Aldi Case Essay

1395 Words Feb 28th, 2016 6 Pages
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
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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

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