Premium Essay

Aldi & Lidl

In: Business and Management

Submitted By GoldenChris
Words 1159
Pages 5
Aldi and Lidl: International Expansion: Case study

Answer 1
Greenfield Investment strategy is associated with companies expanding its business outside its national borders. Greenfield investment is one such example where the company sets off in an effort to establish its business operations from the scratch. in recent years it is evident that the strategy of these two companies has tilted in favor of the Greenfield investments.
There are various factors responsible for both Aldi & Lidl in choosing Greenfield investment as a primary market entry strategy.

Some of these factors are as mentioned below: Degree of freedom:
Greenfield investment involves setting up business in the manner as perceived by the investors. They are free to choose their own suppliers, channel of distribution and so this freedom allowed the two companies to change required strategy whenever required in order to adapt to different market conditions in different countries. This strategy involves few rules, regulations, licensing issues that allowed the company to cash in on the brand name, which means ability to attract new customers with relatively low costs. Resource & efficiency: Since Germany had already been exploited, the companies¶ seeked for ways of acquiring resources at much lower rates. So by choosing this stategy , , would help them to compete in the markets with major supermarkets and hypermarkets as they could drive down the costs of products that would lead to attracting more cunsumers loyalty .
This could enable them to maximize their market share.

Other Factors:

Political developments: the end of communism 1990¶s allowed for privatization and expanding their business in international fields had become much easier as a result,.
Technological aspects:
Developments in technology over the years had made it possible to reduce the time and effort for...

Similar Documents

Free Essay


...Assessment ONE. Individual Case Study Report (40%) MKT 3130 Coursework Aldi and Lidl: International Expansion of Two German Grocery Discounters Source: Ghauri, P. & Cateora, P. 2010, page 566-571 With a worldwide annual sales volume of €3.7 trillion in 2007 and an average annual sales growth of 2.7 percent during the past ten years, the grocery retailing industry can be considered as one of the world’s key economic sectors. Over the past decades, grocery discounters such as Aldi and Lidl have strengthened their position in the grocery retailing industry – especially in Germany and Europe. With their no-frills approach, they have led to significant changes in the industry and have challenged many companies which operate other store formats,’ such as supermarkets or hypermarkets. In this context, a Financial Times report on international retailing noted in 1995: ‘The spread of the discount format has been particularly disruptive to Europe’s grocery retail industry and has driven retailers to examine cross-border markets’. The Grocery Discount Format The key terms describing a grocery discounter are ‘minimalism’ and ‘efficiency’, which are integrated into all business areas. In fact, grocery discounters’ ambitions are to sell quality products at the lowest price possible. To realise profits in spite of the low prices, grocery discounters reduce their costs to a minimum and attempt to generate high volumes of sales through a limited product range of fastmoving......

Words: 2862 - Pages: 12

Free Essay


...Lidl Stiftung & Co. is a German global discount supermarket chain, based in Neckarsulm, Baden-Württemberg, Germany, that operates over 10,000 stores across Europe. It belongs to the holding company Schwarz Gruppe, which also owns the store chains Handelshof and hypermarket Kaufland. Lidl is the chief competitor of the similar German discount chain Aldi. This advert about Lidl happens in a small pub. The guests will have 3 meals. That will be a hors d’oeuvre a main course and a dessert. The main point of this advert is that the costumers don’t get a receipt after they have eaten their dinner. But instead the customers have to pay what they think the food and drinks were worth. Because the food they get served is so good they expect it must be quite expensive and so pay a lot of more money than actually worth. When they get their change back a lot of people look up weird and are a bit confused about the huge amount of change they get back. The positive points about this advert are that they put Lidl in such a good position. The people who see this advert on TV or on another network device look at the advert and see that the people get an amazing dinner served for such a cheap price. For example the lamb for £10.30 which is a portion for four people! I couldn’t really think of any negative examples about the advert except for the reason that they didn’t show the reaction when the costumers got told that all their food was buyable in lidl I think this advert is one of the...

Words: 634 - Pages: 3

Premium Essay


...Brand position&perception Brand position Aldi is one of the largest retailers in Germany, its stated goal was to provided customer regularly buy products with highest quality and guaranteed low prices. It was entered Australia in 2001 and was considered to be one of the pioneers of the hard discounter concept-a format characterized by a high turnover on a narrow range of grocery items in a small space. In addition, aldi offered a limited assortment of around 700 products lines as against the 25,000 lines stocked by other retailers. The high quality of the products and their low prices soon attracted shoppers and it became popular in Australia it was get the seventh position on the astralia top ten retailers of 2008. Brand Perception As of 2008, Aldi's Australian operations were spread across New South Wales, Australian Capital Territory(ACT), Queensland, and Victoria and it had a market share of 4.7 percent in the australia grocery retail market. It had a long-term strategy in australia and planned to expand to other regions such as western australia with a investment of A$ 1billion. However, experts felt that there were significant challenges in store for aldi. They pointed out that its success in australia had attracted the attention of other leading hard discounters in Europe and the US . In addition to tough competition from some very strong local players, aldi would have to contend with competition from these hard discounters in the futures as they made their...

Words: 699 - Pages: 3

Premium Essay

Coriolis Aldi Research

...ALDI IN AUSTRALIA: WHAT WILL BE THE IMPACT? May 2000 Aldi in Australia Aldi will become a small but significant player in the Australian market OVERVIEW I. Aldi is the world’s lowest cost grocery retailer II. The United Kingdom provides an excellent model for the development of Aldi in Australia III. The arrival of Aldi in Australia will have a focused impact, felt mostly on key line pricing and by Franklins Aldi 2 Aldi in Australia I. Aldi is the world’s lowest cost grocery retailer – Ia. Aldi acts as a category killer in core grocery lines – Ib. Aldi has a low-cost logistics and operational system that works on a 12% gross margin – Ic. Privately owned Aldi has a long investment horizon and plenty of patient capital – Id. There are few threats to Aldi or the limited assortment store. Aldi is immune to competition, even from WalMart Aldi 3 Aldi in Australia Ia. Aldi acts as a category killer in core grocery lines – Aldi is a limited assortment discount grocery store, a format characterized by a high turnover on a narrow range of grocery items in a small space – The main appeal of limited assortment stores is low prices – Packaged grocery accounts for almost 50% of a German Aldi store’s turnover and 50% of an American store’s SKU mix – In Germany, over 70% of German households shop at Aldi, mostly for basic staples Aldi 4 Aldi in Australia Aldi is a limited assortment discount grocery store… TYPES OF......

Words: 9186 - Pages: 37

Free Essay


...IES184 P-1071-E 0-606-009 Aldi: A German Retailing Icon “The next Wal-Mart?” Cover story on Aldi, Business Week, April 26th, 2004 “I love my Aldi – good quality at rock-bottom prices. Why do I need ‘brands’ when all they do is rip you off?” Long-time Aldi customer, driving a BMW “Discount means to leave away everything that is unnecessary.” Dieter Brandes, former Aldi executive Introduction In 2005, Aldi, a German-based grocery store chain, was turning heads throughout Europe, Australia and the United States with its rock-bottom prices, efficient store operations and growing global network of limited assortment stores. Founded in the German town of Essen, with antecedents dating back to 1946, Aldi had revenues of €37 billion ($44 billion US)1, This case was prepared by Jordan Mitchel, Research Assistant, under the supervision of Professor Marc Sachon, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. October 2005. This case was written with the support of the CIIL (International Center for Logistics Research), IESE. Copyright © 2005, IESE. To order copies or request permission to reproduce materials, call IESE PUBLISHING 34 932 534 200, send a fax to 34 932 534 343, or write Juan de Alós, 43 - 08034 Barcelona, Spain, or No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form......

Words: 9719 - Pages: 39

Premium Essay

Aldi and Sainsbury

...Aldi and Sainsbury Grocery store is a shop which the main product sold primarily food HISTORY OF GROCERY SOTRES . They hold an extremely significant value in consumer lifestyle. This essay will compare strengths and weaknesses between Aldi and Sainsbury. Aldi Aldi is a private company which was founded in Essen, Germany 1946 by Karl and Theo Albrecht. Aldi is now a leading worldwide discount supermarket chain with more than 8,500 stores in more than 15 countries. After several years, the owners separated Aldi into Aldi Nord, which operates shops in the north of Germany, and Aldi Sud, which operate the south and the UK. Karl took the Aldi Sud (South), and his brother Theo took the Nord (North) (Rudolph, 2011). Moreover, in times of economic depression were consumers are caring more about the price. Aldi to took advantage of the depression with it being one of the leading supermarkets that offer discounts and lower prices than the main stream supermarkets. This strategy also known as razor strategy was very effective in the UK because when the economic depression hit Europe people felt the need to save and cut down expenses and restore to cheaper options. Aldi before depression. this below shows the number of the shops for people who want to save money for food for , which allows them to offer the best quality products at low prices (Haberer, 2008). According to Mirror Magazine “Aldi won the award of supermarket of the year, and this award for second year in a......

Words: 1610 - Pages: 7

Premium Essay

Wal Mart in Germany

...IWIM - Institut für Weltwirtschaft und Internationales Management IWIM - Institute for World Economics and International Management Why did Wal-Mart fail in Germany? Andreas Knorr and Andreas Arndt Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“ Band 24 Hrsg. von Andreas Knorr, Alfons Lemper, Axel Sell, Karl Wohlmuth Universität Bremen Why did Wal-Mart fail in Germany? Andreas Knorr and Andreas Arndt Andreas Knorr, Alfons Lemper, Axel Sell, Karl Wohlmuth (Hrsg.): Materialien des Wissenschaftsschwerpunktes „Globalisierung der Weltwirtschaft“, Bd. 24, Juni 2003, ISSN 0948-3837 (ehemals: Materialien des Universitätsschwerpunktes „Internationale Wirtschaftsbeziehungen und Internationales Management“) Bezug: IWIM - Institut für Weltwirtschaft und Internationales Management Universität Bremen Fachbereich Wirtschaftswissenschaft Postfach 33 04 40 D- 28334 Bremen Telefon: 04 21 / 2 18 - 34 29 Telefax: 04 21 / 2 18 - 45 50 E-mail: Homepage: Abstract Clearly dominating the US retail market, Wal-Mart expanded into Germany (and Europe) in late 1997. Wal-Mart’s attempt to apply the company’s proven US success formula in an unmodified manner to the German market, however, turned out to be nothing short of a fiasco. Upon closer inspection, the circumstances of the company’s failure to establish itself in Germany give reason to believe that it pursued a fundamentally flawed......

Words: 4978 - Pages: 20

Premium Essay

Assignment 1

...Strategic Analysis of ALDI Table of Contents 1. Introduction 2 2. Brief Background on Aldi 3 3. Market Identification of Aldi 4 4. Environmental Analysis 5 4.1 PESTEL Analysis 6 4.1.1 Political factors 6 4.1.2 Economical factors 6 4.1.3 Social and cultural factors 7 4.1.4 Technology factors 8 4.1.5 Environmental Factors 8 4.1.6 Legal factors 9 4.2 Key Trends affecting the industry 9 5. SWOT Analysis 10 5.1 Strengths 10 5.2 Weaknesses 11 5.2 SWOT Table 12 6. Identification and evaluation of the Strategies pursued by Aldi 13 6.1 Strategies implemented by ALDI 13 6.2 Critical Evaluation of the Strategies 14 7. Conclusion 16 8. References 16 1. Introduction Albrecht Discount Inc., globally known as Aldi, is a German based family owned global discount chain of supermarkets. Aldi constitutes of two independent groups, that are Aldi Nord (North) and Aldi Sud (South) legally and economically independent but family related (Aldi Sud Business, 2013). It is the market leader in the industry of international grocery retailing and owns and operates chain of discount grocery stores in Europe, Australia and United States. It’s stores retail and supply general merchandise and food including meat products, fresh meat, frozen and refrigerated foods, sweets and snacks, dairy and bakery products, beverages and pantry items in addition to home care and personal care products (Report Linker, 2013). In the present Aldi Inc.’s......

Words: 4027 - Pages: 17

Premium Essay

Prin. of Mngt.

...Viewpoint The unveiling of Walmart’snext generation stores is part of a strategic plan dubbed “project impact.” Announced in 2008, the nationwide remodeling effort aims to improve the Walmart shopping experience and increase sales. Time Context According to the Project’s rollout schedule 70% of U.S stores will undergo an upgrade by the end of 2012; the remaining renovations will wrap up in 2014. Problem statement SWOT Analysis Strength: The strength of Wal-Mart is the popularity. The company is known worldwide. The company's strength is the brand name which is very strong. The mark strength is what returns the company, its products and services popular. In addition the company's strength is its ability to make strategic adjustments every time you need . The company ensures that whenever changes occur in the industry have plans alternative to it. The strength of the company is the supply chain system where the company has products in a locked place until needed in a certain branch. To end a force Wal-Mart is its Web site that is easy to use, attractive, and instructive. This Web site encourages customers to visit the store and use the company's products. Weakness: W The main weakness of Wal-Mart is criticism to the company. Criticism affects not only the image of the company, but its position in the supply chain. This criticism affects the relationships between suppliers and the company that talks of this fact effects outputs in the supply chain of the company.......

Words: 538 - Pages: 3

Premium Essay

Aldi Example

...* APP update for ALDI * ` * Executive Summary This report involves how information system solves the issues experienced by a leading global supermarket chain and how the proposed plan will be enforced its targets of capturing more market shares and increasing company’s profits. Firstly, our team will describe the main problems to be confronted by ALDI. Then the goals and objectives of the project will be clarified, and the crucial factor for business future development is also listed. The following sector offers a full view of the business case. Specifically, this part contains the reasons and motivations for exploiting the new project, and the business case organizer. Additionally, the relevant environment conditions are described from several aspects in detail. Meanwhile, the current situation and opportunities are analyzed via SWOT model. After that a detailed description of assumption and obstacles about present condition and future projects is shown. Next, we provide two feasible options for ALDI, and we adopts several elements and methods to weigh both options. Then a constructive and enforceable recommendation and opinion is given through previous analysis. Finally, the implementation strategy of project will be identified briefly. * 1. Introduction Nowadays, online shopping in brick-and-mortar stores is a common consumer practice. Mobile devices, especially smart phones, have become a key tool for web shoppers (Turban, Volonino and R.......

Words: 4571 - Pages: 19

Premium Essay

How Germany Busted Wal-Mart's Bubble

...How Germany Busted Wal-Mart’s Bubble Reasons and lessons learned behind Wal-Mart’s failed attempt into Germany * Founder Sam Walton opened the first store in 1962 and is now the world’s largest retailer with more than 10,000 retail units under 69 different banners in 27 countries. * 2.2 million employees serving 200 million customers and members every week. * Net sales for 2012 increased 5.9% to $443.9 billion, $125 billion derived from international sales. * Wal-Mart’s 2012 Annual Report…… Five key strategies that are central to Wal-Mart’s future success: 1. Developing their people 2. Driving the productivity loop 3. Winning in Global eCommerce 4. Reinvigorating their customer–focused culture 5. Being the lead on social and environmental issues Wal-Mart’s History in the German Market * Entry began in 1997 with the acquisition of 21 hypermarkets from Wertkauf GmbH, then another 74, which included sites which previous owners had failed to make profitable. * Wal-Mart Germany was initially lead by an American (who didn’t speak a word of German.) Lacking an understanding for German culture, Wal-Mart misfires a second time by replacing the CEO with a Brit to take the helm. * Unable to find what makes German consumers “tick”, Wal-Mart exits the $370 billion German retail market and sells its 85 operations to rival Metro AG, incurring a pretax loss of $1 billion *Wal-Mart’s largest global competitor Carrefour SA......

Words: 899 - Pages: 4

Premium Essay

Research on Walmart

...The purpose of this assignment is to identify the entry of the U.S. Company Wal-Mart that has expanded internationally and the applied strategy for entering the German market. Additionally assessed will be the barriers that were faced and Wal-Mart’s failure in Germany. Finally there will be recommendations by the author of what they could have done differently. Wal-Mart operates nowadays over 11,500 stores in 28 countries world - wide (Wal-Mart Stores, Inc, 2015). As further domestic success for Wal-Mart in the U.S. was limited because of competitors like Target and K-Mart, they decided to expand internationally (Arndt, 2003). Wal-Mart entered the German market in 1997 (Jui, 2011). The management was confident that their success in USA can be replicated elsewhere all over the world and the German market seemed to be very attractive at that time as the world’s third largest economy (Arndt, 2003). Wal-Mart designed an international expansion strategy, which was also used for the German market (Brunn, 2006, p. 261). Instead of building their own stores as it is typical for Wal-Mart in the U.S., they focused internationally on takeovers of already existing chains (Brunn, 2006, p. 263). Germany’s leading supermarkets are usually privately owned, whereas Wal-Mart got only the possibility to buy the weak chains Interspar and Wertkauf, which also generated the first problem with their entry into the German market (Brunn, 2006, p. 263). Consequently, their start in Germany was rough...

Words: 642 - Pages: 3

Free Essay

Aldi Case

...April   ALDI offering the ‘same for less’ value proposition Andrian Saputra Njonoriswondo Billy Qian Claudya Vici Yvonne Huang 17 Table of contents Introduction Australian Retail Industry Market Segmentation Product Differentiation Consumer Perception Cost Effective Strategy Potential Future Problems Conclusion Appendix References pg. 2 pg. 2 pg. 2,3 pg. 3 pg. 4 pg. 4,5 pg. 5,6 pg. 6 pg. 7 pg. 8,9 M A R K 1 0 1 2   M a r k e t i n g   F u n d a m e n t a l s   Introduction In present, the number of retailers in the marketplace is uncountable. Hence, it is important for the organisations to understand and satisfy their consumers and customers in order to have a long-run survival in the marketplace. Every organisation is aiming to be efficient and effective in operation. Thus, they have to be sure that consumers and customers have a freedom to choose goods at the best price and perceive a service that match their preferences. To succeed, the company has to be certain about which part of consumers or customers they want to satisfy. In other words, they have to create a more focused target market. This idea is often called market segmentation. Market segmentation can be defined as a marketing strategy that involves dividing a broad target market into narrower target consumers who have common needs and wants (Goldstein 2007). ALDI has been regarded as a successful company that can meet the expectations of customers whereas the other existing firms......

Words: 3253 - Pages: 14

Free Essay

Hrm Importance

...Introduction ALDI is a German Based Discount Supermarket Chain. Albrecht Discount is the full form of ALDI. The Supermarket Chain consists of two main groups. ALDINORD and ALDI SUB. However both groups are independent in their operations and work within the specific market grounds. The individual groups were originally owned and managed by brothers Karl Albrecht and Theo Albrecht. The company has transformed from a small business to one of the most successful and valuable retail business chain with an annual estimated turnover of 53 billion Euros, over 9,000 stores in 18 countries and around 100,000 employees around the world. ALDI operations are mainly based on the limited Assortment Concept - The high quality range of goods sold in the store was initially limited to a basic selection of goods to be purchased in large quantity, sold at realistic prices and presented in simple way. At ALDI, everything from building shop, selecting suppliers, locations and selling goods, is done to make possible considerable savings with the discount always passed on to customers in the end price. ALDI have introduced Cart Rental System. Customer need to put one coin in the grocery Cart and gets back the coin when the Cart is returned. This mechanism will cut off the need to hire employees whose job is to retrieve the grocery cart. The grocery industry has been revolutionized with a unique business model by ALDI that enable them to provide the highest class product at the lowest prices. ALDI......

Words: 4226 - Pages: 17

Free Essay


...References 20 Bibliography 21 TASK 1 Since the first store was opened in the German town of Essen in 1913, by Karl and Theo Albrecht, Albrecht Discount has continued to flourish into the successful, global organisation we know as Aldi. Aldi has over 8000 stores worldwide and continues to expand in Europe, North America and Australia. The finance section of The Telegraph (October, 2012) reported that Aldi hope to have 500 stores open in the UK by the end of 2013, 40 of them new stores with an estimated cost of £181m, will create 4,500 new jobs. Despite hours of research on Aldi, it proved extremely difficult to find their mission statement. As an international organisation they have many websites but none appear to display their mission statement; nor does their Corporate Responsibility Policy (Aldi, UK 2013). The reason for this difficulty became clear with the discovery of a book, Bare Essentials: The Aldi Way to Retail Success, Brandes and Brandes (2012). Dieter Brandes contributed for many years to the policies which brought success to Aldi; he was initially a regional general manager and then for 10 years, until he left in 1993, was a managing director for the Executive Board. In his book, he explains how Aldi never had a mission statement, because they never needed one. The company’s goals of lowest prices and best quality are sensible, understandable and simple, so how could anyone else write anything which would make them any clearer?......

Words: 3472 - Pages: 14