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Aldi Case

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Case Study - ALDI

1. How does ALDI’s strategy lead to a competitive advantage? How does the company achieve this strategy?

Costumers want to buy the finest products available at the best price possible. ALDI understands its costumers and deliver their desires to them. The Company’s strategy is about selling high quality products at a low price. The German grocery discounter’s strategy leads to a competitive advantage due to the reason that their low prices do not affect their product’s quality. In other words, ALDI’s products are just as good as their competitor’s products, but cheaper.
To achieve their strategy, ALDI uses many different methods. They are very efficient, and they reduce costs in all the areas of their business. The first method is by buying goods in a large scale, and for that reason, they take advantage of quantity discounts. The second method is by maintaining small stores and usually, they are located in inexpensive areas, such as the outskirts of towns and minor streets. The third method is by displaying the goods on pallets and not shelves, which are much more expensive. The forth method is by training employees to be capable of doing whatever they are needed to do. For example, the person that stays in the checkout charging for the products can also replace the pallets when they are empty. The fifth method is by having the customers to bring their own bags or having to pay for the ones in the supermarket. Also, the customers are supposed to make a deposit of one euro when using the carts and only get it back if the cart is returned to the place. This method saves employees’ time and ALDI’s money on hiring.

2. Does ALDI’s low-cost strategy imply that the company offers low quality? Why is quality important, regardless of competitive strategy?

It is usually assumed that when a product is very cheap, it is also poorly made. As…...

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