Possible Economic, Political And Technological Future States Of Aldi Australia

Economic Future State

Discuss about the Supplier Exploitation and Ethical Climates.

In today’s competitive environment, it is very important for an organization envision its future states. Foreseeing the future states provides a description about the overall change vision and future situation of an organization in the country where it is operating its business. Companies use different frameworks to predict the future states in the country. This report includes three possible future states of Aldi Australia. These possible future states are economic, political and technological within which Aldi Australia could find it operating in the next 10 years. Moreover, it includes the suggestions for each future state that company can adapt to become successful. At the end, some benchmark measures and milestones are included which can be explain that company is using these adaptations properly as the environmental changes.

The major aim of the report is to analyze the three future states i.e. economic, political and technological state in context of Aldi Australia. Aldi Australia is an international discounted retail store with over 10,000 stores in 18 counties across the world including Australia. Moreover, report proposes to discuss the suggestions which can be used by the firm to adapt these future states.

In Australia, Aldi supermarket is operating its business in different future states (Grewal, Roggeveen & Nordfält, 2017). In next ten years, the company will be operating its business in different political, economic and technological states which are stated below:

In the future, Aldi Australia could find itself in a better economic environment as Australia is positioned as the 6^th fastest growing new economic traders and it has enticed global investments into this country. According to the Australian Department of Foreign Trade, the Australian economic growth rate is 2.7% and current unemployment rate is also 5.25% that is predicted to be declined in the timeframe of next 10 years (Australian Government Productivity Commission, 2011). As a leading retailer of Australia, Aldi Australia can continue to manage its momentum that will be driven by economic development. There are some economic factors which can support the growth of company i.e. strong economic growth and increasing purchasing power of people.

Considering the past performance, it is estimated that retail industry in Australian will expand at a growth rate of 5% over next 10 years. In addition to this, due to availability of various products at Aldi’s supermarket store, customers will be able to reduce their shopping costs and they can purchase the products on discounted prices. In Australian economic environment, sudden growth and sudden downfall of Aldi Australia is very common. During past few years, lower interest rates have given relief to the organization. Because of lower interest rates, purchasing power of retail customers has increased. In this way, Aldi Australia that was decreasing has suddenly begun growing (Renko & Druzijanic, 2014). This situation will be continued in the future also. Thus, the organization will be able to drive the growth due to continuously increasing disposable income, customers’ confidence and high net worth individuals. It would have a great impact on the growth and development of Aldi in Australia.

Political Future State

Aldi Australia is a popular name in the Australian retail sector that is fulfilling the demands of its customers via its grocery stores. The company is operating its business in the political environment where the tax policies are changing in accordance to the parties’ agenda. It will be the most uncertain factor for the growth of Aldi Australia (Schleper, Blome and Wuttke, 2015). It would be very challenging for the organization to operate the business according to German Law i.e. “The Code Law”. In the country, there are various food standards which are established by FSANZ that will have various impacts on the Aldi Australia because it develops barriers to new retailers. Like today, the government will be supporting the home products. The government interferes with different protectionism measures like tariffs to safeguard the retail products and brands of Australia which will have a great impact on the future growth of Aldi in this political scenario.

Moreover, Australian Retailer Association (ARA) has been motivating, protecting and promoting the retail brands by offering support and education since last 100 years and it will be continued in the future years also (Butler, 2014). It will provide a better environment to the Aldi Australia during coming years. The concerns towards packaged foods are very high so the legal needs would be high for Aldi. Thus, the government will have more intervention via rules and policies in the future to enhance the quality of Aldi’s products.

The future state of technological environment plays a significant role in the operations of retail and industry and Aldi Australia. One of the major technological developments for Aldi Australia is the online shopping system that will upgrade the Aldi’s future business operations. Supermarkets are progressively turning to the technology to support their service propositions with the increasing customers expecting the effective self-service checkouts from grocery stores. Till now, Aldi has not adopted this type of technology that can be adverse for the company in the future. The technological environment will become very much advanced for the retailers as they want to offer their services becoming more innovative and advanced (Chen, 2017). In the future, creative packaging innovation could be done by Aldi to enhance the quality of its products and to differentiate them.

Moreover, the organization can provide other technological facilities which will assist while shopping to add unique features. In next 10 years, the companies will be using effective and advanced technologies to store the food products for a longer duration. In the future, the company will be able to use more advanced and updated advertising and promotional processes as people will be more active on internet and social media sites. In the industry, there are two biggest retailers like Woolworths and Coles which are using effective and advanced technologies that will put competitive pressure on Aldi Australia (Knight, 2016).

Technological Future State

There are some recommendations for each future state which can be considered by Aldi Australia to adapt these future states. These suggestions are given below:

• Considering the economic stability in the country, Aldi Australia should open its more stores in the strategic locations of Australia. The purchasing power of customers has been increasing continusouly so company can increase its customer base by opening new stores in the country.
• The organization should focus on the efficient business model and local sourcing that will result in the exceptional value. It will help the shoppers to save a significant amount by going to Aldi instead of other big supermarkets (Findlay & Garnaut, 2017).
• To survive in the future economic changes, the company should make investment of over $1 billion within next three years in expanding and refurbishing its East Coast stores. In addition to this, it should increase its fresh food variety to address the major gap in its offers.

• Aldi Australia should increase the employment rate in the country by providing jobs to the Australian people as it will enable the organization to gain the support of Australian government.
• The company should create a flexible code of conduct and regulation system that can be modified according to the immediate changes in the government’s taxation policy and trade policies (Gray, Harymawan & Nowland, 2016).
• It should comply with all the rules and regulations which are imposed by the government on retailers. It should follow the Food standard code that is established by FSANZ. It will enable the organization to attract more customers towards its services.

• Considering the competitive pressure to advanced technology use, the company should also use the modern technology infrastructure at its stores (Gregory, 2015). For example, Aldi Australia should use green refrigeration technology in the future so that it can store the perishable products for a longer duration.
• The company should make investment on technological advancements like self-service checkouts, faster payment system, online portal, online inventory records etc.
• Furthermore, Aldi Australia should adopt Internet of Things for its supply chain and other operations so that it can align with the future state of technological environment (Borland, et al, 2016).

Thus, these suggestions will assist the organization to be successful in the future years.

For each of the above adaptations, the benchmark measures and milestones will be set that will ensure that the company is adapting the appropriately as the changes in environment. These are the measurement tools which can assist the organization to analyse and improve the performance of company (Epstein & Buhovac, 2014). The benchmark measures and milestones for each adaptation are given below:

A systematic process can be followed to develop the benchmark measures and milestones for Aldi Australia. To ensure the proper adaptation of economic environmental changes, the below benchmark measures and milestones are established:

Conclusion

From the above analysis, it can be concluded that the future states of environment are continuously changing for Aldi Australia with the passage of time. In the above report, three of the future states i.e. political, economic and technological for Aldi Australia are defined. It can be founded that Australia will be providing a favourable business environment within next 10 years. There are some recommendations which can be used by the organization to adapt different future states of environment. If organization will operate its business by setting given milestones and benchmarks, it will be able to adapt environmental changes.

Thus, it is hereby recommended that Aldi Australia should adopt effective strategies to adapt the above future states of environment. As mentioned above, the purchasing power of the customers has been increasing in Australia so company should increase the prices of its products. It will assist the organization to increase its revenues. In addition to this, it should focus on how it can increase its customers in the challenging environment. In today’s modern environment, people are becoming very much aware about new and advanced technology so it should adopt new technology in its retail operations.

References

Australian Government Productivity Commission. (2011). Economic Structure and Performance of the Australian Retail Industry. Retrieved from https://melbourneinstitute.unimelb.edu.au/assets/documents/hilda-bibliography/other-publications/2011/Productivity_Commission_retail-industry.pdf.

Borland, H., Ambrosini, V., Lindgreen, A. and Vanhamme, J. (2016). Building theory at the intersection of ecological sustainability and strategic management. Journal of Business Ethics, pp.1-15.

Butler, S. (2014). Aldi vows to fight on in supermarket price war as UK profits leap 65%. The Guardian.

Chen, C. (2017). 5 Ways Technology Is Transforming the Grocery Industry, Retrieved from https://www.thestreet.com/story/14325676/1/5-ways-technology-is-changing-grocery-industry.html.

Connell, J. (2016). Rural change in Australia: population, economy, environment. Routledge.

Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.

Findlay, C., & Garnaut, R. (Eds.). (2017). The political economy of manufacturing protection: Experiences of ASEAN and Australia (Vol. 19). Routledge.

Gray, S., Harymawan, I., & Nowland, J. (2016). Political and government connections on corporate boards in Australia: Good for business?. Australian Journal of Management, 41(1), 3-26.

Gregory, J. (2015). The Internet of Things: revolutionizing the retail industry. Accenture Strategy.

Grewal, D., Roggeveen, A. L., & Nordfält, J. (2017). The future of retailing. Journal of Retailing, 93(1), 1-6.

Khan, S. (2011). Marketing Mix Strategy Adaptation: A Retail Organisation’s Response To The Global Economic Downturn. Cape Peninsula University of Technology.

Knight, E. (2016). The Aldi effect: Why your grocery bill is shrinking. Retrieved from https://www.smh.com.au/business/companies/the-aldi-effect-why-your-grocery-bill-is-shrinking-20160620-gpn157.html.

Low, C. (2016). Coles, Woolworths, Aldi price war gets personal with cut-price tissues and toothpaste. The Sydney Morning Herald.

Nenycz-Thiel, M. (2011). Private labels in Australia: A case where retailer concentration does not predicate private labels share. Journal of Brand Management, 18(8), 624-633.

Renko, S., & Druzijanic, M. (2014). Perceived usefulness of innovative technology in retailing: Consumers? and retailers? point of view. Journal of retailing and consumer services, 21(5), 836-843.

Schleper, M.C., Blome, C. and Wuttke, D.A. (2015). The dark side of buyer power: Supplier exploitation and the role of ethical climates. Journal of Business Ethics, pp.1-18.

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