Case Analysis Of Aldi

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Deliverable B: NorthbrookOriginated as a small family grocery business in Germany, Aldi's growth and expansion into the U.S. had to overcome fierce competition within the market. Pricing is always a keyfactor in attracting and maintaining customers. Also,Aldi has been focusing on operating discount stores to offer up to 1,300 everyday grocery items at a low price. To accomplish this, Aldi reaches out to suppliers of fresh and home goods and gains contracts for purchases. 90% of the products provided by Aldi now are exclusive company brands. Advertised as "directly from the carters," these directly purchased goods save customers up to 50% and thus allows Aldi to expand quickly over the country, efficiently building up their customer base to …show more content…
A business process Aldi exhibits is improving the health and nutritional value of their products. Aldi strives to improvea healthy lifestyle enhancing the powerof customers. There are a few clear reasons why the threat of substitutes is moderately high. Groceries are not unique. There are many companies that sellvery similar products. Thisgives customers many substitutesforAldi’s products. The performance of those substitutions is high, and switching costs are non-existent, adding to the threat. The business process that Aldi uses to mitigate these forces is focusedon keepingcosts relatively low. Thus, the costof those substitutes isoften higher than Aldi’s products. Aldi should change its marketing and sales strategy in order toappeal to the younger age demographic. By launching new marketing campaigns aimed towards the millennial target market, Aldi would increase their brand awareness, stimulating growth in sales at local stores. Also, Aldi could expand their product mix introducing new items that would appeal to the younger generation. If they donothave any, they should consider creating products (clothing, accessories, etc) that will appeal to them. This marketing strategy drives sales and results in economies of scale that enable the company to offer lower prices without negatively affecting financial returns. As the Millennials are considered a “money-conscious” generation with a more active lifestyle which requires suppliesof daily grocery items, Aldi’s low-pricing products can attract them for purchases.Thiswill enable Aldi to compete even better with other competitors that attract younger customers. Thistakes into account the competition in the industry competitiveforce. Thiswill also address the threat of substitutes if Aldi makes the products specific enough to Aldi where you will notbe able to get them anywhere else besides

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