Project imple 1: The Australian supermarket chain Aldi
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Added on 2020-03-16
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The Focus of this report is to open 50 new Aldi Express Franchisee stores in 3 Australian cities, Sydney, Melbourne & Brisbane. This report addresses the justification of the project proposal, the justification of the demand for Aldi express stores as well as several reasons how Aldi express will give a complex competition to 7eleven, Coles and Woolworths.
Project imple 1: The Australian supermarket chain Aldi
Added on 2020-03-16
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Project imple1.Executive SummaryOriginally from Germany, Aldi is a supermarket chain, which has over 460 stores across Australia. Aldi hasbeen very successful around the world and gains almost 10% share in the supermarket and grocery market forNSW/ACT, Queensland and Victorian stores. Aldi proves to be very successful in the grocery market whilehaving a fierce competition with Coles and Woolworth especially for Aldi’s low prices and high quality products.The Focus of this report is to open 50 new Aldi Express Franchisee stores in 3 Australian cities, Sydney,Melbourne & Brisbane. In spite of having a high demand for Aldi products customers feel the stores’ reach isless convenient to them. After understanding the customer’s behavior and their needs, this project aims toincrease the sales of Aldi by atleast 30% in next 2 years. This project studies 3 basic prospects ofConvenience, Product and Value and has made its future plans accordingly. Upon addressing the issue that ithas more demand but less convenience, background research on Aldi was necessary to determine if theproject was not already taking place but it has no plans to open express stores. According to IBISWorld, Aldi’s strong growth has made two industry giants Coles and Woolworths to cut downprices and expand their product range[ CITATION Jes17 \l 1033 ]. This report addresses the justification of the project proposal, the justification of the demand for Aldi express aswell as several reasons how Aldi express will give a complex competition to 7eleven, Coles and Woolworths.This project will include the scope; the objectives and deliverables, non-goals/exclusions, the constraints andsome assumptions will also be covered in this report.With a plan to modernize the pre-established supermarket into a 24*7 convenient express store, determiningthe cost, requirements and other managerial plans will be another aspect of this report. These will besupported by use of a Gantt chart, an activity list, a resource requirement and resource schedule, costestimates, a quality management plan HR plan, stakeholders and communication management plan, a controland monitoring system and a risk management plan. Since the initial cost of investment would have been very high if Aldi planned to open its own 50 stores inSydney, Melbourne and Brisbane, it will open its Franchisee stores in these cities and will have certainrequirement for these franchisee owners and eventually make money from royalty other than a certain percentof share in the sales. 2.Project Proposal 2.1ABOUT THE ORGANIZATIONAldi is a chain of discount grocery store, which operates in 17 countries. Aldi mainly handles its businesses under 2 main divisions which are Aldi Sud and Aldi Nord and Sud’s main operations are in Western and Southern Germany with international operations in Ireland, Austria, Hungary, the US, Switzerland, the UK, Australia, and Slovenia. Nord’s main operations are based in Northern and Eastern Germany with international operations in Denmark, France, Spain, the Netherlands, Belgium, Luxembourg, Portugal and Poland Within Australia Aldi operates 360 stores which are all located in the following states WA, NSW, ACT, VIC, QLD and SA. Aldi’ revenue was $5.8 billion dollars in December 2014 and has increased by $1 billion since then each year[ CITATION Fra17 \l 1033 ]. There has been a spurting rise in the Australian
food industry and according to its revenue; it was $113 billion in 2014 with an average growth rate of 4.5%, which contributed $79.9 billion to supermarket industry[ CITATION Mar161 \l 1033 ]. According to Market Line’s food retail industry report, the leading companies in the supermarket segment other than ALDI have started lessening the price of their products if they are placed near ALDI store, which includes two grocery giants Coles and Woolworths. 2.2PROJECT INTRODUCTION & JUSTIFICATIONThis project aims at opening new 50 Aldi Express convenient stores in Victoria. These convenient stores will sell basic pharmaceutical items considering the pharmacies are usually closed during the night in Victoria. Based on the information accessed, we believe that Aldi has a huge scope of expansion in the Victoria market considering there is lackof convenient stores (no competition to 7eleven, is also expensive) and the supermarkets present have higher prices than Aldi. The main elements that we will work upon Aldi in this project will be expansion of brand by opening new express 24*7 stores keeping in mind it will be more reachable and convenient to customers than it presently is. Second, the project will focus on increasing the product range keeping in mind the quality perspective of the brand. Third, increase the market share of the company by almost 30% than its present market share. The demand for Aldi products in Victoria will be relatively high due to the presence of value focused and quality focused customers, specially after new express stores open which will make the customers easily accessible to basic items as wellas basic medicines that could be needed by a customer at any time. The Facebook page of Aldi clearly shows how awaited are customers to have new stores of Aldi due to lack of Aldi stores at present. The demand for more stores of Aldi in Victoria is clearly due to high customer demand. Comparing Aldi with Coles and Woolworths, Aldi is just 16 year old to Australia whereas Coles and Woolworths are around 100 years old to this market.The following table outlines the share of supermarkets in Australian market, which clearly shows the overtaken share of Aldi in such a short span of 16 years (compared to Coles & Woolworths): Supermarket Share Coles 33.2%Woolworths35.7%Aldi 13.2%IGA9.3%Other Supermarkets 8.6%Source: Roy Morgan Single source Australia [ CITATION Roy17 \l 1033 ]The customers’ demand for Aldi is high because of its relative low prices as compared to the supermarkets and convenient stores (7eleven). For example, a 850 g loaf of Bakers Life Bakehouse Mixed Grain Bread in Aldi is $2.29 compared to a similar loaf of Helga’s 850g Mixed Grain Bread at 3.50 in both Coles and Woolworths. A customer saves $1.21 in Aldi only by purchasing a load of bread. Hence in a period of 52 weeks, by buying a loaf of bread from Coles and Woolworths will cost you $182 while it would cost only 119.08 if you buy it from Aldi. This would save you $62.92 per year only from a loaf of bread.
Aldi express stores would also provide numerous products at any time of the day or night. Statements in favor of theidea although were few, but strong:Lack of Convenient Stores in Victoria (only 7 eleven – but very high prices)Pharmacies are usually closed at the nighttime. The products delivered will be of high quality The products delivered will be of relatively low price. Opening 50 stores we considered will be a huge initial investment for the company and hence it will be given out toprivate owners for Franchisee. 3.Preliminary Implementation Plan3.1SCOPEThe scope of the project consists of establishing ‘Aldi Express’ stores across Melbourne, Canberra and Sydney,initially, and later-on expanding across the country. This is primarily being done to compete with 711 storeswhich are open round-the-clock. An additional pharmacy section is also being added to cater to the needs ofthose requiring medicines during the night. To hasten the roll-out, a franchising model has been adoptedwhich will help implement the format rapidly.The scope does not includegoing into the supermarket sectoropening stores on our owntargeting non-urban areas of Victoria, NSW and ACT, as of now at least3.2DELIVERABLES
S.NO.MAJOR DELIVERABLEDESCRIPTION01.Schedule management planIt provides everyone involved in the project with a list oftasks to be completed and a specific timeline to befollowed02.Resource management planIt provides information as to what assets are present andat what stage are they required during the course ofcompleting the project03.Cost management plan andestimateIt provides details of the cost estimates required for thecompletion of the project, and, also gives a plan tomanage the expenses04.HR planIt provides details of the personnel hired by the companyto roll-out the project05.Communication planIt provides details as to how to go about communicatinginformation about the project to the various stakeholders06.Risk management planIt provides details of the various risks that might impactthe outcome of the project. It also gives a plan to mitigatethe risks07.Quality management planIt provides a standard of the quality to be expected fromthe final outcome of the project08.Project implementation planIt provides details of the steps that need to be taken toimplement the project from start to finish3.3CONSTRAINTS
S.NO.DIMENSIONCONSTRAINT (Limits)DRIVER (State Objective)01.Operating Cost100,000 AUD02.Time to becomeoperational65 days03.PersonnelNo constraints. 04.LocationsResidential areasCommercial areas3.4ASSUMPTIONSS.NO.ASSUMPTION01.All laws complied with02.Balance sheet of Aldi not available hence all data has been assumed03.Customers would want convenience store items at a cheaper price04.Customers want medicines in the middle of the night but all stores whichsell medicines are closed4.ScheduleThe activities carried out throughout the project are as follows:WBSTask Name0Development of 50 Aldi Express convenient stores in Victoria1 Project Initialization
1.1 Project Requirement Analysis1.2 Tender Document Submission1.3 Tender Approval1.4 Communication plan2 Resource Accumulation and Risk Management2.1 Development of HR Plan2.2 Project Team Build up2.3 Material Resources are Accumulated2.4 Resource management plan2.5 Analysis of project requirements2.6 Quality estimation is developed2.7 Quality management plan2.8 Analysis of risk factors2.9 Risk management plan3 Project Planning3.1 Selection of Plan methodology3.2 Schedule management plan3.3 Cost estimation and resource allocation3.4 Cost management plan and estimate3.5 Approval of Project Plan3.6 Project implementation plan4 Aldi Stores Development4.1 Selection of the locations in Victoria4.2 Employing Contractor for stores 4.3 Site Leveling4.4 Furniture and fixtures 4.5 Transportation of raw materials4.6 Wall development4.7 Cementing and Laying bricks4.8 Painting of the interior walls4.9 Final Interior works4.10 External Cementing and painting4.11 Boards and Holdings are put4.12 Health and safety methods are implied4.13 Government Approval5 Project is closedFig 2.0:- Displays the various tasks involved during the course of the project.5. Gantt chart
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