Aldi Inc. - Optimizing Profits in Economic Recession


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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.

Case Details:

Price:
Case Code : BSTR348 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Growth Strategy
Case Length : 11 Pages
Period : 2007-2009
Pub Date : 2009
Teaching Note : Not Available
Organization : Aldi Inc.
Industry : Retail
Countries : US, Germany

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:


» 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:

  Page No.
Introduction 1
Background Note 2
Store and Merchandise Management 3
Tackling Recession 5
The Road Ahead 8
Exhibits 9

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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