QHO335 Business Project Assignment Sample

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Introduction to Business Project Assignment

The cost-of-living crisis is a circumstance where the cost of essential items such as housing, food, energy, transportation, and healthcare increases at a faster rate compared to the average household income. In addition, climate shocks, supply chain disruptions, inflation, pandemic after-effects, and reduced staffing levels are significant factors that contribute massively to the cost-of-living crisis. This situation has a strong influence on the overall growth, success, and profitability of businesses. As a result, people and families struggle with daily expenses and have less disposable income to spend on products and services to meet their basic needs. This business project will analyse Aldi’s response during the cost-of-living crisis in the UK. Along with this, the project will highlight the challenges faced by Aldi due to this situation and the strategies they implemented to address the rising crisis while considering support options such as Online Assignment Help UK for academic guidance.

QHO335 Business Project Assignment Sample

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Sarah Davis 7 Years | MA

Results

Aldi Inc. is one of the leading supermarket chain and it is a subsidiary of Einkauf GmbH & Co oHG, which operates discount grocery stores. The headquarter of Aldi is situated in the US but it also operates its business within the UK from 1990. The portfolio of chosen business includes food products, household goods, beverages, baby care, fruits and vegetables, personal care, pet food, pantry products, meat etc. Along with this, the mission statement of the selected business is offering better and high-quality products to the customers at low price. The core values of the chosen business encompass simplicity, consistency and responsibility.

In the context of organizational structure, Aldi is a family-owned business and it has two separate entities such as ALDI SUD and ALDI NORD which are manage by their family members (Aldi, 2024). The organizational strategy of the chosen business is based on the sustainability and it is committing to reducing its operational emissions by investing in renewable energy, reduction in energy consumption, enhancing the efficiency of transport and procuring 100% green electricity. On the other hand, Aldi has an effective and positive culture because it develops spaces where employees of all experiences, beliefs and cultures can thrive.

The cost of living crisis has a massive influence on the overall growth of the business because it reduces its profitability by reducing the power of customers to spend their money on essential products and services due to its costs (Pedersen, Ritter and Di Benedetto, 2020). In general, all the companies are negatively impacted from the cost-of-living crisis but it positively influences Aldi’s operation. In addition, this situation positively impacts on the process of Aldi because it is one of the leading discounted grocery stores so that time the customers are likely to purchase the products at discounted prices to meet their needs and requirements. The cost-of-living crisis has changed the way of Aldi’s operation because it increases profitability at higher rates and market share due to boosting in sales. In this situation the customers are likely to purchase the products of a low price due to less disposable income of the individuals and families so it becomes fourth largest supermarket in the UK by overtaking Morrison’s.

Furthermore, at the time of cost-of-living crises the shopping habits of the customers were changed and it attracted wide range of customers to its stores (Hill and Webber, 2022). In December, 2022 the chosen supermarket announced that its sales were recorded at £ 15.5 million from almost £ 2 million (Beevers, 2023).

Form the above figure it has been depicted that, the sales of Aldi drastically increases even at the time of cost-living crises and in 2022 it was higher by 27% as compared to previous years (Bedford, 2024). Apart from this, it helps in attracted huge number of customers which eventually positively impacts on the overall profitability and sales. Due to low disposable income of the people Aldi started to sale its products at low prices to fulfil their basic needs and requirements. In 2022, Aldi attracted 1 million customers due to the cost-of-living crisis as compare to other supermarkets in the UK. (Armstrong, 2023)

Challenges and strategies

With the opportunities, there were several challenges that were faced by Aldi due to cost-of-living crisis which negatively impacted the overall growth and success. Supply chain disruption is considered as one of the critical challenges that faced by the chosen business at the time of the cost-living crisis (Francis-Devine et al, 2022). This challenge leads to financial consequences, customer satisfaction and reputation, legal and regulatory issue as well as employee productivity and morale which negatively impacts on the overall sales and profitability of Aldi. At that time due to the increase of sales Aldi emphasised on effective process of manufacturing which increases costs. Usually, if the production costs of the organization are increases then they focus on increasing the prices of the products to earn higher productivity. But, Aldi not increase the prices of its products during the cost-living crisis even the production cost rapidly boosted which eventually negatively influenced on overall profitability and sales. Apart from this, supply chain disruption can create uncertainty among employees which negatively influences on employee morale (Azadegan et al, 2020). Due to lower morale of the employees who were unable to focus on producing the products in a successful way which leads to increased dissatisfaction of the customers and their experience.

Intense competition is another challenge that faced by Aldi at the time of cost-of-living crisis. The grocery and supermarket sector of the UK is extremely competitive due to large number of companies that are providing the grocery products to customers to meet their needs and requirements (Handoyo et al, 2023). Tesco, Lidl, Farmfoods etc., are the biggest rivalries of Aldi they provide similar products to the customers. In the event of cost-living-crisis, the competitors of the chosen business were also not raising the prices of the products due to less disposable income of the people and families. From this challenge, Aldi is unable to gain a competitive advantage over competitors which negatively influences on its overall profitability and sales.

New strategies

Supply chain disruption is a common challenge that is faced by Aldi due to cost-of-living-crisis. To improve the performance, the selected business must implement the effective strategy to react to rise of living costs and continue its operation for long period of time. For the continue operation successfully, Aldi can need to emphasis on sustainable supply chain because it lead to processes are less vulnerable to disruption. Adoption of this strategy is useful for the chosen company in order to mitigate the challenge and continue to its operation successfully because it aids in reduce negative environmental impact, enhance continuity of supply, protecting against reputational damage and gain competitive advantage over competitors (Alzoubi et al, 2020). In addition, another challenge is extreme competition that faced by Aldi due to cost-of-living crisis situation. For gaining the competitive advantage over competitors and continue its operation, Aldi can emphasis on integrating emerging and latest technologies to produce better products to the customers at low prices.

Discussion

From the findings, it has been discussed that, Aldi performed excellently during the cost-of-living crisis. At that time, the prices of the essential products are drastically increases but there is no change in the disposable income of the people. For responding cost-of-living crisis Adli implemented various strategies such as supporting its employees and focusing on customers. Adoption of these alternative strategies is beneficial for the chosen business in its future success because it helps in increase morale and motivation as well as satisfaction of the customers (KHAN, 2022). At that time the cost of wages was increased by Aldi in order to support its employees from which they put all their efforts to give their performance in effective way. Being a discount grocery store, Aldi was also provided loyalty schemes, cash back rewards etc., to the customers during cost-living crisis.

Conclusion

By summing up, it has been concluded that, Aldi is one of leading discount grocery store in the UK. During the situation of cost-living crisis, the chosen organization performs well in the competitive market by providing the products on discount rates to the customers that result in increased sales and profitability. However, during this time, Aldi also faced various challenges such as supply chain disruption and intense competition. To mitigate this challenge and continue its operation, Aldi needs to emphasize on sustainable supply chain and integrate latest and emerging technologies. To respond to the rise in living costs, Aldi focused on its customers and support its customers.

Recommendation

• Focus on innovation: Aldi could introduce innovative and unique products at lower prices in comparison to the competitors by using the latest and updated technologies. Adoption of this strategy can be beneficial for Aldi because it helps attract and retain a wide range of customers over rivalries for the long time which leads to increased profitability and sales
• Sustainable practices: For future success, the chosen organization needs to focus on sustainability to provide eco-friendly products to customers in order to increase their satisfaction and enhance their experience (Muriithi, 2020).

References

Books and Journals

• Alzoubi, H., Ahmed, G., Al-Gasaymeh, A. and Kurdi, B., 2020. Empirical study on sustainable supply chain strategies and its impact on competitive priorities: The mediating role of supply chain collaboration. Management Science Letters, 10(3), pp.703-708.
• Azadegan, A., Mellat Parast, M., Lucianetti, L., Nishant, R. and Blackhurst, J., 2020. Supply chain disruptions and business continuity: An empirical assessment. Decision Sciences, 51(1), pp.38-73.
• Francis-Devine, B., D. Harari., M. Keep., P. Bolton, and R. Harker., 2022. Rising cost of living in the UK. House of Commons Library.
• Handoyo, S., Suharman, H., Ghani, E.K. and Soedarsono, S., 2023. A business strategy, operational efficiency, ownership structure, and manufacturing performance: The moderating role of market uncertainty and competition intensity and its implication on open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 9(2), p.100039.
• Hill, K. and Webber, R., 2022. From pandemic to cost of living crisis: Low-income households in challenging times. Joseph Rowntree Foundation.
• KHAN, N., 2022. The cost of living crisis: how can we tackle fuel poverty and food insecurity in practice?. British Journal of General Practice, 72(720), pp.330-331.
• Muriithi, S.M., 2020. The future business diagnostic model: The core to successful business sustainability in the 21st century.
• Pedersen, C.L., Ritter, T. and Di Benedetto, C.A., 2020. Managing through a crisis: Managerial implications for business-to-business firms. Industrial Marketing Management, 88, pp.314-322.

Online

• Ald,2024. About us. Online. Available through: <https://www.aldi.co.uk/corporate/about>
• Armstrong, A, 2023. Aldi attracted one million new customers. Online. Available through: <https://www.thesun.co.uk/money/24134281/aldi-attracted-one-million-new-customers/ >
• Bedford, E, 2024. Sales growth of Aldi. Online. Available through: <https://www.statista.com/statistics/386763/aldi-sales-percentage-change-great-britain-uk/ >
• Beevers, A, 2023. Aldi sales boosted by cost-of-living crisis. Online. Available through: <https://www.theretailbulletin.com/food-and-drink/aldi-sales-boosted-by-cost-of-living-crisis-25-09-2023/#:~:text=by%20Angela%20BeeverAldi%20has%20announced%20that%20its%20sales%20rose%20by%20almost%20%C2%A3,more%20customers%20to%20its%20stores. >