TASK 1. 

Evaluate the following 2 countries to identify which represents the most potentially attractive target market for Aldi's future international expansion strategy:

• Czech Republic
• New Zealand

In order to evaluate which of these 2 countries represents the most potentially attractive target market, you are required to undertake a comparative PESTEL analysis of those macro-environmental factors of the 2 countries that are relevant to Aldi. 

– Worth 20% of the overall mark

– Not included in the word count

• This background analysis must be included as an appendix, presented in table format and must be no more than 5 pages in length. 

• Data should be recent, primarily quantitative and obtained from appropriate sources (e.g. the most recently published World Economic Forum's Global Competitiveness report).
• A scoring system should be used for each macro-environmental factor / sub-factor for each country to show whether each factor / sub-factor is more or less attractive for your company. These scores should then be totalled for each country in order to arrive at an overall scoring of attractiveness for each country.

TASK 2. 

Discuss the rationale for the selection of your chosen market. Your rationale should be justified with a more detailed discussion of your PESTEL analysis of the macro-environmental factors of your chosen market that you have presented in the appendix for Task 1. This discussion should explicitly consider the implications of the macro-environmental factors of your chosen market for Aldi.

– Worth 20% of the overall mark; 825 words.

• This task must be presented in the first section of the main body of your report.

TASK 3. 

Apply the 5-Forces model to critically analyse the competitive intensity of the industrial environment of Aldi in your chosen market. A SWOT analysis is not acceptable.

– Worth 20% of the overall mark; 825 words.

• This task must be presented in the second section of the main body of your report.

TASK 4. 

Analyse the firm's internal environment in order to EITHER:

i) critically evaluate the resources and capabilities of Aldi and the competitive implications of these for the company when entering into your chosen market (this will require an application of the VRIO framework)

OR:

ii) identify Aldi's internal value-adding activities and critically evaluate which of these will be most relevant in supporting the company to enter into your chosen market (this will require an application of the Value Chain model). 

A SWOT analysis for either option is not acceptable.

– Worth 20% of the overall mark; 825 words.

• This task must be presented in the third section of the main body of your report.

TASK 5. 

Critically evaluate the various modes of entry available to Aldi and recommend – with justification based on the findings of your analyses in Tasks 2, 3 & 4 above – the most suitable mode of entry that will enable this strategic international expansion to be a success for the company. 

– Worth 20% of the overall mark; 825 words.

• This task must be presented in the fourth and final section of the main body of your report.

Introduction

The world is coming close with globalization and this has made international business and world economy grow manifolds, within a span of very short time (Okoye & Nwaigwe, 2015). Organizations are expanding beyond the national boundaries to perform globally. This is drawing huge profits and growth aspects of organizations as well as countries. But the growth and profits are not coming alone, they bring along huge risk and challenges of international businesses too (CTI Reviews, 2016). The same applies to the company Aldi, under concern, that has business operations in around 12 countries and has plans to expand further. The report would extend to analyse the external markets where Aldi has benefits to venture upon as well as internal environment analysis to depict the capability of Aldi to perform in selected market. The results of analysis can be used as a decision-making measure for Aldi to plan its initiatives for expansion.

Task 2:

Based on PESTLE analysis conducted for both the countries Czech Republic and New Zealand, for Aldi's expansion, Czech Republic scores better as compared to New Zealand. A PESTLE analysis conducted considered all macro-economic factors.

GDP Growth Rate: The GDP growth rate of a country depicts its economic prosperity. The figures specified in Table 1 in appendix 1 depict a lower growth rate for the Czech Republic. This is a cause of concern, but when the difference is checked by comparing to New Zealand, the difference is very low. Also, if the forecasts are checked for 2018 the prospects of growth rate seem better for The Czech Republic over New Zealand making Czech a better economy to invest in.

Interest Rate: When planning expansion, companies need to do quite a lot of investments in purchases. At that phase, a lowered interest rate is a point of attraction for investing companies. Figures in Table 1 in appendix 1 specify interest rates to be lower in the Czech Republic as compared to New Zealand, making Czech Republic a better option to expand business for Aldi.

(Some parts of the solution has been blurred due to privacy protection policy)