Aldi's Success Story: ACC 5006 Contemporary Business Management Report

This report provides an analysis of Aldi's success as a reputable retailer in international markets. It highlights Aldi's competitive pricing strategy, which allows them to offer products at a lower cost without compromising quality. The report discusses Aldi's competitive advantages, including their focus on providing value and quality to customers, lean production methods, and efficient use of capital. A SWOT analysis identifies Aldi's strengths, weaknesses, opportunities, and threats, while a PESTLE analysis examines the political, economic, social, technological, environmental, and legal factors that impact the company. The report also explores Aldi's communication strategy, rapid growth, and the implications of its business practices on stakeholders. Ultimately, the report aims to provide a comprehensive understanding of the factors that have contributed to Aldi's success in the highly competitive retail market. Desklib offers similar past papers and solved assignments for students.

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Executive Summary
Aldi is one of the well known supermarket chains that mainly works for the benefit of their
customers. Their main motif is to sell the low budget products to their customers. In other words
Aldi wishes to make their products available to the customers’ belonging from the middle and
the lower income groups as well. Aldi has used all the possible means to develop their goods and
services so that they can create a customer loyalty. However there are many competitors and they
are trying their level best to attract the attention of the customers. Thus, ALDI has to work very
hard in order to offer their customers some of the best quality products and services so that they
do not switch over to any other options.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Aldi ‘s competitive advantage.........................................................................................................3
SWOT..............................................................................................................................................4
PESTLE...........................................................................................................................................6
Aldi’s communication strategy........................................................................................................8
Aldi’s Rapid Growth........................................................................................................................9
Implication on the company’s stakeholders..................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
Aldi is one of the well known retail supermarket chains that operate in different parts of
the world. It is basically of the German origin. With the availability of the modern scientific tools
and implements they have upgraded themselves a lot. They are working hard in order to satisfy
the needs and demands of their customers. One of the major objectives is to provide the
customers with the best and the fresh quality of products at the most affordable price (Schmid et
al. 2018). There are many factors that have led to the success of the organization. This
assignment has dealt with the various successes factors that are responsible for the purpose of the
success of the organization in this highly competitive market.
Discussion
Aldi ‘s competitive advantage.
There are many different objectives that have been set by the organization in order to work for
their competitive advantage. One of their objectives is to provide both value and quality to their
customers by staying true to their values. The mission statement of the organization says
“To provide our customers with the products they buy regularly and ensure that those products
are of the highest possible quality at guaranteed low prices.”They have always tried their level
best to work as a low budget supermarket. Their objectives are to provide the low budget
families with ample amount of products from where they can shop. This acts as one of their
advantages in order to win the competition over their competitors (Nwachukwu et al. 2017). The
other is the lean production method. This is also helped them a lot for achieving their
competitive advantage. This is because it is through this method that they follow the minimizing

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waste policy. The company follows the following visions that is “ALDI has a clear business
philosophy and a number of guiding principles. It can be summarized by following statement:
“Top quality at incredibly low prices- guaranteed”
They try to minimize the unnecessary usage of the labor, space, time and the materials.
This strategy is made successful only through the efforts of all the employees on a continuous
improvement basis. All the other employees of the organization have to contribute in the
implementation of these strategies so that the company can actually give a very good production.
Just in time is another functional strategy that is used by the organization. Aldi has made sure
that they are able to use their capital and their budget in a cost effective manner, it is for this
reason that they are using this particular method of ordering and buying them profits only when
they are needed (Grundy 2017). This also helps the company in avoiding the unnecessary cost or
the unnecessary wastage of the products. The TQM or the total quality management is one of the
major strategies that is used in order to make all the workers become responsible for their own
work. All these strategies help the organization to stand out from the rest of their competitors in
the retail food market industry.
SWOT
STRENGTH-
One of the major strengths of Aldi is that it is about 700 stores in UK. This is evident of
the fact that they are also acing as one of the major sources of employment. They are the 5th most
well known retailer in UK and they also have about 7% market share. One of the strength is that
Aldi is a discount market. It is known for the discounts and the low budget food that is provided
by them. It has also won Supermarket of the Year at the Mother & Baby Awards 2017. They are

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also sure about the product quality. It is for this reason that they can provide their customers with
Double Guarantee. They also assure to replace their products if their customers show that they
are dissatisfied with the products that they have purchased from the company.
WEAKNESS
There are some kinds of scandals that have been faced by the organization. There was a
scandal of the organization selling horse meat in the year 2012. They have also blamed their
supplier Comigel for this particular activity (Weber, Tsoukatos and Maizza 2015).
OPPORTUNITIES
The organization has to start using all the ecommerce ventures or the electronic platforms
for their marketing purposes. They must start venturing into many new markets that are located
in the highly populated places like Brazil and India (Hodgetts et al. 2016). The population of
these places is huge and most of customers are comfortable in doing online shopping
THREATS
There is always the threat from the other large companies. There is a chance that many
other supermarket chains like Walmart, Tesco and others may enter into the market and provide
better buying options to the customers (Nwachukwu et al.2017). Thus they have to use all the
latest technological advancements and developments in order to strengthen their production. This

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will help them to deal with all the threats coming in their way. They can make their customers
loyal towards their band by providing them all the attractive discounts and offers.
PESTLE
POLITICAL
The political condition of UK is more or less stable. Thus it is suitable for ay organization
to operate in this business scenario. This could give them a good scope to carry on with their
import and exports (Koenraadt, Henstock and Barber 2015). The country has also announced a
decrease in the corporation tax from 19 to 27% for the company profit. Thus it will be good for
the companies to carry on with their business (Tiwari, Fischer and Kalogerakis 2017).
ECONOMIC
UK is the 5th largest country in the world by the nominal GDP. Though the 2008
recession has created a trouble for the country, the Government has played a very essential role
in order to improve these issues. The cost of importing goods also increased. However the rate of
inflation was 3.1% in November 2017. The rate has gone up from 0.25% to 0.5% . However
there are fewer chances for the country to suffer from these lower interest rates in future thus the
companies can get a good and favorable environment for operating in this country.
SOCIAL
The population of UK comprises of the elder generations of people. It is for this reason
that the companies have a large scope for providing for this elder group of customers. In 2016,
18% of people were aged 65 and over, while 2.4% were aged 85 and over. Thus the companies

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have to provide more number of products. Thus, Aldi has to make sure that they are trying to
excel in the manufacturing and sale of the health conscious products. This will be helpful for the
company to excel in the long run.
TECHNOLOGICAL
UK is one of the most rapidly advancing countries in the world. Aldi will have a very
good business opportunity if they are carrying on with their business in UK as they will be
getting all the rapidly advancing and upgraded technological means.
ENVIRONMENTAL FACTORS
The environment in UK is stable for the company to carry on with their business
operations. However the only challenges that they might often face is due to the unfavourable
weather conditions, It is for this reason that Ali had to take some steps that will help them to
carry their import and exports with proper protection during times of challenging weather
condition.
LEGAL FACTORS
The legal system is well developed and is mainly hinted at protecting the rights of the
citizens. The Employment Act 1996 protects rights of employees. Thus Aldi can provide a safe
and sound environment to all their customers who are working in this country (Tiwari, Fischer
and Kalogerakis 2017). Thus Aldi is at an advantage to recruit employees from the different parts
of the country. The prevalent law and orders of the place will help the company to safeguard and
provide proper protection to the rights of their employees.

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Aldi’s communication strategy
Aldi is currently using all the possible and helpful communication strategies for all their
stakeholders. They make sure that they are being able to follow an effective internal and external
communication approach. It is for this reason that they are using the advertisements and media
for the purpose of reaching put to their customers. This must be noted that advertisements and
print media is one of the most effective means of communication for the customers. Aldi stated
with one of the campaigns called like brands, only cheaper campaign that helped them to convey
about their cheap and discounted products to their customers. They made sure that they are being
able to attract the attention of their customers towards their products. Another campaign of Aldi
is ‘swap and save’. This communication was done mainly the means of the print media that is
through the newspapers. This communication or advertising strategy is very similar Tesco’s ‘big
price drop’ campaign or Sainsbury’s ‘brand match’ campaign.
They have also tried their level best to use the social media to reach put to their
customers and the other external stakeholders. This is because Aldi has developed a good grip
over the customers who are comfortable on the social media apps. One such online campaign of
Aldi is ‘Aldi Advocates’. This particular promotion is for consumers who recommend Aldi to
others because of its low prices compared to other brands. For an instance, I love Aldi is one
such online campaign on facebook. This campaign helps one stakeholder to send a free card to
any of their contacts or friends. These are evident of the fact that Aldi is taking care of the
different strategies that they are using for communicating with all their stakeholders. However in
this age of rapid advancement and development they have to make many important
developments and strategies so that they can actually succeed in the long run.

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Aldi’s Rapid Growth
Their prior objective is to provide their customers with low budget products. This is one
of the major aspects that has led to the rapid success of the company It is for this reason that this
company has been able to attract a large number of customers. They make sure that they are
using limited amount of their products for the promotion at a certain point of time. It is for this
reason that they put only about 8 percent of their products for the promotions at one point of
time. This is about 40 percent in comparison, to the 40 percent of them products that are usually
placed by the other companies of the organization.
The other objective that the company has always tried to fulfill is the employee centric
approach. Happy employee is one of their major objectives for which they have been working
day and night. Aldi had also launched a new strategy as per which they will be paying 10.20
pounds in London from 2018 February. Thus in this way they are the highest paying supermarket
of UK. They also try their level best to make sure that they are being able to wok over the
improvement of their supply and logistics (DeSmet 2018). They are in the practice of sending at
least one or two lorries that help them in collecting the supplies like raw materials from their
suppliers on their way back to the distribution centers. This helps them in making the effective
and the optimum utilization of their time and management.
They make sure that they are using all the locally produced and the fresh materials. It is
for this reason that they always try to place the orders at night to the distribution centers. This is
a very good and clear indication for the suppliers to know how much is needed and how well are
they actually performing.

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Implication on the company’s stakeholders
The key internal stakeholders of the company are the employees (Hodgetts et al.2016).
The company makes sure that they are being able to make their employees happy by all the
means possible. They provide their employees with proper chances of growth and development.
In this current scenario they make sure that they are being able to satisfy their customers a great
deal. They want to make their employees work within a friendly environment. It is for this reason
that they provide a high salary package as per the accepted market standards. In order to flourish
in their professional career in the retail sector the company gives ample opportunities to their
employees. They make sure that they are being able to make their employees market ready.
They also make sure that they are being able to create a proper impression over the food retail
sectors. This is done by bringing about inventions that helps the organization to flourish in the
long run (Jenkins and Williamson 2015).
They can do this by making sure that the products being supplied by them are the best in
the market. In order to do that they ensure that all the products being provided by them are of the
superior quality. They make sure that all their success stories are properly arranged right from
behind the scenes. In other words, they always make sure that they are maintaining a proper
cleanliness and organized ways in their back areas. In other words they always make sure that
they are using all the fresh and high quality products.
Apart from this, the other good impact that this organization is having on the food retail
sector is the way they handle the barcodes. In other words, they have specialized and advanced
forms of barcodes. The company is also of the opinion that their barcodes are much more
advanced than the rest of the other competitors in the food retail industry. They are of the
opinion that their barcodes are 40 percent more quickly than the ones used by their competitors.

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This helps in easing the process and making sure that all their goods are being scanned at a very
rapid and a very easy manner.
Conclusion
Thus, it can be concluded that Aldi is doing a very good job in the current scenario. They
are trying to satisfy all the needs and demands of their customers. They have also worked over
their target markets. It is for this reason that they have tried to target the customers who belong
from the low and the medium income groups as well. Their main motif is to make their products
available for all the customers. They also focus over their employee centric approach. They
always want to make their employees happy. Aldi is among those companies who do not like to
betray their employees in terms of their pay scale. Thus they make sure that they are paying a
high amount of salaries to their employees. However they have to make sure that they are
following the strategy of continuous improvement in order to stay in the competition in the long
run. They have to make sure that they are making effective usage of all their resources in order to
outrun all their competitors.