Aldi Risk and Threats
Risks & Threats
Aldi, as with any business in today’s environment, have a range of both internal and external risks that have the possibility on impacting on their operations, profit, and business as a whole. Our digital marketing strategy itself brings up a number of risks that Aldi needs to be aware of and keep in mind when implementing the strategy. In the following section we will look at both the potential risks as well as potential threats that face ALDI in Australia.
Potential threats facing Aldi
Source: http://www.stuartalexander.com.au/aust_grocery_market_woolworths_coles_wholesale.php
Source: http://www.stuartalexander.com.au/aust_grocery_market_woolworths_coles_wholesale.php
Aldi operates in an oligopoly environment, with both Coles and Woolworths demanding much of the market share. As such Aldi needs to continually find ways to not only keep up with the market leaders but find a way to compete with them. This brings up the first potential threat facing Aldi. The first threat we will discuss is that of new competitors within Aldi’s industry. As mentioned before Aldi already operates within an oligopoly, however the threat of new entrants is also relatively high. This could pose a potential risk to Aldi as new entrants will mean that Aldi will need to fight even harder just to keep the same market share. As fig 1 (Lasker, 2010) shows, Aldi only commanded 3% of the total market share in Australia in 2010. With Aldi only commanding such a small percentage of the overall market share it could be assumed that if another supermarket were to enter the industry Aldi would struggle to keep their current market share.
The next potential threat that faces Aldi is the economic environment. The economic environment is possibly one of the biggest threats. As we have seen in the retail sector, economic activity has been steadily decreasing, with David Jones being an excellent example having dropped 19% in profit in just this half of the financial year
Aldi, as with any business in today’s environment, have a range of both internal and external risks that have the possibility on impacting on their operations, profit, and business as a whole. Our digital marketing strategy itself brings up a number of risks that Aldi needs to be aware of and keep in mind when implementing the strategy. In the following section we will look at both the potential risks as well as potential threats that face ALDI in Australia.
Potential threats facing Aldi
Source: http://www.stuartalexander.com.au/aust_grocery_market_woolworths_coles_wholesale.php
Source: http://www.stuartalexander.com.au/aust_grocery_market_woolworths_coles_wholesale.php
Aldi operates in an oligopoly environment, with both Coles and Woolworths demanding much of the market share. As such Aldi needs to continually find ways to not only keep up with the market leaders but find a way to compete with them. This brings up the first potential threat facing Aldi. The first threat we will discuss is that of new competitors within Aldi’s industry. As mentioned before Aldi already operates within an oligopoly, however the threat of new entrants is also relatively high. This could pose a potential risk to Aldi as new entrants will mean that Aldi will need to fight even harder just to keep the same market share. As fig 1 (Lasker, 2010) shows, Aldi only commanded 3% of the total market share in Australia in 2010. With Aldi only commanding such a small percentage of the overall market share it could be assumed that if another supermarket were to enter the industry Aldi would struggle to keep their current market share.
The next potential threat that faces Aldi is the economic environment. The economic environment is possibly one of the biggest threats. As we have seen in the retail sector, economic activity has been steadily decreasing, with David Jones being an excellent example having dropped 19% in profit in just this half of the financial year
Bibliography: Lasker, P. (2010, March). David Jones reports drop in profits. Retrieved June 2012, from ABC: http://www.abc.net.au/news/2012-03-21/david-jones-reports-drop-in-profits/3904766 Stuart Alexander. (2011). Australian Market. Retrieved June 2012, from Stuart Alexander: http://www.stuartalexander.com.au/aust_grocery_market_woolworths_coles_wholesale.php