Question

1. Aldi, a Germany-based global discount supermarket chain, opened two stores recently in New York City and it can offer prices that are 20% less than Walmart’s, which makes it an attractive place for city dwellers to shop. Aldi’s distinctive competence is produced by a number of factors. It operates with a business model that focuses on selling a limited number of groceries and household items in a small setting. Its typical stores are just 16% the size of a typical Wal-Mart store and carry just 1,500 or so items, compared to 100,000 items in a superstore. Most of its items are private brands, that is, goods that Aldi buys and packages itself. Which of the following concepts best describes the factors that contribute to Aldi’s distinctive competence?

   	a.	Situational analysis
   	b.	Core capabilities
   	c.	Strategic group
   	d.	Strategic reference points

Answer 1

Option B

• The concept of core capabilities states that companies or firms focus on some specific or unique capabilities that contribute to their competitive position in the market place.
• Here in the Example, Aldi's competence focuses on model's selling limited groceries and household items in a small settings which distinguishes it from other firms like the Walmart.
• Aldi has a distinct capability of setting two small stores with less items, which helped him to achieve dominance in the global discount supermarket chain.
• Hence the concept of core capabilities best describes the factors that contributed to Aldi's distinctive competence.