ALDI case - ALDI case competition FINAL round PDF

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ALDI case competition FINAL round...

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Who will do it?

Until when?

Description of corporate history and culture

The description of ALDI's history includes at least two true historical details. Defines “Small difference, big savings.” Describes ALDI corporate responsibilities to at least 3 targets (customers, suppliers, community, etc..) and is written clearly and concisely.

Claire west

11am thur

Description of business processes and organizational strategy

Describes at least two Alexis Nam business processes’ that reflect ALDI’s cost leadership strategy and is written clearly and concisely

11 am Thur

Threat of New Entrants

Correctly identifies the strength of the force in the supermarket/grocery industry, explains reasoning AND is written clearly and concisely.

Chris perrotta

11 am Thur

Supplier Bargaining Power

Correctly identifies the strength of the force in the supermarket/grocery industry, explains reasoning AND is written clearly and concisely.

Seohee Bak

11:00 am Thur

Customer Bargaining Power

Correctly identifies the strength of the force in the

Su Bai

11:00 am Thur

supermarket/grocery industry, explains reasoning AND is written clearly and concisely. Threat of Substitutes

Correctly identifies the strength of the force in the supermarket/grocery industry, explains reasoning AND is written clearly and concisely.

Alexis Nam

11am thur

Competitive Rivalry

Correctly identifies the strength of the force in the supermarket/grocery industry, explains reasoning AND is written clearly and concisely.

Tara Arora

11:00 am Thur

ALDI’s future

The conclusion about together whether ALDI should change a business process was logically supported. The idea expressed affects at least one business process. The rationale involves saving money or time or another resource. The idea embodies ALDI's corporate values.

11am thur

Case overview and Definition of Customer-facing Technology

Includes the objective of finding a customer-facing technology for ALDI to implement; Is written clearly and concisely.. –

11am thur

Alexis Nam

UPDATE WITH MEGAN’S suggestions Characteristics of Collaboration

Includes definition of collaboration and demonstrates clear understanding of constructive feedback. Written clearly and concisely.

Claire West

11am thur

Action

Details / Comments / Challenges

Assigned to

Start Date/Time

End Date/Time

Total Minutes (estimate)

Investigate ALDI history and culture

First I read the background and history of ALDI and picked two historical facts I thought were interesting. I incorporated ALDI’s corporate responsibilities throughout the whole paragraph.

Claire West

3/10

3/11

75

8 pm

10:30 am

3/11

3/11

9am

9:50am

Investigate ALDI strategy and business processes

Alexis Nam

50

Investigate threat of new entrants

First, I looked at the factors that are considered when looking at the threat of new entrants. Then I looked at how ALDI is doing in regards to those factors.

Chris Perrotta

Investigate supplier bargaining power

After I looked up the Seohee factors, I searched for Bak what kinds of suppliers ALDI have and found a reason for suppliers products’ speciality in the ALDI website.

Investigate customer bargaining power

I research about the the consumer bargaining power in the retail industry, and what specifically effect the bargaining power

Investigate threat of substitutes

Investigate competitive rivalry

Su Bai

Alexis Nam

I researched competitive rivalry in the supermarket/grocery industry and then I looked specifically at who Aldi’s main

Tara Arora

3/10

3/10

9 pm

9:45 pm

3/10

3/10

10PM

12PM

3/11

3/11

12 am

1:00 am

3/11

3/11

10am

11am

3/11

3/11

9 am

10:15 am

45

120

60

60

75

competitors are. I also researched how price comparisons and marketing/advertising strategies affect competition in the grocery industry. Come up with conclusion about ALDI’s future Overview customer-facing technology for ALDI to implement Come up with characteristics of collaboration

Alexis Nam

I looked up different definitions of collaboration then combined them all to make my own then discussed how constructive criticism plays a role in collaboration.

Claire West

3/10

3/11

8 pm

10:30 am

75

Section1: ALDI Analysis Description of corporate history and culture ALDI (Albrecht Discounts) is known for being a grocery store that puts its customers first ever since it first opened in 1913. They have many responsibilities as a corporation that go off of their saying, “Small difference, big savings”, which demonstrates their perspective on the food industry and how they believe that Great quality shouldn’t come at a high price; rather, great quality should come with everyday low prices. The original founder, Anna Albrecht, left a lasting legacy with her small food store in Essen, Germany that grew to allow 2,000+ ALDI stores in over 36 states that continue to do good in the world by helping the community to employ over 25,000 people and help their consumers save time and money without sacrificing quality. ALDI also promises its suppliers that they will strive to establish and maintain social and environmental compliance standards for their supply chain due to manufacturing in countries with poor labor laws.

Description of business processes and organizational strategy The Aldi supermarket chain has a cost leadership strategy that their costs are lower than their competitors, including Coles and Woolworths. Its slogan is “Quality Food. Everyday Low Prices.” This cost leadership strategy involves scoring low cost in providing products/services and charging lower prices than competitors. Aldi made it possible by stripping down the shopping experience in an efficient way. According to Katrign Gielens, professor of marketing at UNC’s Kenan-Flagler Business School, its operating costs are about half those of competing supermarket chains. For example, rather than employing a team of runners to retrieve carts from the parking lot all day, Aldi keeps its shopping carts locked up, forcing its customers to return carts after each shopping trip. Additionally, Aldi cuts cost by choosing smaller name brands and thus offering lower prices than the prices of big name brand products. Eventually Aldi sells its groceries at lower costs than other supermarket chains. This is a profitable strategy, proven by its rapid growth in the UK, the US, and Australia.

Porter’s Five - Suppliers bargaining power The supermarket industry's suppliers are numerous and diverse, from a huge number of private providers to large corporations. This is the biggest threat. There are too many vendors who supply products similar to those purchased to competitors. However, the retailer can select one of the suppliers who supply the necessary products. This could lead to a weakening of the supplier's vying power. ALDI is a limited line discount retailer and they are working with the customer through received customers’ feedback and ideas for selecting product range so it can offer seasonally relevant items listed in addition to permanent listing. they provide consumers with the

best quality products for each season. Most markets have 4000-5000sku (Stock Keeping units), but ALDI has approximately 1,300 items listed everyday which is significantly less than standard markets’ average. It leads if ALDI purchased from a single supplier, the supplier can achieve economies of scale and supplier can give more merit to the retailer. In addition, the low price structure allows ALDI to order consistent quantities, while the ALDI partner can prepare for significant steady volumes. Porter’s 5- Customer Bargaining Power The retail industry allows consumers a high bargaining power because it’s based on continually providing lower and lower prices. Close competition in proximity to each other furthers the buyers bargaining power; lowering prices more. Similarity in product enables consumers to switch from one seller to another without much or any hindrance. Several stores, excluding Aldi, offer an incentive to return by giving discounts to returning shoppers. Aldi which does not offer this does not have a say in the movement of market prices. Henceforth, Aldi’s shoppers have the highest bargaining power. Porter’s 5- Threat of New Entrants The supermarket/grocery store industry has a weak threat to new entrants. The grocery store industry is very hard to enter because it is dominated by big name companies. Today, it is nearly impossible for a new supermarket company to rise to the top of the industry. This is because it requires a lot of capital, brand awareness, experience, and good access to resources. After 45 years in the U.S. with stores in 35 states, ALDI has become more well known and continues to grow. ALDI uses its resources rather than choosing big name brand products, they find other brands to offer low prices. ALDI is gradually trending upwards with around $15 billion in revenue in 2019. In terms of revenue, ALDI is not too far behind some other competitors however, they are still way behind the very top of the industry.

Porter’s Five - Threat of Substitutes The threat of substitutes for food items in the supermarket industry is relatively low because customers constantly consume foods, and supermarket/grocery stores have the best access to get food items. On the other hand, the threat of substitutes for non-food items, such as clothing, is relatively high. This is because other speciality shops tend to be better in quality and quantity in those items. In another perspective, considering the pandemic situation, the biggest substitute for the overall supermarket industry would be online shopping. Online grocery shopping may be cheaper, safer, and more convenient for the majority of people.

Porter’s Five - Competitive Rivalry

In the supermarket and grocery industry, the competitive rivalry is very high because all of the competitors offer their products at around the same priceline. Aldi is known to focus on low prices for their products, however the main competitors of Aldi have the exact same goal in mind. Aldi’s main competitors in the industry are Walmart, Woolworth, SuperValu, LIDL, and Cole’s because all of these companies strive to provide their customers with low prices and a large variety of products. These companies are all so cost-focused that they even take into account a difference of a few cents between their own store’s prices and that of their competitors. With high competitive rivalry, comes very intense and fierce competition in advertising and marketing campaigns. Aldi and all of its competitors create advertisements and marketing campaigns with the primary goal of overtaking market share and stealing market share from their other competitors in the industry. Consequently, the overall marketing and advertising costs tend to be higher for Aldi, however the main products in their grocery stores are sold at everyday low prices, as promised. Since Aldi pulls in its customers with the promise of lower prices than the average grocery store or supermarket, the level of competition is insanely high among grocery stores and supermarkets with the same goal of keeping fixed costs minimized. With the Aldi grocery products being almost identical to that of their competitors, Aldi and its rival companies are fully aware that a slight change in their pricing strategy or marketing strategy will either drive away customers or bring more in. ALDI’s future The conclusion about whether ALDI should change a business process was logically supported. The idea expressed affects at least one business process. The rationale involves saving money or time or another resource. The idea embodies ALDI's corporate values. ALDI’s business process has shown weaknesses in their variety of products and their marketing and advertising strategies. Our team suggests that ALDI provides stronger advertisements and marketing campaigns. An example of this would be providing a reward/loyalty program for their customers. This would make customers have a larger incentive to frequently buy ALDI products. ALDI has also been known primarily for their food products so by expanding their product line to include household necessities would also strengthen their customer reach. To reach a larger audience, ALDI should also increase their supply of vegan, organic and other dietary specific foods. Lastly, ALDI’s inventory consists of over 90% of ALDI exclusive brand products. By selling more products from other brands, they will expand their overall market reach and revenue.

Case overview and Definition of Customer-facing Technology Includes the objective of finding a customer-facing technology for ALDI to implement; Is written clearly and concisely.. – UPDATE WITH MEGAN’S suggestions According to the Techopedia, customer-facing technology includes hardware, software or technology with UIs or applications that directly interact with customers. It is designed to deliver

satisfying over experiences via all customer touch points. ALDI must try to find and implement a customer-facing technology because a good customer facing app can be a huge cost saver, offering additional values to relationships with customers and being a tool for customer analytics.

Section 2: Team Dynamics Characteristics of Collaboration Collaboration can be described as a situation of two or more people working together to create or achieve a common goal. While working with others, it is important to give constructive feedback. It is important to provide this meaningful judgment based on observation to identify areas of weakness and promote a positive change.

Giving and Receiving constructive criticism We did get a late start on this deliverable as we all do not know each other and it is not easy online. After this deliverable, we have gotten to understand each other more and feel more comfortable communicating with one another. We now understand the effort that needs to be taken and can work together and hold each other accountable. As a group, we have agreed to schedule graduale zoom meetings that everyone can make in order for us to all be on the same page. 1. Problem team members -

Caden: This old team member failed to inform the rest of us he had dropped this class and we needed to cover his part at the very last minute.

2. Team protocols -

Do not be late to group meetings Do your part on time and come prepared Be respectful of others opinions

3. -

Forms of communication Groupme Google docs Zoom meetings

Works Cited “ALDI.” Forbes, Forbes Magazine, 9 Feb. 2021, www.forbes.com/companies/aldi/?sh=7e2103162987.

Faithfull, Mark. “Instacart, Curbside And Aldi's Quest To Become #3 U.S. Grocer By Stores.” Forbes, Forbes Magazine, 15 Feb. 2021, www.forbes.com/sites/markfaithfull/2021/02/16/instacart-curbside-and-aldis-quest-to-beco me-3-us-grocer-by-stores/?sh=38f1f73c6e6d.

“Cost Leadership Strategy.” Success Tax Professionals, 8 Feb. 2017, www.stptax.com/cost-leadership-strategy/#:~:text=The%20Aldi%20supermarket%20chain %20has,costs%20than%20Coles%20and%20Woolworths.

“How a Cheap, Brutally Efficient Grocery Chain Is Upending America's Supermarkets.” CNN, Cable News Network, edition.cnn.com/interactive/2019/05/business/aldi-walmart-low-food-prices/index.html. “Who Are the Top 10 Grocers in the United States?” FoodIndustry.Com, 11 Jan. 2021, www.foodindustry.com/articles/top-10-grocers-in-the-united-states-2019/. Adamkasi. “Porter's Five Forces Analysis of Aldi.” Porter Analysis, 21 June 2017, www.porteranalysis.com/porters-five-forces-analysis-of-aldi/.

Aldi. “Homepage.” ALDI US, corporate.aldi.us/en/aldi-history/.

“Our Story.” ALDI, careers.aldi.us/our-story.

“What Is Customer Facing? - Definition from Techopedia.” Techopedia.com, www.techopedia.com/definition/23325/customer-facing.

ALDI. “Homepage.” aldi suppliers, https://aldisuppliers.co.uk/GCAAwards.aspx...