Aldi: A Low-Cost Retail Giant's Distinctive Business Practices
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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.
The Aldi Way of Working
The company specialized in selling staple products like food, beverages, and household supplies, which customers shopped for on a regular basis. (Reportedly, many German consumers made their main purchases at Aldi, and supplemented their shopping by purchasing products that were not stocked by Aldi from other stores.) Typically, Aldi stores carried only around 700 different products, compared to around 25,000 products carried by a traditional retailer and almost 150,000 carried by a Wal-Mart Supercenter...
Aldi Nord moved into Belgium, Denmark, France, Luxembourg, the Netherlands, Portugal, and Spain. Germany was the only country in which both the companies operated, but even there, the territorial demarcations were clear (Refer to Exhibit VI for the geographical distribution of markets between the two Aldi companies)...
While Aldi was one of the biggest and most successful retailers in Germany, some analysts expressed concerns that the company's growth might slow down as the German market became saturated. Reportedly, by 2005, more than 80 percent of the Germans lived within 20 minutes of an Aldi store. Analysts said that this would limit the company's expansion in Germany. Besides, in Germany, shopping at discount retailers was not restricted to the lower income groups...
Exhibit I: A Note on Lidl
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