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ALDI case study:
The orocery discounter ALDI was founded in 1913 as Albrecht Discount in Essen. Germany. Currently. ALDI operates stores in 18 countries in Europe, Australia. aiid the United States. ALDI’s strategy revolves around providing good-quality groceries for low prices. Quality is important to ALDI, which guarantees products sold with a no-questions-asked money-back guarantee.
ALDI achieves its low-cost strategy by using a variety of meth-ods. First, it buys large quantities of items from vetted suppliers capable of delivering good-quality products. taking advantage of quantity discounts and economies of scale. ALDI stores are typi-cally small, around 15,000 squire feet. and are standardized with respect to appearance and layout, while allowing for small differ-ences between countries where they operate. A typical store sells around 700 products. compared to approximately 25,000 items stocked at a traditional supermarket. Usually there are only one or two brands of a certain item, and 95% of the items are store brands.
ALDI chooses inexpensive locations, usually outside town or on side streets, to minimize overhead. ALDI products are displayed
on pallets rather than on shelving. Employees are cross-trained to be able to operate the checkout as well as restock items by replacing pallets. This results in flexibility, as more cash registers are opened when there are many customers, while when few customers are in the store, the employees replace empty pallets with full ones. Customers must pay for bags (or bring their own) and bring carts back to a standard location to recoup a coin deposit. ALDI stores typically operate with a 13% margin for overhead and labor, in con-trast to other grocers, whose margin is around 30%.
Discussion Questions

  1. How does ALDI’s strategy lead to a competitive advantage? How does the company achieve this strategy?
  2. Does ALDI’s low-cost strategy imply that the company offers low quality? Why is quality important, regardless of competitive strategy?

Sample Solution

understudies. Given the expected worth of such figures propelling scholastic achievement and hence impacting results like maintenance, wearing down, and graduation rates, research is justified as it might give understanding into non-mental techniques that could be of possible benefit to this populace (Lamm, 2000) . Part I: INTRODUCTION TO THE STUDY Introduction The country is encountering a basic lack of medical care suppliers, a deficiency that is supposed to increment in the following five years, similarly as the biggest populace in our country’s set of experiences arrives at the age when expanded clinical consideration is essential (Pike, 2002). Staffing of emergency clinics, centers, and nursing homes is more basic than any time in recent memory as the enormous quantities of ‘people born after WW2’s start to understand the requirement for more continuous clinical mediation and long haul care. Interest in turning into a medical caretaker has disappeared as of late, presumably because of the historical bac>

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understudies. Given the expected worth of such figures propelling scholastic achievement and hence impacting results like maintenance, wearing down, and graduation rates, research is justified as it might give understanding into non-mental techniques that could be of possible benefit to this populace (Lamm, 2000) . Part I: INTRODUCTION TO THE STUDY Introduction The country is encountering a basic lack of medical care suppliers, a deficiency that is supposed to increment in the following five years, similarly as the biggest populace in our country’s set of experiences arrives at the age when expanded clinical consideration is essential (Pike, 2002). Staffing of emergency clinics, centers, and nursing homes is more basic than any time in recent memory as the enormous quantities of ‘people born after WW2’s start to understand the requirement for more continuous clinical mediation and long haul care. Interest in turning into a medical caretaker has disappeared as of late, presumably because of the historical bac>

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