...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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...3. Is the industry in which Aldi operates attractive? Aldi is now acknowledged as operating the leanest low-cost model in the world. The key to its success is low service and even lower choice. In my opinion, Aldi operate attractive but still have space for improvement. Aldi is a typical ‘hard discounter’, pursuing a cost-leadership strategy. Its approach is to offer a limited number of good quality products at low prices. Due to above reason, customers have limited choices of the products compare with those large chain supermarket eg. Coles. Aldi also offers a selection of ‘surprise buys’, which change every week and are only available as long as the stocks last. The Aldi website states that they focus on their own brands in order to remain independent, enabling them to avoid high marketing costs often associated with national brands and to set their own price, product and quality policies. According to Shoebridge, however, house brands are attractive for grocery retailers because they cost 5–20 per cent less than national brands, depending on the category. In addition, a retailer’s profit margin on house brands is about two percentages points higher than the margins on a national brand. The limited number of products enables Aldi to leverage its impressive buying power and to control the cost of its products by buying in large quantities. According to Brandes, Aldi has 30 to 100 times the buying power of Wal-Mart. Minimising costs at all levels in the value chain is the...
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...3. Is the industry in which Aldi operates attractive? Aldi is now acknowledged as operating the leanest low-cost model in the world. The key to its success is low service and even lower choice. In my opinion, Aldi operate attractive but still have space for improvement. Aldi is a typical ‘hard discounter’, pursuing a cost-leadership strategy. Its approach is to offer a limited number of good quality products at low prices. Due to above reason, customers have limited choices of the products compare with those large chain supermarket eg. Coles. Aldi also offers a selection of ‘surprise buys’, which change every week and are only available as long as the stocks last. The Aldi website states that they focus on their own brands in order to remain independent, enabling them to avoid high marketing costs often associated with national brands and to set their own price, product and quality policies. According to Shoebridge, however, house brands are attractive for grocery retailers because they cost 5–20 per cent less than national brands, depending on the category. In addition, a retailer’s profit margin on house brands is about two percentages points higher than the margins on a national brand. The limited number of products enables Aldi to leverage its impressive buying power and to control the cost of its products by buying in large quantities. According to Brandes, Aldi has 30 to 100 times the buying power of Wal-Mart. Minimising costs at all levels in the value chain is...
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...IES184 P-1071-E 0-606-009 Aldi: A German Retailing Icon “The next Wal-Mart?” Cover story on Aldi, Business Week, April 26th, 2004 “I love my Aldi – good quality at rock-bottom prices. Why do I need ‘brands’ when all they do is rip you off?” Long-time Aldi customer, driving a BMW “Discount means to leave away everything that is unnecessary.” Dieter Brandes, former Aldi executive Introduction In 2005, Aldi, a German-based grocery store chain, was turning heads throughout Europe, Australia and the United States with its rock-bottom prices, efficient store operations and growing global network of limited assortment stores. Founded in the German town of Essen, with antecedents dating back to 1946, Aldi had revenues of €37 billion ($44 billion US)1, This case was prepared by Jordan Mitchel, Research Assistant, under the supervision of Professor Marc Sachon, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. October 2005. This case was written with the support of the CIIL (International Center for Logistics Research), IESE. Copyright © 2005, IESE. To order copies or request permission to reproduce materials, call IESE PUBLISHING 34 932 534 200, send a fax to 34 932 534 343, or write Juan de Alós, 43 - 08034 Barcelona, Spain, or iesep@iesep.com No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or...
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...Privately held by brothers Theo and Karl Albrecht, Aldi Group is Germany's leading grocery store chain and a top competitor in the global retail food industry. Cited by some as Europe's largest retailer, the chain has found success by going against virtually every standard of supermarketing, from its legendary reticence to the "Spartan atmosphere" of its stores. By the early 1990s the company operated an estimated 3,000 stores under the Aldi, Hofer, and Combi names in Germany, the Netherlands, Belgium, Denmark, Austria, the United States, France, and the United Kingdom. Established in 1913 in Germany, Aldi operates what are known in the grocery business as "limited-assortment" stores or "hard discounters." Aldi has taken this retail concept, which features low overhead and scanty selection, to its leanest, meanest extreme. Unlike the vast majority of supermarket chains, which are continuously increasing their product offerings and selling space, Aldi holds selection at its stores to about 500 items. The bulk of these items are packaged grocery or dry goods. All other grocery formats carry at least ten times Aldi's typical 500-item lineup. Up to 95 percent of Aldi's offerings are sold under private or packer labels, and some of these products are made expressly for the chain. A 1993 examination of the limited-assortment niche noted that successful discounters (like Aldi) work closely with manufacturers to design products that are cheaper to transport, stock, and sell than name-brand...
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...Aldi and Lidl: International Expansion: Case study Answer 1 Greenfield Investment strategy is associated with companies expanding its business outside its national borders. Greenfield investment is one such example where the company sets off in an effort to establish its business operations from the scratch. in recent years it is evident that the strategy of these two companies has tilted in favor of the Greenfield investments. There are various factors responsible for both Aldi & Lidl in choosing Greenfield investment as a primary market entry strategy. Some of these factors are as mentioned below: Degree of freedom: Greenfield investment involves setting up business in the manner as perceived by the investors. They are free to choose their own suppliers, channel of distribution and so this freedom allowed the two companies to change required strategy whenever required in order to adapt to different market conditions in different countries. This strategy involves few rules, regulations, licensing issues that allowed the company to cash in on the brand name, which means ability to attract new customers with relatively low costs. Resource & efficiency: Since Germany had already been exploited, the companies¶ seeked for ways of acquiring resources at much lower rates. So by choosing this stategy , , would help them to compete in the markets with major supermarkets and hypermarkets as they could drive down the costs of products that would lead to attracting...
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...ALDI is a German grocery store that was started over forty years ago. Today it has over five thousand stores in 16 different countries. It is ranked 12 out of the top 30 food retailers in the world, and Germany named it their top brand in 2000. ALDI is able to offer such low prices by having a relatively small selection but buying in large quantities, known as the limited assortment concept. It carries only 700 to 1500 items compared to Wal-mart’s 25,000 items. It focuses on most frequently used products, and spices up its selection with “weekly specials” such as DVD players and house wares. Their “no frills” strategy is also one of ALDI’s cost saving methods. They eliminate virtually all of the extras. There are no baggers, fancy displays, check cashing or preferred customer savings programs. Customers shop out of open displays, which are easy to replenish and require the least amount of labor. They also use a shopping cart rental system. The customer is required to put a coin in the grocery cart and when the cart is returned the customer gets the coin back. This tactic cuts down on labor costs, since customers must take their cart back to its original location to receive their coin. This eliminates the need to hire employees whose job is to retrieve shopping carts. ALDI strives to maintain operational efficiency. Its “bare bones” approach to inventory acquisition has made it easier for them to order large quantities far in advance. ALDI has an amazing turnover rate. It...
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...* APP update for ALDI * ` * Executive Summary This report involves how information system solves the issues experienced by a leading global supermarket chain and how the proposed plan will be enforced its targets of capturing more market shares and increasing company’s profits. Firstly, our team will describe the main problems to be confronted by ALDI. Then the goals and objectives of the project will be clarified, and the crucial factor for business future development is also listed. The following sector offers a full view of the business case. Specifically, this part contains the reasons and motivations for exploiting the new project, and the business case organizer. Additionally, the relevant environment conditions are described from several aspects in detail. Meanwhile, the current situation and opportunities are analyzed via SWOT model. After that a detailed description of assumption and obstacles about present condition and future projects is shown. Next, we provide two feasible options for ALDI, and we adopts several elements and methods to weigh both options. Then a constructive and enforceable recommendation and opinion is given through previous analysis. Finally, the implementation strategy of project will be identified briefly. * 1. Introduction Nowadays, online shopping in brick-and-mortar stores is a common consumer practice. Mobile devices, especially smart phones, have become a key tool for web shoppers (Turban, Volonino and R. Wood...
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...Sean Spencer 2/1/2016 BA 427 Business Policy Aldi: The Dark Horse Discounter Should Wal-Mart be worried about Aldi? Should Aldi be worried about Wal-mart? Do you believe Aldi to be at a competitive advantage or disadvantage relative to Wal-mart? Both Walmart and Aldi should be worried about each other because both have distinct advantages over each other in bringing in customers. Aldi advantage is that its stores provide the lowest price in town with their products being on average 15-20% cheaper than Wal-Mart (pg 3). How it does this is by cutting costs and offering its products at the lowest possible price. This practice of cutting cost is best summed up by the Aldi motto “"When you buy a can of peas at Aldi, you're paying almost entirely for the can of peas” (Steen pg 4). How Aldi does this is by skipping or excluding practices that most tradition grocery retail provide or practice. These practices include not spending money on advertising, market research or comparing their prices to their competitors. Aldi also do not invest in highly complicated engineering, the only focus of Aldi is operating their business at the lowest possible cost. By doing so Aldi operating cost is significantly lower than those at Wal-Mart but by focusing on offering the lowest price alone is also Aldi main weakness which Wal-Mart can exploit. Aldi main focus is not to customer service, but to offering their products at the lowest possible price and because their stores focus on offering lower...
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...Aldi and Sainsbury Grocery store is a shop which the main product sold primarily food HISTORY OF GROCERY SOTRES . They hold an extremely significant value in consumer lifestyle. This essay will compare strengths and weaknesses between Aldi and Sainsbury. Aldi Aldi is a private company which was founded in Essen, Germany 1946 by Karl and Theo Albrecht. Aldi is now a leading worldwide discount supermarket chain with more than 8,500 stores in more than 15 countries. After several years, the owners separated Aldi into Aldi Nord, which operates shops in the north of Germany, and Aldi Sud, which operate the south and the UK. Karl took the Aldi Sud (South), and his brother Theo took the Nord (North) (Rudolph, 2011). Moreover, in times of economic depression were consumers are caring more about the price. Aldi to took advantage of the depression with it being one of the leading supermarkets that offer discounts and lower prices than the main stream supermarkets. This strategy also known as razor strategy was very effective in the UK because when the economic depression hit Europe people felt the need to save and cut down expenses and restore to cheaper options. Aldi before depression. this below shows the number of the shops for people who want to save money for food for , which allows them to offer the best quality products at low prices (Haberer, 2008). According to Mirror Magazine “Aldi won the award of supermarket of the year, and this award for second year in a raw...
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...April ALDI offering the ‘same for less’ value proposition Andrian Saputra Njonoriswondo Billy Qian Claudya Vici Yvonne Huang 17 Table of contents Introduction Australian Retail Industry Market Segmentation Product Differentiation Consumer Perception Cost Effective Strategy Potential Future Problems Conclusion Appendix References pg. 2 pg. 2 pg. 2,3 pg. 3 pg. 4 pg. 4,5 pg. 5,6 pg. 6 pg. 7 pg. 8,9 M A R K 1 0 1 2 M a r k e t i n g F u n d a m e n t a l s Introduction In present, the number of retailers in the marketplace is uncountable. Hence, it is important for the organisations to understand and satisfy their consumers and customers in order to have a long-run survival in the marketplace. Every organisation is aiming to be efficient and effective in operation. Thus, they have to be sure that consumers and customers have a freedom to choose goods at the best price and perceive a service that match their preferences. To succeed, the company has to be certain about which part of consumers or customers they want to satisfy. In other words, they have to create a more focused target market. This idea is often called market segmentation. Market segmentation can be defined as a marketing strategy that involves dividing a broad target market into narrower target consumers who have common needs and wants (Goldstein 2007). ALDI has been regarded as a successful company that can meet the expectations of customers whereas the other existing firms are...
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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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...Aldi in the International Market Foundation & History In 1920 and 1922 Karl and Theo Albrecht, the famous Aldi brothers, were born as sons of a miner which lived in Schonebeck, a suburb of Essen. When the father fell into unemployment the mother founded and started working at grocery-store. Both brothers learned a commercial profession in a retail trade, growing up with the mother owning/working at the grocery store. In the beginning of the Second World War the brothers had to serve for military service. After the war, when returned home, the Aldi brothers took over their parents` grocery-store. Step by step they expanded to a chain of stores. In 1948 they founded the “ALbrecht DIscount” company, which was later on named ALDI. Within no time, the Albrechts had 13 grocery stores, which expanded more and more. In 1955 the enterprise already counted 101 subsidiaries, in the following five years the number of subsidiaries rose to 300. In 1961 the joint brother company came to an end because both brothers went on their separate ways and started separate companies. Karl Albrecht ran the chain of stores on the South side of the Ruhr and Theo Albrecht took over the business in the North. The simple arranged Aldi subsidiaries spread rapidly in the Federal Republic of Germany. In 300 towns the brothers ran 600 Aldi subsidiaries. In 1962 the first well-know “bona fide” Aldi supermarket opened in Dortmund. In 1976 the company developed an international esteem due to expansion...
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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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...The earliest roots of ALDI trace back to 1913, when the mother of Karl and Theo Albrecht opened a small store in a suburb of Essen, Germany. Their father was employed as a miner and later as a baker’s assistant. Karl Albrecht was born in 1920, Theo Albrecht in 1922. Theo Albrecht completed an apprenticeship in his mother’s store, while Karl Albrecht worked in a delicatessen. Karl Albrecht served in the German Army during World War II. In 1946, the brothers took over their mother’s business and soon opened another retail outlet nearby. By 1950, the Albrecht brothers owned 13 stores in Germany. Today ALDI operates over 8000 stores worldwide and over 1400 in the United States alone (Amann, 2010). In 2010 more than 200 ALDI store managers in 32 states filed a lawsuit against the U.S. division of the German discount grocer, saying they were wrongly classified as exempt from overtime and should have been paid for working more than 40 hours a week. The basis of the complaint made by Howard McNelley, a former ALDI Manager, concerns his classification as a Salaried Manager even though his duties were simply stocking shelves, cleaning, running a register, and many times he was the only employee in the store (Martin, 2010). Aldi stores will many times operate an entire work day with less than 3 employees in a store. During slow periods the employee designated as the manager will sometimes be the only employee present and will simply run a register. The hiring, firing, and promoting of all...
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