HI6006 Report: Acquisitions and Structure of Australian Supermarkets

This report provides a detailed analysis of Aldi's acquisitions and their impact on the structure of the Australian supermarket industry. It examines the company's acquisition strategies, including the purchase of Delhaize Group's Bottom Dollar Food Real Estate Sites, and its subsequent effects on market competition and business performance. The report explores various aspects of the acquisition structure, such as the integration of business components, tax benefits, and the management of financial assets. It also discusses Aldi's merging with Kohl, strategic stake in Delhaize Group, and the methods of forecasting and analysis of feasibility of acquisition. Furthermore, the report delves into Aldi's business strategies, including functional and mechanistic aspects, private labels, competitive pricing, and lean production, along with its marketing mix model encompassing product, price, place, and promotion strategies. The report also includes a bibliography of relevant sources used in the analysis.

MANAGEMENT
(Acquisitions and structure- Australian Supermarkets)

INTRODUCTION
The supermarket chains in Australia has been immensely benefited
with the mergers and acquisitions
It has facilitated targeting the right audiences with focus on
business expansion too
Both the businesses’ products and services are available at the
same place after the acquisition
It has broken down the value into rolled equity, vendor take backs,
etc.

ACQUISITIONS
STRUCTURE
The company considered as major influencers of acquisition isAldi
supermarket chain
The major components are associated with purchasing stocks
assets and mergers
The acquisition means acquiring the business along with its
physical assets such as plants, machineries and equipment
Prior to acquisition, warranty negotiations and purchase of assets
should be considered properly

ACQUISITIONS
STRUCTURE (CONTINUED)
The various business components of the new business are
combined together to create a single component
This has encouraged the shareholders to get good rate of return on
investments and new entities too
There are multiple benefits such as tax benefits, acquiring more
assets and increase the range of products
This often facilitates transactions of assets and ensures preventing
tax loss too

ACQUISITIONS OF ALDI
The acquisition of Aldi include the purchase of Delhaize Group's
Bottom Dollar Food Real Estate Sites
The private equity partners are withdrawn, which has helped in
maintaining positive financial status
New departments are formed after the acquisition and growth of
stores for drawing more clients
The management of capital gain tax must be done properly by the
Taxation office in Australia

ACQUISITIONS OF ALDI (CONTINUED)
Share and exchange of transactions during the management of financial
assets and liabilities improved the structure of acquisition for Aldi
It is responsible for enhancing the business performance and made sure
to accomplish the business processes within quick time
The accelerated growth plan has been further facilitated with the
purchase of the estates, which has further helped in opening up new
stores along with introduction of many stores all across.
The acquisition structure has improved with the sharing of transactions
revolving around the management and purchase of business entities and
future liabilities, loans and other receivables too

ALDI ACQUISITION
Not only Aldi has gained a good capital and increased numbers of
assets, but also there has been creation of better scopes and
opportunities for the businesses to reposition the brand portfolio
By maintaining a strong strategic stake in Delhaize Group, Aldi has
created strong connections with other businesses and people too
Informal clearance is important for determining the feasibility of
acquisition and survive I the competitive business environment

ALDI ACQUISITION
(CONTINUED)
The methods of forecasting and analysis of feasibility of acquisition
are important
It is also important to identify the effects regarding choices made
by consumers and competitive constraints within the competitive
supermarket chains
With the acqusitions of the Group, the company has also managed
to increase the geographic footprint, which has allowed the
company to introduce new products and services
This has facilitated the continuous supply of healthy food items and
on-trend options like fresh produces for the customers

ALDI’S MERGING WITH
KOHL
Aldi merging with Kohl as a signed deal for piloting the grocery test
and at the same time, open up new stores to drive the traffic level.
Aldi’s pilot launch has further resulted in hybrid partnerships
including the fitness centres and health clubs, which can be
beneficial too for generating more sales and attract investors or
shareholders too
The ACCC wanted proper agreement from Aldi and Kohl related to
the acquisition for providing information though with the limitations
in acceptance of protocol
The merger and acqusitions has been aimed to enhance the growth
of the company by opening multiple distribution channels to serve
people effectively as well

STRUCTURE OF THE COMPANY
The structure of Aldi shows that more focus has been given on functional
and mechanistic aspects, which has helped in offering products and
services at a much lower price
The main strategies include using private labels, which allows for avoiding
the middle man or third party
The savings are passed on to the clients, which ensures increased sales
volume and discounts on products and services
Aldi supermarket chain’s management structure is effective considering
the fact that most of the stakeholders have been taken into consideration
to ensure smooth business functioning

STRUCTURE OF THE
BUSINESSES

ALDI’S THREE
STRATEGIESThe recent business strategy is the upgrades of many stores,
which has been possible with the help of $1.6 billion
investment to re-model the 1,300 US stores by the end of the
year 2020
Utilisation of energy saving refrigeration and using
environment friendly building materials has helped in
ensuring the reduction of operational costs
The use of solar panels in the roofs has further allowed to
implement a remodelling program and thus the company has
made investments of $3.4 billion to expand its stores
The competitive pricing strategy is implemented by Aldi by
comparing the prices of different other retail chains and then
implement the right pricing strategy for reducing the quality
of products

. The learn production strategy has also eliminated the wastes and
used lesser labour, space, materials and time for ensuring
continuous improvement, timely production, time based
management of human resources
Aldi has implemented corporate social responsibility principles that
are needed to be followed by the employees to committing towards
something good to the environment
The support functions were facilitated, which further ensure
divisional success along with creation of more scopes and
opportunities to reduce the overhead costs

MARKETING MIX MODEL
Product
The products are offered at affordable prices without compromising on
its quality
The sourcing of products from selected suppliers and own branding have
created greater control over the processes of production and pricing
The other product range includes fresh fruits, vegetables, health and
beauty item, electronic products, household goods, etc.
Price
The unit pricing strategy at the grocery stores has helped the customers
to compare between the prices if products of Aldi and other supermarket
chains
The low prices are charged to create market penetration and gain
higher market share
The competitive pricing strategy has allowed Aldi to keep prices low and
create positive mind sets among clients (Aldi.com.au 2019)

Place
More than 8000 stores in 18 countries and new stores are
being introduced in Britain every week
The products are procured from suppliers and stores ate he
local warehouses
The online presence has created ease for customers to check
the product details and locate the nearest stores too
Promotions
Investments in promotional activities have allowed for greater
brand exposure
The interaction with clients via direct mail and newspapers is
useful too
The use of email marketing has further helped in developing
trust among the clients

BIBLIOGRAPHY
Antràs, P. and Yeaple, S.R., 2014. Multinational firms and the structure of international trade.
In Handbook of international economics (Vol. 4, pp. 55-130). Elsevier.
Arora, A., Belenzon, S. and Rios, L.A., 2014. Make, buy, organize: The interplay between
research, external knowledge, and firm structure. Strategic Management Journal, 35(3),
pp.317-337.
Bouraoui, T. and Li, T., 2014. The Impact of Adjustment in Capital Structure in Mergers &
Acquisitions on US Acquirers' Business Performance. Journal of Applied Business Research,
30(1), p.27.
Chapman, K., Innes-Hughes, C., Goldsbury, D., Kelly, B., Bauman, A. and Allman-Farinelli, M.,
2013. A comparison of the cost of generic and branded food products in Australian
supermarkets. Public health nutrition, 16(5), pp.894-900.
Coles.com.au. (2019). Coles Supermarkets. [online] Available at: https://www.coles.com.au/
[Accessed 24 Jan. 2019].
Woolworths.com.au. (2019). {{metaController.metaData.title}}. [online] Available at:
https://www.woolworths.com.au/ [Accessed 24 Jan. 2019].

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