Strategic Direction Of Discount Store Aldi

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2014 Name of the Writer Goes Here Name of the Instructor Goes Here Name of the Institution Goes Here Date of Submission Goes Here Word Count: 2,037 Table of Contents Introduction: 3 SWOT Analysis: 3 Strengths: 3 Weaknesses: 4 Opportunities: 4 Threats: 4 Porter Five Forces analysis: 4 Threat of New Entrants: 4 Bargaining Power of suppliers: 4 Bargaining power of customers: 5 Threat of Substitution: 5 Bargaining Power of Competitors: 6 PESTEL Analysis: 6 Political Factors: 6 Economic Factors: 6 Social factors: 7 Technological Factors: 7 Environmental Factor: 7 Legal: 8 Critical Analysis: 8 Conclusion: 10 References: 10 Introduction: The paper will look at the strategic direction of discount store Aldi in the UK market. The endeavour…show more content…
The Porter Five forces analysis is as follows: Threat of New Entrants: The market is packed with many players. Previously Sainsbury and Tesco has been the dominating force in the UK grocery retail market. There are no real barriers that can thwart the entrance of a new player in the market. The most important aspect is the attainment of the economies of scale for the retailers. This is facilitated by the different types of suppliers in the market. However, the entrant must have sufficient knowledge to operate profitably in the UK market. Bargaining Power of suppliers: The bargaining power of suppliers is well built in the UK grocery market. This is accentuated by the fact that big retailers can offer more competitive prices to suppliers which may pose problem for smaller retailers. This has an instant impact on the profit of the retailers and Aldi uses it to its advantage by offering competitive deals to minimize the competition. Bargaining power of customers: The bargaining power of customers is very high; it could be construed that the consumers dictate the grocery market and the loyalty effect is very difficult to achieve. This particular aspect also has a strategic perspective; therefore as products become standardized the switching cost for the customers is pretty low. It is for this reason, many retailers have strategically retorted to expansion in other businesses. However, in order to remain competitive, Aldi will

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