Critically analyse and apply a number of theoretical models and their potential for developing strategy and supporting strategic decisions.

Assignment Brief

As part of the formal assessment for the programme you are required to submit a STRATEGIC MANAGEMENT assignment. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.

Learning Outcomes:

After completing the module, you should be able to:

1. Critically analyse and apply a number of theoretical models and their potential for developing strategy and supporting strategic decisions.
2. Analyse theoretical developments in strategy.
3. Support the development of organisational strategies and plans.
4. Critically assess the impact of strategy making in an increasingly volatile and turbulent environment.
5. Appreciate the significance of and the difficulties in formulating and implementing strategy.
6. Critically analyse the balance of deliberate and emergent approaches to strategy formulation that has been adopted by Aldi in the past. Discuss the extent to which that balance has been appropriate and explain why? Recommend and justify how you believe that balance should be transformed for the future. What support is required to promote the development of the recommended balance of organisational strategies and plans?
7. Critically assess the major macroenvironmental and industry issues that Aldi has faced in the past. Evaluate Aldi’s responses to the major macroenvironmental and industry issues. How effective have those responses been?
8. Using Porter’s Value Chain framework, critically analyse Aldi’s strategic capability. What linkages in the Value Chain does Aldi manage particularly well? With the aid of the VRIO framework, assess the sustainability of Aldi’s strategic capability.
9. Critically analyse Aldi’s previous strategies using Porter’s Generic Strategy framework, and the Ansoff Matrix. To what extent are these strategies appropriate for the future? Analyse the approach to internationalisation that Aldi has adopted and assess the extent to which that approach has been appropriate, and explain why?

Sample Answer

Strategic Management Analysis of Aldi

Aldi, a leading global discount supermarket chain, has experienced sustained growth due to its consistent application of value-driven strategies. In examining Aldi’s approach to strategy formulation, it is clear that the company has maintained a pragmatic balance between deliberate and emergent strategies. The deliberate aspects are evident in its long-standing commitment to cost leadership, while emergent elements have surfaced as Aldi adapts to market dynamics, such as expanding product lines and improving store layouts to meet customer preferences. This hybrid approach has largely been appropriate, enabling Aldi to remain agile without compromising its core identity. However, in a rapidly changing retail environment influenced by digital disruption and shifting consumer expectations, Aldi must recalibrate this balance. A greater emphasis on emergent strategies, supported by real-time data analytics, agile decision-making structures, and enhanced customer feedback loops, is recommended. To support this shift, Aldi would benefit from investing in organisational learning, leadership development, and digital infrastructure that promotes responsiveness without diluting its strategic clarity.

Aldi has also faced numerous macroenvironmental and industry challenges. The rise of e-commerce, economic uncertainty, global supply chain disruptions, and the growing demand for sustainability have reshaped the retail sector. Aldi’s responses to these pressures have been cautiously effective. For example, while competitors accelerated their online and home delivery services, Aldi remained relatively slow to adopt e-commerce. Nevertheless, it has recently begun to pilot click-and-collect services and form partnerships with third-party delivery providers. Additionally, Aldi’s strategic emphasis on private label products has shielded it from supplier volatility and allowed greater control over pricing and quality. However, while Aldi has taken steps towards sustainable practices, such as reducing plastic packaging and supporting ethical sourcing, the pace and visibility of these efforts could be enhanced to better align with stakeholder expectations and ESG standards.

Aldi’s strategic capabilities can be evaluated through Porter’s Value Chain framework. Its strength lies in the tight integration of inbound logistics, operations, and procurement. By maintaining lean supply chains, limited SKUs, and strong supplier relationships, Aldi reduces complexity and cost. Efficient warehouse operations, minimalist store formats, and a small but well-trained workforce contribute to operational excellence. Marketing and customer service remain minimal but effective, relying on value communication rather than heavy advertising. Using the VRIO framework, these capabilities, particularly supply chain efficiency and cost control, are valuable, rare, and difficult to imitate, offering sustainable competitive advantages. However, Aldi’s long-term sustainability depends on its ability to innovate, especially in areas such as digital transformation and personalised customer engagement, which are not currently core competencies.

In terms of strategic direction, Aldi has historically employed a cost leadership strategy, as identified in Porter’s Generic Strategies. This has been supported by a focus on operational efficiency, bulk buying, and exclusive store-brand products. According to the Ansoff Matrix, Aldi has pursued a market development strategy by expanding geographically, particularly in the US, UK, and Australia. While these strategies have served Aldi well, future growth will require some diversification and market penetration strategies. With rising competition from digital-native grocery retailers and changing consumer habits, Aldi may need to adopt elements of a differentiated strategy, such as healthier product ranges or tech-enhanced shopping experiences, while maintaining its price advantage.

Regarding internationalisation, Aldi has largely adopted a cautious and organic approach, tailoring its model to local markets while preserving its core business model. This has generally been appropriate, allowing Aldi to learn and adapt while maintaining control. For example, in the US and Australia, Aldi has adapted product ranges and store formats without compromising on efficiency. However, further international success may require a more nuanced localisation strategy that incorporates regional preferences more aggressively, along with strategic alliances or acquisitions in markets with established competition.

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