Question

In regards to the case study: Aldi, the darkhorse discounter.

-Should Wal-Mart be worried about Aldi? Should Aldi be worried about Wal-

Mart? Do you believe Aldi to be at a competitive advantage or disadvantage to

Wal-Mart?

- What is Aldi’s strategy?

- In locating its stores, should Aldi avoid locating close to a Wal-Mart store?

Answer 1

Should Wal-Mart be worried about Aldi? Should Aldi be worried about Wal-

Mart?

Aldi store has operating cost advantage as compared to Wal-mart and has good levels of quality control and efficiency while targeting discounted customers,Wal-mart derives most of the revenue from the grocery sales and should be worried to loose it customers to Aldi which has its own operating strong points.

Do you believe Aldi to be at a competitive advantage or disadvantage to

Wal-Mart?

Advantages

• Affordability in pricing and discounting model.
• Operating cost efficiency in comparison to Wal-Mart
• Top quality product line and quality control
• Aldi strong presence in German market

Disadvantages

• Wal-mart offers bigger customer experience
• Customer perception of Walmart being a bigger brand
• Walmart has logistics and warehouse advantage

What is Aldi’s strategy?

• Cutting publicity expenses as a cost saving strategy
• It focussed on efficiency of operation to cut cost
• It encouraged self service model,it did not need stock boys as there was no shelving and carts must be paid by deposits.
• It introduced smaller stores with 5-10 employees at strategic locations keeping the target customers in mind.

In locating its stores, should Aldi avoid locating close to a Wal-Mart store?

Aldi can choose location close to Wal-mart ,the shopping experience in Aldi is easier than in Wal- Mart as navigatig through Wal- mart to shop the product of your choice can be a cumbersome experience,Aldi will pull away grocery and food shoopers from the Wal-mart,by offering attractive discounts it can increase footprints despite being located near Wal-mart.