Free Aldi Supermarket Essay Sample
Organizations function differently in an inclusive environment, depending on each organizations culture, structure, position, objectives, as well as strategy. However, the immediate environment of a business poses a very great influence to its operations, sustainability, and continuity. Various categories of environmental forces have been identified including, political, social, economical, and technical. Each kind of a force influences the organizations in distinct ways, thus every organization has to lay appropriate strategies that would help identify the company's objectives, potentials, weaknesses, threats and opportunities that are the keys to an excellent strategic stretch as well as sustainability. Some business organizations operate in very volatile environments, for instance the Aldi supermarkets in the United Kingdom, thus need to strategically plan and implement the new strategies with an aim of overcoming the prevailing weaknesses and threats, in order to survive. A competitive organization needs to widen its strategic stretch in order to enhance its existence in the volatile environments that are prone to change at unpredicted times (Naoum, 2001).
Strategic stretch of an organization is the scope of the business success in its operations as determined by the strategic planning procedures. The stretch is an important factor, which assists the leadership of a company to discover their aspirations for growth, and lay down strategies that can help them move to the expected destiny. Strategic planning represents the processes by which organizations describe their strategies and come up with appropriate decisions that support the allocation of the organization's resources in pursuing the defined strategies. Strategic planning entails the utilization of various business analytical techniques including, SWOT analysis, STEER, PESTEL analysis as well as EPISTEL analysis. The type of strategic analysis techniques to be used for a particular organization depends on the structure, complexity, position and the preferences of the organization at hand. For Aldi supermarkets, various structural social, political, cultural, and operational weaknesses, strengths, opportunities, and threats have been identified. Although it is a large medium-scale enterprise, its strategic planning and implementation organization resembles a normal business structure and arrangement (Palmer and Hardy, 2001).
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The structure of Aldi supermarkets
Aldi supermarket is one of the largest and most popular food retailers around the globe, with thousands of branches in almost all United Kingdom states. The organization .started as a small grocery in 1948, but today has managed to penetrate deeper into the available markets. This reveals one of the major strengths that the business has among the others that sell similar products. The main market operates in Germany, though has two divisions each of which is managed by the two stakeholders, i.e., the two brothers who initiated it. This would be considered as a threat to the organization, in fear of influence of one another or conflicts occurrence due to ideological differences. A decentralized organizational structure support's Aldi's business concept, where one division operates in the north and known as Aldi north while the other division operates in the south and called Aldi south. The fact that they have a decentralized management system suggests that growth is a possible concept, since the two stakeholders can borrow ideas from each other. Also, to some extent, with such a management system, it is possible for the company to expand rapidly in the prevailing market, for the two have distinct skills and abilities, thus would be considered as an opportunity. The operation in two divisions would also be a risky strategy since it would pave a way for competition between the two stakeholders, thus would be considered as a threat (Aldi stores submission, 2007).
The organization has a flat and lean organizational structure, which does not give room to employ a large number of employees. For instance, the Germany headquarters employ only about one hundred and fifty staff, who is well skilled to perform their responsibilities. Employing small numbers of employees would serve as strength to the organization for it supports division of labour and maximal utilization of skills and talents, as well as enhance employee satisfaction (Grulus et al., 2008). On the other hand, it would be considered as a weakness since they may limit the skills that would help business advancements from being employed. According to recent research reports on various conducted investigations, there is no planning department that has been put into place to control development activities or even functions that are central to the organization. There are no positions of staff in existence within the organization, thus any new plan is conducted by individuals who are delegated at the time of need to carry out the planning procedures. The delegated who offer practical solutions for a certain problem are as well responsible for the implementation of the new strategies. The organization's management is guided by the principles of decentralization and delegation. These factors are important, though the lack of staff, planning or even marketing departments should be considered as a weakness since it seems that no changes can be actually implemented in the organization. Even if changes are implemented, change management would seem difficult since it may not be possible to delegate the correct people with the correct skills instantly when a need arises. A good strategic planning procedure needs division of labour for effectiveness, but this lacks in Aldi (ALDI Group Company Profile, 2006).
Additionally, the organizational culture of Aldi is marked by a strong influence from the founders. According to a research conducted by Brandes, the results and therefore the assumptions are that Aldi's philosophy, principles, and strategies for business are very much reflected by the rules and cultural values in the organization. These influences indicate a weakness since the company may operate on corrupt ideas and collapse at some point. Philosophers always consider two better than one, hence, by not incorporating other employees in decision-making processes complicates their working environment. Reported case studies provide information on Aldi model as a typical one whose basis is on a concept that is simple. The model advocates for high quality products provision, but at low prices, a factor that would help the company targets all classes of customers. More over, the focus of the organization is on the cost-effectiveness and an endless passion for details. Their daily operations are marked by strong objectives aimed at making the organization larger, in order to achieve a better position globally in terms of services provision (PricewaterhouseCoopers, 2007). The selling at low prices and the simplicity in their organization would be considered as strength, since it is a factor that has made the organization prosper over the years. Cost-effectiveness is an organizational strength as well as an opportunity for growth and improvement (Omar and Fraser, 2010).
Aldi's strategic planning processes
Strategic position of an organization determines its success in an inclusive environment, thus a key determinant to the organizations strategic stretch. Aldi's supermarket has properly laid its strategies to some extent and has been able to grow into a large business over the years, which is an organizational strength. First, as stated by the website of the company, they normally focus on selling their independent brands, with an intention to counteract marketing costs, often so high. They avoid selling national brands that go for high prices and prefer selling their brand at cheap prices, which helps in serving all their clients appropriately. This strategy is very important and a strength to the business. Similarly, it would be considered as an opportunity for them to utilize and develop in the volatile environment (Salwan, 2007).
Additionally, the strategy they set to employ just a few employees in the organization would be very important in preventing organizational complexities, ensure maximal utilization of skills and abilities of the few, and ensure employee satisfaction, thus considered strength. They have as well taken the position as hard discounters, who are termed as ones who will to provide a limited number of products, but at low affordable prices, an opportunity for them to expand in a competitive environment. The stores used in operation of the organization are simple, practical and with a similar layout. In addition, they have an attractive arrangement of their items on the shelves, which attract many customers to buy the products, a factor considered as an opportunity to capture more customers in the prevailing market. Furthermore, they do not provide free shopping bags, a factor that contributes to cutting the costs incurred by the organization (Terashima and Dawson, 2008). Another success factor in their strategy is that they hire no consultants or even spend money preparing complicated statistical reports or plans, thus cutting on costs. Their business strategies are known to have not changed since its beginning, a factor that can enhance continuity and sustainability. At the same time, there are no much changes made to the products that they have been selling over the years they have been in operation, a factor that is deemed crucial for business sustainability, a business strength (Varley, 2006).. More important, their strategies are laid down with their target markets in their mind, thus providing affordable goods and at very low prices, a key factor that influences more consumers of their products. All these strategies have acted as the strengths to the organization's operations over the years, enhancing its sustainability and survival in a volatile environment (Reutterer, 2008).
How Aldi supermarket utilizes resources, capabilities, and competencies
The Aldi supermarket utilizes its resources for its continued growth and development. Of all the others, it has two stakeholders who have had a development mind and through them the company has been able to move far, which is strength to the operations. The company has been able to utilize the prevailing market in selling a broad collection of products. They include, food, beverages, household and sanitary products. Having the products has enabled them to penetrate into the available markets, thus this serves as the organization's strength. Additionally, the company operates strongly since they are able to sell products with an independent label. They only deal with only a few brands from outside, a factor that has enabled the company to be in a position to operate in small sized stores without much complication. The small size has given the organization strength to sell more of particular products. More over, the growth has been facilitated through the company's understanding of its responsibility in the immediate environment. Their aspirations have driven the management into label their products distinctly, which is strength to the organizational growth (Baron et al., 2001).
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More over, they have laid appropriate strategies that ensure the safety of their products. At the same time, they have worked hard to remain friendly to the surrounding environment and maintain an environment that is friendly with their environment. These factors have rendered them strong in penetrating the market as well as an opportunity to make big profits. More important, the core competencies include the selling of high quality products that are appealing to the customers at very low prices. This has seen the organization expand over the years. The low prices serve as an opportunity for the company to grow in a competitive environment. The selling of high quality products deems it possible for them to be strong sellers of such products and also makes them have the expected confidence to trade with such items (Johnston and Bate, 2003).
Influence of UK government spending review-2010 on the organization
The UK government review of 2010, impacted positively on the growth of Aldi supermarkets. It advocated for interactions that are more social as well as provided consumer protection. The government considers the retail businesses to have contributed greatly to the growth and development of the country's economy. Though the government spending increased as a result of introduction of incentives, the ultimate result was remarkable good. More over, the government has recently realized the potential that small retail businesses have over the large organization, thus the review recommended that such organizations be supported fully to realize better outcomes. Nevertheless, the government set stringent regulations that ensure that the concerns of customers are well catered for to avoid unscrupulous traders who are out to make a fortune out of the innocent customers. As a result, this would act as an opportunity for better and high quality service delivery, not only to its clientele, but also to the larger state (Kazmi, et al., 2008).
Influence of stakeholders on the organization and its strategic intent
The stakeholders of the organization are two, the reason for the business operating under two divisions. The report as reveal that it started as a single business, but later split into two divisions due to ideological differences of the two. The stakeholders have a very great influence to the operations of the business since; the fact that the cultural organizations are Marjory influenced by the stakeholders suggests how much they are in control. The report by researchers that no much change has been incorporated since the inception of the business in 1948 is a clear indication that the stakeholders are totally in control. Additionally, the fact that all stores are made in the same design, layout and with a similar arrangement would be an important factor to indicate a centralized administration. The objectives of the Aldi Company are to become the best distributor of the products across the globe. The stakeholders have all along been the determinants to the business move, thus the strategic stretch so far have depended on them, which can be considered as a weakness. Similarly, the fact that they have always led the business into selling cheap products to a customers suggests that they are able to perfect their CRM (customer relationship management), which is an opportunity to expand the business in the target markets (Sheehan, 2010).
Aldi supermarkets, though a small business enterprise, has been able to operate globally due to their well laid down strategies. Out of the utilization of appropriate strategic planning techniques, they have been able to operate over a wide strategic stretch, thus surviving in a volatile and competitive environment. The success of Aldi supermarket can be attributed to proper utilization of resources, capabilities, and core competencies in an inclusive environment. More over, the stakeholders have played a significant role to the organization's growth. Finally, the government involvement has brought about profound effects on the growth of the organization (Salwan, 2007).