The aim of carrying out the research is to analyze the organizational culture and the strategic management adopted by the managers of Aldi. The research is also meant to understand the strategic change that takes place within the organization. As the organizational culture maintained within a company is very important for the employees to have job satisfaction and a good work culture helps the organization to maintain their reputation in the market. The managers within the organization also opt for an innovation as the company can compete with its rivals in the international markets (Homburg and Pflesser, 2000). By maintaining a healthy work culture the company is at an advantageous position to grab a large share of the market and expand its business. It is noted that the organizational culture is constructed socially and it is influenced by the environment change. It also depends on the leadership strategies adopted by the team leaders of the organization which influences the team members to perform well in teams and have a cooperative attitude (Homburg and Pflesser, 2000; Dunbar and Schwalbach, 2000). Good performance of the organization has a positive impact on the society and the company gains reputation in the international markets.
A well designed strategy involves the mission and vision of the organization and the way the employees can be motivated to contribute to the organization’s reputation (Parnell, 2006). By applying the cost cutting strategy the company earns a profit that it can utilise in future business activities. The company aims at developing a new business program in order to invite suppliers as well as provide benefits to the employees (Burt, 2000). The business model followed by Aldi was based on efficiency as well as simplicity. The product strategy followed by the managers of Aldi depended on carrying a limited variety of the relevant products that are of high demand in the market.
The change management theory involves the building blocks within the company in order to achieve the future goals. The managers of Aldi Inc. plans to carry out the change within the company so that it can compete with the modern world. The company follows the Kotter’s eight step change management theory that involves various steps to undertake a change within the organization. The first step involves the process of identifying requirement of change within the company. The next steps deals with planning for the change by forming a team. The third step involves that Aldi Inc sets a vision for undertaking the change. The fourth step involves that the employees of Aldi understand the vision and accept it. The fifth step involves that managers Aldi plans the strategies in such a way so as to remove the obstacles in path of undertaking the change. The sixth step involves that the employees and the managers of Aldi plan for a short term win. The seventh step of the theory involves that the company hires employees to undertake the change and plan for the process to be followed to undertake the change. The ultimate step involves that managers of Aldi Inc. ensure leadership development within the organization for the success of the organization and to achieve its goal.
Aldi Group expanded rapidly in other countries as well in order to set up its business and attract a huge customer base for its products. It has been studied that Aldi’s growth has accelerating due to the unique business model that the company follows that is to serve the customers with quality goods at low prices (Muller and Kraussl, 2011). The company was named as the low price grocery store. It is noted that more than 25 million customers each month take advantage from the company’s simple approach to grocery retailing (Dawson, 2001).
Further the company is known for its track record that it has set by being an employer of choice by offering its employees with lot of compensation as well as the benefits. The company has reached a level of the customer satisfaction that the customers recommend the company to the friends and their family members (Hackbarth and Kettinger, 2004).
Aldi undertakes a strategic drift in order to compete with the rivals. The business model followed by the company undertakes a particular cost leadership strategy which is used to reduce the cost of running a grocery store (Dawson, 2001). The strategy involves purchasing of the low price land in the outskirts of the city and built cheap warehouses in order to store the products manufactured by the company. The company employs few members in order to cut the cost incurred by the company to train the employees.
Figure 1: Business Model of Aldi
(Source: Dawson, 2001)
Another strategy that the company adopts is that of the differentiation strategy. The company undergoes product differentiation that is it manufactures wide range of products for its customers and they would not face any difficulty in their choice of the products (Homburg and Pflesser, 2000). The market mainly follows the policy of a monopolistically competitive economy where the firms undergo product differentiation and there are possibilities of the entry of the new firms within the market so that they can compete with the other firms (Enders, et al., 2009). However the managers of Aldi are involved in the decision making process of the company regarding the strategies that are to be implemented (Colla, 2003).
The strategy followed by Aldi mainly aimed at providing products at low prices to the customers but the strategy was not successful in Switzerland and UK due to various reasons (Juhl, et al., 2006).
