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Situational Analysis of Aldi in Australia

Discuss about the Strategic Analysis for Aldi Grocery Stores.

The major focus of the Aldi grocery stores is in Australia where there has been an evaluation based on the strategic analysis. There have been recommendations for the improvement of the strategy through the use of the macro environment analysis and the industry with internal analysis. The report has been focusing on the SWOT analysis that has been done to analyze the progress of the grocery store in Australia. The current challenges that Aldi might have identified are based on the consultancy service where there have been different management solutions with in-depth internal and external analysis.

Macro Environment: It includes the influences of the economic, political, technological and the other international trends. In Aldi, there has been carried off the trends which affect the growth of the grocery market. It includes:

This will include the change in the government tax policy which depends on the standard food code along with establishing the government policy to protect home country products. It includes the Australian employment policy with the proper operations and the industry protectionism. (Grant, 2014).

Australia economic growth rate has been 2.7% which is depending on the foreign trade work with the higher fuel prices that has a higher impact on the lower pricing strategy with the competitiveness of the market.

The increased social demand for the packaged grocery items will direct to the higher preference for the products of the home and brands. The low spending culture with the marketing trends and health conscious culture.

Online shopping systems have been set where there is a new packaging innovation with the upgrading product quality to differentiate the product and brands. The advertisement is through the internet and emails which could be through the viral marketing.

Australia is considered with the increasing concerns over the environmental pollutions which force the authorities to change the Australian law. (Jenkins et al.,2015).

The industry analysis includes the factors with the industry that affect the profitability and competitive position of organisation. The Porter’s five forces includes the:

It is considered to be high when there has been competitor strategy to work on the implementation better by another in the market. With this, the legal requirements are entering the market for the business with the competition where Aldi has been holding the different other company in the market which are Walmart, Tesco, and the direct competitors.

Macro Environment

Threat of Substitutes

This has been of a higher concern for the competitors globally with the identification of the switching costs like the other products which are in the market. Aldi focuses on lower price and higher quality.

Bargaining Power of the Suppliers

This is considered to be lower when the industry includes the offer from the similar services. Aldi includes the options for the supplier with the backward integration of large retailers where Aldi has a lower bargaining power. (Rosenbaum et al., 2015).

Bargaining Power of Buyers

It includes the consideration about the moderate number of the buyers in the market with the lower switching costs. This has been able to orient a higher quality with the cheap rates.

Competitive Rivalry

There have been different companies who come in competition to this. They are also able to provide the different products and the pricing like Aldi. Hence, the threat for this is higher in the Australia Market.

As per the analysis, the company strategy for Aldi has depended on the focus of the fresh products with the improvement of the setup that will attempt to the improved navigation. This aims to the cut average check out where the overall ethical shoppers are with environmental concerns which are being addressed for the new locations. Also has been able to work on carrying more branded products in the new stores than the ones which it tried to sell under the house brands. (Christopher, 2016). It attempts to attract the people through the colored packaging and a better quality of the product. The food retail includes the higher competitive market strategy which offers a customer value for money. The customers look for the best quality of the products along with a tough competition that has been important to value the customers for money and not compromise on the quality. The efficiency is based on the inputs and the outputs where Aldi operates the involvement of the reduced costs with the saving time, space, effort, and energy. Aldo has an approach to elaborate the displays with additional services and the promotions.

The idea of the quality depends on the fit for the purpose which looks at the different aspects of the quality. It is mainly from the ethical production to the purchase of the final customer plans. This helps the customers to eat the balanced diet along with making it sure that the products can meet the liability and the national quality depending upon the clear information and the labeling. (Kotler et al., 2015).

Industry Analysis

Considering the SWOT analysis, there have been:

  • Strengths where there is an increase in the reputation of the quality as well as the recognition. There has been a unique approach for the products and brands which have a limited number of the quality products that are relatively lower than the other competitors. The wider range includes the gain in cost efficiency with the lower spending on the advertisements and the continued research on lesser demand of the products.
  • The weakness is based on the lower name of the brand with the limited use of the technology that has been depending on the few well-trained staff. The lesser advertisements have been customer oriented with, the lower borrowing ability.
  • The opportunity includes the positioning with the capitalizing of the lowest costs. There has been an increasing market penetration that can easily implement new systems for maintaining the other quality standards. (Borland et al., 2016).
  • The threats are about the globalization which attracts the different competitors where the organization is not able to resist the massive expansion or which could affect the cultural growth.

The current strategy of the company focusses on the higher quality of the products which have been provided at a lower price. Hence, this includes the exclusiveness of the brand products, limited range, focus and the price changing policy.

  • The exclusive brand product includes the centralisation to the Aldi strategy where the focus has been on the exclusive brand products. ALDI forms the leading manufacturers for the production of brand goods. For example, Vegemite which offers the lower costs and a higher quality alternative.
  • The limited range and the centralized ALDI capacity is based on reduced costs with the provision to hold the limited range of the products. It includes the suppliers who seek for providing the products with the taste and the most competitive price. The products have been made available on size where there have been traditional supermarkets which stock for 20000 lines. (Grunig et al., 2015).
  • The focus has been on ALDI strategy which brings a change in the expansion of the retail base including the petrol price and the liquor and online shopping. The area is based on surprise buys where there has been a batch of products like the television or computers for the storage of fixed periods.
  • The price changing policy includes the pass on the lower costs of the change to the customers and the increased price when the cost increase. The value propositions and the long-term approach can enhance the capacity to make the decisions which have a major impact on the short term returns.

The structure is based on the internal analysis where there have been competitive implications from the resources. The strength is the competency where Aldi can pose and create the sustainable competitive advantage to earn the average returns. The resources and the capabilities include the opening hours, product differentiation and the reputation in providing the better services to the customer. The analysis is based on the positions as the cost leader and then it is continued to be maintained. There has been a major focus on how to focus the resources and the other capabilities along with value chain analysis. The focus has been on the capabilities and the resources which will be able to help in overcoming the strategic problems. (Geppert et al., 2015). The major concentration has been on selling the selected range for the exclusive brands rather than spending the money on the customer loyalty programs to ensure easy accessibility. The customers can handle the scientific research with the effective adaptation as per the requirements of the customers.

Aldi's major objective has been to grow the market share where the emphasis has been on the quality of the products and the value of the customers. This can offer the customers a better way to shop. Aldi has been able to promise their customers provide them with the best quality of the product along with ensuring a better quality of the health and nutrition. The sources are fresh, and vegetable production is from the local growers. Aldi has been expanding the new stores where there has been the establishment in the suburbs where there are cheap groceries.

The product differentiation is based on developing and promoting a difference in the products which help in providing the products and services. Aldi includes the behavioral concern where the customers look for the good quality of the products at a much low price. The customer service is based on product finding where there is a proper introduction and categorizing of the stock with simple layouts which may decrease the new of the extra staff. The entire benefit is about the designing with the customer convenience including the dedicated parking with the clear price cards. (Perez et al., 2015).

Company Strategy and Its Context

At Aldi, there is seating of the employees which is important and effective service of differentiation which can create a quicker scanning of the items and the technology positioning. This is based on the on handling the reusing of the bags which has been completely prohibited.

It has been seen that the products have been able to create a positive financial outlook for Aldi where there is a way to achieve a stronger customer base with the cheaper products and the convenience. The company has been able to expose their brands with the focus on how the shoppers are going to purchase the less known products and the brands for the price and the quality. The packaging and the displaying of the products at Aldi have been entirely different from the competitors, and this includes the moving of the stock by placing the individual items on the shelf with the cold items that need this. It is also able to minimize the unnecessary packaging of the products which does not contain the shrink wrapping plastic and other recycling stations for the disposing of the cartons. The promotion has been important which can achieve the awareness in the products along with selling and bringing to the market. The promotional mixture uses the advertising which is for the special offers like the liquor promotion and the line promotions. The strong influence is with the growing usage and the popularity of the social media with the proper advertisements. (Grant, 2014).

The e-marketing has been the best option for the line promotion which has been on the Facebook page which includes the product advertisement where the image has been of the free washing liquid along with the information about how there is a possibility to promote the reliable services and quality as per the expectations.

The recommendations are based on providing the better brands with the maintenance of the globalized pricing. Hence, for the better Aldi, the company needs to focus on the special buys of the non-groceries which have been in the different stores at a much lower price. The major focus of Aldi should be to provide the bare bones which have been able to improve the shopping experience for the customers. The on-trend merchandise with the careful crafted discounted model will add to the advantage of the company. The customers focus on buying the fresh products and the selection of the home goods. It has to smartly expand its product selection to include more of the items which are for the selected house brands and the merchandise catered for the health conscious shopper with the private brands mainly concentrating on gluten free natural products. Aldi is considered to be the fastest growing company which has been able to compete in the UK supermarket sector with the providing of the quality goods at a lower price. This will help in maintaining a good relationship with the different stakeholders along with the proper treatment to the staff. The Aldi Academy needs to make sure of the good graduates who can handle the management positions as the business continue to expand.

Evaluation of the Current Strategic Approach of the Organisation

With this, there is a need to focus on the supply chain management with the built up of the environment and the communities. The supply chain has been able to create the culture long lasting relationships which rely on the product quality at the lower price. The limited assortment of the products and the discounted prices, Aldi has been able to work on the stores where there have been operations related to the ALDI Nord and ALDI Sud. It will include the bare-bones shopping experience for the customers which will evolve into the grocery store that can combine with the contemporary design. The company needs to work on the expansion of the product selection which includes the special items along with the house brands and the other merchandise. It has been holding the private brands which focus on the gluten free, better-for-you products.

Conclusion

Aldi needs to focus on the customers to bring the reusable bags so that there are fewer problems related to the environment. The sponsorship brings benefits to Aldi to help in raising the awareness and the perception from the recruitment perspective. This is based on the perception which includes what the brand is mainly for and its overall aim. Aldi has been able to focus on the higher quality of the applications with the proper setup of the relationship between the movement it constructed its store. (Odood et al., 2015). The community engagement has been able to create the goodwill along with introducing the local shoppers to buy the products along with building the long lasting relationship. Aldi has been able to support the different number of the community barbecues which are in direct association with the free products and the raising of the funds for the Children.

References

Borland, H., Ambrosini, V., Lindgreen, A. and Vanhamme, J., 2016. Building theory at the intersection of ecological sustainability and strategic management. Journal of Business Ethics, pp.1-15.

Brandes, D. and Brandes, N., 2015. Bare Essentials: The Aldi Success Story. Linde Verlag GmbH.

Clegg, S.R., Kornberger, M. and Pitsis, T., 2015. Managing and organizations: An introduction to theory and practice. Sage.

Christopher, M., 2016. Logistics & supply chain management. Pearson Higher Ed.

Grant et al., 2014. Contemporary StrategicManagement: An Australian Perspective, 2nd edn, Wiley.

Grünig, R. and Kühn, R., 2015. Preparing the Strategy Planning Project. InThe Strategy Planning Process (pp. 67-75). Springer Berlin Heidelberg.

Geppert, M., Williams, K. and Wortmann, M., 2015. Micro-political game playing in Lidl: A comparison of store-level employment relations. European Journal of Industrial Relations, 21(3), pp.241-257.

Glauner, F., 2016. Future Viability, Business Models, and Values: Strategy, Business Management and Economy in Disruptive Markets. Springer.

Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis. Routledge.

Kotler, P., Burton, S., Deans, K., Brown, L. and Armstrong, G., 2015.Marketing. Pearson Higher Education AU.

Kühn, R., 2015. Preparing the Strategy Planning Project. InThe Strategy Planning Process (pp. 67-75). Springer Berlin Heidelberg.

Lu, S.C., 2016. A Study on Entry Strategies into the Tuna Market in Mainland China.

Laffy, D. and Walters, D., 2016. Managing Retail Productivity and Profitability. Springer.

Ododo, C., Mulholland, G. and Turner, J., 2015, November. Can Discount Pricing Be A Comeptitive Brand Strategy? An Evaluation of Aldi. InInternational Conference on Marketing and Business Development Journal(Vol. 1, No. 1, pp. 241-251). Bucharest University of Economic Studies Publishing House.

Pérez Mesa, J.C. and Galdeano-Gómez, E., 2015. Collaborative firms managing perishable products in a complex supply network: an empirical analysis of performance. Supply Chain Management: An International Journal, 20(2), pp.128-138.

Rosenbaum-Elliott, R., Percy, L., Elliott, R.H. and Pervan, S., 2015. Strategic brand management. Oxford University Press, USA.

Schleper, M.C., Blome, C. and Wuttke, D.A., 2015. The dark side of buyer power: Supplier exploitation and the role of ethical climates. Journal of Business Ethics, pp.1-18.

Wilcox, M., 2016. Effective Talent Management: Aligning Strategy, People and Performance. Routledge.

Williams, K. and Wortmann, M., 2015. Micro-political game playing in Lidl: A comparison of store-level employment relations. European Journal of Industrial Relations, 21(3), pp.241-257.

Zhang, L., Zhou, R. and Xu, J., 2015. An Exploratory Case Study of the Relationship Between Strategy and Brand Value Based on Innovation Choice. In Proceedings of the Ninth International Conference on Management Science and Engineering Management (pp. 1055-1063). Springer Berlin Heidelberg.

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