ALDI AUSTRALIA ANALYSIS

External analysis 3 2. Macro-environmental analysis 3 2. Socio-cultural environment 4 2. Technological environment 4 2. Environmental aspect 5 2. Recommendations 12 3. Online shopping experience 12 3. Implementation 12 3. Avail more common brands to stores 12 3. Implementation 13 4. External analysis 2. Macro-environmental analysis Here is where we analyze the PESTEL factors (political environment, economic situation, socio-economic factors, technological changes, environmental and legal environment) in the broader external environment where Aldi Australia operates and how they affect it. The external business environment consists of macro and microenvironment. Macro has a broader view, and micro narrows down on the specific context (McLean 2005). Economic environment • Inflation for the first quarter of 2018 has been low with an estimated annual CPI of 1. Shoppers' expectations around convenience, value, and choice have driven more people to the online marketplace, where they have access to products and services easily (Rose Y.

Richard L. Stephen F. Aldi is yet to tap into this sector, and have not announced any plans to do so. • The lack of an online presence prevents Aldi from reaching potential customers. Woolworths and Coles control two-thirds of the market while Aldi controls 13%. The other independent retailers control the rest of the market. Aldi keeps a small range of ‘pre-selected’ private brands in its stores, compared to 20,000-30,000 units in Woolworths and Cole’s stores. This strategy led to a response by Woolworths and Coles to add private brands in their stock and also cut some of its prices for select goods. Retailers seeking a share of the pie of this market will face an uphill task to challenge the already existing chains.

The expectation of more local products is being handled by stocking more local goods in Aldi’s stores. Service process innovation at Aldi The younger generation is keen to see gender-equality in advertisements, and are attached to brands that show this equality as opposed to those which do not. This aspect is service process innovation at its best; the consumer makes clear his/her views on existing service and the service producer (Aldi) has to shift to this new system or phase out. of Australian females hold the belief that there is gender inequality in advertising (Jane B. This calls for more gender-equality efforts. This also forms the Resource-based View of strategy (Barney 1991). Aldi Australia banked on its minimalist approach to keep its stores simple.

It displayed goods on pallets instead of shelves like its competitors. It had fewer staff members per store (some stores had only three staff members). Customers bought their packaging material and also packed the goods by themselves. A SWOT matrix will also help in identifying the strengths and weaknesses of the business from the internal analysis and opportunities and threats it faces from the external review. • From the internal analysis, Aldi offers more local products that are attached to the customers but has less of the more common brands that consumers may need. • From the external analysis, Aldi is yet to tap into the online marketplace which is a potential goldmine. There is also the threat of stagnating growth as the branches have a physical presence in nearly all essential centers, so there is a need to be innovative to find more areas to venture into.

Innovation strategy map FINANCIAL BENEFITS OF INNOVATION CUSTOMER VALUE PROPOSITION INNOVATION PROCESSES INNOVATION SUPPORT INFRASTRUCTURE 3. Open innovation employs knowledge inflow in pushing internal innovation and knowledge outflow to expandexternal innovation markets(Henry 2011). Open innovation will accelerate the use of online shopping opportunities to expand the market for Aldi. Avail more common brands to stores The existing customers love the simplicity of Aldi Australia. But, only 7% of the population of Australians shop only at one specific chain. The rest of the community hop from one store to another depending on the goods or offers available. The threat of less space for expansion calls for the innovation strategies to make the firm more competitive in its industry. Aldi should consider an online shopping platform and stock more brands.

An online platform will bring in more customers and additional brands will increase Aldi’s customer’s loyalty. Proper implementation will definitely make Aldi Australia more competitive. REFERENCES Powell, D. McLean, J. Management Techniques and Theories. British Journal of Administrative Management. Vol. pp. viewed 19 August 2018, https://www. news. com. au/finance/business/retail/aldi-australias-future-store-locations-no-online-experience/news-story/924dc67fe5be1c29d118f24fdd539d6b Teece D. J.