Strategic Analysis of Aldi Essay

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What are the trends in the Australian Food Industry?
The trend within the Australian food industry seems to attempt to be competitive price-wise. Furthermore, expanded their industry to other sectors including petrol, merchandise and liquor. The food industry looks to what people want and stocks it accordingly. By branching out, those in the food industry are able to cover more segments and increase their profitability in a wider sense. Aldi’s competitive environment in Australia consists of 5 firms, the two major competitor being Woolworths and Coles.
Woolworths has positioned itself as the ‘The Fresh Food People’, aiming to provide a wide range of fresh produce in addition to dry groceries and other merchandise. Many farmers in
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They offer house brands as a cheaper alternative to national brands and are aiming to increase the number of products they sell under brand names they own. Both Woolworths and Coles are in the process of overhauling their supply chain management, warehouse and distribution systems in an aggressive bid to cut costs. Price is an important issue and both claim to provide customers with competitive prices and more value for money. The regional retail operators Action, IGA and Franklins pursue a similar approach. They are in the process of addressing supply chain efficiencies and improving logistic arrangements, also with the aim to cut costs. Similar to Woolworths and Coles, all three regional operators offer house brands and are likely to increase their number over the next few years. Price is also a major issue for the regional supermarkets and they all state that their prices are competitive and that they provide value for money.

How is this strategy reflected in Aldi’s value creating activities?
Aldi uses the cost leadership strategy for its operations throughout its corporations across Europe, in Australia and the United States of America. This cost leadership strategy is reflected in the Aldi’s value creating activities in many ways:
Firm Infrastructure
Aldi has very few layers of management and there are also very few employees at the staff level at the global Aldi headquarters in

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