Aldi, a discount supermarket retailer, has grown from its German base to the rest of Europe,...

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Operations Management

Aldi, a discount supermarket retailer, has grown from itsGerman base to the rest of Europe, Australia, and the United Statesby replicating a simple business format. Aldi limits the number ofproducts (SKUs in the grocery business) in each category to ensureproduct turn, to ease stocking shelves, and to increase its powerover suppliers. It also sells mostly private-label products tominimize cost. It has small, efficient, and simply designed stores.It offers limited services and expects customers to bring their ownbags and bag their own groceries. As a result, Aldi can offer itsproducts at prices 40 percent lower than competing supermarkets.(350 words)

A. Identify and critically discuss the business level strategyadopted by Aldi to outperform rivals and achieve competitiveadvantage?

B. Explain the potential pitfalls of Aldiâ€™s strategy and howit can improve company competitive position vis-Ã -vis the fiveforces.?

**N.B In your answer, you should show critical, analytical andjustification skills of the subject matter, rather than meredescription.

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1 The business level strategy adopted by Aldi to outperform rivals and achieve competitive advantage is Costleadership strategy Aldi is a supermarket which offers the products at the lowest price possible It operates on its business with Low price philosophy Strictly no frills approach Aldi achieved it by allowing minimum operational costs like buying a single line per item of a particular brand which in turn gives minimum choices to the customer So the process is quite straight forward which reduces the overall purchasing expenses which proves that it is a lowcost producer and thus enable to offer customer at a lower price and yet still obtain the See Answer

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