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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 its Germanbase to the rest of Europe, Australia, and the United States byreplicating 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)

  1. Identify and critically discuss the business level strategyadopted by Aldi to outperform rivals and achieve competitiveadvantage.
  2. Explain the potential pitfalls of Aldi’s strategy and how itcan improve company competitive position vis-à-vis the fiveforces.

Answer & Explanation Solved by verified expert
3.7 Ratings (690 Votes)
The business strategy which is adopted buy Aldi to outperform Rivals and achieve competitive advantage is as follows 1 It has very limited number of products in its stock keeping units in each category This in shows each product turn frequently and it also is the stocking shelves 2 Since the company has Limited number of stock keeping units it also gets power over suppliers This is because it frequently purchase material from then and it a sells good quantity of Limited products 3 It has a very efficient and simple design stores where products can be found out easily by the customers 4 It sells mostly private label    See Answer
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