Aldi: A Low-Cost Retail Giant's Distinctive Business Practices
|
|
ICMR HOME | Case Studies Collection
Case Details:
Case Code : BSTR252
Case Length : 16 Pages
Period : 1945-2006
Pub Date : 2007
Teaching Note :Not Available Organization : Aldi
Themes: Business Strategy
Industry : Retail
Countries : Germany
To download Aldi: A Low-Cost Retail Giant's Distinctive Business Practices case study (Case Code:
BSTR252) click on the button below, and select the case from the list of available cases:
OR
Buy With PayPal
|
Price:
For delivery in electronic format: Rs. 400; For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extra
» Business Strategy Case Studies » Case Studies Collection » Business Strategy Short Case Studies
» View Detailed Pricing Info » How To Order This Case
» Business Case Studies
» Case Studies by Area
» Case Studies by Industry
» Case Studies by Company
Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
Chat with us
Please leave your feedback
|
<< Previous
"There are people who say there is no room to compete with
Wal-Mart on price, but Aldi has figured out a way to do it."
- Russ Jones, Vice President at Cap Gemini Ernst & Young,1
in 2002.2
"We certainly recognize Aldi as being a tough competitor."
- Bill Wertz, a spokesman for Wal-Mart, in 2004.3
"We run our businesses extremely efficiently and reflect
that in the price. There is no such thing as a free carrier bag or a free
loyalty point. The cost is always passed on to the customer."
- Tony Baines, Head of Buying for Aldi in the UK, in 2005.4
The Land of the Hard Discounter
In July 2006, Wal-Mart Stores Inc. (Wal-Mart)5,
the largest and most successful retailer in the world, announced that it would
close down its retail operations in Germany and exit the market. At the time of
the exit, Wal-Mart operated 85 stores in Germany. The company announced that it
would sell its operations to German retail major Metro AG6.
The financial details of the agreement were not disclosed, but Wal-Mart
reportedly booked a $918 million pre-tax loss on the venture.7
Other than the South Korean market (from which Wal-Mart exited in May 2006)8,
Germany was the only other international market in which the company had faced
major problems.
|
|
Wal-Mart had entered Germany in 1998, but had found the going
tough from the very beginning. The main reason for this was the clout enjoyed by
hard discounters9 like the Aldi Group (Aldi)
and Lidl & Schwarz Stiftung & Co (Lidl) in the country.
|
Wal-Mart, known worldwide for its low prices, had not
been able to match the prices offered by the German hard discounters.
This, combined with the cultural roadblocks it faced in the country,
eventually led to Wal-Mart leaving the country (Refer to Exhibit I for a
note on Lidl).
In the early 2000s, Germany was the third largest retail market in the
world behind the United States (US) and Japan.10
However, the dynamics in the German retail sector differed considerably
from those in other major markets. Germany was thought to be the home of
the hard discounter. |
Aldi: A Low-Cost Retail Giant's Distinctive Business Practices
- Next Page>>
|
|