Organisational life cycle is extremely important for an organisation to understand and to be able to apply it to each of the products or services that it provides. I will discuss how the organisational life cycle applies to the company Aldi and I will also use concepts and theories from this module to support my answer.
Aldi is a global discount supermarket chain providing good quality food and drink products to customers at a low cost price. Everything Aldi does is focused around giving its customers value for money. Through being efficient and cutting costs Aldi invest profits back into the business which helps to reach the companies goals and objectives. Aldi’s competitors are supermarkets such as Supervalu, Dunnes, Tesco but their main competitor is Lidl as they have the same business approach and are the most alike as a company. Aldi most importance aspects that they maintain include three core values simplicity, consistency and responsibility. Aldi shops portray a simple design and all shops are very similar which creates consistency. Responsibility is an important aspect of all areas of the business, from training and developing employees to drive the business forward as part of continuous improvement, to taking an active role in its supply chain to ensure continuous improvement. Aldi production is not just about reducing costs for the business. It is also about passing these savings on to its customers to offer value for money. These efficiencies show how they run there day to day operations and how they perform. Continuous improvement – a culture where all employees are constantly involved in making improvements to quality of the business. Just-in-time production – materials are received just as they are needed. Time based management – an approach that aims to reduce the time wasted in business operations. This usually requires a multi-skilled and flexible workforce.
Total quality management (TQM) – a quality assurance ideal where all workers have a responsibility for getting it ‘right first time’ Aldi mission is to maintain and provide its customers with quality products at prices that provide value for money. Aldi’s success is shown by the fact that it is expanding rapidly. They are opening new shops and experiencing sales growth that requires it to take on more staff. Aldi expects new recruits to make an immediate contribution to the business. They also provide training so that they can develop their careers within the company. Aldi has entry levels for apprentices, store assistants, deputy managers, assistant store managers, trainee store managers and graduate trainee area managers. (http://businesscasestudies.co.uk/aldi/)
Goals and good management practise
To promise their customers quality products at the best possible price. They share this goal with their suppliers to put customers first. To provide product quality which includes includes consumer safety, health and well-being. To minimise both the resource intensity of their products and the negative environmental impacts of their production To make commitments to reducing the environmental impact of the business To maintain their growth rate and keep expanding, opening more stores Introduce new technologies to cut energy use such as solar power and heat capture.
Aldi’s main goal “To promise their customers quality products at the best possible price” is what the business operates around. This is what drives their management team and operations team to strive and meet this goal and to find ways to keep improving this. Aldi have spent time in making the company an environmentally friendly business they are committed to reducing the environmental impact of the business in the following ways: Continuously reducing the carbon footprint
Maximising the energy efficiency of Aldi
Meeting leading global standards for green buildings
Reducing, reusing and recycling waste
Aldi has signed up to a voluntary commitment to reduce the carbon footprint of grocery packaging and food waste. Aldi are exploring new technologies to cut energy use, such as solar power and heat capture. They have trialled a heat recovery system in their stores to capture and recycle waste heat from refrigeration units to heat other areas of the building. Literally produce energy from hot air. Aldi constantly monitor scientific research surrounding the ingredients and materials used in the products. Aldi have put a procedure in place that if new information comes to light indicating that products which were once thought safe are now proven to be hazardous to human health or the environment. Aldi’s goal is to react appropriately and swiftly. http://businesscasestudies.co.uk/aldi/competitive-advantage-through-efficiency/reducing-costs-and-eliminating-waste.html#axzz2htMjOW41 Organisation life cycle
The organisational life cycle is the life cycle of an organisation from its creation to its termination. The four principal stages of the organisational life cycle are Birth
Growth
Decline
Death
Birth stage, in the birth stage an entrepreneur thinks about a business model, forms a management group to work with and then they form a business plan. The entrepreneur’s primary concern is securing funds for development and survival. At this stage, the organisation is a one man show with the founder/entrepreneur bearing all responsibility for development and management.
Growth stage, when a business is in the growth stage it’s moving in the right direction for now and is hungry for success. Suring the growth stage a business is starting to spend its wings put their stamp on their products and company and make appositive reputation for them. The business should be working as a team and building the business. The main focus of the growth stage is sales and early product diversification. Product lines usually can expand but this generally results in a more complete array of products for a particular market rather than new positions in widely varying markets.
Decline, when a business is falling into the decline stage the business can consists of Symptoms such as lack of teamwork; project stagnation, leadership frustration and lack of communication; repeated organizational mistakes; missed deadlines; ineffective meetings; and unclear vision, strategies and objectives. All of these symptoms lead to decline. If a business experiences symptoms of a decline for a period of time it will lead to death of a business. http://www.ehow.com/about_6540051_basic-overview-organizational-life-cycles.html
ALDI’s company birth strategy was to deliver a restricted selection of fast products. The company sells mainly staple products like food, beverages, and household supplies, which is needed on a daily basis. Many people in Germany bought their main product from ALDI, and the additional product which is not found in ALDI are brought from other stores. ”ALDI stores carried only around 700 different products, compared to around 25,000 products carried by a traditional retailer and almost 150,000 carried by a Wal-Mart Supercenter”.
Even though Aldi was one of the largest and most booming retailers in Germany, some analysts expressed concerns that the company’s growth might suddenly slow down as the German market became saturated. However, more than 80% of the Germans lived within 20 minutes of an Aldi shop. Analysts said that this would limit the company’s expansion in Germany. Besides, in Germany, shopping at discount retailers was not limited to the lower income groups. This proves their deep saturation into the market and intensive network. Statistics show that there are repeated customer’s which proves that Aldi has created brand preference also. This proves that Aldi has migrated from the introduction stage to the Growth stage of its life cycle. Since retail business is looked in long term prospective, Aldi decided to continue its operations. People started recognizing the brand name and reputation of the company.
They started introducing innovative products and services and applied strategies to channelling their distribution network. Even though Aldi is in a stable stage and doing well but in my opinion it’s technically in the growth as it’s still expanding internationally due to success and increases. http://www.product-arts.com/articlelink/1246-company-evolution-a-the-organizational-life-cycle In relation to the population theory when a bigger business opens the smaller businesses will close unless it’s unique. When Aldi opens a shop in a small village or even in cities the smaller supermarkets such as spar they will either close or focus on selling products/services that are different to the bigger stores being Aldi.
According to Kraft’s Public Policy; Institutional Theory is “Policy-making that emphasizes the formal and legal aspects of government structures.” Institutional theory is “A widely accepted theoretical posture that emphasizes rational myths, isomorphism, and legitimacy. In relation to this theory Aldi has certain traits, structures and ways of operating as in all shops are fitted the same, they have the same layout which makes it easier on the customers for example if a customer is used to shopping it heir local Aldi shop if they visit a different town and decide to shop in an Aldi store there they will know the layout of the shop as it will be the same as their local Aldi and they also will have the same stock. (http://en.wikipedia.org/wiki/Institutional_theory)
Conclusion
Through my research I have come to believe that Aldi has a bright future not only in the Irish and UK market but internationally they could not help but succeed by the practices they have adopted and put in place. In my opinion Aldi’s aim is to dominate the Supermarket Industry and once they have accomplished the running of a maximum amount of stores operating within their guide lines they will enter their stable stage and will remain as one of the leading supermarket chains.
I believe that Aldi consists of good practices; good management skills and they have become a beneficial employer with Ireland and the UK. I do hope that Aldi are able to maintain these positive abilities which will hopefully prevent the company in the future from experiencing any decline symptoms which could lead the company to decline.
