strategic management | STRATEGIC MANAGEMENT OF ALDI’S EXPANSION IN AUSTRALIA

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Assessment 3Information
Subject Code: GB580
Subject Name: Strategic Management
Assessment Title: Individual Analysis
Weighting: 40%
Total Marks: 40
Due Date: Week 12
Sunday at 11.55pm
Assessment Description
Individual assignment – Case study analysis
(40 marks | Word limit: 2,500 words)
Analyse the following case study, which can be found in Grant et al., (2014) Contemporary Strategic
Management: An Australian Perspective, 2nd edn, Wiley.
• The Australian Supermarket Industry (See p.440)
Using the case study as well as up to date sources of information from your own independent research you
are required to analyse the strategic management of Aldi’s expansion in Australia.
You need to discuss the following:
a) Provide a situational analysis of Aldi in Australia.
b) Discuss the fit between the company strategy and its context.
c) Analyse and evaluate the current strategic approach of the organisation.
d) Discuss the fit between the company strategy and its goals and expectations.
e) Outline with recommendations the future for Aldi you have chosen based on their current situation and
strategy.
You are expected to use a minimum of 15 references. As a guide these must be authoritative and comprise:
• At least 10 academic articles/papers
• Up to 2 text books (including the prescribed text).
• Up to 3 other authoritative sources of your choice.

Description

The supermarket industry in Australia is at the maturity stage. The retail industry is the largest in the market in terms of revenues, customer size, and profits. Unlike traditionally when the market was dominated by local companies such as Woolworths and Coles controlling over 70% of the market, currently there has been an influx of foreign companies such as Aldi thus, increasing competition. As a result of high competition and maturity stage, the main players employ aggressive strategies based on cost reduction advantage rather than differentiation based advantage. Cost reduction strategy was introduced into the market by Aldi as a way of penetrating into the market. As mentioned by Burch and Lawrence (2005) and Miller, Eisenstat and Foote (2002), slowing industry and reduced returns are some of the characteristics of mature markets and industries. Between 2007 and 2012, the Australian supermarket industry achieved an average annual growth of 3.4% and the growth was forecasted to reduce by 2.4% annually between 2012 and 2017 (Grant, Butler, Orr & Murray 2014). According to Grant, Butler, Orr and Murray (2014), the reduction in annual growth of the market is based on the cost based competition. By the year 2015, the supermarket industry in Australia had $AU101 billion with an annual growth of 3.4%. The industry has employed over 328,511 people (IBISWorld 2016).