Business Strategy Case Study: Aldi's Competitive Strategy

Aldi uses a Cost-Focused competitive strategy. This can be seen by the way that Aldi takes more consideration of the middle class people that live in rural and suburban areas by introducing the lower prices on most of its products. Aldi focuses more on high volume and fewer products, so that they are able to increase their sales and still offer lower prices. Another thing that Aldi does to implement the cost-focused competitive strategy is that they are not open for twenty-four hours like many of the other grocery stores are. As a result of this, Aldi is able to decrease its staff and utility costs, and can offer its employees better working hours without the obstacle of a third shift. Aldi also produces their own version of most products in …show more content…
This helps in maintaining the Aldi level of efficiency.Also, Aldi does not directly stack all their products on the steel shelves. It is easier to simply stack the crates containing the goods than taking the time to rearrange them on the shelves. This also helps in reducing the amount of time wasted thus increasing the level of efficiency. Aldi’s present organization can be analyzed by looking at each of Porter’s Five Forces and how they impact Aldi.Aldi’s bargaining power of customers is a weak force because of the fact that it is a cost-focused company that puts emphasis on a high quality and low cost across a segment of the industry. There is large amount of competition in the retail world, and Aldi is in a safe position they offer lower prices to their customers. Aldi is also known for using many cost effective business strategies to decrease the price of the products, thus reducing the threat of customers using their bargaining power against Aldi.The threat of substitutes is a very strong force for Aldi because there are many other possible choices for customers. Some of these possible substitutions include stores such as Walmart, Target, Tesco, Save-A-Lot, and Kwicksave among many others. Also, the threat of substitutes is high because Aldi does not have specialized products, so the products that can be found at Aldi can very easily be found at other stores as …show more content…
Competing rival stores, like Tesco and Save-A-Lot, are already using the basic features of email subscription and social media platforms. If Aldi were to adapt these strategies, they could influence the younger buyers some of their competitors are already receiving. If Aldi were to implement this strategy, the threat of new entrants would not be so severe because of the strong following they would have already gained through the implementation of these strategies.Currently Aldi is thriving by focusing on higher volumes and fewer products, in the future, they should introduce more