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STRATEGIC MANAGEMENT

STRATEGIC MANAGEMENT 1

Table of Contents
Aldi track record of success .......................................................................................................................... 2
Exclusive brand of products ...................................................................................................................... 2
Limited range ............................................................................................................................................ 2
Focus ......................................................................................................................................................... 2
Price change policy ................................................................................................................................... 2
Core value proposition.................................................................................................................................. 3
Threats .......................................................................................................................................................... 3
Organization prospects ................................................................................................................................. 3
Flexibility around key elements formalization.......................................................................................... 3
Decentralization ........................................................................................................................................ 4
Functions minimization ............................................................................................................................. 4
Bibliography .................................................................................................................................................. 5
STRATEGIC MANAGEMENT 2

Aldi track record of success


Aldi is an Australian grocery market that is the most heavily concentrated in the globe.
This organization has a high-level rivalry among the competitors. This organization has
introduced itself in 2001. This organization focuses to deliver high-quality products at low
prices. The main elements for the low price elements for the successful strategy are a limited
range, price change policy, focus, and exclusive brand products.

Exclusive brand of products


The main strategy of the organization's success is to focus on exclusive products of the
brand. This organization forms partnerships by leading manufacturers to deliver their own-brand
products. The organization offered Vegemite and targeted for replacement at a low cost as an
alternative of high quality can be sourced.

Limited range
This organization has reduced the price that is the provision of a limited product range.
This organization has become successful by taking the lead in the market. This organization
pursues suppliers that can deliver the products by the required characteristics at a competitive
price. This organization stocks only 600 to 700 lines. The stocking of only one side of every
product organization significantly decreases costs.

Focus
This organization is involved in a direct focus on what it sees as the main business. This
organization not focuses on the practices of Woolworths and Coles and expanding its retail base
to involve liquor, petrol, pharmaceuticals, and online shopping. It has strict policies to deviate
from a strict policy of selling core products as it provides practice of “surprise buys”.

Price change policy


This organization has the first policy on changes in price. This helped the organization to
pass on a lesser price to customers. This also attracts more customers and generates more profits
for the organization. This also helps the organization to change towards customers by placing a
note on store cartons.
STRATEGIC MANAGEMENT 3

Core value proposition


The crucial element of the organization “a value proposition is to maintain a certain level
of quantity even at the expenditure of higher retail price. This organization did not sell a product
with low quality. This may present a sometimes a higher price with superior quality with the
expenditure of a higher price of retail. This organization is privately owned and increased
capacity to make decisions of business that can impact negatively short-term returns but make
sense at a long-term level. This organization has built the stores to 20-25 years by minimum
maintenance. This organization has developed long-term partnerships with suppliers. Suppliers
of the organization provide a cheaper price for the required product quality and provide its
existing preference to existing suppliers that can compete on value. The target market of the
organization is based on geography segmentation. This sends messages to different gender and
age. This organization has effective strategies according to the customization of promotions and
products to build a relationship with customers.

Threats
The net contribution percentage and profitability of the organization are below to
average. This organization has missed important information for the investor (Fernfortuniversity,
2016). There is a lack of proper financial accountants within the organization. This organization
spends a large amount on the training and development of employees compare to competitors
(Voigt, et. al, 2016). There is poor business management in the organization. There is a lack of
new technology within the organization (Fernfortuniversity, 2016).

Organization prospects
This organization will implement the three key characteristics like flexibility around key
elements formalization, decentralization, and function minimization.

Flexibility around key elements formalization


Reporting at clear lines will allow the fast flow of information and decision-making
consensus. This will decrease the misunderstanding and increase the efficiency, expectations,
and rules that are described in the organization system of management, health and safety
manuals at occupational level, training manuals, safety manuals, and description of job. High
information will send a clear message to the workforce regarding extreme situations.
STRATEGIC MANAGEMENT 4

Decentralization
The organization warehouse only supports 60 to 70 stores. After reaching the capacity
organization will reach the new region and replicated roles. The size of the Aldi stores is capped.
This has 10 to 15 workers by four to six registers of cash. This organization will not make the
present stores bigger but open more stores in the Area. This will also extend towards the
monitoring of performance. Management at the regional level will monitor the inventory, sales,
and productivity of individual stores by interests of efficiency.

Functions minimization
This organization will focus on the minimization of cost and core business. This
organization will prefer more localized advertising. This organization will impress the market
investor. This organization will also focus on the marketing department at ALDI. This
organization will also go out and look for the most effective sites.
STRATEGIC MANAGEMENT 5

Bibliography
ALDI, 2019. ALDI Grocery Stores - Quality Food. Everyday Low Prices. [Online] Aldi Available at:
https://www.aldi.us/.

Voigt, K. I., Buliga, O., Michl, K. 2016. Striving for Customer Benefit: The Case of Aldi. Management for
Professionals, 1(1). PP.11–24.

Centralchristian. 2016. 5 Strategies to Improve Organizational Effectiveness. [Online] Available at:


https://myonline.centralchristian.edu/news/2016/08/17/5-strategies-improve-organizational-
effectiveness.

Bhasin, H. 2018. SWOT analysis of Aldi. [online] Marketing91. Available at:


https://www.marketing91.com/swot-analysis-of-aldi/.

Fernfortuniversity. 2016. ALDI SWOT Analysis Matrix. [online] Available at:


http://fernfortuniversity.com/term-papers/swot/1433/1065-aldi.php.

Lewis, A. 2018. Importance of Strategic Management in Business-what is strategic. [online]


Thebizmanagementguide. Available at: https://thebizmanagementguide.com/importance-of-
strategic-management-in-business/.