Boston Consulting Group (BCG) Matrix: It help companies to evaluate position of the business in terms of brand portfolio and its prospects. This matrix basically classifies business portfolio into four categories based on two dimensions, industry attractiveness (growth rate of that industry) and relative market share (Gollakota, Gupta and Bork, 2010). This matrix help business to understand in which sector the firm should invest in and which one is to be divested. BCG Matrix have four sectors and are explained below:

Star: It represent those products which have high growth rate and require huge investment to maintain the position of that product in market. It also has high market share.

Cash cow: It represent the situation in which business unit have high market share but has slow growth. This requires less investment and produce steady cash inflow which can be invested in other business unit.

Question marks: It indicate those product which possess a low market share in a high growth market. It requires heavy investment to maintain position of product and its market share.

Dogs: In this business unit have low market share and growth rate. In this business units have weak positions due to less return on products. Owner can eliminate the business or sell out due to loss in the business.

This is an effective business tool which help managers to manage their products and get to know about market areas where they can invest their money in order to get high return and where they can liquidate their business units in order to prevent further loss.

Related Sample: Strategies and Digital Maturity Model on Nike

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