Aldi is a Germany-based hard discounter that has unique business practices. They use a lean approach to its business operations to offer its customers quality products at competitive prices. They concentrate on purchasing power; carrying only the most frequently purchased grocery and household items, of which most are ALDI select brands. As a result, they get the lowest prices from our suppliers and pass the savings on to the customers. They update operations eliminating every feature that increases cost and prices. II. Objectives and Scope Our group was given a task to do the case study analysis on Aldi.
We need to find out how Aldi’s strategy leads to competitive advantage and how they achieve this strategy. We also need to find out whether Aldi’s low-cost strategy implies that they offer low quality products and why quality is important regardless of competitive strategy. For us to answer these questions, we will use different tools and techniques that are discussed in the class like the lean production. III. Methods/Approach Our group did group discussions through the use of social media. While we were discussing about the case, we were simultaneously doing our case study report through the use of google docs.
We basically used the internet for reference. We Identified Aldi’s competitive advantage by identifying their Differentiation, Cost leadership and Response IV. Analysis and Discussion Aldi has competitive advantage by incorporating the lean approach to its business operations. Lean production is about getting more from less. The lean productions objective is to reduce the number of resources used in offering goods and services for consumers and it is about making the organisation more efficient. Lean production involves reducing cost and using less labour, materials, space and time by eliminating waste.
For Aldi, lean production is not just about reducing costs for the business. It is also about passing these savings on to its customers to offer value for money. Aldi demonstrates a time based management approach within the context of its supply chain. They take advantage of the local produce of their location for supplies to reduce the need for long and costly delivery journeys. They also apply time based management to training their employees. Training their staff to do variety of tasks which results to less staff costs and staff will gain knowledge of the whole business.
Aldi uses a just-in-time production by only keeping the stock that it need. The company only buys the stock required at any given time. Aldi is not investing much on stock that is going to be held for a long period of time. They also do not pay for large warehouses to store stock or pay additional staff to monitor warehouse stock. Aldi has three core values which are simplicity, consistency and responsibility which helps in their competitive advantage. They use simple designs to all their stores which creates consistency. V. Findings and Conclusion
We therefore conclude that Aldi has a good competitive advantage because of their unique approach to retailing. They focus their operations on providing its customers with quality products that are value for money. Aldi achieves this by ensuring that its operations are as efficient as possible while also adhering to its core values of simplicity, consistency and responsibility. Through adopting a variety of lean approaches Aldi is able to offer its customers the highest quality products at the lowest possible price. VI. Recommendations They are doing a good job. They should continue what they are doing and improve more in the process
This is a Journal Entry for Human Communications class. Attached is the prompt and some information to help complete it. The paper requires you to talk about personal experiences, so you can make up anything. I am a female, so please keep that in mind when you make up the experiences.