Aldi Inc. - Optimizing Profits in Economic Recession
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Case Code: BSTR348 Case Length: 11 Pages Period: 2007-2009 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.300 Organization: Aldi Inc. Industry: Retail Countries: US, Germany Themes: Growth Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
The case examines the business strategy of the US-based Aldi Inc, part of the Aldi Süd division of the Aldi Group (Aldi) based in Germany. Aldi (Short for Albrecht Discount), a discount retailer, entered the US in 1976. The discount retailer emphasized on keeping its cost low so that it could offer lower prices to its consumers. In order to fulfill its objective, Aldi selected lands for its stores in the city outskirts to take advantage of low rents. Aldi stores were smaller than a typical supermarket in the US. They were kept open only during the prime shopping time. In Aldi stores, the merchandise was displayed on pallets rather than on shelves so that less number of employees was required to arrange products on the shelves. Consumers had to carry their own shopping bags, or had to buy a reusable Aldi bag.
The case details how Aldi's cost effective operating strategy helped it to optimize profits during economic recession in the US. It also discusses a number of strategic initiatives that Aldi took to gain market share. The case ends with an analysis of whether Aldi would be able to sustain its growth in the US after recession or not.
Issues
The case is structured to achieve the following teaching objectives
- Understand the business model of Aldi
- Discuss the growth strategies of Aldi over the years
- Analyze the impact of recession on the US retail market
- Evaluate the business strategy of Aldi during economic recession in the US
- Examine the reasons for Aldi's success in the US in a recessionary environment
Contents
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Introduction
Background Note
Store and Merchandise Management
Tackling Recession
The Road Ahead
Exhibits
Keywords
Aldi Inc., Economic Recession, Global Economic Slowdown, Discount Retailer, Strategic Initiatives, Principles of Aldi, Store Management, Merchandise Management, Retail Strategy, Store Expansion, Product Strategy, Private Label Brands, Product Branding, Value-for-Money Retailer
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