...------------------------------------------------- Top of Form Aldi The food retail industry is a highly competitive market. More so than ever, organisations need to offer customers value for money. Customers want the best quality products at the lowest possible prices. With such tough competition it is vital for organisations to understand what their customers want. Aldi understands that its customers want value for money but do not want to compromise on quality. This case study will demonstrate how Aldi uses a lean approach to its business operations to offer its customers quality products at competitive prices. Since opening its first store in 1913, Aldi has established itself as a reputable retailer operating in international markets including Germany, Australia and the U.S. Aldi has over 7,000 stores worldwide. What distinguishes Aldi from its competitors is its competitive pricing strategy without reducing the quality of its products. In fact, in some cases Aldi’s products are 30% cheaper than those offered by its competitors. Aldi can do this because the business operates so efficiently. Efficiency is the relationship between inputs and outputs. For Aldi, operating efficiently involves reducing costs in all areas. Some of the key areas where Aldi is able to minimise costs are by saving time, space, effort and energy. Aldi’s approach to doing this is to run its business around the principles of lean thinking. Aldi has a no-nonsense approach to running its business. Whereas...
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...understand what their customers want. Aldi understands that its customers want value for money but do not want to compromise on quality. This case study will demonstrate how Aldi uses a lean approach to its business operations to offer its customers quality products at competitive prices. Since opening its first store in 1913, Aldi has established itself as a reputable retailer operating in international markets including Germany, Australia and the U.S. Aldi has over 7,000 stores worldwide. What distinguishes Aldi from its competitors is its competitive pricing strategy without reducing the quality of its products. In fact, in some cases Aldi’s products are 30% cheaper than those offered by its competitors. Aldi can do this because the business operates so efficiently. Efficiency is the relationship between inputs and corresponding outputs. For Aldi operating efficiently involves reducing costs in all areas of the business. Some of the key areas where Aldi is able to minimise costs are by saving time, space, effort and energy. Aldi’s approach to doing this is to run its business around the principles of lean thinking. Aldi has a no-nonsense approach to running its business. Whereas other food retailers have elaborate displays, additional services and promotions that draw customers into the business, Aldi’s core purpose is to ‘provide value and quality to our customers by being fair and efficient in all we do’. Everything Aldi does is focused around giving its...
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...A Case Study on Aldi I. Introduction The retail industry is a very competitive market. Organizations need to offer customers value for money. Customers want to pay for low priced but high quality products. With such hard competition it is necessary for organizations to know what their customers want. Aldi recognizes that its customers want value for money but do not want to compromise on quality. This case study will show how Aldi’s strategy led them to a competitive advantage. It will also show how Aldi provides quality products at reasonable costs. Aldi is a Germany-based hard discounter that has unique business practices. They use a lean approach to its business operations to offer its customers quality products at competitive prices. They concentrate on purchasing power; carrying only the most frequently purchased grocery and household items, of which most are ALDI select brands. As a result, they get the lowest prices from our suppliers and pass the savings on to the customers. They update operations eliminating every feature that increases cost and prices. II. Objectives and Scope Our group was given a task to do the case study analysis on Aldi. We need to find out how Aldi’s strategy leads to competitive advantage and how they achieve this strategy. We also need to find out whether Aldi’s low-cost strategy implies that they offer low quality products and why quality is important regardless of competitive strategy.For us to answer these questions, we will...
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...ALDI ------------------------------------------------- Strategic Management and Employee Management Alignment ALDI ------------------------------------------------- Strategic Management and Employee Management Alignment Executive Summary ALDI is a German company that is a global leader in the retail grocery industry with over 7000 stores worldwide. The company has a good reputation for their high quality products with low pricing. The purpose of this assessment is to investigate how well ALDI align their human resource strategies to the overall business strategy. The report commence with a presentation of the company’s main features, where it started and how it has developed to be an international leader. Further on, the assessment contains an explanation of what business strategy ALDI has in the organisation and what the people management processes and practices look like in the company. Lastly it identifies actual examples of people management processes and how well they are applied into the organisation. Improvements are highlighted as a way for the organisation to improve and be able to remain competitive on the international market. Key findings of this report are that the current business strategy is a cost leadership approach. The strategic management of ALDI at present is one of expansion and growth. The employee management reflects this as ALDI is participating in a period of recruitment and employee training and development. The marketing...
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...organisations manufactured products to market and create satisfied customers. The program incorporates topics such as manufacturing, operations, purchasing, transportation, and physical distribution. If the process is successful then all of these activities are coordinated into a seamless process. The process is linked with all the partners within the organisation those include vendors, carriers, third-party companies, and information system providers. The well known strategy used by manufacturers is known as “Just-in-Time” – JIT. JIT or also known as Lean Production named by John Krafcik, permits the production of only what is required, when it is needed, and only in the quality needed. This doesn’t only apply to the firm but also to the suppliers (Goetsch & Davis, 2012). The JIT concept was first called Toyota Production System which was initially developed by Taiichi Ohnoin the 1950s as the successor to Henry Ford mass production system. This concept was then developed and perfected by Taiichi Ohno of Toyota in 1970s, who is now referred as...
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...Introduction ALDI is a German discount retail chain which has entered the grocery market in Australia since 2001. ALDI provide low prices but high quality groceries to consumers. Although there are two major retail grocery chains which are Woolworths and Coles in Australia, ALDI has becomes another force by its low price products. This critique will analyse both micro and macro marketing environment. It will then demonstrate the current marketing approach of ALDI in Australia and redesign its marketing mix by 7Ps. The last, it will outline several recommendations. 1 Marketing Environment Analysis – Micro Trends 1.1 Trend One: Competitors A firm need to provide more consumer satisfaction than its competitors if it desires to be successful. Therefore, marketers need to modify the market strategy for the target customers. Each company should consider its position and size which are compared to its competitors (Kotler & Armstrong, 2012, p. 92). ALDI, the German discount store chain, intended to enter Australia market in 2001, they have to attract Australian customers’ attention and encourage consumer to purchase products in ALDI (ALDI, 2013). There are two major competitors of ALDI, including Woolworths and Coles, they have been occupied the top of Australian retailers for few decades in Australia. In addition, Australian brands are lack the capability of competitive and Australia was a monopoly market until 2005 (Ritson, 2013, para. 6). For this reason, ALDI must have more...
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...References 20 Bibliography 21 TASK 1 Since the first store was opened in the German town of Essen in 1913, by Karl and Theo Albrecht, Albrecht Discount has continued to flourish into the successful, global organisation we know as Aldi. Aldi has over 8000 stores worldwide and continues to expand in Europe, North America and Australia. The finance section of The Telegraph (October, 2012) reported that Aldi hope to have 500 stores open in the UK by the end of 2013, 40 of them new stores with an estimated cost of £181m, will create 4,500 new jobs. Despite hours of research on Aldi, it proved extremely difficult to find their mission statement. As an international organisation they have many websites but none appear to display their mission statement; nor does their Corporate Responsibility Policy (Aldi, UK 2013). The reason for this difficulty became clear with the discovery of a book, Bare Essentials: The Aldi Way to Retail Success, Brandes and Brandes (2012). Dieter Brandes contributed for many years to the policies which brought success to Aldi; he was initially a regional general manager and then for 10 years, until he left in 1993, was a managing director for the Executive Board. In his book, he explains how Aldi never had a mission statement, because they never needed one. The company’s goals of lowest prices and best quality are sensible, understandable and simple, so how could anyone else write anything which would make them any clearer? Understandable...
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...Assignment Case Study Aldi store originated in 1913 and is one of Germany’s leading store chains. It was created by the Albriet brothers. Aldi stores corporation has various names such as Aldi, Hofer, and Combi. There are approximately 5400 stores worldwide. The Aldi stores are located in the following countries, Germany, Netherlands, Belgium, Denmark, Austria, France, United States, and the United Kingdom. Currently there are 20,000 Aldi employees worldwide. In 1993 the sales for the Aldi Group was 21 billion dollars. Aldi has been known as one of the top competitors in the global retail markets. Product and branding strategies Approximately 90% of Aldi’s products are under their own brand, which means that the can and dry goods are produced by local manufacturers and then re-labeled under a generic name. Aldi takes pride in only supplying 500 – 1000 items at any given time in their store. They take pride in keeping the stores lean and bare minimum selling primarily frozen foods, fresh vegetables and canned goods. Pricing strategies Pricing is very important to Aldi stores, they utilize the Market Penetration Pricing strategy which means that they set the price of a product or service as low as possible to facilitate rapid sales of the goods and services. Market Penetration Pricing strategy is used primarily with new product introductions. Aldi takes pride in having their products 30% cheaper than their competitors. Lean Production Aldi takes pride in reducing...
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...wisdom is shared about who their customers are and their value, the level of quality of products and services they should be offering. Thompson and Coe (1997) suggested that competitive advantage that is sustainable is acknowledged as a factor that is critical for survival in the turbulent environment of the 1990s. They opined that most organisation strive to exist and at the same time aim to have a market share that is considerable in making a profit, the means to be more marketable is not by selling existing goods or services but by creating a brand name that is distinctive for itself.. However, for us to have a better understanding of the question, I would be examining the UK grocery industry with particular reference to Tesco plc and ALDI GMBH. Rivals organisations try to outperform one another thus ending up competing solely on basis of incremental improvements that is either in cost or quality. Striving to capture attention and retain their customers, the strategies of supermarkets varies between price wars, innovation and loyalty schemes. According to Harvey (2000) the developments in the UK supermarkets of recent are distinctive in retailing in the country hence it is vital in assessing the competition in this market. Furthermore, he suggested that the supermarket in the UK delivers a market place that is different from a simple “basket of goods” with a price that is specific and quality. The concerns of product range, potential innovation and factors that are associated...
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...Executive Summary Reed’s VP Marketing Meredith Collins needs to develop a plan to increase the market share (MS) of this company from 14% to 16% in the Columbus Market. The Reeds actual expansion plan does not consider any new store opening. The competition in the retailers market is intense and the profit margins are low, therefore Collins has a minimal margin of error. Reed is the actual leader of the retailer Columbus Market but the Executives of the company are worried that Reed lost 1% of MS in the last five years. They just have implemented the dollar Weekend Campaign with no considerable important results. Reed Business is in the High end segment and it has differentiated by offering high quality products and excellent customer service. In this market price is the most important factor, but location, quality, diversity of products and customer service are also points of differentiation. In the latest years in Supermarket Industry the private labels have not been perceived anymore as low quality and their presence in the market has increased in 3% since 2005. Customers have become friendlier towards healthy and organic food. The customers are not as loyal as 20 years ago; nowadays is a trend of savvy customers. Reed’s customers are affluent, old and owned small medium houses, also more likely to have a pet. Based on the facts above my recommendation is maintaining focus in its actual customer segment, improving the product mix offered by developing private labels,...
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...ALDI IN AUSTRALIA: WHAT WILL BE THE IMPACT? May 2000 Aldi in Australia Aldi will become a small but significant player in the Australian market OVERVIEW I. Aldi is the world’s lowest cost grocery retailer II. The United Kingdom provides an excellent model for the development of Aldi in Australia III. The arrival of Aldi in Australia will have a focused impact, felt mostly on key line pricing and by Franklins Aldi 2 Aldi in Australia I. Aldi is the world’s lowest cost grocery retailer – Ia. Aldi acts as a category killer in core grocery lines – Ib. Aldi has a low-cost logistics and operational system that works on a 12% gross margin – Ic. Privately owned Aldi has a long investment horizon and plenty of patient capital – Id. There are few threats to Aldi or the limited assortment store. Aldi is immune to competition, even from WalMart Aldi 3 Aldi in Australia Ia. Aldi acts as a category killer in core grocery lines – Aldi is a limited assortment discount grocery store, a format characterized by a high turnover on a narrow range of grocery items in a small space – The main appeal of limited assortment stores is low prices – Packaged grocery accounts for almost 50% of a German Aldi store’s turnover and 50% of an American store’s SKU mix – In Germany, over 70% of German households shop at Aldi, mostly for basic staples Aldi 4 Aldi in Australia Aldi is a limited assortment discount grocery store… TYPES OF DISCOUNT...
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...Barriers to ‘US style’ lean retailing: the case of Wal-Mart’s failure in Germany Susan Christophersonà Abstract Wal-Mart’s exit from the German market in 2006 after 10 years of attempting to achieve sustainable competitive advantage contributes an interesting case to the small but expanding literature on ‘failure’ in international investment. The work on the disinvest decision in all its forms has been critical to a re-conceptualization of the international investment process as dynamic rather than static, linear and inexorable. An important segment of the work on investment and disinvestment as dynamic processes focuses on the environment in which investment and disinvestment decisions evolve. While the environment of the host country market has begun to be examined, the market environment of the country in which the retail transnational corporation (TNC) originates also affects the international disinvestment process. To explore this ‘home country effect’, I examine the resources Wal-Mart brought into the German market and their ability to use those resources in the German context. WalMart’s resources were shaped by the market governance regime in which the firm evolved, and not insignificantly, over which it had and has influence. Within this theoretical frame, Wal-Mart’s reliance on the resources of network dominance and autonomous action that made for its success in the USA contributed to unsuccessful strategies in the German retailing market. Keywords: lean retailing, Wal-Mart...
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...Strategies to Fight Low-Cost Rivals * Nirmalya Kumar From the December 2006 Issue * Strategies to Fight Low-Cost Rivals Strategy & Execution HBR Article Executive Summary Reprint: R0612F Companies find it challenging and yet strangely reassuring to take on opponents whose strategies, strengths, and weaknesses resemble their own. Their obsession with familiar rivals, however, has blinded them to threats from disruptive, low-cost competitors. Successful price warriors, such as the German retailer Aldi, are changing the nature of competition by employing several tactics: focusing on just one or a few consumer segments, delivering the basic product or providing one benefit better than rivals do, and backing low prices with superefficient operations. Ignoring cut-price rivals is a mistake because they eventually force companies to vacate entire market segments. Price wars are not the answer, either: Slashing prices usually lowers profits for incumbents without driving the low-cost entrants out of business. Companies take various approaches to competing against cut-price players. Some differentiate their products—a strategy that works only in certain circumstances. Others launch low-cost businesses of their own, as many airlines did in the 1990s—a so-called dual strategy that succeeds only if companies can generate synergies between the existing businesses and the new ventures, as the financial service providers HSBC and ING did. Without synergies, corporations...
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