Aldi 's Performance Based On Their Current Strategy

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:

2. Reed’s strategy is to attract affluent customers by providing a wider range of superior selections. Because of the wide product selection, it is not able to keep operating expenses as low as Aldi and dollar stores (who have a limited product focus). Therefore, it is not at Reed’s advantage to enter into the area (low price strategy) where they don’t have a real competitive advantage.

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

Promotions – Aldi uses a combination of above-the-line and below-the-line promotions with a focus on its ‘Like Brands’ and ‘Swap & Save’ campaigns.

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.

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.

In business, three major strategies comprising of cost leadership, differentiation, and focus strategies exist. The focus strategy emphasizes on providing services and products to a specified buyer group or market segment within a given geographic market. The differentiation approach is often defined as provision of services or products that are perceived to be unique in the market place. Wal-Mart emphasizes on the long-term strategy of cost leadership. Through this strategy, the company ensures that it offers customers with quality products at relatively lower prices than other providers in the industry. Through overall cost leadership strategy, Wal-Mart has been offering better quality products at a lower price than any competitor can offer. For the organization to achieve this goal, it has developed long-term supply chain management, which ensures that products are made available to the market at the required time (Enz, 2010).

2. Price: Once again, Aldi triumphs with a 5 star rating for price. IGA, Woolworths & Coles received 3 stars each for price.

Nevertheless, the vertical value chain created by Aldi benefits the company’s corporate strategy. To be a local supplier,

On the other hand, both Aldi and Lidl prioritize their business at a low price and cost minimization basis. These two companies intended to lower their costs of operation, such as the elimination of non-value adding service and no-frills approach, and pass the benefits on to customers in the form of lower price products. Moreover, according to the case, both companies offer less product range than other mainstream retailers such as Tesco. Therefore, the concept of lean should be adopted by these two companies as their functionalities

This dissertation is submitted in partial fulfillment of the requirements for the Degree in Marketing Practice

The salespeople in the department are highly confident about the high-end merchandise offers and being sufficient in excellence, with qualities of these products available on demand (Cravens, & Piercy., 2013). Customers like to test new merchandise through a variety of manufacturers and price innovation so that it can be a great opportunity in concerns of sales and revenue. In the concept, new clients want guidance through strategies to help promote excessive-end merchandise. In manual methods for customers in creating an association, affiliation among needs and fulfillments and all of these strategies primarily base of the shopping of nature for the customers because spending on behavior may have an excessive effect on the future purchases (Cravens, & Piercy., 2013). In the excessive-end alternative challenges and concerns in a department store with the boom in prices and regards to the entire product section, but to restrict to a selected segment or a few specific segments. First-rate is a contributing element that should omit at any degree and grow a distinction in retail outlets regarding offerings provided by free delivery, online marketing, online advertisement, and trade (Cravens, & Piercy., 2013). The cost leadership alternative is a comprehensive company method for local corporations that rely on the entire industry as opposed to a selected market section, in which the company recommends the lowest charges inside the marketplace