ALDI Company Strategy Case Study Discussion
Businesses employ a variety of strategies to maximize earnings and acquire a competitive advantage over their industry’s competitors. ALDI has developed unique strategic management approaches that have helped it acquire and sustain competitiveness in the face of a variety of business challenges. The company’s operational concepts can be summarized in the form of the four main points: simplicity, frugality, high quality, and prudence.
Due to its exceptionally excellent operating procedures in Germany and across the world, Aldi has become a German retailing icon. Within its market share, it offers a tiny or limited choice of things at extremely low prices, which is achieved by purchasing in large quantities and benefiting from economies of scale. The brand utilizes the strategy of limited assortment, selling between 700 and 1500 items at any time.
An affiliate marketing strategy might be recommended as a tool to further increase Aldi’s efficiency. This form of promotion is relatively cheap but allows for high rates of exposure to demographically diverse groups of potential customers. It is a common knowledge that modern consumers rely a lot on the Internet reviews and the way social media transports them in the form of word of mouth. As a result, Aldi may be able to rely on such websites to market their products to a certain demographic.
As a low-cost supermarket chain, Aldi is somewhat limited by the business strategies it might utilize to maximize the efficiency without losing the definition of the unique selling point. It therefore prioritizes the cost leadership strategy which is coherent with the brand’s public perception. If Aldi was to employ more of a differentiation strategy, it could increase the assortment of the store but the prices would likely have gone up.
Reference
Hitt, M., Duane, R. & Hoskisson, R. (2020). Strategic management: Concepts and Cases: Competitiveness and Globalization (13th ed.), Cengage Learning.