Case Analysis on Aldi: Changing the Landscape of Grocery Shopping 1

Case Analysis on Aldi: Changing the Landscape of Grocery Shopping

Name of Student

Miriam College

MBA 207: Applied Operations Management with TQM

Due Date

Name of Faculty
Case Analysis on Aldi: Changing the Landscape of Grocery Shopping 2

Global Issue: Case Analysis on Aldi: Changing the Landscape of Grocery Shopping

Review of Subject

Aldi Group is Germany's leading grocery store chain and a top competitor in the global

retail food industry. Established in 1946, Aldi is a discount grocery chain that has gained

substantial ground because of its operations management. The company currently has more than

10,000 stores in 17 countries across Europe, Australia, United States, and, most recently, China.

Aldi operates what are known in the grocery business as "limited-assortment" stores or "hard

discounters." Aldi has taken this retail concept, which features low overhead and scanty

selection, to its leanest, meanest extreme. Unlike the vast majority of supermarket chains, which

are continuously increasing their product offerings and selling space, Aldi holds selection at its

stores to about 500 items. By limiting consumer choice, Aldi saves money in several ways. Aldi

stores are correspondingly small--usually 8,000 to 15,000 square feet--compared to the 50,000 to

125,000 square feet typically utilized by competitors with larger catalogs of items.

Discussion

The discussion for this case study revolves around two questions:

1. Aldi and similar stores offer different customer experience. Do you think a similar business

model could work in other industries?

Aldi’s business model centers for creating value which are customer excellence,

operational excellence, locational excellence and product excellence. They were able to

achieve operational excellence by carefully selecting the number of stocks which allowed

them to have more value per product which in return allowed them to maintain strong

relationships with its suppliers. Further, they made the check-out process 40% faster by
Case Analysis on Aldi: Changing the Landscape of Grocery Shopping 3

separate checkout and bagging areas saving customers from the headache of waiting in line.

They were able to maintain a sustainable competitive advantage in product excellence by

having extensive testing for each new product before it was placed on the shelves. Despite

such, they were able to offer lowest prices possible for a quality product. Aldi was able to

create locational excellence by implementing interesting strategy when it comes to location.

They were able to find locations which are clearly visible and accessible to all. Lastly, Aldi,

creates value through customer excellence, a wide range of customers were catered from

lower-class individuals looking for cheap products to high class individuals. The choice is

much more limited than in larger stores but customer retention of products has paved Aldi

for its unique set-up. Hence, if other industries able to pull it off like Aldi, then there is no

reason that such business model would not work on them.

2. What are the sacrifices customers have to make in order to have access to this shopping

experience?

Consumers could be concerned with a number of things when it comes to choosing

with grocery store to shop, it is the enjoyment to pick same products with different brands.

The need to examine one’s memory and knowledge about the products, however with Aldi

customers are likely to sacrifice a variety of choice of products and only pick the brand that

is available on the shelves. since Aldi seeks to reduce number of goods to increase its

efficiency.

Conclusions
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References

Heizer, J., Render, B., & Munson, C. (2019). Operations Management: Sustainability and

Supply Chain Management (13th ed.). Pearson.