Sean Spencer 2/1/2016 BA 427 Business Policy Aldi: The Dark Horse Discounter Should Wal-Mart be worried about Aldi? Should Aldi be worried about Wal-mart? Do you believe Aldi to be at a competitive advantage or disadvantage relative to Wal-mart? Both Walmart and Aldi should be worried about each other because both have distinct advantages over each other in bringing in customers. Aldi advantage is that its stores provide the lowest price in town with their products being on average 15-20% cheaper than Wal-Mart (pg 3). How it does this is by cutting costs and offering its products at the lowest possible price. This practice of cutting cost is best summed up by the Aldi motto “"When you buy a can of peas at Aldi, you're paying almost …show more content…
The point is that both stores have advantages and disadvantages that the other can exploit, but if I had to choose which store had the competitive advantage I would have to say Aldi. The reason why Aldi seems to have the competitive advantage is that Aldi clearly provides the lowest possible price for all their products, which Walmart could never match. Why this is important is because both stores main customer base tend to be more work class to lower middle class. Why this is important because with this customer base the number one concern tends to be price and less on traditional concerns of convenience and quality. Also even though Wal-Mart provides more goods and service and are more capable to adapt to the customers' trends, Aldi operates at a much lower price and can operate and build new stores at a fraction of the cost Walmart can which can be vital if a bidding war where to break out and completion in a new market. Aldi is well poised to compete and beat Walmart and should be a force to come in the retail business. What is Aldi’s strategy? The main focus of Aldi is to offer the lowest possible price to the customer while operating their stores at the lowest cost as well. I have already stated how Aldi does not invest in advertising or any research of any kind and the main investment is in building new stores or logistics to supply those stores. But Aldi’s also uses the strategy of tricking its customers to do all the
The reputation and recognition make Aldi attractive in the marketing activities and this aspect needs to be improved in the future to compete with both existing and forthcoming rivals. Meanwhile, the high buying power and costs control would help Aldi to diversify its products and increase market penetration to serve diverse Australian population. This leads to the reconsideration of Aldi’s current strategy of limiting product range to adopt other strategies as a number of differentiation strategies has been used by other
ALDI claims that when you shop at ALDI, you can always count on finding products that are consistently equal to or better than the top national brands in quality and taste, for up to 50% less than at traditional grocery stores. ALDI claims that by shopping at their stores, one can save an average of $115 a month on family’s groceries on staples like fresh produce, milk, bread and eggs.
As Aldi has already established itself as a large discount supermarket chain with over 10,000 stores in 18 different countries including Australia (2001), and holds a large market share in the grocery world due to its business culture and market leading initiatives. This report aims to provide the ALDI board of directors with:
1.3 Physical Resources & Capabilities The ALDI brothers took over the family business of their parents in 1946. World wide expansion led to enormous growth. This comprises around 9800 stores (1000 to 1500 SQM each). The layout is simple with wide ails designed to refill shelves in the fastest, most convenient way {Brands, D. 2003}. They offer a small assortment of mainly fast-moving items (approximately 700 food – including a slim and organic line- and non food products). Small warehouses are located at the back of each store. Affiliates are equipped with limited technology such as intelligent cash systems high-end product concerning quality and price and bottle deposit machines. ALDI won the 2008 energy management award for great results in terms of cooling systems, illumination etc. Most stores have about 100 parking space and a shopping cart area near the entrance. ALDI has a long history which implies that they have gained great experience over the years. The location and layout of stores are designed to support fast and efficient supply and not especially aimed at customer needs. This is a weakness. Stores advantageously located as there are in convenient reach for consumers. Their product range is adapted to various consumer needs (organic, healthy living). The technological equipments are of high quality enabling fast operations at the checkout (ALDI’s staff are two times faster compared with other similar operations). This is
When we compare with amazon.com we will find same features and can sell our goods at amazon.com
From the time it opened, Aldi has expanded the number of product assortments that allow consumers to find nearly anything they need to supply and feed their families. Aldi developed a strong marketing program and decentralized their pricing and assortments that also include some well-known products. Aldi’s begins its value propositions to shoppers with its amazingly low prices. Their “hard” discount pricing, averages about 30% below standard supermarkets like Winn-Dixie or Kroger’s (Brick, 2016). They attribute their success and growth to the “hard discount” model as it has demonstrated to be highly effective. Aldi is different than “large” discounters like Walmart where Walmart’s varieties are limited in size and led by private label products, and investments are made in stores atmosphere, unfortunately, resulting in lackluster customer service. This allows “hard” discounters like Aldi to win the grocery price war by greater margins than Walmart, making Aldi a major competitor of Walmart (Bartone,
This report is going to present the current culture of Aldi, critically examining its current culture and possible proposal for a change in culture. It identifies the current organisational culture, its strengths and weaknesses and make recommendations necessary for an organisational culture change.
Evidently, Wal-Mart is not doing anything to differentiate itself from rivals. It gives no frills to self-service outlets always providing the cheapest prices. Through a well-built influence with suppliers, the company has gained the power to manipulate prices and amend manufacturing procedures thus wringing out more savings for its customers. All that the company does from the frequent calls to suppliers to doubling up execs in hotel rooms aimed at saving the
6. Store Layout: Store layout is crucial for customers to move. Shoppers won’t need a map to navigate their local Aldi, with a 5 star rating for store lay out. Coles, IGA & Woolworths received 4 stars for their layout.
Nevertheless, the vertical value chain created by Aldi benefits the company’s corporate strategy. To be a local supplier,
Aldi’s will be expanding with 400 stores in the United States to keep up on pressure price. It is a privately held German retailer, known for cheap prices on private brand food products, being sold in rudimentary stores, has recently included inexpensive fashion to its availability. This will be a competitive factor for low priced retailers.
Although Publix has branded the industry with the value and quality of their products and services, companies such as Wal-Mart can give competition to Publix since they offer a larger variety of services and products besides food. Walmart’s focus “Low Prices Everyday - Save Money Live Better” leads the industry but their customer service level is nowhere near Publix’s.
The report is a brief overview of ALDI’s performance based on their current strategy. The report will analyze ALDI’s strategy to perform effectively within the highly current competitive market. The report will identify the mission and fundamental objective of the company. Furthermore, the report draws attention to the analysis of strategies of ALDI and evaluates the performance of their current strategy
Aldi is an international company which has stores in multiple countries such as Germany, United Kingdom, and in the United States etc. As the case shows, Aldi is very popular in Germany, which captured 90% of shoppers. Aldi’s success in Germany implies its well-designed business model and the strategy of Aldi will be discussed below (See Exhibit 1).
This dissertation is submitted in partial fulfillment of the requirements for the Degree in Marketing Practice