Strategic Management Report: Aldi's Failure in Branded Products

This report provides an analysis of Aldi's strategic management, specifically addressing the company's decision to avoid branded products and its implications. The report investigates the reasons behind Aldi's strategy, highlighting the company's focus on private label products and cost-effectiveness. It examines the consumer buying behavior model, including the economic and learning models, to understand how Aldi targets its customers and maintains a competitive advantage. The report also discusses Aldi's competitive strategies and its ability to attract customers through lower prices and copycat brands, offering insights into Aldi's overall business approach and its position within the market.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Table of Contents
Introduction................................................................................................................................2
Reasons Aldi fail to provide branded products to customers.....................................................2
Theoretical Model......................................................................................................................2
Conclusion..................................................................................................................................3
References..................................................................................................................................4

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Introduction
The report deals with analysis of failure of Aldi in providing customers with branded
goods and services like other brands. The investigation of theoretical models is required to be
used to analyse the failure to provide such goods.
Reasons Aldi fail to provide branded products to customers
Aldi avoid brand names in more than 90% of the products that are sold by them to
their customers and they are private labels (Aldi.us, 2018). The private label of the company
is more than 27 percentage cheaper than Woolworths and Coles. It has been noticed that they
provide different similar quality products to their customers at a lower price and gain
competitive advantage. They piggyback off the favourite brands with the copycat brands
wherein the much alike products are provided even in better kind of quality. This is the main
reason the company has grown to such a huge extent in comparison to the other competitors
in the market.
In the bid to remain more competitive in the market, the major supermarkets are
discounting and continuing to expand the range of both private label and copycat products in
the market. They cannot provide customers with branded products as they do not entertain
seasonal discount coupons and they are mainly focused on providing products at cheaper
price 24*7 and deal with suppliers, customers and employees at a consistent manner.
Unlike other competitors, they do not own large stores and does not stock huge
number of goods. They target the middle disposable income group individuals in the market
as the price is the driving factor of the company (Solomon et al. 2014).

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Theoretical Model
The consumer buying behaviour model has to be adopted by the company in being
competitive in nature in comparison to other competitors. The company
Economic model is helpful in assuming the limited kind of purchasing power along
with set of needs and purchases. The bases for the economic model includes to maximise the
utility for the customers with middle level disposable income. The needs of the consumers
are being connected with the changes in their preferences and provide the customers with the
same kind of branded products at a cheaper price (Orji et al. 2017).
Furthermore, the learning model helps them in promoting the association of the
different products with the strong drivers and this helps the marketers to understand and
change the buying behaviour of the customers (Dewangan and Siddiqui 2015). The company
has targeted the different customers in the market whose disposable income is medium and
they prefer to receive the similar kind of products of that of the competitors however at a
cheaper rate.
Conclusion
Therefore, it can be concluded that Aldi has adopted the consumer buying behaviour
model that included the economic and learning model. Both the models has helped the
company in gaining strong customer base and provide them with same kind of branded
products at a cheaper price.

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References
Aldi.us. (2018). ALDI US - Homepage. [online] Available at: https://www.aldi.us/ [Accessed
4 May 2018].
Dewangan, J.K. and Siddiqui, J.V.I.N., 2015. EFFECTS OF DEMOGRAPHIC VARIABLES
ON CONSUMER BUYING BEHAVIOUR: WITH REFERENCE TO PURCHASE OF
HOUSEHOLD COMMODITIES FROM ORGANIZED RETAIL STORES IN
CHHATTISGARH, INDIA. Global Journal of Multidisciplinary Studies, 4(9).
Orji, M.G., Sabo, B., Abubakar, M.Y. and Usman, A.D., 2017. Impact of personality factors
on consumer buying behaviour towards textile materials in South Eastern
Nigeria. International Journal of Business and Economics Research, 6(1), pp.7-18.
Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R.,
2014. Consumer behavior: Buying, having, and being (Vol. 10). Pearson.