The success of Aldi

1904 Words Feb 2nd, 2014 8 Pages
Aldi’s business Report

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Executive summary
This report presents a business case study of Aldi, to examine both internal and external factors that drive Aldi to the current successful position in the UK highly competitive grocery market. The report contains the PESTLE, which analyses external factors affecting
Aldi’s business strategy. Furthermore, the report will discuss the essential business strategies; include the cost-leadership and price strategy, which helps Aldi to obtain competitive advantages. In addition, the report will point out the internal process as the main managerial model to Aldi. At the end of the report, it will recommend the ways to increase sales, in particular online sales.

Introduction
Aldi is
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Strategic analysis
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Under the divisional organizational structure with flat management, Aldi has high level of centralization, which is easy to achieve effective decision-making process, and costleadership. As Aldi expressed (2010), its organizational structure does lack of bureaucracy, its straightforward structure leads all employees to focus on delivering quality and value to customers. Figure 1 (source adapted from Aldi official website (2013)

Lean production is the major business strategy for Aldi to obtain success, this means to gain more output with less input. (Times 100 business studies)

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Just in time control Kaizen

Total quality management L

Lean production
Figure 2 (source adapted from Stimpson, P(2002))

Under the lean production approaches, a number of factors are essential to the process for
Aldi to adapt.
1, Kaizen, a corporate culture that involves continues improvements in product quality. This
Japanese culture requires all the employees to develop new idea and suggestions to improve the organizational behavior. Aldi does encourage employees to be innovative, good performance and talents are recognized early and often. (Aldi 2013)
2, Just in time control
The technique of Just in Time control enables Aldi to obtain a high level of inventory management. It requires no buffer stocks are held, products arrives just they are needed on sales. (Stimpson,P 2002)

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