ALDI: Great Expansion Strategy, Operating Efficiency (Case Study Sample)

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Aldi is a large supermarket store that has witnessed tremendous growth and expansion in relations to its market share, profit revenues and production sales over the years due to a number of attributes that the store has which makes it to outperform most of its competitors. These attributes are also called competitive advantages and they can be analyzed as follows; Extremely low and affordable prices, Aldi’s products are extremely low in prices and they are described as delightfully low where for example a bottle of good wine only costs $2.36 in 2013,(Lane,2014) This makes it impossible for its competitors to matchup to such low prices hence acquiring a competitive edge over them
Great expansion strategy. Aldi has hugely embarked on expanding its size by opening up stores in different geographical areas. This is evidenced by the fact that Aldi announced its plans to expand and open 650 new stores in the USA by 2018(Lane, 2014). Aldi stores also increased significantly and doubled up within a span of only three years from 200 in 1990 to 400.this increases the company’s customer base eventually giving it a competitive advantage over the competitors.
Large market share. Aldi, in 2013 took 3.95 share of the total market in the UK outsmarting other supermarkets where the other four big supermarkets in the UK lost in their market share (Lane, 2014). This saw an increase in Aldi’s shoppers over the period, eventually creating a competitive advantage as well.
Operating efficiency. Aldi stores are generally located in strategic locations that have huge traffic and the supermarket store has also embraced innovation in technology where it uses price scanners to rapidly scan prices, this has resulted in yielding significant operation margins.
Good compensation for their employees. Aldi has made its part of its initiative to have its employees well paid where the employees receive generous pay, for example in the US where their pay is significantly higher than in other stores. A well motivated workforce is a productive workforce.
Aldi can create its competitive advantage by establishing a brand loyalty that will ensure repeated purchase from the customers, this boosts on the total volume of sales. Aldi can also create more competitive advantage by embracing vigorous promotional methods, for example through advertising so as to create more awareness about the products it offers. The supermarket store can also ensure it has a highly skilled labour force so as to effectively run the store’s daily operations.
To sustain and maintain its competitive advantage that its competitors cannot match Aldi can adopt strategies such as: the store can use various pricing strategies, such as discrimination pricing to the different stores in the different geographical regions. This helps in maximizing profits. The supermarket store can also embrace the penetration pricing strategy where it fixes low prices when introducing a new product in the market and eventually as time goes by it raises the rice. This helps in attracting and enticing customers to the store and eventually increasing the volume of sales. The organization can also open up stores in areas that have not been ventured into and where gaps exist, for example in an area where no large supermarket stores exist , this improves on their expansion strategies and also on increasing their market share.
Heavy investments in the store’s technology are also key in sustaining Aldi’s competitive advantage as it helps in impr...