Report on Business and the Environment of the Aldi

 Introduction of Business and the Environment of the Aldi

             Economics is a study of the consumption of goods and services, distribution, and production. In each country, economic condition is different because of the difference in trading and consumption behavior, government interventions, and national income. The macroeconomic environment of a country draws an impact on the overall lifestyle of citizens and business outcomes in the country. Organizations perform in the country and generate an impact on the overall national economy. Thus, the national economy and businesses both have an impact on each other. Present work is consist of analysis and assessment of the national economy and businesses of the Aldi (retailers). Present work will discuss the business type, legal structure, organizational objective, and business strategy of Aldi. 

2.      National Economy of Business and the Environment

           The term national economy is a widely discussed term that represents the economic-related information of a country or state. National economics cover several areas relevant to the growth and stability of the economy. National economics cover areas such as economic growth, inflation, employment and unemployment, and balance of payments. Analysis of national economy presents that macroeconomic indicators can provide adequate information concerning with the national economy. The macroeconomic indicators are the balance of payment, rate of inflation, economic growth, and level of output. Basically, all these macroeconomic indicators have the primary function to provide detailed information and numerical information about the condition of the national economy. Increase in the rate of unemployment can definitely create a bad impact on the national economy. Thus by measuring the unemployment level, we can predict the condition of the national economy. Concluding all analysis in a brief we can say that the national economy term is the representation of the economic condition of a nation in the specific duration.   

3.      Reasons for Government Intervention in an Economy

          The government has a major impact on the economy by the development of economic policies in the country. The government gets involved in the economic market with different methods including state production, financial interventions, state production, income transfer, and regulations. The government needs to monitor operations in the market to ensure the quality of the offered products to the citizen for the reason government use regulation. The assessment indicates that another major reason for government intervention in the economy is to control activities, monopoly, and prices in the market. For this purpose, the government takes the assistance of financial interventions. Whenever the government fails to regulate markets appropriately it causes to fail the whole national economy. 

            The major reasons for the Government to take its policy intervention in an economy are (Bénassy-Quéré & Pisani-Ferry, 2018) such as:

·         In order to correct the market catastrophe

·         In order to accomplish a further justifiable distribution of both wealth and income

·         In order to enhance the economic performance

For types of interventions performed by the Government are described on the table below

Market Consequence	Market Failure	Government Intervention
Immobility aspect	Operational unemployment	Government investment in training and education
Public products	The market is failed to deliver pure public products	Government subsidies the public products for a huge public consumption
Failing products	Over product’s consumption along with the adverse externalities	Government advertisement for proper product’s consumption
Quality products	Products’ under consumption with progressive externalities	Government subsidies
Monopoly appearance in a market	Loss of allocative effectiveness  due to higher prices	Government’s policy regarding competition

4.      An evaluation of market structures and how they influence business

             Market structures basically consist of different structure including monopoly, monopolistic competition, perfect competition, and oligopoly markets.

·         Perfect Competition Market Structure

The perfect competition-based market provides the opportunity to the firms to provide the best possible product or service for the targeted customers and society (Dransfield, 2013). The perfect competition also encourages businesses to bring up some innovative outcomes with a competitive advantage. This perfect competition market structure is actually a hypothetically ideal structure of market, in which there are free access and exit which enable the businesses to enter the market effortlessly and exit the market when they found out that the market is not profitable. Examples for the businesses in this perfect competition market structure are agricultural and craft businesses.

·         Monopolistic Competition Market structure

In this structure, the businesses sell highly identical products with only minor differences that they apply as the foundation of their advertising and marketing presentation. Furthermore, in monopolistic competition, the producers are relatively priced maximizers. Some samples for the businesses in a monopolistic competition market structure are such as beauty salons, or repair and service markets (Ashwin, Taylor, & Mankiw, 2016).

·         A monopoly represents a market dominated by a single firm. Monopoly influences the business of new entrants by creating high barriers and risk factors for entrance and growth in the market. Both monopoly and the perfect competition market structures have the capability to maximize the profit and minimize the costs. One of the great examples for the businesses that have been succeeded in doing monopolies is Microsoft.

·         An oligopoly market structure influences the business of firms by providing help to the rivals to thrive. In this market structure, various companies are work together, with a purpose to limit the competition, and eventually dominate a market place. Some examples for the businesses in this Oligopoly market structure are fast food and airline companies (Ashwin, Taylor, & Mankiw, 2016).

5.      Stakeholder’s Influence in the Decision Making Process

          Stakeholders influence the decision-making process in an organization. Stakeholders are basically the entities or people having an interest in the business of an organization. Stakeholders stand for their benefit and interest and influence the decision-making process. The critical assessment represents that higher involvement of stakeholders results in higher interest. Organizations consider their interests and requirements to get long term success. Stakeholder's satisfaction results in the increase of revenue stream and sales maximization. Therefore, in decision making, process organizations give importance to the suggestions and requirements of the stakeholders for organizational benefit (Maignan & Ferrell, 2004). 

In addition to this, a stakeholder is actually defined as the people who have a consigned interest, or else stake, in the business operations. Stakeholders for a company are categorized as (Buckley, Wheeler, & Halbesleben, 2015):

·         The employees

Employees are the main resource for any company, and therefore, every single decision made by the executive should consider the employees. For example, the company should always promote cultural diversity and non-discrimination for its decisions.

·         The customers

It is obvious that without any support from the customers, then the company would not able to survive in the business. The main consideration for the company to take regarding the customers is such as providing the products or services that would be valued by the customers.

·         Business partners

Once a company is partnering with other organizations, then it definitely fundamental for the company to make a win-win decision that will satisfy the business partners while also benefits the company as well.

·         Societies

The societies also should be included in every decision made by the company to make sure that the company is performing the proper Corporate Social Responsibility.

6.      Analysis of the business organization of Aldi

         Aldi is the world-leading grocery retailers. The organization is originated by a German family in 1913. Analysis of the business organization and legal structure of Aldi indicate that it's a privately owned company. Private owners of Aldi are responsible to run all the operations of Aldi without any financial or business-related assistance from state and voluntary organizations. The analysis presents that the legal form and ownership structure of Aldi is Limited Liability Company (LLC). The key characteristics of Aldi as Limited Liability Company are presented below in list:

v  As a legal person or entity, Aldi has the right to own property and cars

v  Finances and taxes are separate from owners

v  Owner and business are separate entities 

In brief, Aldi has made groundbreaking with its unique approach in retail market place. The company focuses its business operations on providing best quality products that worth for money spent by its customers. Aldi has the capability to achieve by making sure the efficiency of its entire business operations side to side with its main values of consistency, simplicity, as well as responsibility. By implementing an assortment of lean methods, the company is able to provide the finest quality products to all of its customers at an affordable price.

7.      Advantages and disadvantages of Aldi’s type of business

The advantages and disadvantages of Aldi's type of business are presented below in the table.

Advantages	Disadvantages
v  Provide limited liabilities to the shareholders and directors of the organization. v  Provide protection from legal obligations in case of liquidity issues or bankruptcy. v  The company works as a legally responsible person having the right to buy assets.  v  Provide a flexible internal structure.	v  Profit made after taxes belongs to the company, not specifically to the owners. v  Profit requires to be equally (or according to contract) distributed in all owners. v  Capital investment cannot be obtained by selling a portion of the business

The table above described the real analysis of both advantages and disadvantages of a type of LLC (limited liability Company) legal form and organizational structure, which is the platform of the Aldi organization. Moreover, the particular type of business is according to the requirement of the Aldi organization.

8.      Evaluation of the suitability of Aldi’s organization

           Evaluation of the suitability of Aldi's organization indicates that LLC is the most suitable business type for Aldi. The key functions of the Aldi organization type are presented here to elaborate on the suitability of this organization type for Aldi. At first, the key function of this type is to support Aldi in profit generation. It deals with taxes and other legal obligations as a legally responsible person thus owners can freely operate in the market to generate profit. The prime function of LLC is to provide a flexible internal structure. Somehow, in LLC capital investment cannot be obtained by selling a portion of the business.  Furthermore, a platform of LLC or Limited Liability Company is an ideal one for Aldi which doing its business in the retail industry. The reason is due to LLC is a structure that will enable the owner to separate the personal assets from the assets of their retail. For example, the personal assets of the owners such as cars or houses protected by the LLC from getting measured in case if the company will eventually get bankrupt (Abbamonte, 2018).

9.      Importance of different business objectives for Aldi.

           Organizational objectives represent the objectives and goals set out by the corporate level management of an organization with the purpose to regulate and align all other activities carried out by the organization in such a manner that accomplish these objectives (Griffin, 2015). Objectives of Aldi are related to the market standing, productivity, employees, management, resources, and corporate responsibility. The market standing objectives are important for Aldi as it will provide support in capturing large market shares and have satisfied customers. Aldi is following lean management approaches to fulfill its objectives related to productivity and resources. These objectives will support Aldi to reduce cost, increase profit and ensure cost-effective production. The potential benefit linked with these objectives is the evidence of its importance.

            A different business objective made by Aldi has been approved with how the company could compete successfully in the supermarket market industry in the United Kingdom, by only delivering the best quality products at affordable prices, in addition to how Aldi has been maintaining its good relationship with all of its stakeholders. This quite important since in these modern days, there are lots of retailers as the competitors of Aldi, and, with this different objective along with the different business operations, the company could reach its success.

10.  Development of business strategy and competitive advantage

         Evaluation of the range of concepts associated with the development of business strategy and competitive advantage in relation to the Aldi represents the detailed and important information. Aldi has set objectives and goals for continuous growth. Strategic management of Aldi is responsible to plan, monitor, analyze and assess all the activities and operations carried out in Aldi to ensure accomplishment of corporate goals and objectives. According to evaluation, Aldi is developing a competitive advantage in the market by promoting efficiency in organizational operations. Competitive advantage is also focused on the cost structure for production and execution of the business operations. Somehow, the case study suggests that lean production of Aldi is not limited to building a competitive advantage with control over cost but it also relates to creating value for the customers.  All of these presentations are the ones that lead Aldi to achieve its success and gain customer loyalty, which is highly essential in the context of retail business. The reason is due to there is tough competition in the retail market industry nowadays which makes retailers should present better performance to attract the customers.

11.  Recommendations of Business and the Environment of the Aldi

         There are some recommendations carried out from the analysis and assessment of the different business concepts and Aldi business. At first, the Aldi organization should set clear and smart goals for sustainable growth in the market. Only focus on cost is not enough Aldi should also pay attention to the maximization of market shares with an increase in customer’s satisfaction towards offered services and products. Secondly, Aldi should also support franchises type of business to engage more enterprisers and investors in the Aldi business as it will benefit in capturing large market shares in the targeted market.  

12.  Conclusion of Business and the Environment of the Aldi

            The whole discussion concludes that organization working in the same industry can be formed of different legal structures and business structures with various kinds of business objectives. Aldi is a privately owned organization with a legal form of limited liability company (LLC), working in Germany from last many years. Aldi’s has limited liability for its owners in case of financial issues.  Management has established some goals and objectives to ensure success in the targeted market. Recommendation based on the analysis shows that Aldi needs to have to pay more focus on its business structure as it is really effective but the addition of other entrepreneurs and franchises can ensure rapid growth in the market.