Lynn University Walmart Competitive Advantage Questions

The Albrecht family opened the first Aldi grocery store in Germany in 1961, and the company has grown rapidly since its inception. Headquartered in Essen, Germany, the international retailer offers a limited assortment of groceries and related items at the lowest possible prices. Functional operations focus on a single strategic objective, minimal costs. Aldi targets consumers with low to moderate incomes.

Aldi minimizes costs in many ways. About 90% of its products are exclusive brands (i.e., private label), allowing Aldi to negotiate high-volume, rock-bottom prices from its suppliers. Stores are modest in size, much smaller than that of a typical chain grocer. Aldi only stocks common food and related products, maximizing inventory turnover. Customers bag their groceries and must either bring their bags or purchase them from Aldi for a nominal charge. Aldi does not offer costly services like banking, check-cashing, and pharmacies.

Aldi also takes an innovative approach to the use of shopping carts. Customers insert a quarter to unlock cart from the interlocked row of carts located outside the store entrance. The quarter is returned with the cart when it is locked back into the group. As a result, no employee time is required to collect stray carts unless a customer is willing to forego the quarter by not returning the cart.

Aldi’s US division is headquartered in Batavia, Illinois, and employs about 25,000 people. The company operates about 1,900 small, deep-discount stores in 36 states. Aldi operates stores in 19 other countries as well.

ASSIGNMENT INSTRUCTIONS

After an assessment of ALDI, answer the following questions:

1. How has Aldi succeeded in the United States amid intense low-cost pressure from Walmart?
2. Is Aldi’s business model likely to be successful in the future? Why or why not?
3. Could Aldi succeed as a nongrocery discount retailer in the United States? Why or why not? Examples of discount retailers include Ross Dress for Less, Dollar Tree, Dollar Tree and Big Lots

Prepare a two-page paper answering the questions in narrative form in APA style format. Submit your paper at Canvas. The paper must include at least two meaningful references, excluding the “textbook sources” listed below.

SUGGESTED RESEARCH SOURCES

Industry websites

• progressivegrocer.com
• cnn.com/interactive
• querysprout.com

Aldi website @ aldi.com

• About ALDI
• ALDI Corporate

Search topics:

• Aldi vs. Walmart
• Aldi business model
• Aldi financial performance
• Aldi financial condition
• Discount retail industry