ALDI: The Dark horse Discounter

ALDI: The Dark horse Discounter

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  ALDI: The Dark horse Discounter Group12 Akshat Kumar Ankit Bhatia Mayank Sharma Neha Srivastava Shaifali Rawat Sinchan Pathak
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  SWOT analysis Strength • AffordablePrice • Aldi strong hold in Germany • Low Cost Operation • Top Quality Product Weakness • Shopping Experience • Not big warehouse as like Walmart • Perception of being cheap product retail store Opportunity • Need to enter Developing Market • Need to increase the marketing budget Threat • Other retailers SKU • Product of Aldi can be thrown by the establish brand • People looking for complete brand experience
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  ALDI Operations • Private labelbrands in the stores • Rigorous quality control - Lab tests and Daily Sampling • Double guarantee - Quality Claims if any replace and refund • Frugality of the founders • 8000-15000 sq ft worldwide • Efficient operations by employees • Traditionally memorized prices for faster checkout for customers for faster checkout • Scanners introduced 20 years after Walmart • Product assortment , variety and pricing decided centrally • “Customer is not the king, we don't provide service , we mass produce things” • Price won’t be changed after its fixed once • Wages were above minimum wages • Attracting graduates to apply for Aldi
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  Should Walmart beworried about Aldi? Aldi’s Growth in US Aldi is beating Wal-Mart at its own game • Walmart has half of its annual U.S. revenue coming in from grocery sales and cannot afford to lose customers to Aldi (targets the same discount-minded customers) • Wages of employees: Walmart employees 300 hundred employees per store – each worker covers approx. 606 sq feet. In Aldi each worker covers approx. 1500 sq. feet • Aldi is able to price it’s product lower than Walmart and is beating Walmart at it’s own game “EDLP” 0 200 400 600 800 1000 1200 1400 1600 1800 2000 1970 1980 1990 2000 2010 2020 2030 No.ofStores Year Stores
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  ALDI’s Strategy Footprint Smaller storesize averaging 5-10 employees per store Operations • everything is packaged and everything is self-service • No shelving means no stockboys to hire • Carts must be paid for by deposit • no baskets to manage EDLP Focused on simplicity, low prices and efficient operations Limited SKU and focus on private labels Smaller and familiar store décor helped customer navigate with ease and find products easily and quickly Store Location Strategic store locations keeping in mind target customers No Publicity Forgoing publicity was both a conscious choice and cost saving element ALDI’s retail strategy has combined a control label National Brand Equivalent (NBE) portfolio with an equally impressive deletion of conventional supermarket services
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  Location Selection byAldi S t r e e t Howell, New Jersey • Aldi is moving about 1 1/2 miles from their current location to build a new, modern store directly across the street from Walmart. • They will compete for the same shoppers, who will buy the same products currently purchased in Walmart. • The shopping experience will be easier than navigating through Walmart. • Most of all, Aldi will pull away grocery and food shoppers, who might have otherwise also purchased something else if they had been shopping in Walmart. Beaumont, Southern California • Wal-Mart shoppers must first drive past the new Aldi, a recent addition to the family-owned German grocery-store chain that is beating the U.S. retail giant at its own game: selling food at rock-bottom prices. • Aldi is betting that many in Beaumont will never make it to the Wal-Mart. • Like hundreds of others Aldi has opened in recent years, the Beaumont store is strategically located to siphon off the retail giant’s discount-seeking shoppers
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  Porter Five Forces Competitive Rivalry – High Threatof New Entrants – Medium Bargaining Power of Suppliers – Low Bargaining Power of Buyers – High Threat of Substitutes – High
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  Shopping at ALDI Shoppingcarts were released after customer pay 25 cents, the coin will be returned after the cart returned to proper location Customers packed their purchases themselves at separate counter using their bags, or bags purchased at the register, or product boxes Most Aldi’s store did not accept credit cards or personal checks, requiring cash or debit cards instead Manufacturers’ coupons were rarely accepted but weekly “Special Buys” showcased as any as 25-30 items in appealing prices
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  Core Competency Core Competency Limited SKU/Timely Distribution Low priceHigh quality
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  Thank You !!