Aldi Case

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

When examining competitive advantage, it is also important to consider the market and take into account the existing competition against larger firms.

ALDI has been able to tap a niche in the market that is more appealing to small stores, do not care much about the brand of a product but more to the economic benefit by buying the product in a more economical way.

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,

Stores are also competing in other forms in order to secure loyal customers. Some of the forms are product range and quality by which stores are offering privately-labeled products that are primarily used in the commodity lines at lower prices.(Australian Government, Department of Agriculture) This has caused a significant shift in the industry, thus allowing players like ALDI who started with a private labeled product early on to gain and improve its market share. Another major form is convenience where several non-price factors such as opening hours, strategic locations, parking area, distribution options (delivery or in-store pickup) and online shopping comes into play. (Australian Government, Department of Agriculture)

Aldi: A German Supermarket retailer spent hundreds of million dollars improving its entire east coast for the next 3-5 years. Exclusive private label brands growing 6.6% in year 2014 and has a total grocery sales growth of 2.4%. Aldi has a low cost of labour, low rent and low general and administrative costs.

If focusing on the retail industry it involved, such as Coles supermarket, the main competition comes from its countpart, Woolworth. Coles and Safeway are the two main retailors in Australia as analysed by Inside Retailing organisation in Australia. Australia’s retail industry has developed to become a leading industry in the national market as well as in the world market. As this article indicates, all entities in the retail industry confront pierce competition. Also cited in the article, a 1966 issue of trade magazine Inside the Food Industry observed that: Woolworths and Coles are now nearing 10% of total Australian retail sales. They are opening more stores than anyone else. Up until now, this figure can be much bigger than 10 percent; and the competition between retailers is increasingly intense.

The suppliers get the advantages of making their products be showcased for the consumers thru these retailing outlets. A wider scope of retail outlets could mean wider scope for the brand recognition of the seller’s products, that is why these retailing giants has more power than suppliers. But when it comes to distribution, having a strong supplier is important, the company be better over competitors when it comes to qualitative factors such as on time deliveries on their branches and wider network of

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.

Today’s customers are more aware and empowered, and have more bargaining power due to the exponential increase in competition – direct, indirect or substitute. In retailing, they want hassle-free shopping, have less time at their disposal to locate the shop and the merchandise and are reluctant to keep waiting. The modern format retail stores are doing their best to anticipate the customer’s demands and are going all out to redesign their store interiors, offer more choices in varieties and assortments, and are giving as many services as feasible.

Suppliers in the industry seek buyers who can move a lot of merchandise in a short period of time. The threat of substitution is a big deal in this industry. Most retail stores carry the same types of products with little differentiation. This makes it difficult for companies in this industry to keep customers coming back. This places an emphasis on the need to build a good reputation with customers.

The vast and diverse nature of the Indian consumer provides ample variety of needs for retail stores to address. Mom & pop stores, departmental stores, e-commerce platforms, all target different needs of a variety of customers. With consumers becoming more and more comfortable with

Retailers need to evaluate their operational capabilities and strive to achieve a seamlessness in buying, placement and promotion of

Typically, this phase involves gathering business requirements of the retailer and understanding the available data. As a company which is operating in the retail industry, the retailer for whom the analysis was performed has to face an immense amount of competition. One of the

The company is well aware of the factors driving this change in the market related to the advancement of technology pertaining to online mobile applications for smart phone and tablets, and internet access. The improved economy adds further value increasing disposable income, consumer confidence and spending. The retailing market and consumer trends following this trend are expected to see more sales as internet access become more available and part of consumer’s daily functions.