Aldi Case
1) What are the core elements to Aldi’s business strategy? Be specific as to what they are doing that sets them apart from competition and WHY this is different than their competitors?
The core elements to Aldi’s business strategy are to offer top quality and extremely low prices. One article states that in the Midwest, Aldi’s prices are “15% and 20% less than Wal-Mart and 30% to 40% cheaper than regional chains.” The company also focuses on selling goods that have a high turnover such as food and beverages. Aldi receives shipments of goods five to six times a week and it takes anywhere from one to four days for delivery. Aldi’s organized and simple supply chain allows for fast shipment. However, what makes Aldi unique is that while it carries a diverse set of 1,500 products, it does not compare to the number of products sold by Walmart at 125,000. Therefore Aldi offers an enjoyable shopping experience for its customers. Customers do not feel overwhelmed by all of the choices of products like they may do at a Walmart store. A major difference between the two companies is how fast they replenish their products. Walmart uses an extremely complex system that can create lag time in the supply chain. Also, Aldi strives on promoting its own brand unlike its competitors. 95% of its goods are the Aldi brand. I believe Aldi is different from its competitors because the company is foreign based and that it is a small format. In the New York Times article about why Aldi has succeeded in cities where Walmart has not it says a major reason is because of its small product line. A simple product line has allowed Aldi to be very profitable. Focusing on one genre of products to sell, Aldi can increase the quality of those products. The company does not spread itself out too thin and strives on brining the lowest best quality product to the shelves.
2) Why have they been so successful over the years? This should be from a consumer perspective. Different from #1 which is from
The core elements to Aldi’s business strategy are to offer top quality and extremely low prices. One article states that in the Midwest, Aldi’s prices are “15% and 20% less than Wal-Mart and 30% to 40% cheaper than regional chains.” The company also focuses on selling goods that have a high turnover such as food and beverages. Aldi receives shipments of goods five to six times a week and it takes anywhere from one to four days for delivery. Aldi’s organized and simple supply chain allows for fast shipment. However, what makes Aldi unique is that while it carries a diverse set of 1,500 products, it does not compare to the number of products sold by Walmart at 125,000. Therefore Aldi offers an enjoyable shopping experience for its customers. Customers do not feel overwhelmed by all of the choices of products like they may do at a Walmart store. A major difference between the two companies is how fast they replenish their products. Walmart uses an extremely complex system that can create lag time in the supply chain. Also, Aldi strives on promoting its own brand unlike its competitors. 95% of its goods are the Aldi brand. I believe Aldi is different from its competitors because the company is foreign based and that it is a small format. In the New York Times article about why Aldi has succeeded in cities where Walmart has not it says a major reason is because of its small product line. A simple product line has allowed Aldi to be very profitable. Focusing on one genre of products to sell, Aldi can increase the quality of those products. The company does not spread itself out too thin and strives on brining the lowest best quality product to the shelves.
2) Why have they been so successful over the years? This should be from a consumer perspective. Different from #1 which is from