Analysis of ALDI's International Business Entry and Strategy - HI5014

This report provides a comprehensive analysis of ALDI's international business operations. It examines the foreign market entry strategies employed by ALDI, focusing on their approach to entering new markets and establishing a global presence. The report delves into the competitive dynamics and market conditions faced by ALDI, including price wars, competition from existing brands, and challenges related to product range and advertising. Furthermore, it explores ALDI's organizational structure, emphasizing its decision support system, employee empowerment, and knowledge management practices, including the use of explicit knowledge and mentoring programs. The report also discusses ALDI's innovation strategies, highlighting their evolution in product assortment, packaging, and store décor. The analysis draws upon various sources to provide a well-rounded understanding of ALDI's success in international markets, its strategic executions, and the challenges it has overcome.

Analysis of ALDI

Introduction
 ALDI is based on Germany and was found by two brothers Karl and
Theo Albrecht in 1946.
 ALDI comprises of supermarket chains comprising of more than
10,000 stores in 20 countries (Wu et al.,2015).
 The estimated turnover of ALDI is estimated to be over €50 billion.

Foreign market entering strategy
 For taking full control over its business ALDI chose Greenfield
investments.
 The company recognized the various needs of the customers in the
new market and met the demands of the requirements of the market.
 Targeting the foreign markets since they are bigger than the
European markets.

Market conditions faced by ALDI
 While entering a new market ALDI faced a price war with other
supermarket brands.
 The low price provided by the company for their products created a
perception of low quality products.
 There was a huge competition from the existing brands in the target
market.

Market conditions faced by ALDI
 The smaller range of product of the supermarket is a big challenge
which was faced by the company.
 The “just-in-time” production of the company meant that the
company can run out of products very soon and had to wait for it
(Jenkins and Williamson 2015).
 Less focus of the supermarket chain in advertising was a huge
problem for the company.

Organizational structure of ALDI
 The organization uses decision support system which empowers the
management team as well as the workforce team of the organization.
 The organization encourages the employees to find innovative
solutions for the problems faced by them.
 The organization instills the feeling of ownership among the
employees which leads to job satisfaction.

Knowledge management of ALDI
 Construction of new techniques from the knowledge received from
previous synthesis of information and data.
 The explicit knowledge gathered from previous experiences are used
for socialization.
 ALDI mentors the new staffs by the help of tactic or the explicit
knowledge gathered.

Innovation of ALDI
 ALDI has been evolving their assortment, packaging of their products
and décor gradually.
 The company is efficiently maintaining its operating model along with
their innovations.
 In 2017 ALDI remodeled its existing stores and even opened new
stores (Chatterjee 2017).

Conclusion
 The company has been very successful so far in entering different
foreign markets.
 The innovations of the company has improved drastically over the
years.
 The company has been very effective in terms of its strategy
executions.

Reference list
 Wu, J.H., Neal, B., Trevena, H., Crino, M., Stuart-Smith, W., Faulkner-Hogg, K.,
Louie, J.C.Y. and Dunford, E., 2015. Are gluten-free foods healthier than non-
gluten-free foods? An evaluation of supermarket products in Australia. British
Journal of Nutrition, 114(3), pp.448-454.
 Jenkins, W. and Williamson, D., 2015. Strategic management and business
analysis. Routledge. Chatterjee, S., 2017. Two efficiency-driven networks on a
collision course: ALDI’s innovative grocery business model vs
Walmart. Strategy & Leadership, 45(5), pp.18-25.
 Chatterjee, S., 2017. Two efficiency-driven networks on a collision course:
ALDI’s innovative grocery business model vs Walmart. Strategy &
Leadership, 45(5), pp.18-25.